EXHIBIT 10.2
CONFORMED COPY
================================================================================
EXECUTION COPY
CREDIT AGREEMENT
Dated as of July 31, 2003
among
WESTLAKE CHEMICAL CORPORATION,
as the Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
THE LENDERS PARTY HERETO
BANC OF AMERICA SECURITIES LLC,
as
Joint Lead Arranger and Co-Book Manager
CREDIT SUISSE FIRST BOSTON,
as
Joint Lead Arranger and Co-Book Manager
TABLE OF CONTENTS
<Table>
<Caption>
Section Page
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THE LENDERS PARTY HERETO..........................................................................................i
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................1
1.01 Defined Terms...................................................................................1
1.02 Other Interpretive Provisions..................................................................24
1.03 Accounting Terms...............................................................................24
1.04 Rounding.......................................................................................25
1.05 References to Agreements and Laws..............................................................25
1.06 Times of Day...................................................................................25
ARTICLE II THE COMMITMENTS AND BORROWINGS........................................................................25
2.01 Loans..........................................................................................25
2.02 Borrowings, Conversions and Continuations of Loans.............................................27
2.03 [Intentionally Omitted]........................................................................28
2.04 Prepayments....................................................................................28
2.05 [Intentionally Omitted]........................................................................30
2.06 Repayment of Loans.............................................................................30
2.07 Interest.......................................................................................31
2.08 Fees...........................................................................................32
2.09 Computation of Interest and Fees...............................................................32
2.10 Evidence of Debt...............................................................................32
2.11 Payments Generally.............................................................................32
2.12 Sharing of Payments............................................................................34
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...............................................................34
3.01 Taxes..........................................................................................34
3.02 Illegality.....................................................................................35
3.03 Inability to Determine Rates...................................................................36
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.........36
3.05 Funding Losses.................................................................................37
3.06 Matters Applicable to all Requests for Compensation............................................37
3.07 Survival.......................................................................................37
ARTICLE IV GUARANTY..............................................................................................38
4.01 The Guaranty...................................................................................38
4.02 Obligations Unconditional......................................................................38
4.03 Reinstatement..................................................................................39
4.04 Certain Additional Waivers.....................................................................39
4.05 Remedies.......................................................................................39
4.06 Rights of Contribution.........................................................................39
4.07 Guarantee of Payment; Continuing Guarantee.....................................................40
ARTICLE V CONDITIONS PRECEDENT TO BORROWINGS.....................................................................40
5.01 Conditions of Closing Date and Initial Borrowing...............................................40
5.02 Conditions to all Borrowings...................................................................44
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................................45
6.01 Existence, Qualification and Power; Compliance with Laws.......................................45
6.02 Authorization; No Contravention................................................................45
6.03 Governmental Authorization; Other Consents.....................................................45
6.04 Binding Effect.................................................................................46
6.05 Financial Statements; No Material Adverse Effect...............................................46
6.06 Litigation.....................................................................................46
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i
<Table>
6.07 No Default.....................................................................................47
6.08 Ownership of Property; Liens...................................................................47
6.09 Environmental Compliance.......................................................................47
6.10 Insurance......................................................................................48
6.11 Taxes..........................................................................................48
6.12 ERISA Compliance...............................................................................48
6.13 Subsidiaries...................................................................................49
6.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.................49
6.15 Disclosure.....................................................................................49
6.16 Compliance with Laws...........................................................................49
6.17 Intellectual Property..........................................................................50
6.18 Solvency.......................................................................................50
6.19 Tax Shelter Regulations........................................................................50
6.20 Business Locations.............................................................................50
6.21 Labor Matters..................................................................................50
6.22 Nature of Business.............................................................................50
6.23 Representations and Warranties from Other Loan Documents.......................................51
6.24 Collateral Documents...........................................................................51
ARTICLE VII AFFIRMATIVE COVENANTS................................................................................51
7.01 Financial Statements...........................................................................51
7.02 Certificates; Other Information................................................................52
7.03 Notices and Information........................................................................53
7.04 Payment of Obligations.........................................................................54
7.05 Preservation of Existence, Etc.................................................................54
7.06 Maintenance of Properties......................................................................54
7.07 Maintenance of Insurance.......................................................................54
7.08 Compliance with Laws...........................................................................55
7.09 Books and Records..............................................................................55
7.10 Inspection Rights..............................................................................55
7.11 Use of Proceeds................................................................................55
7.12 Additional Guarantors..........................................................................56
7.13 Pledged Assets.................................................................................56
7.14 Further Assurances.............................................................................56
ARTICLE VIII NEGATIVE COVENANTS..................................................................................57
8.01 Asset Sales....................................................................................57
8.02 Restricted Payments............................................................................58
8.03 Incurrence of Indebtedness and Issuance of Preferred Stock.....................................60
8.04 Liens..........................................................................................62
8.05 Dividend and Other Payment Restrictions Affecting Subsidiaries.................................62
8.06 Merger, Consolidation or Sale of Assets........................................................63
8.07 Transactions with Affiliates...................................................................63
8.08 Sale and Leaseback Transactions................................................................65
8.09 Anti-Layering..................................................................................65
8.10 Organization Documents; Fiscal Year............................................................65
8.11 Specified Facilities...........................................................................65
8.12 Accounts Receivable Facilities.................................................................65
8.13 Designation of Restricted and Unrestricted Subsidiaries........................................66
8.14 Collateral Account.............................................................................66
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES........................................................................66
9.01 Events of Default..............................................................................66
9.02 Remedies Upon Event of Default.................................................................68
</Table>
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<Table>
9.03 Application of Funds...........................................................................68
ARTICLE X ADMINISTRATIVE AGENT...................................................................................69
10.01 Appointment and Authorization of Administrative Agent..........................................69
10.02 Delegation of Duties...........................................................................69
10.03 Liability of Administrative Agent..............................................................69
10.04 Reliance by Administrative Agent...............................................................70
10.05 Notice of Default..............................................................................70
10.06 Credit Decision; Disclosure of Information by Administrative Agent.............................70
10.07 Indemnification of Administrative Agent........................................................71
10.08 Administrative Agent in its Individual Capacity................................................71
10.09 Successor Administrative Agent.................................................................72
10.10 Administrative Agent May File Proofs of Claim..................................................72
10.11 Collateral and Guaranty Matters................................................................73
10.12 Other Agents; Arrangers and Managers...........................................................73
10.13 Intercreditor Agreement........................................................................73
ARTICLE XI MISCELLANEOUS.........................................................................................74
11.01 Amendments, Etc................................................................................74
11.02 Notices and Other Communications; Facsimile Copies.............................................75
11.03 No Waiver; Cumulative Remedies.................................................................76
11.04 Attorney Costs, Expenses and Taxes.............................................................76
11.05 Indemnification by the Borrower................................................................76
11.06 Payments Set Aside.............................................................................77
11.07 Successors and Assigns.........................................................................77
11.08 Confidentiality................................................................................80
11.09 Set-off........................................................................................80
11.10 Interest Rate Limitation.......................................................................81
11.11 Counterparts...................................................................................81
11.12 Integration....................................................................................81
11.13 Survival of Representations and Warranties.....................................................81
11.14 Severability...................................................................................82
11.15 Tax Forms......................................................................................82
11.16 Replacement of Lenders.........................................................................83
11.17 Governing Law..................................................................................83
11.18 Waiver of Right to Trial by Jury...............................................................84
11.19 Entire Agreement...............................................................................84
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SCHEDULES
1.01(a) Existing Indebtedness
1.01(b) Existing Liens
2.01 Commitments and Pro Rata Shares
6.03 Required Consents, Authorizations, Notices and Filings
6.10 Insurance
6.13 Subsidiaries
6.17 Intellectual Property Matters
6.20(a) Real Properties
6.20(b) Collateral Locations
6.20(c) Chief Executive Office, Jurisdiction of Incorporation,
Principal Place of Business
6.21 Labor Agreements
11.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
1.01 Form of Security Agreement
2.01 Form of New Commitment Agreement
2.02 Form of Loan Notice
7.01 Form of Excess Cash Flow Calculation Certificate
7.12 Form of Joinder Agreement
11.07 Form of Assignment and Assumption
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CREDIT AGREEMENT
This CREDIT AGREEMENT (as amended, modified, restated or supplemented
from time to time, the "Agreement") is entered into as of July 31, 2003 by and
among WESTLAKE CHEMICAL CORPORATION, a Delaware corporation (together with any
permitted successors and assigns, the "Borrower"), the Guarantors (as defined
herein), the Lenders (as defined herein), and BANK OF AMERICA, N.A., as
Administrative Agent (as defined herein).
The Borrower has requested that the Lenders provide a term loan in an
aggregate amount of $120,000,000 for the purposes hereinafter set forth, and the
Lenders are willing to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings
set forth below:
"Accounts Receivable Subsidiary" means any Wholly-Owned Subsidiary of
the Borrower (i) which is formed solely for the purpose of, and which engages in
no substantial activities other than activities in connection with, financing
accounts receivable of the Borrower and/or its Restricted Subsidiaries, (ii)
which is designated by the Borrower as an Accounts Receivables Subsidiary
pursuant to an officers' certificate delivered to the Administrative Agent,
(iii) no portion of Indebtedness or any other obligation (contingent or
otherwise) of which is at any time recourse to or obligates the Borrower or any
Restricted Subsidiary in any way, or subjects any property or asset of the
Borrower or any Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to (1)
representations, warranties and covenants (or, any indemnity with respect to
such representations, warranties and covenants) entered into in the ordinary
course of business in connection with the sale (including a sale in exchange for
a promissory note of or Equity Interest in such Accounts Receivable Subsidiary)
of accounts receivable to such Accounts Receivable Subsidiary or (2) any
guarantee of any such accounts receivable financing by the Borrower or any
Restricted Subsidiary that is permitted to be incurred pursuant to Sections 8.02
and 8.03, (iv) with which neither the Borrower nor any Restricted Subsidiary has
any contract, agreement, arrangement or understanding other than contracts,
agreements, arrangements and understandings entered into in the ordinary course
of business in connection with the sale (including a sale in exchange for a
promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of
accounts receivable in accordance with Section 8.12 and fees payable in the
ordinary course of business in connection with servicing accounts receivable and
(v) with respect to which neither the Borrower nor any Restricted Subsidiary has
any obligation (a) to subscribe for additional Equity Interests therein or make
any additional capital contribution or similar payment or transfer thereto other
than in connection with the sale (including a sale in exchange for a promissory
note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable to such Accounts Receivable Subsidiary in accordance with Section
8.12 or (b) to maintain or preserve the solvency, any balance sheet term,
financial condition, level of income or results of operations thereof.
"Acquired Debt" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of
such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or into,
or becoming a Restricted Subsidiary of, such specified Person and (b)
Indebtedness secured by a Lien that, at the time of acquisition of an asset by
such specified Person, encumbers such asset.
"Additional Commitment" means, with respect to any Lender which
executes a New Commitment Agreement in accordance with Section 2.01(b), the
commitment of such Lender in an aggregate principal amount up to the amount
specified in such New Commitment Agreement to make Tranche B Term Loans in
accordance with the provisions of Section 2.01.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 11.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any 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. "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.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, BAS), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agreement" has the meaning assigned to such term in the heading
hereof.
"Applicable Rate" means, (a) with respect to Base Rate Loans, 2.75% and
(b) with respect to Eurodollar Loans, 3.75%.
"Asset-Based Facility" means the senior secured revolving credit
agreement dated as of the Closing Date among the Borrower, the guarantors named
therein, Bank of America, N.A., Banc of America LLC and the lenders named
therein providing for a revolving credit facility with availability of up to
$200,000,000, subject to borrowing base limitations, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets or rights; provided that the
sale, conveyance or other disposition of all or substantially all of the assets
of the Borrower and its Restricted Subsidiaries taken as a whole will also be
subject to Section 8.06 and Section 9.01(m) and not by the provisions of Section
8.01; and (b) the issuance of Equity Interests in any Restricted Subsidiary or
the sale by any Consolidated Party of Equity Interests in any of its
Subsidiaries or Joint Ventures. Notwithstanding the preceding sentence, none of
the following items will be deemed to be an Asset Sale: (i) any single
transaction or series of related transactions (to the extent not involving
Collateral) for which the Borrower or its Restricted Subsidiaries receive
aggregate consideration of less than $15,000,000; (ii) a transfer of assets
between or among the Loan Parties; (iii) a transfer of assets between or among
Consolidated Parties that are not Loan Parties;
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(iv) an issuance of Equity Interests by a Restricted Subsidiary to another
Consolidated Party; (v) the sale or lease of products, services, accounts
receivable, rolling stock, barges, pipeline capacity or chemical products in the
ordinary course of business; (vi) except to the extent such transaction (or
series or related transactions) involves Collateral having a net book value of
more than $5,000,000, any sale or other disposition of damaged, worn-out or
obsolete assets in the ordinary course of business; (vii) a sale (including a
sale in exchange for a promissory note of or Equity Interest in such Accounts
Receivable Subsidiary) of accounts receivable and/or related assets to an
Accounts Receivable Subsidiary in connection with any Receivables Facility;
(viii) the sale or other disposition of cash or Cash Equivalents; or (ix) a
Restricted Payment that does not involve the sale, lease, conveyance or other
disposition of Collateral and does not violate Section 8.02.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit 11.07, and shall include, in the case of
the initial assignments of portions of Tranche B Term Loan B by the sole initial
Lender, one or more master assignments and assumption agreements to effect
assignments to multiple assignees substantially on the terms of the form of
Assignment and Assumption set forth in Exhibit 11.07.
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses and
disbursements of internal counsel.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended on may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implied in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation".
"Audited Financial Statements" means the audited consolidated and
consolidating balance sheet of the Borrower and its Restricted Subsidiaries for
the fiscal year ended December 31, 2002, and the related consolidated and
consolidating statements of income or operations, shareholders' equity and cash
flows for such fiscal year of the Borrower and its Restricted Subsidiaries,
including the notes thereto.
"Bank of America" means Bank of America, N.A. and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BAS" means Banc of America Securities LLC.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
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"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Borrower" has the meaning specified in the heading hereof.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Businesses" means, at any time, a collective reference to the
businesses operated by the Consolidated Parties at such time.
"Capital Lease Obligations" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) Dollars; (b) securities issued or directly
and fully guaranteed or insured by the United States government or any agency or
instrumentality of the United States government (provided that the full faith
and credit of the United States is pledged in support of those securities)
having maturities of not more than one-year from the date of acquisition; (c)
certificates of deposit and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers' acceptances with maturities not
exceeding one year and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500,000,000 and a
Thomson Bank Watch Rating of "B" or better; (d) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) above entered into with any financial
institution meeting the qualifications specified in clause (c) above; (e)
commercial paper having one of the two highest ratings obtainable from Moody's
or S&P and in each case maturing within nine months after the date of
acquisition; and (f) investments in any Dollar denominated money market fund as
defined by Rule 2a-7 under the Investment Company Act of 1940.
"Casualty Proceeds" shall have the meaning assigned to such term in
Section 7.07(b).
4
"Change of Control" means the occurrence of any of the following: (a)
the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Borrower and its Restricted Subsidiaries taken as a whole to any "person" (as
that term is used in Section 13(d) of the Exchange Act) other than a Principal
or a Related Party of a Principal; (b) the adoption of a plan relating to the
liquidation or dissolution of the Borrower; (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the
Principals and their Related Parties or a Permitted Group, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock
of the Borrower, measured by voting power rather than number of shares, other
than in any transaction that complies with clause (d) herein; (d) the Borrower
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Borrower, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Borrower or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Borrower outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance); or (e) after an initial public offering
of the Borrower or any direct or indirect parent of the Borrower, the first day
on which a majority of the members of the board of directors of the Borrower are
not Continuing Directors.
"Closing Date" means the first date all the conditions precedent in
Section 5.01 are satisfied or waived in accordance with Section 5.01.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means a collective reference to all real and personal
Property with respect to which Liens in favor of the Administrative Agent are
purported to be granted pursuant to and in accordance with the terms of the
Collateral Documents.
"Collateral Account" means the deposit account maintained by the
Borrower with the Administrative Agent (and subject to the security interest of
the Administrative Agent) into which Net Proceeds from Asset Sales of Collateral
and Casualty Proceeds from Involuntary Dispositions affecting Collateral shall
be deposited pending final application of such proceeds in accordance with the
terms of this Agreement.
"Collateral Documents" means a collective reference to the Security
Agreement, the Mortgage Instruments and such other security documents as may be
executed and delivered by the Loan Parties pursuant to the terms of Section
7.13.
"Commitment" means, as to each Lender, the Tranche B Term Loan
Commitment of such Lender.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication: (a) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus (b) provision for taxes based on income or profits
of such Person and its Restricted Subsidiaries for such period (including any
provision for taxes on the Net Income of any Joint Venture that is a
pass-through entity for federal income tax purposes, to the extent such taxes
are paid or payable
5
by such Person or any of its Restricted Subsidiaries, provided, however, that
such provision for taxes shall only be equal to such Person's proportional share
in the Joint Venture), to the extent that such provision for taxes was deducted
in computing such Consolidated Net Income; plus (c) the Fixed Charges of such
Person and its Restricted Subsidiaries for such period, to the extent that such
Fixed Charges were deducted in computing such Consolidated Net Income; plus (d)
depreciation, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; minus (e) non-cash items increasing such
Consolidated Net Income for such period, other than the accrual of revenue in
the ordinary course of business, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the preceding, the provision
for taxes based on the income or profits of, and the depreciation and
amortization and other non-cash expenses of, a Restricted Subsidiary of the
Borrower will be added to Consolidated Net Income to compute Consolidated Cash
Flow of the Borrower only to the extent that a corresponding amount would be
permitted at the date of determination to be distributed as a dividend to the
Borrower by such Restricted Subsidiary without prior governmental approval (that
has not been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (a) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting will be included only to the extent of the amount of
dividends or similar distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person; (b) the Net Income of any Restricted
Subsidiary will be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (c) the cumulative effect of a change
in accounting principles will be excluded; and (d) notwithstanding clause (a)
above, the Net Income (but not loss) of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries.
"Consolidated Parties" means a collective reference to the Borrower and
its Restricted Subsidiaries, and "Consolidated Party" means any one of them.
"Continuing Directors" means, as of any date of determination, any
member of the board of directors of the Borrower who (a) was a member of such
board of directors on the Closing Date or (b) was nominated for election or
elected or appointed to such board of directors with the approval of, or whose
nomination for election by the stockholders was approved by, a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination, appointment or election.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate"
set forth in this Section 1.01.
6
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the Maturity Date. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Borrower to
repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale will not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Borrower may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 8.02. The amount of Disqualified Stock deemed to be outstanding at
any time for purposes of this Agreement will be the maximum amount that the
Borrower and its Restricted Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Restricted Subsidiary that is organized
under the laws of any political subdivision of the United States.
"Eligible Assignee" has the meaning specified in Section 11.07(g).
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
7
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Restricted Subsidiaries directly or indirectly 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) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) 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 Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate a Pension
Plan under Section 4041(c) of ERISA, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA if such termination could
reasonably be expected to have a Material Adverse Effect, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and
(b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
8
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted and with a term equivalent to such
Interest Period would be offered by Bank of America's London Branch to
major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.01.
"Excess Cash Flow" means, for any fiscal year, with respect to the
Borrower and its Restricted Subsidiaries on a consolidated basis, as reported in
the financial statements delivered pursuant to Section 7.01(a) and as determined
in accordance with GAAP, an amount (rounded to the nearest $1,000,000) equal to
the sum (without duplication) of (a) net cash provided by operating activities,
after excluding the impact of changes in any Receivables Facility, minus (b)
capital expenditures (except to the extent attributable to the incurrence of
Capital Lease Obligations or otherwise financed with Indebtedness (other than
Indebtedness under the Asset-Based Facility)), minus (c) the aggregate principal
amount of the Loans repaid or prepaid (whether voluntary or mandatory) during
such period.
"Excess Cash Flow Payment Date" means, with respect to any fiscal year
of the Borrower beginning with the fiscal year ending December 31, 2004, the
tenth Business Day following the 90th day after the end of such fiscal year;
provided, however, if on such date, Availability (after giving effect to the
prepayment required by Section 2.04(b)(i)) is less than $50,000,000 or the Fixed
Charge Coverage Ratio is less than 1.0 to 1.0, then the "Excess Cash Flow
Payment Date" shall be the earlier of (a) the third Business Day thereafter that
Availability (after giving effect to the prepayment required by Section
2.04(b)(i)) is at least $50,000,000 and the Fixed Charge Coverage Ratio is at
least 1.0 to 1.0 and (b) the date that the prepayment described in Section
2.04(b)(iii) is otherwise permitted under the Asset-Based Facility. For purposes
of this definition, the terms "Availability" and "Fixed Charge Coverage Ratio"
shall have the meanings assigned thereto in the Asset-Based Facility (as in
effect on the Closing Date).
"Exchange Act" means the Security Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Existing Financings" means (a) that certain Third Amended and Restated
Revolving Credit Agreement dated as of June 21, 2002 between the Borrower, the
Lenders party thereto and JPMorgan Chase Bank, as Administrative Agent, (b) that
certain Second Amended and Restated Term Loan Agreement dated as of June 21,
2002 between the Borrower, the Lenders party thereto and JPMorgan Chase Bank, as
Administrative Agent, (c) that certain Amended and Restated Note Agreement dated
as of June 21, 2002, between the Borrower and the noteholders party thereto and
(d)the accounts receivable facility originally evidenced by that certain
Receivables Transfer Agreement by and among Park Avenue Receivables Corporation,
Westlake AR Corporation, Westlake Management Services, Inc., and The Chase
Manhattan Bank, dated as of October 29, 1997, and the other agreements related
thereto.
"Existing Indebtedness" means the Indebtedness of the Borrower and its
Subsidiaries (other than Indebtedness under this Agreement) in existence on the
Closing Date and set forth on Schedule 1.01(a), including all reimbursement
obligations with respect to letters of credit outstanding as of that date, in
each case until such amounts are repaid.
"Fair Market Value" means the price that could be negotiated in an
arm's-length transaction between a willing buyer and a willing seller not
involving distress or necessity of either party, determined in good faith by the
board of directors of the Borrower (unless otherwise provided in this
Agreement).
9
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated June 26, 2003, among the
Borrower, the Administrative Agent and BAS.
"Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise
discharges any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference period. In
addition, for purposes of calculating the Fixed Charge Coverage Ratio: (a)
acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations, or any
Person or any of its Restricted Subsidiaries acquired by the specified Person or
any of its Restricted Subsidiaries, and including any related financing
transactions and including increases in ownership of Restricted Subsidiaries,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date will be given pro forma effect (in
accordance with Regulation S-X under the Securities Act) as if they had occurred
on the first day of the four-quarter reference period; (b) the Consolidated Cash
Flow attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, will be excluded; (c) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses (and ownership interests therein) disposed of prior
to the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date; (d) any Person that is a Restricted Subsidiary on the Calculation Date
will be deemed to have been a Restricted Subsidiary at all times during such
four-quarter period; (e) any Person that is not a Restricted Subsidiary on the
Calculation Date will be deemed not to have been a Restricted Subsidiary at any
time during such four-quarter period; and (f) if any Indebtedness bears a
floating rate of interest, the interest expense on such Indebtedness will be
calculated as if the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging
Obligation applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of: (a) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt issuance costs
10
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations; plus
(b) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus (c) any interest accruing on
Indebtedness of another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon; plus (d) the product of (i) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Borrower (other than Disqualified Stock) or to
the Borrower or a Restricted Subsidiary of the Borrower, times (i) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP. However, interest payments on Indebtedness of a Joint Venture shall,
in each case, not be deemed Fixed Charges of the Borrower or any Restricted
Subsidiary as of any date of determination when such Indebtedness is not
considered Indebtedness of the Borrower or any Restricted Subsidiary.
"Foreign Lender" has the meaning specified in Section 11.15(a)(i).
"Foreign Subsidiary" means any Restricted Subsidiary that is not a
Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fully Satisfied" means, with respect to the Obligations as of any
date, that, as of such date, (a) all principal of and interest accrued to such
date which constitute Obligations shall have been irrevocably paid in full in
cash and (b) all fees, expenses and other amounts then due and payable which
constitute Obligations shall have been irrevocably paid in cash.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"General Partner" means a Restricted Subsidiary of the Borrower or any
of its Restricted Subsidiaries that has no assets and conducts no operations
other than its ownership of a general partnership interest in a Joint Venture.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantors" means a collective reference to the Persons identified as
"Guarantors" on the signature pages hereto, and each other Person that
subsequently becomes a Guarantor by executing a Joinder Agreement as
contemplated by Section 7.12, and "Guarantor" means any one of them.
11
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements (other than with respect to the obligations of a Joint
Venture, solely by virtue of a Restricted Subsidiary being the General Partner
of such Joint Venture if, as of the date of determination, no payment on such
Indebtedness has been made by such General Partner of such Joint Venture and
such arrangement would not be classified and accounted for, in accordance with
GAAP, as a liability on a consolidated balance sheet of the Borrower), or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take or pay or to maintain financial statement conditions or otherwise).
"Guaranty" means the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders pursuant to Article IV hereof.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Obligations" means with respect to any specified Person, the
obligations of such Persons under (a) interest rate swap agreements (whether
from fixed to floating or from floating to fixed), interest rate cap agreements
and interest rate collar agreements, (b) other agreements or arrangements
designed to manage interest rate risk and (c) other agreements on arrangements
designed to protect such Person against fluctuations in currency exchange rates,
currency values or commodity prices.
"Indebtedness" means, with respect to any specified Person, without
duplication, any indebtedness of such Person (excluding accrued expenses and
trade payables), whether or not contingent: (a) in respect of borrowed money,
(b) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof), (c) in respect of
banker's acceptances, (d) representing Capital Lease Obligations on Attributable
Debt in respect of sale and leaseback transactions, (e) representing the balance
deferred and unpaid of the purchase price of any property due more than six
months after such property is acquired, or (f) representing any Hedging
Obligations, if and to the extent any of the preceding items (other than letters
of credit, Attributable Debt and Hedging Obligations) would appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any Indebtedness of
any other Person. The amount of any Indebtedness outstanding as of any date will
be (i) the accreted value of the Indebtedness, in the case of any Indebtedness
issued within original issue discount; (ii) the principal amount of the
Indebtedness, in the case of any other Indebtedness, and (iii) in respect of
Indebtedness of another Person secured by a Lien on the assets of the specified
Person, the lesser of (A) the Fair Market Value of such assets at the date of
determination, and (B) the amount of the Indebtedness of the other Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.05.
"Indemnitees" has the meaning set forth in Section 11.05.
"Intellectual Property" has the meaning set forth in Section 6.17.
12
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of the Closing Date among the Administrative Agent, on behalf of itself
and the Lenders, and the administrative agent under the Asset-Based Facility, on
behalf of itself and the lenders thereunder, as amended, modified, restated or
supplemented from time to time.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Loan Notice; provided
that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Investment Grade" means a rating of Baa3 or better by Moody's and BBB-
or better by S&P (or, if either such entity ceases to rate the Senior Notes for
reasons outside of the control of the Borrower, the equivalent investment grade
credit rating from any other "nationally recognized statistical rating
organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act selected by the Borrower as a replacement agency).
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, loans, fees, compensation and advances to
officers, directors and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment" excludes trade credit and accounts receivable in the ordinary
course of business and reimbursement obligations in respect of letters of credit
and tender, bid, performance, government contract, surety and appeal bonds, in
each case solely with respect to obligations of the Borrower or any of its
Restricted Subsidiaries. If the Borrower or any Restricted Subsidiary sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary, the Borrower will be deemed to have
made an Investment on the date of any such sale or disposition equal to the Fair
Market Value of the Borrower's Investments in such Restricted Subsidiary that
were not sold or disposed of in an amount determined as provided in the final
paragraph of Section 8.02. The acquisition by the Borrower or any Restricted
Subsidiary of a Person that holds an Investment in a third Person will be deemed
to be an Investment by the Borrower or such Restricted Subsidiary in such third
Person in an amount equal to the
13
Fair Market Value of the Investments held by the acquired Person in such third
Person in an amount determined as provided in the final paragraph of Section
8.02. Except as otherwise provided in this Agreement, the amount of an
Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.
"Involuntary Disposition" means any loss of, damage to or destruction
of, or any condemnation or other taking for public use of, any Property of any
Consolidated Party.
"Involuntary Disposition Prepayment Event" means, with respect to any
Involuntary Disposition affecting the Collateral, the failure of the Loan
Parties to apply (or cause to be applied) an amount equal to the Casualty
Proceeds of such Involuntary Disposition, if any, either (a) to prepay the Loans
or (b) to repair or replace the Property affected by such Involuntary
Disposition, in each case within 300 days following receipt by a Consolidated
Party of the Casualty Proceeds of such Involuntary Disposition as required by
Section 7.07(b).
"IRS" means the United States Internal Revenue Service.
"Joinder Agreement" means a Joinder Agreement substantially in the form
of Exhibit 7.12 hereto, executed and delivered by a new Guarantor in accordance
with the provisions of Section 7.12.
"Joint Venture" means any joint venture between the Borrower and/or any
Restricted Subsidiary and any other Person, and such joint venture is: (a) owned
50% or less by the Borrower and/or any of its Restricted Subsidiaries; and (b)
not directly or indirectly Controlled by or under direct or indirect common
Control of the Borrower and/or any of its Restricted Subsidiaries.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, any Person which becomes a Lender by executing a New
Commitment Agreement pursuant to Section 2.01(b), and their successors and
assigns, and "Lender" means any one of them.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option on other agreement to give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"Limited Recourse Stock Pledge" means the pledge of Equity Interests in
any Joint Venture or Unrestricted Subsidiary to secure Non-Recourse Debt of such
Joint Venture or such Unrestricted Subsidiary, which pledge is made by a
Restricted Subsidiary of the Borrower, the activities of which are
14
limited to making and managing Investments, and owning Equity Interests, in such
Joint Venture or Unrestricted Subsidiary, but only for so long as its activities
are so limited.
"Loan" means any extension of credit by a Lender to the Borrower under
Article II in the form of a Tranche B Term Loan.
"Loan Documents" means this Agreement, each Note, each Joinder
Agreement, the Collateral Documents and the Fee Letter.
"Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit 2.02.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower or
the Borrower and its Restricted Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party; or (d) a material adverse effect on
the Collateral (or the value thereof).
"Maturity Date" means July 31, 2010.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Mortgage Instruments" shall have the meaning assigned such term in
Section 5.01(d).
"Mortgage Policies" shall have the meaning assigned such term in
Section 5.01(d).
"Mortgaged Properties" shall have the meaning assigned such term in
Section 5.01(d).
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however: (a) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (i) any Asset Sale or any
disposition pursuant to a sale and leaseback transaction or (ii) the disposition
of any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and (b) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Borrower or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(a) the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment
15
banking fees, and sales commissions, and any relocation expenses incurred as a
result of the Asset Sale, (b) taxes paid or payable as a result of the Asset
Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (c) amounts required to be paid to
holders of minority interests in Restricted Subsidiaries or Joint Ventures as a
result of such Asset Sale, (d) amounts required to be applied to the repayment
of Indebtedness secured by a Permitted Lien (ranking senior to any Lien of the
Administrative Agent) on the asset or assets that were the subject of such Asset
Sale, or which must by the terms of such Lien or by applicable Law be repaid out
of the proceeds of such Asset Sale, (e) all payments made with respect to
liabilities directly associated with the assets which are the subject of the
Asset Sale, including, without limitation, trade payables and other accrued
liabilities, and (f) any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Commitment Agreement" has the meaning assigned to such term in
Section 2.01(b).
"Non-Recourse Debt" means Indebtedness (a) as to which neither the
Borrower nor any of its Restricted Subsidiaries (i) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor
or otherwise, or (iii) constitutes the lender; (b) no default with respect to
which (including any rights that the holders of the Indebtedness may have to
take enforcement action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of any other Indebtedness of the
Borrower or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its Stated Maturity; and (c) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Borrower or any of its Restricted Subsidiaries, other than the Equity
Interests of a Joint Venture that is not a Restricted Subsidiary or of an
Unrestricted Subsidiary pledged by the Borrower or any of its Restricted
Subsidiaries as a Limited Recourse Stock Pledge.
"Note" or "Notes" has the meaning specified in Section 2.10(a).
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Parent" means Westlake Polymer and Petrochemical, Inc., a Delaware
corporation.
"Pari Passu Indebtedness" means, in the case of the Obligations, any
senior Indebtedness of the Loan Parties.
16
"Participant" has the meaning specified in Section 11.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Permitted Business" means the petrochemical, chemicals, and vinyls or
plastic fabrications business and any other businesses related, incidental,
complementary or ancillary thereto.
"Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to the Borrower's initial public offering of common stock, provided
that no single Person (other than the Principals and their Related Parties)
Beneficially Owns (together with its Affiliates) more of the Voting Stock of the
Borrower that is Beneficially Owned by such group of investors than is then
collectively Beneficially Owned by the Principals and their Related Parties in
the aggregate.
"Permitted Investments" means (a) any Investment in any Loan Party; (b)
any Investment in Cash Equivalents; (c) any Investment by the Borrower or any
Restricted Subsidiary in a Person, if as a result of such Investment (i) such
Person becomes a Loan Party or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, a Loan Party; (d) any Investment made as a
result of the receipt of non-cash consideration from an Asset Sale that was made
pursuant to and in compliance with Section 8.01; (e) any acquisition of assets
or Capital Stock solely in exchange for the, or out of the net cash proceeds of
a substantially concurrent, issuance of Equity Interests (other than
Disqualified Stock) of the Borrower; (f) any Investments received in settlement,
compromise or resolution of (i) obligations of trade creditors or customers that
were incurred in the ordinary course of business of the Borrower or any of its
Restricted Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade creditor or
customer; or (ii) litigation, arbitration or other disputes with Persons who are
not Affiliates; (g) Investments represented by Hedging Obligations; (h) loans or
advances to employees made in the ordinary course of business of the Borrower or
the Restricted Subsidiary in an aggregate principal amount not to exceed
$2,000,000 at any one time outstanding; (i) Investments in an Accounts
Receivable Subsidiary that, as conclusively determined by the board of directors
of the Borrower, are necessary or advisable to effect a Receivables Facility;
(j) Limited Recourse Stock Pledges; (k) additional Investments in a Subsidiary
holding an interest in Suzhou Huasu Plastics Co. Ltd. in an aggregate amount not
to exceed $8,500,000; (l) Investments in Joint Ventures in an aggregate amount
not to exceed $25,000,000; and (m) other Investments in any Person (excluding
contributions of Collateral to such Person) having an aggregate Fair Market
Value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (m) that are at the time outstanding
not to exceed $10,000,000.
"Permitted Liens" means:
(a) Liens on assets of any Loan Party (other than Collateral) securing
Pari Passu Indebtedness that is permitted by this Agreement to be incurred
and/or securing Hedging Obligations related thereto;
17
(b) Liens in favor of any Loan Party;
(c) Liens on property of a Person existing at the time such Person
becomes a Subsidiary or is merged with or into or consolidated with the Borrower
or any Subsidiary; provided that such Liens were in existence prior to the
contemplation of such acquisition, merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Borrower or the Subsidiary or that becomes a Subsidiary;
(d) Liens on property (including Capital Stock) existing at the time of
acquisition of the property by the Borrower or any Subsidiary, provided that
such Liens were in existence prior to, and not incurred in contemplation of,
such acquisition;
(e) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (d) of the second paragraph of Section 8.03 covering only
the assets acquired with or financed by such Indebtedness;
(f) Liens existing on the Closing Date and set forth on Schedule
1.01(b);
(g) Liens imposed by law, such as carriers', warehousemen's, landlord's
and mechanics' Liens, in each case, incurred in the ordinary course of business;
provided that such Liens secure only amounts not yet due and payable or, if due
and payable, are unfiled and no other action has been taken to enforce the same
or are being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established;
(h) Liens created by the Loan Documents;
(i) Liens securing reimbursement obligations with respect to commercial
letters of credit obtained in the ordinary course of business, consistent with
past practices, which encumber documents and other property or assets relating
to such letters of credit and products and proceeds thereof;
(j) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal income taxation
pursuant to Section 103(b) of the Code, including, without limitation, liens as
a cash collateral account securing existing reimbursement obligations with
respect to a letter of credit issued pursuant thereto;
(k) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar agreement
establishing a trust or escrow arrangement;
(l) Liens on assets of the Borrower or any Restricted Subsidiary
arising as a result of a sale and leaseback transaction with respect to such
assets; provided that the proceeds from such sale and leaseback transaction are
applied to the repayment of Indebtedness or acquisition of assets or the making
of capital expenditures pursuant to Section 8.01(b) or 8.01(c), as applicable;
(m) Liens (on assets other than the Collateral Account, real property,
fixtures and equipment) that secure the Asset-Based Facility, which to the
extent that such Liens attach to Collateral, are subject to the Intercreditor
Agreement;
(n) the interest of a lessor or licensor under an operating lease or
license under which the Borrower or any of its Restricted Subsidiaries are
lessee, sublessee, or licensee, including protective financing statement
filings;
18
(o) Limited Recourse Stock Pledges;
(p) Liens encumbering customary initial deposits and margin deposits,
netting provisions and setoff rights, in each case securing Indebtedness under
Hedging Obligations;
(q) Liens to secure any Permitted Refinancing Indebtedness permitted to
be incurred by this Agreement; provided, however, that: (i) the new Lien shall
be limited to all or part of the same property and assets that secured or, under
the written agreements pursuant to which the original Lien arose, could secure
the original Lien (plus improvements and accessions to, such property or
proceeds or distributions thereof); and (ii) the Indebtedness secured by the new
Lien is not increased to any amount greater than the sum of (x) the outstanding
principal amount or, if greater, committed amount, of the Permitted Referencing
Indebtedness and (y) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancings, refunding, extension, renewal or
replacement;
(r) Liens on accounts receivable and related property deemed to arise
in connection with any Receivables Facility; and
(s) Liens incurred in the ordinary course of business of the Borrower
or any Restricted Subsidiary with respect to obligations that do not exceed
$10,000,000 at any one time outstanding.
"Permitted Payments to Parent" means, without duplication as to
amounts: (a) payments to the Parent to permit the Parent to pay when due, or the
incurrence by the Borrower or any Restricted Subsidiary of expenses on behalf of
Parent with respect to, reasonable accounting, legal and administrative expenses
of the Parent, in an aggregate amount not to exceed $1,000,000 million per
annum; and (b) for so long as the Borrower is a member of a group filing a
consolidated or combined tax return with the Parent, payments to the Parent in
the amount of the relevant tax (including any penalties and interest) that the
Borrower would owe if the Borrower were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are members
of the consolidated or combined group), taking into account any carryovers and
carrybacks of tax attributes (such as net operating losses) of the Borrower and
such Subsidiaries from other taxable years.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Borrower or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Borrower or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that (a) the principal amount
(or initial accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount outstanding, or in the case of
a revolving line of credit, available (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith); (b) such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (c) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Obligations, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Obligations on subordination
terms at least as favorable to the Lenders as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (d) such Indebtedness is incurred either by
the Borrower or by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
19
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Principals" means T.T. Chao, his descendents, including by adoption,
and the spouses of any such individuals.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Principal Amortization Payment" means a principal payment on the
Tranche B Term Loan as set forth in Section 2.06.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means as to each Lender, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the principal amount of the Term Loan held by such Lender at such time and the
denominator of which is the aggregate principal amount of the Term Loan at such
time. The initial Pro Rata Share of each Lender is set forth opposite the name
of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.
"Real Properties" means, at any time, a collective reference to each of
the facilities and real properties owned, leased or operated by the Consolidated
Parties at such time.
"Receivables Facility" means one or more receivables financing
facilities or arrangements, as amended from time to time, pursuant to which the
Borrower or any of its Restricted Subsidiaries sells (including a sale in
exchange for a promissory note of or Equity Interest in an Accounts Receivable
Subsidiary) its accounts receivable, related assets and the provision of
billing, collection and other services in connection therewith, in each case to
an Accounts Receivable Subsidiary.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not the Borrower or a
Restricted Subsidiary in connection with, any Receivables Facility.
"Register" has the meaning set forth in Section 11.07(c).
"Related Party" means (a) any controlling stockholder, 80% (or more)
owned Subsidiary, or immediate family member (in the case of an individual) of
any Principal or (b) any Person, the beneficiaries, stockholders, partners,
owners or Persons beneficially holding a 50% or more controlling interest of
which consist of any one or more Principals and/or such other Persons referred
to in the immediately preceding clause (a).
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
20
"Required Lenders" means, at any time, Lenders holding in the aggregate
more than 50% of the outstanding Loans. The unfunded Commitments of, and the
outstanding Loans held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer, assistant treasurer or controller of a Loan
Party. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means (a) the declaration or payment of any
dividend or the making of any other distribution on account of the Borrower's or
any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Borrower or any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Borrower's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Borrower or
to the Borrower or a Restricted Subsidiary); (b) the purchase, redemption or
other acquisition or retirement for value (including, without limitation, in
connection with any merger or consolidation involving the Borrower) of any
Equity Interests of the Borrower or any direct or indirect parent of the
Borrower; (c) any payment on or with respect to, or purchase, redemption,
defeaseance or other acquisition or retirement for value of, any Indebtedness of
any Loan Party that is contractually subordinated to the Obligations (excluding
any intercompany Indebtedness between or among the Borrower and any of its
Restricted Subsidiaries), except a payment of interest or principal at or after
the Stated Maturity of such interest or principal; (d) any Restricted
Investment; or (e) any voluntary, optional or other non-scheduled payment,
prepayment, redemption, acquisition for value (including without limitation, by
way of depositing money or securities with the trustee with respect thereto
before due for the purpose of paying when due), refund, refinance or exchange of
any Indebtedness of such the Borrower or any of its Restricted Subsidiaries
(other than Indebtedness under the Loan Documents or the Asset-Based Facility)
(in each case, whether or not mandatory).
"Restricted Subsidiary" of a Person means any Subsidiary of the such
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, each reference to a "Restricted Subsidiary" shall refer to a
Subsidiary of the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Security Agreement" means the security and pledge agreement in the
form of Exhibit 1.01 dated as of the Closing Date executed in favor of the
Administrative Agent by each of the Loan Parties, as amended, modified, restated
or supplemented from time to time.
"Senior Note" means any one of the 8 3/4 % Notes due 2011 issued by the
Borrower in favor of the Senior Noteholders pursuant to the Senior Note
Indenture, as such Senior Notes may be amended, modified, restated or
supplemented and in effect from time to time in accordance with the terms
hereof.
21
"Senior Note Indenture" means the Indenture, dated as of the Closing
Date, by and among the Borrower and the Senior Noteholders, as the same may be
amended, modified, restated or supplemented and in effect from time to time in
accordance with the terms hereof.
"Senior Noteholder" means any one of the holders from time to time of
the Senior Notes.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they mature
in the ordinary course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary course,
(c) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage, (d) the fair value of the Property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (e) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Specified Facilities" means the Calcasieu Parish, Louisiana ethylene,
styrene and polyethylene facilities and the Marshall County, Kentucky ethylene,
chlor-alkali, vinyl chloride monomer and polyvinyl chloride facilities.
"Specified Permitted Liens" means Liens of the type described in
clauses (d), (e), (f), (g), (h), (m) and (n) of the definition of "Permitted
Liens".
"Stated Maturity" means, with respect to any installment of interest on
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness, and will not include any contingent obligations to repay,
redeem or repurchase any such interest on principal prior to the date originally
scheduled for the payment thereof.
"Styrene Plant Sale" means an Asset Sale of the plant, properties and
equipment comprising the styrene manufacturing facility located in Calcasieu
Parish, Louisiana and owned by Westlake Styrene Corporation.
"Subsidiary" means, with respect to any specified Person: (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency and after giving effect to any voting agreement or
stockholders' agreement that effectively transfers voting power) to vote in the
election of directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and (b) any partnership (i) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (ii) the only general partners of which are that Person or one
or more Subsidiaries of that Person (or any combination thereof). Unless
otherwise specified, all references herein to a "Subsidiary" or to
"Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Tranche B Term Loan" has the meaning specified in Section 2.01(b).
22
"Tranche B Term Loan Commitment" means, as to each Lender, its
obligation to make its portion of the Tranche B Term Loan to the Borrower
pursuant to Section 2.01(a), in the principal amount set forth opposite such
Lender's name on Schedule 2.01 or in the Assignment and Assumption or New
Commitment Agreement, as applicable, pursuant to which such Lender becomes a
party hereto. The aggregate principal amount of the Tranche B Term Loan
Commitments of all of the Lenders as in effect on the Closing Date is ONE
HUNDRED TWENTY MILLION DOLLARS ($120,000,000) and may be increased from time to
time in accordance with Section 2.01(b).
"Type" means, with respect to any Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unrestricted Subsidiary" means (i) any Accounts Receivable Subsidiary,
(ii) Westlake International Investments Corporation, a British Virgin Islands
corporation, (iii) any Subsidiary of an Unrestricted Subsidiary and (iv) any
other Subsidiary of the Borrower that is designated by the board of directors of
the Borrower as an Unrestricted Subsidiary pursuant to a board resolution, but
only to the extent that such Subsidiary: (A) has no Indebtedness other than
Non-Recourse Debt; (B) is not party to any agreement, contract, arrangement or
understanding with the Borrower or any Restricted Subsidiary unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Borrower or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Borrower; (C) is a Person
with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation (1) to subscribe for
additional Equity Interests or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (D) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Borrower or any
of its Restricted Subsidiaries. Any designation of a Subsidiary of the Borrower
as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by
filing with the Administrative Agent a certified copy of the board resolution of
the Borrower giving effect to such designation and an officers' certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section 8.02. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Borrower as of such date and, if such Indebtedness
is not permitted to be incurred by Section 8.03, an Event of Default shall
exist. The board of directors of the Borrower may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Borrower of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under Section 8.03, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the board of
directors of such Person.
23
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
times (ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment times (b) the then
outstanding principal amount of such Indebtedness.
"Wholly-Owned Subsidiary" of any specified Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) will at
the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of
such Person and one or more Wholly-Owned Subsidiaries of such Person.
1.02 OTHER INTERPRETIVE PROVISIONS.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder"
and words of similar import when used in any Loan Document shall refer
to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference
appears.
(iii) The term "including" is by way of example and
not limitation.
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(c) Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) Except as otherwise specifically prescribed herein, all accounting
terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement
shall be prepared in conformity with, GAAP applied on a consistent basis, as in
effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the
24
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
1.04 ROUNDING.
Any financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS.
Unless otherwise expressly provided herein, (a) references to
Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.
1.06 TIMES OF DAY.
Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).
ARTICLE II
THE COMMITMENTS AND BORROWINGS
2.01 LOANS.
(a) Tranche B Term Loan. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make its portion of a term loan (the
"Tranche B Term Loan") to the Borrower on the Closing Date (or on the effective
date of any increase in the Tranche B Term Loan Commitment pursuant to Section
2.01(b), as applicable) in an amount not to exceed such Lender's Tranche B Term
Loan Commitment. Amounts repaid on the Tranche B Term Loan may not be
reborrowed. The Tranche B Term Loan may consist of Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.
(b) Increases of the Tranche B Term Loan Commitments. The Borrower
shall have the right upon at least fifteen (15) Business Days' prior written
notice to the Administrative Agent to increase the Tranche B Term Loan
Commitments by up to $50,000,000 in the aggregate, in a single increase, at any
time and from time to time during the period commencing on the Closing Date and
ending on the fourth anniversary of the Closing Date, subject, however, in any
such case, to satisfaction of the following conditions precedent:
(i) no Default exists on the date on which such increase is to
become effective;
(ii) the representations and warranties set forth in Article
VI of this Agreement shall be true and correct in all material respects
on and as of the date on which such increase is to
25
become effective, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date;
(iii) such increase shall be an integral multiple of
$1,000,000 and shall in no event be less than $5,000,000;
(iv) such requested increase shall be effective on such date
only to the extent that, on or before such date, (A) the Administrative
Agent shall have received and accepted a corresponding amount of
Additional Commitment(s) pursuant to a commitment letter(s) reasonably
acceptable to the Administrative Agent from one or more lenders
reasonably acceptable to the Administrative Agent and, with respect to
any lender that is not at such time a Lender hereunder, the Borrower,
(B) each such lender has executed an agreement in the form of Exhibit
2.01 (hereto (each such agreement a "New Commitment Agreement"),
accepted in writing therein by the Administrative Agent and, with
respect to any lender that is not at such time a Lender hereunder, the
Borrower, with respect to the Additional Commitment of such lender and
(C) the Administrative Agent shall have received from the Borrower a
Loan Notice with respect to the funding of such Additional Commitment;
(v) the Borrower shall have paid to each Lender (that is a
Lender prior to giving effect to such Additional Commitment(s)) an
amount equal to the product of (A) the amount of such Lender's
Commitment (prior to giving effect to such Additional Commitment(s))
multiplied by (B) the weighted average (expressed as a percentage and
determined as of the date of payment thereof) of the commitment,
upfront and/or other similar fees paid by the Loan Parties in respect
of any Additional Commitment(s) pertaining to any such increase;
(vi) the Administrative Agent shall have received all
documents (including resolutions of the board of directors of the
Borrower) it may reasonably request relating to the corporate or other
necessary authority for and the validity of such increase in the
Aggregate Revolving Commitments, and any other matters relevant
thereto, all in form and substance reasonably satisfactory to the
Administrative Agent; and
(vii) the Borrower shall have purchased additional title
insurance with respect to the Mortgaged Properties such that after
giving effect to the funding of such Additional Commitment, the amount
of title insurance on the Mortgaged Properties shall not be less than
the outstanding amount of the Loans.
Upon the effectiveness of the increase in the Tranche B Term Loan
Commitments pursuant to this Section 2.01(b), (i) the Pro Rata Shares of each
Lender shall be automatically adjusted to give effect to such increase, provided
that the amount of each Lender's Tranche B Term Loan Commitment (other than a
Lender whose Tranche B Term Loan Commitment shall have been increased in
connection with such increase) shall remain unchanged, (ii) the Borrower, the
Administrative Agent and the Lenders will use all commercially reasonable
efforts to assign and assume outstanding Tranche B Term Loans to conform the
respective amounts thereof held by each Lender to the respective Pro Rata
Shares, as so adjusted, it being understood that the parties hereto shall use
commercially reasonable efforts to avoid prepayment or assignment of any
affected Tranche B Term Loan that is a Eurodollar Rate Loan on a day other than
the last day of the Interest Period applicable thereto and (iii) beginning with
the date of the next Principal Amortization Payment next succeeding the date of
such increase, the amount of each Principal Amortization Payment on the Tranche
B Term Loans shall be increased by the minimum amount that, when allocated
ratably (based on outstandings) among all of the Lenders holding Tranche B Term
Loans immediately after giving effect to such increase in the Tranche B Term
Loan Commitments, would provide (assuming all other things to be equal) for each
of the Lenders holding Tranche B Term Loans immediately prior to giving effect
to such
26
increase in the Tranche B Term Commitments to receive in connection with such
Principal Amortization Payment an amount at least equal to the amount that such
Lender would have received had such increase in the Tranche B Term Loan
Commitments (and the corresponding adjustment to such Principal Amortization
Payment pursuant to this Section 2.01(b)) not taken place.
At such time as the Borrower has received and accepted Additional
Commitments in an aggregate amount equal to $50,000,000, the Borrower's ability
to solicit and accept commitments pursuant to this Section 2.01(b) shall
terminate.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
irrevocable notice from the Borrower to the Administrative Agent, which may be
given by telephone (provided that such telephonic notice complies with the
information requirements of the form of Loan Notice attached hereto). Each such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans; provided, however, all
Borrowings made on the Closing Date shall be made as Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower on behalf of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing
of or conversion to Base Rate Loans shall be in a principal amount of $500,000
or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
Borrowing, a conversion of Loans from one Type to the other, or a continuation
of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion
or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Loans are to be converted, and (v)
if applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice. Upon satisfaction of
the applicable conditions set forth in Section 5.02 (and, if such Borrowing is
the initial Borrowing, Section 5.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower.
27
(c) Subject to Section 3.05, a Eurodollar Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans having Interest Periods greater than
one month without the consent of the Required Lenders. During the existence of
an Event of Default, no Loans may be converted to or continued as Eurodollar
Rate Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
Bank of America's prime rate used in determining the Base Rate promptly
following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than four (4) Interest Periods in effect with respect to
the Tranche B Term Loan.
2.03 [INTENTIONALLY OMITTED].
2.04 PREPAYMENTS.
(a) Voluntary Prepayments of Loans.
(i) General. The Borrower may, upon notice to the
Administrative Agent, at any time after the first anniversary of the
Closing Date (i) voluntarily prepay Base Rate Loans in whole or in part
without premium or penalty, and (ii) subject to Section 3.05 hereof,
voluntarily prepay Eurodollar Rate Loans in whole or in part on the
last day of the applicable Interest Period without premium or penalty;
provided that (A) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (x) three Business Days prior to any
date of prepayment of Eurodollar Rate Loans and (y) on the date of
prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple
of $1,000,000 in excess thereof (or, if less, the entire principal
amount thereof then outstanding); (C) any prepayment of Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof (or, if less, the entire principal amount
thereof then outstanding); and (D) any prepayment of the Tranche B Term
Loan shall be applied to remaining Principal Amortization Payments in
inverse order of maturities thereof. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Loans to be
prepaid. The Administrative Agent will promptly notify each Lender of
its receipt of each such notice, and of the amount of such Lender's Pro
Rata Share of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts
required pursuant to Section 3.05. Each such prepayment shall be
applied to the Loans of the Lenders in accordance with their respective
Pro Rata Shares.
(ii) Certain Prepayments Permitted Prior to First Anniversary
of the Closing Date. Notwithstanding the foregoing clause (i), the
Borrower shall be permitted to prepay up to 35% of the outstanding
principal of the Tranche B Term loan prior to the first anniversary of
the Closing
28
Date with the net proceeds from the issuance of Capital Stock by the
Borrower subject to the satisfaction of the following conditions:
(A) after giving effect to such prepayment, the
outstanding principal amount of the Tranche B Term Loan shall
not be less than the sum of (1) $65,000,000 plus (2) 65% of
all Additional Commitments that have been funded;
(B) such prepayment occurs not later than 90 days
after the date of such issuance of Capital Stock; and
(C) such prepayment shall be subject to an additional
premium equal to the amount of such prepayment multiplied by
1%.
(b) Mandatory Prepayments.
(i) Excess Cash Flow. If Excess Cash Flow for any fiscal year
is at least $2,000,000 then on the Excess Cash Flow Payment Date for
such fiscal year, the Borrower shall prepay the Loans in an amount
equal to 50% of such Excess Cash Flow (such prepayment to be applied as
set forth in clause (iv) below).
(ii) (A) Asset Sales.
(1) Collateral. Within 5 days after
the receipt of any Net Proceeds from an
Asset Sale of Collateral (but subject to the
applicable reinvestment provisions of
Section 8.01(c), if any), the Borrower shall
prepay the Loans in an aggregate amount
equal to 100% of the Net Proceeds of the
related Asset Sale (such prepayment to be
applied as set forth in clause (iv) below).
In connection with any such prepayment, the
Borrower shall deliver to the Administrative
Agent a notice of such prepayment together
with a certificate of a Responsible Officer,
on behalf of the Borrower, setting forth in
reasonable detail the calculation of the Net
Proceeds from the related Asset Sale; the
Borrower will also endeavor to provide such
documentation to the Administrative Agent at
least three days notice prior to such
prepayment.
(2) Other Assets. Immediately upon
the failure of the Loan Parties to apply (or
cause to be applied) the Net Proceeds of any
Asset Sale of assets other than Collateral
in the manner contemplated by the terms of
Section 8.01(b), the Borrower shall prepay
the Loans in an aggregate amount equal to
100% of the Net Proceeds of the related
Asset Sale not applied (or caused to be
applied) by the Loan Parties in the manner
contemplated by the terms of Section 8.01(b)
(such prepayment to be applied as set forth
in clause (iv) below). In connection with
any such prepayment, the Borrower shall
deliver to the Administrative Agent a notice
of such prepayment together with a
certificate of a Responsible Officer, on
behalf of the Borrower, setting forth in
reasonable detail the calculation of the Net
Proceeds from the related Asset Sale.
(B) Involuntary Dispositions. Immediately
upon the occurrence of an Involuntary Disposition
Prepayment Event, the Borrower shall prepay the Loans
in an aggregate amount equal to 100% of the Casualty
Proceeds of the related
29
Involuntary Disposition (such prepayment to be
applied as set forth in clause (iv) below). In
connection with any such prepayment, the Borrower
shall deliver to the Administrative Agent a notice of
such prepayment together with a certificate of a
Responsible Officer, on behalf of the Borrower,
setting forth in reasonable detail the calculation of
the Casualty Proceeds from the related Involuntary
Disposition; the Borrower will also endeavor to
provide such documentation to the Administrative
Agent at least three days notice prior to such
prepayment.
(iii) Certain Issuances of Equity. If, prior to the first
anniversary of the Closing Date, the Borrower elects to prepay any
portion of the Senior Notes with the net proceeds from the issuance of
Capital Stock by the Borrower, the Borrower shall immediately make a
ratable prepayment of the Loans (but in no event shall such prepayment
exceed 35% of the outstanding principal of the Tranche B Term Loan)
which prepayment shall comply with clauses (A) through (C) of Section
2.04(a)(ii) (such prepayment to be applied as set forth in clause (iv)
below).
(iv) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.04(b) shall be applied
to prepay the Tranche B Term Loan (to remaining Principal Amortization
Payments in inverse order of maturities thereof). Within the parameters
of the applications set forth above, prepayments shall be applied first
to Base Rate Loans and then to Eurodollar Rate Loans in direct order of
Interest Period maturities. All prepayments under this Section 2.04(b)
shall be subject to Section 3.05, but otherwise without premium or
penalty, and shall be accompanied by interest on the principal amount
prepaid through the date of prepayment.
(v) Prepayment Account. If the Borrower is required to make a
mandatory prepayment of Eurodollar Rate Loans under this Section
2.04(b), the Borrower shall have the right, in lieu of making such
prepayment in full, to deposit an amount equal to such mandatory
prepayment with the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the prepayment of such
Eurodollar Rate Loans and shall be applied to the prepayment of the
applicable Eurodollar Rate Loans at the end of the current Interest
Periods applicable thereto. At the request of the Borrower, amounts so
deposited shall be invested by the Administrative Agent, as instructed
by the Borrower, in Cash Equivalents maturing prior to the date or
dates on which it is anticipated that such amounts will be applied to
prepay such Eurodollar Rate Loans; any interest earned on such Cash
Equivalents will be for the account of the Borrower and the Borrower
will deposit with the Administrative Agent the amount of any loss on
any such Cash Equivalents to the extent necessary in order that the
amount of the prepayment to be made with the deposited amounts may not
be reduced.
2.05 [INTENTIONALLY OMITTED].
2.06 REPAYMENT OF LOANS.
The Borrower shall repay the outstanding principal amount of the
Tranche B Term Loan in consecutive quarterly installments as follows (as such
installments may hereafter be adjusted as a result of prepayments made pursuant
to Section 2.04 or as the result of an increase in the amount of the Tranche B
Term Loan Commitments pursuant to Section 2.01(b)), unless accelerated sooner
pursuant to Section 9.02:
30
<Table>
<Caption>
PRINCIPAL AMORTIZATION
PAYMENT (EXPRESSED AS A
PAYMENT DATE PERCENTAGE OF THE TRANCHE
(THE LAST BUSINESS DAY OF B TERM LOAN
EACH OF THE FOLLOWING COMMITMENT ON THE
MONTHS) CLOSING DATE)
----------------------------- --------------------------
September, 2003,
December, 2003, March,
2004 and June, 2004 0.25%
September, 2004,
December, 2004, March,
2005 and June, 2005 0.25%
September, 2005,
December, 2005, March,
2006 and June, 2006 0.25%
September, 2006,
December, 2006, March,
2007 and June, 2007 0.25%
September, 2007,
December, 2007, March,
2008 and June, 2008 0.25%
September, 2008,
December, 2008, March,
2009 and June, 2009 0.25%
September, 2009,
December, 2009 and
March, 2010 23.50%
Maturity Date Balance
</Table>
2.07 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
upon the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
31
2.08 FEES.
(a) The Borrower shall pay to the BAS and the Administrative Agent for
their own respective accounts fees in the amounts and at the times specified in
the Fee Letter. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
(b) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever, except as expressly provided in such writing.
2.09 COMPUTATION OF INTEREST AND FEES.
All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.11(a), bear interest for one day.
2.10 EVIDENCE OF DEBT.
(a) The Borrowings made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Borrowings made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a promissory note (a "Note") which shall
evidence such Lender's Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In the event of any conflict between the accounts and records
maintained by the Administrative Agent and the accounts and records of any
Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.
2.11 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided
32
herein) of such payment in like funds as received by wire transfer to such
Lender's Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Borrowing set
forth in Article V are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans are several
and not joint. The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender
33
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.12 SHARING OF PAYMENTS.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in the Loans made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment in respect of such Loans or such participations, as the case may be, pro
rata with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender under any of
the circumstances described in Section 11.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 11.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the
Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by any Loan Party to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as "Taxes"). If any Loan Party
shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary
34
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section), each of the Administrative Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make such deductions,
(iii) such Loan Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Laws, and
(iv) within 30 days after the date of such payment, such Loan Party shall
furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor (which demand shall be
accompanied by a certificate of the type described in Section 3.06(a)).
3.02 ILLEGALITY.
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
together with an explanation of the circumstances, any obligation of such Lender
to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted. Each
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
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3.03 INABILITY TO DETERMINE RATES.
If the Required Lenders determine that for any reason adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
that the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON EURODOLLAR
RATE LOANS.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law after the Closing Date, or
such Lender's compliance with any guideline, request, directive or other
instruction issued or made after the Closing Date by any central bank or
Governmental Authority, there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Loans, or
a reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a) any
such increased costs or reduction in amount resulting from (i) Taxes or Other
Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which such Lender is organized or has its Lending Office, and (iii)
reserve requirements contemplated by Section 3.04(c)), then from time to time
upon demand of such Lender, which shall include a certificate of the type
described in Section 3.06(a), (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law after the
Closing Date regarding capital adequacy or any change therein or in the
interpretation thereof by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or compliance by such
Lender (or its Lending Office) therewith, has the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of such Lender's obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such Lender's
desired return on capital), then from time to time upon demand of such Lender,
which shall include a certificate of the type described in Section 3.06(a),
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender for such
reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall
be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 15 days' prior notice, which shall include a
certificate of the type described in Section 3.06(a), (with a copy to the
Administrative Agent) of such additional interest from
36
such Lender. If a Lender fails to give notice 15 days prior to the relevant
Interest Payment Date, such additional interest shall be due and payable 15 days
from receipt of such notice.
3.05 FUNDING LOSSES.
Upon demand of any Lender, which shall include a certificate of the
type described in Section 3.06(a), (with a copy to the Administrative Agent)
from time to time, the Borrower shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:
(a) any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of
the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 11.16;
including any loss or expense (other than any loss of anticipated profits)
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder shall be delivered to
the Borrower by the Agent or such Lender and shall be conclusive in the absence
of manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under Section
3.01 or 3.04 or if the circumstances described in Section 3.02 exist with
respect to any Lender, the Borrower may replace such Lender in accordance with
Section 11.16.
3.07 SURVIVAL.
All of the Borrower's obligations under this Article III shall survive
the repayment of all other Obligations hereunder.
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ARTICLE IV
GUARANTY
4.01 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender and the Administrative Agent as hereinafter provided, as primary obligor
and not as surety, the prompt payment of the Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) strictly in accordance with the
terms thereof. The Guarantors hereby further agree that if any of the
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Loan Documents, the obligations of each Guarantor under this
Agreement and the other Loan Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under the Debtor Relief Laws or any comparable provisions of any
applicable state law.
4.02 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.01 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Loan Documents, or any
other agreement or instrument referred to therein, or any substitution, release,
impairment or exchange of any other guarantee of or security for any of the
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.02 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor for amounts paid under this Article IV until such time as the
Obligations have been Fully Satisfied. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Loan Documents or any other agreement or instrument referred to
in the Loan Documents shall be done or omitted;
(c) the maturity of any of the Obligations shall be
accelerated, or any of the Obligations shall be modified, supplemented
or amended in any respect, or any right under any of the Loan Documents
or any other agreement or instrument referred to in the Loan Documents
shall be waived or any other guarantee of any of the Obligations or any
security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
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(d) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Obligations
shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of
any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Loan Documents or any other agreement or instrument referred to in
the Loan Documents, or against any other Person under any other guarantee of, or
security for, any of the Obligations.
4.03 REINSTATEMENT.
The obligations of the Guarantors under this Article IV shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including, without limitation,
fees and expenses of counsel) incurred by the Administrative Agent or such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
4.04 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Obligations, except through the exercise of rights
of subrogation pursuant to Section 4.02 and through the exercise of rights of
contribution pursuant to Section 4.06, unless and until such time as all
Obligations are Fully Satisfied.
4.05 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Obligations may be declared to be forthwith due
and payable as provided in Section 9.02 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable
by any other Person) shall forthwith become due and payable by the Guarantors
for purposes of Section 4.01. The Guarantors acknowledge and agree that their
obligations hereunder are secured in accordance with the terms of the Collateral
Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
4.06 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment.
39
The payment obligations of any Guarantor under this Section 4.06 shall be
subordinate and subject in right of payment to the Obligations until such time
as the Obligations have been Fully Satisfied, and none of the Guarantors shall
exercise any right or remedy under this Section 4.06 against any other Guarantor
until such Obligations have been Fully Satisfied. For purposes of this Section
4.06, (a) "Excess Payment" shall mean the amount paid by any Guarantor in excess
of its Ratable Share of any Guaranteed Obligations; (b) "Ratable Share" shall
mean, for any Guarantor in respect of any payment of Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of all of the Loan Parties exceeds the amount
of all of the debts and liabilities (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Loan Parties hereunder) of the Loan Parties; provided, however, that, for
purposes of calculating the Ratable Shares of the Guarantors in respect of any
payment of Obligations, any Guarantor that became a Guarantor subsequent to the
date of any such payment shall be deemed to have been a Guarantor on the date of
such payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such payment; (c) "Contribution Share" shall mean, for any
Guarantor in respect of any Excess Payment made by any other Guarantor, the
ratio (expressed as a percentage) as of the date of such Excess Payment of (i)
the amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder) to (ii)
the amount by which the aggregate present fair salable value of all assets and
other properties of the Loan Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Loan Parties) of the Loan Parties other than the maker of
such Excess Payment; provided, however, that, for purposes of calculating the
Contribution Shares of the Guarantors in respect of any Excess Payment, any
Guarantor that became a Guarantor subsequent to the date of any such Excess
Payment shall be deemed to have been a Guarantor on the date of such Excess
Payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such Excess Payment; and (d) "Guaranteed Obligations" shall mean the
Obligations guaranteed by the Guarantors pursuant to this Article IV. This
Section 4.06 shall not be deemed to affect any right of subrogation, indemnity,
reimbursement or contribution that any Guarantor may have under Law against the
Borrower in respect of any payment of Guaranteed Obligations. Notwithstanding
the foregoing, all rights of contribution against any Guarantor shall terminate
from and after such time, if ever, that such Guarantor shall be relieved of its
obligations in accordance with Section 10.11.
4.07 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Article IV is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Obligations
whenever arising.
ARTICLE V
CONDITIONS PRECEDENT TO BORROWINGS
5.01 CONDITIONS OF CLOSING DATE AND INITIAL BORROWING.
The occurrence of the Closing Date, the effectiveness of this Agreement
and the obligation of each Lender to make its initial Borrowing hereunder is
subject to satisfaction of the following conditions precedent:
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(a) Loan Documents, Organization Documents, Etc. The
Administrative Agent's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of
the signing Loan Party on behalf of the signing Loan Party, each dated
the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal
counsel:
(i) executed counterparts of this Agreement and the
other Loan Documents;
(ii) copies of the Organization Documents of each
Loan Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation or organization, where
applicable, and certified by a Responsible Officer of such
Loan Party to be true and correct as of the Closing Date;
(iii) such certificates of resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Loan Party as the Administrative
Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act
as a Responsible Officer of each Loan Party signed on behalf
of each Loan Party in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party; and
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and is validly
existing, in good standing and qualified to engage in business
in (A) the jurisdiction of its incorporation or organization
and (B) each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business
requires such qualification, except to the extent that failure
to do so could not reasonably be expected to have a Material
Adverse Effect.
(b) Opinions of Counsel. The Administrative Agent shall have
received, in each case dated as of the Closing Date and in form and
substance reasonably satisfactory to the Administrative Agent:
(i) a legal opinion of Baker Botts, general counsel
for the Loan Parties; and
(ii) a legal opinion of special local counsel for the
Loan Parties for each state in which any Mortgaged Property is
located.
(c) Personal Property Collateral. The Administrative Agent
shall have received:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of the chief executive office of each Loan
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) UCC financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent's
sole discretion, to perfect the Administrative Agent's
security interest in the Collateral;
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(iii) searches of ownership of, and Liens on,
intellectual property of each Loan Party in the appropriate
governmental offices;
(iv) duly executed notices of grant of security
interest in the form required by the Security Agreement as are
necessary, in the Administrative Agent's sole discretion, to
perfect the Administrative Agent's security interest in the
Collateral consisting of intellectual property; and
(v) in the case of any personal property Collateral
located at a premises leased by a Loan Party, such estoppel
letters, consents and waivers from the landlords on such real
property as may be required by the Administrative Agent.
(d) Real Property Collateral. The Administrative Agent shall
have received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each, as the same may be
amended, modified, restated or supplemented from time to time,
a "Mortgage Instrument" and collectively the "Mortgage
Instruments") encumbering the fee or leasehold interest of any
Loan Party in each of the Real Properties designated in
Schedule 6.20(a) as a "Mortgaged Property" (each a "Mortgaged
Property" and collectively the "Mortgaged Properties");
(ii) in the case of each real property leasehold
interest of any Loan Party constituting Mortgaged Property,
(a) such estoppel letters, consents and waivers from the
landlords on such real property as may be required by the
Administrative Agent, which estoppel letters shall be in the
form and substance reasonably satisfactory to the
Administrative Agent and (b) evidence that the applicable
lease, a memorandum of lease with respect thereto, or other
evidence of such lease in form and substance reasonably
satisfactory to the Administrative Agent, has been or will be
recorded in all places to the extent necessary or desirable,
in the reasonable judgment of the Administrative Agent, so as
to enable the Mortgage Instrument encumbering such leasehold
interest to effectively create a valid and enforceable first
priority lien (subject to Specified Permitted Liens) on such
leasehold interest in favor of the Administrative Agent (or
such other Person as may be required or desired under local
law) for the benefit of Lenders;
(iii) maps or plats of an existing boundary survey
of the sites of the real property covered by the Mortgage
Instruments prepared by an independent professional licensed
land surveyor and dated a date reasonably satisfactory to each
of the Administrative Agent and the title insurance company,
which maps or plats and the surveys on which they are based
shall be sufficient to delete any standard printed survey
exception contained in the applicable title policy;
(iv) ALTA mortgagee title insurance policies (the
"Mortgage Policies") with respect to each Mortgaged Property,
assuring the Administrative Agent that each of the Mortgage
Instruments creates a valid and enforceable first priority
mortgage lien on the applicable Mortgaged Property, free and
clear of all defects and encumbrances except Specified
Permitted Liens, which Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the
Administrative Agent and shall include such endorsements as
are reasonably requested by the Administrative Agent and are
available in the applicable jurisdictions;
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(v) evidence as to (A) whether any Mortgaged Property
is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a "Flood
Hazard Property") and (B) if any Mortgaged Property is a Flood
Hazard Property, (1) whether the community in which such
Mortgaged Property is located is participating in the National
Flood Insurance Program, (2) the applicable Loan Party's
written acknowledgment of receipt of written notification from
the Administrative Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates
of insurance of the Consolidated Parties evidencing flood
insurance satisfactory to the Administrative Agent and naming
the Administrative Agent as sole loss payee on behalf of the
Lenders; and
(vi) evidence reasonably satisfactory to the
Administrative Agent that each of the Mortgaged Properties,
and the uses of the Mortgaged Properties, are in compliance in
all material respects with all applicable zoning laws (the
evidence submitted as to which should include the zoning
designation made for each of the Mortgaged Properties, the
permitted uses of each such Mortgaged Properties under such
zoning designation and, if available, zoning requirements as
to parking, lot size, ingress, egress and building setbacks);
a zoning endorsement to the Mortgage Policies shall be deemed
to satisfy this requirement.
(e) Evidence of Insurance. Receipt by the Administrative Agent
of copies of insurance policies or certificates of insurance of the
Loan Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents, including, but not
limited to, naming the Administrative Agent as additional insured (in
the case of liability insurance) or loss payee (in the case of hazard
insurance) on behalf of the Lenders.
(f) Consummation of Related Financings. The Borrower (i) shall
(or the initial purchaser of the Senior Notes shall) have initiated
funding of Senior Notes in an aggregate principal amount of $380
million and (ii) shall have borrowed approximately $23 million under
the Asset-Based Facility. BAS shall be satisfied with the terms and
conditions of the Senior Note Indenture and the Asset-Based Facility,
and the Administrative Agent shall have received a copy, certified on
behalf of the Borrower by a Responsible Officer of the Borrower as true
and complete, of the Senior Note Indenture and the loan documents
evidencing the Asset-Based Facility, all as originally executed and
delivered, together with all exhibits and schedules thereto.
(g) Officer's Certificates. The Administrative Agent shall
have received a certificate or certificates executed on behalf of the
Borrower by a Responsible Officer of the Borrower as of the Closing
Date, in form and substance satisfactory to the Administrative Agent,
stating that (A) the conditions specified in Sections 5.02(a) and (b)
have been satisfied, (B) each Loan Party is in compliance with all
existing financial obligations, (C) all governmental, shareholder and
third party consents and approvals, if any, with respect to the Loan
Documents and the transactions contemplated thereby have been obtained,
(D) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Loan Party or any
transaction contemplated by the Loan Documents, if such action, suit,
investigation or proceeding could have a Material Adverse Effect and
(E) immediately after giving effect to the initial Borrowing, (1) no
Default or Event of Default exists and (2) all representations and
warranties contained herein and in the other Loan Documents are true
and correct in all material respects.
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(h) Fees. Any fees required to be paid on or before the
Closing Date shall have been paid.
(i) Attorney Costs. The Borrower shall have paid all Attorney
Costs of the Administrative Agent to the extent invoiced prior to the
Closing Date, plus such additional amounts of Attorney Costs as shall
constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude a final settling of accounts
between the Borrower and the Administrative Agent).
(j) Existing Financings. The Administrative Agent shall have
received evidence, in form and substance satisfactory to the
Administrative Agent, that the Existing Financings have been or
concurrently with the Closing Date is being terminated and all Liens
securing the Existing Financings have been or concurrently with the
Closing Date are being released.
(k) Accuracy of Representations and Warranties. The
representations and warranties of the Borrower and each other Loan
Party contained in Article VI or any other Loan Document, or which are
contained in any document furnished at any time under or in connection
herewith or therewith, shall be true and correct on and as of the
Closing Date.
(l) No Default. No Default shall exist and be continuing as of
the Closing Date.
(m) Intercreditor Agreement. The Administrative Agent shall
have received an executed copy of the Intercreditor Agreement.
(n) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the
Consolidated Parties.
5.02 CONDITIONS TO ALL BORROWINGS.
The obligation of each Lender to honor any Loan Notice (other than a
Loan Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and
each other Loan Party contained in Article VI or any other Loan
Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct
on and as of the date of such Borrowing, except to the extent that such
representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date,
and except that for purposes of this Section 5.02, the representations
and warranties contained in subsections (a) and (b) of Section 6.05
shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 7.01.
(b) No Default shall exist, or would result from, such
proposed Borrowing.
(c) There shall not have been commenced against any
Consolidated Party an involuntary case under any applicable Debtor
Relief Law, now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee,
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sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed.
(d) The Administrative Agent shall have received a Loan Notice
in accordance with the requirements hereof.
Each Loan Notice (other than a Loan Notice requesting only a conversion
of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted
by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 5.02(a), (b) and (c) have been satisfied on and
as of the date of the applicable Borrowing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Loan Parties represent and warrant to the Administrative Agent and
the Lenders that:
6.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.
Each Consolidated Party (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents, if any, to which it is a party and (c)
is duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.
6.02 AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or result in or
require the creation of any Lien under, (i) any Contractual Obligation to which
such Person is a party or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law (including, without limitation,
Regulation U or Regulation X issued by the FRB).
6.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, any Loan Party of this Agreement or any other Loan
Document, except for (a) consents, authorizations, notices and filings described
in Schedule 6.03, all of which have been obtained or made and (b) filings to
perfect the Liens created by the Collateral Documents.
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6.04 BINDING EFFECT.
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto. This Agreement constitutes, and each other Loan Document when
so delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms except as enforceability may be limited by applicable Debtor
Relief Laws and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
6.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Consolidated Parties as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Consolidated Parties as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Consolidated
Parties dated March 31, 2003, and the related consolidated statements of income
or operations, shareholders' equity and cash flows for the fiscal quarter ended
on that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of the Consolidated
Parties as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments.
(c) During the period from December 31, 2002 to and including the
Closing Date, there has been no sale, transfer or other disposition by any
Consolidated Party of any material part of the business or Property of the
Consolidated Parties, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
the Consolidated Parties, taken as a whole, in each case, which is not reflected
in the foregoing financial statements or in the notes thereto and has not
otherwise been disclosed in writing to the Lenders on or prior to the Closing
Date.
(d) The financial statements delivered pursuant to Section 7.01(a) and
(b) have been prepared in accordance with GAAP (except as may otherwise be
permitted under Section 7.01(a) and (b)) and present fairly (on the basis
disclosed in the footnotes to such financial statements) the consolidated and
consolidating financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods.
(e) Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.
6.06 LITIGATION.
There are no actions, suits, proceedings, claims or disputes pending
or, to the knowledge of the Loan Parties after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against any Consolidated Party or against any of
its properties or revenues that (a) purport to adversely affect or expressly
pertain to this Agreement or any
46
other Loan Document, or any of the transactions contemplated hereby or (b)
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect.
6.07 NO DEFAULT.
No Consolidated Party is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
6.08 OWNERSHIP OF PROPERTY; LIENS.
Each Consolidated Party has good record title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Consolidated Parties is subject to no Liens,
other than Permitted Liens.
6.09 ENVIRONMENTAL COMPLIANCE.
Except as would not reasonably be expected to have a Material
Adverse Effect:
(a) Each of the Real Properties and all operations at the Real
Properties are in compliance with all applicable Environmental Laws,
there is no violation of any Environmental Law with respect to the Real
Properties or the Businesses, and there are no conditions relating to
the Real Properties or the Businesses that could give rise to liability
under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has previously
contained, any Hazardous Materials at, on or under the Real Properties
in amounts or concentrations that constitute or constituted a violation
of, or could give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal
notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does any Responsible Officer of any Loan Party have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) Hazardous Materials have not been transported or disposed
of from the Real Properties, or generated, treated, stored or disposed
of at, on or under any of the Real Properties or any other location, in
each case by or on behalf of any Consolidated Party in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Responsible Officers
of the Loan Parties, threatened, under any Environmental Law to which
any Consolidated Party is or will be named as a party, nor are there
any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Consolidated Parties, the Real Properties or the Businesses.
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(f) There has been no release, or threat of release, of
Hazardous Materials at or from the Real Properties, or arising from or
related to the operations (including, without limitation, disposal) of
any Consolidated Party in connection with the Real Properties or
otherwise in connection with the Businesses, in violation of or in
amounts or in a manner that could give rise to liability under
Environmental Laws.
6.10 INSURANCE.
The properties of the Borrower and its Restricted Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Restricted
Subsidiary operates. The present insurance coverage of the Loan Parties is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 6.10.
6.11 TAXES.
The Consolidated Parties have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Restricted Subsidiary that would, if
made, have a Material Adverse Effect.
6.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Loan Parties, nothing has occurred which would prevent, or
cause the loss of, such qualification. Each Loan Party and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of the Loan Parties,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred within the past five years or is
reasonably expected to occur which could reasonably be expected to have a
Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension Liability
in excess of $20,000,000; (iii) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan which could
48
reasonably be expected to have a Material Adverse Effect; and (v) no Loan Party
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list as of the
Closing Date with respect to the Borrower and each of its direct and indirect
Subsidiaries of (i) jurisdiction of incorporation and (ii) number and percentage
of outstanding shares of each class owned (directly or indirectly) by the
Consolidated Parties. Neither the Borrower nor any of its Restricted
Subsidiaries has outstanding any securities convertible into or exchangeable for
its Capital Stock nor does any such Person have outstanding any rights to
subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
6.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT.
(a) The Borrower is not engaged and will not engage, principally or as
one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, (ii) is or is required to be registered as an "investment company"
under the Investment Company Act of 1940 or (iii) subject to regulation under
any other Law which limits its ability to incur Indebtedness.
6.15 DISCLOSURE.
Each Loan Party has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Restricted Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other written information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projections, estimates
and pro forma financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
6.16 COMPLIANCE WITH LAWS.
Each Consolidated Party is in compliance in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
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6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
material trademarks, service marks, trade names, trade dress, patents,
copyrights, technology, know-how and processes (the "Intellectual Property")
necessary for each of them to conduct its business as currently conducted. Set
forth on Schedule 6.17 is a list of all Intellectual Property registered or
pending registration with the United States Copyright Office or the United
States Patent and Trademark Office and owned by each Loan Party or that any Loan
Party has the right to use. No claim has been asserted by any Person against any
Loan Party and is pending that challenges or questions the use of the
Intellectual Property or the validity or effectiveness of the Intellectual
Property, nor does any Loan Party know of any such claim, and, to the knowledge
of the Responsible Officers of the Loan Parties, the use of the Intellectual
Property by any Consolidated Party or the granting of a right or a license in
respect of the Intellectual Property from any Consolidated Party does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, none of the Intellectual Property of the
Loan Parties is subject to any licensing agreement or similar arrangement except
as set forth on Schedule 6.17.
6.18 SOLVENCY.
The Loan Parties are Solvent on a consolidated basis.
6.19 TAX SHELTER REGULATIONS.
The Borrower does not intend to treat the Loans as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In
the event the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof. If the
Borrower so notifies the Administrative Agent, the Borrower acknowledges that
one or more of the Lenders may treat its Committed Loans as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
6.20 BUSINESS LOCATIONS.
Set forth on Schedule 6.20(a) is a list of all Real Properties located
in the United States that are owned or leased by the Loan Parties as of the
Closing Date that constitute Collateral. Set forth on Schedule 6.20(b) is a list
of all locations where any Collateral of a Loan Party is located as of the
Closing Date. Set forth on Schedule 6.20(c) is the chief executive office,
taxpayer identification number, organizational identification number,
jurisdiction of incorporation or formation and principal place of business of
each Loan Party as of the Closing Date.
6.21 LABOR MATTERS.
Except as set forth on Schedule 6.21, there are no collective
bargaining agreements covering the employees of a Consolidated Party as of the
Closing Date. None of the Consolidated Parties has suffered any strikes,
walkouts, work stoppages or other material labor difficulty within the last five
years. The Consolidated Parties have no Multiemployer Plans.
6.22 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are primarily engaged
in a Permitted Business.
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6.23 REPRESENTATIONS AND WARRANTIES FROM OTHER LOAN DOCUMENTS.
Each of the representations and warranties made by any of the Loan
Parties in any of the other Loan Documents is true and correct in all material
respects, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.
6.24 COLLATERAL DOCUMENTS.
The provisions of the Collateral Documents are effective to create in
favor of the Administrative Agent for the benefit of the Lenders and any other
secured parties identified therein, a legal, valid and enforceable first
priority (subject to Specified Permitted Liens) security interest in all right,
title and interest of the Loan Parties in the Collateral described therein and
all proceeds thereof. Except for filings completed prior to the Closing Date and
as contemplated by this Agreement and the Collateral Documents, no filing or
other action will be necessary to perfect or protect such security interest.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, each Loan Party
shall, and shall (except in the case of the covenants set forth in Sections
7.01, 7.02, 7.03 and 7.11) cause each Restricted Subsidiary to:
7.01 FINANCIAL STATEMENTS.
Deliver to the Administrative Agent, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Consolidated Parties as at the end of such fiscal
year, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any "going concern" or like
qualification, exception, assumption or explanatory language or any
qualification, exception, assumption or explanatory language as to the
scope of such audit; and
(b) as soon as available, but in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Consolidated
Parties as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal quarter and for the portion of the
Borrower's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of
the previous fiscal year and the corresponding portion of the previous
fiscal year, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition,
results of operations, shareholders' equity and cash flows of the
Consolidated Parties in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes.
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7.02 CERTIFICATES; OTHER INFORMATION.
Deliver to the Administrative Agent, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.01(a), a certificate of its independent
certified public accountants certifying such financial statements;
(b) at least 30 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending December 31, 2003,
annual financial projections for the next fiscal year;
(c) within 90 days after the end of each fiscal year of the
Borrower, a certificate in the form of Exhibit 7.01 containing
information regarding the calculation of Excess Cash Flow;
(d) promptly after the same are available, (i) copies of each
annual report, proxy or financial statement or other report or
communication sent to the stockholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the
SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or
to a holder of any Indebtedness owed by any Consolidated Party in its
capacity as such a holder and not otherwise required to be delivered to
the Administrative Agent pursuant hereto and (ii) upon the request of
the Administrative Agent, all reports and material written information
to and from the United States Environmental Protection Agency, or any
state or local agency responsible for environmental matters, the United
States Occupational Health and Safety Administration, or any state or
local agency responsible for health and safety matters, or any
successor agencies or authorities concerning environmental, health or
safety matters;
(e) promptly upon receipt thereof, a copy of any "management
letter" submitted by independent accountants to any Consolidated Party
in connection with any annual, interim or special audit of the books of
such Person;
(f) promptly after the Borrower has notified the
Administrative Agent of any intention by the Borrower to treat the
Loans as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS
Form 8886 or any successor form; and
(g) promptly, such additional information regarding the
business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably
request.
Documents required to be delivered pursuant to Section 7.01(a)
or (b) or Section 7.02(f) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto, on
the Borrower's website on the Internet at the website address listed on
Schedule 11.02; or (ii) on which such documents are posted on the
Borrower's behalf on IntraLinks/IntraAgency or another relevant
website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored
by the Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative
52
Agent or any Lender that requests the Borrower to deliver such paper
copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify (which may be by facsimile or electronic mail) the
Administrative Agent and each Lender of the posting of any such
documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. The
Administrative Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its
copies of such documents.
7.03 NOTICES AND INFORMATION.
(a) Upon knowledge obtained by a Responsible Officer of any Loan Party,
promptly notify the Administrative Agent and each Lender of the occurrence of
any Default.
(b) Upon knowledge obtained by a Responsible Officer of any Loan Party,
promptly notify the Administrative Agent and each Lender of any matter that has
resulted or could reasonably be expected to result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Borrower or any Restricted Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Restricted Subsidiary and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or proceeding affecting the
Borrower or any Restricted Subsidiary, including pursuant to any applicable
Environmental Laws.
(c) Promptly notify the Administrative Agent and each Lender of the
occurrence of any ERISA Event.
(d) Promptly notify the Administrative Agent and each Lender of any
material change in accounting policies or financial reporting practices by the
Borrower or any Restricted Subsidiary.
(e) Following the occurrence of any event or the discovery of any
condition which the Administrative Agent or the Required Lenders reasonably
believe has caused (or could be reasonably expected to cause) the
representations and warranties set forth in Section 6.09 to be untrue in any
material respect and upon the request of the Administrative Agent, the Loan
Parties will furnish or cause to be furnished to the Administrative Agent, at
the Loan Parties' expense, a report of an environmental assessment of reasonable
scope, form and depth, (including, where appropriate, invasive soil or
groundwater sampling) by a consultant reasonably acceptable to the
Administrative Agent as to the nature and extent of the presence of any
Hazardous Materials on any Real Properties and as to the compliance by any
Consolidated Party with Environmental Laws at such Real Properties. If the Loan
Parties fail to deliver such an environmental report within seventy-five (75)
days after receipt of such written request then the Administrative Agent may
arrange for same, and the Consolidated Parties hereby grant to the
Administrative Agent and its representatives access to the Real Properties to
reasonably undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment arranged
for by the Administrative Agent pursuant to this provision will be payable by
the Loan Parties on demand and added to the obligations secured by the
Collateral Documents.
(f) At the time of delivery of the financial statements and reports
provided for in Section 7.01, deliver to the Administrative Agent a report
signed on behalf of the Borrower by a Responsible Officer of the Borrower on
behalf of the Borrower setting forth (i) to the extent necessary or used in
connection with the Specified Facilities, a list of registration numbers for all
patents, trademarks, service marks, trade names and copyrights awarded to any
Loan Party since the last day of the immediately preceding fiscal year and (ii)
a list
53
of all patent applications, trademark applications, service mark applications,
trade name applications and copyright applications submitted by any Loan Party
since the last day of the immediately preceding fiscal year and the status of
each such application, all in such form as shall be reasonably satisfactory to
the Administrative Agent.
Each notice pursuant to this Section 7.03(a) through (e) shall be
accompanied by a statement of a Responsible Officer of the Borrower on behalf of
the Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect
thereto. Each notice pursuant to Section 7.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.
7.04 PAYMENT OF OBLIGATIONS.
Pay and discharge as the same shall become due and payable, all its
obligations and liabilities, including (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
the Borrower or such Restricted Subsidiary; and (b) all lawful claims which, if
unpaid, would by law become a Lien upon its property.
7.05 PRESERVATION OF EXISTENCE, ETC.
(a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction not prohibited by this Agreement; (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business; and (c)
preserve or renew all of its material registered copyrights, patents,
trademarks, trade names and service marks.
7.06 MAINTENANCE OF PROPERTIES.
(a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear and Involuntary Dispositions excepted; and (b)
make all necessary repairs thereto and renewals and replacements thereof; and
(c) use the standard of care typical in the industry in the operation and
maintenance of its facilities.
7.07 MAINTENANCE OF INSURANCE.
(a) Maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, property insurance and, except with
respect to North American Pipe Corporation, Westlake Profiles Limited and North
American Profiles Limited, business interruption insurance) in such amounts,
covering such risks and liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice. The
Administrative Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Administrative Agent, that it
will give the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled (ten (10) days prior
written notice if such policy or policies are being cancelled for any failure to
pay premiums).
(b) In the event that the Consolidated Parties receive net cash
proceeds ("Casualty Proceeds") on account of Involuntary Dispositions affecting
the Collateral, the Loan Parties shall, within 300 days, apply (or cause to be
applied) an amount equal to such Casualty Proceeds to (i) repair or replace the
related
54
Collateral or (ii) prepay the Loans in accordance with the terms of Section
2.04(b)(ii)(B). All insurance proceeds on account of Collateral shall be subject
to the security interest of the Administrative Agent (for the ratable benefit of
the Lenders) under the Collateral Documents. Pending final application of any
Casualty Proceeds, the Loan Parties shall deposit such Casualty Proceeds in the
Collateral Account. At the request of the Borrower, amounts so deposited shall
be invested by the Administrative Agent, as instructed by the Borrower, in Cash
Equivalents; any interest earned on such Cash Equivalents will be for the
account of the Borrower and the Borrower will deposit with the Administrative
Agent the amount of any loss on any such Cash Equivalents to the extent
necessary in order that the amount of the prepayment to be made with the
deposited amounts may not be reduced. Provided that no Event of Default exists,
the Administrative Agent will release amounts on deposit in the Collateral
Account upon written request of the Borrower certifying that such amounts will
be applied in accordance with this Section 7.07(b) within five (5) Business
Days. In the case of any Involuntary Disposition that includes both Collateral
and other assets, the Loan Parties shall deliver to the Administrative Agent
satisfactory evidence of the amount of the Casualty Proceeds that are
attributable to Collateral; if the Administrative Agent is not satisfied with
such evidence, the Administrative Agent may, at the expense of the Loan Parties,
retain an independent third party to perform such valuation.
7.08 COMPLIANCE WITH LAWS.
Comply with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
7.09 BOOKS AND RECORDS.
(a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower or such Restricted Subsidiary, as the case may be; and (b) maintain
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Restricted Subsidiary, as the case may be.
7.10 INSPECTION RIGHTS.
Permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice. The Loan Parties agree that the Administrative Agent, and its
representatives, may conduct an annual audit of the Collateral, at the expense
of the Loan Parties.
7.11 USE OF PROCEEDS.
Use the proceeds of the Borrowings to repay certain existing
Indebtedness on the Closing Date and for general corporate purposes not in
contravention of any Law or of any Loan Document.
55
7.12 ADDITIONAL GUARANTORS.
Notify the Administrative Agent at the time that (a) any Person becomes
a Domestic Subsidiary or (b) any Subsidiary of any Loan Party guarantees the
Borrower's obligations under the Senior Note Indenture or the Asset-Based
Facility, and promptly thereafter (and in any event within 30 days), cause such
Person to (i) become a Guarantor by executing and delivering to the
Administrative Agent a Joinder Agreement, and (ii) deliver to the Administrative
Agent documents of the types referred to in clauses (iii) and (iv) of Section
5.01(a) and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to in clause (a)), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
7.13 PLEDGED ASSETS.
Each Loan Party will cause (i) all of its owned and leased real
property, fixtures and equipment comprising or used for or in connection with
the Specified Facilities that is (a) located on, contiguous to or connected with
and in reasonable proximity to, any Specified Facility and (b) necessary or used
for or in connection with the ownership, expansion, operation, use or
maintenance of any Specified Facility and (ii) all of its general intangibles
(including patents, copyrights, trademarks, trade secrets and other intellectual
property, whether owned or licensed, customer and supplier contracts, drawings,
plans books and records, employment, consulting, operating, maintenance or
services agreements and other contractual rights, public and private licenses,
permits, franchises, powers, authorities, pollution and environmental credits
and allowances, goodwill and other intangible property of every type or
description) at any time owned or acquired by any Loan Party that is necessary
or used for or in connection with, or in any respect related, incidental or
ancillary to, the ownership, expansion, operation, use, maintenance or sale or
other disposition of any Specified Facility, to be subject at all times to first
priority, perfected and, in the case of real Property (whether leased or owned),
title insured Liens in favor of the Administrative Agent to secure the
Obligations pursuant to the terms and conditions of the Collateral Documents or
such other additional security documents as the Administrative Agent shall
reasonably request, subject in any case to Specified Permitted Liens and rights
of lenders under the Asset-Based Facility as provided in the Intercreditor
Agreement. In furtherance of the foregoing, the Loan Parties agree to deliver
such other documentation as the Administrative Agent may reasonably request
(subject to reasonable time limitations) in connection with the foregoing,
including, without limitation, appropriate UCC-1 financing statements, real
estate title insurance policies, surveys, environmental reports, landlord's
waivers, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Administrative Agent's Liens thereunder) and other items of the types required
to be delivered pursuant to Section 5.01(c) and (d), all in form, content and
scope reasonably satisfactory to the Administrative Agent.
7.14 FURTHER ASSURANCES.
Within 30 days following the Closing Date, the Loan Parties shall
deliver to the Administrative Agent satisfactory evidence that the mechanics
lien in the amount of $650,000 in favor of Cambridge Lee encumbering the
Mortgaged Property located in Calvert City, Kentucky has either (a) been
satisfied in full and released, (b) has been fully bonded or (c) has been
otherwise discharged, released or terminated.
56
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied:
8.01 ASSET SALES.
(a) No Loan Party shall, nor shall it permit any Restricted Subsidiary
to, directly or indirectly consummate an Asset Sale unless: (i) the
consideration received at the time of such Asset Sale is at least equal to the
Fair Market Value (as determined by the Borrower's board of directors and
evidenced by a resolution of the board of directors set forth in an officers'
certificate delivered to the Administrative Agent) of the assets or Equity
Interests issued or sold or otherwise disposed of; and (ii) at least 75% of the
consideration received in such Asset Sale is in the form of cash or Cash
Equivalents or a controlling interest in a business engaged in a Permitted
Business. For purposes of this provision, each of the following will also be
deemed to be cash: (A) any liabilities, as shown on its most recent balance
sheet, of the Consolidated Parties (other than contingent liabilities and
liabilities that are by their terms subordinated to the Obligations) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Consolidated Parties from further liability; (B) any
securities, notes or other obligations received by the Consolidated Parties from
such transferee that are promptly, subject to ordinary settlement periods,
converted or monetized by the Consolidated Parties into cash, to the extent of
the cash received in that conversion or monetization; and (C) any Capital Stock
or assets of the kind referred to in clauses (ii) or (iv) of Section 8.01(b).
(b) Within 300 days after the receipt of any Net Proceeds from an Asset
Sale of assets other than Collateral, the Borrower shall apply those Net
Proceeds, at its option:
(i) to repay the Loans pursuant to Section 2.04(b)(ii)(A) or
to repay Indebtedness outstanding under the Asset-Based Facility (so
long as there is a corresponding permanent reduction of the commitments
thereunder);
(ii) to acquire all or substantially all of the assets of, or
any Capital Stock of, any Person or division thereof conducting a
Permitted Business, if, in the case of any such acquisition of Capital
Stock and after giving effect thereto, such Person will be a Restricted
Subsidiary (or enter into a binding commitment for any such
acquisition); provided that such binding commitment shall be treated as
a permitted application of Net Proceeds from the date of such
commitment until and only until the earlier of (x) the date on which
such acquisition is consummated and (y) the 180th day following the
expiration of the aforementioned 300-day period. If the acquisition or
expenditure contemplated by such binding commitment is not consummated
on or before such 180th day and the Borrower shall not have applied (or
caused to be applied) such Net Proceeds pursuant to clause (i), (iii)
or (iv) of this Section 8.01(b) on or before such 180th day, such
commitment shall be deemed not to have been a permitted application of
Net Proceeds;
(iii) to make a capital expenditure; or
(iv) to acquire other assets that are not classified as
current assets under GAAP and that are used or useful in a Permitted
Business. Pending the final application of any Net Proceeds, the
Consolidated Parties may invest the Net Proceeds in any manner that is
not prohibited by this Agreement.
57
(c) Within 5 days after the receipt of any Net Proceeds from an Asset
Sale of Collateral (including any Collateral that is transferred in connection
with the sale or other disposition of the Capital Stock of a Subsidiary), the
Borrower shall apply those Net Proceeds to repay the Loans pursuant to Section
2.04(b)(ii)(A); provided, however, in connection with (i) the Styrene Plant Sale
and (ii) other Asset Sales to the extent that the net book value of the
Collateral subject to such Asset Sale (or a series of related Asset Sales) does
not exceed $10,000,000, in each case, within 300 days after the receipt of the
Net Proceeds from such Asset Sale, the Borrower shall apply those Net Proceeds,
at its option to either repay the Loans pursuant to Section 2.04(b)(ii)(A) or to
acquire replacement assets that are used or useful in a Specified Facility and
are pledged as Collateral to the Administrative Agent, on behalf of the Lenders,
pursuant to the Collateral Documents; pending the final application of such Net
Proceeds, the Loan Parties shall deposit such Net Proceeds in the Collateral
Account. At the request of the Borrower, amounts so deposited shall be invested
by the Administrative Agent, as instructed by the Borrower, in Cash Equivalents;
any interest earned on such Cash Equivalents will be for the account of the
Borrower and the Borrower will deposit with the Administrative Agent the amount
of any loss on any such Cash Equivalents to the extent necessary in order that
the amount of the prepayment to be made with the deposited amounts may not be
reduced. Provided that no Event of Default exists, the Administrative Agent will
release amounts on deposit in the Collateral Account upon written request of the
Borrower certifying that such amounts will be applied in accordance with this
Section 8.01(c) within five (5) Business Days. In the case of any Asset Sale
that includes both Collateral and other assets, the Loan Parties shall deliver
to the Administrative Agent satisfactory evidence of the amount of the Net
Proceeds that are attributable to Collateral; if the Administrative Agent is not
satisfied with such evidence, the Administrative Agent may, at the expense of
the Loan Parties, retain an independent third party to perform such valuation.
8.02 RESTRICTED PAYMENTS.
(a) No Loan Party shall, nor shall it permit any Restricted Subsidiary
to, directly or indirectly make any Restricted Payment unless, at the time of
and after giving effect to such Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
and
(ii) the Borrower would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in the first paragraph of Section 8.03; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Borrower and its
Restricted Subsidiaries since the Closing Date (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv), (vi), (vii), (viii),
(ix) and (x) of Section 8.02(b), is less than the sum, without
duplication, of:
(A) 50% of the Consolidated Net Income for the period
(taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the Closing Date to the
end of the Borrower's most recently ended fiscal quarter for
which the financial statements required to be delivered
pursuant to Section 7.01 are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit);
provided, however, that if at any time after the Closing Date
the Senior Notes are rated Investment Grade, the percentage
will be 100%
58
of Consolidated Net Income for such period; provided, further,
however, that if such Restricted Payment is to be made in
reliance upon an additional amount permitted pursuant to the
immediately preceding proviso, the Senior Notes must be rated
Investment Grade at the time such Restricted Payment is
declared or, if not declared, made, plus
(B) 100% of the aggregate net cash proceeds received
by the Borrower since the Closing Date as a contribution to
its common equity capital or by the Borrower or any of its
Restricted Subsidiaries from the issue or sale of Equity
Interests of the Borrower (other than Disqualified Stock) or
from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt
securities of the Borrower or any of its Restricted
Subsidiaries that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a Subsidiary),
plus
(C) to the extent that any Restricted Investment that
was made after the Closing Date is sold for cash or otherwise
liquidated, repaid for cash or otherwise reduced, the lesser
of (i) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any)
and (ii) the initial amount of such Restricted Investment,
plus
(D) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the Closing
Date, the Fair Market Value of the Borrower's Investment in
such Subsidiary as of the date of such redesignation, plus
(E) 50% of any dividends received by a Loan Party
after the Closing Date from an Unrestricted Subsidiary or a
Joint Venture, to the extent that such dividends were not
otherwise included in Consolidated Net Income of the Borrower
for such period; provided, however, that if at any time after
the Closing Date the Senior Notes are rated Investment Grade,
the percentage will be 100% of any such dividends; provided,
further, however, that if such Restricted Payment is to be
made in reliance upon an additional amount permitted pursuant
to the immediately preceding proviso, the Senior Notes must be
rated Investment Grade at the time such Restricted Payment is
declared or, if not declared, made.
(b) So long as no Default has occurred and is continuing or would be
caused thereby, Section 8.02(a) will not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Agreement;
(ii) the making of any Restricted Payment in exchange for, or
out of the net cash proceeds of the substantially concurrent issuance
or sale (other than to a Subsidiary) of, Equity Interests of the
Borrower (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to the Borrower;
provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition will be excluded from Section 8.02(a)(iii)(B);
(iii) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of any Loan Party that is contractually
subordinated to the Obligations with the net cash proceeds
59
from a substantially concurrent incurrence of Permitted Refinancing
Indebtedness;
(iv) the payment of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by
a Restricted Subsidiary to another Consolidated Party, or the purchase,
redemption or other acquisition or retirement of any such Equity
Interests held by a Consolidated Party;
(v) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Borrower or any
Restricted Subsidiary held by any current or former officer, director
or employee of the Borrower or any of its Restricted Subsidiaries
pursuant to any equity subscription agreement, stock option agreement,
shareholders' agreement or similar plan or agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed $1,000,000 in any twelve-month
period;
(vi) the repurchase of Equity Interests deemed to occur upon
the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;
(vii) the declaration and payment of dividends to holders of
any class or series of Disqualified Stock of the Borrower or any
Restricted Subsidiary issued on or after the Closing Date in accordance
with the Fixed Charge Coverage Ratio set forth in the first paragraph
of Section 8.03;
(viii) distributions or payments of Receivables Fees;
(ix) Permitted Payments to the Parent; and
(x) other Restricted Payments in an aggregate amount not to
exceed $25,000,000 since the Closing Date.
(c) The amount of all Restricted Payments (other than cash) will be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Borrower or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The Fair Market Value of any assets or securities that are required to be valued
by this covenant will be determined by the board of directors whose resolution
with respect thereto will be delivered to the Administrative Agent. The board of
directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
Fair Market Value exceeds $15,000,000.
8.03 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
directly or indirectly create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Borrower will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Borrower may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock and the Guarantors may incur Indebtedness or issue
preferred stock, if the Fixed Charge Coverage Ratio for the Borrower's most
recently ended four full fiscal quarters for which the financial statements
required to be delivered pursuant to Section 7.01 are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to
1.0, determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom and, in the case of Acquired
60
Debt, giving pro forma effect to the applicable transaction related thereto), as
if the additional Indebtedness had been incurred (and such transaction had
occurred) or the preferred stock or Disqualified Stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The first paragraph of this Section 8.03 will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"): (a) the Loans; (b) the Existing Indebtedness; (c) (i)
Indebtedness (including letters of credit) under the Asset-Based Facility or a
Receivables Facility in an aggregate outstanding principal amount not to exceed
$200,000,000, and (ii) Indebtedness under the Senior Notes issued on the Closing
Date in an aggregate principal amount not to exceed $380,000,000 (and notes with
identical terms as the Senior Notes that are registered pursuant to the
registration rights agreement set forth in the Senior Note Indenture and issued
in exchange for the Senior Notes); (d) Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the purpose
of financing all or any part of the purchase price or cost of design,
construction, installation or improvement of property, plant or equipment used
or usable in a Permitted Business, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (d), not to exceed $10,000,000
at any time outstanding; (e) Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to extend, refund, refinance, renew,
defease or replace Indebtedness (other than intercompany Indebtedness) that was
permitted by this Agreement to be incurred under the first paragraph of this
Section 8.03 or clauses (b), (c)(i), (d), (e) or (p) of this paragraph; (f)
intercompany Indebtedness between or among the Borrower and any of its
Restricted Subsidiaries; provided, however, that (i) if a Loan Party is the
obligor on such Indebtedness and the payee is not a Loan Party, such
Indebtedness must be expressly subordinated to the prior payment in full in cash
of the Obligations and (ii) (A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other
than the Borrower or a Restricted Subsidiary and (B) any sale or other transfer
of any such Indebtedness to a Person that is not either the Borrower or a
Restricted Subsidiary will be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Borrower or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (f); (g) the issuance by any
Restricted Subsidiary to the Borrower or to any of its Restricted Subsidiaries
of shares of preferred stock; provided, however, that (i) any subsequent
issuance or transfer of Equity Interests that results in any such preferred
stock being held by a Person other than the Borrower or a Restricted Subsidiary,
and (ii) any sale or other transfer of any such preferred stock to a Person that
is not either the Borrower or a Restricted Subsidiary, will be deemed, in each
case, to constitute an issuance of such preferred stock by such Restricted
Subsidiary that was not permitted by this clause (g); (h) Hedging Obligations in
the ordinary course of business and not for speculative purposes; (i) the
guarantee by any Loan Party of Indebtedness of a Consolidated Party that was
permitted to be incurred by another provision of this Section 8.03; provided
that if the Indebtedness being guaranteed is subordinated to or pari passu with
the Obligations, then the guarantee shall be subordinated to the same extent as
the Indebtedness guaranteed; (j) Indebtedness in respect of workers'
compensation claims; self-insurance obligations; bankers' acceptances;
performance, appeal, completion, guarantee and surety bonds; or similar
requirements in the ordinary course of business; (k) Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so long as
such Indebtedness is covered within five business days; (l) Indebtedness of
Foreign Subsidiaries in an aggregate principal amount at any time outstanding
pursuant to this clause (l), including all Permitted Refinancing Indebtedness
incurred to refund, refinance, defease, renew, extend or replace Indebtedness
incurred pursuant to this clause (l), not to exceed $10,000,000; (m)
Indebtedness arising from agreements of the Borrower or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred in connection with the disposition of any
business, assets or subsidiary, other than guarantees of Indebtedness incurred
by any Person acquiring all or any portion of such business, assets or
subsidiary for the purpose of financing such acquisition; provided that the
maximum aggregate liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by the
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Borrower or such Restricted Subsidiary in connection with such disposition; (n)
Indebtedness consisting of take-or-pay obligations contained in supply
agreements entered into in the ordinary course of business; (o) Indebtedness of
the Borrower to any of its Subsidiaries incurred in connection with the purchase
of accounts receivable and related assets by the Borrower from any such
Subsidiary which assets are subsequently conveyed by the Borrower in connection
with a Receivable Facility; and (p) additional Indebtedness of the Loan Parties
in an aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
extend, refund, refinance, renew, defease or replace any Indebtedness incurred
pursuant to this clause (p), and the issuance by the Borrower of any
Disqualified Stock and by any Restricted Subsidiary of any additional preferred
stock, not to exceed $50,000,000.
For purposes of determining compliance with this Section 8.03, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (a) through (o) of the
preceding paragraph, or is entitled to be incurred pursuant to the first
paragraph of this Section 8.03, the Borrower will be permitted to classify such
item of Indebtedness on the date of its incurrence, or later reclassify all or a
portion of such item of Indebtedness, in any manner that complies with this
covenant. The accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this covenant; provided, in each
such case, that the amount thereof is included in Fixed Charges of the Borrower
as accrued. Notwithstanding any other provision of this covenant, the maximum
amount of Indebtedness that the Borrower or any Restricted Subsidiary may incur
pursuant to this covenant shall not be deemed to be exceeded solely as a result
of fluctuations in exchange rates or currency values.
8.04 LIENS.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
directly or indirectly create, incur, assume or suffer to exist any Lien, except
Permitted Liens. No Loan Party shall, nor shall it permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any Collateral, except Specified Permitted Liens.
8.05 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
directly or indirectly create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends or make any other distributions on its Capital
Stock to the Borrower or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Borrower or any of its Restricted Subsidiaries; (b)
make loans or advances to the Borrower or any of its Restricted Subsidiaries; or
(c) transfer any of its properties or assets to the Borrower or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of: (i) agreements governing Existing
Indebtedness, the Senior Note Indenture and the Asset-Based Facility each as in
effect on the Closing Date and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
those agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or refinancings are
not materially more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in those agreements on the
Closing Date; (ii)
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the Loan Documents; (iii) applicable Law; (iv) any instrument governing
Indebtedness or Capital Stock of a Person as in effect at the time of the
acquisition by the Borrower or any of its Restricted Subsidiaries of such Person
or the properties or assets of such Person (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; provided that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Agreement to be incurred; (v) customary non-assignment provisions in
contracts and leases entered into in the ordinary course of business; (vi)
construction loans and purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations that impose
restrictions on the property constructed, purchased or leased of the nature
described in clause (c) of the preceding paragraph; (vii) any agreement for the
sale or other disposition of a Restricted Subsidiary that restricts
distributions by that Restricted Subsidiary pending the sale or other
disposition; (viii) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced; (ix)
Indebtedness secured by Permitted Liens that limit the right of the debtor to
dispose of the assets subject to such Liens; (x) any restriction under an
agreement governing Indebtedness of a Foreign Subsidiary permitted under Section
8.03; (xi) provisions limiting or prohibiting the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar agreements
entered into with the approval of the Borrower's board of directors, which
limitation or prohibition is applicable only to the assets that are the subject
of such agreements; and (xii) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business.
8.06 MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Borrower shall not, directly or indirectly, consolidate or merge
with or into another Person (whether or not the Borrower is the surviving
corporation) unless (i) the Borrower is the surviving or continuing Person, (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists and (iii) the Borrower shall, on the date of such transaction
after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph Section 8.03.
The Borrower shall not, directly or indirectly, sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Borrower and its Restricted Subsidiaries taken as a whole, in one
or more related transactions, to another Person.
This Section 8.06 will not apply to (a) a merger or consolidation of
the Borrower with an Affiliate for the purpose of reincorporating or
reorganizing the Borrower in another jurisdiction or (b) a merger or
consolidation of the Borrower with a Wholly-Owned Subsidiary so long as the
Borrower is the surviving corporation. In addition, the Borrower may not,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person.
8.07 TRANSACTIONS WITH AFFILIATES.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
directly or indirectly make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the
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Borrower (each, an "Affiliate Transaction"), unless (a) the Affiliate
Transaction is on terms that are no less favorable to the Borrower or the
relevant Restricted Subsidiary than those that might reasonably have been
obtained in a comparable transaction by the Borrower or such Restricted
Subsidiary with an unrelated Person and (b) the Borrower delivers to the
Administrative Agent: (i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5,000,000, a resolution of the board of directors set forth in an officers'
certificate certifying that such Affiliate Transaction complies with this
covenant and such Affiliate Transaction been approved by a majority of the
members of the board of directors and (ii) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $15,000,000, an opinion as to the fairness to the
Borrower or such Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.
Notwithstanding the foregoing, the following items will not be deemed
to be Affiliate Transactions and, therefore, will not be subject to the
provisions of the prior paragraph:
(1) any fees, compensation and other payments paid to any
officer or employee pursuant to any employment agreement, employee or
director benefit plan, officer and director indemnification agreement
or any similar arrangement entered into by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business;
(2) transactions between or among the Borrower and/or its
Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted
Subsidiary) that is an Affiliate of the Borrower solely because the
Borrower owns, directly or through a Restricted Subsidiary, an Equity
Interest in, or Controls, such Person;
(4) payment of reasonable directors' fees to Persons who are
not otherwise Affiliates of the Borrower;
(5) any issuance of Equity Interests (other than Disqualified
Stock) of the Borrower to Affiliates of the Borrower;
(6) Restricted Payments not prohibited by Section 8.02;
(7) loans or advances to employees in the ordinary course of
business not to exceed $2,000,000 in the aggregate at any one time
outstanding;
(8) sales (including a sale in exchange for a promissory note
of or Equity Interest in such Accounts Receivable Subsidiary) of
accounts receivable, related assets and the provision of billing,
collection and other services in connection therewith, in each case, to
an Accounts Receivable Subsidiary in connection with any Receivables
Facility;
(9) transactions pursuant to any contract or agreement in
effect on the Closing Date, as the same may be amended, modified,
extended or replaced from time to time, so long as any such contract or
agreement as so amended, modified, extended or replaced is, taken as a
whole, not materially less favorable to the Borrower and its Restricted
Subsidiaries;
(10) any transaction or series of transactions between the
Borrower or any Restricted Subsidiary and any of their Joint Ventures,
provided that (a) such transaction or series of transactions is in the
ordinary course of business between the Borrower or such Restricted
Subsidiary and such
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Joint Venture, and (b) with respect to any such Affiliate Transaction
involving aggregate consideration in excess of $5,000,000, such
Affiliate Transaction complies with clause (a) of the initial paragraph
above and such Affiliate Transaction has been approved by the board of
directors; and
(11) Permitted Investments and Permitted Payments to the
Parent.
8.08 SALE AND LEASEBACK TRANSACTIONS.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
directly or indirectly enter into any sale and leaseback transaction; provided
that the Borrower or any Restricted Subsidiary may enter into a sale and
leaseback transaction if (a) the Borrower or that Restricted Subsidiary, as
applicable, could have (i) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction under the
Fixed Charge Coverage Ratio test in the first paragraph of Section 8.03 and (ii)
incurred a Lien to secure such Indebtedness pursuant to Section 8.04, (b) the
gross cash proceeds of that sale and leaseback transaction are at least equal to
the Fair Market Value, as determined in good faith by the board of directors and
set forth in an officers' certificate delivered to the Administrative Agent, of
the property that is the subject of that sale and leaseback transaction and (c)
the transfer of assets in that sale and leaseback transaction is permitted by,
and the Borrower applies the proceeds of such transaction in compliance with,
Section 8.01(b) or 8.01(c), as applicable.
8.09 ANTI-LAYERING.
The Borrower will not incur, and will not permit any Guarantor to
incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Pari Passu Indebtedness of the
Borrower or such Guarantor unless such Indebtedness is also contractually
subordinated in right of payment to the Obligations on substantially identical
terms; provided, however, that no Indebtedness will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Borrower solely by virtue of being unsecured or by virtue of being secured on a
first or junior Lien basis.
8.10 ORGANIZATION DOCUMENTS; FISCAL YEAR.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to,
(a) amend, modify or change its Organization Documents in a manner materially
adverse to the Lenders or (b) change its fiscal year.
8.11 SPECIFIED FACILITIES.
No Loan Party shall, nor shall it permit any Subsidiary to, operate its
primary petrochemical manufacturing facilities producing ethylene, styrene,
polyethylene, chlor-alkali, vinyl chloride monomer and polyvinyl chloride other
than on properties in Calcasieu Parish, Louisiana or Marshall County, Kentucky
that are subject to Mortgage Instruments.
8.12 ACCOUNTS RECEIVABLE FACILITIES.
No Loan Party shall, nor shall it permit any Restricted Subsidiary to
sell (including a sale in exchange for a promissory note of or Equity Interest
in such Accounts Receivable Subsidiary) accounts receivable and related assets
to any Accounts Receivable Subsidiary unless the aggregate consideration
received in each such sale is at least equal to the aggregate fair market value
of the receivables sold.
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8.13 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The board of directors of the Borrower shall not designate any
Restricted Subsidiary to be an Unrestricted Subsidiary. The board of directors
of the Borrower may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if that redesignation would not cause a Default.
8.14 COLLATERAL ACCOUNT.
The Loan Parties shall not deposit any funds in the Collateral Account
other than Net Proceeds from Asset Sales of Collateral and Casualty Proceeds
from Involuntary Dispositions affecting the Collateral.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
9.01 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Non-Payment. The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal
of any Loan, or (ii) within three days after the same becomes due, any
interest on any Loan or any fee due hereunder or any other amount
payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or
observe any term, covenant or agreement contained in any of (i) Section
7.05(a), 7.10, 7.11, 7.12 or 7.13 or Article VIII; or (ii) Section
7.01, 7.02, 7.03 and such failure continues for a period of five (5)
Business Days; or
(c) Other Defaults. Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b)
above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or
(d) Representations and Warranties. Any representation,
warranty, certification or statement of fact made or deemed made by or
on behalf of the Borrower or any other Loan Party herein, in any other
Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or
(e) Other Indebtedness. Any Loan Party or any of its
Restricted Subsidiaries shall default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed (or the
payment of which is guaranteed by a Loan Party or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the Closing Date, if that default (i) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $20,000,000
million or more and has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days of such
maturity or acceleration; or
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(f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Restricted Subsidiaries institutes or consents to the institution of
any proceeding under any Debtor Relief Law, or makes an assignment for
the benefit of creditors; or applies for or consents to the appointment
of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part
of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any
material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for 60 calendar days, or
an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or
any Restricted Subsidiary becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within 30
days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or any
Restricted Subsidiary (i) any one or more final judgments or orders for
the payment of money in an aggregate amount exceeding $20,000,000 (to
the extent not covered by independent third-party insurance as to which
the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of 60
consecutive days during which a stay of enforcement of such judgment,
by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $20,000,000, or (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $20,000,000; or
(j) Invalidity of Loan Documents; Guarantees. (i) Any Loan
Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or satisfaction in
full of all the Obligations, ceases to be in full force and effect; or
any Person acting on behalf of a Loan Party with actual or apparent
authority contests in any manner the validity or enforceability of any
Loan Document; or any Person acting on behalf of a Loan Party with
actual or apparent authority denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or (ii) except as the result of
or in connection with a dissolution, merger or disposition of a
Subsidiary not prohibited by this Agreement, the Guaranty given by any
Guarantor hereunder or any provision thereof shall cease to be in full
force and effect, or any Person acting by or on behalf of such
Guarantor with actual or apparent authority shall deny or disaffirm
such Guarantor's obligations under its Guaranty; or
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(k) Senior Note Indenture. There shall occur and be continuing
any "Event of Default" (or any comparable term) under, and as defined
in, the Senior Note Indenture; or
(l) Asset-Based Facility. There shall occur and be continuing
any "Event of Default" (or any comparable term) under, and as defined
in, the Asset-Based Facility beyond any applicable grace period set
forth in the Asset-Based Facility; or
(m) Change of Control. There occurs any Change of Control.
9.02 REMEDIES UPON EVENT OF DEFAULT.
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law;
provided, however, that upon the occurrence of an actual or deemed
entry of an order for relief with respect to the Borrower under the
Bankruptcy Code of the United States, the obligation of each Lender to
make Loans shall automatically terminate, the unpaid principal amount
of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without further
act of the Administrative Agent or any Lender.
9.03 APPLICATION OF FUNDS.
After the acceleration of the Obligations as provided for in Section
9.02(b) (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 9.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;
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Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
ARTICLE X
ADMINISTRATIVE AGENT
10.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
10.02 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
10.03 LIABILITY OF ADMINISTRATIVE AGENT.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Loan Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the
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observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
10.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
10.05 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower referring
to this Agreement, describing such Default and stating that such notice is a
"notice of default." The Administrative Agent will notify the Lenders of its
receipt of any such notice. The Administrative Agent shall take such action with
respect to such Default as may be directed by the Required Lenders in accordance
with Article IX; provided, however, that unless and until the Administrative
Agent has received any such direction, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable or in the best interest of
the Lenders.
10.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial
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and other condition and creditworthiness of the Loan Parties and their
respective Subsidiaries, and all applicable bank or other regulatory Laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrower hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.
10.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Loan Party and without limiting the
obligation of any Loan Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the payment of all
other Obligations and the resignation of the Administrative Agent.
10.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective Affiliates
as though Bank of America were not the Administrative Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
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10.09 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders, which successor administrative agent shall
be consented to by the Borrower at all times other than during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent, and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated without any other or further act or deed on the part
of any Lender. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article X and Sections 11.04 and
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.
10.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans and all
other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims
of the Lenders and the Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of
the Lenders and the Administrative Agent and their respective agents
and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.08 and 11.04) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.08 and 11.04.
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Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
10.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion,
(a) to release any Lien on any property granted to or held by
the Administrative Agent under any Loan Document (i) upon payment in
full of all Obligations (other than contingent indemnification
obligations), (ii) that is transferred or to be transferred as part of
or in connection with any Asset Sale permitted hereunder or under any
other Loan Document, or (iii) subject to Section 11.01, if approved,
authorized or ratified in writing by the Required Lenders;
(b) to subordinate any Lien on any Property granted to or held
by the Administrative Agent under any Loan Document to the holder of
any Lien on such Property that is permitted by clause (e) of the
definition of "Permitted Liens"; and
(c) to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of Property, or to
release any Guarantor from its obligations under the Guaranty pursuant to this
Section 10.11.
10.12 OTHER AGENTS; ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger"
or "co-arranger" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
10.13 INTERCREDITOR AGREEMENT.
Each Lender hereby authorizes the Administrative Agent to enter into,
on behalf of the Lenders, the Intercreditor Agreement, and to take such action
as is necessary to exercise its rights and perform its obligations thereunder.
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ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 9.02) without
the written consent of such Lender (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.02 or of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender);
(b) postpone any date fixed by this Agreement or any other
Loan Document for any payment (excluding mandatory prepayments) of
principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan or any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only the
consent of the Required Lenders shall be necessary to amend the
definition of "Default Rate" or to waive any obligation of the Borrower
to pay interest at the Default Rate;
(d) change Section 2.12 or Section 9.03 in a manner that would
alter the pro rata sharing of payments required thereby without the
written consent of each Lender;
(e) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number
or percentage of Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender;
(f) (i) except as the result of or in connection with an Asset
Sale not prohibited by this Agreement, release all or substantially all
of the Collateral and (ii) except as otherwise provided in Section
10.11, release all or substantially all of the Guarantors, in each case
without the written consent of each Lender; and
(g) except as the result of or in connection with a
dissolution, merger or disposition of a Loan Party not prohibited by
this Agreement, release the Borrower or substantially all of the other
Loan Parties from its or their obligations under the Loan Documents
without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.
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Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders shall determine whether
or not to allow a Loan Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding and such determination shall be binding on
all of the Lenders.
11.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower or the Administrative Agent, to the
address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 11.02 or to such other address,
facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower and the
Administrative Agent.
All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and other
communications to the Administrative Agent pursuant to Article II shall not be
effective until actually received by such Person. In no event shall a voicemail
message be effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as
75
provided in Section 7.02, and to distribute Loan Documents for execution by the
parties thereto, and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
11.03 NO WAIVER; CUMULATIVE REMEDIES.
No failure by any Lender or the Administrative Agent to exercise, and
no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.04 ATTORNEY COSTS, EXPENSES AND TAXES.
The Loan Parties jointly and severally agree (a) to pay or reimburse
the Administrative Agent for all costs and expenses incurred in connection with
the development, preparation, negotiation and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. All amounts due under this Section 11.04
shall be payable within ten Business Days after demand therefor. The agreements
in this Section shall survive the repayment of all other Obligations.
11.05 INDEMNIFICATION BY THE BORROWER.
Whether or not the transactions contemplated hereby are consummated,
the Loan Parties jointly and severally shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, trustees, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other
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agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) any Commitment or Loan or the use or proposed use of the proceeds
therefrom, (c) any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned or operated by the Borrower,
any Subsidiary or any other Loan Party, or any Environmental Liability related
in any way to the Borrower, any Subsidiary or any other Loan Party, or (d) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,
IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 11.05 shall be payable within
ten Business Days after demand therefor. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender and the repayment, satisfaction or discharge of all the other
Obligations.
11.06 PAYMENTS SET ASIDE.
To the extent that any payment by or on behalf of any Loan Party is
made to the Administrative Agent or any Lender, or the Administrative Agent or
any Lender exercises its right of set-off, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
11.07 SUCCESSORS AND ASSIGNS.
(a) 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, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) or (h) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). 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,
Participants to the extent
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provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans; provided that (i) except in
the case of an assignment of the entire remaining amount of the assigning
Lender's Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as
defined in subsection (g) of this Section) with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) 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 or, if "Trade Date" is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $1,000,000 unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) 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 with respect to the Loans or the
Commitment assigned; and (iii) 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. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement 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
3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection 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 subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office 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 Commitments of,
and principal amounts of the Loans 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 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 and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent 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
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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,
waiver or other modification described in the first proviso to Section 11.01
that directly affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 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 3.01 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 11.15 as though
it were a Lender.
(f) 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; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent, and (ii)
unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, "Eligible Assignee" shall
not include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund 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.
(h) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities, provided that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
Section 11.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.
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11.08 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, trustees,
employees and agents, 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 Governmental
Authority or representative thereof; (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 the enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement so long as
such Eligible Assignee or Participant (prospective or otherwise) agrees to be
bound by such provisions or (ii) any direct or indirect contractual counterparty
or prospective counterparty (or such contractual counterparty's or prospective
counterparty's professional advisor) to any credit derivative transaction
relating to obligations of the Loan Parties; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower; or (i) to the National Association of Insurance
Commissioners or any other similar organization. In addition, the Administrative
Agent and the Lenders may, to the extent permitted by Law, disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Borrowings; provided, however, without the consent of the
Borrower (not to be unreasonably withheld), such disclosure and information
shall be limited to the matters presented in the "Summary of Indicative Terms
and Conditions" contained in the Confidential Offering Memorandum dated June,
2003, as updated from time to time. For the purposes of this Section,
"Information" means all information received from any Loan Party relating to any
Loan Party or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party; provided that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section 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.
Notwithstanding anything herein to the contrary, "Information" shall not
include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the "tax treatment" and
"tax structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the
Administrative Agent or such Lender relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans and transactions contemplated hereby.
11.09 SET-OFF.
In addition to any rights and remedies of the Lenders provided by law,
upon the occurrence and during the continuance of any Event of Default, each
Lender is authorized at any time and from time to time, without prior notice to
the Borrower or any other Loan Party, any such notice being waived by the
80
Borrower (on its own behalf and on behalf of each Loan Party) 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 by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
11.10 INTEREST RATE LIMITATION.
Notwithstanding anything to the contrary contained in any Loan
Document, the interest paid or agreed to be paid under the Loan Documents shall
not exceed the maximum rate of non-usurious interest permitted by applicable Law
(the "Maximum Rate"). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than 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 contemplated term of the
Obligations hereunder.
11.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.12 INTEGRATION.
This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the inclusion of supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
11.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.
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11.14 SEVERABILITY.
If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
11.15 TAX FORMS.
(a) (i) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of
any payment subject to withholding under the Code (or upon accepting an
assignment of an interest herein), two duly signed completed copies of
either IRS Form W-8BEN or any successor thereto (relating to such
Foreign Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Foreign Lender by
the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that
such Foreign Lender is entitled to an exemption from, or reduction of,
U.S. withholding tax, including any exemption pursuant to Section
881(c) of the Code. Thereafter and from time to time, each such Foreign
Lender shall (A) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid, or such
evidence as is satisfactory to the Borrower and the Administrative
Agent of any available exemption from or reduction of, United States
withholding taxes in respect of all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement, (B) promptly notify
the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in
the reasonable judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Lending Office) to avoid
any requirement of applicable Laws that the Borrower make any deduction
or withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own
account that is not subject to U.S. withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required
under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such
Lender.
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(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any
Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section 11.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing
provisions of this Section 11.15(a); provided that if such Lender shall
have satisfied the requirement of this Section 11.15(a) on the date
such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
Section 11.15(a) shall relieve the Borrower of its obligation to pay
any amounts pursuant to Section 3.01 in the event that, as a result of
any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person
for the account of which such Lender receives any sums payable under
any of the Loan Documents is not subject to withholding or is subject
to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold
any Taxes required to be deducted and withheld from any payment under
any of the Loan Documents with respect to which the Borrower is not
required to pay additional amounts under this Section 11.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the repayment of all other Obligations hereunder and
the resignation of the Administrative Agent.
11.16 REPLACEMENT OF LENDERS.
Under any circumstances set forth herein providing that the Borrower
shall have the right to replace a Lender as a party to this Agreement, the
Borrower may, upon notice to such Lender and the Administrative Agent, replace
such Lender by causing such Lender to assign its Commitment and outstanding
Loans (with the assignment fee to be paid by the Borrower in such instance)
pursuant to Section 11.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower. The Borrower shall (x) pay in full all principal,
interest, fees and other amounts owing to such Lender through the date of
replacement (including any amounts payable pursuant to Section 3.05) and (y)
release such Lender from its obligations under the Loan Documents. Any Lender
being replaced shall execute and deliver an Assignment and Assumption with
respect to such Lender's Commitment and outstanding Loans.
11.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
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AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT
THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE LOAN PARTIES, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH OF THE LOAN PARTIES, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
11.18 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.19 ENTIRE AGREEMENT.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWER: WESTLAKE CHEMICAL CORPORATION
By: /s/ A. Chao
------------------------------------------------
Albert Chao
President
GUARANTORS: GEISMAR VINYLS COMPANY LP
By: GEISMAR HOLDINGS, INC., its general partner
WESTLAKE PETROCHEMICALS LP
By: WESTLAKE CHEMICAL INVESTMENTS, INC., its general
partner
WESTLAKE POLYMERS LP
By: WESTLAKE CHEMICAL INVESTMENTS, INC., its general
partner
WESTLAKE STYRENE LP
By: WESTLAKE CHEMICAL HOLDINGS, INC., its general
partner
WPT LP
By: WESTLAKE CHEMICAL HOLDINGS, INC., its general
partner
By: /s/ Tai-Li Keng
-----------------------------------
Tai-Li Keng
Vice-President
GEISMAR HOLDINGS, INC.
GRAMERCY CHLOR-ALKALI CORPORATION
GVGP, INC.
NORTH AMERICAN PIPE CORPORATION
NORTH AMERICAN PROFILES, INC.
VAN BUREN PIPE CORPORATION
WESTECH BUILDING PRODUCTS, INC.
WESTLAKE CHEMICAL HOLDINGS, INC.
WESTLAKE CHEMICAL INVESTMENTS, INC.
WESTLAKE CHEMICAL MANUFACTURING, INC.
WESTLAKE CHEMICAL PRODUCTS, INC.
WESTLAKE DEVELOPMENT CORPORATION
WESTLAKE MANAGEMENT SERVICES, INC.
WESTLAKE OLEFINS CORPORATION
WESTLAKE OVERSEAS CORPORATION
WESTLAKE PVC CORPORATION
WESTLAKE RESOURCES CORPORATION
WESTLAKE VINYL CORPORATION
WESTLAKE VINYLS, INC.
By: /s/ Tai-Li Keng
--------------------------------------------
Tai-Li Keng
Vice-President
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ Mary F. Edwards
-------------------------------------------
Name: Mary F. Edwards
Title: Agency Officer
LENDERS: BANK OF AMERICA, N.A., as a Lender
By: /s/ Edward Hamilton
-------------------------------------------
Name: Edward Hamilton
Title: Senior Vice President
Exhibit 1.01
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") dated as of July
31, 2003 is by and among the parties identified as "Grantors" on the signature
pages hereto and such other parties as may become Grantors hereunder after the
date hereof (individually a "Grantor", and collectively the "Grantors") and BANK
OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative
Agent") for the holders of the Secured Obligations referenced below.
WITNESSETH
WHEREAS, a $120 million credit facility has been established in favor
of Westlake Chemical Corporation, a Delaware corporation (the "Borrower"),
pursuant to the terms of that Credit Agreement (as amended, modified,
supplemented and extended from time to time, the "Credit Agreement") dated as of
the date hereof among the Borrower, the Guarantors identified therein, the
Lenders identified therein and Bank of America, N.A., as Administrative Agent;
and
WHEREAS, this Security Agreement is required under the terms of the
Credit Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Capitalized terms used and not otherwise defined herein shall have
the meanings provided in the Credit Agreement.
(b) The following terms shall have the meanings assigned thereto in the
Uniform Commercial Code in effect in the State of New York on the date hereof:
Accession, Account, As-Extracted Collateral, Chattel Paper, Commercial Tort
Claim, Consumer Goods, Deposit Account, Documents, Equipment, Farm Products,
Fixtures, General Intangibles, Instrument, Inventory, Letter-of-Credit Rights,
Manufactured Home, Proceeds, Software, Standing Timber and Supporting
Obligation.
(c) As used herein, the following terms shall have the meanings set
forth below:
"Collateral" has the meaning provided in Section 2 hereof.
"Collateral Account" means the deposit account maintained by
the Borrower with the Administrative Agent (and subject to the security
interest of the Administrative Agent) into which Net Proceeds from
Asset Sales of Collateral and Casualty Proceeds from Involuntary
Dispositions affecting Collateral shall be deposited pending final
application of such proceeds in accordance with the terms of the Credit
Agreement.
"Copyright License" means any agreement, written or oral,
providing for the grant by or to a Grantor of any right to use any
Copyright, including, without limitation, any thereof referred to in
Schedule 6.17 to the Credit Agreement.
"Copyrights" means (a) all registered United States copyrights
in all Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings and applications in the United States Copyright Office
including, without limitation, any thereof referred to in Schedule 6.17
to the Credit Agreement, and (b) all renewals thereof including,
without limitation, any thereof referred to in Schedule 6.17 to the
Credit Agreement.
"Patent License" means any agreement, whether written or oral,
providing for the grant by or to a Grantor of any right to manufacture,
use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule 6.17 to the Credit
Agreement.
"Patents" means (a) all letters patent of the United States or
any other country and all reissues and extensions thereof, including,
without limitation, any letters patent referred to in Schedule 6.17 to
the Credit Agreement, and (b) all applications for letters patent of
the United States or any other country and all divisions, continuations
and continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 6.17 to the Credit Agreement.
"Secured Obligations" means, without duplication, (i) all of
the obligations of the Loan Parties to the Lenders and the
Administrative Agent, under the Credit Agreement or any other Loan
Document (including, but not limited to, any interest accruing after
the commencement of a proceeding by or against any Loan Party under any
Debtor Relief Laws, regardless of whether such interest is an allowed
claim under such proceeding), whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or
contingent, howsoever evidenced, created, held or acquired, whether
primary, secondary, direct, contingent, or joint and several, as such
obligations may be amended, modified, increased, extended, renewed or
replaced from time to time, and (ii) all costs and expenses incurred in
connection with enforcement and collection of the obligations described
in the foregoing clause (i), including reasonable attorneys' fees.
"Specified Facilities" means, with respect to the Grantors,
(a) the Calcasieu Parish, Louisiana ethylene, styrene, and polyethylene
facilities, and (b) the Marshall County, Kentucky chlor-alkali, vinyl
chloride monomer and polyvinyl chloride complexes (each, individually,
a "Specified Facility").
"Trademark License" means any agreement, written or oral,
providing for the grant by or to a Grantor of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 6.17 to the Credit Agreement.
"Trademarks" means (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether 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, or otherwise, including, without limitation, any
thereof referred to in Schedule 6.17 to the Credit Agreement, and (b)
all renewals thereof.
"UCC" means the Uniform Commercial Code.
"Work" means any work that is subject to copyright protection
pursuant to Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Grantor hereby grants to the Administrative Agent, for the benefit of the
holders of the Secured Obligations, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Grantor
in all of the following property that is (i) located on, contiguous to,
connected with or in reasonable proximity to any Specified Facility or (ii)
arising from, necessary or used in connection with,
2
or in any respect related, incidental or ancillary to, the ownership, expansion,
operation, use, maintenance or sale or other disposition of any Specified
Facility, whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Collateral"):
(a) the Collateral Account;
(b) those Commercial Tort Claims identified on Schedule 2(d)
attached hereto and other causes of action;
(c) all Documents;
(d) all Equipment;
(e) all Fixtures;
(f) all General Intangibles; Patents; Patent Licenses;
Trademarks; Trademark Licenses; Copyrights; Copyright Licenses; trade
secrets; goodwill; other intellectual property (whether owned or
licensed); drawings; blueprints; specifications; plans; books and
records; employment, consulting, operating, maintenance or services
agreements; utility contracts; other contractual rights; public and
private licenses, permits, franchises, certificates, registrations,
privileges, entitlements, powers, authorities, pollution and
environmental credits and allowances; loan commitments and financing
arrangements incurred or obtained to finance additions, repairs or
improvements to a Specified Facility, Fixtures or Equipment; bonds;
leases; rights to indemnification; any award, remuneration, settlement,
or compensation heretofore made or hereafter to be made by any
Governmental Authority to any Grantor); surety bonds; and insurance
policies and the proceeds therefrom payable or to be payable
thereunder;
(g) all Instruments;
(h) Letter-of-Credit Rights;
(i) all Software;
(j) all Supporting Obligations; and
(k) to the extent not otherwise included, all Accessions and
all Proceeds of any and all of the foregoing.
The Grantors and the Administrative Agent, on behalf of the holders of
the Secured Obligations, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral security
for all of the Secured Obligations, whether now existing or hereafter arising
and (ii) is not to be construed as an assignment of any Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.
Notwithstanding the forgoing, the Collateral shall in no event include
Inventory, Accounts, Deposit Accounts (other than the Collateral Account),
Chattel Paper or contracts to supply Inventory or services to customers of the
Grantors.
3. [Reserved]
3
4. Representations and Warranties. Each Grantor hereby represents and
warrants to the Administrative Agent, for the benefit of the holders of the
Secured Obligations, that so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have been
terminated:
(a) Legal Name; Chief Executive Office; Etc.. As of the date
hereof:
(i) Each Grantor's exact legal name, taxpayer
identification number, organization identification number, and
state of formation are (and for the prior five years have
been) as set forth on Schedule 6.20(c) to the Credit
Agreement.
(ii) Each Grantor's chief executive office is located
(and for the prior five years has been) at the location set
forth on Schedule 6.20(c) to the Credit Agreement attached
hereto.
(iii) Other than as set forth on Schedule 4(a)
attached hereto, no Grantor has been party to a merger,
consolidation or other change in structure or used any
tradename in the prior five years.
(b) Ownership. Each Grantor is the legal and beneficial owner,
lessee or licensee of its Collateral and has the right to pledge, sell,
assign or transfer the same.
(c) Security Interest/Priority. This Security Agreement
creates a valid security interest in favor of the Administrative Agent,
for the benefit of the holders of the Secured Obligations, in the
Collateral of such Grantor and, when properly perfected by filing,
shall constitute a valid perfected security interest in such
Collateral, to the extent such security interest can be perfected by
filing under the UCC, free and clear of all Liens except for Permitted
Liens.
(d) Types of Collateral. None of the Collateral consists of,
or is the Accessions or the Proceeds of, As-Extracted Collateral,
Consumer Goods, Farm Products, Manufactured Homes, or Standing Timber.
(e) Copyrights, Patents and Trademarks.
(i) Schedule 6.17 to the Credit Agreement includes
all Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses owned by any Grantor in its
own name, or to which any Grantor is a party, as of the date
hereof.
(ii) Each Copyright, Patent and Trademark of such
Grantor is valid (to the Grantor's knowledge), subsisting,
unexpired, enforceable (to the Grantor's knowledge) and has
not been abandoned.
(iii) Except as set forth in Schedule 6.17 to the
Credit Agreement, none of the Copyrights, Patents and
Trademarks of any Grantor is the subject of any licensing or
franchise agreement.
(iv) No holding, decision or judgment has been
rendered by any Governmental Authority that would limit,
cancel or question the validity of any Copyright, Patent or
Trademark of any Grantor.
(v) No action or proceeding is pending seeking to
limit, cancel or question the validity of any Copyright,
Patent or Trademark of any Grantor, or that, if adversely
4
determined, could reasonably be expected to have a material
adverse effect on the value of any Copyright, Patent or
Trademark of any Grantor.
(vi) All applications pertaining to the Copyrights,
Patents and Trademarks of each Grantor have been duly and
properly filed, and all registrations or letters pertaining to
such Copyrights, Patents and Trademarks have been duly and
properly filed and issued, and all of such Copyrights, Patents
and Trademarks are , to the Grantor's knowledge, valid and
enforceable.
(vii) No Grantor has made any assignment or agreement
in conflict with the security interest in the Copyrights,
Patents or Trademarks of any Grantor hereunder.
5. Covenants. Each Grantor covenants that, so long as any of the
Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Grantor shall:
(a) Other Liens. Defend the Collateral against the claims and
demands of all other parties claiming an interest therein other than
Permitted Liens.
(b) Instruments; Documents. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by
any Instrument, or if any property constituting Collateral shall be
stored or shipped subject to a Document, ensure that such Instrument or
Document is either in the possession of such Grantor at all times or,
if requested by the Administrative Agent, is immediately delivered to
the Administrative Agent, and duly endorsed in a manner satisfactory to
the Administrative Agent. For purposes of clarification, amounts
payable in connection with a Grantor's inventory shall not be subject
to this clause (b).
(c) Change in Structure, Location or Type. Not, without
providing ten days prior written notice to the Administrative Agent (i)
change its name or state of formation, (ii) be party to a merger,
consolidation or other change in structure or (iii) use any tradename
other than as set forth on Schedule 4(a) attached hereto.
(d) Perfection of Security Interest. Execute and deliver to
the Administrative Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Administrative Agent may
reasonably request) and do all such other things as the Administrative
Agent may reasonably deem necessary, appropriate or convenient (i) to
assure to the Administrative Agent the effectiveness and priority of
its security interests hereunder, including (A) such instruments as the
Administrative Agent may from time to time reasonably request in order
to perfect and maintain the security interests granted hereunder in
accordance with the UCC, (B) with regard to Copyrights, a Notice of
Grant of Security Interest in Copyrights for filing with the United
States Copyright Office in the form of Schedule 5(d)(i) attached
hereto, (C) with regard to Patents, a Notice of Grant of Security
Interest in Patents for filing with the United States Patent and
Trademark Office in the form of Schedule 5(d)(ii) attached hereto and
(D) with regard to Trademarks, a Notice of Grant of Security Interest
in Trademarks for filing with the United States Patent and Trademark
Office in the form of Schedule 5(d)(iii) attached hereto, (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise
protect and assure the Administrative Agent of its rights and interests
hereunder. To that end, each Grantor authorizes the Administrative
Agent to file one or more financing statements (with collateral
descriptions broader and/or less specific than the description of the
Collateral contained herein) disclosing the Administrative Agent's
security interest in any or all of the Collateral of such Grantor
without such Grantor's signature thereon, and further each Grantor also
hereby irrevocably makes, constitutes and appoints the Administrative
Agent, its nominee or any other Person whom the Administrative Agent
may designate, as such Grantor's attorney-in-fact with full power and
for the
5
limited purpose to sign in the name of such Grantor any such financing
statements (including renewal statements), amendments and supplements,
notices or any similar documents that in the Administrative Agent's
reasonable discretion would be necessary, appropriate or convenient in
order to perfect and maintain perfection of the security interests
granted hereunder, such power, being coupled with an interest, being
and remaining irrevocable so long as the Secured Obligations remain
unpaid and until the commitments relating thereto shall have been
terminated. Each Grantor hereby agrees that a carbon, photographic or
other reproduction of this Security Agreement or any such financing
statement is sufficient for filing as a financing statement by the
Administrative Agent without notice thereof to such Grantor wherever
the Administrative Agent may in its sole discretion desire to file the
same. In the event for any reason the law of any jurisdiction other
than New York becomes or is applicable to the Collateral of any Grantor
or any part thereof, or to any of the Secured Obligations, such Grantor
agrees to execute and deliver all such instruments and to do all such
other things as the Administrative Agent in its sole discretion
reasonably deems necessary, appropriate or convenient to preserve,
protect and enforce the security interests of the Administrative Agent
under the law of such other jurisdiction (and, if a Grantor shall fail
to do so promptly upon the request of the Administrative Agent, then
the Administrative Agent may execute any and all such requested
documents on behalf of such Grantor pursuant to the power of attorney
granted hereinabove). If any Collateral is in the possession or control
of a Grantor's agents and the Administrative Agent so requests, such
Grantor agrees to notify such agents in writing of the Administrative
Agent's security interest therein and, upon the Administrative Agent's
request, instruct them to hold all such Collateral for the account of
the holders of the Secured Obligations and subject to the
Administrative Agent's instructions. Each Grantor agrees to mark its
books and records to reflect the security interest of the
Administrative Agent in the Collateral.
(e) Control. Execute and deliver all agreements, assignments,
instruments or other documents as the Administrative Agent shall
reasonably request (including, without limitation, a "Control
Agreement" substantially in the form of Schedule 5(e) or in such other
form as may be agreed by the Borrower and the Administrative Agent) for
the purpose of obtaining and maintaining control within the meaning of
the UCC with respect to the Collateral Account or any Letter-of-Credit
Rights constitution Collateral.
(d) Collateral held by Warehouseman, Bailee, etc. If any
Collateral is at any time in the possession or control of a
warehouseman, bailee, agent or processor of such Grantor, (i) notify
the Administrative Agent of such possession or control, (ii) notify
such Person of the Administrative Agent's security interest in such
Collateral, (iii) instruct such Person to hold all such Collateral for
the Administrative Agent's account and subject to the Administrative
Agent's instructions and (iv) use its best efforts to obtain an
acknowledgment from such Person that it is holding such Collateral for
the benefit of the Administrative Agent. For purposes of clarification,
no Grantor's inventory nor amounts payable in connection with such
inventory shall be subject to this clause (d).
(e) Covenants Relating to Copyrights.
(i) Not do any act or knowingly omit to do any act
whereby any material Copyright may become invalidated and (A)
not do any act, or knowingly omit to do any act, whereby any
material Copyright may become injected into the public domain;
(B) notify the Administrative Agent immediately if it knows
that any material Copyright may become injected into the
public domain or of any adverse determination or development
(including, without limitation, the institution of, or any
such determination or development in, any court or tribunal in
the United States or any other country) regarding a Grantor's
ownership of any such Copyright or its validity; (C) take all
necessary steps as it shall deem appropriate under the
circumstances, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each
registration of each material Copyright owned by a
6
Grantor including, without limitation, filing of applications
for renewal where necessary; and (D) promptly notify the
Administrative Agent of any material infringement of any
material Copyright of a Grantor of which it becomes aware and
take such actions as it shall reasonably deem appropriate
under the circumstances to protect such Copyright, including,
where appropriate, the bringing of suit for infringement,
seeking injunctive relief and seeking to recover any and all
damages for such infringement.
(ii) Not make any assignment or agreement in conflict
with the security interest in the Copyrights of each Grantor
hereunder.
(f) Covenants Relating to Patents and Trademarks.
(i) (A) Continue to use each Trademark on each and
every trademark class of goods applicable to its current line
as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use unless it determines
in its reasonable business judgement to cease any such use,
(B) maintain as in the past the quality of products and
services offered under such Trademark, (C) employ such
Trademark with the appropriate notice of registration, (D) not
adopt or use any mark that is confusingly similar or a
colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the holders
of the Secured Obligations, shall obtain a perfected security
interest in such mark pursuant to this Security Agreement, and
(E) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby any
Trademark may become invalidated.
(ii) Not do any act, or omit to do any act, whereby
any Patent may become abandoned or dedicated.
(iii) Notify the Administrative Agent promptly if it
knows that any application or registration relating to any
Patent or Trademark may become abandoned or dedicated, or of
any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or any court or tribunal in any country)
regarding a Grantor's ownership of any Patent or Trademark or
its right to register the same or to keep and maintain the
same.
(iv) Whenever a Grantor, either by itself or through
an agent, employee, licensee or designee, shall file an
application for the registration of any Patent or Trademark
with the United States Patent and Trademark Office or any
similar office or agency in any other country or any political
subdivision thereof, the Grantor shall report such filing to
the Administrative Agent and the holders of the Secured
Obligations within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request
of the Administrative Agent, a Grantor shall execute and
deliver any and all agreements, instruments, documents and
papers as the Administrative Agent may reasonably request to
evidence the security interest of the Administrative Agent and
the holders of the Secured Obligations in any Patent or
Trademark and the goodwill and general intangibles of a
Grantor relating thereto or represented thereby.
(v) Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the
United States Patent and Trademark Office, or any similar
office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without
limitation, filing of applications for renewal,
7
affidavits of use and affidavits of incontestability, unless
it determines in its reasonable business judgement not to
maintain or pursue the application or registration.
(vi) Promptly notify the Administrative Agent and the
holders of the Secured Obligations after it learns that any
Patent or Trademark included in the Collateral is infringed,
misappropriated or diluted by a third party and promptly sue
for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution,
or to take such other actions as it shall reasonably deem
appropriate under the circumstances to protect such Patent or
Trademark.
(vii) Not make any assignment or agreement in
conflict with the security interest in the Patents or
Trademarks of each Grantor hereunder.
(g) Insurance. Insure, repair and replace the Collateral of
such Grantor as set forth in the Credit Agreement. All insurance
proceeds shall be subject to the security interest of the
Administrative Agent hereunder.
(h) Commercial Tort Claims.
(i) Promptly notify the Administrative Agent in
writing of the initiation of any Commercial Tort Claim before
any Governmental Authority by or in favor of such Grantor or
any of its Subsidiaries.
(ii) Execute and deliver such statements, documents
and notices and do and cause to be done all such things as the
Administrative Agent may reasonably deem necessary,
appropriate or convenient, or as are required by law, to
create, perfect and maintain the Administrative Agent's
security interest in any Commercial Tort Claim.
6. Advances by Administrative Agent. On failure of any Grantor to
perform any of the covenants and agreements contained herein, the Administrative
Agent may, at its sole option and in its sole discretion, perform the same and
in so doing may expend such sums as the Administrative Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any insurance premiums, the payment of any taxes, a payment to obtain a
release of a Lien or potential Lien, expenditures made in defending against any
adverse claim and all other expenditures that the Administrative Agent may make
for the protection of the security hereof or that may be compelled to make by
operation of law. All such sums and amounts so expended shall be repayable by
the Grantors on a joint and several basis (subject to Section 22 hereof)
promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the Default Rate. No such performance of any covenant or
agreement by the Administrative Agent on behalf of any Grantor, and no such
advance or expenditure therefor, shall relieve the Grantors of any default under
the terms of this Security Agreement, the other Loan Documents or any other
documents relating to the Secured Obligations. The Administrative Agent may make
any payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Grantor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8
7. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Administrative Agent shall have, in
addition to the rights and remedies provided herein, in the Loan Documents, in
any other documents relating to the Secured Obligations, or by law (including,
without limitation, levy of attachment and garnishment), the rights and remedies
of a secured party under the UCC of the jurisdiction applicable to the affected
Collateral and, further, the Administrative Agent may, with or without judicial
process or the aid and assistance of others, (i) enter on any premises on which
any of the Collateral may be located and, without resistance or interference by
the Grantors, take possession of the Collateral, (ii) dispose of any Collateral
on any such premises, (iii) require the Grantors to assemble and make available
to the Administrative Agent at the expense of the Grantors any Collateral at any
place and time designated by the Administrative Agent that is reasonably
convenient to both parties, (iv) remove any Collateral from any such premises
for the purpose of effecting sale or other disposition thereof, and/or (v)
without demand and without advertisement, notice, hearing or process of law, all
of which each of the Grantors hereby waives to the fullest extent permitted by
law, at any place and time or times, sell and deliver any or all Collateral held
by or for it at public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon such terms
as the Administrative Agent deems advisable, in its sole discretion (subject to
any and all mandatory legal requirements). Each of the Grantors acknowledges
that any private sale referenced above may be at prices and on terms less
favorable to the seller than the prices and terms that might have been obtained
at a public sale and agrees that such private sale shall be deemed to have been
made in a commercially reasonable manner. Neither the Administrative Agent's
compliance with applicable law nor its disclaimer of warranties relating to the
Collateral shall be considered to adversely affect the commercial reasonableness
of any sale. In addition to all other sums due the Administrative Agent and the
holders of the Secured Obligations with respect to the Secured Obligations, the
Grantors shall pay the Administrative Agent and each of the holders of the
Secured Obligations all reasonable documented costs and expenses incurred by the
Administrative Agent or any such holder of the Secured Obligations, including,
but not limited to, reasonable attorneys' fees, and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of the Secured Obligations, or
in the prosecution or defense of any action or proceeding by or against the
Administrative Agent or the holders of the Secured Obligations or the Grantors
concerning any matter arising out of or connected with this Security Agreement,
any Collateral or the Secured Obligations, including, without limitation, any of
the foregoing arising in, arising under or related to a case under the
Bankruptcy Code. To the extent the rights of notice cannot be legally waived
hereunder, each Grantor agrees that any requirement of reasonable notice shall
be met if such notice is personally served on or mailed, postage prepaid, to the
Borrower in accordance with the notice provisions of Section 11.02 of the Credit
Agreement at least ten Business Days before the time of sale or other event
giving rise to the requirement of such notice. The Administrative Agent shall
not be obligated to make any sale or other disposition of the Collateral
regardless of notice having been given. To the extent permitted by law, any
holder of the Secured Obligations may be a purchaser at any such sale. To the
extent permitted by applicable law, each of the Grantors hereby waives all of
its rights of redemption with respect to any such sale. Subject to the
provisions of applicable law, the Administrative Agent and the holders of the
Secured Obligations may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted by law,
be made at the time and place to which the sale was postponed, or the
Administrative Agent may further postpone such sale by announcement made at such
time and place.
(b) Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Grantors without cost or charge to the Administrative Agent, and
use the same, together with materials, supplies, books and records of the
Grantors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Administrative Agent may
remove Collateral, or any part
9
thereof, from such premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral.
(c) Nonexclusive Nature of Remedies. Failure by the Administrative
Agent or the holders of the Secured Obligations to exercise any right, remedy or
option under this Security Agreement, any other Loan Document, any other
documents relating to the Secured Obligations, or as provided by law, or any
delay by the Administrative Agent or the holders of the Secured Obligations in
exercising the same, shall not operate as a waiver of any such right, remedy or
option. No waiver hereunder shall be effective unless it is in writing, signed
by the party against whom such waiver is sought to be enforced and then only to
the extent specifically stated, which in the case of the Administrative Agent or
the holders of the Secured Obligations shall only be granted as provided herein.
To the extent permitted by law, neither the Administrative Agent, the holders of
the Secured Obligations, nor any party acting as attorney for the Administrative
Agent or the holders of the Secured Obligations, shall be liable hereunder for
any acts or omissions or for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct hereunder. The rights
and remedies of the Administrative Agent and the holders of the Secured
Obligations under this Security Agreement shall be cumulative and not exclusive
of any other right or remedy that the Administrative Agent or the holders of the
Secured Obligations may have.
(d) Retention of Collateral. To the extent permitted under applicable
law, in addition to the rights and remedies hereunder, upon the occurrence of an
Event of Default, the Administrative Agent may, after providing the notices
required by Sections 9-620 and 9-621 of the UCC or otherwise complying with the
requirements of applicable law of the relevant jurisdiction, accept or retain
all or any portion of the Collateral in satisfaction of the Secured Obligations.
Unless and until the Administrative Agent shall have provided such notices,
however, the Administrative Agent shall not be deemed to have accepted or
retained any Collateral in satisfaction of any Secured Obligations for any
reason.
(e) Deficiency. In the event that the proceeds of any sale, collection
or realization are insufficient to pay all amounts to which the Administrative
Agent or the holders of the Secured Obligations are legally entitled, the
Grantors shall be jointly and severally liable for the deficiency (subject to
Section 22 hereof), together with interest thereon at the Default Rate, together
with the costs of collection and reasonable attorneys' fees. Any surplus
remaining after the full payment and satisfaction of the Secured Obligations
shall be returned to the Grantors or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.
8. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Grantor hereby designates and appoints the Administrative
Agent, on behalf of the holders of the Secured Obligations, and each of its
designees or agents, as attorney-in-fact of such Grantor, irrevocably and with
power of substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise and adjust, and
give discharges and releases concerning the Collateral, all as the
Administrative Agent may reasonably deem appropriate;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any of the Collateral and enforcing any
other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the
Administrative Agent may reasonably deem appropriate;
10
(iv) to receive, open and dispose of mail addressed to a
Grantor and endorse checks, notes, drafts, acceptances, money orders,
bills of lading, warehouse receipts or other instruments or documents
evidencing payment, shipment or storage of the goods giving rise to the
Collateral on behalf of and in the name of such Grantor, or securing,
or relating to such Collateral;
(v) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the
Collateral;
(vi) to direct any parties liable for any payment in
connection with any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct;
(vii) 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;
(viii) to sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in respect of,
any Collateral or the goods or services that have given rise thereto,
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes;
(ix) to adjust and settle claims under any insurance policy
relating thereto;
(x) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
security and pledge agreements, affidavits, notices and other
agreements, instruments and documents that the Administrative Agent may
reasonably deem appropriate in order to perfect and maintain the
security interests and liens granted in this Security Agreement and in
order to fully consummate all of the transactions contemplated therein;
(xi) to institute any foreclosure proceedings that the
Administrative Agent may reasonably deem appropriate; and
(xii) to do and perform all such other acts and things as the
Administrative Agent may reasonably deem appropriate or convenient in
connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated. The Administrative 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 Administrative Agent in this Security
Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to protect, preserve and realize
upon its security interest in the Collateral.
(b) Performance by the Administrative Agent of Obligations. If any
Grantor fails to perform any agreement or obligation contained herein, the
Administrative Agent itself may perform, or cause performance of, such agreement
or obligation, and the expenses of the Administrative Agent incurred in
connection therewith shall be payable by the Grantors on a joint and several
basis (subject to Section 22 hereof).
11
(c) The Administrative Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Administrative Agent hereunder, the Administrative Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood and
agreed that the Grantors shall be responsible for preservation of all rights in
the Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Grantors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which the Administrative Agent accords its own property, which shall be
no less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any of the Collateral. In the event of a public or
private sale of Collateral pursuant to Section 7 hereof, the Administrative
Agent shall have no obligation to clean, repair or otherwise prepare the
Collateral for sale.
9. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.
10. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the
Administrative Agent or any of the holders of the Secured Obligations in cash or
its equivalent, will be applied in reduction of the Secured Obligations in the
order set forth in the Credit Agreement or other document relating to the
Secured Obligations, and each Grantor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Administrative Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Administrative Agent's
sole discretion, notwithstanding any entry to the contrary upon any of its books
and records.
11. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the Loan
Documents). Upon such payment and termination, this Security Agreement and the
liens and security interests of the Administrative Agent hereunder shall be
automatically terminated and the Administrative Agent shall, upon the request
and at the expense of the Grantors, execute and deliver all UCC termination
statements and/or other documents reasonably requested by the Grantors
evidencing such termination. Notwithstanding the foregoing, all releases and
indemnities provided hereunder (in all cases, whether or not caused by or
arising, in whole or in part, out of the negligence of the indemnified party)
shall survive termination of this Security Agreement.
(b) This Security Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any holder of the Secured
Obligations as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including, without limitation, attorneys' fees, the allocated cost
of internal counsel and disbursements) incurred by the Administrative Agent or
any holder of the Secured Obligations in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Secured
Obligations.
12
12. Amendments and Waivers. This Security Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.01 of the Credit Agreement.
13. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Grantor, its successors and assigns, and shall inure, together with the rights
and remedies of the Administrative Agent and the holders of the Secured
Obligations hereunder, to the benefit of the Administrative Agent and the
holders of the Secured Obligations and their successors and permitted assigns;
provided, however, that none of the Grantors may assign its rights or delegate
its duties hereunder without the prior written consent of the requisite Lenders
under the Credit Agreement. To the fullest extent permitted by law, each Grantor
hereby releases the Administrative Agent and each holder of the Secured
Obligations, their respective successors and assigns and their respective
officers, attorneys, employees and agents, from any liability for any act or
omission or any error of judgment or mistake of fact or of law relating to this
Security Agreement or the Collateral, except for any liability arising from the
gross negligence or willful misconduct of the Administrative Agent or such
holder, or their respective officers, attorneys, employees or agents.
14. Notices. All notices required or permitted to be given under this
Security Agreement shall be given as provided in Section 11.02 of the Credit
Agreement.
15. Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
16. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
17. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, the LAW OF THE STATE OF NEW YORK applicable to agreements made
and to be performed entirely within such State; PROVIDED THAT THE ADMINISTRATIVE
Agent AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK SITTING IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS SECURITY
AGREEMENT, EACH PARTY TO THIS SECURITY AGREEMENT CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
PARTY TO THIS SECURITY AGREEMENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS SECURITY AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH PARTY TO THIS
SECURITY AGREEMENT WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
13
18. Waiver of Right to Trial by Jury.
EACH PARTY TO THIS SECURITY AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS SECURITY AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
19. Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
20. Survival. All representations and warranties of the Grantors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Loan Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.
21. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by a Grantor), or by a
guarantee, endorsement or property of any other Person, then the Administrative
Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Administrative
Agent shall have the right, in its sole discretion, to determine which rights,
security, liens, security interests or remedies the Administrative Agent shall
at any time pursue, relinquish, subordinate, modify or take with respect
thereto, without in any way modifying or affecting any of them or the Secured
Obligations or any of the rights of the Administrative Agent or the holders of
the Secured Obligations under this Security Agreement, under any of the other
Loan Documents or under any other document relating to the Secured Obligations.
22. Joint and Several Obligations of Grantors.
(a) Subject to subsection (c) of this Section 22, each of the Grantors
is accepting joint and several liability hereunder in consideration of the
financial accommodation to be provided by the holders of the Secured
Obligations, for the mutual benefit, directly and indirectly, of each of the
Grantors and in consideration of the undertakings of each of the Grantors to
accept joint and several liability for the obligations of each of them.
(b) Subject to subsection (c) of this Section 22, each of the Grantors
jointly and severally hereby irrevocably and unconditionally accepts, not merely
as a surety but also as a co-debtor, joint and several liability with the other
Grantors with respect to the payment and performance of all of the Secured
Obligations arising under this Security Agreement, the other Loan Documents and
any other documents relating to the Secured Obligations, it being the intention
of the parties hereto that all the Secured Obligations shall be the joint and
several obligations of each of the Grantors without preferences or distinction
among them.
14
(c) Notwithstanding any provision to the contrary contained herein, in
any other of the Loan Documents or in any other documents relating to the
Secured Obligations, the obligations of each Guarantor under the Credit
Agreement and the other Loan Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.
23. Entire Agreement
This SECURITY AGREEMENT and the other Loan Documents represent the
final agreement AMONG the parties and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. There are
no unwritten oral agreements AMONG the parties.
[Signature Pages Follow]
15
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
GRANTORS: WESTLAKE CHEMICAL CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
GEISMAR HOLDINGS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
GEISMAR VINYLS COMPANY LP
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
GRAMERCY CHLOR-ALKALI CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
GVGP, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
NORTH AMERICAN PIPE CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
NORTH AMERICAN PROFILES, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
VAN BUREN PIPE CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
16
WESTECH BUILDING PRODUCTS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE CHEMICAL HOLDINGS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE CHEMICAL INVESTMENTS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE CHEMICAL MANUFACTURING, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE CHEMICAL PRODUCTS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE DEVELOPMENT CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE MANAGEMENT SERVICES, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE OLEFINS CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
17
WESTLAKE OVERSEAS CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
WESTLAKE PETROCHEMICALS LP
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE POLYMERS LP
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE PVC CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE RESOURCES CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE STYRENE LP
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE VINYL CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
WESTLAKE VINYLS, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
-----------------------------------------
18
WPT LP
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A..,
as Administrative Agent
By:
----------------------------------
Name:
Title:
19
SCHEDULE 5(d)(i)
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Ladies and Gentlemen:
Please be advised that the undersigned Grantor hereby grants a
continuing security interest in and continuing lien upon, the copyrights and
copyright applications on Schedule 1 attached hereto to the Administrative Agent
for the ratable benefit of the holders of the Secured Obligations, pursuant to
and as more fully set forth in the Security Agreement dated as of July 31, 2003
(the "Security Agreement") by and among the Grantors party thereto (each an
"Grantor" and collectively, the "Grantors") and Bank of America, N.A., as
Administrative Agent (the "Administrative Agent") for the holders of the Secured
Obligations referenced therein, which Security Agreement is hereby made a part
hereof by reference as though set forth in its entirety. Capitalized terms used
herein and not otherwise defined shall have the meaning assigned thereto in the
Security Agreement.
The undersigned Grantor and the Administrative Agent, on behalf of the
holders of the Secured Obligations, hereby acknowledge and agree that the
security interest in the copyrights and copyright applications set forth on
Schedule 1 attached hereto (i) may only be terminated in accordance with the
terms of the Security Agreement and (ii) is not to be construed as an assignment
of any copyright or copyright application.
Very truly yours,
----------------------------------
[Grantor]
By:
-----------------------------------------
Name:
Title:
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By:
-----------------------------------------
Name:
Title:
SCHEDULE 5(d)(ii)
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Ladies and Gentlemen:
Please be advised that the undersigned Grantor hereby grants a
continuing security interest in and continuing lien upon, the patents and patent
applications set forth on Schedule 1 attached hereto to the Administrative Agent
for the ratable benefit of the holders of the Secured Obligations, pursuant to
and as more fully set forth in the Security Agreement dated as of July 31, 2003
(the "Security Agreement") by and among the Grantors party thereto (each an
"Grantor" and collectively, the "Grantors") and Bank of America, N.A., as
Administrative Agent (the "Administrative Agent") for the holders of the Secured
Obligations referenced therein, which Security Agreement is hereby made a part
hereof by reference as though set forth in its entirety. Capitalized terms used
herein and not otherwise defined shall have the meaning assigned thereto in the
Security Agreement.
The undersigned Grantor and the Administrative Agent, on behalf of the
holders of the Secured Obligations, hereby acknowledge and agree that the
security interest in the patents and patent applications set forth on Schedule 1
attached hereto (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.
Very truly yours,
----------------------------------
[Grantor]
By:
-------------------------------
Name:
Title:
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By:
-----------------------------------------
Name:
Title:
21
SCHEDULE 5(d)(iii)
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Ladies and Gentlemen:
Please be advised that the undersigned Grantor hereby grants a
continuing security interest in and continuing lien upon, the trademarks and
trademark applications set forth on Schedule 1 attached hereto to the
Administrative Agent for the ratable benefit of the holders of the Secured
Obligations, pursuant to and as more fully set forth in the Security Agreement
dated as of July 31, 2003 (the "Security Agreement") by and among the Grantors
party thereto (each an "Grantor" and collectively, the "Grantors") and Bank of
America, N.A., as Administrative Agent (the "Administrative Agent") for the
holders of the Secured Obligations referenced therein, which Security Agreement
is hereby made a part hereof by reference as though set forth in its entirety.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned thereto in the Security Agreement.
The undersigned Grantor and the Administrative Agent, on behalf of the
holders of the Secured Obligations, hereby acknowledge and agree that the
security interest in the trademarks and trademark applications set forth on
Schedule 1 attached hereto (i) may only be terminated in accordance with the
terms of the Security Agreement and (ii) is not to be construed as an assignment
of any trademark or trademark application.
Very truly yours,
----------------------------------
[Grantor]
By:
-------------------------------
Name:
Title:
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By:
-----------------------------------------
Name:
Title:
22
SCHEDULE 5(e)
[FORM OF ACCOUNT CONTROL AGREEMENT]
THIS DEPOSIT ACCOUNT CONTROL AGREEMENT (this "Agreement") is entered
into as of ____________ ___, 20___, among Westlake Chemical Corporation (the
"Company"), Bank of America, N.A. (the "Bank"), and Bank of America, N.A, in its
capacity as administrative agent (in such capacity, the "Agent") for the Lenders
under that certain Credit Agreement (the "Credit Agreement") dated as of July
31, 2003 among the Company, the Guarantors identified therein, the Lenders
identified therein and Agent. Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $120 million credit facility has been established in favor
of the Company pursuant to the terms of the Credit Agreement.
WHEREAS, this Agreement is required under the terms of the Credit
Agreement and the Security Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
A. Bank has agreed to establish and maintain for Company
deposit account number _______________ (the "Collateral Account").
B. Company has assigned to Agent a security interest in the
Collateral Account.
C. Company, Agent and Bank are entering into this Agreement to
evidence Agent's security interest in the Collateral Account and to provide for
the disposition of amounts deposited in the Collateral Account.
Accordingly, Company, Agent and Bank agree as follows:
1. (a) This Agreement evidences Agent's control over the Collateral
Account. Notwithstanding anything to the contrary in the agreement between Bank
and Company governing the Collateral Account, Bank will comply with instructions
originated by Agent as set forth herein directing the disposition of funds in
the Collateral Account without further consent of the Company or any other
Person.
(b) Company represents and warrants to Agent and Bank that it has not
assigned or granted a security interest in the Collateral Account, except to
Agent.
(c) Company will not permit the Collateral Account to become subject to
any other pledge, assignment, lien, charge or encumbrance of any kind, other
than Agent's security interest referred to herein.
2. Bank shall prevent Company from making any withdrawals from the Collateral
Account without the prior consent of the Agent. Company covenants to Agent it
will not close the Collateral Account. Bank shall have no liability in the event
Company breaches this covenant to Agent. Funds are not available if, in the
reasonable determination of Bank, they are subject to a hold, dispute or legal
process preventing their withdrawal.
3. Bank agrees it shall not offset, charge, deduct or otherwise withdraw funds
from the Collateral Account, except as permitted by Section 4, until it has been
advised in writing by Agent that all of
23
Company's obligations that are secured by the Collateral Account are paid in
full. Agent shall notify Bank promptly in writing upon payment in full of
Company's obligations.
4. Bank is permitted to charge the Collateral Account:
(a) for its fees and charges relating to the Collateral
Account and other fees associated with this Agreement; and
(b) in the event any check deposited into the Collateral
Account is returned unpaid for any reason or for any breach of warranty claim.
5. (a) If the balances in the Collateral Account are not
sufficient to compensate Bank for any fees or charges due Bank in connection
with the Collateral Account or this Agreement, Company agrees to pay Bank on
demand the amount due Bank. Company will have breached this Agreement if it has
not paid Bank, within five days after such demand, the amount due Bank.
(b) If the balances in the Collateral Account are not
sufficient to compensate Bank for any returned check, Company agrees to pay Bank
on demand the amount due Bank. If Company fails to so pay Bank immediately upon
demand, Agent agrees to pay Bank within five days after Bank's demand to Agent
to pay any amount received by Agent with respect to such returned check. The
failure to so pay Bank shall constitute a breach of this Agreement.
6. (a) Bank will not be liable to Company or Agent for any
expense, claim, loss, damage or cost ("Damages") arising out of or relating to
its performance under this Agreement other than those Damages which result
directly from its acts or omissions constituting gross negligence or intentional
misconduct.
(b) In no event will Bank be liable for any special, indirect,
exemplary or consequential damages, including but not limited to lost profits.
(c) Bank will be excused from failing to act or delay in
acting, and no such failure or delay shall constitute a breach of this Agreement
or otherwise give rise to any liability of Bank, if (i) such failure or delay is
caused by circumstances beyond Bank's reasonable control, including but not
limited to legal constraint, emergency conditions, action or inaction of
governmental, civil or military authority, fire, strike, lockout or other labor
dispute, war, riot, theft, flood, earthquake or other natural disaster,
breakdown of public or private or common carrier communications or transmission
facilities, equipment failure, or negligence or default of Company or Agent or
(ii) such failure or delay resulted from Bank's reasonable belief that the
action would have violated any guideline, rule or regulation of any governmental
authority.
(d) Bank shall have no duty to inquire or determine whether
Company's obligations to Agent are in default or whether Agent is entitled to
provide the Notice to Bank. Bank may rely on notices and communications it
believes in good faith to be genuine and given by the appropriate party.
(e) Notwithstanding any of the other provisions in this
Agreement, in the event of the commencement of a case pursuant to Title 11,
United States Code, filed by or against Company, or in the event of the
commencement of any similar case under then applicable federal or state law
providing for the relief of debtors or the protection of creditors by or against
Company, Bank may act as Bank deems necessary to comply with all applicable
provisions of governing statutes and shall not be in violation of this Agreement
as a result.
(f) Bank shall be permitted to comply with any writ, levy
order or other similar judicial or regulatory order or process concerning the
Collateral Account and shall not be in violation of this Agreement for so doing.
24
7. Company and Agent shall jointly and severally indemnify Bank against, and
hold it harmless from, any and all liabilities, claims, costs, expenses and
damages of any nature (including but not limited to allocated costs of staff
counsel, other reasonable attorney's fees and any fees and expenses) in any way
arising out of or relating to disputes or legal actions concerning Bank's
provision of the services described in this Agreement. This section does not
apply to any cost or damage attributable to the gross negligence or intentional
misconduct of Bank. Company's and Agent's obligations under this section shall
survive termination of this Agreement.
8. Company and Agent shall jointly and severally pay to Bank, upon receipt of
Bank's invoice, all costs, expenses and attorneys' fees (including allocated
costs for in-house legal services) incurred by Bank in connection with the
enforcement of this Agreement and any instrument or agreement required
hereunder, including but not limited to any such costs, expenses and fees
arising out of the resolution of any conflict, dispute, motion regarding
entitlement to rights or rights of action, or other action to enforce Bank's
rights in a case arising under Title 11, United States Code. Company agrees to
pay Bank, upon receipt of Bank's invoice, all costs, expenses and attorneys'
fees (including allocated costs for in-house legal services) incurred by Bank in
the preparation and administration of this Agreement (including any amendments
hereto or instruments or agreements required hereunder).
9. Termination and Assignment of this Agreement shall be as follows:
(a) Agent may terminate this Agreement by providing notice to
Company and Bank that all of Company's obligations which are secured by the
Collateral Account are paid in full. Agent may also terminate or it may assign
this Agreement upon 30 days' prior written notice to Company and Bank. Bank may
terminate this Agreement upon 30 days' prior written notice to Company and
Agent. Company may not terminate this Agreement except with the written consent
of Agent and upon prior written notice to Bank.
(b) Notwithstanding subsection 9(a), Bank may terminate this
Agreement at any time by written notice to Company and Agent if either Company
or Agent breaches any of the terms of this Agreement, or any other agreement
with Bank. Furthermore, as such time as the Obligations under the Credit
Agreement have been Fully Satisfied, any remaining balances in the Collateral
Account shall be distributed to the Company.
10. (a) Each party represents and warrants to the other parties
that (i) this Agreement constitutes its duly authorized, legal, valid, binding
and enforceable obligation; (ii) the performance of its obligations under this
Agreement and the consummation of the transactions contemplated hereunder will
not (A) constitute or result in a breach of its certificate or articles of
incorporation, by-laws or partnership agreement, as applicable, or the
provisions of any material contract to which it is a party or by which it is
bound or (B) result in the violation of any law, regulation, judgment, decree or
governmental order applicable to it; and (iii) all approvals and authorizations
required to permit the execution, delivery, performance and consummation of this
Agreement and the transactions contemplated hereunder have been obtained.
(b) The parties each agree that it shall be deemed to make and
renew each representation and warranty in subsection 10(a) on and as of each day
on which Company uses the services set forth in this Agreement.
11. (a) This Agreement may be amended only by a writing signed by
Company, Agent and Bank; except that Bank's charges are subject to change by
Bank upon 30 days' prior written notice to Company.
(b) This Agreement may be executed in counterparts; all such
counterparts shall constitute but one and the same agreement.
25
(c) This Agreement controls in the event of any conflict
between this Agreement and any other document or written or oral statement. This
Agreement supersedes all prior understandings, writings, proposals,
representations and communications, oral or written, of any party relating to
the subject matter hereof.
(d) This Agreement shall be interpreted in accordance with
North Carolina law without reference to that state's principles of conflicts of
law.
12. Any written notice or other written communication to be given under this
Agreement shall be addressed to each party at its address set forth on the
signature page of this Agreement or to such other address as a party may specify
in writing. Except as otherwise expressly provided herein, any such notice shall
be effective upon receipt.
14. Nothing contained in the Agreement shall create any agency, fiduciary, joint
venture or partnership relationship between Bank and Company or Agent.
26
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.
Company: WESTLAKE CHEMICAL Address for notices:
CORPORATION
By:
-------------------------------
Name:
Title:
Agent: Bank of America, N.A. Address for notices:
By:
-------------------------------
Name:
Title:
Bank: Bank of America, N.A. Address for notices:
By:
-------------------------------
Name:
Title:
Exhibit 2.01
FORM OF NEW COMMITMENT AGREEMENT
Reference is made to the Credit Agreement dated as of July 31, 2003
among Westlake Chemical Corporation, a Delaware corporation (the "Borrower"),
certain Subsidiaries of the Borrower as Guarantors, the Lenders identified
therein and Bank of America, N.A., as Administrative Agent (as the same may be
amended, modified, extended or restated from time to time, the "Credit
Agreement"). All of the defined terms in the Credit Agreement are incorporated
herein by reference.
1. Effective as of the Effective Date set forth below, the undersigned
Lender hereby confirms its Additional Commitment, in an aggregate principal
amount of up to the amount (and the Pro Rata Share) specified below to make
Tranche B Term Loans in accordance with the provisions of Section 2.01 of the
Credit Agreement. If the undersigned Lender is already a Lender under the Credit
Agreement, such Lender acknowledges and agrees that such Additional Commitment
is in addition to any existing Tranche B Term Loan Commitment of such Lender
under the Credit Agreement. If the undersigned Lender is not already a Lender
under the Credit Agreement, such Lender hereby (a) represents and warrants that
it has full power and authority, and has taken all action necessary, to execute
and deliver this New Commitment Agreement and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (b)
acknowledges, agrees and confirms that, by its execution of this New Commitment
Agreement, such Lender will, as of the Effective Date, be a party to the Credit
Agreement and the Intercreditor Agreement and be bound by the provisions of the
Credit Agreement and, to the extent of its Commitment, have the rights and
obligations of a Lender under the Credit Agreement and of a Bank under the
Intercreditor Agreement and (c) attaches all documentation required to be
delivered pursuant to Section 11.15 of the Credit Agreement.
2. This New Commitment Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Amount of Additional Commitment $
---------------
Tranche B Term Loan Commitment (after giving
effect to the Additional Commitment) $
---------------
Pro Rata Share (after giving effect to
the Additional Commitment) %
---------------
Effective Date of Additional Commitment , 20
--------- --
The terms set forth above are hereby agreed to:
[LENDER] Address for Notices:
-----------------------------
By: -----------------------------
---------------------------- -----------------------------
Title: Ph:
--------------------------
Fx:
--------------------------
CONSENTED TO:
BANK OF AMERICA, N.A.,
as Administrative Agent WESTLAKE CHEMICAL CORPORATION
By: By:
------------------------------ -------------------------------
Title: Title:
29
Exhibit 2.02
FORM OF LOAN NOTICE
Date:
----------
To: Bank of America, N.A., as Administrative Agent
Re: Credit Agreement (as amended, modified, supplemented and extended from
time to time, the "Credit Agreement") dated as of July 31, 2003 among
Westlake Chemical Corporation, a Delaware corporation (the "Borrower"),
the Guarantors identified therein, the Lenders identified therein, and
Bank of America, N.A., as Administrative Agent. Capitalized terms used
but not otherwise defined herein have the meanings provided in the
Credit Agreement.
Ladies and Gentlemen:
The undersigned hereby requests a Loan in the form of [a Borrowing][a
conversion][a continuation of Eurodollar Rate Loans]:
1. On ______________ (a Business Day).
2. In the amount of $[___________], comprised of [Base Rate Loans][Eurodollar
Rate Loans with an Interest Period of [______] months.
With respect to the Borrowing of this Loan, the Borrower hereby represents and
warrants that the conditions set forth in Section 5.02 of the Credit Agreement
have been satisfied on and as of the date of such Borrowing.
WESTLAKE CHEMICAL CORPORATION,
a Delaware corporation
By:
------------------------------------
Name:
Title:
Exhibit 7.13
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of
_____________, 20__, is by and between _____________________, a
___________________ (the "Subsidiary"), and BANK OF AMERICA, N.A., in its
capacity as Administrative Agent under that certain Credit Agreement (as it may
be amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), dated as of July 31, 2003, by and among Westlake Chemical
Corporation, a Delaware corporation (the "Borrower"), the Guarantors, the
Lenders and Bank of America, N.A., as Administrative Agent. All of the defined
terms in the Credit Agreement are incorporated herein by reference.
The Loan Parties are required by Section 7.12 of the Credit
Agreement to cause the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Subsidiary will be deemed to be a
party to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as if
it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Subsidiary hereby jointly and severally together with the other Guarantors,
guarantees to each Lender and the Agent, as provided in Article IV of the Credit
Agreement, the prompt payment and performance of the Obligations in full when
due (whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Subsidiary will be deemed to be a
party to the Security Agreement, and shall have all the obligations of a
"Grantor" (as such term is defined in the Security Agreement) thereunder as if
it had executed the Security Agreement. The Subsidiary hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Security Agreement. Without limiting generality of
the foregoing terms of this paragraph 2, the Subsidiary hereby grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right of set off against any and all right, title and interest of the Subsidiary
in and to the Collateral (as such term is defined in Section 2 of the Security
Agreement) of the Subsidiary. The Subsidiary hereby represents and warrants to
the Agent that:
(i) The Subsidiary's chief executive office, tax payer
identification number, organization identification number, and chief
place of business are (and for the prior four months have been) located
at the locations set forth on Schedule 1 attached hereto and the
Subsidiary keeps its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on
Schedule 2 attached hereto.
(iii) The Subsidiary's legal name and jurisdiction of
incorporation is as shown in this Agreement and the Subsidiary has not
in the past four months changed its name, been party to a
merger, consolidation or other change in structure or used any
tradename except as set forth in Schedule 3 attached hereto.
(iv) The patents, copyrights, and trademarks listed on
Schedule 4 attached hereto constitute all of the registrations and
applications for the patents and trademarks owned by the Subsidiary.
3. The address of the Subsidiary for purposes of all notices
and other communications is ____________________, ____________________________,
Attention of ______________ (Facsimile No. ____________).
4. The Subsidiary hereby waives acceptance by the Agent and
the Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
5. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute one contract.
6. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
Name:
Title:
32
Schedule 1
TO FORM OF JOINDER AGREEMENT
[Chief Executive Office, Tax Identification Number, Organization Identification
Number and Chief Place of Business of Subsidiary]
33
Schedule 2
TO FORM OF JOINDER AGREEMENT
[Types and Locations of Collateral]
34
Schedule 3
TO FORM OF JOINDER AGREEMENT
[Tradenames]
35
Schedule 4
TO FORM OF JOINDER AGREEMENT
[Patents, Copyrights, and Trademarks]
36
Exhibit 11.07
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between ____________________ (the "Assignor") and _______________________ (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (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 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 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, but not limited to, 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:
------------------------------
3. Borrower:
------------------------------
4. Agent: Bank of America, N.A., as the administrative agent
under the Credit Agreement
5. Credit Agreement: The $120,000,000 Credit Agreement dated as of July
31, 2003 among Westlake Chemical Corporation, a
Delaware corporation, the Guarantors party
thereto, the Lenders parties thereto and Bank of
America, N.A., as Agent.
6. Assigned Interest:
<Table>
<Caption>
Aggregate Amount of Amount of
Commitment/Loans for Commitment/Loans Percentage Assigned of
Facility Assigned all Lenders Assigned Commitment/Loans
----------------- -------------------- ---------------- ----------------------
Tranche B Term Loan $ $ %
$ $ %
$ $ %
</Table>
[7. Trade Date: ]
-----------------
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY 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:
--------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
--------------------------------
Title:
[Consented to and](1) Accepted:
BANK OF AMERICA, N.A. as
Agent
By
-----------------------------
Title:
- ----------
(1) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
2
ANNEX 1
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 meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (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 to Section 7.1
thereof, as applicable, 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 Agent or any other Lender, (v) if it is a not a United States
person under Section 7701(a)(30) of the Code, 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
(vi) Assignee is an "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended; and (b) agrees
that (i) it will, independently and without reliance on the 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 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 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 New York.