Exhibit 10.1
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CREDIT AGREEMENT
dated as of
7 April 2006
among
DARLING INTERNATIONAL INC.
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
___________________________
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Co-Lead Arranger
HARRIS N.A.,
as a co-lead arranger
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Table of Contents
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Page #
ARTICLE I. DEFINITIONS...................................................................................1
Section 1.01. Defined Terms.................................................................................1
Section 1.02. Classification of Loans and Borrowings.......................................................18
Section 1.03. Terms Generally..............................................................................18
Section 1.04. Accounting Terms; GAAP.......................................................................18
ARTICLE II. THE CREDITS..................................................................................18
Section 2.01. Commitments..................................................................................18
Section 2.02. Loans and Borrowings.........................................................................19
(a) Loans Made Ratably...........................................................................19
(b) Initial Type of Loans........................................................................19
(c) Minimum Amounts; Limitation on Eurodollar Borrowings.........................................19
(d) Limitation on Interest Periods...............................................................19
Section 2.03. Requests for Borrowings......................................................................19
Section 2.04. Swingline Loans..............................................................................20
(a) Commitment...................................................................................20
(b) Borrowing Procedure..........................................................................20
(c) Revolving Lender Participation in Swingline Loans............................................20
Section 2.05. Letters of Credit............................................................................21
(a) General......................................................................................21
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions........................21
(c) Expiration Date..............................................................................22
(d) Participations...............................................................................22
(e) Reimbursement................................................................................22
(f) Obligations Absolute.........................................................................23
(g) Disbursement Procedures......................................................................23
(h) Interim Interest.............................................................................23
(i) Replacement of the Issuing Bank..............................................................24
(j) Cash Collateralization.......................................................................24
Section 2.06. Funding of Borrowings........................................................................24
(a) By Lenders...................................................................................24
(b) Fundings Assumed Made........................................................................25
Section 2.07. Interest Elections...........................................................................25
(a) Conversion and Continuation..................................................................25
(b) Delivery of Interest Election Request........................................................25
(c) Contents of Interest Election Request........................................................25
(d) Notice to the Lenders........................................................................26
(e) Automatic Conversion.........................................................................26
(f) Limitations on Election......................................................................26
Section 2.08. Termination and Reduction of Commitments.....................................................26
(a) Termination Date.............................................................................26
(b) Optional Termination or Reduction............................................................26
(c) Notice of Termination or Reduction...........................................................26
Section 2.09. Repayment of Loans; Evidence of Debt.........................................................27
(a) Promise to Pay...............................................................................27
(b) Lender Records...............................................................................27
(c) Administrative Agent Records.................................................................27
(d) Prima Facie Evidence.........................................................................27
(e) Request for a Note...........................................................................27
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Section 2.10. Amortization of Term Loans...................................................................27
Section 2.11. Prepayment of Loans..........................................................................28
(a) Optional Prepayment..........................................................................28
(b) Mandatory Prepayment of Revolving Loans......................................................28
(c) Mandatory Prepayments from Net Proceeds of Prepayment Event..................................28
(d) Excess Cash Flow Prepayment..................................................................29
(e) Notice of Prepayment; Application of Prepayments.............................................29
Section 2.12. Fees.........................................................................................29
(a) Commitment Fees..............................................................................29
(b) Letter of Credit Fees........................................................................30
(c) Agent Fees...................................................................................30
(d) Payment of Fees..............................................................................30
Section 2.13. Interest.....................................................................................31
(a) ABR Borrowings...............................................................................31
(b) Eurodollar Borrowing.........................................................................31
(c) Default Interest.............................................................................31
(d) Payment of Interest..........................................................................31
(e) Computation..................................................................................31
Section 2.14. Alternate Rate of Interest...................................................................31
Section 2.15. Increased Costs..............................................................................32
(a) Change In Law................................................................................32
(b) Capital Adequacy.............................................................................32
(c) Delivery of Certificate......................................................................32
(d) Limitation on Compensation...................................................................32
Section 2.16. Break Funding Payments.......................................................................33
Section 2.17. Taxes........................................................................................33
(a) Gross Up.....................................................................................33
(b) Payment of Other Taxes.......................................................................33
(c) Tax Indemnification..........................................................................33
(d) Receipts.....................................................................................33
(e) Foreign Lenders..............................................................................34
(f) Refund.......................................................................................34
(g) Indemnity....................................................................................34
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs;
Proceeds of Collateral.......................................................................34
(a) Payments Generally...........................................................................34
(b) Pro Rata Application.........................................................................35
(c) Sharing of Set-offs..........................................................................35
(d) Payments from Borrower Assumed Made..........................................................35
(e) Set-Off Against Amounts Owed Lenders.........................................................35
(f) Application of Proceeds of Collateral and Guaranty...........................................36
(g) Noncash Proceeds.............................................................................36
(h) Return of Proceeds...........................................................................36
Section 2.19. Mitigation Obligations; Replacement of Lenders...............................................37
(a) Mitigation...................................................................................37
(b) Replacement..................................................................................37
Section 2.20. Increase of Revolving Commitments............................................................37
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ARTICLE III. REPRESENTATIONS AND WARRANTIES...............................................................38
Section 3.01. Organization; Powers.........................................................................38
Section 3.02. Authorization; Enforceability................................................................38
Section 3.03. Governmental Approvals; No Conflicts.........................................................38
Section 3.04. Financial Condition; No Material Adverse Change..............................................39
(a) Financial Statements.........................................................................39
(b) Pro Forma Balance Sheet......................................................................39
(c) Projections..................................................................................39
(d) No Undisclosed Liabilities...................................................................39
(e) No Material Adverse Change...................................................................39
Section 3.05. Properties...................................................................................39
(a) Title; Mortgaged Property....................................................................39
(b) Intellectual Property........................................................................39
Section 3.06. Litigation and Environmental Matters.........................................................40
(a) Litigation...................................................................................40
(b) Environmental Matters........................................................................40
(c) Disclosed Matters............................................................................40
Section 3.07. Compliance with Laws and Agreements..........................................................40
Section 3.08. Investment Company Act Status................................................................40
Section 3.09. Taxes........................................................................................40
Section 3.10. ERISA........................................................................................40
Section 3.11. Disclosure...................................................................................41
Section 3.12. Subsidiaries.................................................................................41
Section 3.13. Insurance....................................................................................41
Section 3.14. Labor Matters................................................................................41
Section 3.15. Solvency.....................................................................................41
Section 3.16. Senior Indebtedness..........................................................................42
Section 3.17. Margin Securities............................................................................42
ARTICLE IV. CONDITIONS...................................................................................42
Section 4.01. Effective Date...............................................................................42
(a) Execution and Delivery of This Agreement.....................................................42
(b) Legal Opinions...............................................................................42
(c) Corporate Authorization Documents............................................................42
(d) Closing Certificate..........................................................................42
(e) Fees.........................................................................................43
(f) Personal Property Security Documents.........................................................43
(g) Real Property Security Documents.............................................................43
(h) Insurance....................................................................................43
(i) Noteholder Consent; Other Consents and Approvals.............................................44
Section 4.02. Each Credit Event............................................................................44
(a) Representations and Warranties...............................................................44
(b) No Default...................................................................................44
Section 4.03. Term Loan Conditions; NBP Acquisition........................................................44
ARTICLE V. AFFIRMATIVE COVENANTS........................................................................44
Section 5.01. Financial Statements and Other Information...................................................45
(a) Annual Audit.................................................................................45
(b) Quarterly Financial Statements...............................................................45
(c) Compliance Certificate.......................................................................45
(d) Accountant's No Default Statement............................................................45
(e) Budget.......................................................................................45
(f) Public Reports...............................................................................45
(g) Additional Information.......................................................................45
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Section 5.02. Notices of Material Events...................................................................46
(a) Default......................................................................................46
(b) Notice of Proceedings........................................................................46
(c) ERISA Event..................................................................................46
(d) Material Adverse Effect......................................................................46
(e) Casualty and Condemnation....................................................................46
Section 5.03. Existence; Conduct of Business...............................................................46
Section 5.04. Payment of Obligations.......................................................................46
Section 5.05. Maintenance of Properties....................................................................47
Section 5.06. Insurance....................................................................................47
Section 5.07. Books and Records; Inspection and Audit Rights...............................................47
Section 5.08. Compliance with Laws.........................................................................47
Section 5.09. Use of Proceeds and Letters of Credit........................................................47
Section 5.10. Further Assurances; Collateral Matters.......................................................48
(a) Additional Restricted Subsidiaries...........................................................48
(b) Creation, Perfection and Protection of Liens on Material Fee Owned Property..................48
(c) Creation, Perfection and Protection of Liens on Material Leasehold Property..................49
(d) Title Insurance..............................................................................49
(e) Post Closing Delivery of Real Property Security Documents....................................49
(f) Excessive Cost...............................................................................50
ARTICLE VI. NEGATIVE COVENANTS...........................................................................50
Section 6.01. Indebtedness.................................................................................50
Section 6.02. Liens........................................................................................52
Section 6.03. Fundamental Changes..........................................................................55
Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions....................................55
Section 6.05. Asset Sales..................................................................................58
Section 6.06. Sale and Leaseback Transactions..............................................................59
Section 6.07. Swap Agreements..............................................................................60
Section 6.08. Restricted Payments..........................................................................60
Section 6.09. Transactions with Affiliates.................................................................60
Section 6.10. Restrictive Agreements.......................................................................61
Section 6.11. Amendment of Material Documents..............................................................61
Section 6.12. Change in Fiscal Year........................................................................62
ARTICLE VII. FINANCIAL COVENANTS..........................................................................62
Section 7.01. Fixed Charge Coverage........................................................................62
Section 7.02. Leverage Ratio...............................................................................62
ARTICLE VIII. EVENTS OF DEFAULT............................................................................62
Section 8.01. Events of Default; Remedies..................................................................62
Section 8.02. Performance by the Administrative Agent......................................................64
ARTICLE IX. THE ADMINISTRATIVE AGENT.....................................................................64
Section 9.01. Appointment..................................................................................64
Section 9.02. Rights as a Lender...........................................................................65
Section 9.03. Limitation of Duties and Immunities..........................................................65
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Section 9.04. Reliance on Third Parties....................................................................65
Section 9.05. Sub-Agents...................................................................................65
Section 9.06. Successor Agent..............................................................................65
Section 9.07. Independent Credit Decisions.................................................................66
Section 9.08. Other Agents.................................................................................66
Section 9.09. Powers and Immunities of Issuing Bank........................................................66
Section 9.10. Permitted Release of Collateral and Subsidiary Loan Parties..................................67
(a) Automatic Release............................................................................67
(b) Written Release..............................................................................67
(c) Other Authorized Release and Subordination...................................................67
(d) Authorized Release of Subsidiary Loan Party..................................................67
Section 9.11. Perfection by Possession and Control.........................................................68
Section 9.12. Lender Affiliates Rights.....................................................................68
ARTICLE X. MISCELLANEOUS................................................................................68
Section 10.01. Notices......................................................................................68
Section 10.02. Waivers; Amendments..........................................................................69
(a) No Waiver; Rights Cumulative.................................................................69
(b) Amendments...................................................................................69
Section 10.03. Expenses; Indemnity; Damage Waiver...........................................................70
(a) Expenses.....................................................................................70
(b) Indemnity....................................................................................70
(c) Lender's Agreement to Pay....................................................................71
(d) Waiver of Damages............................................................................71
(e) Payment......................................................................................71
Section 10.04. Successors and Assigns.......................................................................71
(a) Successors and Assigns.......................................................................71
(b) Assignment...................................................................................72
(c) Participations...............................................................................73
(d) Pledge.......................................................................................74
Section 10.05. Survival.....................................................................................74
Section 10.06. Counterparts; Integration; Effectiveness.....................................................74
Section 10.07. Severability.................................................................................74
Section 10.08. Right of Setoff..............................................................................75
Section 10.09. Governing Law; Jurisdiction; Consent to Service of Process...................................75
(a) Governing Law................................................................................75
(b) Jurisdiction.................................................................................75
(c) Venue........................................................................................75
(d) Service of Process...........................................................................75
Section 10.10. WAIVER OF JURY TRIAL.........................................................................75
Section 10.11. Headings.....................................................................................76
Section 10.12. Confidentiality..............................................................................76
Section 10.13. Maximum Interest Rate........................................................................76
(a) Limitation to Maximum Rate; Recapture........................................................76
(b) Cure Provisions..............................................................................77
(c) Chapter 346 of the Texas Finance Code........................................................77
Section 10.14. Limitation of Liability......................................................................77
Section 10.15. No Duty......................................................................................77
Section 10.16. No Fiduciary Relationship....................................................................77
Section 10.17. Equitable Relief.............................................................................77
Section 10.18. Construction.................................................................................78
Section 10.19. USA Patriot Act..............................................................................78
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LIST OF EXHIBITS AND SCHEDULES
EXHIBITS:
Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Guaranty Agreement
Exhibit C - Form of Increased Commitment Supplement
Exhibit D - Form of Security Agreement
Exhibit E - Form of Compliance Certificate
SCHEDULES:
Schedule 1.01(a) - Mortgaged Property
Schedule 1.01(b) - Existing Letters of Credit
Schedule 2.01 - Commitments
Schedule 3.10 - Underfunded Plans
Schedule 3.12 - Subsidiaries
Schedule 3.14 - Labor Matters
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Investments
Schedule 6.05 - Asset Sales
Schedule 6.10 - Existing Restrictions
CREDIT AGREEMENT dated as of April 7, 2006 (this "Agreement") among
DARLING INTERNATIONAL INC., a Delaware corporation, the LENDERS party hereto,
and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I.
Definitions
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Section 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted EBITDA" means, for any period (the "Subject Period"), the
total of the following calculated without duplication for such period: (a) the
EBITDA of the Borrower and its Restricted Subsidiaries; plus (b), on a pro forma
basis, the pro forma EBITDA of each Prior Target or, as applicable, the EBITDA
of a Prior Target attributable to the assets acquired from such Prior Target,
for any portion of such Subject Period occurring prior to the date of the
acquisition of such Prior Target or the related assets but only to the extent
such EBITDA for such Prior Target can be established in a manner reasonably
satisfactory to the Administrative Agent or based on financial statements of the
Prior Target prepared in accordance with GAAP and including in the calculation
of such pro forma EBITDA only such adjustments for cost savings as are
reasonably acceptable to the Administrative Agent; minus (c) the EBITDA of each
Prior Company and, as applicable but without duplication, the EBITDA of Borrower
and each Restricted Subsidiary attributable to all Prior Assets, in each case
for any portion of such Subject Period occurring prior to the date of the
disposal of such Prior Companies or Prior Assets.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an administrative questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agreement" has the meaning assigned to such term in the preamble
hereto.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
1
"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day and with respect to any Loan and
with respect to any letter of credit fee or any commitment fee payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "ABR Spread", "Eurodollar Spread", "Commitment Fee Rate" or
"Letter of Credit Fee" as the case may be, based upon the Pricing Ratio as of
the most recent determination date; provided that until July 31, 2006, the
"Applicable Rate" shall be the applicable rate per annum set forth below in
Category 3:
============== ===================================== ================ ============= =============== ================
Eurodollar Commitment Letter of
Category Pricing Ratio ABR Spread Spread Fee Rate Credit Fee
============== ===================================== ================ ============= =============== ================
1 Greater than or equal to 2.50 to 1.00 1.00% 2.00% 0.500% 2.25%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
2 Less than 2.50 to 1.00 but greater 0.75% 1.75% 0.500% 2.00%
than or equal to 2.00 to 1.00
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
Less than 2.00 to 1.00 but greater
3 than or equal to 1.50 to 1.00 0.50% 1.50% 0.375% 1.75%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
Less than 1.50 to 1.00 but greater
4 than or equal to 1.00 to 1.00 0.25% 1.25% 0.375% 1.50%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
5 Less than 1.00 to 1.00 0.00% 1.00% 0.250% 1.25%
============== ===================================== ================ ============= =============== ================
For purposes of the foregoing, (i) the Pricing Ratio shall be determined as of
the end of each fiscal quarter of the Borrower's fiscal year based upon the
Borrower's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Pricing Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the Pricing Ratio shall be deemed to be in Category 1: (A) at any time that an
Event of Default has occurred and is continuing or (B) at the option of the
Administrative Agent or at the request of the Required Lenders if the Borrower
fails to deliver the consolidated financial statements required to be delivered
by it pursuant to Section 5.01(a) or (b), during the period from the expiration
of the time for delivery thereof until such consolidated financial statements
are delivered.
"Approved Fund" means a Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Asset Purchase Agreement" means that certain Asset Purchase
Agreement dated as of December 19, 2005 among the Borrower, Darling National LLC
and National By-Products, LLC.
"Assignment and Assumption" means an Assignment and Assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
2
"Borrower" means Darling International Inc., a Delaware corporation.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City, Houston, Texas and Dallas, Texas
are authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Expenditures" means, for any period and a Person, (a) the
additions to property, plant and equipment and other capital expenditures of
such Person and its consolidated subsidiaries that are (or would be) set forth
in a consolidated statement of cash flows of such Person for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
such Person and its consolidated subsidiaries during such period.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means any of the following: (a) the acquisition
of ownership, directly or indirectly, beneficially or of record, by any Person
or group (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of Equity Interests representing more than 50% of either the
aggregate ordinary voting power or the aggregate equity value represented by the
issued and outstanding Equity Interests in the Borrower; and (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of
Borrower by Persons who were neither (i) nominated by the board of directors of
Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment or Term Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
3
"Collateral" means the Mortgaged Property, the "Collateral" as
defined in the Security Agreement and any and all property in which Liens have
been granted to the Administrative Agent to secure the Obligations.
"Commitment" means a Revolving Commitment or the Term Commitment, or
any combination thereof (as the context requires).
"Consolidated Net Income" means, for any period and any Person (a
"Subject Person"), such Subject Person's consolidated net income (or loss)
determined in accordance with GAAP, but excluding any extraordinary,
nonrecurring, nonoperating or noncash gains or losses, including or in addition,
the following:
(a) the income (or loss) of any Unrestricted Subsidiary, any
other Person who is not a Restricted Subsidiary but whose accounts
would be consolidated with those of the Subject Person in the Subject
Person's consolidated financial statements in accordance with GAAP or
any other Person (other than a Restricted Subsidiary) in which the
Subject Person or a subsidiary has an ownership interest; provided,
however, that (i) Consolidated Net Income shall include amounts in
respect of the income of such when actually received in cash by the
Subject Person or such subsidiary in the form of dividends or similar
distributions and (ii) Consolidated Net Income shall be reduced by the
aggregate amount of all investments, regardless of the form thereof,
made by the Subject Person or any of its subsidiaries in such Person
for the purpose of funding any deficit or loss of such Person;
(b) any gains or losses accrued on foreign currency receivables
or on foreign currency payables of the Subject Person or a subsidiary
organized under the laws of the United States which are not realized
in a cash transaction;
(c) the income or loss of any foreign subsidiary or of any
foreign Person (other than a subsidiary) in which the Subject Person
or subsidiary has an ownership interest to the extent that the
equivalent dollar amount of the income contains increases or decreases
due to the fluctuation of a foreign currency exchange rate after the
Effective Date; and
(d) the income or loss of any Person acquired by the Subject
Person or a subsidiary for any period prior to the date of such
acquisition (provided such income or loss may be included in the
calculation of Adjusted EBITDA to the extent provided in the
definition thereof).
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Covered Party" means each Loan Party and any other Subsidiary of the
Borrower designated by the Borrower as a "Covered Party" for purposes of this
Agreement.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Deposit Obligations" means all obligations, indebtedness, and
liabilities of the Covered Parties, or any one of them, to any Lender or any
Affiliate of any Lender which have been designated by the Borrower by written
notice to the Administrative Agent as entitled to the security of the Collateral
4
and which arise pursuant to any deposit, lock box or cash management
arrangements entered into by such Lender or Affiliate with the Covered Parties,
or any one of them, whether now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, including, without limitation, the
obligation, indebtedness, and liabilities of the Covered Parties, or any one of
them, to repay any credit extended in connection with such arrangements,
interest thereon, and all fees, costs, and expenses (including reasonable
attorneys' fees and expenses) provided for in the documentation executed in
connection therewith.
"Disclosed Matters" means all the matters disclosed in on the
Schedules hereto or in the Borrower's reports to the Securities and Exchange
Commission on form 10-K for the fiscal year ended December 31, 2005.
"Disposition" has the meaning assigned to such term in Section 6.05.
"Disqualified Equity Interests" means any Equity Interest which, by
its terms (or by the terms of any security or other Equity Interest into which
it is convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable, pursuant to a
sinking fund obligations or otherwise, (b) is redeemable at the option of the
holder thereof, in whole or in part, (c) provides for the scheduled payments of
dividends in cash or (d) is or becomes convertible into or exchangeable for
Indebtedness or any other Equity Interest that would constitute Disqualified
Equity Interests, in each case, on or prior to the first anniversary of the Term
Loan Maturity Date.
"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means a Subsidiary that is not a Foreign
Subsidiary.
"EBITDA" means, for any period and any Person, the total of the
following each calculated without duplication on a consolidated basis for such
period: (a) Consolidated Net Income; plus (b) any provision for (or less any
benefit from) income or franchise taxes included in determining Consolidated Net
Income; plus (c) interest expense (including the interest portion of Capital
Lease Obligations) deducted in determining Consolidated Net Income; plus (d)
amortization and depreciation expense deducted in determining Consolidated Net
Income; plus (e), to the extent not disregarded in the calculation of
Consolidated Net Income, non-cash charges.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means all applicable laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources or health and safety as it relates to environmental protection.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Person resulting from or
based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) the release of any Hazardous Materials into the environment or
(d) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"Equity Interests" means shares of the capital stock, partnership
interests, membership interest in a limited liability company, beneficial
interests in a trust or other equity interests or any warrants, options or other
rights to acquire such interests.
5
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Excess Cash Flow" means, for any period, the sum (without
duplication) of: (a) EBITDA of the Borrower and the Restricted Subsidiaries;
minus (b) the sum of the following: (i) cash interest expense added in
determining such EBITDA; (ii) cash taxes added in determining such EBITDA; (iii)
the principal portion of required and voluntary repayments of Indebtedness
(other than voluntary repayments on the Loans); (iv) the un-financed portion of
all Capital Expenditures; (v) the un-financed cash portion of the Purchase Price
for all acquisitions permitted by Section 6.04(l) and all Route Swaps permitted
by Section 6.04(k) and un-financed cash portion paid in connection with all
investments in joint ventures and Unrestricted Subsidiaries permitted by clauses
(d) and (q) of Section 6.04; and (vi) all Restricted Payments made under the
permissions of Section 6.08. Expenditures made with the proceeds of Revolving
Loans shall be considered "un-financed" for purposes of this definition.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Loan Parties hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located, (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a) and (d) all liabilities, penalties and interest with respect to
any of the forgoing excluded taxes.
6
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it
"Financial Officer" means the chief financial officer, executive vice
president of finance and administration, principal accounting officer, treasurer
or controller of the Borrower (or any other officer acting in substantially the
same capacity of the foregoing).
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal
quarter, the ratio of:
(a) the sum of the following for Borrower and the Restricted
Subsidiaries calculated on a consolidated basis in accordance with
GAAP for the period of four (4) consecutive fiscal quarters then
ended: (i) EBITDA minus (ii) cash taxes to
(b) Fixed Charges for the period of four (4) consecutive fiscal
quarters then ended.
"Fixed Charges" means for any period, the sum of the following for
the Borrower and the Restricted Subsidiaries calculated on a consolidated basis
in accordance with GAAP without duplication for such period: (a) the aggregate
amount of interest, including payments in the nature of interest under
Capitalized Lease Obligations, paid in cash; (b) the scheduled amortization of
Indebtedness paid or payable in cash; (c) Restricted Payments; and (d) 50% of
depreciation expense.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"Fully Satisfied" or "Full Satisfaction" means, as of any date, that
on or before such date:
(a) with respect to the Loan Obligations: (i) the principal of
and interest accrued to such date on the Loan Obligations (other than
the contingent LC Exposure) shall have been paid in full in cash, (ii)
all fees, expenses and other amounts then due and payable which
constitute Loan Obligations (other than the contingent LC Exposure and
other contingent amounts not then liquidated) shall have been paid in
full in cash, (iii) the Commitments shall have expired or irrevocably
been terminated, and (iv) the contingent LC Exposure shall have been
secured by: (A) the grant of a first priority, perfected Lien on cash
or cash equivalents in an amount at least equal to 102% of the amount
of such LC Exposure or other collateral which is reasonably acceptable
to the Issuing Bank or (B) the issuance of a "back-to-back" letter of
credit in form and substance reasonably acceptable to the Issuing Bank
with an original face amount at least equal to 102% of the amount of
such LC Exposure;
7
(b) with respect to the Swap Obligations (i) all termination
payments, fees, expenses and other amounts then due and payable under
the related Swap Agreements which constitute Swap Obligations shall
have been paid in full in cash; and (ii) all contingent amounts which
could be payable under the related Swap Agreements shall have been
secured by: (A) the grant of a first priority, perfected Lien on cash
or cash equivalents in an amount at least equal to 102% of the amount
of such contingent Swap Obligations or other collateral which is
reasonably acceptable to the Lender or Affiliate of a Lender holding
the applicable Swap Obligations or (B) the issuance of a letter of
credit in form and substance reasonably acceptable to the Lender or
Affiliate of a Lender holding the applicable Swap Obligations and in
an amount at least equal to 102% of the amount of such contingent Swap
Obligations; and
(c) with respect to the Deposit Obligations: (i) all fees,
expenses and other amounts then due and payable which constitute
Deposit Obligations shall have been paid in full in cash, (ii) any
further commitments to extend credit in connection with such Deposit
Obligations shall have expired or irrevocably been terminated or
reasonably satisfactory arrangements to secure the same shall be made
with the depository bank, and (iii) all contingent amounts which could
be payable in connection with the Deposit Obligations shall have been
secured by: (A) the grant of a first priority, perfected Lien on cash
or cash equivalents in an amount at least equal to 102% of the amount
of such contingent Deposit Obligations or other collateral which is
acceptable to the Lender or Affiliate of a Lender holding the
applicable Deposit Obligations or (B) the issuance of a letter of
credit in form and substance reasonably acceptable to the Lender or
Affiliate of a Lender holding the applicable Deposit Obligations and
in an amount at least equal to 102% of the amount of such contingent
Deposit Obligations.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation (including
any obligations under an operating lease) of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation (including any obligations under an operating
lease) of the payment thereof, (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guaranty Agreement" means the guaranty of the Subsidiary Loan
Parties in the form of Exhibit B hereto.
"Hazardous Materials" means any material, substance or waste
classified, characterized or regulated as "hazardous," "toxic," "radioactive" or
a "Pollutant" or contaminant under Environmental Laws, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, and infectious or medical wastes.
8
"Increase Amount" has the meaning assigned to such term in Section
2.20.
"Increased Commitment Supplement" means the Increase Commitment
Supplement in the form of Exhibit C hereto.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments; (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person; (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business); (e) all Indebtedness of others secured by any Lien on property owned
or acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed; (f) all Capital Lease Obligations of such Person; (g) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty; (h) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances; (i)
all obligations of such Person in respect of mandatory redemption or cash
mandatory dividend rights on Disqualified Equity Interests; (j) all obligations
of such Person, contingent or otherwise, for the payment of money under any
noncompete, consulting or similar agreement entered into with the seller of a
Target or any other similar arrangements providing for the deferred payment of
the purchase price for an acquisition permitted hereby or an acquisition
consummated prior to the date hereof; (k) all obligations of such Person under
any Swap Agreement; and (l) all Guarantees by such Person in respect of the
foregoing items (a) through (k). The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor. The amount of the obligations of the Borrower or
any Subsidiary in respect of any Swap Agreement shall, at any time of
determination and for all purposes under this Agreement, be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time giving effect to current market conditions notwithstanding any
contrary treatment in accordance with GAAP.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated February 2006 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
9
(or, with the consent of each relevant Lender, nine or twelve months)
thereafter, as the Borrower may elect, provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the preceding Business Day and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"Investment" has the meaning assigned to such term in Section 6.04.
"Issuing Bank" means JPMorgan Chase Bank, N.A., in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank
and the Borrower may, in its discretion, arrange for one or more Letters of
Credit to be issued by one or more of the other Revolving Lenders. In the event
an Affiliate or other Revolving Lender issues a Letter of Credit hereunder under
the terms of the foregoing sentence, the term "Issuing Bank" shall include any
such Affiliate or Revolving Lender with respect to Letters of Credit issued by
such Affiliate or Revolving Lender, as applicable.
"LC Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Increased Commitment
Supplement or an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement and any letter of credit described on Schedule 1.01(b) and outstanding
on the Effective Date.
"Leverage Ratio" means, as of any date of determination, the ratio of
Total Indebtedness outstanding as of such date to Adjusted EBITDA for the four
fiscal quarter period most recently ended.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of an amount comparable to the amount of such Eurodollar Borrowing and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
10
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guaranty Agreement, the
Security Agreement, the Mortgages and all other certificates, agreements and
other documentation now or hereafter executed and/or delivered pursuant to or in
connection with the foregoing.
"Loan Obligations" means all obligations, indebtedness, and
liabilities of the Loan Parties, or any one of them, to the Administrative Agent
and the Lenders arising pursuant to any of the Loan Documents, whether now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligation of the Loan Parties to
repay the Loans, the LC Disbursements, interest on the Loans and LC
Disbursements, and all fees, costs, and expenses (including reasonable
attorneys' fees and expenses) provided for in the Loan Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, financial condition or results of operations of the
Borrower and the Restricted Subsidiaries taken as a whole, (b) the validity or
enforceability of any of the Loan Documents or (c) the rights of or remedies
available to the Administrative Agent or any of the Lenders under any Loan
Document.
"Material Fee Owned Property" means (a) as of the Effective Date, the
parcels of property described on Schedule 1.01(a) and (b) at any time after the
Effective Date, any parcel of real property owned in fee by a Loan Party that is
acquired after the Effective Date and is used as a processing plant by such Loan
Party.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit but including, without limitation, obligations in respect of
one or more Swap Agreements) of any one or more of the Borrower and the
Restricted Subsidiaries in an aggregate principal amount exceeding $5,000,000.
"Material Leasehold Property" means any parcel of real property in
which a Loan Party has been granted a leasehold estate, which is used as a
processing plant by such Loan Party and which has been designated by the
Administrative Agent to be mortgaged hereunder based on the material value
thereof, either in and of itself or because of its importance to the operations
of the Borrower and the Restricted Subsidiaries. None of the leasehold estates
owned as of the Effective Date shall be designated as "Material Leasehold
Property".
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Administrative Agent.
11
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
1.01(a), and includes each other parcel of real property and improvements
thereto with respect to which a Mortgage is required to be granted pursuant to
Section 5.10.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NBP Acquisition" means the acquisition by Darling National LLC, a
subsidiary of the Borrower, of substantially all the assets of National
By-Products, L.L.C. pursuant to the terms of the Asset Purchase Agreement.
"Net Proceeds" means, with respect to any Prepayment Event (a) the
cash proceeds received in respect of such event including (i) any cash received
in respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all fees and out-of-pocket expenses (including underwriting discounts,
investment banking fees, commissions, collection expenses and other customary
transaction costs) paid or reasonably estimated to be payable by the Borrower
and the Restricted Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a Disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Restricted Subsidiaries as a result of such event
to repay Indebtedness (other than Loans) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event, and (iii) the amount
of all taxes paid (or reasonably estimated to be payable) by the Borrower and
the Restricted Subsidiaries, and the amount of any reserves established by the
Borrower and the Restricted Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, in each case that are directly attributable
to such event (as determined reasonably and in good faith by a Financial Officer
of the Borrower).
"New Lender" has the meaning assigned to such term in Section 2.20.
"Obligations" means all Loan Obligations, the Swap Obligations and
all Deposit Obligations.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Participant" has the meaning set forth in Section 10.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations
are 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;
12
(b) investments in commercial paper maturing within 365/366 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 365/366 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody's and (iii) have portfolio assets of at least $5,000,000,000.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prepayment Event" means:
(a) any Disposition (including pursuant to a sale and leaseback
transaction) of any asset of the Borrower or any Restricted Subsidiary
under Section 6.05(e), (l) or (o) (in each case, other than the real
property located in Petaluma, CA) or with the consent of the Required
Lenders; or
(b) any casualty or other damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any asset
of the Borrower or any Restricted Subsidiary; or
(c) any sale or issuance by the Borrower of any of its Equity
Interests in a public offering or in a private placement or sale
underwritten, managed, arranged, placed or initially purchased by an
investment bank, which, for the avoidance of doubt, does not include
the sale or issuance of Equity Interests to Borrower's officer's
directors, employees, members of management and consultants in
connection with incentive plans existing on the Effective Date or as
may exist as approved by the Borrower's stockholders from time to
time; or
(d) the incurrence by the Borrower or any Restricted Subsidiary
of any Indebtedness other than Indebtedness permitted under Section
6.01 or with the consent of the Required Lenders.
13
"Pricing Ratio" means, as of any fiscal quarter end, the ratio of:
(a) the sum of (i) Total Indebtedness outstanding as of such date
minus (ii) all obligations, contingent or otherwise, of such Person as
an account party in respect of letters of credit and letters of
guaranty outstanding as of such date to
(b) Adjusted EBITDA for the four fiscal quarter period then
ended.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Prior Assets" means assets comprising a division or branch of
Borrower or a Restricted Subsidiary in a transaction in accordance with this
Agreement which would not make the seller a "Prior Company".
"Prior Company" means any Restricted Subsidiary whose Equity
Interests, or all or substantially all of whose assets have been disposed of, in
a transaction in accordance with this Agreement.
"Prior Target" means all Targets acquired or whose assets have been
acquired in a transaction permitted by Section 6.04.
"Pro Forma Leverage Ratio" means, with respect to any proposed
acquisition or Restricted Payment, the Leverage Ratio calculated: (a) for the
most recent four (4) fiscal quarter period then ended on a pro forma basis as if
the acquisition or Restricted Payment, as applicable, had occurred as of the
first day of such period, (b) to include any Indebtedness incurred or assumed in
connection therewith, (c) to the extent such Indebtedness bears interest at a
floating rate using the rate in effect at the time of calculation for the entire
period of calculation, (d) any sale of Subsidiaries or lines of business which
occurred during such period occurred on the first day of such period, and (e)
with respect to an acquisition, as if the Target were a "Prior Target" for
purposes of calculating Adjusted EBITDA.
"Purchase Price" means, as of any date of determination and with
respect to a proposed acquisition, the Purchase Price to be paid for the Target
or its assets, including all cash consideration paid (including the then
estimated amount of deferred purchase price obligations) or to be paid (based on
the estimated amount thereof), the value of all other assets to be transferred
by the purchaser in connection with such acquisition to the seller (but
specifically excluding any stock of the Borrower issued to the seller which
shall not be part of the Purchase Price for purposes of this definition) all
valued in accordance with the applicable purchase agreement and the outstanding
principal amount of all Indebtedness of the Target or the seller assumed or
acquired in connection with such acquisition.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Responsible Officer" means the chief executive officer, president,
any vice president, any Financial Officer or Secretary of the Borrower.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
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"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Restricted Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Equity Interests in the Borrower or any
Subsidiary.
"Restricted Subsidiaries" means the Subsidiary Loan Parties and each
other Subsidiary of the Borrower that is not an Unrestricted Subsidiary. The
Borrower may designate any Unrestricted Subsidiary as a Restricted Subsidiary at
any time by written notice to the Administrative Agent if after giving effect to
such designation, the Borrower is and is projected to be in compliance with the
financial covenants herein, no Default exits or would otherwise result and the
Borrower complies with the obligations under clause (a) Section 5.10.
"Revolving Availability Period" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08, (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04 and (c) as
established or increased from time to time pursuant to an Increased Commitment
Supplement. The amount of each Lender's Revolving Commitment as of the Effective
Date is set forth on Schedule 2.01. The initial aggregate amount of the Lenders'
Revolving Commitments is $125,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section
2.01.
"Revolving Maturity Date" means April 7, 2011.
"Route Swaps" has the meaning assigned to such term in Section
6.05(d).
"S&P" means Standard & Poor's.
"Secured Parties" means the Agent, the Lenders and each Affiliate of
a Lender who is owed any portion of the Obligations.
"Security Agreement" means the Security Agreement among the Borrower
and the Subsidiary Loan Parties in substantially the form attached hereto as
Exhibit D.
"Security Documents" means the Guaranty Agreement, the Security
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.10 to secure any of the
Obligations.
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"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subject Person" has the meaning assigned to such term in the
definition of Consolidated Net Income.
"Subordinated Debt" means the Senior Subordinated Notes Due December
31, 2009 issued by the Borrower on December 31, 2003 in the aggregate principal
amount of $35,000,000 and the Indebtedness represented thereby.
"Subordinated Debt Documents" means that certain Note Purchase
Agreement dated as of December 31, 2003 among the Borrower, the guarantors party
thereto and the purchasers party thereto under which the Subordinated Debt was
issued and all other instruments, agreements and other documents evidencing or
governing the Subordinated Debt or providing for any Guarantee or other right in
respect thereof.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means Darling National, LLC and each other
Subsidiary that is not a Foreign Subsidiary or a Subsidiary designated as an
Unrestricted Subsidiary.
"Swap Agreement" means any agreement with respect to any swap, cap,
collar, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current, former or future directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Swap Obligations" means all obligations, indebtedness, and
liabilities of the Covered Parties, or any one of them, to any Lender or any
Affiliate of any Lender which have been designated by the Borrower by written
notice to the Administrative Agent as entitled to the security of the Collateral
and which arise pursuant to any Swap Agreements with the Covered Parties, or any
one of them, whether now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, including, without limitation, all fees,
costs, and expenses (including reasonable attorneys' fees and expenses) provided
for in such Swap Agreements.
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"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity
as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Target" means the Person who is to be acquired or whose assets are
to be acquired in an acquisition permitted by clause (l) of Section 6.04.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Term Loans hereunder, expressed as an amount
representing the maximum principal amount of the Term Loans to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.04. The initial
amount of each Lender's Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Term Commitment, as applicable. The initial aggregate amount of the Lenders'
Term Commitments is $50,000,000.
"Term Lender" means a Lender with a Term Commitment or an outstanding
Term Loan.
"Term Loans" means a Loan made pursuant to clause (a) of Section
2.01.
"Term Loan Maturity Date" means April 7, 2012.
"Total Indebtedness" means, at the time of determination, the sum of
the following determined for Borrower and the Restricted Subsidiaries on a
consolidated basis (without duplication) in accordance with GAAP: (a) all
obligations for borrowed money; plus (b) all obligations of such Person
evidenced by bonds, notes, debentures, or other similar instruments, other than
the Loans; plus (c) all Capital Lease Obligations; plus (d) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty.
"Transactions" means the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unrestricted Subsidiaries" means Insurance Company of Colorado, Inc.
and each other Subsidiary of the Borrower designated by the Borrower pursuant to
written notice provided to the Administrative Agent as an "Unrestricted
Subsidiary"; provided the Borrower shall not be permitted to designate any
Subsidiary as an Unrestricted Subsidiary if after giving effect to such
designation, the Borrower is not projected to be in compliance with the
financial covenants herein or if a Default exists or would otherwise result.
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"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
Section 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, amended and restated, supplemented, extended, renewed, replaced or
otherwise modified (subject to any restrictions on such amendments,
restatements, amendments and restatements, supplements, extensions, renewals,
replacements or modifications set forth herein), (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns, (c)
the words "herein", "hereof" and "hereunder", and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or the methodologies utilized
thereunder or in the application thereof on the operation of such provision (or
if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
ARTICLE II.
The Credits
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Section 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make up to three advances in dollars to
the Borrower during the period from and including the Effective Date to but
excluding October 7, 2006 in an aggregate principal amount for all such advances
not exceeding its Term Commitment and (b) to make Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender's Revolving
Exposure exceeding such Lender's Revolving Commitment. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of
Term Loans may not be reborrowed.
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Section 2.02. Loans and Borrowings.
(a) Loans Made Ratably. Each Loan (other than a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of the same Class and
Type made by the Lenders ratably in accordance with their respective Commitments
of the applicable Class. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Initial Type of Loans. Subject to Section 2.14, each
Revolving Borrowing and Term Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans as the Borrower may request in accordance herewith. Each
Swingline Loan shall be an ABR Loan. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) Minimum Amounts; Limitation on Eurodollar Borrowings. At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. At the time that each ABR Revolving
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $1,000,000; provided that an ABR
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Revolving Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e). Each
Swingline Loan shall be in an amount that is an integral multiple of $1.00 and
not less than $100,000. Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding at any time.
(d) Limitation on Interest Periods. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving Maturity Date or the Term
Loan Maturity Date, as applicable.
Section 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., Houston, Texas time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., Houston, Texas time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be given not later than 10:00 a.m., Houston, Texas time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, or a Term Borrowing;
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(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
Section 2.04. Swingline Loans.
(a) Commitment. Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from
time to time during the Revolving Availability Period, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of outstanding Swingline Loans exceeding $10,000,000 or (ii)
the sum of the total Revolving Exposures exceeding the total Revolving
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.
(b) Borrowing Procedure. To request a Swingline Loan, the
Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 12:00 noon, Houston, Texas time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Borrower. The Swingline
Lender shall make each Swingline Loan available to the Borrower by means of a
credit to the general deposit account of the Borrower with the Swingline Lender
or by wire transfer, automated clearinghouse debit or interbank transfer to such
other account, accounts or Persons designated by the Borrower in the applicable
request (or, in the case of a Swingline Loan made to finance the reimbursement
of an LC Disbursement as provided in Section 2.05(e), by remittance to the
Issuing Bank) by 3:00 p.m., Houston, Texas time, on the requested date of such
Swingline Loan.
(c) Revolving Lender Participation in Swingline Loans. The
Swingline Lender may by written notice given to the Administrative Agent not
later than 10:00 a.m., Houston, Texas time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
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hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
Section 2.05. Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section
2.05), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the Borrower also shall submit a letter of credit application on the Issuing
Bank's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$35,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.
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(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date two years after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, two years after such renewal or extension)
(provided that any Letter of Credit with a one-year term may provide for the
automatic renewal thereof for additional one-year periods not to extend past the
date in clause (ii) below) and (ii) the date that is five Business Days prior to
the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section 2.05, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, Houston, Texas time, on the first
Business Day after such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., Houston, Texas
time, on such date, or, if such notice has not been received by the Borrower
prior to such time on such date, then not later than 12:00 noon, Houston, Texas
time, on (i) the Business Day that the Borrower receives such notice, if such
notice is received prior to 10:00 a.m., Houston, Texas time, on the day of
receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Sections 2.03 or 2.04
that such payment be financed with an ABR Revolving Borrowing or Swingline Loan
in an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
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(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.05, constitute a legal or equitable discharge
of, or provide a right of setoff against, the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's gross negligence, willful
misconduct or failure to exercise care when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of, or material breach of the terms of the Loan
Documents by, the Issuing Bank, the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section 2.05, then Section 2.13 (c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Revolving Lender pursuant to paragraph (e) of this Section 2.05 to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.
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(i) Replacement of the Issuing Bank. An Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the 102% of the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VIII.
Each such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the Obligations. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived. If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such return, the
Borrower would remain in compliance with Section 2.11(b) and no Default shall
have occurred and be continuing.
Section 2.06. Funding of Borrowings.
(a) By Lenders. Each Lender shall make each Loan to be made by
it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, Houston, Texas time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.04. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent or by wire
transfer, automated clearing house debit or interbank transfer to such other
account, accounts or Persons designated by the Borrower in the applicable
Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
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(b) Fundings Assumed Made. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section 2.06 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
Section 2.07. Interest Elections.
(a) Conversion and Continuation. Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.07. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) Delivery of Interest Election Request. To make an election
pursuant to this Section 2.07, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Revolving
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.
(c) Contents of Interest Election Request. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02 and paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
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(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Notice to the Lenders. Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of
the details thereof and of such Lender's portion of each resulting Borrowing.
(e) Automatic Conversion. If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing.
(f) Limitations on Election. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto. A Borrowing of any Class
may not be converted to or continued as a Eurodollar Borrowing if after giving
effect thereto (i) the Interest Period therefor would commence before and end
after a date on which any principal of the Loans of such Class is scheduled to
be repaid and (ii) the sum of the aggregate principal amount of outstanding
Eurodollar Borrowings of such Class with Interest Periods ending on or prior to
such scheduled repayment date plus the aggregate principal amount of outstanding
ABR Borrowings of such Class would be less than the aggregate principal amount
of Loans of such Class required to be repaid on such scheduled repayment date.
Section 2.08. Termination and Reduction of Commitments.
(a) Termination Date. Unless previously terminated, (i) the Term
Commitments shall terminate at 5:00 p.m., Houston, Texas time, on October 6,
2006 and (ii) the Revolving Commitments shall terminate on the Revolving
Maturity Date.
(b) Optional Termination or Reduction. The Borrower may at any
time terminate, or from time to time reduce, the Commitments of any Class;
provided that (i) each reduction of the Commitments of any Class shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Borrower shall not terminate or reduce the Revolving Commitments
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, the sum of the Revolving Exposures would exceed
the total Revolving Commitments.
(c) Notice of Termination or Reduction. The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section 2.08 at least three Business
Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Revolving Commitments
delivered by the Borrower may state that such notice is conditioned upon the
26
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.
Section 2.09. Repayment of Loans; Evidence of Debt.
(a) Promise to Pay. The Borrower hereby unconditionally promises
to pay (i) to the Administrative Agent for the account of each Revolving Lender
the then unpaid principal amount of each Revolving Loan of such Lender on the
Revolving Maturity Date, (ii) to the Administrative Agent for the account of
each Term Lender the then unpaid principal amount of each Term Loan of such
Lender as provided in Section 2.10 and (iii) to the Swingline Lender the then
unpaid principal amount of each Swingline Loan on the earlier of the Revolving
Maturity Date and the day that is ten Business Days after such Swingline Loan is
made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans then outstanding.
(b) Lender Records. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(c) Administrative Agent Records. The Administrative Agent shall
maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(d) Prima Facie Evidence. The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section 2.09 shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(e) Request for a Note. Any Lender may request that Loans of any
Class made by it be evidenced by a promissory note. In such event, the Borrower
shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
Section 2.10. Amortization of Term Loans. The Borrower shall repay
the Term Borrowings in twenty-four (24) quarterly principal installments as
follows:
(a) Twenty-three (23) installments, in the amount of $1,250,000
each, due and payable on the last Business Day of each June, September, December
and March of each year commencing on June 30, 2006 and continuing until and
including December 30, 2011; and thereafter
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(b) One final installment in the amount of all Term Loans then
outstanding, due and payable on the Term Loan Maturity Date;
provided that no payment shall be due on either June 30, 2006 or September 30,
2006 under the foregoing clause (a) unless, with respect to each such date, an
advance has been made under the Term Commitment at least 60 days prior to such
date. Prior to any repayment of any Term Borrowings, the Borrower shall select
the Borrowing or Borrowings to be repaid and shall notify the Administrative
Agent by telephone (confirmed by telecopy) of such selection not later than
11:00 a.m., Houston, Texas time, three Business Days before the scheduled date
of such repayment. Each repayment of a Borrowing shall be applied ratably to the
Loans included in the repaid Borrowing. Repayments of Term Borrowings shall be
accompanied by accrued interest on the amount repaid.
Section 2.11. Prepayment of Loans.
(a) Optional Prepayment. The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part
without prepayment penalty or premium, subject to the requirements of this
Section 2.11 and Section 2.16.
(b) Mandatory Prepayment of Revolving Loans. In the event and on
such occasion that the sum of the Revolving Exposures exceeds the total
Revolving Commitments, the Borrower shall prepay Revolving Borrowings or
Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Administrative Agent pursuant to Section
2.05(j)) in an aggregate amount equal to such excess.
(c) Mandatory Prepayments from Net Proceeds of Prepayment Event.
In the event and on each occasion that any Net Proceeds are received by or on
behalf the Borrower or any Subsidiary in respect of any Prepayment Event, the
Borrower shall, within three Business Days after such Net Proceeds are received,
prepay Term Borrowings in an aggregate amount equal to such Net Proceeds;
provided that:
(i) in the case of any event described in clauses (a) or
(b) of the definition of the term Prepayment Event, if the Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Borrower and the Subsidiaries intend to apply the Net Proceeds
from such event, within 18 months after receipt of such Net Proceeds, to acquire
or repair assets to be used in the business of the Borrower and the Restricted
Subsidiaries or to make an acquisition permitted by Section 6.04(l), to acquire
a Route Swap permitted by Section 6.04(k) or to make an Investment permitted by
Section 6.04(q) or (s), then no prepayment shall be required pursuant to this
paragraph in respect of such event except (A) to the extent of any Net Proceeds
therefrom that have not been so applied within 24 months after receipt of such
Net Proceeds, at which time a prepayment shall be required in an amount equal to
the Net Proceeds that have not been so applied or (B) if at the time of the
proposed application of the Net Proceeds, an Event of Default exists, then at
that time, a prepayment shall be required in an amount equal to such Net
Proceeds and
(ii) Net Proceeds from a single Prepayment Event shall not
be required to be used to prepay Term Borrowings under this clause (c) if the
aggregate amount of Net Proceeds received from such Prepayment Event do not
exceed $500,000 unless such Net Proceeds, when added to the aggregate amount of
Net Proceeds received from all Prepayment Events occurring in the same fiscal
year which are not reinvested pursuant to this clause (c) exceed $1,000,000 (in
which event the aggregate amount of such Net Proceeds from all such Prepayment
Events in excess of $1,000,000, shall then be required to be used to prepay the
Term Borrowing under this clause (c)).
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(d) Excess Cash Flow Prepayment. Following the end of each
Applicable Fiscal Year, the Borrower shall prepay Term Borrowings in an
aggregate amount equal to the sum of: (i) 50% of Excess Cash Flow for such
Applicable Fiscal Year; minus (ii) the aggregate amount of voluntary prepayments
made on the Term Loans during such Applicable Fiscal Year; minus (iii) the
aggregate amount of voluntary prepayments made on the Revolving Loans during
such Applicable Fiscal Year that were accompanied by a permanent reduction of
the Revolving Commitments. Each prepayment pursuant to this paragraph shall be
made within 5 Business Days after the date on which financial statements are
delivered pursuant to Section 5.01(a) with respect to the Applicable Fiscal Year
for which Excess Cash Flow is being calculated. As used in this clause, the term
"Applicable Fiscal Year" means each fiscal year, beginning with the fiscal year
ending on or about December 31, 2006; provided that for a fiscal year to be an
"Applicable Fiscal Year" under this clause, the Leverage Ratio as calculated as
of the last day of such fiscal year for the four fiscal quarters then ended must
be greater than 2.25 to 1.00. If the Leverage Ratio as calculated as of the last
day of a fiscal year for the four fiscal quarters then ended is equal to or less
than 2.25 to 1.00, then such fiscal year shall not be an "Applicable Fiscal
Year" and no prepayment will be required under this clause (d) for such fiscal
year.
(e) Notice of Prepayment; Application of Prepayments. The
Borrower shall notify the Administrative Agent (and, in the case of prepayment
of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 11:00 a.m., Houston, Texas time (or such later time as
the Administrative Agent may agree), three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., Houston, Texas time (or such later time as the Administrative Agent
may agree), one Business Day before the date of prepayment or (iii) in the case
of prepayment of a Swingline Loan, not later than 12:00 noon, Houston, Texas
time, (or such later time as the Administrative Agent may agree), on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment; provided that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13. Prepayments of Term
Loans shall be applied to all remaining installments outstanding thereunder, pro
rata based on the principal amount of each installment.
Section 2.12. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of each
Commitment of such Lender during the period from and including the Effective
Date to but excluding the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears (i) in the case of commitment fees
in respect of the Revolving Commitments, on the date which is three Business
Days following the last day of each March, June, September and December of each
year and on the date on which the Revolving Commitments terminate, commencing on
the first such date to occur after the date hereof, and (ii) in the case of
commitment fees in respect of the Term Commitments, on the date which is three
Business Days following the date on which the Term Commitments terminate. All
commitment fees shall be computed on the basis of a year of 360 days and shall
29
be payable for the actual number of days elapsed (including the first day but
excluding the last day). For purposes of computing commitment fees with respect
to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to
be used to the extent of the outstanding Revolving Loans and LC Exposure of such
Lender (and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
(b) Letter of Credit Fees. The Borrower agrees to pay:
(i) Participation Fee. to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Rate
on the average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure;
(ii) Standby Letter of Credit Fronting Fees. to the Issuing
Bank a fronting fee with respect to standby Letters of Credit, which shall
accrue at the rate of 0.10% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) attributable to standby Letters of Credit during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure with respect to standby Letters of Credit;
(iii) Commercial Letters of Credit Fronting Fees. to the
Issuing Bank a fronting fee with respect to each commercial Letter of Credit,
which fee shall equal the product of 1.00% of the initial stated amount of such
commercial Letter of Credit multiplied by a fraction, the numerator of which is
the number of days including in the term of such commercial Letter of Credit and
whose denominator is 360; and
(iv) Issuing Bank Standard Fees. the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder.
Participation fees and standby Letter of Credit fronting fees accrued through
and including the last day of March, June, September and December of each year
shall be payable on the third Business Day following such last day, commencing
on the first such date to occur after the Effective Date; provided that: (A) all
such fees shall be payable on the date on which the Revolving Commitments
terminate; (B) any such fees accruing after the date on which the Revolving
Commitments terminate shall be payable on demand; and (C) all fronting fees
payable with respect to commercial Letters of Credit shall be payable on the
date of the issuance thereof. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and standby Letter of Credit fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) Agent Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative Agent.
(d) Payment of Fees. All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the Administrative Agent (or
to the Issuing Bank, in the case of fees payable to it) for distribution, in the
case of commitment fees and participation fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
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Section 2.13. Interest.
(a) ABR Borrowings. The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) Eurodollar Borrowing. The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Rate.
(c) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section 2.13 or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Revolving Loans as provided
in paragraph (a) of this Section 2.13.
(d) Payment of Interest. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and, in the case
of Revolving Loans, upon termination of the Revolving Commitments; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) Computation. All interest hereunder shall be computed on the
basis of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
Section 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
31
Section 2.15. Increased Costs.
(a) Change In Law. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Adequacy. If any Lender or the Issuing Bank
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's or the Issuing
Bank's capital or on the capital of such Lender's or the Issuing Bank's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) Delivery of Certificate. A certificate of a Lender or the
Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section 2.15 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Limitation on Compensation. Failure or delay on the part of
any Lender or the Issuing Bank to demand compensation pursuant to this Section
2.15 shall not constitute a waiver of such Lender's or the Issuing Bank's right
to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that
such Lender or the Issuing Bank, as the case may be, notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Bank's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.
32
Section 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(e) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19 or Section 2.20, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
Section 2.17. Taxes.
(a) Gross Up. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) Payment of Other Taxes. In addition, the Borrower shall pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) Tax Indemnification. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder or under any other Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) Receipts. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
33
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
(f) Refund. If the Administrative Agent or a Lender determines,
in its sole discretion, that it has received a refund of any Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 2.17, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay
such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
(g) Indemnity. Notwithstanding any provision contained herein to
the contrary, any indemnity with respect to Taxes shall be governed exclusively
by this Section 2.17.
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-Offs; Proceeds of Collateral.
(a) Payments Generally. The Borrower shall make each payment
required to be made by it hereunder or under any other Loan Document (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 12:00 noon, Houston, Texas
time), on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 1111
Fannin, 9th Floor, Houston, TX 77002, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
or performance under any Loan Document shall be due on a day that is not a
Business Day, the date for payment or performance shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
34
(b) Pro Rata Application. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c) Sharing of Set-offs. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Revolving Loans, Term Loans or
participations in LC Disbursements or Swingline Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its
Revolving Loans, Term Loans and participations in LC Disbursements and Swingline
Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Payments from Borrower Assumed Made. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) Set-Off Against Amounts Owed Lenders. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(c),
2.05(d) or (e), 2.06(b), 2.18(c) or 10.03(c), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
35
(f) Application of Proceeds of Collateral and Guaranty. All
amounts received under the Guaranty Agreement and all proceeds received by the
Administrative Agent from the sale or other liquidation of the Collateral when
an Event of Default exists shall first be applied as payment of the accrued and
unpaid fees of the Administrative Agent hereunder and then to all other unpaid
or unreimbursed Obligations (including reasonable attorneys' fees and expenses)
owing to the Administrative Agent in its capacity as Administrative Agent only
and then any remaining amount of such proceeds shall be distributed:
(i) first, to an account at the Administrative Agent over
which the Administrative Agent shall have control in an amount equal to 102% of
the LC Exposure then outstanding;
(ii) second, to the Secured Parties, pro rata in accordance
with the respective unpaid amounts of Loan Obligations and Swap Obligations,
until all the Loan Obligations and Swap Obligations have been paid and satisfied
in full or cash collateralized;
(iii) third, to the Secured Parties, pro rata in accordance
with the respective unpaid amounts of the Deposit Obligations, until all Deposit
Obligations have been paid and satisfied in full or cash collateralized; and
(iv) fourth, to the Secured Parties, pro rata in accordance
with the respective unpaid amounts of the remaining Obligations.
After all the Obligations have been Fully Satisfied in accordance with Section
9.10, any proceeds of Collateral shall be delivered to the Person entitled
thereto as directed by the Borrower or as otherwise determined by applicable law
or applicable court order.
(g) Noncash Proceeds. Notwithstanding anything contained herein
to the contrary, if the Administrative Agent shall ever acquire any Collateral
through foreclosure or by a conveyance in lieu of foreclosure or by retaining
any of the Collateral in satisfaction of all or part of the Obligations or if
any proceeds of Collateral received by the Administrative Agent to be
distributed and shared pursuant to this Section 2.18 are in a form other than
immediately available funds, the Administrative Agent shall not be required to
remit any share thereof under the terms hereof and the Secured Parties shall
only be entitled to their undivided interests in the Collateral or noncash
proceeds as determined by clause (f) of this Section 2.18. The Secured Parties
shall receive the applicable portions (in accordance with the foregoing clause
(f)) of any immediately available funds consisting of proceeds from such
Collateral or proceeds of such noncash proceeds so acquired only if and when
received by the Administrative Agent in connection with the subsequent
disposition thereof. While any Collateral or other property to be shared
pursuant to this Section is held by the Administrative Agent pursuant to this
clause (g), the Administrative Agent shall hold such Collateral or other
property for the benefit of the Secured Parties and all matters relating to the
management, operation, further disposition or any other aspect of such
Collateral or other property shall be resolved by the agreement of the Required
Lenders.
(h) Return of Proceeds. If at any time payment, in whole or in
part, of any amount distributed by the Administrative Agent hereunder is
rescinded or must otherwise be restored or returned by the Administrative Agent
as a preference, fraudulent conveyance, or otherwise under any bankruptcy,
insolvency, or similar law, then each Person receiving any portion of such
amount agrees, upon demand, to return the portion of such amount it has received
to the Administrative Agent.
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Section 2.19. Mitigation Obligations; Replacement of Lenders.
(a) Mitigation. If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) Replacement. If a Lender requests compensation under Section
2.15, or if the Borrower is required to pay any additional amount to a Lender or
any Governmental Authority for the account of a Lender pursuant to Section 2.17,
or if a Lender defaults in its obligation to fund Loans hereunder or if a Lender
has become insolvent and its assets become subject to a receiver, liquidator,
trustee, custodian or other officer having similar powers or if a Lender shall
become a Non-consenting Lender (as defined below), then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 10.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent to the extent required by
Section 10.04, which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply. In the event that (i) the Borrower or the
Administrative Agent have requested the Lenders to consent to a departure or
waiver of any provisions of the Loan Documents or to agree to any other
modification thereto, (ii) the consent, waiver or other modification in question
requires the agreement of all Lenders (or all affected Lenders) in accordance
with the terms of Section 10.02 and (iii) the Required Lenders (or, in the case
of any Class voting, the holders of a majority of the outstanding Loans and
unused Commitments in respect of such Class) have agreed to such consent, waiver
or other modification, then any Lender who does not agree to such consent,
waiver or other modification shall be deemed a "Non-consenting Lender".
Section 2.20. Increase of Revolving Commitments. By written notice to
the Administrative Agent (which the Administrative Agent shall promptly
distribute to the Lenders), the Borrower may request an increase of the
aggregate amount of the Revolving Commitments (each such increase, the "Increase
Amount") provided that (a) each Increase Amount shall be in an amount equal to
any integral multiple of $5,000,000 and not less than $5,000,000, (b) the
aggregate of all Increase Amounts permitted under this Section 2.20 shall not
exceed $25,000,000; and (c) no Default shall have occurred and be continuing. If
one or more of the existing Lenders chooses not to increase its Revolving
Commitment, then by notice to the Administrative Agent, any one or more new
financial institutions, as consented to (such consent not to be unreasonably
withheld) by the Borrower and the Administrative Agent (each such financial
37
institution, a "New Lender"), may commit to provide an amount equal to the
aggregate amount of the requested increase that will not be provided by the
existing Lenders. Upon receipt of notice from the Administrative Agent to the
Lenders and the Borrower that the existing Lenders, or sufficient existing
Lenders and New Lenders, have agreed to commit to an aggregate amount equal to
the Increase Amount (or such lesser amount as the Borrower shall agree, which
shall be at least $5,000,000 and an integral multiple of $5,000,000 in excess
thereof), then: provided that no Default exists at such time or after giving
effect to the Increase Amount, the Borrower, the Administrative Agent and the
existing Lenders willing to increase their respective Revolving Commitments and
the New Lenders (if any) shall execute and deliver an Increased Commitment
Supplement. If all existing Lenders shall not have provided their pro rata
portion of the Increase Amount, then after giving effect to the Increase Amount
the outstanding Revolving Loans may not be held pro rata in accordance with the
new Revolving Commitments. In order to remedy the forgoing, on the effective
date of the Increased Commitment Supplement, the Lenders shall make advances
among themselves (either directly or through the Administrative Agent) so that
after giving effect thereto the Revolving Loans will be held by the Lenders, pro
rata in accordance with their respective Applicable Percentages. Any advances
made under this Section 2.20 by a Lender shall be deemed to be a purchase of a
corresponding amount of the Revolving Loans of the Lender or Lenders who shall
receive such advances. The Revolving Commitments of the Lenders who do not agree
to increase their Revolving Commitments can not be reduced or otherwise changed
pursuant to this Section 2.20.
ARTICLE III.
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
Section 3.01. Organization; Powers. Each of the Borrower and its
Restricted Subsidiaries is validly existing under the laws of the jurisdiction
of its organization or formation, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, its jurisdiction of organization or formation and every other
jurisdiction where such qualification is required.
Section 3.02. Authorization; Enforceability. The Transactions to be
entered into by each Loan Party are within such Loan Party's power and have been
duly authorized by all necessary action. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of the Borrower or
such other Loan Party (as the case may be), enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
Section 3.03. Governmental Approvals; No Conflicts. The execution,
delivery and performance of the Loan Documents: (a) do not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, except filings necessary to perfect Liens created under
the Loan Documents and except for immaterial consents, approvals, registrations,
filing or other actions, (b) will not violate in any material respect any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Restricted Subsidiaries or any order of
any Governmental Authority, (c) will not in any material respect violate or
result in a default under any material indenture, agreement or other instrument
binding upon the Borrower or any of its Restricted Subsidiaries or its assets,
or give rise to a right thereunder to require any payment to be made by the
Borrower or any of its Restricted Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Restricted Subsidiaries, except Liens created under and permitted by the Loan
Documents.
38
Section 3.04. Financial Condition; No Material Adverse Change.
(a) Financial Statements. The Borrower has heretofore furnished
to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows as of and for the fiscal year ended December
31, 2005. Such financial statements present fairly, in all material respects,
the financial position and results of operations and cash flows of the Borrower
and its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP.
(b) Pro Forma Balance Sheet. The Borrower has heretofore
furnished to the Lenders its pro forma consolidated balance sheet as of December
31, 2005 prepared giving effect to the NBP Acquisition and the Transactions as
if the NBP Acquisition and the Transactions had occurred on such date. Such pro
forma consolidated balance sheet (i) has been prepared in good faith based on
assumptions believed by the Borrower to be reasonable in light of the facts and
circumstances known to the Borrower at the time of preparation thereof), (ii) is
based on the best information available to the Borrower at such time after due
inquiry, and (iii) accurately reflects all adjustments necessary to give effect
to NBP Acquisition and the Transactions.
(c) Projections. The Borrower's forecasted consolidated and
consolidating: (i) balance sheets; (ii) profit and loss statements; and (iii)
cash flow statements, have been prepared by Borrower in light of the business of
Borrower and National By-Products, L.L.C. and represent as of the date thereof
the good faith estimate of Borrower and its senior management of the future
financial performance of the Borrower, after giving pro forma effect to the NBP
Acquisition (it being understood that such projections may vary from actual
results and such variances may be material).
(d) No Undisclosed Liabilities. Except as disclosed in the
financial statements referred to above or the notes thereto or in the
Information Memorandum and except for the Disclosed Matters, after giving effect
to the Transactions and the NBP Acquisition, none of the Borrower or its
Restricted Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses required to be
disclosed in accordance with GAAP.
(e) No Material Adverse Change. Since December 31, 2005, there
has been no material adverse change in the business, assets, property, financial
conditions or results of operation, of the Borrower and its Restricted
Subsidiaries, taken as a whole.
Section 3.05. Properties.
(a) Title; Mortgaged Property. Each of the Borrower and its
Restricted Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its Mortgaged
Properties), except for defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties for
their intended purposes and none of the assets of the Borrower or any Restricted
Subsidiary is subject to any Lien except Liens permitted by Section 6.02. The
Mortgaged Properties constitute all the Material Fee Owned Property of the Loan
Parties as of the Effective Date.
(b) Intellectual Property. Except as could not reasonably be
expected to have a Material Adverse Effect, each of the Borrower and its
Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property necessary for its business,
and the use thereof by the Borrower and its Restricted Subsidiaries does not
infringe upon the rights of any other Person.
39
Section 3.06. Litigation and Environmental Matters.
(a) Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Restricted Subsidiaries (i) which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or (ii)
that as of the Effective Date, involve any of the Loan Documents or the
Transactions.
(b) Environmental Matters. Except as could not reasonably be
expected to, either individually or in the aggregate, result in a Material
Adverse Effect, neither the Borrower nor any of its Restricted Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Disclosed Matters. Since the date of this Agreement, there
has been no change in the status of the Disclosed Matters that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 3.07. Compliance with Laws and Agreements. Each of the
Borrower and each Restricted Subsidiary is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 3.08. Investment Company Act Status. Neither the Borrower nor
any of its Restricted Subsidiaries is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940.
Section 3.09. Taxes. Each of the Borrower and its Restricted
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes not overdue by more than 30 days or,
if more than 30 days overdue, that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Restricted
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
Section 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all projected benefit
obligations (a) under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and (b) of all underfunded Plans (based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans, except in each case, to the extent such excess
could not reasonably be expected to have a Material Adverse Effect and except,
as of the Effective Date, to the extent reflected on Schedule 3.10.
40
Section 3.11. Disclosure. Neither the Information Memorandum nor any
of the other written reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Administrative
Agent (other than information of a general economic or industry specific nature,
projected financial information or other forward looking information) in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by other
information so furnished), when taken as a whole, contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading; provided that, with respect to projected
financial information, the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time (it being understood that projections may vary from actual results and that
such variances may be material).
Section 3.12. Subsidiaries. As of the Effective Date, Borrower has no
Subsidiaries other than those listed on Schedule 3.12 hereto. As of the
Effective Date, Schedule 3.12 sets forth the jurisdiction of incorporation or
organization of each such Subsidiary, the percentage of Borrower's ownership of
the outstanding Equity Interests of each Subsidiary directly owned by Borrower,
the percentage of each Subsidiary's ownership of the outstanding Equity
Interests of each other Subsidiary and the authorized, issued and outstanding
Equity Interests of Borrower and each Subsidiary. All of the outstanding capital
stock of Borrower and each Restricted Subsidiary has been validly issued, is
fully paid, and is nonassessable. There are no outstanding subscriptions,
options, warrants, calls, or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into any Equity
Interests of any Restricted Subsidiary except, after the Effective Date, such
Equity Interests of Restricted Subsidiaries permitted to be issued hereunder (or
not prohibited by the Loan Documents) which are pledged pursuant to the terms of
the Security Agreement.
Section 3.13. Insurance. Each of the Borrower and the Restricted
Subsidiaries maintain with financially sound and reputable insurers, insurance
with respect to its properties and business against such casualties and
contingencies and in such amounts as are usually carried by businesses engaged
in similar activities as the Borrower and the Restricted Subsidiaries and
located in similar geographic areas in which the Borrower and the Restricted
Subsidiaries operate
Section 3.14. Labor Matters. As of the Effective Date, except as
disclosed on Schedule 3.14, (a) there are no strikes, lockouts or slowdowns
against the Borrower or any Restricted Subsidiary pending or, to the knowledge
of the Borrower, threatened, that would have a material impact on the operations
of the Borrower and the Restricted Subsidiaries and (b) the hours worked by and
payments made to employees of the Borrower and the Restricted Subsidiaries have
not been in material violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters.
Section 3.15. Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
the Loan Parties, taken as a whole, at a fair valuation, will exceed their debts
and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of the Loan Parties, taken as a whole, will be
greater than the amount that will be required to pay the probable liability of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) the Loan
Parties, taken as a whole, 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 Loan Parties, taken as a whole, will not have
unreasonably small capital with which to conduct the business in which they are
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date. As used in this Section 3.15, the term "fair
value" means the amount at which the applicable assets would change hands
between a willing buyer and a willing seller within a reasonable time, each
having reasonable knowledge of the relevant facts, neither being under any
compulsion to act, with equity to both and "present fair saleable value" means
the amount that may be realized if the applicable company's aggregate assets are
sold with reasonable promptness in an arm's length transaction under present
conditions for the sale of a comparable business enterprises.
41
Section 3.16. Senior Indebtedness. The Obligations constitute "Senior
Debt" under and as defined in the Subordinated Debt Documents, this Agreement
constitutes and evidences a "Credit Facility" and the "Senior Credit Facility"
under and as defined in the Subordinated Debt Documents and the Administrative
Agent is the "Senior Agent" under and as defined in the Subordinated Debt
Documents.
Section 3.17. Margin Securities. Neither the Borrower nor any
Restricted Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations U or X of the Board of
Governors of the Federal Reserve System), and, except for the repurchases of the
Borrower's capital stock in accordance with the limitations in Section 5.09 and
Section 6.08, no part of the proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.
ARTICLE IV.
Conditions
----------
Section 4.01. Effective Date. The obligations of the Lenders to make
Loans and any agreement of the Issuing Bank to issue any Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):
(a) Execution and Delivery of This Agreement. The Administrative
Agent (or its counsel) shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii) written
evidence reasonably satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) Legal Opinions. The Administrative Agent shall have received
a written opinion (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of counsel for the Loan Parties covering such matters
relating to the Loan Parties, the Loan Documents or the Transactions as are
customary for financings of this type. The Borrower hereby requests such counsel
to deliver such opinions.
(c) Corporate Authorization Documents. The Administrative Agent
shall have received such documents and certificates as the Administrative Agent
or its counsel may reasonably request relating to the organization, existence
and good standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan Documents or the
Transactions as are customary for financings of this type, all in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.
(d) Closing Certificate. The Administrative Agent shall have
received a certificate, dated the Effective Date and signed by a Responsible
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
42
(e) Fees. The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Effective Date, including,
to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Loan Party hereunder or under any other
Loan Document.
(f) Personal Property Security Documents. The Administrative
Agent shall have received counterparts of the Security Agreement and Guaranty
Agreement signed on behalf of each applicable Loan Party, together with the
following:
(i) stock certificates representing all the outstanding
shares of capital stock of each Restricted Subsidiary owned by or on behalf of
any Loan Party as of the Effective Date (except that stock certificates
representing shares of stock of a Foreign Subsidiary may be limited to 65% of
the outstanding shares of stock of such Foreign Subsidiary), and stock powers
and instruments of transfer, endorsed in blank, with respect to such stock
certificates;
(ii) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create or
perfect the Liens intended to be created under the Security Documents;
(iii) the results of the search of the Uniform Commercial
Code (or equivalent) filings, tax Liens and judgment Liens made with respect to
the Loan Parties and any predecessor company identified pursuant to the Security
Agreement in each jurisdiction (A) in which a Loan Party is organized, (B) where
a Loan Party has its chief executive office or has had its chief executive
office within the last four months prior to the Effective Date and (C) in which
any Collateral is located; and copies of the financing statements (or other
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been released or,
simultaneously with the initial Loans hereunder, will be released; and
(iv) Subject to the terms of the Security Agreement, (A)
such other executed documentation as the Administrative Agent may deem necessary
to perfect and protect its Liens, including, without limitation, intellectual
property assignments for all intellectual property pledged as Collateral, and
(B) all other Collateral the possession of which is necessary to perfect the
Lien therein.
(g) Real Property Security Documents. Except as provided in
Section 5.10(e), the Administrative Agent shall have received counterparts of a
Mortgage with respect to each Mortgaged Property signed on behalf of the record
owner of such Mortgaged Property, together with:
(i) a final commitment or commitments for policies of title
insurance issued by a nationally recognized title insurance company, committing
to insure the Lien of each Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as permitted by
Section 6.02 or as are otherwise reasonably satisfactory to the Administrative
Agent, and containing such endorsements as the Administrative Agent may
reasonably request and copies of all the documentation listed as exceptions to
title thereon; and
(ii) a survey of each Mortgaged Property, certified by a
licensed surveyor meeting ALTA requirements in a form sufficient to allow the
issuer of the applicable title insurance policy to issue a lender's policy;
(h) Insurance. The Administrative Agent shall have received
evidence that the insurance required by Section 5.06 is in effect.
43
(i) Noteholder Consent; Other Consents and Approvals. The
holders of the Subordinated Debt shall have consented to the incurrence of the
Loan Obligations and the granting of the Liens in favor of the Administrative
Agent to secure all the Obligations as contemplated hereby and shall have agreed
that the Obligations constitute "Senior Debt" under and as defined in the
Subordinated Debt Documents. All other material third party consents and
approvals from any Governmental Authority or other Person necessary, or, in the
reasonable discretion of the Administrative Agent, advisable in connection with
the Transaction shall have been obtained.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and any agreement of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 10.02) at or prior to 3:00 p.m., Houston, Texas time, on April 7, 2006
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
Section 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and any agreement of the Issuing
Bank to issue, amend, renew or extend any Letter of Credit, is subject to
receipt of the request therefor in accordance herewith and to the satisfaction
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Loan Party set forth in the Loan Documents shall be true and
correct on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, in all
material respects with the same force and effect as if such representations and
warranties had been made on and as of such date except to the extent that such
representations and warranties relate specifically to another date.
(b) No Default. At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section 4.02.
Section 4.03. Term Loan Conditions; NBP Acquisition. The obligation
of each Term Lender to make the advance under the Term Commitment, any portion
of the proceeds of which will be used to finance the purchase price of the NBP
Acquisition, is subject to receipt of the prior request therefor in accordance
herewith and to the NBP Acquisition having been, or the Administrative Agent
shall have evidence satisfactory to it that substantially simultaneously with
the initial funding of such Term Loans, the NBP Acquisition will be consummated
in accordance with the Asset Purchase Agreement, without any amendment to or
waiver of any material terms or conditions of the Asset Purchase Agreement that
are material and adverse to the interest of the Lenders that have not been
approved by the Administrative Agent. After the closing of the NBP Acquisition,
the Borrower shall deliver to the Administrative Agent copies of all material
closing documents delivered under the Asset Purchase Agreement.
ARTICLE V.
Affirmative Covenants
---------------------
Until the Loan Obligations have been Fully Satisfied, the Borrower
covenants and agrees with the Lenders that:
44
Section 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent:
(a) Annual Audit. Within 120 days after the end of each fiscal
year of the Borrower, its audited consolidated and unaudited consolidating
balance sheet and related statements of operations, stockholders' equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP;
(b) Quarterly Financial Statements. Within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
its consolidated and consolidating balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) Compliance Certificate. Concurrently with any delivery of
financial statements under clause (a) or (b) above, a certificate in
substantially the form of Exhibit E hereto of a Financial Officer of the
Borrower (i) certifying as to whether a Default, which has not previously been
disclosed or which has not been cured, has occurred and, if such a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Article VII and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.04 which has
not already been disclosed and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate;
(d) Accountant's No Default Statement. Concurrently with any
delivery of financial statements under clause (a) above, a report of the
accounting firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial
statements of any Event of Default under Article VIII (which report may be
limited to the extent required by accounting rules or guidelines);
(e) Budget. Within 30 days after the end of each fiscal year of
the Borrower, a detailed consolidated budget for the then current fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for such fiscal year and
setting forth the material assumptions used for purposes of preparing such
budget);
(f) Public Reports. Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Restricted Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities exchange,
as the case may be; and
(g) Additional Information. Promptly following any request
therefor, such information regarding the Loan Parties' compliance with
Environmental Laws and the environmental condition of the Mortgaged Properties
and such other information regarding the operations, business affairs and
financial condition of the Borrower or any Restricted Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.
45
Section 5.02. Notices of Material Events. The Borrower will furnish
to the Administrative Agent prompt written notice of the following:
(a) Default. the occurrence of any Default;
(b) Notice of Proceedings. The filing or commencement of any
action, suit or proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Restricted Subsidiary that could
reasonably be expected to result in a Material Adverse Effect;
(c) ERISA Event. The occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have occurred, could reasonably be
expected to have a Material Adverse Effect;
(d) Material Adverse Effect. Any other development that results
in, or could reasonably be expected to result in, a Material Adverse Effect; and
(e) Casualty and Condemnation. Any casualty or other insured
damage to any material portion of any Collateral or the commencement of any
action or proceeding for the taking of any material portion of the Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
Section 5.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Restricted Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence; provided that the foregoing shall not prohibit any transactions
permitted under Section 6.03 or Section 6.05. The Borrower will, and will cause
each of its Restricted Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect all of its
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names unless the failure to preserve, renew and keep in
full force and effect such rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks or trade names could not reasonably be expected
to have a Material Adverse Effect; provided that the foregoing shall not
prohibit any transactions permitted under Section 6.05.
Section 5.04. Payment of Obligations. The Borrower will, and will
cause each of its Restricted Subsidiaries to, pay its Indebtedness (not
including for purposes of this Section 5.04, Indebtedness consisting of trade
payables which are subject to compliance with clause (u) of Section 6.01) and
other obligations, including Tax liabilities, before the same shall become more
than 30 days overdue, or if more than 30 days overdue, except where (a) (i) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (ii) the Borrower or such Restricted Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, and
(iii) such contest effectively suspends collection of the contested obligation
and the foreclosure of any Lien securing such obligation or (b) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect. For the avoidance of doubt, clause (f) of Article
VIII shall be given effect independent of the terms of this Section 5.04 such
that an Event of Default may occur under clause (f) of Article VIII as described
therein, even if the circumstances creating such Event of Default would not
result in a violation of this Section 5.04.
46
Section 5.05. Maintenance of Properties. The Borrower will, and will
cause each of its Restricted Subsidiaries to, keep and maintain all property in
good working order and condition, ordinary wear and tear and casualty and
condemnation excepted and except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.06. Insurance. The Borrower will, and will cause each of
its Restricted Subsidiaries to, maintain, with financially sound and reputable
insurance companies insurance in such amounts (with no greater risk retention)
and against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations; provided that the Borrower shall at no time permit assets
with an aggregate book value of more than $10,000,000 to be uninsured at any
time (including in such uninsured amount, the amount of any deductibles and self
insurance retentions). The Borrower will furnish to the Lenders, upon request of
the Administrative Agent (but not more frequently than once per fiscal year),
information in reasonable detail as to the insurance so maintained. Each general
liability insurance policy shall name the Administrative Agent as additional
insured. Each insurance policy covering Collateral shall name the Administrative
Agent as loss payee and shall provide that such policy will not be canceled or
materially changed without thirty (30) days (or ten (10) days in the event of a
payment default) prior written notice to the Administrative Agent.
Section 5.07. Books and Records; Inspection and Audit Rights. The
Borrower will, and will cause each of its Restricted Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
in order to permit the preparation of its financial statements in accordance
with GAAP. The Borrower will, and will cause each of its Restricted Subsidiaries
to, permit any representatives designated by the Administrative Agent or any
Lender (at each Lender's own expense), upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested; provided that (a) the Borrower shall reimburse the
Administrative Agent not more than once each fiscal year for visits,
inspections, examinations and discussions conducted under this Section 5.07 if
no Event of Default exists at the time thereof (and the Borrower shall reimburse
the Administrative Agent for all such visits, inspections, examinations and
discussions conducted when an Event of Default exists) and (b) the Borrower
shall have the opportunity to be present at any meeting with its independent
accountants.
Section 5.08. Compliance with Laws. The Borrower will, and will cause
each of its Restricted Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section 5.09. Use of Proceeds and Letters of Credit. The proceeds of
the Term Loans will be used only for: (a) the payment of the amounts payable
under the Asset Purchase Agreement as consideration for the NBP Acquisition and
(b) the refinancing of existing Indebtedness, including obligations outstanding
under the Subordinated Debt Documents. The proceeds of the Revolving Loans and
Swingline Loans may be used only: (a) for the payment of the fees and expenses
payable in connection with the Transactions, the NBP Acquisition and the
repayment of the Indebtedness, (b) to finance the working capital needs of the
Borrower, the Restricted Subsidiaries and to the extent otherwise permitted or
not prohibited hereby, Unrestricted Subsidiaries, and (c) for other general
corporate purposes of the Borrower and the Restricted Subsidiaries, including
financing Capital Expenditures and Investments (including the NBP Acquisition),
47
in each case permitted hereby. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations G, U and X. Letters of
Credit will be issued to support transactions entered into by the Borrower or a
Restricted Subsidiary in the ordinary course of business and, to the extent
permitted or not prohibited hereby, to support transactions entered into by an
Unrestricted Subsidiary in the ordinary course of business.
Section 5.10. Further Assurances; Collateral Matters. Subject to the
terms of the Security Agreement, the Borrower will, and will cause each
Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which the Administrative Agent may reasonably request, to
effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Loan Parties.
(a) Additional Restricted Subsidiaries. In furtherance of the
foregoing, if any additional Subsidiary is formed or acquired after the
Effective Date or any Unrestricted Subsidiary is designated as a Restricted
Subsidiary after the Effective Date, the Borrower will notify the Administrative
Agent and the Lenders thereof and (a) if such Subsidiary is a Domestic
Subsidiary and has not been designated as an Unrestricted Subsidiary, the
Borrower will cause such Restricted Subsidiary to become a party to the Guaranty
Agreement and Security Agreement promptly after such Restricted Subsidiary is
formed, acquired or designated and promptly take such actions to create and
perfect Liens on such Restricted Subsidiary's assets to secure the Obligations
as the Administrative Agent shall reasonably request and (b) if any Equity
Interest in any Restricted Subsidiary are acquired after the Effective Date by
or on behalf of any Loan Party or any Unrestricted Subsidiary is designated as a
Restricted Subsidiary after the Effective Date, the Borrower will cause the
Equity Interests of each such Subsidiary to be pledged pursuant to the Security
Agreement promptly after such Restricted Subsidiary is formed, acquired or
designated (except that, if such Restricted Subsidiary is a Foreign Subsidiary,
the Equity Interest in such Restricted Subsidiary to be pledged pursuant to the
Security Agreement shall be limited to 65% of the outstanding Equity Interests
of such Restricted Subsidiary).
(b) Creation, Perfection and Protection of Liens on Material Fee
Owned Property. In the event that the Borrower or any other Loan Party acquires
any Material Fee Owned Property after the Effective Date (whether directly or
through an acquisition permitted hereby), the Borrower agrees it shall or shall
cause the applicable Loan Party to promptly deliver to the Administrative Agent
counterparts of a Mortgage with respect to such Material Fee Owned Property
signed on behalf of the record owner of such Material Fee Owned Property,
together with each of the following, in each case, to the extent reasonably
required by the Administrative Agent:
(i) a commitment for a policy of title insurance issued by
a title insurance company reasonably acceptable to the Administrative Agent,
committing to insure the Lien of such Mortgage as a valid Lien on the Material
Fee Owned Property described therein, free of any other Liens except as
permitted by Section 6.02 or as are otherwise reasonably satisfactory to the
Administrative Agent, and containing such endorsements as the Administrative
Agent may reasonably request and copies of all the documentation listed as
exceptions to title thereon; and
(ii) if available or necessary to accurately describe the
Material Fee Owned Property for purposes of filing a Mortgage, a survey of the
Material Fee Owned Property, certified by a licensed surveyor meeting ALTA
requirements in a form sufficient to allow the issuer of the applicable title
insurance policy to issue a lender's policy.
48
(c) Creation, Perfection and Protection of Liens on Material
Leasehold Property. In the event that the Borrower or any Loan Party acquires
any Material Leasehold Property after the Effective Date (whether directly or
through an acquisition permitted hereby), the Borrower agrees it shall, or shall
cause the applicable Loan Party to use commercially reasonable efforts to
promptly obtain from the landlord of such Material Leasehold Property, a consent
to the grant by the applicable Loan Party of a Lien to the Administrative Agent
in the Loan Party's interest in the related leasehold estate in form and
substance reasonably satisfactory to the Administrative Agent (a "Landlord
Consent"). If a Landlord Consent is obtained with respect to any parcel of
Material Leasehold Property then the Borrower will, or will cause the applicable
Loan Party to deliver to the Administrative Agent counterparts of a Mortgage
with respect to such Material Leasehold Property signed on behalf of the record
owner of such Material Leasehold Property, together with, each of the following,
in each case, to the extent required by the Administrative Agent:
(i) a title report describing the state of title to the
Material Leasehold Property (which may be a commitment for a policy of title
insurance) prepared by a title insurance company reasonably acceptable to the
Administrative Agent, and copies of all the documentation listed as exceptions
to title thereon; and
(ii) if available or necessary to accurately describe the
Material Leasehold Property for purposes of filing a Mortgage, a survey of the
Material Leasehold Property, certified by a licensed surveyor meeting ALTA
requirements in a form sufficient to allow the issuer of the applicable title
insurance policy to issue a lender's policy.
(d) Title Insurance. Within ninety (90) days following delivery
of any Mortgage (other than a Mortgage encumbering a leasehold estate), Borrower
shall deliver or cause to be delivered to Administrative Agent a lender's title
insurance policies issued by title insurers reasonably satisfactory to
Administrative Agent (the "Mortgage Policies") in form and substance and in
amounts (not to exceed 100% of the purchase price) reasonably satisfactory to
Administrative Agent assuring Administrative Agent that such Mortgage is a valid
and enforceable first priority mortgage on the respective Mortgaged Property,
free and clear of all defects and encumbrances except as permitted by Section
6.02 or as are otherwise reasonably satisfactory to the Administrative Agent.
The Mortgage Policies shall be in form and substance reasonably satisfactory to
Administrative Agent and shall include an endorsement insuring against the
effect of any matter that Administrative Agent may reasonably request, and shall
provide for affirmative insurance and such reinsurance as Administrative Agent
may reasonably request.
(e) Post Closing Delivery of Real Property Security Documents.
To the extent not delivered on or prior to the Effective Date as a result of the
failure of commitments for policies of title insurance to be delivered or of
surveys to be available, the Administrative Agent shall, on or before May 31,
2006, received counterparts of a Mortgage with respect to each parcel of
Mortgaged Property owned as of the Effective Date but not covered by a Mortgage
as of the Effective Date, signed on behalf of the record owner of such Mortgaged
Property, together with:
(i) a commitment or commitments for policies of title
insurance issued by a title insurance company reasonably acceptable to the
Administrative Agent, committing to insure the Lien of each such Mortgage as a
valid first Lien on the Mortgaged Property described therein, free of any other
Liens except as permitted by Section 6.02 or as are otherwise reasonably
satisfactory to the Administrative Agent, and containing such endorsements as
the Administrative Agent may reasonably request and copies of all the
documentation listed as exceptions to title thereon; and
(ii) if available or necessary to accurately describe the
Mortgage Property for purpose of filing a Mortgage, a survey of each such parcel
of Mortgaged Property, certified by a licensed surveyor meeting ALTA
requirements in a form sufficient to allow the issuer of the applicable title
insurance policy to issue a lender's policy;
49
(f) Excessive Cost. Notwithstanding the provisions of clauses
(a) through (c) and (f) of this Section 5.10 or the terms of the Security
Agreement, the Administrative Agent shall not take a Lien (or perfect a Lien) in
an asset of a Loan Party if (A) the Borrower shall have requested in writing
that the Administrative not be granted or not perfect its Lien in such asset and
(B) the Administrative Agent determines in its reasonable discretion that the
cost of granting or perfecting a Lien on such asset (including any mortgage,
stamp, intangibles or other tax) is excessive in relation to the benefit to the
Lenders afforded by such Lien on such asset.
ARTICLE VI.
Negative Covenants
------------------
Until the Loan Obligations have been Fully Satisfied, the Borrower
covenants and agrees with the Lenders that:
Section 6.01. Indebtedness. The Borrower will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
(b) the Subordinated Debt;
(c) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and amendments, modifications, extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof except as otherwise permitted by this Section 6.01;
(d) Indebtedness among the Borrower and its Subsidiaries;
provided that, (i) all such Indebtedness of any Loan Party must be expressly
subordinated to the Obligations on terms and conditions reasonably satisfactory
to the Administrative Agent, it being understood that payments may be made
thereon unless an Event of Default has occurred and is continuing and (ii) any
Indebtedness owing to the Borrower or any Restricted Subsidiary by any
Subsidiary that is not a Loan Party (including any such Indebtedness outstanding
as of the Effective Date and any Indebtedness owing at the time a Subsidiary is
designated as an Unrestricted Subsidiary) shall be subject to compliance with
Section 6.04;
(e) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Restricted Subsidiary of Indebtedness of the Borrower or any other
Subsidiary; provided that Guarantees by the Borrower or any Restricted
Subsidiary of Indebtedness of any Subsidiary that is not a Loan Party (including
any such Guarantees outstanding as of the Effective Date and any Guarantees in
effect when a Subsidiary is designated as an Unrestricted Subsidiary) shall be
subject to compliance with Section 6.04;
(f) Indebtedness of the Borrower or any Restricted Subsidiary
incurred to finance the acquisition, construction or improvement of any assets
(including rolling stock), including Capital Lease Obligations and any such
Indebtedness assumed in connection with the acquisition of any assets or secured
by a Lien on any assets prior to the acquisition thereof, and amendments,
modifications, extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof except as
otherwise permitted by this Section 6.01; provided that (i) such Indebtedness is
incurred prior to or within 180 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (f) shall not exceed $5,000,000 at any
time outstanding;
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(g) Indebtedness arising in connection with Swap Agreements
permitted by Section 6.07; provided that Guarantees by the Borrower or any
Restricted Subsidiary of such Indebtedness of any subsidiary that is not a Loan
party shall be subject to compliance with Section 6.04;
(h) Indebtedness of any Person that becomes a Subsidiary after
the date hereof and amendments, modifications, extensions, renewals and
replacements thereof which do not increase the principal amount thereof (other
than by unpaid interest, fees, expenses and any prepayment premium of make whole
amount) except as otherwise permitted by this Section 6.01; provided that (i)
such Indebtedness exists at the time such Person becomes a Subsidiary and is not
created in contemplation of or in connection with such Person becoming a
Subsidiary, and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (h) plus the aggregate amount of the Indebtedness permitted by
clause (s) of this Section 6.01 shall not exceed $25,000,000 at any time
outstanding;
(i) obligations in respect of customs, surety, stay, appeal and
performance bonds, and performance and completion guarantees and similar
obligations incurred by the Borrower or any Restricted Subsidiary, in each case
in the ordinary course of business, consistent with past practice;
(j) to the extent constituting Indebtedness, contingent
obligations arising under indemnity agreements to title insurance companies to
cause such title insurers to issue title insurance policies in the ordinary
course of business with respect to the real property of the Borrower or any
Restricted Subsidiary;
(k) to the extent constituting Indebtedness, customary
indemnification and purchase price adjustments or similar obligations incurred
in connection with Investments and Dispositions otherwise permitted hereunder;
(l) to the extent constituting Indebtedness, unfunded pension
fund and other employee benefit plan obligations and liabilities to the extent
they are permitted to remain unfunded under applicable law;
(m) to the extent constituting Indebtedness, deferred
compensation payable to directors, officers, employees, members of management or
consultants of the Borrower and the Restricted Subsidiaries;
(n) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount at any time outstanding for all such Persons taken together not
to exceed $750,000;
(o) Indebtedness consisting of promissory notes issued by the
Borrower or any Restricted Subsidiary to future, present or former directors,
officers, members of management, employees or consultants of the Borrower or any
of its Subsidiaries or their respective estates, heirs, family members, spouses
or former spouses to finance the purchaser or redemption of Equity Interests of
the Borrower permitted by clause (e) of Section 6.08;
(p) cash management obligations and Indebtedness incurred by the
Borrower or any Restricted Subsidiary in respect of netting services, overdraft
protections and similar arrangements, in each case entered into in the ordinary
course of business in connection with cash management and deposit accounts and
not involving the borrowing of money;
(q) Indebtedness consisting of (i) the financing of insurance
premiums, provided that the aggregate principal amount of Indebtedness permitted
by this clause (q)(i) shall not exceed $4,000,000 at any time outstanding and
(ii) take-or-pay obligations of the Borrower or any Restricted Subsidiary
entered into in the ordinary course of business, provided that the aggregate
principal amount of Indebtedness permitted by this clause (q)(ii) shall not
51
exceed $2,000,000 at any time outstanding (for avoidance of doubt, the
obligations limited by this clause (q)(ii) shall not include obligations under
contracts for the acquisition of raw materials if there is no corresponding
obligation to make a payment in lieu of acquiring such raw materials);
(r) Indebtedness incurred by a Loan Party constituting
reimbursement obligations with respect to letters of credit (other than Letters
of Credit) or bank guarantees issued for the purposes described in Section
6.02(d), (e) and (k) or issued to secure trade payables entered into in the
ordinary course of business and the obligations arising under drafts accepted
and delivered in connection with a drawing thereunder; provided that (i) upon
the drawing of any such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence and (ii) the aggregate outstanding face amount of all such
letters of credit or bank guarantees does not exceed $1,000,000 at any time;
(s) obligations, contingent or otherwise, for the payment of
money under any noncompete, consulting or similar agreement entered into with
the seller of a Target or any other similar arrangements providing for the
deferred payment of the purchase price for an acquisition permitted hereby
provided that the aggregate principal amount of Indebtedness permitted by this
clause (s) plus the aggregate amount of the Indebtedness permitted by clause (h)
of this Section 6.01 shall not exceed $25,000,000 at any time outstanding;
(t) Indebtedness of the type described in clause (e) of the
definition thereof to the extent the related Lien is permitted under Section
6.02;
(u) accounts payable incurred in the ordinary course of business
which are not more than 90 days overdue, or if more than 90 days overdue, are
(i) being contested in good faith by appropriate proceedings, or (ii) do not
exceed $250,000 in the aggregate;
(v) other Indebtedness of the Borrower and the Subsidiary Loan
Parties provided that the aggregate principal amount of Indebtedness permitted
by this clause (v) shall not exceed $5,000,000 at any time outstanding; and
(w) all premiums (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest on
obligations described in clauses (a) through (v) above.
Section 6.02. Liens. The Borrower will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on
any asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents;
(b) Liens imposed by law for taxes, assessments and governmental
charges that are not overdue by more than 30 days or, if more than 30 days
overdue, (i) are being contested in compliance with Section 5.04 or (ii) do not
exceed in the aggregate outstanding at any time $250,000;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or, if more than 30 days overdue, (i) are being contested in
compliance with Section 5.04 or (ii) do not exceed in the aggregate outstanding
at any time $250,000;
52
(d) pledges and deposits made in the ordinary course of business
(i) in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations or (ii) to secure letters of credit or bank
guarantees posted to support payment of items set forth in the foregoing clause
(i); provided that such letters of credit and bank guarantees are issued in
compliance with clause (r) of Section 6.01;
(e) Liens securing the performance of, or granted in lieu of,
contracts with trade creditors, government contracts, leases, bids, statutory
obligations, customs, surety, stay and appeal bonds, performance bonds,
performance and completion guarantees and other obligations of a like nature, in
each case entered into in the ordinary course of business and deposits securing
letters of credit or bank guarantees posted to support payment of the items set
forth in this clause (e); provided that (i) such letters of credit (other than
the Letters of Credit) and bank guarantees are issued in compliance with clause
(r) of Section 6.01; and (ii) the Liens permitted by this clause (e) shall at no
time encumber any assets other than (A) the amount of cash or marketable
investments required to be pledged thereunder and (B) with respect to customs
and surety bonds, performance bonds, and performance and completion guarantees,
the specific assets in respect to which such bonds or guarantees are issued and
which are customarily encumbered under similar bond and guarantee transactions;
(f) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (j) of Article VIII;
(g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and other minor
irregularities in title (including leasehold title), in each case, that do not
materially and adversely interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(h) Liens arising from filing UCC financing statements regarding
leases and consignment arrangements permitted or not prohibited by any of the
Loan Documents and Liens securing liabilities in respect of indemnification
obligations thereunder as long as each such Lien only encumbers the assets that
are the subject of the related lease (or contained in such leasehold) or
consignment;
(i) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted or not prohibited by any
of the Loan Documents and any leases, subleases, licenses or sublicenses granted
in the ordinary course of business not interfering in any material respect with
the business of any Loan Party;
(j) the rights reserved or vested in any Person by the terms of
any lease, license, franchise, grant or permit held by any Loan Party or by a
statutory provision to terminate any such lease, license, franchise, grant or
permit or to require periodic payments as a condition to the continuance
thereof;
(k) Liens granted in the ordinary course of business to secure:
(i) liabilities for premiums or reimbursement obligations to insurance carriers,
(ii) liabilities in respect of indemnification obligations under leases or other
contractual arrangements or (iii) letters of credit or bank guarantees posted to
support payment of items set forth in this clause (k); provided that (i) such
letters of credit and bank guarantees are issued in compliance with clause (r)
of Section 6.01 and (ii) the Liens permitted by this clause (k) shall at no time
encumber any assets other than the amount of cash or marketable investments
required to be pledged thereunder;
53
(l) Liens (i) of a collection bank arising under Section 4-210
of the Uniform Commercial Code on items in the course of collection, (ii) in
favor of a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) and (iii) arising in connection with pooled
deposit or sweep accounts of the Borrower or any Restricted Subsidiary and
consisting of the right to apply the funds held therein to satisfy overdraft
obligations incurred in the ordinary course of business of such Person, in each
case, which are within the general parameters customary in the banking industry;
(m) Liens in favor of a commodity or security intermediary who
hold a commodity or, as applicable, a security account on behalf of the Borrower
or a Restricted Subsidiary provided such Lien encumbers only the related account
and the property held therein;
(n) any Lien on any asset of the Borrower or any Restricted
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (i) such Lien shall not apply to any other property or asset of the
Borrower or any Restricted Subsidiary (other than the proceeds and products
thereof and accessions thereto, except that individual financings provided by a
Person or its Affiliates may be cross collateralized to other financings
provided by such Person or its Affiliates) and (ii) such Lien shall secure only
those obligations which it secures on the Effective Date and amendments,
modifications, extensions, renewals and replacements thereof (which, if such
obligations constitute Indebtedness, are permitted by Section 6.01);
(o) any Lien existing on any equipment (including rolling
stock), fixtures or real property or any assets subject to the Indebtedness
permitted under clause (f) of Section 6.01, in each case, prior to the
acquisition thereof by the Borrower or any Restricted Subsidiary or existing on
any such equipment (including rolling stock), fixtures or real property of any
Person that becomes a Restricted Subsidiary after the date hereof prior to the
time such Person becomes a Restricted Subsidiary; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition or such
Person becoming a Restricted Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other assets of the Borrower or any Restricted Subsidiary
(other than the proceeds or products thereof and after-acquired property
subjected to a Lien pursuant to the terms existing at the time of such
acquisition (it being understood that such requirement shall not be permitted to
apply to any property to which such requirement would not have applied but for
such acquisition) and except that individual financings provided by a Person or
its Affiliates may be cross collateralized to other financings provided by such
Person or its Affiliates); and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be and any amendments,
modifications, extensions, renewals or replacements thereof and if such
obligations (or as applicable, any amendments, modifications, extensions,
renewals or replacements thereof) are Indebtedness, such Indebtedness is
otherwise permitted by Section 6.01;
(p) Liens on specific assets (including rolling stock) acquired,
constructed or improved by the Borrower or any Restricted Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by clause (f) of
Section 6.01, (ii) such security interests and the Indebtedness secured thereby
are incurred prior to or within 180 days after such acquisition or the
completion of such construction or improvement and (iii) such security interests
shall not apply to any other assets of the Borrower or any Subsidiary, except
that individual financings provided by a Person or its Affiliates may be cross
collateralized to other financings provided by such Person or its Affiliates;
(q) Liens in favor of customs and revenue authorities arising as
a matter of law in the ordinary course of business to secure payment of customs
duties that are not overdue by more than 30 days or, if more than 30 days
overdue, (i) are being contested in compliance with Section 5.04 or (ii) do not
exceed $250,000 in the aggregate outstanding at any time;
(r) Liens (i) (A) on advances of cash or Permitted Investments
in favor of the seller of any property to be acquired in an Investment permitted
pursuant to Section 6.04 to be applied against the purchase price for such
Investment, and (B) consisting of an agreement to dispose of any property in a
Disposition permitted under Section 6.05, in each case, solely to the extent
such Investment or Disposition, as the case may be, would have been permitted
and (ii) on cash earnest money deposits made by the Borrower or any Restricted
Subsidiary in connection with any letter of intent or purchase agreement
permitted hereunder;
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(s) Liens in favor of the Borrower or any Restricted Subsidiary
securing Indebtedness permitted under Section 6.01(d) or other obligations owed
to the Borrower or a Restricted Subsidiary; provided that any such Liens
encumbering any Collateral shall be subordinated to the Liens of the
Administrative Agent on terms and conditions reasonably satisfactory to the
Administrative Agent;
(t) Liens that are contractual rights of set-off relating to
purchase orders and other similar agreements entered into in the ordinary course
of business;
(u) Liens representing the interest of a purchaser of goods sold
by the Borrower or any of its Restricted Subsidiaries in the ordinary course of
business under conditional sale, title retention, consignment or similar
arrangements; provided that such Liens arise only under the applicable
conditional sale, title retention, consignment or similar arrangements and such
Liens only encumber the good so sold thereunder;
(v) Liens on property of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary permitted under clause (n) of Section
6.01; and
(w) other Liens securing Indebtedness or other obligations in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
provided that the aggregate book value of all assets encumbered by all the Liens
permitted under this clause (w) shall not exceed $5,000,000, with the book value
of an asset determined at the time of the granting of the Lien therein.
Section 6.03. Fundamental Changes. The Borrower will not, nor will it
permit any Restricted Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Event of Default shall have occurred and be continuing:
(a) any Subsidiary may merge with the Borrower in a transaction in which the
Borrower is the surviving corporation, (b) any Restricted Subsidiary may merge
with any Subsidiary in a transaction in which the surviving entity is a
Subsidiary and if any party to such merger is a Subsidiary Loan Party, is a
Subsidiary Loan Party, (c) any Person may merge into the Borrower in an
Investment permitted by Section 6.04 in which the Borrower is the surviving
corporation, (d) any Person may merge with a Restricted Subsidiary in an
Investment permitted by Section 6.04 in which the surviving entity is a
Subsidiary and if any party to such merger is a Subsidiary Loan Party, is a
Subsidiary Loan Party; (e) any Subsidiary (other than a Subsidiary Loan Party)
may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; and (f) in connection with the
Disposition of a Subsidiary or its assets permitted by Section 6.05, a
Subsidiary may merge with or into any other Person. The Borrower will not, and
will not permit any of its Subsidiaries to, engage to any material extent in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto.
Section 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests in or evidences of indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit or
all or substantially all of the assets of a division or branch of any Person of
any Person (any one of the actions described in the foregoing provisions of this
Section 6.04, herein an "Investment"), except:
55
(a) the NBP Acquisition;
(b) cash and Investments that were Permitted Investments when
such Investments were made;
(c) Investments existing on the date hereof and set forth on
Schedule 6.04 and any modification, replacement, renewal or extension thereof;
provided that the amount of the original Investment is not increased except by
the terms of such investment or as otherwise permitted by this Section 6.04;
(d) Investments among the Borrower and its Subsidiaries;
provided that the aggregate amount of Investments by Loan Parties in or for the
benefit of Subsidiaries that are not Loan Parties (including any such
Investments described on Schedule 6.04 and any such Investments outstanding at a
time when a Subsidiary is designated as an Unrestricted Subsidiary in accordance
with the definition thereof) shall not exceed $2,000,000 at any time
outstanding;
(e) Guarantees constituting Indebtedness permitted by clauses
(e) and (v) of Section 6.01; provided that the aggregate principal amount of
Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any
Loan Party shall be subject to the limitation set forth in clause (d) above;
(f) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with any
Person, in each case in the ordinary course of business;
(g) notes and other non-cash consideration received as part of
the purchase price of assets disposed of pursuant to Section 6.05;
(h) extension of trade credit in the ordinary course of
business;
(i) Investments arising in connection with the Swap Agreements
permitted by Section 6.07; provided that the aggregate amount of Investments by
Loan Parties in or for the benefit of Subsidiaries that are not Loan Parties
shall be subject to the limitation set forth in clause (d) above;
(j) loans and advances to officers, directors, employees,
members of management or consultants of the Borrower and the Restricted
Subsidiaries made (i) in the ordinary course of business for travel and
entertainment expenses, relocation costs and similar purposes up to a maximum
for all such loans and advances of $1,500,000 in the aggregate at any one time
outstanding and (ii) in connection with such Person's purchase of Equity
Interests of the Borrower in an aggregate amount not to exceed $1,500,000 for
all such loans and advances in the aggregate at any one time outstanding;
(k) Route Swaps consummated in compliance with Section 6.05;
(l) Borrower or a Restricted Subsidiary may purchase, hold or
acquire (including pursuant to a merger) not less than 90% of the Equity
Interests in a Person and may purchase or otherwise acquire (in one transaction
or a series of transactions) all or substantially all of the assets of any other
Person or all or substantially all of the assets of a division or branch of such
Person, if, with respect to each such acquisition:
56
(i) Default. No Default exists or would result therefrom;
(ii) Purchase Price Limitation. If the Pro Forma Leverage
Ratio is more than 2.00 to 1.00, then (A) the Purchase Price for the acquisition
in question does not exceed $7,000,000 and (B) the sum of the following does not
exceed $20,000,000: (1) the Purchase Price for the acquisition in question plus
(2) an amount equal to the total sum of all Purchase Prices paid for all
acquisition (other than the acquisition in question) which were consummated (x)
in the same fiscal year as the acquisition in question and (y) when the Pro
Forma Leverage Ratio for such acquisition was greater than 2.00 to 1.00;
(iii) Delivery and Notice Requirements. Borrower shall
provide to Administrative Agent, prior to the consummation of the acquisition,
the following: (A) notice of the acquisition, (B) the most recent financial
statements of the Target that Borrower has available, (C) copies of the
applicable purchase agreement and copies of such other documentation and
information relating to the Target and the acquisition as Administrative Agent
may reasonably request, (D) projected income and cash flow statements for the
Borrower for the period through the Term Loan Maturity Date, prepared on a basis
acceptable to the Administrative Agent, giving pro forma effect to acquisition
and any Indebtedness incurred in connection therewith and (E) a certificate
signed by a Financial Officer of the Borrower certifying: (1) that the Borrower
shall be in compliance with the covenants contained in Article VII on a pro
forma basis for the four (4) fiscal quarter period then most recently ending and
on a projected basis through the Term Loan Maturity Date (assuming, for purposes
of such projections through the Term Loan Maturity Date, the consummation of the
acquisition in question, that the incurrence or assumption of any Indebtedness
in connection therewith occurred on the first day of such period and to the
extent such Indebtedness bears interest at a floating rate, using the rate in
effect at the time of calculation for the entire period of calculation), (2)
that after giving effect to the acquisition in question, all representations and
warranties contained in the Loan Documents will be true and correct on and as of
the date of the closing of the acquisition in all material respects with the
same force and effect as if such representations and warranties had been made on
and as of such date, except to the extent that such representations and
warranties relate specifically to another date; (3) that no Default exists or
will result for the acquisition; and (4) to the Borrower's calculation of its
compliance with clause (ii) of this Section;
(iv) U.S. and Canadian Acquisitions. The Target is (A)
organized under the laws of a state in the United States of America or, if the
acquisition is an acquisition of assets by Borrower or a Domestic Subsidiary,
organized under the laws of a state in the United States of America or under the
laws of a province of Canada and (B) involved in the same general type of
business activities as the Borrower and the Restricted Subsidiaries;
(v) No Contested Acquisitions. The proposed acquisition
shall have been approved by the Board of Directors of the Target (or similar
governing body if the Target is not a corporation) and no Person shall have
announced that it will oppose the acquisition; and
(vi) Structure. If the proposed acquisition is an
acquisition of the stock or other Equity Interest issued by a Target, the
acquisition will be structured so that the Target will become a Restricted
Subsidiary or will be merged with or into the Borrower or a Restricted
Subsidiary who is at least 90% owned by the Borrower. If the proposed
acquisition is an acquisition of assets, the acquisition will be structured so
that the Borrower or a Restricted Subsidiary shall acquire the assets either
directly or through a merger;
(m) Investments consisting of Indebtedness, Liens, fundamental
changes, Dispositions, Swap Obligations and Restricted Payments permitted under
Sections 6.01, 6.02, 6.03, 6.05, 6.07 and 6.08, respectively;
(n) advances of payroll payments to employees in the ordinary
course of business;
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(o) Guarantees by a Loan Party of leases of the Borrower and
Subsidiaries (other than Capital Lease Obligations) entered into in the ordinary
course of business; provided that the aggregate amount of Investments by Loan
Parties in Subsidiaries that are not Loan Parties is subject at all time to the
limitations set forth in clause (d) of this Section 6.04;
(p) Investments in the ordinary course consisting of
endorsements for collection or deposit;
(q) An Investment, or series of related Investments, which has
been disclosed by the Borrower to the Administrative Agent as long as: (i) the
initial Investment is made on or before April 7, 2008 and (ii) the aggregate
amount of such Investment permitted by this clause (q) shall not exceed
$12,000,000 at any time outstanding;
(r) the Borrower may serve as an account party under a letter of
credit or provide cash collateral to support obligations of Insurance Company of
Colorado, Inc. as long as such support is required by, and is in the amount
required by, applicable insurance regulations; and
(s) in addition to the Investments otherwise permitted by this
Section 6.04, the Borrower and the Restricted Subsidiaries may make Investments
in an aggregate amount not to exceed $3,500,000; provided that as of the date of
any such Investment and after giving effect thereto, (i) no Default shall exists
or result therefrom; and (ii) no Investment made under this clause (s) shall
increase the aggregate amount of Investments permitted by clause (d) of this
Section 6.04.
Section 6.05. Asset Sales. The Borrower will not, and will not permit
any of the Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it (each such sale,
transfer, lease or other disposition herein a "Disposition"), nor will the
Borrower permit any of the Restricted Subsidiaries to issue any additional
Equity Interest in such Subsidiary except:
(a) Dispositions of inventory, obsolete, used, worn-out or
surplus assets and Permitted Investments in the ordinary course of business;
(b) Dispositions by any Restricted Subsidiary of all or
substantially all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or to any Restricted Subsidiary; provided that (i) if the transferor in
such a transaction is a Subsidiary Loan Party, then the transferee must either
be the Borrower or a Subsidiary Loan Party or (ii) to the extent constituting an
Investment, such Investment must be an Investment permitted by Section 6.04;
(c) Dispositions resulting from casualty losses and condemnation
proceedings;
(d) transfers to un-affiliated third parties of a list of
customers who provide raw materials to the Loan Parties and of the associated
vehicles and containers utilized to collect and store such materials provided
that such transfers are made in connection with a corresponding purchase by the
Borrower or a Restricted Subsidiary from the applicable third party of similar
assets (any such transaction a "Route Swap") and provided that if Leverage Ratio
as of the end of the most recent fiscal quarter is more than 2.00 to 1.00, then
the net affect of such Route Swap shall not require the Borrower or applicable
Restricted Subsidiary to make a cash payment of more than $1,000,000 to the
counterparty in connection with such Route Swap;
(e) Dispositions in connection with any sale-leaseback or
similar transaction; provided that the fair market value of all property so
disposed of shall not exceed $5,000,000 from and after the Effective Date;
58
(f) Dispositions permitted by Sections 6.03 (so long as any
Disposition pursuant to a liquidation permitted pursuant to Section 6.03 shall
be done on a pro rata basis among the equity holders of the applicable
Subsidiary), 6.04, 6.06, 6.07 and 6.08 and Liens permitted by Section 6.02;
(g) the issuance of Equity Interests by a Restricted Subsidiary
to the Borrower or another Restricted Subsidiary (and each other equity holder
on a pro rata basis) to the extent constituting an Investment permitted by
Section 6.04 and subject to compliance with the terms of Section 4.8 of the
Security Agreement which require the pledge thereof as therein specified;
(h) Dispositions of accounts receivable in connection with the
collection or compromise thereof in the ordinary course of business, subject,
when an Event of Default exists, to compliance with the terms of Section 4.1 of
the Security Agreement;
(i) Dispositions in the ordinary course of business consisting
of the abandonment of intellectual property which, in the reasonable good faith
determination of the Borrower, is not material to the conduct of the business of
the Borrower and the Subsidiaries;
(j) Dispositions of residential real property and related assets
in the ordinary course of business in connection with relocation activities for
directors, officers, members of management, employees or consultants of the Loan
Parties;
(k) voluntary terminations of Swap Agreements;
(l) Dispositions set forth on Schedule 6.05;
(m) Dispositions of Unrestricted Subsidiaries;
(n) Dispositions of the Investments entered into under the
permissions of Section 6.04(q); and
(o) Dispositions of assets that are not permitted by any other
clause of this Section 6.05; provided that: (i) the aggregate book value of all
assets disposed of in reliance upon this clause (o) shall not exceed $2,500,000
during any fiscal year of the Borrower; and (ii) the Net Proceeds of such
disposition shall be delivered to the Administrative Agent for repayment of the
Term Loans in compliance with Section 2.11(c);
provided that all Dispositions permitted hereby (other than those permitted by
clauses (b), (c), (f), (g), (i) and (m) above) shall be made for fair value and
all Dispositions permitted hereby (other than those permitted by clauses (a),
(b), (c), (d), (f), (g), (h), (i), (k) and (m) above) shall be made for at least
75% cash consideration.
Section 6.06. Sale and Leaseback Transactions. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred, except for any such sale and leaseback of
any assets if (a) the sale is made under the permissions of clause (e) of
Section 6.05, (b) the sale and leaseback is consummated within 180 days after
the Borrower or such Subsidiary acquires or completes the construction of such
asset and (c) any Indebtedness incurred under the leaseback is permitted by
clauses (f) and (v) of Section 6.01.
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Section 6.07. Swap Agreements. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, enter into any Swap Agreement,
except (a) Swap Agreements entered into to hedge or mitigate risks to which the
Borrower or any Restricted Subsidiary has actual exposure (other than those in
respect of Equity Interests of the Borrower or any of its Restricted
Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or Investment of the Borrower or any Restricted
Subsidiary.
Section 6.08. Restricted Payments. The Borrower will not, nor will it
permit any Restricted Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except: (a) Borrower and its
Restricted Subsidiaries may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its stock of the same
class; (b) Restricted Subsidiaries may declare and pay dividends ratably with
respect to their capital stock; (c) to the extent constituting Restricted
Payments, the Borrower and its Restricted Subsidiaries may enter into
transactions expressly permitted by Sections 6.03, 6.05 or 6.09; (d) repurchases
by Borrower of partial interests in its common stock for nominal amounts which
are required to be repurchased in connection with the exercise of stock options
or warrants to permit the issuance of only whole shares of common stock; (e) the
Borrower may pay for the repurchase, retirement or other acquisition or
retirement for value of Equity Interests of the Borrower held by any future,
present or former director, officer, member of management, employee or
consultant of the Borrower or any of its Subsidiaries (or the estate, heirs,
family members, spouse or former spouse of any of the foregoing); provided that
(i) at the time of any such repurchase, retirement or other acquisition no
Default exists or would result, (ii) the aggregate amount of Restricted Payments
made under this clause (e) in any fiscal year does not exceed the sum of: (i)
$1,000,000 (the "Yearly Limit"); plus (ii) the portion of the Yearly Limit from
each of the immediately preceding two fiscal years (not including any fiscal
year ending prior to the Effective Date) which was not expended by Borrower for
Restricted Payments in such fiscal years (the "Carryover Amount" and in
calculating the Carryover Amount for any fiscal year, the Yearly Limit
applicable to the previous fiscal years shall be deemed to have been utilized
first by any Restricted Payments made under this clause (e) in such fiscal year)
plus (iii) an amount equal to the cash proceeds from the sale of Equity
Interests to directors, officers, members of management, employees or
consultants of the Borrower or of its Subsidiaries (or the estate, heirs, family
members, spouse or former spouse of any of the foregoing) in such fiscal year;
(f) the repurchase of Equity Interests of the Borrower that occurs upon the
cashless exercise of stock options or warrants as a result of the Borrower
accepting such options or warrants as satisfaction of the exercise price of such
Equity Interests; and (g) the Borrower may make additional Restricted Payments
if no Default exists or would result therefrom and either:
(A) the Pro Forma Leverage Ratio is less than or equal to
2.50 to 1.00 or
(B) if the Pro Forma Leverage Ratio is more than 2.50 to
1.00, then the aggregate amount of Restricted Payments made under the
permissions of this clause (g) in respect of a fiscal year (including the
Restricted Payment in question) shall not at any time exceed 50% of the
Consolidated Net Income of the Borrower and its Restricted Subsidiaries for such
fiscal year.
Section 6.09. Transactions with Affiliates. The Borrower will not,
nor will it permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions in the ordinary course of business
that are at prices and on terms and conditions not less favorable to the
Borrower or such Restricted Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among the Loan
Parties not involving any other Affiliate, (c) any Restricted Payment permitted
by Section 6.08, (d) the payment of reasonable and customary fees and expense
60
payable to directors of Borrower and the other Restricted Subsidiaries and the
provision of customary indemnification to directors, officers, employees,
members of management and consultants of the Borrower and the Subsidiaries, (e)
sales or issuances of Equity Interests to Affiliates of the Borrower which are
otherwise permitted or not restricted by the Loan Documents, (f) loans and other
transactions by Borrower and the Restricted Subsidiaries to the extent permitted
under this Article VI; and (g) employment and severance arrangements between the
Borrower and any Restricted Subsidiary and their directors, officers, employees,
members of management and consultants in the ordinary course of business.
Section 6.10. Restrictive Agreements. The Borrower will not, nor will
it permit any Restricted Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Restricted Subsidiary to create, incur or permit to exist any Lien upon any of
its property or assets in favor of the Administrative Agent for the benefit of
the Secured Parties securing any of the Obligations, or (b) the ability of any
Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee the Obligations or
any part thereof; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document or
Subordinated Debt Document, (ii) the foregoing shall not apply to restrictions
and conditions existing on the date hereof identified on Schedule 6.10 (but
shall apply to any extension or renewal of, refinancings of or any amendment or
modification in each case expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to Dispositions permitted by Section
6.05 pending such Dispositions, provided such restrictions and conditions apply
only to the Subsidiary or other asset that is to be sold, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof
(including the granting of any Lien) (vi) the foregoing shall not apply if such
restrictions and conditions were binding on a Restricted Subsidiary at the time
such Restricted Subsidiary first becomes a Restricted Subsidiary, so long as
such contractual obligations were not entered into solely in contemplation of
such Person becoming a Restricted Subsidiary, and (vii) the foregoing shall not
apply to customary provisions in joint venture agreements and other similar
agreements applicable to joint ventures permitted under Section 6.04 and
applicable solely to such joint ventures.
Section 6.11. Amendment of Material Documents. The Borrower will, nor
will they permit any Restricted Subsidiary to, amend, modify or waive any of its
rights under the following documents in any manner material and adverse to the
interest of the Lenders that have not been approved by the Administrative Agent:
(a) its certificate of incorporation, by-laws or other organizational documents
or (b) the Asset Purchase Agreement. Borrower will not and will not permit any
Restricted Subsidiaries to change or amend the terms of the Subordinated Debt
Documents, if the effect of such amendment is to: (a) increase the interest rate
on the Subordinated Debt; (b) shorten the time of payments of principal or
interest due under the Subordinated Debt Documents; (c) change any event of
default or any covenant to a materially more onerous or restrictive provision;
(d) change the subordination provisions thereof (or the subordination terms of
any guaranty thereof); (e) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holders of the Subordinated Debt in a manner
materially adverse to Administrative Agent or any Lender as senior creditors or
the interests of the Lenders under this Agreement or any other Loan Document in
any respect; or (f) in any manner amend any term of any Subordinated Debt
Document relating to the prohibition of the creation or assumption of any Lien
upon the properties or assets of Borrower or any Restricted Subsidiary or
relating to the prohibition of creation, existence or effectiveness of any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to (i) pay dividends or make any other distribution; (ii) subject to
subordination provisions, pay any Indebtedness owed to Borrower or any
Subsidiary; (iii) make loans or advances to Borrower or any Subsidiary; or (iv)
transfer any of its property or assets to Borrower or any Subsidiary.
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Section 6.12. Change in Fiscal Year. Borrower will not change the
manner in which either the last day of its fiscal year or the last days of the
first three fiscal quarters of its fiscal year is calculated.
ARTICLE VII.
Financial Covenants
-------------------
Until the Loan Obligations have been Fully Satisfied, the Borrower
covenants and agrees with the Lenders that:
Section 7.01. Fixed Charge Coverage. As of the last day of each
fiscal quarter, the Borrower shall not permit the Fixed Charge Coverage Ratio to
be less than 1.25 to 1.00.
Section 7.02. Leverage Ratio. As of the last day of each fiscal
quarter, the Borrower shall not permit the Leverage Ratio to exceed 3.00 to
1.00.
ARTICLE VIII.
Events of Default
-----------------
Section 8.01. Events of Default; Remedies. If any of the following
events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise; or the Borrower
shall fail to pay any reimbursement obligation in respect of any LC Disbursement
when and as the same shall become due and payable, and such failure with respect
to such reimbursement obligations shall continue unremedied for a period of
three days;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation, warranty or certification made or deemed
made by or on behalf of the Borrower or any Restricted Subsidiary in or in
connection with any Loan Document, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with any Loan
Document, shall prove to have been incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.02(a) or in Article VI or in
Article VII of this Agreement;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower;
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(f) the Borrower or any Restricted Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable beyond any applicable grace period or any event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits, after giving effect to any applicable grace
period, the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (f) shall not apply
to secured Indebtedness that becomes due as a result of the Disposition
(including as a result of a casualty or condemnation event) of the property or
assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Restricted Subsidiary or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Restricted Subsidiary or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed, undischarged or unbonded for 60 days or an
order or decree approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Restricted Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (g) of this Article VII, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, or (v) make a general assignment for the benefit of creditors;
(i) the Borrower or any Restricted Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against the Borrower,
any Restricted Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during which execution is
available to the judgment creditor and shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to levy upon any assets of
the Borrower or any Restricted Subsidiary to enforce any such judgment;
(k) an ERISA Event shall have occurred that could reasonably be
expected to result in a Material Adverse Effect;
(l) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted in writing by any Loan Party not to be,
a valid and perfected Lien on any Collateral, except (i) as a result of the
Disposition of the applicable Collateral in a transaction permitted under the
Loan Documents or (ii) as a result of the Administrative Agent's failure to (A)
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Security Documents or (B) file Uniform
Commercial Code continuation statements or (iii) as to Collateral consisting of
real property, to the extent such losses are covered by a Lender's title
insurance policy;
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(m) any of the Subsidiary Guaranty, the Security Agreement or
any Mortgage shall for any reason cease to be in full force and effect and
valid, binding and enforceable in accordance with its terms after its date of
execution, or the Borrower or any other Loan Party shall so state in writing; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest, notice of intent
to accelerate, notice of acceleration or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (g) or (h) of this Section, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by the
Borrower. In addition, if any Event of Default shall occur and be continuing,
the Administrative Agent may (and if directed by the Required Lenders, shall)
foreclose or otherwise enforce any Lien granted to the Administrative Agent, for
the benefit of the Secured Parties, to secure payment and performance of the
Obligations in accordance with the terms of the Loan Documents and exercise any
and all rights and remedies afforded by the laws of the State of Texas or any
other jurisdiction, by any of the Loan Documents, by equity, or otherwise.
Section 8.02. Performance by the Administrative Agent. If any Loan
Party shall fail to perform any covenant or agreement in accordance with the
terms of the Loan Documents which constitutes an Event of Default, the
Administrative Agent may, at the direction of the Required Lenders, perform or
attempt to perform such covenant or agreement on behalf of the applicable Loan
Party. In such event, the Borrower shall, at the request of the Administrative
Agent promptly pay any amount expended by the Administrative Agent or the
Lenders in connection with such performance or attempted performance to the
Administrative Agent, together with interest thereon at the interest rate
provided for in Section 2.13(c) from and including the date of such expenditure
to but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Administrative Agent nor any
Lender shall have any liability or responsibility for the performance of any
obligation of any Loan Party under any Loan Document.
ARTICLE IX.
The Administrative Agent
------------------------
Section 9.01. Appointment. Each of the Lenders and the Issuing Bank
hereby irrevocably appoints JPMorgan Chase Bank, N.A. as agent on its behalf,
and on behalf of each of its Affiliates who are owed Obligations (each such
Affiliate by acceptance of the benefits of the Loan Documents hereby ratifying
such appointment) and authorizes the Administrative Agent to take such actions
on its behalf and on behalf of such Affiliates and to exercise such powers as
are delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
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Section 9.02. Rights as a Lender. The Person serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent, and such Person and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.
Section 9.03. Limitation of Duties and Immunities. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
Person serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall not be deemed
not to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
Section 9.04. Reliance on Third Parties. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Section 9.05. Sub-Agents. The Administrative Agent may perform any
and all its duties and exercise its rights and powers by or through any one or
more sub-agents appointed by the Administrative Agent. The Administrative Agent
and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of this Article IX shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.
Section 9.06. Successor Agent. Subject to the appointment and
acceptance of a successor the Administrative Agent as provided in this
paragraph, the Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the
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Required Lenders shall have the right to appoint a successor, subject to the
consent of the Borrower (which consent shall not be unreasonably withheld);
provided that the Borrower's consent shall not be required if an Event of
Default exists. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank, subject to the consent of the
Borrower (which consent shall not be unreasonably withheld); provided that the
Borrower's consent shall not be required if an Event of Default exists. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article IX and Section 10.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
Section 9.07. Independent Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
Section 9.08. Other Agents. Harris N.A. has been designated as a
co-lead arranger in recognition of the level of its Commitments. Harris N.A. is
not an agent for the Lenders and does not have any obligation hereunder other
than those existing in its capacity as a Lender. Without limiting the foregoing,
Harris N.A. shall not have or be deemed to have any fiduciary relationship with
or duty to any Lender.
Section 9.09. Powers and Immunities of Issuing Bank. Neither the
Issuing Bank nor any of its Related Parties shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
any Loan Document except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the preceding sentence, the
Issuing Bank (a) shall have no duties or responsibilities except those expressly
set forth in the Loan Documents, and shall not by reason of any Loan Document be
a trustee or fiduciary for any Lender or for the Administrative Agent, (b) shall
not be required to initiate any litigation or collection proceedings under any
Loan Document, (c) shall not be responsible to any Lender or the Administrative
Agent for any recitals, statements, representations, or warranties contained in
any Loan Document, or any certificate or other documentation referred to or
provided for in, or received by any of them under, any Loan Document, or for the
value, validity, effectiveness, enforceability, or sufficiency of any Loan
Document or any other documentation referred to or provided for therein or for
any failure by any Person to perform any of its obligations thereunder, (d) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants, and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants, or experts, and (e) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
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genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by any Loan Document, the Issuing Bank shall in all cases
be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and the Administrative
Agent; provided, however, that the Issuing Bank shall not be required to take
any action which exposes it to personal liability or which is contrary to any
Loan Document or applicable law.
Section 9.10. Permitted Release of Collateral and Subsidiary Loan
Parties.
(a) Automatic Release. If any Loan Party sells any Collateral
which is permitted to be disposed of under Section 6.05, the Liens in the
Collateral granted to the Administrative Agent under the Loan Documents shall
automatically terminate and the Collateral will be disposed of free and clear of
all Liens of the Administrative Agent.
(b) Written Release. The Administrative Agent is authorized to
release of record, and shall release of record, any Liens encumbering any
Collateral that is permitted to be sold upon an authorized officer of the
Borrower certifying in writing to the Administrative Agent that the proposed
Disposition of Collateral is permitted under Section 6.05. To the extent the
Administrative Agent is required to execute any release documents in accordance
with the immediately preceding sentence, the Administrative Agent shall do so
promptly upon request of the Borrower without the consent or further agreement
of any Secured Party. If the Disposition of Collateral is not permitted under or
pursuant to the Loan Documents, the Liens encumbering the Collateral may only be
released in accordance with the provisions of Section 10.02.
(c) Other Authorized Release and Subordination. The
Administrative Agent is irrevocably authorized by the Secured Parties, without
any consent or further agreement of any Secured Party to: (i) subordinate or
release the Liens granted to the Administrative Agent to secure the Obligations
with respect to any property which is permitted to be subject to a Lien of the
type described in clauses (d), (e), (g), (h), (i), (j), (k), (l), (m), (n), (o),
(p) or (r) of Section 6.02 and (ii) release the Administrative Agent's Liens
when all the Loan Obligations and Swap Obligations have been Fully Satisfied;
provided that if as of the date of the requested release: (A) the Borrower is
subject to a proceeding of the type described in clauses (g) or (h) of Article
VIII, or (B) the Administrative Agent is applying the proceeds of Collateral in
accordance with Section 2.12, then the Administrative Agent shall not release
its Liens until all the Obligations have been Fully Satisfied.
(d) Authorized Release of Subsidiary Loan Party. If:
(i) no Default exists or would result; and
(iii) the Administrative Agent shall have received a
certificate of a Responsible Officer of the Borrower requesting the release of a
Subsidiary Loan Party, certifying that (A) no Default exists or will result from
the release of the Subsidiary Loan Party; and (B) the Administrative Agent is
authorized to release such Subsidiary Loan Party because either: (1) the Equity
Interest issued by such Subsidiary Loan Party or the assets of such Subsidiary
Loan Party have been sold in a transaction permitted by Section 6.05 (including
with the consent of the Required Lenders pursuant to Section 10.02(b)) or (2)
such Subsidiary Loan Party has been designated as an Unrestricted Subsidiary in
accordance with the designation provisions of the definition of the term
"Unrestricted Subsidiary";
then the Administrative Agent is irrevocably authorized by the Secured Parties,
without any consent or further agreement of any Secured Party to release the
Liens granted to the Administrative Agent to secure the Obligations in the
assets of such Subsidiary Loan Party and release such Subsidiary Loan Party from
all obligations under the Loan Documents. To the extent the Administrative Agent
is required to execute any release documents in accordance with the immediately
preceding sentence, the Administrative Agent shall do so promptly upon request
of the Borrower without the consent or further agreement of any Secured Party.
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Section 9.11. Perfection by Possession and Control. The
Administrative Agent hereby appoints each of the other Lenders to serve as
bailee to perfect Administrative Agent's Liens in any Collateral (other than
deposit, securities or commodity accounts) in the possession of any such other
Lender and each Lender possessing any such Collateral agrees to so act as bailee
for the Administrative Agent in accordance with the terms and provisions hereof.
Section 9.12. Lender Affiliates Rights. By accepting the benefits of
the Loan Documents, any Affiliate of a Lender that is owed any Obligation is
bound by the terms of the Loan Documents. But notwithstanding the foregoing: (a)
neither the Administrative Agent, any Lender nor any Loan Party shall be
obligated to deliver any notice or communication required to be delivered to any
Lender under any Loan Documents to any Affiliate of any Lender; and (b) no
Affiliate of any Lender that is owed any Obligation shall be included in the
determination of the Required Lenders or entitled to consent to, reject, or
participate in any manner in any amendment, waiver or other modification of any
Loan Document. The Administrative Agent shall not have any liabilities,
obligations or responsibilities of any kind whatsoever to any Affiliate of any
Lender who is owed any Obligation. The Administrative Agent shall deal solely
and directly with the related Lender of any such Affiliate in connection with
all matters relating to the Loan Documents. The Obligation owed to such
Affiliate shall be considered the Obligation of its related Lender for all
purposes under the Loan Documents and such Lender shall be solely responsible to
the other parties hereto for all the obligations of such Affiliate under any
Loan Document.
ARTICLE X.
Miscellaneous
-------------
Section 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone or other means, all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if the Borrower or any other Loan Party, to it at 251
O'Connor Ridge Boulevard, Suite 300, Irving, Texas 75038, Attention of John
Muse, Executive Vice President, Administration and Finance (Telecopy No.:
972.281.4449);
(ii) if to the Administrative Agent, to JPMorgan Chase
Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 9th Floor Houston,
Texas 77002 Telephone: 713.750.2984; Telecopy: 713.750.2129 and JPMorgan Chase
Bank, N.A., 2200 Ross Avenue, Fifth Floor, Dallas, Texas 75201, Attention:
Matthew H. Hildreth, Telephone: 214.290.2688 ; Telecopy: 214.290.2765;
(iii) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
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Section 10.02. Waivers; Amendments.
(a) No Waiver; Rights Cumulative. No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section 10.2, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived, amended or modified
except (i) pursuant to an Increased Commitment Supplement executed in accordance
with the terms and conditions of Section 2.20 which only needs to be signed by
the Borrower, the Administrative Agent and the Lenders increasing or providing
new Revolving Commitments thereunder and (ii) in the case of this Agreement and
any circumstance other than as described in clause (i) pursuant to an agreement
or agreements in writing entered into by the Borrower and the Required Lenders
or, in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the Loan
Party or Loan Parties that are parties thereto in each case with the consent of
the Required Lenders; provided that no such agreement shall (A) increase the
Commitment of any Lender without the written consent of such Lender (it being
understood that a waiver of any condition precedent in Section 4.01 or Section
4.02 or the waiver of any Default, mandatory prepayment or mandatory reduction
of the Commitments shall not be an increase of a Commitment of any Lender), (B)
reduce the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon (other than interest accruing pursuant to Section 2.13(c) or a
waiver thereof), or reduce any fees payable hereunder, without the written
consent of each Lender directly affected thereby (it being understood that any
change to the definition of "Pricing Ratio" or in the component definitions
thereof shall not constitute a reduction in the rate of interest or fees
thereon), (C) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon (other than interest
accruing pursuant to Section 2.13(c) or a waiver thereof), or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender directly affected thereby, (D) change Section 2.18(b),
(c) or (f) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender directly affected
thereby, (E) change any of the provisions of this Section or the definition of
"Required Lenders," without the written consent of each Lender, (F) release any
Subsidiary Loan Party from its Guarantee under the Guaranty Agreement or limit
its liability in respect of such Guarantee, without the written consent of each
Lender unless such release is in accordance with the provisions of Section 9.10,
and (G) release all or substantially all of the Collateral from the Liens of the
Security Documents, without the written consent of each Lender; provided further
that (1) no such agreement shall amend, modify or otherwise affect the rights or
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duties of the Administrative Agent, the Issuing Bank or the Swingline Lender
without the prior written consent of the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be, and (2) notwithstanding the terms
of clause (ii) above, any waiver, amendment or modification of this Agreement
that by its terms affects the rights or duties under this Agreement of the
Revolving Lenders (but not the Term Lenders) or the Term Lenders (but not the
Revolving Lenders) may be effected by an agreement or agreements in writing
entered into by the Borrower and requisite percentage in interest of the
affected Class of Lenders.
Section 10.03. Expenses; Indemnity; Damage Waiver.
(a) Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel (limited to
one primary counsel for the Administrative Agent and one additional counsel in
each jurisdiction in which the Mortgaged Property is located), in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), in connection
with the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section 10.03, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit; (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of counsel (limited to one counsel to the
Administrative Agent and the Lenders, one additional counsel in each
jurisdiction in which any Collateral is located or any proceedings are held and
if necessary as a result of conflicts of interest, one additional counsel to the
Lenders), in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section
10.03, or in connection with the Loans made or Letters of Credit issued
hereunder.
(b) Indemnity. THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE
AGENT, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST, AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS
OF ANY COUNSEL FOR ANY INDEMNITEE (LIMITED TO ONE COUNSEL TO THE INDEMNITEES AND
ONE ADDITIONAL COUNSEL IN EACH JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS
LOCATED), INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF ANY LOAN
DOCUMENT OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE
PERFORMANCE BY THE PARTIES TO THE LOAN DOCUMENTS OF THEIR RESPECTIVE OBLIGATIONS
THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS, THE NBP ACQUISITION, ANY
OTHER ACQUISITION PERMITTED HEREBY OR ANY OTHER TRANSACTIONS CONTEMPLATED
HEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A
LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO
NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL
OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY MORTGAGED
PROPERTY OR ANY OTHER PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE
70
BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (IV) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF, OR A MATERIAL BREACH OF ANY OBLIGATION
UNDER THE LOAN DOCUMENTS BY, SUCH INDEMNITEE OR RELATED TO THE PRESENCE OR
RELEASE OF HAZARDOUS MATERIALS OR VIOLATIONS OF ENVIRONMENTAL LAWS THAT FIRST
OCCUR AT A PROPERTY OWNED OR LEASED BY BORROWER OR ITS SUBSIDIARIES AFTER SUCH
PROPERTY IS TRANSFERRED TO AN INDEMNITEE OR ITS SUCCESSORS OR ASSIGNS BY WAY OF
A FORECLOSURE, DEED-IN-LIEU OF FORECLOSURE OR SIMILAR TRANSFER.
(c) Lender's Agreement to Pay. To the extent that the Borrower
fails to pay any amount required to be paid by it to the Administrative Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section 10.03, each Lender severally agrees to pay to the Administrative Agent,
the Issuing Bank or the Swingline Lender, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures, outstanding
Term Loans and unused Commitments at the time.
(d) Waiver of Damages. To the extent permitted by applicable
law, none of parties hereto shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, any Loan Document or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) Payment. All amounts due under this Section 10.03 shall be
payable not later than 10 days after written demand therefor.
Section 10.04. Successors and Assigns.
(a) Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 10.04. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit and any Secured Party related to any Lender), Participants (to
the extent provided in paragraph (c) of this Section 10.04) and, to the extent
expressly contemplated hereby, the Secured Parties and other Related Parties of
each of the Administrative Agent, the Issuing Bank and the Lenders), any legal
or equitable right, remedy or claim under or by reason of this Agreement.
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(b) Assignment. (i) Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default exists, any other assignee; and
(B) the Administrative Agent, provided that no consent of
the Administrative Agent shall be required for an assignment of (1) any
Revolving Commitment to an assignee that is a Lender with a Revolving Commitment
immediately prior to giving effect to such assignment or (2) all or any portion
of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default exists;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement; provided that this clause shall not be construed to
prohibit the assignment of a proportionate part of all the assigning Lender's
rights and obligations in respect of one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this Section 10.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section 10.04.
72
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, absent manifest error, and the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section 10.04 and any written consent to such assignment required by
paragraph (b) of this Section 10.04, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register; provided that if either the assigning Lender or the assignee shall
have failed to make any payment required to be made by it pursuant to Sections
2.04(c), 2.05(d) or (e), 2.06(b), 2.18(c) or 10.03(c), the Administrative Agent
shall have no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) Participations. (i) Any Lender may, without the consent of
the Borrower, the Administrative Agent, the Issuing Bank or the Swingline
Lender, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (A) such Lender's obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (c)(ii) of this Section 10.04, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 10.04. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 10.08 as though it were a Lender, provided such Participant agrees to
be subject to Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Sections 2.15, 2.16 or 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender.
73
(iii) Each Lender selling a participation to a Participant
shall, as a non-fiduciary agent of the Borrower, keep a register of each such
Participant, specifying such Participant's entitlement to payments of principal
and interest with respect to such participation. The entries in such register
shall be conclusive, and each Lender shall treat each Person whose name is
recorded in such Lender's register as the Participant, notwithstanding notice to
the contrary.
(d) Pledge. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 10.04 shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
Section 10.05. Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder. The
provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
Section 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS AND ANY SEPARATE LETTER AGREEMENTS WITH RESPECT TO FEES
PAYABLE TO THE ADMINISTRATIVE AGENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY AND ALL PREVIOUS
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER ORAL OR
WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES HERETO. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto
(which may be sent on pages designated only as "Signature Pages to Credit
Agreement" or "Signature Pages to Darling International Inc. Credit Agreement,"
without page numbers or other identifying information), and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
Section 10.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
74
Section 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the Loan Obligations held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. Each party exercising
rights under this Section 10.8 shall promptly notify the Borrower (with a copy
to the Administrative Agent) after any such exercise; provided that the failure
to give such notice shall not effect the validity of such right. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
Section 10.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Texas.
(b) Jurisdiction. EACH LENDER, EACH LOAN PARTY AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT
LOCATED IN DALLAS COUNTY TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF SUCH PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF SUCH PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK
OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) Venue. Each Loan Party and each other party to this
Agreement hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section 10.09. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Service of Process. Each Loan Party and each other party to
this Agreement irrevocably consents to service of process in the manner provided
for notices in Section 10.01. Nothing in this Agreement or any other Loan
Document will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 10.10. WAIVER OF JURY TRIAL. EACH LOAN PARTY AND EACH OTHER
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
75
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH LOAN PARTY AND EACH OTHER PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 10.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed: (a) to
its Related Parties, including accountants, legal counsel and other advisors (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 10.12, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Loan Party and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 10.12 or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, "Information" means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower. Any
Person required to maintain the confidentiality of Information as provided in
this Section 10.12 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Section 10.13. Maximum Interest Rate.
(a) Limitation to Maximum Rate; Recapture. No interest rate
specified in any Loan Document shall at any time exceed the Maximum Rate. If at
any time the interest rate (the "Contract Rate") for any obligation under the
Loan Documents shall exceed the Maximum Rate, thereby causing the interest
accruing on such obligation to be limited to the Maximum Rate, then any
subsequent reduction in the Contract Rate for such obligation shall not reduce
the rate of interest on such obligation below the Maximum Rate until the
aggregate amount of interest accrued on such obligation equals the aggregate
amount of interest which would have accrued on such obligation if the Contract
Rate for such obligation had at all times been in effect. As used herein, the
term "Maximum Rate" means, at any time with respect to any Lender, the maximum
rate of nonusurious interest under applicable law that such Lender may charge
Borrower. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments, and other charges contracted for, charged,
or received in connection with the Loan Documents that constitute interest under
applicable law. Each change in any interest rate provided for herein based upon
the Maximum Rate resulting from a change in the Maximum Rate shall take effect
without notice to Borrower at the time of such change in the Maximum Rate. For
purposes of determining the Maximum Rate under Texas law, the applicable rate
ceiling shall be the weekly rate ceiling described in, and computed in
accordance with, Chapter 303 of the Texas Finance Code.
76
(b) Cure Provisions. No provision of any Loan Document shall
require the payment or the collection of interest in excess of the Maximum Rate.
If any excess of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in connection
with this loan transaction, the provisions of this Section 10.13 shall govern
and prevail and neither Borrower nor the sureties, guarantors, successors, or
assigns of Borrower shall be obligated to pay the excess amount of such interest
or any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the obligations outstanding hereunder, and, if the
principal of the obligations outstanding hereunder has been paid in full, any
remaining excess shall forthwith be paid to the Borrower. In determining whether
or not the interest paid or payable exceeds the Maximum Rate, Borrower and each
Lender shall, to the extent permitted by applicable law, (a) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the entire contemplated term of the obligations outstanding
hereunder so that interest for the entire term does not exceed the Maximum Rate.
(c) Chapter 346 of the Texas Finance Code. The provisions of
Chapter 346 of the Finance Code of Texas are specifically declared by the
parties hereto not to be applicable to this Agreement or to the transactions
contemplated hereby.
Section 10.14. Limitation of Liability. None of Loan Parties, the
Administrative Agent, any Lender, or any of their respective Related Parties
shall have any liability with respect to, and the Borrower, the Administrative
Agent and each Lender and, by the execution of the Loan Documents to which it is
a party, each other Loan Party, hereby waives, releases, and agrees not to sue
any of them upon, any claim for any special, indirect, incidental, consequential
or punitive damages suffered or incurred by such party in connection with,
arising out of, or in any way related to any of the Loan Documents, or any of
the transactions contemplated by any of the Loan Documents.
Section 10.15. No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by the Administrative Agent
or any Lender shall have the right to act exclusively in the interest of the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to Borrower, any other Loan Party, any of the Borrower's shareholders
or any other Person.
Section 10.16. No Fiduciary Relationship. The relationship between
the Loan Parties on the one hand and the Administrative Agent and each Lender on
the other is solely that of debtor and creditor, and neither the Administrative
Agent nor any Lender has any fiduciary or other special relationship with any
Loan Party, and no term or condition of any of the Loan Documents shall be
construed so as to deem the relationship between the Loan Parties on the one
hand and the Administrative Agent and each Lender on the other to be other than
that of debtor and creditor.
Section 10.17. Equitable Relief. Each Loan Party recognizes that in
the event a Loan Party fails to pay, perform, observe, or discharge any or all
of the obligations under the Loan Documents, any remedy at law may prove to be
inadequate relief to the Administrative Agent and the Lenders. Each Loan Party
therefore agrees that the Administrative Agent and the Lenders, if the
Administrative Agent or the Required Lenders so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
77
Section 10.18. Construction. Each Loan Party, the Administrative
Agent and each Lender acknowledges that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.
Section 10.19. USA Patriot Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrower that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.
[Signature Pages Begin on the Next Page]
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
DARLING INTERNATIONAL INC.
By: /s/ John O. Muse
------------------------------------------
Name: John O. Muse
Title: Executive Vice President Finance
and Administration
JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent
By: /s/ Matthew H. Hildreth
-------------------------------------------
Matthew H. Hildreth, Senior Vice President
HARRIS N.A.
By: /s/ John Stichnoth
-------------------------------------------
Name: John Stichnoth
Title: Vice President
COMERICA BANK
By: /s/ Donald P. Hellman
-----------------------------------------
Name: Donald P. Hellman
Title: Senior Vice President
U S BANK NATIONAL ASSOCIATION
By: /s/ Curtis A. Schrieber
--------------------------------------
Curtis A. Schrieber, Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A. "RABOBANK INTERNATIONAL", NEW YORK BRANCH
By: /s/ Pamela Beal
---------------------------------------------
Name: Pamela Beal
Title: Vice President
By: /s/ Brett Delfino
---------------------------------------------
Name: Brett Delfino
Title: Executive Director
CITIBANK TEXAS, N.A.
By: /s/ Harold Beattie, Jr.
----------------------------------------
Name: Harold Beattie, Jr.
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Joanne K. Bramanti
----------------------------------------------
Joanne K. Bramanti, Senior Vice President
COMMERCE BANK, N.A.
By: /s/ Wayne C. Lewis
----------------------------------------
Name: Wayne C. Lewis
Title: Vice President
LIST OF EXHIBITS AND SCHEDULES
------------------------------
EXHIBITS:
Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Guaranty Agreement
Exhibit C - Form of Increased Commitment Supplement
Exhibit D - Form of Security Agreement
Exhibit E - Form of Compliance Certificate
SCHEDULES:
Schedule 1.01(a) - Mortgaged Property
Schedule 1.01(b) - Existing Letters of Credit
Schedule 2.01 - Commitments
Schedule 3.10 - Underfunded Plans
Schedule 3.12 - Subsidiaries
Schedule 3.14 - Labor Matters
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Investments
Schedule 6.05 - Asset Sales
Schedule 6.10 - Existing Restrictions
EXHIBIT A
TO
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Form of Assignment and Assumption
---------------------------------
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells
and assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any Letters of Credit, guarantees, and
Swingline Loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of [identify
Lender](1)]
3. Borrower: DARLING INTERNATIONAL INC.
4. Administrative Agent: JPMORGAN CHASE BANK, N.A., as the administrative
agent under the Credit Agreement
5. Credit Agreement: The Credit Agreement dated as of April 7, 2006
among Darling International Inc., the Lenders
parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties
thereto.
- --------------
(1) Select as applicable.
6. Assigned Interest:
========================= =========================== ========================== ===========================
Aggregate Amount of Amount of
Commitment/Loans Commitment/Loans Percentage Assigned of
Facility Assigned for all Lenders Assigned Commitment/Loans (2)
========================= =========================== ========================== ===========================
Revolver $ $ %
------------------------- --------------------------- -------------------------- ---------------------------
Term $ $ %
========================= =========================== ========================== ===========================
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
---------------------------------
Name:
Title:
- -------------------
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
[Consented to and](3) Accepted:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By:
------------------------------
Name:
Title:
[Consented to:](4)
DARLING INTERNATIONAL INC.
By:
------------------------------
Name:
Title:
- -----------------------
(3) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
(4) To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.
ANNEX 1
DARLING INTERNATIONAL INC.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant thereto, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns. This Assignment and Assumption may
be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Texas.
EXHIBIT B
TO
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Form of Guaranty Agreement
--------------------------
GUARANTY AGREEMENT
WHEREAS, DARLING INTERNATIONAL INC., a Delaware corporation (the
"Borrower") has entered into that certain Credit Agreement dated April 7, 2006,
among Borrower, the lenders party thereto (the "Lenders"), JPMORGAN CHASE BANK,
N.A., as the administrative agent (the "Agent") (such Credit Agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being hereinafter referred to as the "Credit
Agreement", and capitalized terms not otherwise defined herein shall have the
same meaning as set forth in the Credit Agreement);
WHEREAS, the execution of this Guaranty Agreement is a condition to
the Agent's and each Lender's obligations under the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, each of the undersigned Subsidiary Loan
Parties and any Subsidiary Loan Party hereafter added as a "Guarantor" hereto
pursuant to a Subsidiary Joinder Agreement in the form attached as an Exhibit to
the Security Agreement (individually a "Guarantor" and collectively the
"Guarantors"), hereby irrevocably and unconditionally guarantees to the Secured
Parties the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon the
following terms:
1. The term "Guaranteed Indebtedness", as used herein, means all of
the Obligations, as defined in the Credit Agreement. The "Guaranteed
Indebtedness" shall include any and all post-petition interest and expenses
(including attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or other similar law; provided that the Guaranteed Indebtedness
shall be limited, with respect to each Guarantor, to an aggregate amount equal
to the largest amount that would not render such Guarantor's obligations
hereunder subject to avoidance under Section 544 or 548 of the United States
Bankruptcy Code or under any applicable state law relating to fraudulent
transfers or conveyances.
2. The Guarantors together desire to allocate among themselves
(collectively, the "Contributing Guarantors"), in a fair and equitable manner,
their obligations arising under this Guaranty Agreement. Accordingly, in the
event any payment or distribution is made by a Guarantor under this Guaranty
Agreement (a "Funding Guarantor") that exceeds its Fair Share (as defined
below), that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall (as defined below), with the result that all
such contributions will cause each Contributing Guarantor's Aggregate Payments
(as defined below) to equal its Fair Share. "Fair Share" means, with respect to
a Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Adjusted Maximum Amount (as defined below) with respect to
such Contributing Guarantor to (ii) the aggregate of the Adjusted Maximum
Amounts with respect to all Contributing Guarantors, multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty Agreement in respect of the obligations
guarantied. "Fair Share Shortfall" means, with respect to a Contributing
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "Adjusted Maximum Amount" means, with respect to a Contributing
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty Agreement
determined in accordance with the provisions hereof; provided that, solely for
purposes of calculating the "Adjusted Maximum Amount" with respect to any
Contributing Guarantor for purposes of this paragraph 2, the assets or
liabilities arising by virtue of any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Contributing
Guarantor. "Aggregate Payments" means, with respect to a Contributing Guarantor
as of any date of determination, the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty Agreement (including, without limitation, in respect of
this paragraph 2). The amounts payable as contributions hereunder shall be
determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this paragraph 2 shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder.
3. This instrument shall be an absolute, continuing, irrevocable and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the Full Satisfaction of the Guaranteed Indebtedness in accordance with
Section 9.10 of the Credit Agreement. No set-off, counterclaim, recoupment,
reduction, or diminution of any obligation, or any defense of any kind or nature
which Borrower may have against any Secured Party or any other party, or which
any Guarantor may have against Borrower, any Secured Party or any other party,
shall be available to, or shall be asserted by, any Guarantor against any
Secured Party or any subsequent holder of the Guaranteed Indebtedness or any
part thereof or against payment of the Guaranteed Indebtedness or any part
thereof other than the Full Satisfaction of the Guaranteed Indebtedness in
accordance with Section 9.10 of the Credit Agreement.
4. If a Guarantor becomes liable for any indebtedness owing by
Borrower to any Secured Party by endorsement or otherwise, other than under this
Guaranty Agreement, such liability shall not be in any manner impaired or
affected hereby, and the rights of the Secured Parties hereunder shall be
cumulative of any and all other rights that any Secured Party may ever have
against such Guarantor. The exercise by any Secured Party of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.
5. Upon the occurrence and continuance of an Event of Default arising
from Borrower's default in payment or performance of the Guaranteed
Indebtedness, or any part thereof, when such Guaranteed Indebtedness becomes
due, whether by its terms, by acceleration, or otherwise, the Guarantors shall,
jointly and severally, promptly pay the amount due thereon to Agent, without
notice or demand, in lawful currency of the United States of America, and it
shall not be necessary for Agent or any other Secured Party, in order to enforce
such payment by any Guarantor, first to institute suit or exhaust its remedies
against Borrower or others liable on such Guaranteed Indebtedness, or to enforce
any rights against any collateral which shall ever have been given to secure
such Guaranteed Indebtedness. In the event such payment is made by a Guarantor,
then such Guarantor shall be subrogated to the rights then held by Agent and any
other Secured Party with respect to the Guaranteed Indebtedness to the extent to
which the Guaranteed Indebtedness was discharged by such Guarantor and, in
addition, upon payment by such Guarantor of any sums to Agent or any other
Secured Party hereunder, all rights of such Guarantor against Borrower, any
other guarantor or any collateral arising as a result therefrom by way of right
of subrogation, reimbursement, or otherwise shall in all respects be subordinate
and junior in right of payment to the Full Satisfaction of the Guaranteed
Indebtedness in accordance with Section 9.10 of the Credit Agreement. All
payments received by the Agent hereunder shall be applied by the Agent to
payment of the Guaranteed Indebtedness in the order provided for in Section
2.18(f) of the Credit Agreement.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
payable by the Guarantors hereunder forthwith on demand by Agent or any other
Secured Party.
7. Each Guarantor hereby agrees that its obligations under this
Guaranty Agreement shall not be released, discharged, diminished, impaired,
reduced, or affected for any reason or by the occurrence of any event,
including, without limitation, one or more of the following events, whether or
not with notice to or the consent of any Guarantor: (a) the taking or accepting
of collateral as security for any or all of the Guaranteed Indebtedness or the
release, surrender, exchange, or subordination of any collateral now or
hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial
release of the liability of any Guarantor hereunder, or the full or partial
release of any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of Borrower, or the dissolution, insolvency, or
bankruptcy of Borrower, any Guarantor, or any other party at any time liable for
the payment of any or all of the Guaranteed Indebtedness; (d) any renewal,
extension, modification, waiver, amendment, or rearrangement of any or all of
the Guaranteed Indebtedness or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or compromise
that may be granted or given by Agent or any other Secured Party to Borrower,
any Guarantor, or any other party ever liable for any or all of the Guaranteed
Indebtedness; (f) any neglect, delay, omission, failure, or refusal of Agent or
any other Secured Party to take or prosecute any action for the collection of
any of the Guaranteed Indebtedness or to foreclose or take or prosecute any
action in connection with any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed Indebtedness;
(g) the unenforceability or invalidity of any or all of the Guaranteed
Indebtedness or of any instrument, document, or agreement evidencing, securing,
or otherwise relating to any or all of the Guaranteed Indebtedness; (h) any
payment by Borrower or any other party to Agent or any other Secured Party is
held to constitute a preference under applicable bankruptcy or insolvency law or
if for any other reason Agent or any other Secured Party is required to refund
any payment or pay the amount thereof to someone else; (i) the settlement or
compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any
security interest or lien securing any or all of the Guaranteed Indebtedness;
(k) any impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (l) the failure of Agent or any other Secured Party to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or any other Guarantor (other than the Full Satisfaction
of the Guaranteed Indebtedness in accordance with Section 9.10 of the Credit
Agreement).
8. Each Guarantor represents and warrants to Agent and the Lenders as
follows:
(a) All representations and warranties in the Credit Agreement
relating to it are true and correct in all material respects as of the
date hereof and on each date the representations and warranties
hereunder are restated pursuant to any of the Loan Documents with the
same force and effect as if such representations and warranties had
been made on and as of such date except to the extent that such
representations and warranties relate specifically to another date.
(b) It has, independently and without reliance upon Agent or any
Lender and based upon such documents and information as it has deemed
appropriate, made its own analysis and decision to enter into the Loan
Documents to which it is a party.
(c) It is not relying upon Agent or any Lender to provide (and
neither the Agent nor any Lender shall have any duty to provide) any
information concerning the financial condition and assets of Borrower
to it either now or in the future.
(d) Each Loan Party is a member of an affiliated group and the
Loan Parties are collectively engaged in a common enterprise with one
another. Each Loan Party will receive reasonably equivalent value in
exchange for the obligations incurred under the Loan Documents to
which each is a party. Each Loan Party will derive substantial benefit
from the credit extended pursuant to the credit Agreement in an amount
at least equal to its obligations under the Loan Documents to which it
is a party
9. Each Guarantor covenants and agrees that, until the Loan
Obligations have been Fully Satisfied, it will comply with all covenants set
forth in the Credit Agreement specifically applicable to it.
10. When an Event of Default exists and subject to the terms of
Section 2.18 of the Credit Agreement, Agent and each other Secured Party shall,
to the fullest extent permitted by law, have the right to set-off and apply
against this Guaranty Agreement or the Guaranteed Indebtedness constituting Loan
Obligations or both, at any time and without notice to any Guarantor, any and
all deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from Agent and each other Secured Party to
any Guarantor whether or not the Guaranteed Indebtedness is then due and
irrespective of whether or not Agent or any other Secured Party shall have made
any demand under this Guaranty Agreement. Each Secured Party agrees promptly to
notify the Borrower (with a copy to the Agent) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of Agent and
other Secured Parties hereunder are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which Agent or any
other Secured Party may have.
11. (a) Each Guarantor hereby agrees that the Subordinated
Indebtedness (as defined below) shall be subordinate and junior in right of
payment to the Full Satisfaction of the Guaranteed Indebtedness in accordance
with Section 9.10 of the Credit Agreement. The Subordinated Indebtedness shall
not be payable, and no payment of principal, interest or other amounts on
account thereof shall be made or given, directly or indirectly, by or on behalf
of any Debtor (hereafter defined) or received, accepted, retained or applied by
any Guarantor unless and until the Guaranteed Indebtedness shall have been Fully
Satisfied in accordance with Section 9.10 of the Credit Agreement; except that
prior to the occurrence and continuance of an Event of Default, each Debtor
shall have the right to make payments and a Guarantor shall have the right to
receive payments on the Subordinated Indebtedness from time to time in the
ordinary course of business. After the occurrence and during the continuance of
an Event of Default, no payments may be made or given on the Subordinated
Indebtedness, directly or indirectly, by or on behalf of any Debtor or received,
accepted, retained or applied by any Guarantor unless and until the Guaranteed
Indebtedness shall have been Fully Satisfied in accordance with Section 9.10 of
the Credit Agreement. If any sums shall be paid to a Guarantor by any Debtor or
any other Person on account of the Subordinated Indebtedness when such payment
is not permitted hereunder, such sums shall be held in trust by such Guarantor
for the benefit of Agent and the other Secured Parties and shall forthwith be
paid to Agent and applied by Agent against the Guaranteed Indebtedness in
accordance with this Guaranty Agreement. For purposes of this Guaranty Agreement
and with respect to a Guarantor, the term "Subordinated Indebtedness" means all
indebtedness, liabilities, and obligations of Borrower or any other Guarantor
(Borrower and such other Guarantor herein the "Debtors") to such Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or are direct, indirect, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such indebtedness, liabilities, or obligations are evidenced by a note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such indebtedness, obligations, or liabilities may, at their
inception, have been, or may hereafter be created, or the manner in which they
have been or may hereafter be acquired by such Guarantor.
(b) Each Guarantor agrees that any and all Liens (including any
judgment liens), upon any Debtor's assets securing payment of any Subordinated
Indebtedness shall be and remain inferior and subordinate to any and all Liens
upon any Debtor's assets securing payment of the Guaranteed Indebtedness or any
part thereof, regardless of whether such Liens in favor of a Guarantor, Agent or
any other Secured Party presently exist or are hereafter created or attached.
Without the prior written consent of Agent, no Guarantor shall (i) file suit
against any Debtor or exercise or enforce any other creditor's right it may have
against any Debtor, or (ii) foreclose, repossess, sequester, or otherwise take
steps or institute any action or proceedings (judicial or otherwise, including
without limitation the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce
any obligations of any Debtor to such Guarantor or any Liens held by such
Guarantor on assets of any Debtor.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving any
Debtor as debtor, Agent shall have the right to prove and, to the extent
permitted by applicable law, vote any claim under the Subordinated Indebtedness
and to receive directly from the receiver, trustee or other court custodian all
dividends, distributions, and payments made in respect of the Subordinated
Indebtedness until the Guaranteed Indebtedness has been Fully Satisfied in
accordance with Section 9.10 of the Credit Agreement. Agent may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
accordance with the Credit Agreement.
12. Except for modifications made pursuant to the execution and
delivery of a Subsidiary Joinder Agreement (which needs to be signed only by the
Subsidiary Loan Party thereto) and the release of any Guarantor from its
obligations hereunder (which shall require the consent of all Lenders unless
such release is otherwise permitted by Section 9.10 of the Credit Agreement); no
amendment or waiver of any provision of this Guaranty Agreement or consent to
any departure by any Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the Guarantors and Agent (with the
consent of the Required Lenders), except as otherwise provided in the Credit
Agreement. No failure on the part of Agent or any other Secured Party to
exercise, and no delay in exercising, any right, power, or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power, or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
13. This Guaranty Agreement is for the benefit of the Secured Parties
and their successors and permitted assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty Agreement is binding not only
on each Guarantor, but on each Guarantor's successors and assigns.
14. Each Guarantor recognizes that Agent and the Lenders are relying
upon this Guaranty Agreement and the undertakings of each Guarantor hereunder
and under the other Loan Documents to which each is a party in making extensions
of credit to Borrower under the Credit Agreement and further recognizes that the
execution and delivery of this Guaranty Agreement and the other Loan Documents
to which each Guarantor is a party is a material inducement to Agent and the
Lenders in entering into the Credit Agreement and continuing to extend credit
thereunder. Each Guarantor hereby acknowledges that there are no conditions to
the full effectiveness of this Guaranty Agreement or any other Loan Document to
which it is a party.
15. Any notice or demand to any Guarantor under or in connection with
this Guaranty Agreement or any other Loan Document to which it is a party shall
be deemed effective if given to the Guarantor, care of Borrower in accordance
with the notice provisions in the Credit Agreement.
16. Except as otherwise specifically provided in the Credit
Agreement, each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Guaranty Agreement, presentment, notice of protest, notice of
dishonor, notice of the incurring by Borrower of additional indebtedness, and
all other notices and demands with respect to the Guaranteed Indebtedness and
this Guaranty Agreement.
17. THIS GUARANTY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT OF
EACH GUARANTOR, AGENT AND THE OTHER SECURED PARTIES WITH RESPECT TO EACH
GUARANTOR'S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY AGREEMENT
IS INTENDED BY EACH GUARANTOR, AGENT AND THE OTHER SECURED PARTIES AS A FINAL
AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY AGREEMENT, AND NO COURSE OF
DEALING AMONG ANY GUARANTOR, AGENT AND ANY OTHER SECURED PARTY, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY AGREEMENT. THERE ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR, AGENT AND
ANY OTHER SECURED PARTY. This Guaranty Agreement may be executed on pages
designated only as "Signature Pages to Guaranty Agreement," without page numbers
or other identifying information.
18. This Guaranty Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
[SIGNATURE PAGE BEGINS ON NEXT PAGE]
EXECUTED as of the first date written above.
GUARANTORS:
-----------
DARLING NATIONAL LLC
By: /s/ John O. Muse
-----------------------------------
Name: John O. Muse
Title: Executive Vice President
Finance and Administration
EXHIBIT C
TO
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Form of Increased Commitment Supplement
---------------------------------------
INCREASED COMMITMENT SUPPLEMENT
This INCREASED COMMITMENT SUPPLEMENT (this "Supplement") is dated as
of ____________, ___ and entered into by and among DARLING INTERNATIONAL INC., a
Delaware corporation (the "Borrower"), each of the banks or other lending
institutions which is a signatory hereto (the "Increased Commitment Lenders"),
JPMORGAN CHASE BANK, N.A., as agent for itself and the other secured parties (in
such capacity, together with its successors in such capacity, the "Agent"), and
is made with reference to that certain Credit Agreement dated as of April 7,
2006 (as amended, amended and restated, supplemented or otherwise modified from
time to time the "Credit Agreement"), by and among the Borrower, certain lenders
and the Agent. Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the
Borrower and the Increased Commitment Lenders are entering into this Increased
Commitment Supplement to provide for the increase of the aggregate Revolving
Commitments;
WHEREAS, each Increased Commitment Lender wishes to increase its
Revolving Commitment [,OR TO THE EXTENT NOT ALREADY A LENDER PARTY TO THE
CREDIT AGREEMENT (HEREIN A "NEW LENDER"), WISHES TO BECOME A LENDER PARTY TO THE
CREDIT AGREEMENT AND TO COMMIT TO MAKE REVOLVING LOANS IN ACCORDANCE WITH THE
TERMS THEREOF];(5)
WHEREAS, the Increased Commitment Lenders are willing to agree to
supplement the Credit Agreement in the manner provided herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. Increase in Revolving Commitments. Subject to the terms
and conditions hereof, each Increased Commitment Lender severally agrees that
its Revolving Commitment shall be increased to [OR, IN THE CASE OF A NEW LENDER,
SHALL BE] the amount set forth opposite its name on the signature pages hereof.
SECTION 2. [NEW LENDERS. EACH NEW LENDER (A) CONFIRMS THAT IT HAS
RECEIVED A COPY OF THE CREDIT AGREEMENT, TOGETHER WITH COPIES OF THE MOST RECENT
FINANCIAL STATEMENTS OF THE BORROWER DELIVERED THEREUNDER AND SUCH OTHER
DOCUMENTS AND INFORMATION AS IT HAS DEEMED APPROPRIATE TO MAKE ITS OWN CREDIT
ANALYSIS AND DECISION TO ENTER INTO THIS SUPPLEMENT; (B) AGREES THAT IT HAS,
INDEPENDENTLY AND WITHOUT RELIANCE UPON THE AGENT, ANY LENDER OR ANY OF THEIR
RELATED PARTIES AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS DEEMED
APPROPRIATE, MADE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO THIS
SUPPLEMENT; (C) AGREES THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE
AGENT, ANY LENDER OR ANY OF THEIR RELATED PARTIES AND BASED ON SUCH DOCUMENTS
AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS
OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THE CREDIT AGREEMENT;
(D) APPOINTS AND AUTHORIZES THE AGENT TO TAKE SUCH ACTION AS AGENT ON ITS BEHALF
AND TO EXERCISE SUCH POWERS AND DISCRETION UNDER THE CREDIT AGREEMENT AS ARE
DELEGATED TO THE AGENT BY THE TERMS THEREOF, TOGETHER WITH SUCH POWERS AND
DISCRETION AS ARE REASONABLY INCIDENTAL THERETO; AND (E) AGREES THAT IT IS A
"LENDER" UNDER THE CREDIT AGREEMENT AND WILL PERFORM IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS ALL OF THE OBLIGATIONS THAT BY THE TERMS OF THE CREDIT
AGREEMENT ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER.
- ------------------
(5) Bracketed alternatives should be included if there are New Lenders.
Section 3. Representations and Warranties. In order to induce the
Increased Commitment Lenders to enter into this Supplement and to supplement the
Credit Agreement in the manner provided herein, Borrower represents and warrants
to Agent and each Lender that (a) the representations and warranties of each
Loan Party contained in the Loan Documents are and will be true, correct and
complete in all material respects on and as of the effective date hereof to the
same extent as though made on and as of that date and for that purpose, this
Supplement shall be deemed to be a Loan Document, and (b) no Default has
occurred and is continuing (both before and after giving effect to this
Supplement).
Section 4. Effect of Supplement. The terms and provisions set forth
in this Supplement shall modify and supersede all inconsistent terms and
provisions set forth in the Credit Agreement and except as expressly modified
and superseded by this Supplement, the terms and provisions of the Credit
Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. The Borrower, the Agent, and the Lenders
agree that the Credit Agreement as supplemented hereby and the other Loan
Documents shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms. Any and all agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Credit Agreement as supplemented hereby, are
hereby amended so that any reference in such documents to the Agreement shall
mean a reference to the Agreement as supplemented hereby.
Section 5. Applicable Law. This Supplement shall be governed by, and
construed in accordance with, the laws of the State of Texas and applicable laws
of the United States of America.
Section 6. Counterparts, Effectiveness. This Supplement may be
executed in any number of counterparts, by different parties hereto in separate
counterparts and on telecopy 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; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Supplement
shall become effective upon the execution of a counterpart hereof by the
Borrower, the Agent and the Increased Commitment Lenders.
Section 7. ENTIRE AGREEMENT. THIS SUPPLEMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES ANY AND ALL PREVIOUS COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
DARLING INTERNATIONAL INC.
By:
---------------------------------------
John O. Muse, Executive Vice President
New Total Revolving Commitment:
$__________________ JPMORGAN CHASE BANK, N.A., as the Agent
and as a Lender
By:
------------------------------------
Name:
Title:
$______________________ [Lenders]
By:
------------------------------------
Name:
Title:
$______________________ [NEW LENDER]
By:
------------------------------------
Name:
Title:
CONSENT OF GUARANTORS
Each Guarantor: (i) consents and agrees to this Supplement; (ii)
agrees that each of the Guaranty Agreement, the Security Agreement, and the
other Loan Documents to which it is a party are in full force and effect and
continues to be its legal, valid and binding obligation enforceable in
accordance with its respective terms; and (iii) agrees that the obligations,
indebtedness and liabilities of the Borrower arising as a result of the increase
in the Revolving Commitments contemplated hereby are "Guaranteed Indebtedness"
as defined in the Guaranty Agreement and "Obligations" as defined in the
Security Agreement and any Mortgage to which it is a party.
DARLING NATIONAL, LLC
[LIST OTHER GUARANTORS WHO HAVE BEEN
JOINED INTO THE GUARANTEE]
By:
-------------------------------------
Name:
Title:
EXHIBIT "D"
TO
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Form of Security Agreement
--------------------------
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT (the "Agreement") dated as of April 7, 2006
is by and among DARLING INTERNATIONAL INC., a Delaware corporation ("Borrower"),
the undersigned Subsidiary Loan Parties and any other Subsidiary Loan Party who
may become a party hereto pursuant to the execution and delivery of a Subsidiary
Joinder Agreement (each a "Debtor" and collectively the "Debtors") and JPMORGAN
CHASE BANK, N.A., as administrative agent for the Secured Parties (the "Agent").
R E C I T A L S:
----------------
Borrower is entering into that certain Credit Agreement dated of even
date herewith with the lenders party thereto (each individually a "Lender" and
collectively, the "Lenders") and the Agent (such agreement, as it may be
amended, amended and restated, supplemented or otherwise modified from time to
time, herein the "Credit Agreement"). The execution and delivery of this
Agreement is a condition to the Agent's and the Lenders' entering into the
Credit Agreement and making the extensions of credit thereunder.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Agent and Lenders to extend
credit under the Credit Agreement, the parties hereto hereby agree as follows:
ARTICLE 1.
Definitions
-----------
Section 1.1. Definitions. As used in this Agreement, the following
terms have the following meanings:
"Collateral" has the meaning specified in Section 2.1.
"Copyright License" means, with respect to a Debtor, any written
agreement now or hereafter in existence granting to the Debtor any
right to use any Copyright including the agreements identified for
such Debtor on Schedule 3.4.
"Copyrights" means, with respect to a Debtor, all of the
following: (a) all copyrights, works protectable by copyright,
copyright registrations and copyright applications of the Debtor,
including those identified for such Debtor on Schedule 3.4; (b) all
renewals, extensions and modifications thereof; (c) all income,
royalties, damages, profits and payments relating to or payable under
any of the foregoing; (d) the right to sue for past, present or future
infringements of any of the foregoing; and (e) all other rights and
benefits relating to any of the foregoing throughout the world.
"Copyright Security Agreement" means, with respect to a Debtor, a
security agreement in a form reasonably satisfactory to Agent pursuant
to which the Debtor grants to the Agent, for the benefit of the
Secured Parties, a security interest in the Copyrights and the
Copyright Licenses for purposes of recording such security interest
with any copyright office of a governmental unit.
"Intellectual Property" means the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses.
"Obligations" means, with respect to each Debtor: (a) if such
Debtor is a Borrower under the Credit Agreement, all "Obligations" (as
such term is defined in the Credit Agreement) of such Debtor; and (b)
with respect to each Debtor that is not the Borrower, all present and
future indebtedness, liabilities, and obligations of such Debtor to
the Agent and the Secured Parties arising under the Loan Documents to
which such Debtor is a party and all such Debtor's Deposit Obligations
and Swap Obligations; provided that with respect to each Subsidiary
Loan Party, the obligations secured by this Agreement shall be
limited, with respect to each Subsidiary Loan Party, to an aggregate
amount equal to the largest amount that would not render such
Subsidiary Loan Party's obligations hereunder and under the other Loan
Documents subject to avoidance under Section 544 or 548 of the United
States Bankruptcy Code or under any applicable state law relating to
fraudulent transfers or conveyances.
"Patent License" means, with respect to a Debtor, any written
agreement now or hereafter in existence granting to the Debtor any
right to use any invention on which a Patent is in existence including
the agreements identified for such Debtor on Schedule 3.4.
"Patent Security Agreement" means, with respect to a Debtor, a
security agreement in a form reasonably satisfactory to Agent pursuant
to which the Debtor grants to the Agent, for the benefit of the
Secured Parties, a security interest in the Patents and the Patent
Licenses for purposes of recording such security interest with any
patent office of a governmental unit.
"Patents" means, with respect to a Debtor, all of the following:
(a) all patents, patent applications and patentable inventions of the
Debtor, including those identified for such Debtor on Schedule 3.4,
and all of the inventions and improvements described and claimed
therein; (b) all continuations, divisions, renewals, extensions,
modifications, substitutions, continuations-in-part or reissues of any
of the foregoing; (c) all income, royalties, profits, damages, awards
and payments relating to or payable under any of the foregoing; (d)
the right to sue for past, present and future infringements of any of
the foregoing; and (e) all other rights and benefits relating to any
of the foregoing throughout the world.
"Pledged Shares" means, with respect to a Debtor, the Equity
Interests identified for such Debtor on Schedules 2.1(b) or (c)
attached hereto or on Schedule 1 to an amendment to this Agreement in
the form of Exhibit A.
"Subsidiary Joinder Agreement" means a Subsidiary Joinder
Agreement in substantially the form of Exhibit B.
"Trademark License" means, with respect to a Debtor, any written
agreement now or hereafter in existence granting to the Debtor any
right to use any Trademark, including the agreements identified for
such Debtor on Schedule 3.4.
"Trademarks" means, with respect to a Debtor, all of the
following: (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on
which any of the foregoing appear, all registrations and recordings
thereof and all applications in connection therewith, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political
subdivision thereof, including those identified for such Debtor on
Schedule 3.4; (b) all reissues, extensions and renewals thereof; (c)
all income, royalties, damages and payments now or hereafter relating
to or payable under any of the foregoing, including damages or
payments for past or future infringements of any of the foregoing; (d)
the right to sue for past, present and future infringements of any of
the foregoing; (e) all rights corresponding to any of the foregoing
throughout the world; and (f) all goodwill associated with and
symbolized by any of the foregoing.
"Trademark Security Agreement" means, with respect to a Debtor, a
security agreement in a form reasonably satisfactory to Agent which
the Debtor grants to the Agent, for the benefit of the Secured
Parties, a security interest in the Trademarks and the Trademark
Licenses for purposes of recording such security interest with the
trademark office of any governmental unit.
"UCC" means the Uniform Commercial Code as in effect in the State
of Texas.
Section 1.2. Other Definitional Provisions. Terms used herein that
are defined in the Credit Agreement and are not otherwise defined herein shall
have the meanings therefor specified in the Credit Agreement. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". Any definition of or reference to any agreement or
other documentation herein shall be construed as referring to such agreement or
documentation as from time to time the same may be amended, amended and
restated, supplemented, extended, renewed, replaced or otherwise modified from
time to time. References to "Articles," "Sections," "subsections," "Exhibits"
and "Schedules" shall be to Articles Sections, subsections, Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided. All definitions contained in this Agreement are equally applicable to
the singular and plural forms of the terms defined. All references to statutes
and regulations shall include any amendments of the same and any successor
statutes and regulations. Terms used herein, which are defined in the UCC,
unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE 2.
Security Interest
-----------------
Section 2.1. Security Interest. As security for the prompt payment
and performance in full when due of its Obligations (whether at stated maturity,
by acceleration or otherwise), each Debtor hereby pledges to the Agent, and
grants to the Agent a continuing security interest in, all of the Debtor's
right, title and interest in and to the following, whether now owned or
hereafter arising or acquired and wherever located (collectively with respect to
any Debtor or all Debtors, as the context requires, the "Collateral"):
(a) all accounts, money, documents, chattel paper (including the
chattel paper described on Schedule 2.1), instruments (including or in addition,
the promissory notes described on Schedule 2.1), the commercial tort claims
described on Schedule 2.1(a), deposit accounts (including the deposit accounts
identified on Schedule 3.2), general intangibles (including all supporting
obligations, all Intellectual Property and all right, title and interest in and
to the Note Purchase Agreement, the other documentation executed and deliver in
connection with NBP Acquisition and all the documentation executed and delivered
in connection with any acquisition consummated under the permissions of the
Credit Agreement), all letter of credit rights and all products and proceeds of
any of the foregoing; and
(b) all investment property, including or in addition, the
following:
(i) all the Equity Interests issued by, and all other
ownership interest in, the Domestic Subsidiaries described on Schedule 2.1(b)
and all other Restricted Subsidiaries (that are not Foreign Subsidiaries)
hereafter created or acquired and owned by the Debtor, including the Equity
Interests described on Schedule 2.1(b);
(ii) all the Equity Interests described on Schedule 2.1(c)
and so much of the Debtor's right, title and interest in any other Equity
Interests issued by its Foreign Subsidiaries so that not more than and not less
than sixty-five percent (65%) of the total combined voting power of each of its
Foreign Subsidiaries is pledged in total hereunder;
(iii) the commodity accounts and securities accounts
described in Schedule 3.2; and
(iv) all products and proceeds of the foregoing; and
(c) all equipment, fixtures, inventory and other goods and all
accessions thereto and all products and proceeds thereof;
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to the following:
(w) any lease, license, intellectual property, contract right,
property right, permit, agreement or other general intangible to which any
Debtor is a party or that a Debtor otherwise owns or any of its rights or
interests thereunder if, and for so long as, the grant of such security interest
shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of any Debtor therein or (ii) a
breach or termination pursuant to the terms of, or a default under, any such
lease, license, intellectual property right, contract right, property right,
permit, agreement or other general intangible (other than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408
or 9-409 of the Uniform Commercial Code (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law or
principles of equity); provided, however, that such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable,
shall attach immediately to any portion of such lease, license, intellectual
property right, contract right, property right or agreement that does not result
in any of the consequences specified in clause (i) or (ii) of this paragraph,
including any proceeds of such lease, license, intellectual property right,
contract right, property right, agreement or other general intangible;
(x) any capital stock, partnership interests, membership
interests and other ownership interests issued by, or any other ownership
interest in, any Unrestricted Subsidiary;
(y) any leasehold interest in real property held by a Debtor or
its subsidiaries on the Closing Date; or
(z) any proceeds from any letter of credit if the Debtor is
required by applicable law to apply such proceeds for a specific purpose.
Section 2.2. Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein: (a) each Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed; (b) the exercise by the Agent of any of
its rights or remedies hereunder shall not release any Debtor from any of its
duties or obligations under such documentation; (c) the Agent shall not have any
obligation under any of such documentation included in the Collateral by reason
of this Agreement; and (d) the Agent shall not be obligated to perform any of
the obligations of any Debtor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
ARTICLE 3.
Representations and Warranties
------------------------------
To induce the Agent and the Lenders to enter into this Agreement and
the Credit Agreement, as applicable, each Debtor represents and warrants to the
Agent and the Lenders that:
Section 3.1. Location of Equipment, Fixtures and Inventory; Third
Parties in Possession. As of the date hereof, all of its equipment, fixtures and
inventory (other than such property which is in transit, property under repair,
containers for the collection of raw materials held by customers in the ordinary
course of business and other property that has a book value in the aggregate
which is less than $1,000,000) are located at the places specified in Schedule
3.1 for such Debtor. Schedule 3.1 identifies the landlords or mortgagees, if
any, of each of its locations identified in Schedule 3.1. None of its Collateral
other than property acquired by such Debtor within the last four months has been
located in any location within the past four completed calendar months prior to
the date hereof other than as set forth on Schedule 3.1 for such Debtor. As of
the Effective Date, the Debtor does not own: (i) any vessels documented under
Chapter 121, Title 46, United States Code (the Ship Mortgage Act) or for which
an application for documentation is pending nor (ii) any aircraft.
Section 3.2. Deposit, Commodity and Securities Accounts; Other
Investment Property. As of the date hereof, Schedule 3.2 identifies all deposit
accounts, commodity accounts and securities accounts owned by Debtor and the
institutions holding such accounts. As of the date hereof, none of the
Collateral consisting of interests in a partnership or limited liability company
are evidenced by a certificate, except as set forth on Schedule 2.1(b), nor has
any such interest been designated a "security" governed by the provisions of
Article 8 of the UCC.
Section 3.3. Office Locations; Fictitious Names; Predecessor
Companies; Tax and Organizational Identification Numbers. As of the date hereof,
its chief executive office and jurisdiction of organization are located at the
place or places identified for it on Schedule 3.1 or pursuant to Section 4.4.
Within the last four completed calendar months prior to the date hereof it has
not had any other chief executive office or jurisdiction of organization except
as disclosed on Schedule 3.1. Schedule 3.1 also sets forth as of the date hereof
all other places where it keeps its books and records and all other locations
where it has a place of business. It does not do business and has not done
business during the past five completed calendar years prior to the date hereof
under any name, trade-name or fictitious business name except as disclosed on
Schedule 3.3. Schedule 3.3 sets forth a list of all names of all of its
predecessor companies including the names of any entities it acquired (by stock
purchase, asset purchase, merger or otherwise) and the chief executive office
and jurisdiction of organization of each such predecessor company and each
jurisdiction in which any Collateral purchased from such companies was located
at the time of purchase. For purposes of the foregoing, a "predecessor company"
shall mean, with respect to a Debtor, any entity whose assets or equity
interests were acquired by the Debtor or who was merged with or into the Debtor,
in each case, within the last four months prior to the date hereof. It is a
registered organization and its United States Federal Income Tax identification
number and organizational identification number are each identified on Schedule
3.3 or pursuant to Section 4.4.
Section 3.4. Intellectual Property. All of its Intellectual Property
material to the conduct of its business that is registered with or for which an
application for registration has been filed with the United States Patent and
Trademark Office and/or Copyright Office as of the date hereof is identified on
Schedule 3.4, and such information is true, correct and complete in all material
respects.
Section 3.5. Commercial Tort Claims. As of the date hereof, Schedule
2.1(a) identifies all of its commercial tort claims.
ARTICLE 4.
Covenants
---------
Each Debtor covenants and agrees with the Agent that until the
Obligations are Fully Satisfied in accordance with Section 9.10 of the Credit
Agreement:
Section 4.1. Accounts; Modifications. It shall, in accordance with
its customary business practices, endeavor to collect or cause to be collected,
as and when due, any and all amounts owing under its accounts and payment
intangibles. During the existence of an Event of Default, the Debtor shall not,
after notice from the Agent under this sentence unless the Agent otherwise
consents, do any of the following outside the ordinary course of business: (a)
grant any extension of time for any payment with respect to any of its accounts
or payment intangibles beyond 120 days after such payment's due date; (b)
compromise, compound, or settle any of its accounts or payment intangibles for
less than the full amount thereof; (c) release, in whole or in part, any Person
liable for payment of any of its accounts or payment intangibles; (d) allow any
credit or discount for payment with respect to any of its accounts or payment
intangibles other than trade or other customary discounts granted in the
ordinary course of business; or (e) release any Lien, guaranty or other
supporting obligation securing any of its accounts or payment intangibles unless
the amounts secured thereby have been paid.
Section 4.2. Further Assurances; Exceptions to Perfection. At any
time and from time to time, upon the request of the Agent, and at the Debtor's
sole expense, each Debtor shall, promptly execute and deliver all such further
documentation and take such further action as the Agent may reasonably deem
necessary or appropriate to preserve, perfect and protect its security interest
in the Collateral and carry out the provisions and purposes of this Agreement
and to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any of the Collateral. In furtherance of the
foregoing, each Debtor hereby authorizes the Agent to file, in the offices of
the appropriate governmental unit or units, financing statements naming it as
debtor and the Agent as secured party, in substantially the form attached as
Exhibit C (and where appropriate, with such changes thereto necessary to file
such financing statement as a fixture filing in the applicable real property
records), in each case as Agent may reasonably deem appropriate.
(a) Specific Required Actions.
Without limiting the generality of the foregoing provisions of this
Section 4.2, each Debtor shall:
(i) execute and deliver a Copyright Security Agreement, a
Patent Security Agreement and/or Trademark Security Agreement as applicable,
describing all its Intellectual Property; and
(ii) execute and deliver to the Agent such other
documentation as the Agent may reasonably require to perfect, protect and
maintain the validity, effectiveness and priority of the Liens intended to be
created by this Agreement.
(b) Exceptions to Perfection. Notwithstanding anything to the
contrary contained herein, if no Event of Default exists:
(i) a Debtor may retain for collection checks representing
proceeds of accounts received in the ordinary course of business;
(ii) a Debtor may retain any letters of credit and money
received or held in the ordinary course of business;
(iii) a Debtor may retain and utilize all dividends and
interest paid in respect to any of the Pledged Shares or any other investment
property;
(iv) a Debtor may retain any documents received and further
negotiated; and
(v) a Debtor shall not be required to:
(A) cause the Agent's security interest to be noted on any
certificate of title evidencing any equipment or otherwise perfect such security
interest in any rolling stock (including railroad cars);
(B) grant the Agent control over any deposit account,
commodity account or securities account, any chattel paper or letter of credit
right;
(C) obtain and deliver to the Agent any waivers,
subordinations or acknowledgments from any third party who has possession or
control of any Collateral, including any agent, landlord, warehousemen, shipper,
consignee, processor or bailee;
(D) deliver to the Agent any instruments unless the
aggregate amount payable under all such instruments which have not been
delivered to the Agent exceeds $250,000, in which event only the instruments
which cause the aggregate amount payable to exceed the $250,000 amount shall be
delivered to the Agent;
(E) take any action under the laws of any jurisdiction
other than the United States of America or any jurisdiction located therein to
create, perfect or protect the security interest of the Agent in the equity
interest of the Foreign Subsidiaries pledged pursuant hereto or in any
Intellectual Property registered outside the United States of America; or
(F) obtain and deliver to the Agent, for the purpose of any
fixture filings to be made by the Agent, real property descriptions for any of
such Debtor's locations or places of business.
If an Event of Default occurs and is continuing and the Agent requests, then the
Debtors shall take such action as the Agent may reasonably request to perfect
and protect the security interests of the Agent in all of the Collateral
including any of the Collateral described in clauses (A) through (F) above,
including the following actions: (i) the delivery to the Agent of all Collateral
the possession of which is necessary to perfect the security interest of the
Agent therein; (ii) instructing all account debtors to make payment on accounts
or any other Collateral to a post office box or boxes or to a deposit account
under the control and in the name of the Agent and (iii) any other of the
actions described in clauses (A) through (F) above. Each Debtor agrees that if
any proceeds of any Collateral (including payments made in respect of accounts
or payment intangibles) shall be received by it after the Agent's request under
this paragraph, it shall promptly deliver such proceeds to the Agent with any
necessary endorsements, and until such proceeds are delivered to the Agent, such
proceeds shall be held in trust by it for the benefit of the Agent and shall not
be commingled with any other funds or property of it.
Section 4.3. Third Parties in Possession of Collateral. Except as
otherwise permitted by Section 4.2, Debtor shall not permit any third Person
(including any warehouseman, bailee, agent, consignee or processor) to hold any
Collateral (other than Collateral in transit, Collateral under repair,
containers for the collection of raw materials held by customers in the ordinary
course of business and other Collateral that has a book value in the aggregate
which is less than $1,000,000), unless it shall: (a) notify such third Person of
the security interests created hereby; (b) instruct such Person to hold all such
Collateral for the Agent's account subject to the Agent's instructions; and (c)
take all other actions the Agent reasonably deems necessary to perfect and
protect its and the Debtor's interests in such Collateral pursuant to the
requirements of the Uniform Commercial Code of the applicable jurisdiction where
the warehouseman, bailee, consignee, agent, processor or other third Person is
located (including, in the case of a consignee, the filing of a financing
statement in the proper jurisdiction naming the applicable third Person as
debtor and it as secured party and notifying the third Person's secured lenders
of its interest in such Collateral before the third Person receives possession
of the Collateral in question).
Section 4.4. Corporate Changes. It shall not change its name,
jurisdiction of organization, or corporate structure in any manner that might
make any financing statement filed in connection with this Agreement seriously
misleading or its United States Federal Tax identification number or
organizational identification number unless it shall have given the Agent thirty
(30) days (or such other period of time as the Agent may agree) prior written
notice thereof (or prompt written notice in the case of a change in the United
States Federal Tax identification number or organizational identification
number) and shall have taken all action reasonably deemed necessary or desirable
by the Agent to protect its security interest in the Collateral with the
priority required by the Credit Agreement.
Section 4.5. Equipment, Fixtures and Inventory; Third Parties in
Possession. It shall keep all its equipment, fixtures and inventory (other than
such property which is in transit, under repair or has an aggregate book value
that is less than $1,000,000) within the United States of America, unless all
action required to perfect and protect the Agent's security interest in such
Collateral with the priority required by the Credit Agreement shall have been
taken. It shall notify the Agent if it acquires after the date hereof any vessel
subject to the Ship Mortgage Act of 1920 or any aircraft and shall take all
action reasonably deemed necessary or desirable by the Agent to create, perfect
and protect its interest in such Collateral with the priority required by the
Credit Agreement.
Section 4.6. Warehouse Receipts Non-Negotiable. It agrees that if any
warehouse receipt or receipt in the nature of a warehouse receipt is issued in
respect of any portion of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be negotiable unless such warehouse receipt or
receipt in the nature thereof is delivered to the Agent or unless the aggregate
book value of all Collateral covered by negotiable warehouse receipts does not
exceed $1,000,000, in which event only the negotiable warehouse receipts in
respect of Collateral with an aggregate book value in excess of $1,000,00 shall
be delivered to the Agent.
Section 4.7. Voting Rights; Distributions, etc. So long as no Event
of Default exists it shall be entitled to exercise any and all voting and other
consensual rights (including the right to give consents, waivers and
notifications) pertaining to any of the Pledged Shares or any other investment
property; provided, however, that no vote shall be cast or consent, waiver or
ratification given or action taken without the prior written consent of the
Agent which would be violate any provision of this Agreement or any other Loan
Document.
Section 4.8. Additional Investment Property and Instruments. It
agrees that it will: (a) not permit any Restricted Subsidiary to issue any
Equity Interests, any notes or other securities or instruments in addition to or
in substitution for any of the Collateral unless permitted by or not prohibited
by the Credit Agreement; and (b) promptly deliver to the Agent an amendment
hereto, duly executed by it, in substantially the form of Exhibit A (an
"Amendment"), in respect of any and all Equity Interests (including any of the
same received from a Restricted Subsidiary created, acquired or designated after
the date hereof; provided that a Debtor shall not be required to pledge more
than 65% of the total combined voting power of any Foreign Subsidiary) and notes
or other securities or instruments, together with all certificates evidencing
such Equity Interests, and subject to the terms of Section 4.2(b)(v)(D), all
such notes or other instruments representing or evidencing the same. It hereby
(a) authorizes the Agent to attach each Amendment to this Agreement, and (b)
agrees that all such Equity Interests, notes or other securities or instruments
listed on any Amendment delivered to the Agent shall for all purposes hereunder
constitute Collateral. If any of the Collateral consists of interests in a
partnership or limited liability company, it shall not permit such interest to
become a "security" governed by the provisions of Article 8 of the Uniform
Commercial Code unless, at the time such interest is pledged hereunder, such
interest is already a "security" governed by the provisions of Article 8 of the
Uniform Commercial Code.
Section 4.9. Intellectual Property Covenants. If it obtains any new
Intellectual Property or rights thereto or becomes entitled to the benefit of
any Intellectual Property, it shall give to Agent written notice thereof
concurrent with the delivery of its quarterly financial statements, and shall
execute and deliver, in form and substance reasonably satisfactory to Agent, a
Copyright Security Agreement, Patent Security Agreement or Trademark Security
Agreement, as applicable, describing any such new Intellectual Property. It
shall: (a) prosecute diligently any copyright, patent, trademark or license
application at any time pending which is necessary for the conduct of its
business; (b) make application on all new copyrights, patents and trademarks as
it may reasonably deem appropriate; (c) preserve and maintain all rights in the
Intellectual Property that is necessary for the conduct of its business; and (d)
obtain any consents, waivers or agreements necessary to enable Agent to exercise
its remedies with respect to the Intellectual Property. It shall not abandon any
pending copyright, patent or trademark application, or Copyright, Patent,
Trademark or any other Intellectual Property which is necessary for the conduct
of its business without the prior written consent of Agent.
Section 4.10. Deposit, Commodity and Security Accounts. Promptly upon
opening any new deposit account, commodity account or securities account other
than the accounts identified on Schedule 3.2 it shall have given the Agent
notice thereof. When an Event of Default exists, it shall take such steps as
Agent may reasonably request to give Agent control over all investment property
and deposit accounts.
Section 4.11. Chattel Paper and Letters of Credit. Upon the Agent's
request, it will place a legend on any chattel paper indicating that Agent has a
security interest in the chattel paper.
Section 4.12. Commercial Tort Claims. It will concurrent with the
delivery of its quarterly financial statements, give notice to the Agent of any
commercial tort claim where the amount in controversy is equal to or exceeds
$1,000,000 and will amend Schedule 2.1(a) hereto and otherwise grant to the
Agent a security interest in any such commercial tort claim that arises after
the date hereof.
ARTICLE 5.
Rights of the Agent
-------------------
Section 5.1. POWER OF ATTORNEY. EACH DEBTOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE AGENT AND ANY OFFICER OR AGENT THEREOF, WITH FULL
POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL
IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF SUCH DEBTOR OR IN ITS OWN NAME,
TO TAKE, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND ALL DOCUMENTATION WHICH THE
AGENT AT ANY TIME WHEN AN EVENT OF DEFAULT EXISTS AND FROM TIME TO TIME DURING
THE EXISTENCE OF AN EVENT OF DEFAULT DEEMS NECESSARY OR DESIRABLE TO ACCOMPLISH
THE PURPOSES OF THIS AGREEMENT AND, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, IT HEREBY GIVES THE AGENT THE POWER AND RIGHT ON ITS BEHALF AND IN
AGENT'S OWN NAME TO DO ANY OF THE FOLLOWING WHEN AN EVENT OF DEFAULT EXISTS,
WITH NOTICE TO BORROWER BUT WITHOUT THE CONSENT OF ANY DEBTOR:
(a) to demand, sue for, collect or receive, in the applicable
Debtor's name or in Agent's own name, any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral and, in
connection therewith, endorse checks, notes, drafts, acceptances, money orders,
documents or any other instruments for the payment of money under the Collateral
or any policy of insurance;
(b) to pay or discharge taxes, Liens or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of mail of the Debtor to an address designated by the Agent and to
receive, open, and dispose of mail addressed to the Debtor;
(d) (i) to direct account debtors and any other parties
obligated on the Collateral to make payment of any and all monies due and to
become due thereunder directly to, or otherwise render performance to or for the
benefit of, the Agent or as the Agent shall direct; (ii) to receive payment of
and receipt for any and all monies, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (iii) to sign
and endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, proxies, stock powers,
verifications and notices in connection with the Collateral; (iv) to commence
and prosecute any suit, action or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral (including any Liens or any
supporting obligation securing or supporting the payment thereof); (v) to defend
any suit, action or proceeding brought against it with respect to any
Collateral; (vi) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as the Agent may deem appropriate; (vii) to exchange any of the
Collateral for other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in connection
therewith, deposit any of the Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms as the
Agent may determine; (viii) to add or release any guarantor, endorser, surety or
other party to any of the Collateral; (ix) to renew, extend or otherwise change
the terms and conditions of any of the Collateral; (x) to grant or issue any
exclusive or nonexclusive license under or with respect to any of the
Intellectual Property (subject to the rights of third parties under pre-existing
licenses); (xi) to endorse its name on all applications and other documentation
necessary or desirable in order for the Agent to use any of the Intellectual
Property; (xii) to make, settle, compromise or adjust any claims under or
pertaining to any of the Collateral (including claims under any policy of
insurance); and (xiii) to sell, transfer, pledge, convey, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all purposes,
and to do, at the Agent's option and the Debtors' expense, at any time, or from
time to time, all acts and things which the Agent deems necessary to protect,
preserve, maintain, or realize upon the Collateral and the Agent's security
interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL
BE IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION
7.10. The Agent shall be under no duty to exercise or withhold the exercise of
any of the rights, powers, privileges and options expressly or implicitly
granted to the Agent in this Agreement, and shall not be liable for any failure
to do so or any delay in doing so. Neither the Agent nor any Person designated
by the Agent shall be liable for any act or omission or for any error of
judgment or any mistake of fact or law, except any of the same resulting from
its or their gross negligence or willful misconduct or material breach of its
obligations under the Loan Documents. This power of attorney is conferred on the
Agent solely to protect, preserve, maintain and realize upon its security
interest in the Collateral. The Agent shall not be responsible for any decline
in the value of the Collateral and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve or maintain any
Lien or supporting obligation given to secure the Collateral.
Section 5.2. Possession; Reasonable Care. The Agent may, from time to
time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of the Agent, of any or all of the Collateral that the
Agent has a right to possess. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, it being understood that the Agent
shall not have any responsibility for: (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against any parties with respect to any Collateral.
ARTICLE 6.
Default
-------
Section 6.1. Rights and Remedies. If an Event of Default exists, the
Agent shall have the following rights and remedies:
(a) In addition to all other rights and remedies granted to the
Agent in this Agreement (including those set forth in Article 5 hereof) or in
any other Loan Document or by applicable law, the Agent shall have all of the
rights and remedies of a secured party under the UCC (whether or not the UCC
applies to the affected Collateral). Without limiting the generality of the
foregoing, the Agent may: (i) without demand or notice to any Debtor, collect,
receive or take possession of the Collateral or any part thereof and for that
purpose the Agent may (subject to the rights of third parties with respect
thereto) enter upon any premises on which the Collateral is located and remove
the Collateral therefrom or render it inoperable and in the event the Agent
seeks to take possession of any or all of the Collateral by judicial process,
each Debtor hereby irrevocably waives any bonds and any surety or security
relating thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of
any such suit or action; (ii) apply the balance of Debtor's deposit account held
at the Agent to Debtor's Obligation; (iii) instruct any bank holding any
Debtor's deposit accounts to pay the balance of such deposit account to or for
the benefit of the Agent; and/or (iv) sell, lease or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or private
sale or sales, at the Agent's offices or elsewhere, for cash, on credit or for
future delivery, on an "as is" and "with all faults" basis, with a disclaimer of
all warranties (including warranties of title, possession, quiet enjoyment and
the like and all warranties of merchantability and fitness) and upon such other
terms as the Agent may deem commercially reasonable or otherwise as may be
permitted by law. Neither the Agent nor any Secured Party shall have any
obligation to clean-up or otherwise prepare the Collateral for sale if the Agent
determines that it is not beneficial to do so or if its costs to do so outweigh
the benefits expected to be received thereby. The Agent shall have the right at
any public sale or sales, and, to the extent permitted by applicable law, at any
private sale or sales, to bid (which bid may be, in whole or in part, in the
form of cancellation of indebtedness) and become a purchaser of the Collateral
or any part thereof. Upon the request of the Agent, each Debtor shall within ten
(10) days (or within such longer number of days as the Agent may approve): (i)
assemble its Collateral and (ii) make it available to the Agent at any place or
places designated by the Agent that are reasonably convenient to it and the
Agent. Each Debtor agrees that the Agent shall not be obligated to give more
than ten (10) days prior written notice of the time and place of any public sale
or of the time after which any private sale may take place and that such notice
shall constitute reasonable notice of such matters; provided that no such notice
shall be required with respect to any Collateral that is perishable, that
threatens to decline speedily in value or is a type customarily sold on the
recognized market. The Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of Collateral may have been given. The Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Each Debtor shall be liable for all
reasonable expenses of retaking, holding, preparing for sale or the like, and
all reasonable attorneys' fees (subject to the limitations set forth in the
Credit Agreement), legal expenses and other costs and expenses incurred by the
Agent in connection with the collection of its Obligations and the enforcement
of the Agent's rights under this Agreement and arising as a result hereof. Each
Debtor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral applied to its Obligations are insufficient
to Fully Satisfy the Obligations in accordance with Section 9.10 of the Credit
Agreement. The Agent may apply the Collateral against the Obligations as
provided in the Credit Agreement and when applying the Collateral against the
Obligations, unless otherwise provided in the Credit Agreement, any Obligations
which are purchase money obligations or represent proceeds of loans utilized to
acquire the Collateral shall be deemed to be paid last. Each Debtor waives all
rights of marshalling, valuation and appraisal in respect of the Collateral. Any
proceeds received or held by the Agent in respect of any sale of, collection
from or other realization upon all or any part of the Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and then or at
any time thereafter applied in whole or in part by the Agent against, the
Obligations in the order permitted by the Credit Agreement. Any surplus of such
proceeds and interest accrued thereon, if any, held by the Agent and remaining
after the Obligations have been Fully Satisfied in accordance with Section 9.10
of the Credit Agreement shall be promptly paid over to the Debtor entitled
thereto or to whomsoever may be lawfully entitled to receive such surplus. The
Agent shall have no obligation to invest or otherwise pay interest on any
amounts held by it in connection with or pursuant to this Agreement.
(i) The Agent may cause any or all of the Collateral held
by it to be transferred into the name of the Agent or the name or names of the
Agent's nominee or nominees.
(ii) The Agent may exercise any and all of the rights and
remedies of any Debtor under or in respect of the Collateral, including any and
all rights to demand or otherwise require payment of any amount under, or
performance of any provision of, any of the Collateral and any and all voting
rights and corporate powers in respect of the Collateral. Each Debtor shall
execute and deliver (or cause to be executed and delivered) to the Agent all
such proxies and other documentation as the Agent may reasonably request for the
purpose of enabling the Agent to exercise the voting and other rights which it
is entitled to exercise pursuant to this clause (iii) and to receive the
dividends, interest and other amounts which it is entitled to receive hereunder.
(iii) The Agent may collect or receive all money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so.
(iv) On any sale of the Collateral, the Agent is hereby
authorized to comply with any limitation or restriction with which compliance is
necessary, in the view of the Agent's counsel, in order to avoid any violation
of applicable law or in order to obtain any required approval of the purchaser
or purchasers by any applicable governmental unit. Such compliance will not be
considered to adversely affect the commercial reasonableness of any sale of any
Collateral.
(v) For purposes of enabling the Agent to exercise its
rights and remedies under this Section 6.1 and enabling the Agent and its
successors and permitted assigns to enjoy the full benefits of the Collateral in
each case as the Agent shall be entitled to exercise its rights and remedies
under this Section 6.1, each Debtor hereby grants to the Agent an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to it) to use, assign, license or sublicense any of its
Intellectual Property, including in such license reasonable access to all media
in which any of the licensed items may be recorded or stored and all computer
programs used for the completion or printout thereof and further including in
such license such rights of quality control and inspection as are reasonably
necessary to prevent the Trademarks included in such license from claims of
invalidation. This license shall also inure to the benefit of all successors and
permitted assigns and transferees of the Agent.
(vi) If Agent sells any of the Collateral of a Debtor on
credit, such Debtor will be credited only with payments actually made by the
purchaser, received by Agent and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Agent may resell the
Collateral and the applicable Debtor shall be credited with the proceeds of the
sale.
Section 6.2. Private Sales. Each Debtor recognizes that the Agent may
be unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "Securities Act") and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Each Debtor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall, to the extent permitted
by law, be deemed to have been made in a commercially reasonable manner. Neither
the Agent nor any Secured Party shall be under any obligation to delay a sale of
any of the Collateral for the period of time necessary to permit the issuer of
such securities to register such securities under the laws of any jurisdiction
outside the United States, under the Securities Act or under any applicable
state securities laws, even if such issuer would agree to do so. Each Debtor
further agrees to do or cause to be done, to the extent that it may do so under
applicable law, all such other reasonable acts and things as may be necessary to
make such sales or resales of any portion or all of the Collateral valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts, arbitrators or
governmental units, domestic or foreign, having jurisdiction over any such sale
or sales, all at the Debtors' expense.
Section 6.3. Standards for Exercising Remedies. To the extent that
applicable law imposes duties on Agent to exercise remedies in a commercially
reasonable manner, each Debtor acknowledges and agrees that it is not
commercially unreasonable for Agent: (a) to fail to incur expenses reasonably
deemed significant by Agent to prepare any Collateral for disposition or
otherwise to complete raw material for work-in-process into finished goods or
other finished products for disposition; (b) except as required by applicable
law, to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of the
Collateral to be collected or disposed of; (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
remove liens on or any adverse claims against the Collateral; (d) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists; (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature; (f) to contact other persons, whether or not in the
same business as Debtor, for expressions of interest in acquiring all or any
portion of the Collateral; (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the Collateral is of a
specialized nature; (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral,
that have the reasonable capability of doing so, and that match buyers and
sellers of assets; (i) to dispose of assets in wholesale rather than retail
markets; (j) to disclaim disposition warranties; (k) to purchase insurance or
credit enhancements to insure Agent against risks of loss, collection or
disposition of Collateral or to provide Agent a guaranteed return from the
collection or disposition of Collateral; (l) to the extent deemed appropriate by
Agent, to obtain the services of brokers, investment bankers, consultants and
other professionals (including Agent and its affiliates) to assist Agent in the
collection or disposition of any of the Collateral; or (m) to comply with any
applicable state or federal law requirement in connection with the disposition
or collection of the Collateral. Each Debtor acknowledges that this Section 6.3
is intended to provide non-exhaustive indications of what actions or omissions
by Agent would not be commercially unreasonable in Agent's exercise of remedies
against the Collateral and that other actions or omissions by Agent shall not be
deemed commercially unreasonable solely by not being included in this Section
6.3. Without limitation upon the foregoing, nothing contained in this Section
6.3 shall be construed to grant any rights to any Debtor or to impose any duties
upon Agent that would not have been granted or imposed by this Agreement or by
applicable law in the absence of this Section 6.3.
ARTICLE 7.
Miscellaneous
-------------
Section 7.1. No Waiver; Cumulative Remedies. No failure on the part
of the Agent to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law or the other Loan
Documents.
Section 7.2. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each Debtor, the Agent, the Secured Parties and
respective successors and permitted assigns, except that no Debtor may assign
any of its rights or obligations under this Agreement without the prior written
consent of the Lenders and Agent may not appoint a successor Agent except in
accordance with the Credit Agreement.
Section 7.3. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. Except as contemplated by
the execution and delivery of a Subsidiary Joinder Agreement or an Amendment
(which only needs to be signed by the party thereto), the provisions of this
Agreement may be amended or waived only by an instrument in writing signed by
the parties hereto (with the consent of and the number of Lenders required by
the Credit Agreement).
Section 7.4. Notices. All notices and other communications provided
for in this Agreement shall be given or made in accordance with the Credit
Agreement and if to any Debtor, at the address for notices of the Borrower set
forth therein.
Section 7.5. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas.
Section 7.6. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 7.7. Survival of Representations and Warranties. All
representations, warranties and certifications made in this Agreement or in any
documentation delivered pursuant hereto shall survive the execution and delivery
of this Agreement, and no investigation by the Agent shall affect the
representations, warranties and certifications or the right of the Agent or any
Secured Party to rely upon them.
Section 7.8. Counterparts. This Agreement may be executed in any
number of counterparts (which may be pages designated only as Signature Pages to
Security Agreement, without page numbers or other identifying information), each
of which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
Section 7.9. Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.10. Termination. Upon the effectiveness of the
authorization for release set forth in Section 9.10 of the Credit Agreement, the
security interests created hereby shall terminate automatically and the Agent
shall, upon the written request, execute and deliver to the Debtors proper
documentation acknowledging the release and termination of the security
interests created by this Agreement, and shall duly assign and deliver to each
Debtor (without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Agent and has not previously been
sold or otherwise applied pursuant to this Agreement.
Section 7.11. Obligations Absolute. All rights and remedies of the
Agent hereunder, and all obligations of each Debtor hereunder, shall be absolute
and unconditional irrespective of: (a) any lack of validity or enforceability of
any of the Loan Documents; (b) any change in the time, manner, or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents; (c) any exchange, release, or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee
or other supporting obligation, for all or any of the Obligations; or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, a third party pledgor or surety other than the Full Satisfaction
of the Obligations.
[SIGNATURE PAGES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTORS:
--------
DARLING INTERNATIONAL INC.
By: /s/ John O. Muse
-----------------------------------
Name: John O. Muse
Title: Executive Vice President
Finance and Administration
DARLING NATIONAL, LLC
By: /s/ John O. Muse
-----------------------------------
Name: John O. Muse
Title: Executive Vice President
Finance and Administration
AGENT:
------
JPMORGAN CHASE BANK, N.A.,
as Agent for the Secured Parties
By: /s/ Matthew H. Hildreth
------------------------------------
Matthew H. Hildreth, Senior Vice
President
INDEX OF SCHEDULES AND EXHIBITS
Schedule 2.1 - Chattel Paper, Promissory Notes and Letters of Credit
Schedule 2.1(a) - Commercial Tort Claims
Schedule 2.1(b) - Pledged Shares - Domestic Subsidiaries
Schedule 2.1(c) - Pledged Shares - Foreign Subsidiaries
Schedule 3.1 - Locations
Schedule 3.2 - Deposit, Commodity and Security Accounts
Schedule 3.3 - Trade and Other Names; Tax I.D. Number
Schedule 3.4 - Intellectual Property
Exhibit A - Form of Amendment
Exhibit B - Subsidiary Joinder Agreement
Exhibit C - Financing Statement
EXHIBIT A
TO
SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated _______________, _____, is delivered pursuant
to Section 4.8 of the Security Agreement (as herein defined) referred to below.
The undersigned hereby agrees that this Amendment may be attached to the
Security Agreement dated as of April 7, 2006 among the undersigned, certain of
its affiliates and JPMorgan Chase Bank, N.A., as agent for the ratable benefit
of the Secured Parties referred to therein (the "Security Agreement"), and that
the Equity Interests, notes or other instruments listed on Schedule 1 annexed
hereto shall be and become part of the Collateral referred to in the Security
Agreement and shall secure payment and performance of all of the undersigned's
Obligations as provided in the Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Security Agreement.
By:
------------------------------
Name:
Title:
Schedule 1
to
Security Agreement Amendment
A. Equity Interests
=========================== ====================== ====================== ========== =================== =========================
Equity Issuer Class of Stock Stock Par Number of Percentage of Total
or Type of Equity Certificate No(s). Value Shares or Units Ownership Interest
=========================== ====================== ====================== ========== =================== =========================
- --------------------------- ---------------------- ---------------------- ---------- ------------------- -------------------------
=========================== ====================== ====================== ========== =================== =========================
B. Notes and Other Instruments
EXHIBIT B
TO
SECURITY AGREEMENT
Subsidiary Joinder Agreement
----------------------------
SUBSIDIARY JOINDER AGREEMENT
----------------------------
This SUBSIDIARY JOINDER AGREEMENT (the "Agreement") dated as of
____________________, ____ is executed by the undersigned (the "Debtor") for the
benefit of JPMORGAN CHASE BANK, N.A., in its capacity as agent for the lenders
party to the hereafter identified Credit Agreement and the other secured parties
(in such capacity herein, the "Agent") and for the benefit of such lenders and
other secured parties in connection with that certain Credit Agreement dated as
of April 7, 2006 among the Agent, DARLING INTERNATIONAL, INC. (the "Borrower),
and the lenders party thereto (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement", and capitalized
terms not otherwise defined herein being used herein as defined in the Credit
Agreement).
The Debtor is a newly formed, established or acquired Restricted
Subsidiary and is required to execute this Agreement pursuant to the terms of
the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Debtor hereby agrees as follows:
1. The Debtor assumes all the obligations of a "Debtor" under the
Security Agreement and agrees that from and after the date hereof it is a
"Debtor" and bound as a "Debtor" under the terms of the Security Agreement as if
a direct signatory thereto. In furtherance of the foregoing, the Debtor hereby
pledges and grants to Agent a security interest in all of its right, title and
interest in and to Debtor's Collateral (as defined in the Security Agreement) to
secure its Obligations (as defined in the Security Agreement) under the terms of
the Security Agreement.
2. Schedules 2.1, 2.1(a), 2.1(b), 2.1(c), 3.1, 3.1(b), 3.2, 3.3 and
3.4 of the Security Agreement are hereby amended to add the information relating
to Debtor set out on Schedules 2.1, 2.1(a), 2.1(b), 2.1(c), 3.1, 3.1(b), 3.2,
3.3 and 3.4 hereof. The Debtor hereby confirms that the representations and
warranties set forth in Article 3 of the Security Agreement applicable to it and
its Collateral and the representations and warranties set forth in the Credit
Agreement applicable to it are true and correct in all material respects after
giving effect to such amendment to the Schedules with the phrases "as of the
date hereof" or "as of the Closing Date" or similar phrases as used therein
meaning the date of this Agreement.
3. In furtherance of its obligations under Section 4.2 of the
Security Agreement but subject to the exceptions set forth therein, Debtor
authorized the filing of such UCC financing statements naming it as debtor, the
Agent as secured party and describing its Collateral and such other
documentation (including intellectual property security agreements) as the Agent
may require to evidence, protect and perfect the Liens created by the Security
Agreement as modified hereby.
4. The Debtor hereby assumes all the obligations of a "Guarantor"
under the Guaranty Agreement and agrees that from and after the date hereof it
is a "Guarantor" and bound as a "Guarantor" under the terms of the Guaranty
Agreement as if it had been an original signatory thereto. In accordance with
the forgoing and for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Debtor irrevocably and unconditionally guarantees to
the Agent and the Lenders the full and prompt payment and performance of the
Guaranteed Indebtedness (as defined in the Guaranty Agreement) upon the terms
and conditions set forth in the Guaranty Agreement.
5. This Agreement shall be deemed to be part of, and a modification
to, the Security Agreement and the Guaranty Agreement and shall be governed by
all the terms and provisions of the Security Agreement and the Guaranty
Agreement, which terms are incorporated herein by reference, are ratified and
confirmed and shall continue in full force and effect as valid and binding
agreements of the Debtor enforceable against the Debtor. The Debtor hereby
waives notice of the Agent's or any Lender's acceptance of this Agreement.
IN WITNESS WHEREOF, the Debtor has executed this Agreement as of the
day and year first written above.
Debtor:
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By:
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Name:
Title:
EXHIBIT C
TO
SECURITY AGREEMENT
Financing Statement Form (National Form)
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UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back)CAREFULLY
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A. NAME & PHONE OF CONTACT AT FILER [optional]
THIS ABOVE SPACE IS
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B. SEND ACKNOWLEDGMENT TO: (Name and Address) USE ONLY
[ ]
[ ]
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1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do not abbreviate or combine names
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1a. ORGANIZATION'S NAME
OR --------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
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1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
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1d. TAX ID #: ADD'NL INFO RE 1e. TYPE OF 1f. JURISDICTION OF 1g. ORGANIZATIONAL ID #, if any
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION
DEBTOR
[ ] NONE
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2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names
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2a. ORGANIZATION'S NAME
OR --------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
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2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
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2d. TAX ID #: ADD'NL INFO RE 1e. TYPE OF 1f. JURISDICTION OF 1g. ORGANIZATIONAL ID #, if any
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION
DEBTOR
[ ] NONE
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3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert only one secured party name (3a or 3b)
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3a. ORGANIZATION'S NAME JPMORGAN CHASE BANK, N.A., as agent
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OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
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3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
P.O. Box 2558 Houston TX 77252-8301 USA
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4. This FINANCING STATEMENT covers the following collateral:
ALL ASSETS OF THE DEBTOR.
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5. ALTERNATIVE DESIGNATION [ ] LESSEE/LESSOR [ ] CONSIGNEE/CONSIGNOR [ ] BAILEE/BAILOR [ ] SELLER/BUYER [ ] AG. LIEN [ ] NON-UCC
[if applicable]: FILING
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6. [ ] This FINANCING STATEMENT is to be filed [for record] [or recorded] 7. Check to REQUEST SEARCH REPORT(S) on Debtor(s)
in the REAL ESTATE RECORDS. [ADDITIONAL FEE] [optional]
Attach Addendum [if applicable] [ ] All Debtors [ ]Debtor 1 [ ]Debtor 2
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8. OPTIONAL FILER REFERENCE DATA
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FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV. 07/29/98)
EXHIBIT "F"
TO
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Form of Compliance Certificate
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COMPLIANCE CERTIFICATE
To: The Administrative Agent and the Lenders parties to the
Credit Agreement described below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of April 7, 2006 (as amended, amended and restated,
modified, renewed, extended or otherwise supplemented from time to time, the
"Agreement") among Darling International Inc. (the "Borrower"), the Lenders
party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ___________________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Restricted Subsidiaries
during the accounting period covered by the attached financial statements [for
QUARTERLY FINANCIAL STATEMENTS ADD: and such financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes];
3. The examinations described in paragraph 2 did not disclose, except
as set forth below, and I have no knowledge of (i) the existence of any
condition or event which constitutes a Default which has not been previously
disclosed or which has not been cured as of the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements most recently
delivered under the Agreement;
Described below are the exceptions, if any, to this paragraph 3 by
listing, in detail, the (i) nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event or (ii) the change
in GAAP or the application thereof and the effect of such change on the attached
financial statements:
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4. I hereby certify that no Loan Party has changed (i) its name, (ii)
the type of entity it is or, (iii) its state of incorporation or organization
without having given the Agent the notice required by the Security Agreement. If
applicable, attached hereto as an exhibit is a listing of commercial tort claims
which are in an amount of $1,000,000 or more and all Intellectual Property
registered with the United States Patent and Trademark Office or Copyright
Office that has been acquired since the later of the Effective Date or the date
of the last Compliance Certificate delivered under the Credit Agreement;
5. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct in
all material respects; and
6. Schedule II hereto sets forth the computations necessary to
determine the Applicable Rate.
The foregoing certifications, together with the computations set
forth in Schedule I and Schedule II hereto and the financial statements
delivered with this Certificate in support hereof, are made and delivered this
_____ day of _____________, 200 .
Darling International Inc.
By:
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Name:
Title:
SCHEDULE I
TO
COMPLIANCE CERTIFICATE
Compliance as of _________, ____
Section 7.01. Fixed Charge Coverage Ratio.
1. Consolidated Net Income of Borrower and its Restricted Subsidiaries (net $
income or (loss), excluding any extraordinary, nonrecurring, nonoperating -----------------
or noncash gains or losses, including or in addition to the following
items)
(a) the income (or loss) of any Unrestricted Subsidiary, any other
Person who is not a Restricted Subsidiary but whose accounts
would be consolidated with those of the Subject Person in the
Subject Person's consolidated financial statements in accordance
with GAAP or any other Person (other than a Restricted
Subsidiary) in which the Subject Person or a subsidiary has an
ownership interest; provided, however, that (i) Consolidated Net
Income shall include amounts in respect of the income of such
when actually received in cash by the Subject Person or such
subsidiary in the form of dividends or similar distributions and
(ii) Consolidated Net Income shall be reduced by the aggregate
amount of all investments, regardless of the form thereof, made
by the Subject Person or any of its subsidiaries in such Person
for the purpose of funding any deficit or loss of such Person; ($)
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(b) any gains or losses accrued on foreign currency receivables or on
foreign currency payables of the Borrower or a subsidiary
organized under the laws of the United States which are not
realized in a cash transaction; ($)
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(c) the income or loss of any Foreign Subsidiary or of any foreign
Person (other than a Subsidiary) in which the Borrower or
Subsidiary has an ownership interest to the extent that the
equivalent dollar amount of the income or loss contains increases
or decreases due to the fluctuation of a foreign currency
exchange rate after the Effective Date; ($)
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(d) the income or loss of any Person acquired by the Borrower or a
Subsidiary for any period prior to the date of such acquisition
(provided such income or loss may be included in the calculation
of Adjusted EBITDA to the extent provided in the definition
thereof); ($)
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(e) sum of Line 1 minus the sum of lines (a) through (d) $
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2. EBITDA
(a) Consolidated Net Income (from 1(d)) $
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(b) any provision for (or less any benefit from) income or franchise
taxes included in determining Consolidated Net Income $
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(c) interest expense (including the interest portion of Capital Lease
Obligations) deducted in determining Consolidated Net Income $
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(d) amortization and depreciation expense deducted in determining
Consolidated Net Income $
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(e) to the extent not disregarded in the calculation of Consolidated $
Net Income, non-cash charges ------------------
(f) sum of Lines (a) through (e) $
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3. Fixed Charges
(a) the aggregate amount of interest paid in cash, including payments
in the nature of interest under Capitalized Lease Obligations $
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(b) the scheduled amortization of Indebtedness paid or payable in cash $
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(c) Restricted Payments $
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(d) 50% of depreciation expenses $
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(e) sum of Lines (a) through (d) $
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4. Line 2(f) minus cash taxes divided by Line 3(e) _____ to 1.00
Compliance with Section 7.01 - Is Line 4 less than 1.25 to 1.00? YES NO
B. SECTION 7.02. LEVERAGE RATIO.
1. Total Indebtedness
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(a) obligations for borrowed money $
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(b) obligations evidenced by bonds, notes, etc. $
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(c) Capital Lease Obligations $
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(d) obligations in respect of letters of credit or letters of
guarantee $
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(e) Total of Lines (a) through (d) $
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2. Borrower's EBITDA (from Line 2(f) above) $
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3. Pro Forma EBITDA of each Prior Target (detailed on a separate Schedule) $
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4. EBITDA applicable to Prior Companies or Prior Assets (detailed on a ($)
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5. Adjusted EBITDA (sum of Line 2 plus Line 3 minus Line 4) $
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6. Line 1(e) divided by Line 5 _____ to 1.00
Compliance with Section 7.02 - Is Line (6) less than or equal to 3.00 to 1.00? YES NO
SCHEDULE II
TO
COMPLIANCE CERTIFICATE
Borrower's Applicable Rate Calculation
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A. PRICING RATIO.
1. Total Indebtedness (from Leverage Ratio Calculation on Schedule(I)) $
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2. Letters of Credit and Letter of Guaranty Obligations ($)
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3. Sum of Line 1 minus Line 2 $
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4. Adjusted EBITDA (from Leverage Ratio Calculation on Schedule(I)) $
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5. Pricing Ratio (Line 3 divided by Line 4) _____ to 1.00
B. APPLICABLE RATE.
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Eurodollar Commitment Letter of
Category Pricing Ratio ABR Spread Spread Fee Rate Credit Fee
============== ===================================== ================ ============= =============== ================
1 = 2.50 to 1.00 1.00% 2.00% 0.500% 2.25%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
2 < 2.50 to 1.00 but = 2.00 to 1.00 0.75% 1.75% 0.500% 2.00%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
3 < 2.00 to 1.00 but = 1.50 to 1.00 0.50% 1.50% 0.375% 1.75%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
4 < 1.50 to 1.00 but = 1.00 to 1.00 0.25% 1.25% 0.375% 1.50%
- -------------- ------------------------------------- ---------------- ------------- --------------- ----------------
5 < 1.00 to 1.00 0.00% 1.00% 0.250% 1.25%
============== ===================================== ================ ============= =============== ================
Based on the foregoing chart, the Applicable Rate will be set with respect to
Category __ as of the Business Day that this Compliance Certificate is
delivered.