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EXHIBIT 4.3(a)
[REVISED EXECUTION COPY]
U.S. $100,000,000
TERM LOAN AGREEMENT,
dated as of June 17, 1997,
among
PIONEER AMERICAS ACQUISITION CORP.,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent for the Lenders,
SALOMON BROTHERS HOLDING COMPANY INC,
as the Documentation Agent for the Lenders,
and
BANK OF AMERICA ILLINOIS,
as the Administrative Agent for the Lenders,
ARRANGED BY
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
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TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . 26
1.3. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . 26
1.4. Accounting and Financial Determinations . . . . . . . . . . . . 26
1.5. Use of UCC Terms . . . . . . . . . . . . . . . . . . . . . . . . 26
1.6. Officers' Certificates and Opinions . . . . . . . . . . . . . . 26
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1.1. Term Loan Commitments . . . . . . . . . . . . . . . . . . . . . 27
2.1.2. Lenders Not Permitted or Required to Make the Term Loans . . . . 27
2.2. Borrowing Procedures and Funding Maintenance . . . . . . . . . . 27
2.3. Continuation and Conversion Elections . . . . . . . . . . . . . 28
2.4. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.5. Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application . . . . . . . . . . . . 29
3.1.1. Repayments and Prepayments . . . . . . . . . . . . . . . . . . . 29
3.1.2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . 32
3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . 32
3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3.1. Arrangement, Structuring and Commitment Fees . . . . . . . . . . 33
3.3.2. Administrative Agent Fee . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . 33
4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . 33
4.3. Increased LIBO Rate Loan Costs, etc. . . . . . . . . . . . . . . 33
4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . 34
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . 35
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . 36
4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE V
CONDITIONS TO TERM LOAN EXTENSION
5.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . 37
5.2. Delivery of Term Note. . . . . . . . . . . . . . . . . . . . . . 37
5.3. Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . . . . . 37
5.4. Consummation of Acquisition . . . . . . . . . . . . . . . . . . 37
5.5. Completion of Consent Solicitation . . . . . . . . . . . . . . . 37
5.6. Completion of Tender Offer . . . . . . . . . . . . . . . . . . . 37
5.7. Issuance of the Senior Notes . . . . . . . . . . . . . . . . . . 38
5.8. Revolving Credit Agreement. . . . . . . . . . . . . . . . . . . 38
5.9. Transaction Documents . . . . . . . . . . . . . . . . . . . . . 38
5.10. Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.11. Additional Security Documents. . . . . . . . . . . . . . . . . . 40
5.12. Existing Intercreditor Agreement. . . . . . . . . . . . . . . . 40
5.13. Intercreditor Agreement. . . . . . . . . . . . . . . . . . . . . 40
5.14. Closing Date Certificates . . . . . . . . . . . . . . . . . . . 40
5.15. Financial Information, etc. . . . . . . . . . . . . . . . . . . 41
5.16. Solvency, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.17. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.18. Material Adverse Change . . . . . . . . . . . . . . . . . . . . 41
5.19. Consents and Approvals, etc. . . . . . . . . . . . . . . . . . . 41
5.20. Reliance Letters . . . . . . . . . . . . . . . . . . . . . . . . 41
5.21. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . 42
5.22. Closing Fees, Expenses, etc. . . . . . . . . . . . . . . . . . . 42
5.23. Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . 43
6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . 43
6.3. No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.4. Validity and Binding Effect . . . . . . . . . . . . . . . . . . 43
6.5. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . . 44
6.7. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.8. Litigation; Contingent Liabilities . . . . . . . . . . . . . . . 44
6.9. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.10. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.11. Partnerships; Joint Ventures . . . . . . . . . . . . . . . . . . 44
6.12. Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.13. Intellectual Property. . . . . . . . . . . . . . . . . . . . . . 45
6.14. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.15. Contracts; Labor Matters . . . . . . . . . . . . . . . . . . . . 45
6.16. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . 46
6.17. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . 46
6.18. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.19. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.20. Investment Company Act Representation . . . . . . . . . . . . . 47
6.21. Public Utility Holding Company Act Representation . . . . . . . 47
6.22. Environmental and Safety and Health Matters . . . . . . . . . . 47
6.23. Related Agreements and Transaction Documents . . . . . . . . . . 48
6.24. Holding Companies . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . 49
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . 49
7.1.2. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . 51
7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . 51
7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.6. Books and Records . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.7. Use of Proceeds, etc. . . . . . . . . . . . . . . . . . . . . . 52
7.1.8. Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . 52
7.1.9. Stock Pledge Agreements . . . . . . . . . . . . . . . . . . . . 52
7.1.10. Concerning the Collateral and the Loan Documents . . . . . . . . 53
7.1.11. Maintenance of Corporate Separateness . . . . . . . . . . . . . 53
7.1.12. Working Capital Line . . . . . . . . . . . . . . . . . . . . . . 54
7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 54
7.2.1. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.2.2. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.2.3. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . 58
7.2.4. Payment Restrictions Affecting Restricted Subsidiaries . . . . . 60
7.2.5. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . 61
7.2.6. Asset Dispositions, etc. . . . . . . . . . . . . . . . . . . . . 63
7.2.7. Modification of Certain Agreements . . . . . . . . . . . . . . . 65
7.2.8. Transactions with Affiliates . . . . . . . . . . . . . . . . . . 65
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7.2.9. Impairment of Security Interest . . . . . . . . . . . . . . . . 66
7.2.10. Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . 66
7.2.11. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . 67
7.2.12. Limitation on Applicability of Certain Covenants . . . . . . . . 67
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . 67
8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . 68
8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.3. Non-Performance of Certain Covenants and Obligations . . . . . . 68
8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . 68
8.1.5. Disaffirmation of Obligations . . . . . . . . . . . . . . . . . 68
8.1.6. Effectiveness and Enforceability of Guarantees . . . . . . . . . 68
8.1.7. Default on Other Indebtedness . . . . . . . . . . . . . . . . . 68
8.1.8. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . 69
8.1.10. Impairment of Security, etc. . . . . . . . . . . . . . . . . . . 69
8.2. Action if Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . 69
8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . 70
ARTICLE IX
THE AGENTS
9.1. Appointment of Agents . . . . . . . . . . . . . . . . . . . . . 70
9.2. Nature of Duties of the Agents. . . . . . . . . . . . . . . . . 70
9.3. General Immunity . . . . . . . . . . . . . . . . . . . . . . . . 71
9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.5. Agents in their Capacity as Lenders. . . . . . . . . . . . . . . 72
9.6. Actions by Each Agent . . . . . . . . . . . . . . . . . . . . . 72
9.7. Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . 73
9.8. Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . 73
9.9. Suits to Protect Collateral . . . . . . . . . . . . . . . . . . 73
9.10. Determinations Relating to Collateral . . . . . . . . . . . . . 73
9.11. Trust Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.12. Release of Collateral . . . . . . . . . . . . . . . . . . . . . 74
9.13. Application of Proceeds of Collateral . . . . . . . . . . . . . 74
9.14. Rights and Remedies to be Exercised by Administrative Agent Only 74
9.15. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . 75
9.16. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.17. The Syndication Agent, the Documentation Agent and the
Administrative Agent . . . . . . . . . . . . . . . . . . . . . . 75
9.18. Agreement to Cooperate . . . . . . . . . . . . . . . . . . . . . 75
9.19. Lenders to Act as Agents . . . . . . . . . . . . . . . . . . . . 75
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . 76
10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . 77
10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 77
10.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.8. Execution in Counterparts, Effectiveness, etc. . . . . . . . . . 79
10.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . 79
10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 79
10.11. Sale and Transfer of Term Loans and Term Notes;
Participations in Term Loans and Term Notes . . . . . . . . . . 79
10.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . 81
10.13. Forum Selection and Consent to Jurisdiction . . . . . . . . . . 81
10.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . 82
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative Information
EXHIBIT A - Form of Term Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Subsidiary Guaranty
EXHIBIT E - Form of Mortgage
EXHIBIT F - Form of Security Agreement
EXHIBIT G - Form of Stock Pledge Agreement
EXHIBIT H - Form of Intercreditor Agreement
EXHIBIT I - Form of Borrower Closing Date Certificate
EXHIBIT J - Form of Parent Closing Date Certificate
EXHIBIT K - Form of Lender Assignment Agreement
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT, dated as of June 17, 1997, is among PIONEER
AMERICAS ACQUISITION CORP., a Delaware corporation (the "Borrower"), the
various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as
syndication agent (the "Syndication Agent") for the Lenders, SALOMON BROTHERS
HOLDING COMPANY INC ("Salomon"), as documentation agent (the "Documentation
Agent") for the Lenders, and BANK OF AMERICA ILLINOIS ("BofA"), as
administrative agent (the "Administrative Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, Pioneer Companies, Inc. (the "Parent") has entered into an
Asset Purchase Agreement dated as of May 14, 1997 (the "Purchase Agreement")
with OCC Tacoma, Inc. (the "Seller"), pursuant to which it will acquire,
through the Borrower and its Wholly-Owned Restricted Subsidiary, Pioneer Chlor
Alkali Company, Inc., a Delaware corporation ("PCAC"), all of the assets and
properties used by the Seller in its chlor-alkali business (the "Tacoma
Business"), including the chlor-alkali production facility located in Tacoma,
Washington, in exchange for (a) $97,000,000, in cash, (b) 55,000 shares of
Convertible Preferred Stock, par value $.01 per share, of the Parent, having a
liquidation preference of $100 per share and (c) the assumption of certain
obligations relating to the acquired chlor-alkali business (the "Acquisition");
WHEREAS, the Borrower has commenced (a) an offer to purchase (the
"Tender Offer") all of its existing 13 3/8% First Mortgage Notes due 2005 (the
"First Mortgage Notes") for a cash purchase price per $1,000 principal amount
of outstanding First Mortgage Notes tendered and accepted not exceeding
(inclusive of any fee paid in connection with the solicitation of consents
referred to below) 120% of the par value thereof plus accrued and unpaid
interest thereon and (b) a solicitation of consents (the "Consent
Solicitation") from the holders of the First Mortgage Notes to delete or modify
certain covenants and other provisions governing the First Mortgage Notes;
WHEREAS, the Borrower intends to issue senior secured notes due 2007
for gross cash proceeds of $200,000,000, which proceeds would be used, in part,
to fund the Acquisition and the Tender Offer (the "Senior Note Offering", and,
together with the Acquisition, the Tender Offer, the Consent Solicitation and
the transactions relating thereto, the "Transaction");
WHEREAS, in connection with the Transaction, the Borrower desires to
obtain from the Lenders a commitment to provide $100,000,000 in term loans, the
proceeds of which will be used, in part, to fund the Acquisition and the Tender
Offer, and pay certain fees and expenses arising in connection with the
Transaction; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend the
commitments and make the loans described herein to the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" is defined in the first recital.
"Acquisition Agreements" means the Purchase Agreement, the Chlorine
Purchase Agreement dated as of June 17, 1997 between PCAC and OCC Tacoma, Inc.,
the Chlorine and Caustic Soda Sales Agreement date as of June 17, 1997 between
PCAC and Occidental Chemical Corporation and the Environmental Operating
Agreement dated as of June 17, 1997 between PCAC and OCC Tacoma, inc.
"Administrative Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 9.4.
"Affiliate" means, with respect to any party, any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such party including any estate or trust under will of such party.
For purposes of this definition, "control" (including with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of 5% or
more of the voting securities of a Person shall be deemed to be control.
"Agents" means, collectively, the Administrative Agent, the
Syndication Agent and the Documentation Agent.
"Agreement" means, on any date, this Term Loan Agreement as originally
in effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"All-Pure" means All-Pure Chemical Co., a California corporation and
direct Wholly-Owned restricted Subsidiary of PAI.
"Alternate Base Rate" means, for any day and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of:
(a) 0.50% per annum above the Federal Funds Rate most recently determined by
the Administrative Agent; and (b) the rate of interest in effect for such day
as most recently publicly announced or established by the Administrative Agent
at its Domestic Office as its "reference rate." (The "reference rate" is a
rate set by the Administrative Agent based upon various factors including the
Administrative
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Agent'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 the reference
rate announced by the Administrative Agent shall take effect at the opening of
business on the day of such establishment or announcement.
"Applicable Margin" means (i) with respect to the unpaid principal
amount of each Term Loan maintained as a Base Rate Loan, 125 basis points and
(ii) with respect to the unpaid principal amount of each Term Loan maintained
as a LIBO Rate Loan, 250 basis points.
"Arranger" means Donaldson, Lufkin & Jenrette Securities Corporation,
a Delaware corporation.
"Asset Sale" means, with respect to the Borrower or any Restricted
Subsidiary, the sale, lease, conveyance or other disposition (including,
without limitation, by way of merger or consolidation, and whether by operation
of law or otherwise) to any Person other than the Borrower or a Wholly-Owned
Restricted Subsidiary of any of the Borrower's or such Restricted Subsidiary's
assets (including, without limitation, (x) any sale or other disposition of
Equity Interests of any Restricted Subsidiary and (y) any sale or other
disposition of any noncash consideration received by the Borrower or such
Restricted Subsidiary from any prior transaction or series of related
transactions that constituted an Asset Sale hereunder), whether owned on the
date hereof or subsequently acquired, in one transaction or a series of related
transactions; provided, however, that the following will not constitute Asset
Sales: (i) transactions (other than transactions described in clause (y) above)
in any calendar year with aggregate cash and/or Fair Market Value of any other
consideration received (including, without limitation, the unconditional
assumption of Indebtedness) of less than $1,000,000; (ii) a transaction or
series of related transactions that results in a Change in Control; (iii) any
sale of assets of the Borrower and its Restricted Subsidiaries or merger
permitted pursuant to Section 7.2.5; (iv) any sale or other disposition of
inventory, property (whether real, personal or mixed) or equipment that has
become worn out, obsolete or damaged or otherwise unsuitable or no longer
needed for use in connection with the business of the Borrower or any
Restricted Subsidiary, as the case may be, in the good faith determination of
the Board of Directors; and (v) any sale of inventory to customers in the
ordinary and customary course of business.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Attributable Indebtedness" means, with respect to any Sale and
Leaseback Transaction, as at the time of determination, the greater of (i) the
Fair Market Value of the property subject to such transaction and (ii) the
present value (discounted at a rate equivalent to the Borrower's then current
weighted average cost of funds for borrowed money, compounded on a semi-annual
basis) of the total net obligations of the lessee for rental payments during
the remaining term of the lease included in such arrangement (including any
period for which such lease has been extended). As used in the preceding
sentence, the "total net obligations of the lessee for rental payments" under
any lease for any such period means the sum of rental and other payments
required to be paid with respect to such period by the lessee thereunder
excluding any amounts required to be paid by such lessee on account of
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges. In the case of any lease which is terminable by the lessee upon
payment of a penalty, such net amount of rent also includes the amount of such
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penalty, but no rent will be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Authorized Officer" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to Section 5.1.1.
"Bankruptcy Law" means chapter 11 of Title 11 of the United States
Code, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendment to, succession to or change in any such
law.
"Base Rate Loan" means a Term Loan bearing interest at a fluctuating
rate determined by reference to the Alternate Base Rate.
"BMPC" means Black Mountain Power Company, a Texas corporation and
direct Wholly-Owned Subsidiary of PCAC.
"Board of Directors" means the Board of Directors of the Borrower or
any committee thereof duly authorized to act on behalf of such Board of
Directors.
"Board Resolution" of any corporation means a copy of a resolution
certified by the Secretary or an Assistant Secretary of such corporation to
have been duly adopted by the board of directors of such entity and to be in
full force and effect on the date of such certification and delivered to the
Administrative Agent.
"BofA" is defined in the preamble.
"Borrower" is defined in the preamble.
"Borrower Closing Date Certificate" means a certificate of an
Authorized Officer of the Borrower substantially in the form of Exhibit I
hereto, delivered pursuant to Section 5.1.4.
"Borrowing" means Term Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(a) 85% of the net book value of all accounts receivable of the Borrower and
its Restricted Subsidiaries as of such date, (b) 50% of the net book value of
all inventory owned by the Borrower and its Restricted Subsidiaries as of such
date, and (c) the lesser of (x) $10,000,000 and (y) 85% of the net book value
of all accounts receivable of Kemwater as of such date plus 50% of the net book
value of all inventory as of such date owned by Kemwater, all calculated on a
consolidated basis and in accordance with GAAP. To the extent that information
is not available as to the amount of accounts receivable or inventory as of a
specific date, the Borrower may utilize the most recent available quarterly or
annual financial report for purposes of calculating the Borrowing Base.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B hereto.
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"Business Day" means any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in
Chicago, Illinois or New York City and, with respect to Borrowings of, Interest
Periods with respect to, payments of principal and interest in respect of,
continuations or conversions of Base Rate Loans into, LIBO Rate Loans, on which
dealings in Dollars are carried on in the London interbank market.
"Capital Stock" means, with respect to any Person, any common stock,
preferred stock and any other capital stock of such Person and shares,
interest, participations or other ownership interest (however designated), of
any Person and any rights (other than debt securities convertible into, or
exchangeable for, capital stock), warrants or options to purchase any of the
foregoing, including (without limitation) each class of common stock and
preferred stock of such Person if such Person is a corporation and each general
and limited partnership interest of such Person if such Person is a
partnership.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Flow" for any period means the Consolidated Net Income of the
Borrower and its Restricted Subsidiaries for such period, plus the following to
the extent included in calculating such Consolidated Net Income: (i)
Consolidated Interest Expense, (ii) income tax expense and (iii) depreciation,
depletion and amortization expense.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change of Control" means the occurrence of any of the following: (i)
a "person" or "group" (as such terms are used in Sections 14 (d) (2) and 13 (d)
(3), respectively, of the Exchange Act), other than Substantial Shareholders,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of at least 50% of the outstanding voting power of the fully
diluted Voting Stock of the Parent or the Borrower, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Parent or the Borrower, (iii)
the merger or consolidation of the Parent or the Borrower with or into another
corporation with the effect that the stockholders of the Parent or the Borrower
immediately prior to such merger or consolidation cease to be the "beneficial
owners" (as defined in Rule 13d-3 under the Exchange Act) of 50% or more of the
combined voting power of the securities of the surviving corporation of such
merger or the corporation resulting from such merger or consolidation
ordinarily (and apart from rights arising under special circumstances) having
the right to vote in the election of directors outstanding immediately after
such merger or consolidation or (iv) during any period of two consecutive
calendar years individuals who are at the beginning of such period (together
with any new directors whose election by the board of directors of the Parent
or the Borrower, or whose nomination for election by the shareholders of the
Parent or the Borrower, was approved by a vote of a majority of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors of the Parent or the
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Borrower then in office. Notwithstanding the foregoing, a Change of Control
shall not be deemed to have occurred under clause (iii) above solely as a
result of a merger or consolidation of the Borrower with or into the Parent
provided that such merger or consolidation is permitted under Section 7.2.5.
"Closing Date" means the date of the initial Borrowing, not to be
later than July 31, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified.
"Collateral" means (i) a first mortgage lien and security interest in
PCAC's interest in real property, buildings, fixtures, and certain equipment
relating to the Tacoma Facility, (ii) a first priority security interest in
PCAC's interest in the Acquisition Agreements, (iii) first mortgage lien on
PCAC's chlor-alkali production facilities located in Henderson, Nevada and St.
Gabriel, Louisiana (including real property, buildings, fixtures and certain
equipment), (iv) a pledge of PAI's interest in the Capital Stock of PCAC and
All-Pure, each as further described in the respective Security Documents with
respect thereto, and (v) any other property or assets which may from time to
time be subject to one or more of the Liens evidenced or created by any Loan
Document.
"Collateral Agent" means United States Trust Company of New York, as
collateral agent under the Intercreditor Agreement, and any successor thereto.
"Commitment Letter" means the commitment letter, dated May 29, 1997,
among the Borrower, the Arranger and the Syndication Agent including all
annexes and exhibits thereto.
"Commitment Termination Event" means (i) the occurrence of any Event
of Default described in clause (a) or (b) of Section 8.1.9, or (ii) the
occurrence and continuance of any other Event of Default and either (x) the
declaration of the Term Loans to be due and payable pursuant to Section 8.3, or
(y) in the absence of such declaration, the giving of notice to the Borrower
by the Administrative Agent, acting at the direction of the Required Lenders,
that the Term Loan Commitments have been terminated.
"Consent Solicitation" is defined in the second recital.
"Consolidated Cash Flow Coverage Ratio" means, as of any date of
determination, the ratio of (i) the aggregate amount of Cash Flow for the
period of the most recent four consecutive fiscal quarters for which internal
financial statements are available prior to the date of such determination to
(ii) Consolidated Interest Expense for such four fiscal quarters of the
Borrower and its Restricted Subsidiaries; provided, however, that (A) if the
Borrower or any Restricted Subsidiary has incurred any Indebtedness since the
beginning of such period that remains outstanding or if the transaction giving
rise to the need to calculate the Consolidated Cash Flow Coverage Ratio is an
incurrence of Indebtedness, or both, Cash Flow and Consolidated Interest
Expense for such period will be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been issued on the first
day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(B) if since the beginning of such period the Borrower or any Restricted
Subsidiary has
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made any Asset Sale, the Cash Flow for such period will be reduced by an amount
equal to the Cash Flow (if positive), directly attributable to the assets which
are the subject of such Asset Sale for such period, or increased by an amount
equal to the Cash Flow (if negative), directly attributable thereto for such
period and Consolidated Interest Expense for such period will be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Borrower or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Borrower and its
continuing Restricted Subsidiaries in connection with any such sale or other
disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent
the Borrower and its continuing Restricted Subsidiaries are no longer liable
for such Indebtedness after such sale), (C) if since the beginning of such
period the Borrower or any Restricted Subsidiary (by merger or otherwise) has
made an Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction causing a calculation to
be made hereunder, which constitutes all or substantially all of an operating
unit of a business, Cash Flow and Consolidated Interest Expense for such period
will be calculated after giving pro forma effect thereto (including the
incurrence of any Indebtedness) as if such Investment or acquisition occurred
on the first day of such period and (D) in making such computation,
Consolidated Interest Expense attributable to any Indebtedness incurred under
any revolving credit facility will be computed based on the average daily
balance of such Indebtedness during such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto, and the amount of
Consolidated Interest Expense associated with any Indebtedness incurred in
connection therewith, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer of the Borrower. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness will be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period.
"Consolidated Interest Expense" means, for any period, interest
expense of the Borrower and its consolidated Restricted Subsidiaries, excluding
amortization of any deferred financing fees, plus, to the extent not included
in such interest expense, (i) interest expense attributable to Capitalized
Lease Obligations, (ii) amortization of debt discount and debt issuance cost,
(iii) capitalized interest, (iv) non-cash interest expense, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) interest actually paid by the Borrower or
any such Restricted Subsidiary under any guarantee of Indebtedness or other
obligation of any other Person, (vii) net costs associated with Hedging
Obligations (including amortization of fees), (viii) Preferred Stock dividends
in respect of all Redeemable Stock of the Borrower held by Persons other than
the Borrower or a Wholly-Owned Restricted Subsidiary of the Borrower and (ix)
the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Borrower) in connection with loans incurred
by such plan or trust to purchase newly issued or treasury shares of the
Capital Stock of the Borrower.
"Consolidated Net Income" means, for any period, and as to any Person,
the aggregate Net Income of such Person and its Subsidiaries (other than, in
the case of the Borrower, the Unrestricted Subsidiaries of the Borrower) for
such period determined in accordance with GAAP; provided that (i) the Net
Income of any Person which is not a Subsidiary of such Person
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but which is consolidated with such Person or is accounted for by such Person
by the equity method of accounting will be included only to the extent of the
amount of cash dividends or cash distributions paid to such Person or a Wholly-
Owned Restricted Subsidiary of such Person (other than, in the case of the
Borrower, the Unrestricted Subsidiaries of the Borrower), (ii) the Net Income
of any Person acquired by such Person or a Subsidiary of such Person in a
pooling of interests transaction for any period prior to the date of such
acquisition will be excluded, (iii) the Net Income of any Subsidiary of such
Person that is subject to restrictions, direct or indirect, on the payment of
dividends or the making of distributions to such Person will be excluded to the
extent of such restrictions, (iv) the Net Income of (A) any Unrestricted
Subsidiary and (B) any Subsidiary less than 80% of whose securities having the
right (apart from the right under special circumstances) to vote in the
election of directors are owned by the Borrower or its Wholly-Owned Restricted
Subsidiaries will be included only to the extent of the amount of cash
dividends or cash distributions actually paid by such Subsidiary to the
Borrower or a Wholly-Owned Restricted Subsidiary of the Borrower, (v) in the
case of the Borrower, the Net Income attributable to any business, properties
or assets acquired (by way of merger, consolidation, purchase or otherwise) by
the Borrower or any Restricted Subsidiary of the Borrower for any period prior
to the date of such acquisition will be excluded, (vi) all extraordinary gains
and losses, and any gain or loss realized upon the termination of any employee
pension benefit plan, in respect of dispositions of assets other than in the
ordinary course of business and any one-time increase or decrease to Net Income
which is required to be recorded because of the adoption of new accounting
policies, practices or standards required by GAAP (together, in each case, with
any provision for taxes) will be excluded and (vii) all amounts of "other
income, net" classified as such on one or more lines of such Person's statement
of operations, in accordance with GAAP, net of applicable income taxes, will be
excluded from such Person's aggregate Net Income; provided that in the case of
the Borrower the foregoing exclusion will not apply to cash dividends or cash
distributions paid to the Borrower in respect of its indirect equity interest
in Saguaro Power Company, a Limited Partnership, to the extent included in
clause (i) of this definition.
"Consolidated Net Worth" means, for any Person, the total of the
amounts shown on the balance sheet of such Person and its consolidated
Subsidiaries (other than, in the case of the Borrower, the Unrestricted
Subsidiaries of the Borrower), determined on a consolidated basis without
duplication in accordance with GAAP, as of the end of the most recent fiscal
quarter of such Person ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the
amount of Capital Stock (other than Redeemable Stock) plus (ii) the amount of
surplus and retained earnings (or, in the case of a surplus or retained
earnings deficit, minus the amount of such deficit).
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
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"Contingent Payment Agreement" means the Contingent Payment Agreement
dated as of April 20, 1995 among the Borrower, the Parent and the Sellers named
therein.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Credit Facility" means any revolving credit facility or similar
arrangement that makes credit available entered into by and among the Borrower
and/or any of its Subsidiaries that is a Subsidiary Guarantor and the lending
institutions party thereto, including any credit agreement, related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agents and the Required
Lenders.
"DLJ" is defined in the preamble.
"Documentation Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Documentation Agent pursuant to Section 9.4.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such in Schedule II hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto. A Lender may have separate Domestic Offices for purposes of
making, maintaining or continuing, as the case may be, Base Rate Loans.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Eligible Investments" means, (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 90 days from the date of acquisition, (ii) time deposits and certificates
of deposit with maturities of not more than 90 days from the date of
acquisition of any commercial banking institution that is a member of the
Federal Reserve System having capital and surplus in excess of $500,000,000,
whose debt has a rating at the time of any such investment of at least "A-2" or
the equivalent thereof by S&P or at least "P-2" or the equivalent thereof by
Moody's, or any Lender or any bank or financial institution party to the
Revolving Credit Facility, (iii) fully secured repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) entered into with any bank or financial institution
meeting the qualifications specified in clause (ii) above, (iv) commercial
paper issued by the parent corporation of any commercial banking institution
that is a member of the Federal Reserve System having capital and surplus in
excess of $500,000,000 and commercial paper or master notes of issuers, rated
at the time of any such
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investment at least "A-2" or the equivalent thereof by S&P or at least "P-2" or
the equivalent thereof by Moody's, or any bank or financial institution party
to the Revolving Credit Facility, and in each case maturing within 270 days
after the date of acquisition, and (v) any shares in an open-end mutual fund
organized by a bank or financial institution having combined capital and
surplus of at least $500,000,000 investing solely in investments permitted by
the foregoing clauses (i), (ii) and (iv).
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to protection and
conservation of the environment concerning any hazardous, toxic or dangerous
waste, substance or constituent, or any pollutant or contaminant.
"Equity Interests" means shares, interests, participations or other
equivalents (however designated) of Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means any corporation, partnership, or other trade
or business (whether or not incorporated) that is, along with the Borrower, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in Section 414(b) and 414(c), respectively, of the
Code or Section 4001 of ERISA, or a member of the same affiliated service group
within the meaning of Section 414(m) of the Code.
"Event of Default" is defined in Section 8.1.
"Excess Land" means certain real property adjoining the sites of
PCAC's Henderson, Nevada and St. Gabriel, Louisiana plants and the Mojave,
California property owned by Imperial West Chemical Co., a Wholly-Owned
Subsidiary of PAI that is not used in the business conducted at such sites,
which real property is referred to and defined in the Contingent Payment
Agreement as the "Subject Parcels".
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Affiliate Agreements" means (i) agreements between the
Borrower or any of its Subsidiaries and Saguaro Power Company, a Limited
Partnership, relating to the delivery of steam and other services, existing on
the date hereof and listed on Item 7.2.8 ("Existing Affiliate Agreements") of
the Disclosure Schedule, (ii) the Tax Sharing Agreement and (iii) agreements
between the Borrower or any of its Subsidiaries and Basic Investments, Inc.
relating to the
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delivery of water and power, power transmission services, and other services,
existing on the date hereof and listed on Item 7.2.8 ("Existing Affiliate
Agreements") of the Disclosure Schedule hereto and (iv) any other agreements
with affiliates of the Borrower, existing on the date hereof and listed on Item
7.2.8 ("Existing Affiliate Agreements") of the Disclosure Schedule hereto.
"Existing First Mortgage Indenture" means the Indenture dated as of
April 1, 1995 among the Borrower, Pioneer Americas, Inc., Pioneer Chlor Alkali
Company, Inc., Imperial West Chemical Co., All Pure Chemical Co., Black
Mountain Power Company, All Pure Chemical Northwest, Inc., Pioneer Chlor Alkali
International, Ltd., and G.O.W. Corporation, and IBJ Schroder Bank & Trust
Company (predecessor in interest to the Existing Trustee), as modified and
supplemented and in effect from time to time.
"Existing Indebtedness" means all Indebtedness (other than the Senior
Notes outstanding) of the Borrower or any Restricted Subsidiary existing on the
date hereof and listed on Item 7.2.1(c) ("Existing Indebtedness") of the
Disclosure Schedule.
"Existing Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement among the Borrower, PCAC, PAI, the Trustee, the
Administrative Agent, the Existing Trustee, the Collateral Agent, the bank
agent under PAI's Loan and Security Agreement dated as April 12, 1995, dated as
of September 14, 1995.
"Existing Trustee" means United States Trust Company of New York as
successor trustee under the Existing First Mortgage Indenture, and any
successor thereto.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined by a majority of the members of the Board of Directors and a
majority of the disinterested members of the Board of Directors, if any, acting
in good faith and will be evidenced by a duly and properly adopted resolution
of the Board of Directors.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to (i) the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or (ii) if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated as of May 29,
1997, among the Borrower, the Arranger and the Syndication Agent.
"First Mortgage Notes" is defined in the second recital.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
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"Fiscal Year" means any period of twelve consecutive months ending on
December 31; references to a Fiscal Year with a numbering corresponding to any
calendar year refer to the fiscal year ending on the 31st of December during
such calender year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Hazardous Materials" means any toxic substance, hazardous substance,
hazardous material, hazardous chemical or hazardous waste defined or qualifying
as such in (or for the purposes of) any Environmental Law, or any pollutant or
contaminant, and shall include, but not be limited to, petroleum, including
crude oil, any radioactive material, including but not limited to any source,
special nuclear or by-product material as defined at 42 U.S.C. Section 2011 et
seq., as amended or hereafter amended, polychlorinated biphenyls and asbestos
in any form or condition.
"Hedging Obligations" means the obligations of any Person or entity
pursuant to any swap or cap agreement, exchange agreement, collar agreement,
option, futures or forward hedging contract, derivative instrument or other
similar agreement or arrangement designed to protect such Person or entity
against fluctuations in interest rates or foreign exchange rates or the price
of raw materials and other chemical products used or produced in the Borrower's
business, as the case may be.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Imperial" means Imperial West Chemical Co., a Nevada corporation and
direct Wholly-Owned Subsidiary of PAI.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"incur" has the meaning ascribed in Section 7.2.1; provided that (a)
with respect to any Indebtedness of any Restricted Subsidiary of the Borrower
that is owing to the Borrower or another Restricted Subsidiary of the Borrower,
any disposition, pledge or transfer of such Indebtedness to any Person (other
than the Borrower or a Wholly-Owned Restricted Subsidiary) shall be deemed to
be an incurrence of such Indebtedness and (b) with respect to any Indebtedness
of the Borrower or a Restricted Subsidiary that is owing to another Restricted
Subsidiary, any transaction pursuant to which a Wholly-Owned Restricted
Subsidiary to which such Indebtedness is owing ceases to be a Wholly-Owned
Restricted Subsidiary shall be deemed to be an incurrence of such Indebtedness;
and provided, further, that any Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary shall be deemed to be
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incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary. The term "incurrence" has a corresponding meaning.
"Indebtedness" of any Person means, without duplication, all
liabilities with respect to (i) indebtedness for money borrowed or which is
evidenced by a bond, debenture, note or other similar instrument or agreement,
but excluding trade credit evidenced by any such instrument or agreement; (ii)
reimbursement obligations, letters of credit and bankers' acceptances; (iii)
indebtedness with respect to Hedging Obligations; (iv) Capitalized Lease
Obligations; (v) indebtedness, secured or unsecured, created or arising in
connection with the acquisition or improvement of any property or asset or the
acquisition of any business; (vi) all indebtedness secured by any Lien upon
property owned by such Person and all indebtedness secured in the manner
specified in this clause even if such Person has not assumed or become liable
for the payment thereof; (vii) all indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person or otherwise representing the
deferred and unpaid balance of the purchase price of any such property,
including all indebtedness created or arising in the manner specified in this
clause even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property; (viii) guarantees, direct or indirect, of any indebtedness of other
Persons referred to in clauses (i) through (vii) above, or of dividends or
leases, taxes or other obligations of other Persons, excluding any guarantee
arising out of the endorsement of negotiable instruments for collection in the
ordinary course of business; (ix) contingent obligations in respect of, or to
purchase or otherwise acquire or be responsible or liable for, through the
purchase of products or services, irrespective of whether such products are
delivered or such services are rendered, or otherwise, any such indebtedness
referred to in clauses (i) through (vii) above; (x) any obligation, contingent
or otherwise, arising under any surety, performance or maintenance bond; and
(xi) Redeemable Stock of the Borrower valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends;
which indebtedness, Capitalized Lease Obligation, guarantee or contingent or
other obligation such Person has directly or indirectly created, incurred,
assumed, guaranteed or otherwise become liable or responsible for, whether then
outstanding or thereafter created in the case of clauses (i) through (x) above,
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability on the balance sheet of
such Person in accordance with GAAP. For purposes of the foregoing definition,
the "maximum fixed repurchase price" of any Redeemable Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Stock as if such Redeemable Stock were purchased on any date
on which Indebtedness is required to be determined pursuant to the Existing
First Mortgage Indenture. As used herein, Indebtedness with respect to any
Hedging Obligation means, with respect to any specified Person on any date, the
net amount (if any) that would be payable by such specified Person upon the
liquidation, close-out or early termination on such date of such Hedging
Obligation. For purposes of the foregoing, any settlement amount payable upon
the liquidation, close-out or early termination of a Hedging Obligation shall
be calculated by the Borrower in good faith and in a commercially reasonable
manner on the basis that such liquidation, close-out or early termination
results from an event of default or other similar event with respect to such
specified Person. Any reference in this definition to indebtedness shall be
deemed to include any renewals, extensions and refundings of any such
indebtedness or any indebtedness, issued in exchange for such indebtedness.
"Indemnified Liabilities" is defined in Section 10.4.
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"Indemnified Parties" is defined in Section 10.4.
"Independent Director" means a director of the Borrower other than a
director (i) who (apart from being a director of the Borrower or any of its
Subsidiaries) is an employee, insider, associate or Affiliate of the Borrower
or any of its Subsidiaries or has held any such position during the previous
year or (ii) who is a director, an employee, insider, associate or Affiliate of
another party to the transaction in question.
"Insurance Proceeds" has the meaning specified in each Mortgage.
"Intercreditor Agreement" means the Intercreditor and Collateral
Agency Agreement dated as of June 17, 1997, among the Borrower, PAI, PCAC, the
Trustee, the Administrative Agent and the Collateral Agent, substantially in
the form of Exhibit H attached hereto.
"Intercreditor Collateral Account" means the Collateral Account as
defined in the Intercreditor Agreement.
"Interest Expense" means, for any applicable period, the aggregate
consolidated interest expense of the Borrower and its Subsidiaries for such
applicable period, as determined in accordance with GAAP, including the portion
of any payments made in respect of Capitalized Lease Liabilities allocable to
interest expense, but excluding (to the extent included in interest expense)
up-front fees and expenses and other deferred financing costs incurred in
connection with the Transaction.
"Interest Period" means, as to any LIBO Rate Loan, the period
commencing on the Borrowing date of such Term Loan or on the date on which any
Term Loan is converted into or continued as a LIBO Rate Loan, and ending on the
date one, two, three, six or, if available in the Administrative Agent's
reasonable determination, nine or twelve months thereafter as selected by the
Borrower in its Borrowing Request or its Conversion/Continuation Notice;
provided however that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the 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;
(iii) no Interest Period for any Term Loan shall extend
beyond the Stated Maturity Date for such Term Loan;
(iv) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Term Loans unless the aggregate
principal amount of Term Loans represented by Base Rate Loans, or by
LIBO Rate Loans having Interest Periods that will expire on or before
such date, equals or exceeds the amount of such principal payment; and
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(v) there shall be no more than five Interest Periods in
effect at any one time.
"Investment" means any direct or indirect advance, loan, other
extension of credit or capital contribution (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others) to, purchase or acquisition of Equity Interests,
bonds, notes, debentures or other securities of, or purchase or other
acquisition of all or a substantial part of the business, Equity Interests or
other evidence of beneficial ownership of, or any other investment in or
guarantee of any Indebtedness of, any Person or any other item that would be
classified as an investment on a balance sheet prepared in accordance with
GAAP. Investments do not include advances to customers and suppliers in the
ordinary course of business and on commercially reasonable terms. In the event
the Borrower or any Subsidiary of the Borrower sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Borrower such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Borrower, the Borrower shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the Fair
Market Value of the Equity Interests of such Subsidiary not sold or disposed of
determined as provided in the final paragraph of Section 7.2.3.
"Kemwater" means Kemwater North America Company, a Delaware
corporation, and any successor thereto.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit K hereto.
"Lenders" is defined in the preamble.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest per annum determined by the Administrative Agent to
be the arithmetic mean (rounded upward to the next 1/16th of 1%) of the rates
of interest per annum at which Dollar deposits in the approximate amount of the
Term Loan to be made or continued as, or converted into, a LIBO Rate Loan by
the Administrative Agent and having a maturity comparable to such Interest
Period would be offered to the Administrative Agent in the London interbank
market at its request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
"LIBO Rate Loan" means a Term Loan bearing interest, at all times
during an Interest Period applicable to such Term Loan, at a fixed rate of
interest determined by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Term Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, the rate of interest per annum (rounded upwards to the next
1/100th of 1%) determined by the Administrative Agent as follows:
LIBO Rate = LIBO Rate
-----------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
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The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be adjusted automatically as to all LIBO Rate Loans then outstanding
as of the effective date of any change in the LIBOR Reserve Percentage.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such in Schedule II hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as shall be so designated
from time to time by notice from such Lender to the Borrower and the
Administrative Agent, whether or not outside the United States, which shall be
making or maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any mortgage, pledge, lien, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Loan Document" means this Agreement, the Term Notes, the Subsidiary
Guaranty, the Intercreditor Agreement, each Borrowing Request, the Fee Letter,
each Stock Pledge Agreement, each Mortgage (upon execution and delivery
thereof), the Security Agreement and each other agreement, document or
instrument delivered in connection with this Agreement or any other Loan
Document, whether or not specifically mentioned herein or therein.
"Margin Stock" has the meaning ascribed to such term in Regulation U
of the Federal Reserve Board or any regulation substituted therefor, as in
effect from time to time.
"Material Adverse Effect" means (a) a material adverse effect on the
business, assets, debt service capacity, liabilities (including environmental
liabilities), financial condition, operations or prospects of the Borrower and
its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect
upon the ability of the Borrower or any other Obligor to perform its respective
material obligations under the Loan Documents to which it is or will be a
party, or (c) an impairment of the validity or enforceability of, or a material
impairment of the rights, remedies or benefits available to the Agents, the
Arranger, the Collateral Agent or the Lenders under this Agreement or any other
Loan Document.
"Monthly Payment Date" means the last day of each calendar month or,
if any such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust, or similar security
instrument, substantially in the form of Exhibit E attached hereto, which from
time to time affects any property that secures PCAC's obligations in respect of
its Contingent Liabilities under the Senior
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Note Indenture and this Agreement, as such instruments may be amended,
supplemented or otherwise modified from time to time.
"Mortgaged Property" has the meaning specified in each Mortgage.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, that is maintained for employees of the Borrower
or any ERISA Affiliate.
"Net Award" has the meaning specified in each Mortgage.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Equity Interests or debt securities that have been converted into or exchanged
for Equity Interests, as referred to in Section 7.2.3, the proceeds of such
issuance or sale in the form of cash or cash equivalents, net of attorneys'
fees, accountants' fees and brokerage, consultation, underwriting and other
fees and expenses actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result thereof.
"Net Income" means, for any period, the net income of the Borrower and
its Subsidiaries (other than its Unrestricted Subsidiaries) for such period on
a consolidated basis, determined in accordance with GAAP.
"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, the proceeds of insurance paid on account of
the loss of or damage to any property, or compensation or other proceeds for
any property taken by condemnation, eminent domain or similar proceedings, and
any non-cash consideration received by the Borrower or any Restricted
Subsidiary from any Asset Sale that is converted into or sold or otherwise
disposed of for cash within 90 days after the relevant Asset Sale), net of (i)
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions), (ii) any
taxes paid or payable as a result thereof, (iii) all amounts required to be
applied to the repayment of, or representing the amount of permanent reductions
in the commitments relating to, Indebtedness secured by a Lien on the asset or
assets the subject of such Asset Sale which Lien is permitted pursuant hereto,
(iv) any reserve for adjustment in respect of the sale price of such asset or
assets required by GAAP, (v) all distributions and other payments required to
be made (including any amounts held pending distribution) to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale, and
(vi) all payments due under Existing Affiliate Agreements arising out of an
Asset Sale. The amount of any taxes required to be accrued as a liability
under GAAP as a consequence of an Asset Sale shall be the amount thereof as
determined in good faith by the Board of Directors.
"Net Worth" means the consolidated net worth of the Borrower and its
Subsidiaries.
"Non-U.S. Lender" means any Lender (including each Assignee Lender)
that is not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any state thereof, or (iii) an estate or trust that is subject
to U.S. Federal income taxation regardless of the source of its income.
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"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Term Notes, and each other Loan Document.
"Obligor" means the Borrower or any other Person (other than any
Agent, the Arranger, or any Lender) obligated under any Loan Document.
"Occupational Safety and Health Law" means the Occupational Safety and
Health Act of 1970 and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to or
imposing liability or standards of conduct concerning employee health and/or
safety.
"Offering Memorandum" means the offering memorandum of the Borrower,
dated June 11, 1997, in connection with the offer and sale of the Senior Notes.
"Officers' Certificate" means a certificate executed by the Chairman
of the Board, Vice Chairman, the President or a Vice President (regardless of
vice presidential designation), and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Borrower or any Subsidiary
Guarantor, as the case may be, and delivered to the Administrative Agent.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Borrower or any of the Subsidiary Guarantors and who shall be
reasonably acceptable to the Required Lenders.
"Organic Document" means, relative to any Obligor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements to which such Obligor is a party applicable to any of its
authorized shares of Capital Stock.
"Parent" is defined in the first recital.
"Parent Closing Date Certificate" means a certificate of an Authorized
Officer of the Parent substantially in the form of Exhibit J hereto, delivered
pursuant to Section 5.1.4.
"Participant" is defined in Section 10.11.2.
"PAI" means Pioneer Americas, Inc., a Delaware corporation and direct
Wholly-Owned Restricted Subsidiary of the Borrower, and any successor thereto.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor entity.
"PCAC" is defined in the first recital.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Plan), and to which the Borrower or any corporation, trade or
business that is, along with the Borrower, an ERISA Affiliate, may have any
liability, including any liability by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the applicable percentage
relating to Term Loans, as set forth in Schedule II hereto or set forth in the
Lender Assignment Agreement as
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such percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11.
"Permitted Investment" means (i) any Eligible Investment, (ii) any
Investment in the Borrower, (iii) Investments in existence on the date hereof
and listed in Item 7.2.3 ("Existing Investments") of the Disclosure Schedule
and any such Investment in Basic Investments, Inc., Basic Land Company, Basic
Management, Inc., Basic Water Company or Victory Valley Land Company, L.P.
which has been reclassified or converted into an alternate form of Investment
in the same or a successor entity, (iv) intercompany notes permitted pursuant
to Section 7.2.1, (v) Investments in any Wholly-Owned Restricted Subsidiary of
the Borrower or any Person which, as a result of such Investment, becomes a
Wholly-Owned Restricted Subsidiary of the Borrower; provided that such Wholly-
Owned Restricted Subsidiary is engaged in a Related Business, and (vi) other
Investments after the date hereof in joint ventures, corporations, limited
liability companies, partnerships or Unrestricted Subsidiaries engaged in a
Related Business that do not at any one time outstanding exceed $5,000,000;
provided that the amount of Investments pursuant to clause (vi) will be
included in the calculation of Restricted Payments pursuant to Section 7.2.3.
"Permitted Liens" means as of any particular time, any one or more of
the following:
(a) Liens for taxes, rates and assessments not yet past due
or, if past due, the validity of which is being contested in good
faith by the Borrower or any Restricted Subsidiary by appropriate
proceedings promptly instituted and diligently conducted and against
which the Borrower has established appropriate reserves in accordance
with GAAP;
(b) the Lien of any judgment rendered which is being
contested in good faith by the Borrower or any of its Restricted
Subsidiaries by appropriate proceedings promptly instituted and
diligently conducted and against which the Borrower has established
appropriate reserves in accordance with GAAP and which does not have a
material adverse effect on the ability of the Borrower and its
Restricted Subsidiaries to operate their business or operations;
(c) other than in connection with Indebtedness, any Lien
arising in the ordinary course of business (i) to secure payments of
workers' compensation, unemployment insurance, pension or other social
security or retirement benefits, or to secure the performance of bids,
tenders, leases, progress payments, contracts (other than for the
payment of money) or to secure public or statutory obligations of the
Borrower, or any Restricted Subsidiary, or to secure surety or appeal
bonds to which the Borrower or any Restricted Subsidiary is a party,
(ii) imposed by law dealing with materialmen's, mechanics', workmen's,
repairmen's, warehousemen's, landlords', vendors' or carriers' Liens
created by law, or deposits or pledges which are not yet due or, if
due, the validity of which is being contested in good faith by the
Borrower or any Restricted Subsidiaries by appropriate proceedings
promptly instituted and diligently conducted and against which the
Borrower has established appropriate reserves in accordance with GAAP,
(iii) rights of financial institutions to setoff and chargeback
arising by operation of law and (iv) similar Liens;
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(d) servitudes, licenses, easements, encumbrances,
restrictions, rights-of-way and rights in the nature of easements or
similar charges which will not in the aggregate materially adversely
impair the use of the subject property by the Borrower or a Restricted
Subsidiary;
(e) zoning and building by-laws and ordinances, municipal
bylaws and regulations, and restrictive covenants, which do not
materially interfere with the use of the subject property by the
Borrower or a Restricted Subsidiary as such property is used as of the
date hereof; and
(f) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any of the Liens referred to in clauses (a)
through (e) of this definition or the Indebtedness secured thereby;
provided that (i) such extension, renewal, substitution or replacement
Lien is limited to that portion of the property or assets, now owned
or hereafter acquired, that secured the Lien prior to such extension,
renewal, substitution or replacement Lien and (ii) the Indebtedness
secured by such Lien (assuming all available amounts were borrowed) at
such time is not increased.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Pioneer East" means Pioneer (East), Inc., a Delaware corporation and
direct Wholly-Owned Subsidiary of PAI.
"Plan" means any Pension Plan or Welfare Plan.
"Preferred Stock" means, as applied to the Equity Interests of any
corporation, stock of any class or classes (however designated) which is
preferred over shares of stock of any other class of such corporation as to the
distribution of assets on any voluntary or involuntary liquidation or
dissolution of such corporation or as to dividends.
"Pro Forma Balance Sheet" is defined in clause (d) of Section 5.1.15.
"Purchase Agreement" is defined in the first recital.
"Quarterly Payment Date" means the last Business Day of each March,
June, September and December, commencing with September, 1997.
"Redeemable Stock" means any Equity Interest that by its terms or
otherwise (i) is required to be redeemed prior to June 30, 2007, (ii) matures
or is redeemable, in whole or in part, at the option of the Borrower, any
Subsidiary or the holder thereof or pursuant to a mandatory sinking fund at any
time prior to June 30, 2007, or (iii) is convertible into or exchangeable for
debt securities which provide for any scheduled payment of principal prior to
June 30, 2007, at the option of the issuer thereof at any time prior to June
30, 2007, until the right to so convert or exchange is irrevocably
relinquished.
"Refinancing" is defined in clause (j) of Section 7.2.1.
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"Refinancing Indebtedness" is defined in clause (j) of Section 7.2.1.
"Related Business" means any corporation or other entity engaged in,
and any asset utilized in, the manufacture or distribution of chlorine, caustic
soda, bleach, hydrochloric acid, iron and other chlorides and aluminum sulfate,
and in lines of business reasonably related thereto.
"Related Party" means, with respect to any Person, any other Person
(a) that directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, such first Person or a
subsidiary of such first Person, (b) that beneficially owns or holds ten
percent (10%) or more of the equity interest of such first Person or a
subsidiary of such first Person or (c) ten percent (10%) or more of the equity
interest of which is beneficially owned or held by such first Person or a
subsidiary of such first Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Release" means a "release", as such term is defined in CERCLA.
"Reportable Event" has the meaning given to such term in ERISA.
"Required Lenders" means, at any time, (i) prior to the Closing Date
hereunder, Lenders having at least 51% of the sum of the Term Loan Commitments
and (ii) on and after the Closing Date, Lenders holding at least 51% of the
principal amount of the Term Loans.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
from time to time.
"Restoration" has the meaning specified in each Mortgage.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" is defined in Section 7.2.3.
"Restricted Payment Computation Date" is defined in Section 7.2.3.
"Restricted Payment Computation Period" is defined in Section 7.2.3.
"Restricted Subsidiary" means (i) any Subsidiary Guarantor, (ii) any
Subsidiary of the Borrower in existence on the date hereof to which any line of
business or division (and the assets associated therewith) of any Subsidiary
Guarantor are transferred after the date hereof, (iii) any Subsidiary of the
Borrower organized or acquired after the date hereof, unless such Subsidiary
has been designated as an Unrestricted Subsidiary by a resolution of the Board
of Directors as provided in the definition of "Unrestricted Subsidiary" and
(iv) any Unrestricted Subsidiary which is designated as a Restricted Subsidiary
by the Board of Directors; provided, that immediately after giving effect to
any such designation (A) no Default or Event of Default has occurred and is
continuing and (B) in the case of any designation referred to in clause (iii)
or (iv) hereof, the Borrower could incur at least $1.00 of Indebtedness
pursuant to Section 7.2.1, on a pro forma basis taking into account such
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designation. The Borrower will evidence any such designation to the
Administrative Agent by promptly filing with the Administrative Agent an
Officers' Certificate certifying that such designation has been made and
complies with the requirements of the immediately preceding sentence.
Notwithstanding any provision herein to the contrary, each Subsidiary Guarantor
will be a Restricted Subsidiary.
"Revolving Credit Agreement" means the Loan and Security Agreement
dated as of June 17, 1997, between the Borrower and Bank of America Illinois,
as agent and a lender, and the lenders named therein, as amended, supplemented
or otherwise modified from time to time in accordance with the provisions
hereof and thereof.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"Sale and Leaseback Transaction" means, with respect to any Person,
any arrangement with another Person for the leasing of any real or tangible
personal property, which property has been or is to be sold or transferred by
such Person to such other Person in contemplation of such leasing.
"Salomon" is defined in the preamble.
"Security Agreement" means the security agreement dated as of June 17,
1997 by PCAC, as debtor, to the Collateral Agent, as secured party in respect
of the Acquisition Agreements, substantially in the form of Exhibit F attached
hereto.
"Security Documents" means (i) each Mortgage, (ii) the Security
Agreement, (iii) the Stock Pledge Agreement, (iv) the Intercreditor Agreement,
(v) the documentation relating to the Intercreditor Collateral Account, and
(vi) all security agreements, mortgages, deeds of trust, pledges, collateral
assignments or any other instrument evidencing or creating any security
interest in favor of the Collateral Agent in all or any portion of the
Collateral, in each case as amended, supplemented or otherwise modified from
time to time.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on any Indebtedness of the Borrower or its Restricted Subsidiaries,
whether outstanding on the date hereof or thereafter incurred as permitted
herein, unless, in the case of any particular Indebtedness, the agreement or
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness is junior or subordinated
in right of payment to any item of Indebtedness of the Borrower or its
Restricted Subsidiaries. Without limiting the generality of the foregoing,
"Senior Indebtedness" includes the principal of, premium, if any, and interest
and all other obligations of every nature of the Borrower from time to time
owed under the Term Facility. Notwithstanding the foregoing, "Senior
Indebtedness" does not include (i) in the case of the obligation of the
Borrower in respect of each Term Note, the obligation of the Borrower in
respect of the other Term Notes, (ii) any liability for foreign, federal,
state, local or other taxes owed or owing by the Borrower or any Restricted
Subsidiary to the extent that such liability constitutes Indebtedness, (iii)
Indebtedness of the Borrower to any Restricted Subsidiary or of any Restricted
Subsidiary to the Borrower or another Restricted Subsidiary, (iv) that portion
of any Indebtedness which at the time of issuance is issued in violation hereof
and (v) Indebtedness and amounts incurred in connection with obtaining goods,
materials or services in the ordinary course of business (other than such
Indebtedness which is owed to banks and other financial institutions or secured
by the goods or materials which were purchased with such Indebtedness).
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"Senior Note Indenture" means the Indenture dated June 17, 1997, among
the Borrower, the Subsidiary Guarantors, and United States Trust Company of New
York, as Trustee, as the same may be amended, restated, amended and restated or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"Senior Note Offering" is defined in the third recital.
"Senior Notes" means the 91/4% Senior Secured Notes due 2007 of the
Borrower issued pursuant to the Senior Note Offering and the Senior Note
Indenture, including, without limitation, any senior secured notes of the
Borrower with substantially identical terms exchanged therefor pursuant to a
registration statement under the Securities Act of 1933, as amended.
"Stated Maturity Date" means, in the case of all Term Loans, December
5, 2006.
"Stock Pledge Agreement" means the pledge agreement from PAI, as
debtor, to the Collateral Agent, as secured party, in respect of all the issued
and outstanding Capital Stock owned by PAI of PCAC and All-Pure, substantially
in the form of Exhibit G attached hereto, and each other pledge agreement
executed and delivered in connection with Section 7.1.9.
"Subordinated Indebtedness" means Indebtedness of the Borrower or any
Subsidiary Guarantor subordinated in right of payment to the Obligations.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors, under ordinary circumstances,
is at the time owned, directly or indirectly, by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries or (ii) any other Person of which at least a majority of voting
interest, under ordinary circumstances, is at the time owned, directly or
indirectly, by such Person, by such Person and one or more of its Subsidiaries
or by one or more of such Person's Subsidiaries.
"Subsidiary Guarantors" means, collectively, PAI, PCAC, All-Pure,
Imperial, BMPC, All Pure Chemical Northwest, Inc., a Washington corporation,
Pioneer Chlor Alkali International, Inc., a Barbados corporation, G.O.W.
Corporation, a Nevada corporation, Pioneer East, TCH, T.C. Products, Inc., and
each other Subsidiary of the Borrower that becomes a guarantor under the
Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty executed and delivered by an
Authorized Officer of each Subsidiary Guarantor pursuant to Section 5.3,
substantially in the form of Exhibit D attached hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Substantial Shareholder" means each of (i) William R. Berkley and his
Affiliates and/or (ii) Interlaken Capital, Inc. and its Affiliates.
"Syndication Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor Syndication
Agent pursuant to Section 9.4.
"Tacoma Business" is defined in the first recital.
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"Tacoma Facility" means PCAC's chlor-alkali production facility in
Tacoma, Washington.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated as of
April 20, 1995 among the Parent and its subsidiaries.
"Taxes" is defined in Section 4.6.
"TCH" means T.C. Holdings, Inc., a New Mexico corporation and direct
Wholly-Owned Subsidiary of All-Pure.
"Tender Offer" is defined in the second recital.
"Term Facility" is defined in the fourth recital.
"Term Loan" is defined in Section 2.1.1.
"Term Loan Commitment" is defined in Section 2.1.1.
"Term Loan Commitment Amount" means $100,000,000.
"Term Loan Commitment Termination Date" means the earliest of (i) July
31, 1997, if the Term Loans have not been made on or prior to such date, (ii)
the Closing Date (immediately after the making of the Term Loans on such date),
and (iii) the date on which any Commitment Termination Event occurs.
"Term Note" means a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Term Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Transaction" is defined in the third recital.
"Transaction Documents" means each of the Acquisition Agreements, the
Senior Note Indenture, the form of Senior Note and all other agreements,
documents, instruments, certificates, filings, consents, approvals, board of
directors resolutions and opinions furnished pursuant to or in connection with
the Acquisition, the Tender Offer, the Consent Solicitation, the Senior Note
Offering and the transactions contemplated hereby or thereby, each as amended,
supplemented, amended and restated or otherwise modified from time to time as
permitted in accordance with the terms hereof or of any other Loan Document.
"Trust Moneys" means all cash or Eligible Investments received by the
Collateral Agent: (a) in exchange for the release of property from the Lien of
any of the Security Documents; (b) as compensation for or proceeds of the sale
of all or any part of the Collateral taken by eminent domain or purchased by,
or sold pursuant to any order of, a governmental authority or otherwise
disposed of; (c) as proceeds of insurance upon any, all or part of the
Collateral (other than any liability insurance proceeds payable to the
Collateral Agent for any loss, liability or expense incurred by it); (d) as
proceeds of any other sale or other disposition of all or any part of the
Collateral by or on behalf of either of the Collateral Agent or any collection,
recovery, receipt, appropriation or other realization of or from all or any
part of the
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Collateral pursuant to the Security Documents or otherwise; or (e) for
application under this Agreement as provided in this Agreement or any other
Security Document, or whose disposition is not otherwise specifically provided
for in this Agreement or in any other Security Document.
"Trustee" means United States Trust Company of New York, in its
capacity as "trustee" under the Senior Note Indenture, and each successor
trustee thereunder to become such pursuant to the applicable provisions
thereof.
"type" means, relative to any Term Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"United States" or "U.S." means the United States of America, its
fifty states and the District of Columbia.
"Unrestricted Subsidiary" means, until such time as it may be
designated as a Restricted Subsidiary by the Board of Directors of the Borrower
as provided in and in compliance with the definition of "Restricted
Subsidiary," (i) any Subsidiary of the Borrower organized or acquired after the
date hereof designated as an Unrestricted Subsidiary by the Board of Directors
of the Borrower in which all investments by the Borrower or any Restricted
Subsidiary are made only from funds available for the making of Restricted
Payments pursuant to Section 7.2.3 and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors of the Borrower may designate any Subsidiary
of the Borrower (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary owns any Equity Interests of,
or owns, or holds any Lien upon, any property of, any Subsidiary of the
Borrower which is not a Subsidiary of such Subsidiary to be so designated;
provided that (w) each Subsidiary to be so designated and each of its
Subsidiaries has not, at the time of designation, and does not thereafter,
directly or indirectly, incur any Indebtedness pursuant to which the lender
with respect thereto has recourse to any of the assets of the Borrower or any
of its Restricted Subsidiaries, (x) immediately after giving effect to such
designation no Default or Event of Default shall have occurred and be
continuing, (y) all outstanding Investments by the Borrower and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation equal in amount to the Fair Market Value of such Investments at the
time of such designation and would be Restricted Payments permitted to be paid
pursuant to the provisions of Section 7.2.3 and (z) the amount of such
Restricted Payments will be included in the calculation of the amount of
Restricted Payments previously made pursuant to such covenant. The Borrower
will evidence any such designation by promptly filing with the Administrative
Agent an Officers' Certificate certifying that such designation has been made
and complies with the requirements of the immediately preceding sentence.
"U.S. Subsidiary" means any Subsidiary of the Borrower that is
incorporated or organized in or under the laws of the United States or any
state thereof.
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"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or Persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the Capital Stock (and all rights and options
to purchase such Capital Stock) of which, other than directors' qualifying
shares, are owned, beneficially and of record, by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person.
"Wholly-Owned Restricted Subsidiary" means, with respect to any
Person, a Restricted Subsidiary of such Person all of the outstanding Capital
Stock or other ownership interests of which (other than capital stock
constituting directors' qualifying shares or interests held by directors or
shares or interests required to be held by foreign nationals, to the extent
mandated by applicable law) are owned by such Person or by one or more
Wholly-Owned Restricted Subsidiaries of such Person.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each other Loan Document, notice and other communication delivered from time to
time in connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Agreement or such
other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder shall be made, and all financial statements required to
be delivered hereunder or thereunder shall be prepared in accordance with,
those generally accepted accounting principles ("GAAP"), as in effect from time
to time and, unless otherwise expressly provided herein, shall be computed or
determined on a consolidated basis and without duplication.
SECTION 1.5. Use of UCC Terms. Unless the context otherwise
requires, the terms "accounts receivable", "inventory" and "general
intangibles" shall have the meanings ascribed thereto in the UCC.
SECTION 1.6. Officers' Certificates and Opinions. Every Officers'
Certificate or Opinion of Counsel with respect to compliance with a condition
or covenant provided for in this Agreement or any other Loan Document shall be
addressed to the Administrative Agent and each of the Lenders and shall
include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
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(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinion
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
Absent any actual knowledge to the contrary, the Administrative Agent may rely
on any such certificate without further inquiry.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement (including Article V), each Lender severally agrees to make
Term Loans pursuant to the Term Loan Commitments described in this Section 2.1.
SECTION 2.1.1. Term Loan Commitments. On the Closing Date, which
shall be a Business Day occurring prior to the Term Loan Commitment Termination
Date, each Lender will make loans (relative to such Lender, its "Term Loans")
to the Borrower equal to such Lender's Percentage of the aggregate amount of
the Borrowing of Term Loans requested by the Borrower to be made on such day
with the commitment of each such Lender to make the Term Loans described in
this Section referred to as its "Term Loan Commitment". No amounts paid or
prepaid with respect to any Term Loans may be reborrowed.
SECTION 2.1.2. Lenders Not Permitted or Required to Make the Term
Loans. No Lender shall be permitted or required to, and the Borrower shall not
request any Lender to, make any Term Loan on the Closing Date if, after giving
effect thereto, the aggregate original principal amount of all the Term Loans
(a) of all Lenders would exceed the Term Loan Commitment
Amount, or
(b) of such Lender would exceed such Lender's Percentage of
the Term Loan Commitment Amount.
SECTION 2.2. Borrowing Procedures and Funding Maintenance. By
delivering a Borrowing Request to the Administrative Agent on or before 10:00
a.m. (Chicago time) on a Business Day, the Borrower may request, on not less
than one Business Day's notice (in the case of Base Rate Loans) or three
Business Days' notice (in the case of LIBO Rate Loans), that a Borrowing be
made on the Closing Date. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be comprised of the type of Term Loans, and
shall be made on the Business Day, specified in such Borrowing Request. On or
before 11:00 a.m. (Chicago time) on such Business Day each Lender shall deposit
with the Administrative Agent same day funds
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in an amount equal to such Lender's Percentage of the requested Borrowing.
Such deposit will be made to an account which the Administrative Agent shall
specify from time to time by notice to the Lenders. To the extent funds are
received from the Lenders, the Administrative Agent shall make such funds
available to the Borrower by wire transfer to the accounts the Borrower shall
have specified in its Borrowing Request. No Lender's obligation to make any
Term Loan shall be affected by any other Lender's failure to make any Term
Loan.
SECTION 2.3. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 10:00
a.m. (Chicago time) on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of a
conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days'
notice (in the case of a continuation of LIBO Rate Loans or a conversion of
Base Rate Loans into LIBO Rate Loans) nor more than five Business Days' notice
that all, or any portion in a minimum amount of $5,000,000 or any larger
integral multiple of $250,000, be, in the case of Base Rate Loans, converted
into LIBO Rate Loans or a minimum amount of $250,000 or any larger integral
multiple of $250,000, in the case of LIBO Rate Loans, converted into Base Rate
Loans or continued as LIBO Rate Loans (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least
three Business Days before the last day of the then current Interest Period
with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however, that (x) each
such conversion or continuation shall be pro rated among the applicable
outstanding Term Loans of all Lenders, and (y) no portion of the outstanding
principal amount of any Term Loans may be continued as, or be converted into,
LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.4. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.5. Term Notes. Each Lender's Term Loans under its Term
Loan Commitment shall be evidenced by a Term Note payable to the order of such
Lender in a maximum principal amount equal to such Lender's Percentage of the
original Term Loan Commitment Amount. The Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made) appropriate notations on
the grid attached to such Lender's Term Note (or on any continuation of such
grid), which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest Period
applicable to the Term Loans evidenced thereby. Such notations shall be
conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of any Lender to make any such notations shall not
limit or otherwise affect any Obligations of the Borrower or any other Obligor.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.
SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay
in full the unpaid principal amount of each Term Loan upon the Stated Maturity
Date therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Term Loans; provided, however, that
(i) any such prepayment shall be made pro rata among
Term Loans of the same type and, if applicable, having the
same Interest Period of all Lenders;
(ii) the Borrower shall comply with Section 4.4 in
the event that any LIBO Rate Loan is prepaid on any day other
than the last day of the Interest Period for such Term Loan;
(iii) all such voluntary prepayments shall require
at least one Business Day's notice in the case of Base Rate
Loans and three Business Days' notice in the case of LIBO Rate
Loans, but no more than five Business Days' notice, in each
case in writing to the Administrative Agent; and
(iv) all such voluntary partial prepayments shall
be, in the case of LIBO Rate Loans, in an aggregate minimum
amount of $5,000,000 or any larger integral multiple of
$1,000,000 and, in the case of Base Rate Loans, in an
aggregate minimum amount of $1,000,000 or any larger integral
multiple of $500,000 or in the aggregate principal amount of
all Term Loans of the type then outstanding; and
(v) any voluntary prepayment of Term Loans made on
or prior to the third anniversary of the Closing Date shall be
subject to the payment of a premium, as set forth below:
(A) 3.0% of the principal amount of Term
Loans prepaid pursuant to this clause (a) of this
Section 3.1.1 on or prior to the first anniversary of
the Closing Date;
(B) 2.0% of the principal amount of Term
Loans prepaid pursuant to this clause (a) of this
Section 3.1.1 subsequent to the first anniversary and
prior to or on the second anniversary of the Closing
Date; and
(C) 1.0% of the principal amount of Term
Loans prepaid pursuant to this clause (a) of this
Section 3.1.1 subsequent to the second anniversary
and prior to or on the third anniversary of the
Closing Date.
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(b) shall, make a mandatory prepayment of the Term Loans on
account of Net Proceeds in accordance with Section 7.2.6;
(c) shall, (i) on each Quarterly Payment Date occurring on or
during any period set forth below, make a scheduled repayment of the
aggregate outstanding principal amount, if any, of all Term Loans in
an amount equal to the amount set forth below opposite such period,
and (ii) on the Stated Maturity Date, make a scheduled repayment of
the outstanding principal amount of all Term Loans in the amount set
forth opposite such date below (in each case as such amounts may have
otherwise been reduced pursuant to this Agreement):
SCHEDULED QUARTERLY
PRINCIPAL
PERIOD REPAYMENT
Closing Date to (and including)
June 30, 1998 $250,000
July 1, 1998 to (and including)
June 30, 1999 $250,000
July 1, 1999 to (and including)
June 30, 2000 $250,000
July 1, 2000 to (and including)
June 30, 2001 $250,000
July 1, 2001 to (and including)
June 30, 2002 $250,000
July 1, 2002 to (and including)
June 30, 2003 $250,000
July 1, 2003 to (and including)
June 30, 2004 $250,000
July 1, 2004 to (and including)
June 30, 2005 $250,000
July 1, 2005 to (and including)
June 30, 2006 $250,000
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SCHEDULED QUARTERLY
PRINCIPAL
PERIOD REPAYMENT
July 1, 2006 to (and including)
September 30, 2006 $250,000
Stated Maturity Date $90,750,000
(d) shall, subject to Section 3.1.2, make a mandatory
prepayment of the Term Loans upon the occurrence of a Change in
Control; and
(e) shall, immediately upon the acceleration of the Stated
Maturity Date of any Term Loans pursuant to Section 8.2 or Section
8.3, repay all outstanding Term Loans, unless, pursuant to Section
8.3, only a portion of all Term Loans are so accelerated (in which
case the portion so accelerated shall be so prepaid).
Each prepayment of any Term Loans made pursuant to this Section shall be
without premium or penalty, except as may be required by clause (a)(v) of this
Section and/or Section 4.4.
SECTION 3.1.2. Application. Amounts prepaid and repaid shall be
applied as set forth in this Section.
(a) Subject to clauses (b) and (c) below, each prepayment or
repayment of principal of the Term Loans shall be applied, to the
extent of such prepayment or repayment, first, to the principal amount
thereof being maintained as Base Rate Loans, and second, to the
principal amount thereof being maintained as LIBO Rate Loans.
(b) Each prepayment of any Term Loans made pursuant to clause
(a) of Section 3.1.1 shall be applied, to the extent of such
prepayment, in the inverse order of the scheduled repayments of such
Term Loans, as set forth in clause (c) of Section 3.1.1 with respect
to such Term Loans.
(c) Each prepayment of Term Loans made pursuant to clause (b)
or clause (d) of Section 3.1.1 shall be applied to the outstanding
principal amount of all Term Loans, except that, (i) with respect to
the amount of any such prepayment, the Administrative Agent will as
soon as is practicable (but in any event no later than the date on
which the Borrower has provided such prepayment to the Administrative
Agent) provide notice of such prepayment to each Lender prior to the
distribution of the funds from such prepayment, and (ii) each Lender
will have the right to refuse any such prepayment by giving written
notice of such refusal to the Administrative Agent within three
Business Days after such Lender's receipt of notice from the
Administrative Agent of such prepayment. In addition, any prepayment
of Term Loans shall be applied to the remaining amortization payments
in the inverse order of the scheduled repayments of such Term Loans,
as set forth in clause (c) of Section 3.1.1 with respect to such Term
Loans.
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SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of the Term Loans shall accrue and be payable in accordance
with this Section 3.2.
SECTION 3.2.1. Rates. Each Base Rate Loan shall accrue interest on
the unpaid principal amount thereof for each day from and including the day
upon which such was made or converted to a Base Rate Loan to but excluding the
date such Term Loan is repaid or converted to a LIBO Rate Loan at a rate per
annum equal to the sum of the Alternate Base Rate for such day plus the
Applicable Margin for such Term Loan on such day. Each LIBO Rate Loan shall
accrue interest on the unpaid principal amount thereof for each day during each
Interest Period applicable thereto at a rate per annum equal to the sum of the
LIBO Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin for such Term Loan on such day. All LIBO Rate Loans shall bear interest
from and including the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. Upon the occurrence and
continuance of (i) any Default described in Section 8.1.1 or (ii) any Event of
Default which shall remain uncured for thirty days (without giving effect to
any grace period therefor), all Term Loans shall bear, and the Borrower shall
pay, but only to the extent permitted by law, interest (after as well as before
judgment) thereon at a rate per annum equal to the rate that would otherwise be
applicable to such Term Loans pursuant to Section 3.2.1 plus 2.0% on each
Monthly Payment Date in arrears.
SECTION 3.2.3. Payment Dates. Interest accrued on each Term Loan
shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Term Loan;
(c) with respect to Base Rate Loans, on each Monthly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, at intervals of three months after the first day of such
Interest Period);
(e) with respect to the principal amount of any Base Rate
Loans converted into LIBO Rate Loans on a day when interest would not
otherwise have been payable pursuant to clause (c), on the date of
such conversion; and
(f) on that portion of any Term Loans the Stated Maturity
Date of which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Term Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
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SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Arrangement, Structuring and Commitment Fees. In
accordance with the Fee Letter, the Borrower shall pay on the Effective Date to
each of the Arranger, the Syndication Agent and the Documentation Agent for its
account their applicable portion of the arrangement and structuring fee
referred to therein and, for the account of the Arranger, the commitment fee
referred to therein.
SECTION 3.3.2. Administrative Agent Fee. The Borrower agrees to pay
an annual administration fee to the Administrative Agent, for its own account,
in the amounts mutually agreed to between the Borrower and the Administrative
Agent, payable in advance on the Closing Date and annually thereafter.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction
of or any change in or in the interpretation of any law makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make, continue or maintain any Term Loan as, or to convert
any Term Loan into, a LIBO Rate Loan of a certain type, the obligations of all
Lenders to make, continue, maintain or convert any such Term Loans shall, upon
such determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all LIBO Rate Loans of such type shall automatically convert into
Base Rate Loans at the end of the then current Interest Periods with respect
thereto or sooner, if required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that (i) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Administrative Agent in its
relevant market, or (ii) by reason of circumstances affecting the
Administrative Agent's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Loans, then,
upon notice from the Administrative Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Term Loans as, or to convert any Term Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Term Loans as, or of converting (or of its obligation to
convert) any Term Loans into, LIBO Rate Loans. Such Lender shall promptly
notify the Administrative Agent and the Borrower in writing of the occurrence
of any such event,
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such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Lender for such increased
cost or reduced amount. Such additional amounts shall be payable by the
Borrower directly to such Lender within five days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Term
Loan as, or to convert any portion of the principal amount of any Term Loan
into, a LIBO Rate Loan) as a result of (i) any conversion or repayment or
prepayment of the principal amount of any LIBO Rate Loans on a date other than
the scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise, (ii) Borrower's failure to borrow any
Term Loans as LIBO Rate Loans in accordance with the Borrowing Request
therefor, or (iii) Borrower's failure to continue, or to convert Base Rate
Loans into LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor, then, upon the written notice of such Lender to the Borrower
(with a copy to the Administrative Agent), the Borrower shall, within five days
of its receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Term Loan Commitment or the Term Loans made by such Lender
is reduced to a level below that which such Lender or such controlling Person
could have achieved but for the occurrence of any such circumstance, then, in
any such case upon notice from time to time by such Lender to the Borrower, the
Borrower shall immediately pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
SECTION 4.6. Taxes. All payments by the Borrower of principal of,
and interest on, the Term Loans and all other amounts payable hereunder shall
be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by
any Lender's net income or receipts (such non-excluded items being called
"Taxes"). In the event that any withholding or deduction from any payment to
be made by the Borrower hereunder is required in respect of any Taxes pursuant
to any applicable law, rule or regulation, then the Borrower will
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(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative
Agent evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of the
Lenders such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Lender will equal the
full amount such Lender would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent
or any Lender with respect to any payment received by the Administrative Agent
or such Lender hereunder, the Administrative Agent or such Lender may pay such
Taxes and the Borrower will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 4.6, a distribution hereunder by the
Administrative Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Borrower.
Upon the request of the Borrower or the Administrative Agent, each
Lender that is organized under the laws of a jurisdiction other than the United
States shall, prior to the due date of any payments under the Term Notes,
execute and deliver to the Borrower and the Administrative Agent, on or about
the first scheduled payment date in each Fiscal Year, one or more (as the
Borrower or the Administrative Agent may reasonably request) United States
Internal Revenue Service Forms 4224 or Forms 1001 or such other forms or
documents (or successor forms or documents), appropriately completed, as may be
applicable to establish the extent, if any, to which a payment to such Lender
is exempt from withholding or deduction of Taxes.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by or on behalf of the Borrower pursuant to this
Agreement, the Term Notes or any other Loan Document shall be made by the
Borrower to the Administrative Agent for the pro rata account of the Lenders,
Agents or Arranger, as applicable, entitled to receive such payment. All such
payments required to be made to the Administrative Agent shall be made, without
setoff, deduction or counterclaim, not later than 11:00 a.m. (Chicago time) on
the date due, in same day or immediately available funds, to such account as
the Administrative Agent shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been received
by the Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each Lender,
Agent or Arranger, as the case may be, its share, if any, of such payments
received by the
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Administrative Agent for the account of such Lender, Agent or Arranger, as the
case may be. All interest and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan
that is not calculated at the Federal Funds Rate, 365 days or, if appropriate,
366 days). Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as otherwise required
by clause (i) of the definition of the term "Interest Period" with respect to
LIBO Rate Loans) be made on the next succeeding Business Day and such extension
of time shall be included in computing interest and fees, if any, in connection
with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Term Loan (other than pursuant to the
terms of Sections 4.3, 4.4 and 4.5) in excess of its pro rata share of payments
then or therewith obtained by all Lenders entitled thereto, such Lender shall
purchase from the other Lenders such participations in the Term Loans made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (i) the amount of such selling Lender's required repayment
to the purchasing Lender in respect of such recovery, 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. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including pursuant to
Section 4.9) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section to share in the benefits of any recovery on such
secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any
Event of Default described in clause (a) or (b) of Section 8.1.9 with respect
to any Obligor or, with the consent of the Required Lenders, upon the
occurrence of any other Event of Default, to the fullest extent permitted by
law, have the right to appropriate and apply to the payment of the Obligations
then owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with or otherwise held by such Lender;
provided, however, that any such appropriation and application shall be subject
to the provisions of Section 4.8. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which such
Lender may have.
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ARTICLE V
CONDITIONS TO TERM LOAN EXTENSION
The obligation of each Lender to fund its Term Loans shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set
forth in this Article V.
SECTION 5.1. Resolutions, etc. The Arranger, the Syndication Agent
and the Administrative Agent shall have received from each Obligor a
certificate, dated the Closing Date, of its Secretary or Assistant Secretary as
to (i) resolutions of its Board of Directors then in full force and effect
authorizing the execution, delivery and performance of each Loan Document to be
executed by it, and (ii) the incumbency and signatures of those of its officers
authorized to act with respect to each Loan Document executed by it, upon which
certificate each Agent and each Lender may conclusively rely until it shall
have received a further certificate of the Secretary or Assistant Secretary of
such Obligor canceling or amending such prior certificate.
SECTION 5.2. Delivery of Term Note. Each Lender shall have received
its Term Note duly executed and delivered by the Borrower.
SECTION 5.3. Subsidiary Guaranty. The Syndication Agent shall have
received the Subsidiary Guaranty, dated the date hereof, duly executed by each
Subsidiary Guarantor.
SECTION 5.4. Consummation of Acquisition. The Arranger, the
Syndication Agent and the Documentation Agent shall have received evidence
satisfactory to each of them that all actions necessary to consummate the
Acquisition shall have been taken in accordance with all applicable law and
that the Acquisition shall have been consummated in accordance with the terms
of the Purchase Agreement without amendment or waiver of any material provision
thereof by the Borrower or any of its affiliates. There shall exist at and as
of the Closing Date (after giving effect to the transactions contemplated by
the Purchase Agreement) no conditions that would constitute a default or event
of default under the Purchase Agreement.
SECTION 5.5. Completion of Consent Solicitation. The Arranger, the
Syndication Agent and the Documentation Agent shall have received copies of
fully executed documentation (which documentation shall be satisfactory to each
of them) relating to and executed in connection with the Consent Solicitation
(including, without limitation, the Supplemental Indenture to the Existing
First Mortgage Indenture by and among the Borrower, the Subsidiary Guarantors
and the Existing Trustee).
SECTION 5.6. Completion of Tender Offer. The Tender Offer shall
have been completed pursuant to documentation satisfactory to the Arranger, the
Syndication Agent and the Documentation Agent at a price per $1,000 principal
amount of First Mortgage Notes not exceeding (inclusive of any fee paid in
connection with the Consent Solicitation) 120% of the par value thereof plus
accrued and unpaid interest thereon and, after giving effect to such
completion, no First Mortgage Notes shall be outstanding, all Liens in respect
of mortgages securing Indebtedness relating to the First Mortgage Notes shall
have been terminated and the Arranger and the Syndication Agent shall have
received evidence that releases and other instruments necessary to release and
terminate such Liens have been delivered to the Borrower.
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SECTION 5.7. Issuance of the Senior Notes. The Arranger, the
Syndication Agent and the Documentation Agent shall have received evidence
satisfactory to each of them that the Borrower shall have received gross
proceeds from the issuance of the Senior Notes which, when added to the
aggregate principal amount of Term Loans to be borrowed hereunder, does not
exceed $300,000,000, and the Arranger, the Syndication Agent and the
Documentation Agent shall be satisfied with all terms and provisions of all
documentation relating to such Senior Notes.
SECTION 5.8. Revolving Credit Agreement. The Arranger, the
Syndication Agent and the Documentation Agent shall have received copies of
fully executed versions of the Revolving Credit Agreement, certified to be true
and complete copies thereof by an Authorized Officer of the Borrower, and be
satisfied with the terms of such Revolving Credit Agreement. The Loan and
Security Agreement dated as of April 12, 1995, among PAI and Bank of America
Illinois, as agent and lender, shall have been terminated (including all
commitments to extend credit thereunder and all Liens securing payment of any
Indebtedness thereunder), all amounts payable thereunder (if any) shall have
been paid or transferred to (and payable under) the Revolving Credit Agreement
and the Arranger and Syndication Agent shall have received evidence that
releases, UCC-3 termination statements and other instruments necessary to
release and terminate any such Liens on any Collateral have been delivered to
the Borrower. As of the Closing Date, each condition to the closing
contemplated by the Revolving Credit Agreement shall have been satisfied or,
with appropriate consents, waived. There shall exist at and as of the Closing
Date (after giving effect to the transactions contemplated by the Revolving
Credit Agreement) no conditions that would constitute a default or event of
default under the Revolving Credit Agreement.
SECTION 5.9. Transaction Documents. The Arranger, the Syndication
Agent and the Documentation Agent shall have received (with copies for each
Lender that shall have expressly requested copies thereof) copies of fully
executed versions of all other Transaction Documents, certified to be true and
complete copies thereof by an Authorized Officer of the Borrower, and be
satisfied with the terms of all such agreements and documents. The Arranger,
the Syndication Agent and the Documentation Agent shall be reasonably satisfied
with all other aspects of the Transaction, including the aggregate sources and
uses of proceeds utilized to consummate the Transaction (including fees and
expenses not to exceed $12,000,000 in the aggregate (exclusive of premium paid
with respect to the First Mortgage Notes in connection with the Tender Offer
and any fee paid in connection with the Consent Solicitation)).
SECTION 5.10. Mortgages. PCAC shall have caused to be delivered to
the Collateral Agent, with copies to each of the Agents, the following
documents and instruments with regard to each Mortgaged Property located in
Henderson, Nevada, St. Gabriel, Louisiana, and Tacoma, Washington, providing
for first priority mortgages:
(a) a Mortgage, duly executed by PCAC, together with evidence
of the due recordation thereof in the appropriate recording office of
the political subdivision where such Mortgaged Property is situated
(or evidence reasonably satisfactory to the Arranger, the Syndication
Agent and the Documentation Agent that each Mortgage, as appropriate,
has been delivered to a nationally-recognized title insurance company
for recording and that all fees, taxes and other expenses associated
with such recording have been paid);
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(b) a mortgagee policy of title insurance (or endorsement
thereto, as appropriate) in favor of the Collateral Agent, issued by
such title insurance company, in such amounts, with such endorsements,
affirmative coverages, and reinsurance agreements as the Syndication
Agent shall reasonably require, and otherwise in form and substance
reasonably satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent, insuring each Mortgage as a first lien on the
property and interests covered thereby subject only to such other
matters as are acceptable to the Arranger, the Syndication Agent and
the Documentation Agent, together with evidence that all premiums in
respect of such policies have been paid in full and true and complete
copies of all documents referred to therein;
(c) certified perimeter surveys of the real property covered
by each Mortgage by registered surveyors as of a date and in form and
substance acceptable to the Arranger, the Syndication Agent and the
Documentation Agent, bearing legal descriptions conforming exactly to
those contained in the title insurance policy referred to in the
preceding clause (b); indicating the length of exterior boundary lines
of the Mortgaged Property, locations of all buildings, utility or
other easements, showing the location of all easements of record,
encroachments, if any, and means of access to the real property from a
public way; and the surveyor's original certification to the
Syndication Agent, the Collateral Agent and the title insurance
company issuing the policies described in the preceding clause (b) and
in the case of surveys with respect to the Mortgaged Properties in
Henderson, Nevada and St. Gabriel, Louisiana, such "affidavits of no
change" as may be required by such title companies to omit the
standard survey exception from such title insurance policies or
endorsements;
(d) evidence reasonably satisfactory to the Arranger, the
Syndication Agent and the Documentation Agent of all filings of
financing statements under the UCC necessary or desirable to perfect
the lien granted by each Mortgage (or evidence reasonably satisfactory
to the Arranger, the Syndication Agent and the Documentation Agent
that such financing statements have been delivered to a nationally
recognized title company for filing and that all fees, taxes and other
expenses associated with such filings have been paid), together with
such searches of UCC, judgment and tax lien records as the Arranger,
the Syndication Agent and the Documentation Agent shall reasonably
require;
(e) policies or certificates of insurance with respect to the
insurance required to be maintained in respect of the property covered
by each Mortgage pursuant to the terms of this Agreement and the
Senior Note Indenture, naming the Collateral Agent as loss payee or
additional named insured, as appropriate;
(f) a non-disturbance and attornment agreement among PCAC,
Saguaro Power Company, a Limited Partnership and the Collateral Agent
with respect to the first priority lien Nevada Mortgage, each in form
and substance acceptable to the Arranger, the Syndication Agent and
the Documentation Agent;
(g) a Waiver of the Nevada "One-Action Rule" by the
Subsidiary Guarantors, other than PCAC, with respect to the Agreement,
each in form and substance acceptable to the Arranger, the Syndication
Agent and the Documentation Agent; and
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(h) such other agreements, instruments, approvals, consents,
opinions, or documents as the Trustee, the Syndication Agent, the
Documentation Agent, the Administrative Agent, the Collateral Agent or
their respective counsel may reasonably request.
SECTION 5.11. Additional Security Documents. The Collateral Agent,
the Syndication Agent, the Documentation Agent and the Administrative Agent
shall have received executed versions of each of the other Security Documents
(other than the Mortgages), duly executed by the appropriate Subsidiary
Guarantor party thereto, together with:
(a) duly executed UCC-1 financing statements or other
documents under the provisions of the UCC or any other applicable
state law in proper form for filing in each office where such filing
is necessary or appropriate to grant to the Collateral Agent the Liens
of the character and priority contemplated by the Security Documents;
(b) share certificates representing all Pledged Shares (as
defined in the Stock Pledge Agreement) and undated stock powers for
such certificates executed and endorsed in blank; and
(c) evidence that all other actions necessary to perfect and
protect the Liens created by the Security Documents have been taken.
SECTION 5.12. Existing Intercreditor Agreement. The Existing
Intercreditor Agreement shall have been terminated pursuant to documents and
instruments satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent.
SECTION 5.13. Intercreditor Agreement. The Borrower, PAI, PCAC, the
Trustee, the Administrative Agent, BofA (as agent under the Revolving Credit
Agreement) and the Collateral Agent shall have entered into the Intercreditor
Agreement, and the Arranger and the Syndication Agent shall have received and
be satisfied with the terms of the executed versions thereof.
SECTION 5.14. Closing Date Certificates. The Arranger and the
Syndication Agent shall have received, with counterparts for each Lender, the
Closing Date Certificates, substantially in the form of Exhibits I and J
hereto, respectively, dated the date hereof and duly executed and delivered by
each of:
(a) the chief executive or financial (or equivalent)
Authorized Officer of the Borrower, in which certificate the Borrower
shall agree and acknowledge that the statements made therein shall be
deemed to be true and correct representations and warranties of the
Borrower made as of such date under this Agreement, and, at the time
such certificate is delivered, such statements shall in fact be true
and correct; and
(b) the chief executive or financial (or equivalent)
Authorized Officer of the Parent, in which certificate the Parent
shall agree and acknowledge that the statements made therein shall be
deemed to be true and correct representations and warranties of the
Parent made as of such date under this Agreement, and, at the time
such certificate is delivered, such statements shall in fact be true
and correct.
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SECTION 5.15. Financial Information, etc. The Arranger and the
Syndication Agent shall have received
(a) the audited financial statements of the Borrower as of
December 31, 1996 and for the period from March 6, 1995 through
December 31, 1995;
(b) the audited financial statements of the Borrower's
predecessor, Pioneer Americas, Inc., as of December 31, 1994 and for
the period from January 1, 1995 through April 20, 1995;
(c) the unaudited financial statements of the Borrower for the
period from January 1, 1997 through March 31, 1997; and
(d) a pro forma opening balance sheet of the Borrower as of
March 31, 1997, after giving effect to the contemplated Transaction
and reflecting the proposed legal and capital structure as of the
Closing Date, which legal and capital structure shall be satisfactory
in all respects to the Arranger, the Syndication Agent and the
Documentation Agent.
SECTION 5.16. Pro Forma Balance Sheet Certificate. The Syndication
Agent and the Administrative Agent shall have received a certificate from the
chief executive or financial Authorized Officer of the Borrower, dated the date
of the initial Borrowing, with respect to delivery of the pro forma balance
sheet described in clause (d) of Section 5.15.
SECTION 5.17. Litigation. There shall exist no pending or threatened
material litigation, proceedings or investigations which (x) contest the
consummation of the Transaction or (y) could reasonably be expected to have a
Material Adverse Effect.
SECTION 5.18. Material Adverse Change. Since December 31, 1996,
there has not occurred or arisen any event or condition which has had or is
reasonably likely to have a Material Adverse Effect on the Borrower, its
Subsidiaries or the Tacoma Business.
SECTION 5.19. Consents and Approvals, etc.. All governmental and
third party approvals necessary or advisable in connection with each aspect of
the Transaction and the continuing operations of the Borrower, its Subsidiaries
and the Tacoma Business shall have been obtained and be in full force and
effect or waived, and all applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on any aspect of the
Transaction.
SECTION 5.20. Reliance Letters. The Syndication Agent and the
Administrative Agent shall, unless otherwise agreed, have received reliance
letters, dated the Closing Date and addressed to each Lender and each Agent, in
respect of each of the legal opinions (other than "disclosure" and other
similar opinions) delivered in connection with the Transaction.
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SECTION 5.21. Opinions of Counsel. The Syndication Agent and the
Administrative Agent shall have received opinions, dated the Closing Date and
addressed to the Agents and all Lenders from
(a) Willkie, Farr & Gallagher, special New York counsel for
the Borrower and the Subsidiary Guarantors, in form and substance
satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent,
(b) Kent R. Stephenson, Esq., the General Counsel of the
Parent, in form and substance satisfactory to the Arranger, the
Syndication Agent and the Documentation Agent,
(c) Jackson & Walker, environmental counsel to the Borrower
and the Subsidiary Guarantors, in form and substance satisfactory to
the Arranger, the Syndication Agent and the Documentation Agent,
(d) Allen, Matkins, Leck, Gamble & Mallory, special
California counsel, regarding matters of California law, in form and
substance satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent,
(e) Lionel, Sawyer & Collins, special Nevada counsel,
regarding the first and second mortgages on PCAC's Henderson facility
and other matters of Nevada law, in form and substance satisfactory to
the Arranger, the Syndication Agent and the Documentation Agent,
(f) Nesser, King & LeBlanc, special Louisiana counsel,
regarding the first and second mortgages on PCAC's St. Gabriel
facility and other matters of Louisiana law, in form and substance
satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent, and
(g) Foster Pepper & Shefelman PLC, special Washington
counsel, regarding the Purchase Agreement, the first mortgage on the
Tacoma Facility and other matters of Washington law, in form and
substance satisfactory to the Arranger, the Syndication Agent and the
Documentation Agent.
SECTION 5.22. Closing Fees, Expenses, etc. The Agents and the
Arranger shall have received, each for their own respective accounts (including
in their capacity as a Lender), as the case may be, all fees, costs and
expenses due and payable pursuant to Sections 3.3 and 10.3 if then invoiced).
SECTION 5.23. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Arranger, the Syndication Agent and the Documentation Agent
and their counsel; the Arranger, the Syndication Agent and the Documentation
Agent and their counsel shall have received all information, approvals,
opinions, documents or instruments as the Arranger, the Syndication Agent and
the Documentation Agent or their counsel may reasonably request.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agents to enter into this
Agreement and to make the Term Loans hereunder, the Borrower represents and
warrants unto the Agents and each Lender as set forth in this Article VI.
SECTION 6.1. Organization, etc. Each of the Borrower and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its respective incorporation.
Each of the Borrower and its Subsidiaries is in good standing and is duly
qualified to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required, except for those
states in which its failure to qualify to do business would not be reasonably
likely to have a Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The Borrower
is duly authorized to execute and deliver this Agreement, the Term Notes, and
each other Loan Document to be executed by it and is duly authorized to borrow
monies hereunder and to perform its obligations under this Agreement, the Term
Notes and each other Loan Document to be executed by it. Each Subsidiary
Guarantor is duly authorized to execute and deliver the Subsidiary Guaranty and
each other Loan Document to be executed by it and is and will continue to be
duly authorized to perform its obligations thereunder. The execution, delivery
and performance by (a) the Borrower of this Agreement, the Term Notes and each
other Loan Document to which it is a party and the Borrowings hereunder and (b)
each Subsidiary Guarantor of the Subsidiary Guaranty and each other Loan
Document to which it is a party do not and will not require any consent or
approval of any governmental agency or authority.
SECTION 6.3. No Conflicts. The execution, delivery and performance
by (a) the Borrower of this Agreement, the Term Notes and each other Loan
Document to which it is a party and (b) each Subsidiary Guarantor of the
Subsidiary Guaranty and each other Loan Document to which it is a party do not
and will not conflict with (i) any provision of law, (ii) the Certificate or
Articles of Incorporation, as applicable, or bylaws, of the Borrower or such
Subsidiary, (iii) any agreement binding upon the Borrower or such Subsidiary
which conflict is reasonably likely to have a Material Adverse Effect or (iv)
any court or administrative order or decree applicable to the Borrower or such
Subsidiary which conflict is reasonably likely to have a Material Adverse
Effect, and do not and will not require, or result in, the creation or
imposition of any Lien on any asset of the Borrower or any Subsidiary, except
as provided herein.
SECTION 6.4. Validity and Binding Effect. This Agreement, the Term
Notes and each other Loan Document contemplated by this Agreement, when duly
executed and delivered, will be legal, valid and binding obligations of the
Borrower and each Subsidiary party thereto, as applicable, enforceable against
the Borrower and each such Subsidiary in accordance with their respective
terms.
SECTION 6.5. No Default. Neither the Borrower nor any Subsidiary of
the Borrower is in default under any agreement or instrument to which the
Borrower or such Subsidiary is a party or by which any of their respective
properties or assets is bound or affected, which default is
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reasonably likely to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
SECTION 6.6. Financial Statements. Each of financial statements of
the Borrower and of the Borrower's predecessor, Pioneer Americas, Inc.,
referred to in clauses (a), (b) and (c) of Section 5.15 have been furnished to
the Agents, have been prepared in conformity with GAAP applied on a basis
consistent with that of the preceding Fiscal Year and period, and present
fairly the financial condition of Borrower and its Subsidiaries as of such
dates and the results of their operations for the periods then ended, subject
(in the case of the interim financial statement) to year-end audit adjustments.
The Pro Forma Balance Sheet includes appropriate pro forma adjustments to give
pro forma effect to the Transaction (including assumptions that have been made
on a reasonable basis). Since December 31, 1996, there has not occurred or
arisen any event or condition which has had or is reasonably likely to have a
Material Adverse Effect.
SECTION 6.7. Insurance. Item 6.7 ("Insurance") of the Disclosure
Schedule is a complete and accurate summary of the property and casualty
insurance program carried by the Borrower and its Subsidiaries on the date
hereof. Such Item 6.7 includes name(s) of insurer(s), policy number(s),
expiration date(s), amount(s) of coverage, type(s) of coverage, the annual
premium(s), deductibles and self-insured retention and describes any
retrospective rating plan, fronting arrangement or any other self-insurance or
risk assumption agreed to by the Borrower or any Subsidiary or imposed upon the
Borrower or any Subsidiary by any such insurer. This summary also includes any
self-insurance program that is in effect.
SECTION 6.8. Litigation; Contingent Liabilities. (a) As of the date
hereof, except for those referred to in Item 6.8 ("Litigation") of the
Disclosure Schedule, there are no claims, litigation, arbitration proceedings
or governmental proceedings pending or threatened against or affecting the
Borrower, the Parent or any of their respective Subsidiaries, any Subsidiary or
any Related Party, the results of which are reasonably likely to have a
Material Adverse Effect.
(b) As of the date hereof, other than any liability incident to the
claims, litigation or proceedings disclosed in Item 6.8 or 6.19 of the
Disclosure Schedule or provided for or disclosed in the financial statements
referred to in Section 6.6, neither the Borrower nor any of its Subsidiaries
has any contingent liabilities which are reasonably likely to have a Material
Adverse Effect.
SECTION 6.9. Liens. None of the Collateral or other property,
revenues or assets of the Borrower or any Subsidiary is subject to any Lien
except Liens permitted by clauses (a) and (b) of Section 7.2.2.
SECTION 6.10. Subsidiaries. As of the date hereof, all of the
Borrower's Subsidiaries are listed in Item 6.10 ("Subsidiaries") of the
Disclosure Schedule. Item 6.10 of the Disclosure Schedule sets forth, for each
such Subsidiary, a complete and accurate statement of (a) the Borrower's
percentage ownership of each of the Subsidiaries, (b) the state or other
jurisdiction of formation or incorporation of each Subsidiary and (c) each
state in which each Subsidiary is qualified to do business. Each Subsidiary of
the Borrower has executed and delivered the Subsidiary Guaranty.
SECTION 6.11. Partnerships; Joint Ventures. As of the date hereof,
neither the Borrower nor any of its Subsidiaries is a partner or joint venturer
in any partnership or joint
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venture other than the partnerships and joint ventures listed in Item 6.11
("Partnerships and Joint Ventures") of the Disclosure Schedule. Item 6.11 of
the Disclosure Schedule sets forth, for each such partnership or joint venture,
a complete and accurate statement of (a) the Borrower's and each Subsidiary's
percentage ownership of each such partnership or joint venture, (b) the state
or other jurisdiction of formation or incorporation, as appropriate, of each
such partnership or joint venture and (c) each state in which each such
partnership or joint venture is qualified to do business.
SECTION 6.12. Senior Notes. The Senior Notes have been issued and
sold to the initial Purchasers thereof on or prior to the Closing Date in
accordance with and pursuant to the terms of the Offering Memorandum and in
compliance with all laws, including without limitation Rule 144A of the
Securities Act of 1933, as amended and all other applicable federal and state
securities laws. The issuance of the Senior Notes and the execution of the
Senior Note Indenture have been duly authorized by all necessary corporate
action on the part of the Borrower and each of its Subsidiaries party thereto
and will not require any consent or approval of any governmental agency or
authority that has not been obtained prior to the date hereof. The issuance of
the Senior Notes and the execution of the Senior Note Indenture do not conflict
with (i) any provision of law, (ii) the Certificate or Articles of
Incorporation or by-laws of the Borrower or any of its Subsidiaries, (iii) any
agreement binding upon the Borrower or any of its Subsidiaries which conflict
is reasonably likely to have a Material Adverse Effect, or (iv) any court or
administrative order or decree applicable to the Borrower or any of its
Subsidiaries which conflict is reasonably likely to have a Material Adverse
Effect, and do not and will not require, or result in, the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries
(other than the Liens created under the Security Documents). All
representations and warranties of the Borrower and the Parent contained in the
purchase agreement relating to the Senior Notes are true and correct in all
material respects as of the date hereof.
SECTION 6.13. Intellectual Property. The Borrower and each of its
Subsidiaries possesses adequate licenses, patents, patent applications,
copyrights, trademarks, trademark applications, trade styles, and tradenames to
continue to conduct its respective business as heretofore conducted by it, and
all such licenses, patents, patent applications, copyrights, trademarks,
trademark applications, trade styles, and tradenames existing on the date
hereof of the Borrower or any Subsidiary are listed in Item 6.13 ("Intellectual
Property") of the Disclosure Schedule.
SECTION 6.14. Solvency. Each of the Borrower and the Subsidiary
Guarantors, immediately after giving effect to the Transaction on the Closing
Date, will be Solvent. As used herein, the term "Solvent" means, with respect
to any such entity on a particular date (i) the fair value of the property of
such entity is greater than the total amount of liabilities (including
contingent liabilities) of such entity, (ii) the present fair saleable value of
the assets of such entity is greater than the probable liability of such entity
on its total existing debts (including contingent liabilities) as they become
absolute and matured, (iii) such entity will be able to pay its debts and
liabilities as they mature and (iv) such entity will not have unreasonably
small capital for the business in which it is engaged, as now conducted and as
proposed to be conducted following the consummation of the Transaction.
SECTION 6.15. Contracts; Labor Matters. Except as disclosed in Item
6.15 ("Contracts and Labor Matters") of the Disclosure Schedule: (a) neither
the Borrower nor any of its
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Subsidiaries is a party to any contract or agreement, or is subject to any
charge, corporate restriction, judgment, decree or order, which is reasonably
likely to have a Material Adverse Effect; (b) as of the date hereof, no labor
contract to which the Borrower or any of its Subsidiaries is a party or is
otherwise subject is scheduled to expire prior to the Stated Maturity Date; (c)
neither the Borrower nor any of its Subsidiaries has, within the two (2) year
period preceding the date of this Agreement, taken any action which would have
constituted or resulted in a "plant closing" or "mass layoff" within the
meaning of the Federal Worker Adjustment and Retraining Notification Act of
1988 or any similar applicable federal, state or local law, and the Borrower
has no reasonable expectation that any such action is or will be required any
time prior to the Stated Maturity Date; and (d) on the date of this Agreement
(i) neither the Borrower nor any of its Subsidiaries is a party to any labor
dispute and (ii) there are no strikes or walkouts relating to any labor
contracts to which the Borrower or any of its Subsidiaries is a party or is
otherwise subject.
SECTION 6.16. Pension and Welfare Plans. Each Pension Plan complies,
and has been administered in compliance, in all material respects, with all
applicable statutes and governmental rules and regulations; no Reportable Event
has occurred and is continuing with respect to any Pension Plan; neither the
Borrower nor any ERISA Affiliate has withdrawn from any Multiemployer Plan in a
"complete withdrawal" or a "partial withdrawal" as defined in section 4203 or
4205 of ERISA, respectively, with respect to which the Borrower or any ERISA
Affiliate has any unsatisfied liability; no steps have been instituted to
terminate any Pension Plan; no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to a Lien under section 302(f) of
ERISA; no condition exists or event or transaction has occurred in connection
with any Pension Plan or Multiemployer Plan that is reasonably likely to have a
Material Adverse Effect; and neither the Borrower nor any ERISA Affiliate is a
"contributing sponsor" as defined in section 4001(a)(13) of ERISA of a "single-
employer plan" as defined in section 4001(a)(15) of ERISA that has two or more
contributing sponsors at least two of whom are not under common control.
Except as listed in Item 6.16 ("Pension and Welfare Plans") of the Disclosure
Schedule, neither the Borrower nor any ERISA Affiliate, to the extent there is
joint and several liability with the Borrower to pay such benefits, has any
liability to pay any welfare benefits under any employee welfare benefit plan
within the meaning of section 3(l) of ERISA to former employees thereof or to
current employees with respect to claims incurred after the termination of
their employment other than as required by section 4980B of the Code or Part 6
of Subtitle B of Title 1 of ERISA.
SECTION 6.17. Regulations G, U and X. Neither the Borrower nor any
of its Subsidiaries is engaged in the business of purchasing or selling Margin
Stock or extending credit to others for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds of the Term Loans will be used to
purchase or carry any Margin Stock or for any other purpose which would violate
any of the margin regulations of the Federal Reserve Board.
SECTION 6.18. Compliance. The Borrower and each of its Subsidiaries
is in compliance with all statutes and governmental rules and regulations
applicable to it, the noncompliance with which is reasonably likely to have a
Material Adverse Effect.
SECTION 6.19. Taxes. Each of the Borrower its Subsidiaries has filed
all material tax returns which are required to have been filed and has paid, or
made adequate provisions for the payment of, all of its Taxes which are due and
payable, except such Taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other
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appropriate provisions as may be required by GAAP have been maintained. The
federal income tax liability of the Parent, the Borrower and each of its
Subsidiaries has been audited by the Internal Revenue Service and has been
finally determined and satisfied (or the time for audit has expired) for all
tax years up to and including the tax year ended December 31, 1995. The
Borrower is not aware of any proposed assessment against the Parent, the
Borrower or any of its Subsidiaries for additional Taxes (or any basis for any
such assessment).
SECTION 6.20. Investment Company Act Representation. Neither the
Borrower nor any of its Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 6.21. Public Utility Holding Company Act Representation.
Neither the Borrower nor any of its Subsidiaries is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 6.22. Environmental and Safety and Health Matters. The
Borrower and its Subsidiaries and/or each property, operations and facility
that the Borrower or any such Subsidiary owns, operates or controls
(a) complies in all respects with (i) all applicable
Environmental Laws, except for those laws the failure with which to
comply is not reasonably likely to have a Material Adverse Effect and
(ii) all applicable Occupational Safety and Health Laws, except for
those laws the failure with which to comply is not reasonably likely
to have a Material Adverse Effect;
(b) is not subject to any judicial or administrative
proceeding alleging the violation of any Environmental Law or
Occupational Safety and Health Law which is reasonably likely to have
a Material Adverse Effect;
(c) has not received any notice (i) that it may be in
violation of any Environmental Law or Occupational Safety and Health
Law which is reasonably likely to have a Material Adverse Effect, (ii)
threatening the commencement of any proceeding under any Environmental
Law or Occupational Safety and Health Law, which is reasonably likely
to have a Material Adverse Effect, or (iii) alleging that it is or may
be responsible for any response, cleanup, or corrective action,
including but not limited to any remedial investigation/feasibility
studies, under any Environmental Law or Occupational Safety and Health
Law, which, is reasonably likely to have a Material Adverse Effect;
(d) to the knowledge of the Borrower is not the subject of
federal or state investigation evaluating whether any investigation,
remedial action or other response is needed to respond to (i) a
Release or threatened Release into the environment of any Hazardous
Material or the spillage, disposal or release or threatened release
into the environment of any other hazardous, toxic or dangerous waste,
substance or constituent, or other substance regulated under any
Environmental Law which is reasonably likely to have a Material
Adverse Effect or (ii) any allegedly unsafe or unhealthful condition
regulated under any Environmental Law or Occupational Safety and
Health Law which is reasonably likely to have a Material Adverse
Effect;
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(e) has not filed any notice under or relating to any
Environmental Law or Occupational Safety and Health Law indicating or
reporting (i) any past or present Release into the environment of, or
treatment, storage or disposal of, any Hazardous Material or spillage,
disposal or release into the environment of any other hazardous, toxic
or dangerous waste, substance or constituent, or other substance
regulated under any Environmental Law or (ii) any potentially unsafe
or unhealthful condition, in either case, which is reasonably likely
to have a Material Adverse Effect, and to Borrower's knowledge, there
exists no basis for such notice irrespective of whether such notice
was actually filed; and
(f) has no contingent liability in connection with any actual
Release into the environment of, or otherwise with respect to, any
Hazardous Material or spillage, disposal or release into the
environment of any other hazardous, toxic or dangerous waste,
substance or constituent, or other substance, whether on any premises
owned or occupied by the Borrower or any Subsidiary or on any other
premises, which is reasonably likely to have a Material Adverse
Effect.
There are no Hazardous Materials on, in or under any property or facilities
owned, operated or controlled by the Borrower or any Subsidiary the presence of
which is reasonably likely to have a Material Adverse Effect, including but not
limited to such Hazardous Materials that may be contained in underground
storage tanks, but excepting such Hazardous Materials used in accordance with
all applicable laws and such Hazardous Materials used in the same manner as
an ordinary consumer (e.g., gasoline in tanks of motor vehicles, small amounts
of cosmetic cleaners, etc.).
SECTION 6.23. Related Agreements and Transaction Documents. As of
the date hereof, all representations and warranties of the Parent, the Borrower
and each of their respective Subsidiaries contained in any Loan Document
(including each of the Security Documents) and all representations and
warranties of the Parent, the Borrower and each of their respective
Subsidiaries contained in any Transaction Document (whether such
representations and warranties were made to the Agent or any Lender or to
another Person) are true and correct as if made on the date hereof (except for
those representations and warranties which are expressly made as of another
specified date) and the Borrower hereby adopts and affirms all such
representations and warranties which the Borrower agrees shall be incorporated
by reference herein and made a part hereof.
SECTION 6.24. Holding Companies. Each of the Parent, the Borrower,
PAI, BMPH, Pioneer East, TCH and Imperial is a holding company without material
assets, operations or business, other than (i) in the case of the Parents, the
ownership of all of the Capital Stock of the Borrower and Pioneer Water
Technologies, Inc., (ii) in the case of the Borrower, all of the Capital Stock
of PAI, (iii) in the case of PAI, all of the Capital Stock of its Subsidiaries,
(iv) in the case TCH, all of the Capital Stock of T.C. Products, Inc. and (v)
in the case of Imperial, 50% of the Capital Stock of Kenwater. None of the
Parent, the Borrower, PAI, BMPH, Pioneer East, TCH and Imperial has any
Indebtedness or other obligations other than, in the case of the Borrower,
Indebtedness of the Borrower in respect of the Term Loans, the loans made to
the Borrower pursuant to the Revolving Credit Agreement and the Senior Notes,
and, in the case of PAI, BMPH, Pioneer East, TCH and Imperial, guaranties
thereof.
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ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Agents and each Lender that, until all Term Loan Commitments have terminated
and all Obligations have been paid and performed in full, the Borrower will
perform the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and each
Agent copies of the following financial statements, reports, notices and
information (except to the extent any such Lender shall have provided written
notice to the Borrower and the Administrative Agent that it is not to receive
any of the following statements, reports, notices and information):
(a) Annual Audited Financial Statements. Within ninety (90)
days after each Fiscal Year, a copy of the annual audited financial
statements of the Parent, the Borrower and the Subsidiaries prepared
on a consolidated and consolidating basis and in conformity with GAAP
and certified by an independent certified public accountant who shall
be satisfactory to the Agents, together with (i) a certificate from
such accountant to the effect that, in making the examination
necessary for the signing of such annual audit report, such accountant
has not become aware of any Default or Event of Default that has
occurred and is continuing and that relates to financial or other
accounting matters or the covenants set forth in this Article VII or,
if such accountant has become aware of any such event, describing it
and (ii) if prepared in connection with the annual audit report, the
annual operating statements of the Parent, the Borrower and the
Subsidiaries prepared on a consolidating basis and in conformity with
GAAP applied in a manner consistent with the audit report referred to
in preceding clauses (a)(i), signed by the Borrower's chief financial
officer or assistant treasurer.
(b) Monthly Financial Statements. Within thirty (30) days
after the end of each month of each Fiscal Year of the Borrower except
(i) forty-five (45) days after the end of each month closing a fiscal
quarter and (ii) ninety (90) days after the end of each month closing
a Fiscal Year, a copy of the unaudited financial statement of the
Parent, the Borrower and the Subsidiaries prepared on a consolidated
and consolidating basis and in conformity with GAAP applied in a
manner consistent with the audit report referred to in preceding
clause (a)(i), signed by the Borrower's chief financial officer and
consisting of at least a balance sheet as at the close of such month
and an income statement and cash flow statement for such month and for
the period from the beginning of such Fiscal Year to the close of such
month, compared, in each case, to the actual results for the same
period during the prior Fiscal Year and to the Borrower's budget
(delivered pursuant to paragraph (c) below, for the current Fiscal
Year).
(c) Annual Budgets. Within thirty (30) days after the end of
each Fiscal Year of the Borrower, a copy of an annual budget of the
Parent for the current Fiscal Year, prepared on a consolidated and
consolidating basis and in conformity with GAAP applied in a manner
consistent with the prior Fiscal Year's budget, signed by the
Borrower's chief financial officer or assistant treasurer and
consisting of at least a balance sheet, an
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income statement and a cash flow statement, each calculated on a
quarter by quarter basis.
(d) Officer's Certificate. Together with the financial
statements furnished by the Borrower under the preceding clauses (a)
and (b), a certificate of the chief executive or financial officer or
assistant treasurer of the Borrower stating that a review of the
activities of the Borrower and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing
officers with a view to determining whether each has kept, observed,
performed and fulfilled its obligations under this Agreement and the
other Loan Documents, and further stating, as to each such officer
signing such certificate, that to the best of his or her knowledge
each has kept, observed, performed and fulfilled each and every
covenant contained in this Agreement and the other Loan Documents and
is not in default in the performance or observance of any of the
terms, provisions and conditions hereof or thereof (or, if a Default
or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what
action each is taking or proposes to take with respect thereto).
(e) SEC and Other Reports. Copies of each filing and report
made by the Parent, the Borrower or any Restricted Subsidiary with or
to any securities exchange or the Securities and Exchange Commission,
including any registration statement and all amendments thereto filed
with respect to the Senior Notes, or as required pursuant to the
Senior Note Indenture, the Senior Note or any other document relating
thereto, promptly upon the filing or making thereof.
(f) Notice of Default. Notice of the occurrence of (i) a
Default or an Event of Default or (ii) a default by the Parent, the
Borrower, any other Obligor or any Restricted Subsidiary under any
material note, indenture, loan agreement, mortgage, lease, deed or
other material similar agreement to which the Parent, the Borrower,
any other Obligor or any Restricted Subsidiary, as appropriate, is a
party or by which it is bound (including any of the Loan Documents).
(g) Notice of Judgment. Notice of the entry of any judgment
or decree against the Parent, the Borrower, any other Obligor or any
Restricted Subsidiary, if the amount of such judgment exceeds
$500,000.
(h) Notice of Other Indebtedness. Copies of any material
amendments, waivers or consents, notices of breach or default, notices
relating to the exercise or nonexercise of any remedy available to any
Person, notices of indemnity or other claims, written materials
relating to any dispute, written materials relating to the exercise of
any rights derived from or arising in connection with any Indebtedness
and other written communications of a material nature, including any
communications by the Parent, the Borrower or any Restricted
Subsidiary in connection with the Loan Documents other than any such
notice or other written materials already sent to the Agents pursuant
to any other Section of this Agreement.
(i) Security Documents. Any statement, report, notice and/or
information required to be delivered to the Collateral Agent pursuant
to any of the Security Documents.
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(j) Other Reports. Any information required to be provided
pursuant to other provisions of this Agreement, and such other reports
or information from time to time reasonably requested by the Agents on
behalf of itself or any Lender.
SECTION 7.1.2. Corporate Existence. Subject to Section 7.2.5, the
Borrower shall, subject to provisions herein, do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
existence and the corporate existence of each of its Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time) and (ii) its (and its Subsidiaries) rights (charter
and statutory), licenses and franchises; provided, however, that the Borrower
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Borrower and its Subsidiaries taken as a whole and that
the loss thereof is not adverse in any material respect to the Lenders.
SECTION 7.1.3. Maintenance of Properties. The Borrower shall, and
shall cause its Restricted Subsidiaries to, maintain their respective
properties and assets in normal working order and condition as of the date
hereof (reasonable wear and tear excepted) and make all repairs, renewals,
replacements, additions, betterments and improvements thereto, as shall be
reasonably necessary for the proper conduct of the business of the Borrower and
its Restricted Subsidiaries taken as a whole; provided that nothing herein
shall prevent the Borrower or any of its Restricted Subsidiaries from
discontinuing any maintenance of any such properties if such discontinuance is
desirable in the conduct of the business of the Borrower and its Restricted
Subsidiaries taken as a whole.
SECTION 7.1.4. Insurance. The Borrower shall, and shall cause its
Restricted Subsidiaries to, maintain liability, casualty and other insurance
(subject to the customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as it customarily
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which the Borrower and its Restricted
Subsidiaries operate (which may include self-insurance in comparable form to
that maintained by such responsible companies).
SECTION 7.1.5. Taxes. The Borrower shall, and shall cause each of
its Subsidiaries to, pay prior to delinquency all material taxes, assessments
and governmental levies except as are being contested in good faith and by
appropriate proceedings diligently conducted and in respect of which
appropriate reserves (in the good faith judgment of management of the Borrower)
are being maintained in accordance with GAAP.
SECTION 7.1.6. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect in
all material respects all of its business affairs and transactions and permit
the Agents and each Lender or any of their respective representatives, at
reasonable times and intervals, and upon reasonable notice, to visit all of its
offices, to discuss its financial matters with its officers and, after notice
to the Borrower and provision of an opportunity for the Borrower to participate
in such discussion, its independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with each Lender or its representatives whether or not any
representative of the Borrower is present, so long as the Borrower has been
afforded a reasonable opportunity to be present) and to examine, and photocopy
extracts from,
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any of its books or other corporate records. The cost and expense of each such
visit shall be borne by the applicable Agent or Lender, except that each Agent
may make one such visit each Fiscal Year and the cost and expense thereof shall
be borne by the Borrower.
SECTION 7.1.7. Use of Proceeds, etc. The Borrower shall apply the
proceeds of the Term Loans to fund the Acquisition and the Tender Offer and pay
certain related fees and expenses.
SECTION 7.1.8. Subsidiary Guarantees. (a) If (i) any Subsidiary of
the Borrower becomes a Restricted Subsidiary after the Closing Date, (ii) the
Borrower or any Subsidiary of the Borrower that is a Subsidiary Guarantor
transfers or causes to be transferred, in one transaction or a series of
related transactions, property or assets (including, without limitation,
businesses, divisions, real property, assets or equipment) which in the
aggregate have a value equal to or greater than 15% of the Borrower's and its
Subsidiaries' total assets determined on a consolidated basis as of the time of
transfer to any Subsidiary or Subsidiaries of the Borrower that is not a
Subsidiary Guarantor or are not Subsidiary Guarantors, (iii) any Subsidiary of
the Borrower which has a value equal to or greater than 5% of the Borrower's
and its Subsidiaries' total assets determined on a consolidated basis as of the
time of determination directly or indirectly guarantees or otherwise becomes
obligated with respect to any Senior Indebtedness or (iv) any Subsidiary of the
Borrower becomes a guarantor of the Senior Notes after the date hereof, the
Borrower shall cause such Subsidiary or Subsidiaries to execute and deliver to
the Administrative Agent a duly executed supplement to the Subsidiary Guaranty,
substantially in the form attached thereto, pursuant to which such Subsidiary
or Subsidiaries shall unconditionally guarantee, in accordance with the
provisions of the Subsidiary Guaranty, all of the Borrower's obligations under
this Agreement and the other Loan Documents on the same terms as the other
Subsidiary Guarantors, which guarantee shall rank pari passu with Senior
Indebtedness of such Subsidiary.
(b) Each guarantee created pursuant to the provisions
described in the foregoing paragraph shall be deemed to be a "Subsidiary
Guaranty" and the issuer of each such Subsidiary Guaranty shall be referred to
as a "Subsidiary Guarantor". Notwithstanding the foregoing, any Subsidiary
Guaranty shall be automatically and unconditionally released and discharged
upon any sale, exchange, transfer or other disposition to any Person of all of
the Borrower's Equity Interest in (or if such Subsidiary is owned by a
Restricted Subsidiary, of all of such Restricted Subsidiary's Equity Interest
in), or all or substantially all the assets of, such Subsidiary, which is in
compliance with this Agreement, including Section 7.2.6.
SECTION 7.1.9. Stock Pledge Agreements. If (i) any Restricted
Subsidiary of the Borrower engages in any business activity other than the
holding of the Capital Stock of one or more Subsidiaries of the Borrower (or in
the case of Imperial, engaging in any business activity other than the holding
of its Investment in Kemwater) and (ii) such Restricted Subsidiary has a value
equal to or greater than 5% of the Borrower's total assets determined on a
consolidated basis as of the time of determination, then the Borrower will, and
will cause the applicable Subsidiary or Subsidiaries of the Borrower (the
"Pledgor Subsidiary" or "Pledgor Subsidiaries") to, execute and deliver to the
Administrative Agent and the Collateral Agent one or more stock pledge
agreements substantially in the form of the Stock Pledge Agreement providing
for the pledge to the Collateral Agent for the benefit of (x) the
Administrative Agent, for itself and the Lenders, and (y) the Trustee, for
itself and the holders of Senior Notes, of all the Capital Stock of such
Restricted Subsidiary held by the Borrower and the Pledgor Subsidiary or
Pledgor
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Subsidiaries, together with delivery to the Collateral Agent of stock
certificates evidencing such Capital Stock (together with undated stock powers
executed in blank), which Capital Stock and stock powers will become
"Collateral" for purposes of the Intercreditor Agreement.
SECTION 7.1.10. Concerning the Collateral and the Loan Documents.
(a) In order to secure the due and punctual payment of the Obligations,
including principal of, premium (if any) and interest (including interest on
overdue principal) on the Term Loans, when and as the same shall become due and
payable, whether on the scheduled payment date therefor, at maturity, by
acceleration or otherwise, and performance of all other obligations of the
Borrower to the Agents and the Lenders under this Agreement and each other Loan
Document and of all obligations of the Borrower's Restricted Subsidiaries under
the Subsidiary Guaranty and each other Loan Document, the Borrower and the
other Obligors have entered into each of the applicable Security Documents to
which each is a party.
(b) The Borrower shall, and shall cause PCAC and PAI to,
perform at their sole cost and expense any and all acts and execute any and all
documents (including, without limitation, the execution, amendment or
supplementation of any financing statement and continuation statement or other
statement) for filing under the provisions of the UCC and the rules and
regulations thereunder, or any other statute, rule or regulation of any
applicable federal, state or local jurisdiction, including any filings in local
real estate land record offices, which are necessary or advisable and shall do
such other acts and execute such other documents as may be required under any
of the Security Documents, from time to time, in order to grant and maintain
valid and perfected Liens on the Collateral in favor of the Collateral Agent in
the priorities purported to be created by the Security Documents, subject only
to Liens permitted under the Security Documents to be senior or pari passu to
the Liens of the Collateral Agent, and to fully preserve and protect the rights
of the Agents and the Lenders under this Agreement and the other Loan
Documents. The Borrower shall, and shall cause PCAC and PAI to, pay and
satisfy promptly all mortgage and financing and continuation statement
recording and/or filing fees, charges and taxes relating to this Agreement, the
Security Documents and the other Loan Documents, any amendments thereto and any
other instruments of further assurance.
(c) The Borrower shall, on each anniversary of the Closing
Date beginning in the 1998 year and upon each delivery of a stock pledge
agreement pursuant to Section 7.1.9, the Borrower shall furnish to the
Administrative Agent an Opinion of Counsel, dated as of such date, either (a)
to the effect that, in the opinion of such counsel, such action has been taken
with respect to the recordings, registerings, filings, re-recordings, re-
registerings and refilings of all financing statements, continuation statements
or other instruments of further assurance as is necessary to maintain the Lien
of each of the Security Documents and reciting with respect to such Liens the
details of such action or referencing prior Opinions of Counsel in which such
details are given, and stating that all financing statements and continuation
statements have been executed and filed that are necessary as of such date and
during the succeeding twelve months fully to preserve and protect the rights of
the Collateral Agent, the Lenders and the Administrative Agent hereunder and
under each of the Security Documents with respect to the Liens, or (b) to the
effect that, in the opinion of such counsel, no such action is necessary to
maintain such Liens.
SECTION 7.1.11. Maintenance of Corporate Separateness. The Borrower
will, and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors' and
shareholders' meetings and the maintenance of corporate
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offices and records. Neither the Borrower nor any of its Restricted
Subsidiaries shall make any payment to a creditor of any Unrestricted
Subsidiary in respect of any liability of such Unrestricted Subsidiary, and no
bank account of an Unrestricted Subsidiary shall be commingled with any bank
account of the Borrower or any of its Restricted Subsidiaries. Any financial
statements distributed to any creditors of an Unrestricted Subsidiary shall
clearly establish the separateness of such Unrestricted Subsidiary from the
Borrower and its Restricted Subsidiaries. Neither the Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which
is likely to result in the corporate existence of any Unrestricted Subsidiary
or any Restricted Subsidiary being ignored by any court of competent
jurisdiction, or in the assets and liabilities of the Borrower or any
Restricted Subsidiary being substantively consolidated with those of any
Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency
proceeding.
SECTION 7.1.12. Working Capital Line. The Borrower shall use its
best efforts to maintain a revolving credit facility or similar arrangement to
the extent it deems necessary based on its cash position and cash flows to fund
the foreseeable capital expenditure and working capital requirements of its
Restricted Subsidiaries.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Agents
and each Lender that, until the Term Loan Commitments have terminated, and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.2.
SECTION 7.2.1. Indebtedness. The Borrower will not, and will not
permit its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become liable with respect to or become
responsible for the payment of, contingently or otherwise ("incur"), any
Indebtedness; provided, however, that the Borrower, or a Restricted Subsidiary
of the Borrower, may incur Indebtedness if at the time of such incurrence and
after giving pro forma effect thereto, the Borrower's Consolidated Cash Flow
Coverage Ratio for the most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such Indebtedness is incurred, calculated on a pro forma basis as if such
Indebtedness was incurred on the first day of such four full fiscal quarter
period, would be at least 2.0 to 1.0. For purposes of determining the
Borrower's Consolidated Cash Flow Coverage Ratio, Cash Flow and Consolidated
Interest Expense for all periods prior to the Closing Date shall be calculated
on a consolidated basis including each of the Borrower's and its Subsidiaries'
predecessors. Notwithstanding the foregoing limitations, the incurrence of the
following will not be prohibited:
(a) Indebtedness in respect of the Term Loans and the
Subsidiary Guaranty and all other Obligations;
(b) Indebtedness of the Borrower evidenced by the Senior
Notes and Indebtedness of the Subsidiary Guarantors in respect of
guarantees of such Senior Notes;
(c) Indebtedness of the Borrower or any Restricted Subsidiary
constituting Existing Indebtedness and any extension, deferral,
renewal, refinancing or refunding thereof;
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(d) Indebtedness of the Borrower or any Restricted Subsidiary
incurred under one or more Credit Facilities in an aggregate principal
amount at any one time outstanding not to exceed the Borrowing Base at
the time such Indebtedness was incurred, less the aggregate amount of
all permanent repayments of revolving loans under such Credit
Facilities made on account of the receipt by the Borrower or any of
its Restricted Subsidiaries of proceeds from the sale of any of its
assets (as expressly permitted pursuant to the terms of any Senior
Indebtedness);
(e) Capitalized Lease Obligations of the Borrower or any
Restricted Subsidiary and Indebtedness of the Borrower or any
Restricted Subsidiary secured by Liens that secure the payment of all
or part of the purchase price of assets or property acquired or
constructed in the ordinary course of business after the date hereof;
provided, however, that the aggregate principal amount of such
Capitalized Lease Obligations plus such Indebtedness of the Borrower
and all of the Restricted Subsidiaries does not exceed $10,000,000
outstanding at any time;
(f) Indebtedness of the Borrower to any Restricted Subsidiary
or of any Restricted Subsidiary to the Borrower or another Restricted
Subsidiary (but only so long as such Indebtedness is held by the
Borrower or a Restricted Subsidiary);
(g) Indebtedness under Hedging Obligations; provided,
however, that, in the case of foreign currency exchange or similar
agreements which relate to other Indebtedness, such agreements do not
increase the Indebtedness of the Borrower or any Restricted Subsidiary
outstanding other than as a result of fluctuations in foreign currency
exchange rates, and in the case of interest rate protection
agreements, only if the notional principal amount of such interest
rate protection agreement does not exceed the principal amount of the
Indebtedness to which such interest rate protection agreement relates;
(h) Indebtedness in respect of performance, completion,
guarantee, surety and similar bonds, banker's acceptances or letters
of credit provided by the Borrower or any Restricted Subsidiary in the
ordinary course of business;
(i) in addition to any Indebtedness otherwise permitted to be
incurred pursuant to the preceding clauses (a) through (h), up to
$10,000,000 aggregate principal amount of Indebtedness at any one time
outstanding;
(j) any refinancing, refunding, deferral, renewal or extension
(each, a "Refinancing") of any Indebtedness of the Borrower or any
Restricted Subsidiary permitted by the first sentence of this Section
or clause (b) above (the "Refinancing Indebtedness"); provided,
however, that (i) such Refinancing Indebtedness does not exceed the
aggregate principal amount of the Indebtedness so refinanced, plus the
amount of any premium required to be paid in connection with such
Refinancing in accordance with the terms of such Indebtedness or the
amount of any premium reasonably determined by the Borrower as
necessary to accomplish such Refinancing, plus the amount of
reasonable and customary out-of-pocket fees and expenses payable in
connection therewith, (ii) the Refinancing Indebtedness does not
provide for any mandatory redemption, amortization or sinking fund
requirement in an amount greater than or at a time prior to the
amounts and times specified in the Indebtedness being refinanced,
refunded, deferred, renewed or extended and (iii) if the Indebtedness
being
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refinanced, refunded, deferred, renewed or extended is subordinated to
the Term Notes, the Refinancing Indebtedness incurred to refinance,
refund, defer, renew or extend such Indebtedness is subordinated in
right of payment to the Obligations on terms at least as favorable to
the Lenders as those contained in the documentation governing the
Indebtedness being so refinanced, refunded, deferred, renewed or
extended; and
(k) Indebtedness in respect of any guarantee provided by the
Borrower or any Restricted Subsidiary in respect of any other
Indebtedness permitted to be incurred pursuant to this Section 7.2.1;
provided, however, that in the event such Indebtedness guaranteed is
subordinated in right of payment to any other Indebtedness of the
obligor thereof, then such guarantee shall be subordinated to
Indebtedness of such guarantor to the same extent.
SECTION 7.2.2. Liens. The Borrower will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien
upon any of their respective assets or properties now owned or acquired after
the Closing Date, or any income or profits therefrom, excluding, however, from
the operation of the foregoing any of the following:
(a) Liens existing as of the Closing Date or pursuant to an
agreement or document in existence on the Closing Date, in each case
as set forth and described in Item 7.2.2(a) ("Existing Liens") of the
Disclosure Schedule, (ii) securing the Obligations, (iii) on accounts
receivable, inventory and related general intangibles securing
obligations under the Revolving Credit Agreement and (iv) securing the
Senior Notes to the extent referred to in the Intercreditor Agreement;
(b) Permitted Liens;
(c) Liens on assets or property of the Borrower, or on assets
or property of Restricted Subsidiaries of the Borrower, to secure the
payment of all or a part of the purchase price of assets or property
acquired or constructed in the ordinary course of business after the
Closing Date; provided, however, that (i) the aggregate principal
amount of Indebtedness secured by such Liens does not exceed the
original cost or purchase price of the assets or property so acquired
(including the reasonable and customary costs of installation of such
acquired assets) or constructed, (ii) the Indebtedness secured by such
Liens is otherwise permitted to be incurred hereunder, (iii) such
Liens do not encumber any other assets or property of the Borrower or
any of its Restricted Subsidiaries and (iv) the Indebtedness secured
by such Liens may not be created more than 100 days after the later of
the acquisition, completion of construction, repair, improvement,
addition or commencement of full operation of the property subject to
such Liens;
(d) Liens on assets or property acquired by the Borrower or
any Restricted Subsidiary after the date hereof; provided, however,
that (i) such Liens existed on the date such assets or property were
acquired and were not incurred as a result of or in anticipation of
such acquisition and (ii) such Liens do not extend to or cover any
assets or property of the Borrower or any of its Restricted
Subsidiaries other than the assets or property so acquired;
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(e) Liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a Lien permitted
hereunder and which is permitted to be refinanced hereunder; provided,
however, that such Liens do not extend to or cover any assets or
property of the Borrower or any of its Restricted Subsidiaries not
securing the Indebtedness so refinanced;
(f) Liens on assets or property of the Borrower or any
Restricted Subsidiary that is subject to a Sale and Leaseback
Transaction; provided, however, that the aggregate principal amount of
Attributable Indebtedness in respect of all Sale and Leaseback
Transactions then outstanding does not at the time such a Lien is
incurred exceed $10,000,000;
(g) Liens on property or shares of Capital Stock of a Person
at the time such Person becomes a Restricted Subsidiary; provided,
however, that such Liens are not created, incurred or assumed in
contemplation of the acquisition thereof by the Borrower or a
Subsidiary and; provided, further, that such Liens may not extend to
any other property owned by the Borrower or a Restricted Subsidiary;
(h) Liens securing Indebtedness of a Restricted Subsidiary
owing to the Borrower or a Wholly-Owned Restricted Subsidiary of the
Borrower;
(i) Liens on inventory, accounts receivable or related
general intangibles of any Restricted Subsidiary securing Indebtedness
which may be incurred under clause (d) of Section 7.2.1;
(j) pari passu Liens on the Collateral securing up to an
aggregate principal amount of $50,000,000 of Indebtedness permitted to
be incurred under the first sentence of Section 7.2.1; provided that
(i) the proceeds of such Indebtedness are used to acquire or construct
additional property, plant and equipment that will be utilized in one
or more Related Businesses, (ii) the aggregate principal amount of
Indebtedness secured by such Liens does not exceed the original cost
or purchase price of the assets or property so acquired (including the
reasonable and customary costs of installation of such acquired
assets) or constructed, and (iii) the assets or property acquired or
constructed with such Indebtedness are pledged to the Collateral Agent
in accordance with the Intercreditor Agreement to become part of the
Collateral securing the Obligations and the Senior Notes on a pari
passu basis with such Indebtedness, and in connection therewith (A)
the holders of such Indebtedness or any trustee or other
representative thereof becomes party to the Intercreditor Agreement,
as amended, and is authorized to exercise rights and remedies in
accordance therewith, and (B) the Collateral Agent receives an
endorsement to its title insurance policies relating to the mortgage
liens constituting part of the Collateral insuring the continuing
priority of such mortgage liens as set forth in the title insurance
policies; and
(k) Liens on assets or property of the Borrower, or on assets
or property of Restricted Subsidiaries of the Borrower, acquired or
constructed after the date hereof other than in the ordinary course of
business and other than assets or property acquired or constructed in
replacement, repair or improvement of any assets or property
constituting Collateral; provided, however, that (i) the aggregate
principal amount of Indebtedness secured by such Liens does not exceed
the original cost or purchase price of the assets or
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property so acquired (including the reasonable and customary costs of
installation of such acquired assets) or constructed, (ii) the
Indebtedness secured by such Liens is otherwise permitted to be
incurred hereunder and (iii) such Liens do not encumber any
Collateral.
SECTION 7.2.3. Restricted Payments, etc. The Borrower will not, nor
will it cause, permit or suffer any Restricted Subsidiary to, (i) declare or
pay any dividends or make any other distributions (including through mergers,
liquidations or other transactions commonly known as leveraged buyouts) on any
class of Equity Interests of the Borrower or such Restricted Subsidiary (other
than dividends or distributions payable or paid by a Wholly-Owned Restricted
Subsidiary of the Borrower on account of its Equity Interests held by the
Borrower or another Restricted Subsidiary or payable or paid in shares of
Capital Stock of the Borrower other than Redeemable Stock), (ii) make any
payment on account of, or set apart money for a sinking or other analogous fund
for, the purchase, redemption or other retirement of such Equity Interests,
(iii) purchase, defease, redeem or otherwise retire any Subordinated
Indebtedness or (iv) make any Restricted Investment, either directly or
indirectly, whether in cash or property or in obligations of the Borrower or
any Restricted Subsidiary (all of the foregoing being called "Restricted
Payments"), unless, (x) in the case of a dividend, such dividend is payable not
more than 60 days after the date of declaration and (y) after giving effect to
such proposed Restricted Payment, all the conditions set forth in clauses (1)
through (3) below are satisfied (A) at the date of declaration (in the case of
any dividend), (B) at the date of such setting apart (in the case of any such
fund) or (C) on the date of such other payment or distribution (in the case of
any other Restricted Payment) (each such date being referred to as a
"Restricted Payment Computation Date"):
(1) no Default or Event of Default has occurred and is
continuing or would result from the making of such Restricted Payment;
(2) at the Restricted Payment Computation Date for such
Restricted Payment and after giving effect to such Restricted Payment
on a pro forma basis, the Borrower or such Restricted Subsidiary could
incur $1.00 of additional Indebtedness pursuant to the first sentence
of Section 7.2.1; and
(3) the aggregate amount of Restricted Payments declared,
paid or distributed subsequent to the date hereof (including the
proposed Restricted Payment) will not exceed the sum of (i) 50% of the
cumulative Consolidated Net Income of the Borrower for the period
subsequent to July 1, 1997 to and including the last day of the
Borrower's last fiscal quarter ending prior to the Restricted Payment
Computation Date (each such period to constitute a "Restricted Payment
Computation Period") (or, if such aggregate cumulative Consolidated
Net Income is a loss, minus 100% of such loss of the Borrower during
the Restricted Payment Computation Period), (ii) the aggregate Net
Cash Proceeds of the issuance or sale or the exercise (other than to a
Subsidiary or an employee stock ownership plan or other trust
established by the Borrower or any of its Subsidiaries for the benefit
of their employees) of the Borrower's Equity Interests (other than
Redeemable Stock) subsequent to the Closing Date, (iii) the aggregate
Net Cash Proceeds of the issuance or sale (other than to a Subsidiary)
of any debt securities of the Borrower that have been converted into
or exchanged for Equity Interests (other than Redeemable Stock) of the
Borrower to the extent such debt securities were originally issued or
sold for cash, plus the aggregate Net Cash Proceeds received by the
Borrower at the time of such conversion or exchange, in each case
subsequent to the Closing Date, (iv) cash
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contributions to the Borrower's capital subsequent to the Closing Date
and (v) $5,000,000.
If no Default or Event of Default has occurred and is continuing or would occur
as a result thereof, the prohibitions set forth above are subject to the
following exceptions: (A) Restricted Investments in obligations representing a
portion of the proceeds of any Asset Sale consummated in accordance with
Section 7.2.6; provided, however, that such Restricted Investments will be
excluded in the calculation of the amount of Restricted Payments previously
made for purposes of clause (3) above; (B) any purchase or redemption of Equity
Interests or Subordinated Indebtedness made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Equity Interests of the
Borrower (other than Redeemable Stock and other than Equity Interests issued or
sold to a Subsidiary or an employee stock ownership plan); provided, however,
that (x) such purchase or redemption will be excluded in the calculation of the
amount of Restricted Payments previously made for purposes of clause (3) above
and (y) the Net Cash Proceeds from such sale will be excluded for purposes of
clause (3) above to the extent utilized for purposes of such purchase or
redemption; (C) any purchase or redemption of Subordinated Indebtedness of the
Borrower made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Indebtedness of the Borrower or any Restricted
Subsidiary which is permitted to be issued pursuant to Section 7.2.1; provided,
however, that such purchase or redemption will be excluded in the calculation
of the amount of Restricted Payments previously made for purposes of clause (3)
above; (D) the repurchase, redemption or other acquisition or retirement for
value of Capital Stock of the Borrower or the Parent held by management or
other employees of the Borrower, the Parent or any Restricted Subsidiary
pursuant to any shareholders agreement, management or employee stock option
agreement or management or employee equity subscription agreement, in
accordance with the provisions of any such arrangement, in an amount not
greater than $500,000 in any calendar year plus the portion of any such amounts
which remains unused at the end of the two prior calendar years, but in no
event to exceed $1,500,000 in any calendar year; provided, however, that any
such repurchase, redemption, acquisition or retirement for value will be
excluded in the calculation of the amount of Restricted Payments previously
made for purposes of clause (3) above; (E) payments to the Parent pursuant to
any tax sharing arrangement so long as payments thereunder do not exceed the
amount of the Borrower and its consolidated subsidiaries' share of Federal and
state income taxes actually paid or to be paid by the Parent; provided,
however, that such payments will be excluded in the calculation of the amount
of Restricted Payments previously made for purposes of clause (3) above; (F)
payments to the Parent to perform accounting, legal, corporate reporting and
administrative functions in the ordinary course of business in an amount not
greater than $500,000 in any calendar year, or to pay required fees in
connection with the Acquisition and related transactions, including the
registration under applicable laws and regulations of its debt or equity
securities issued in connection therewith; provided, however, that such
payments will be excluded in the calculation of the amount of Restricted
Payments previously made for purposes of clause (3) above; and (G) Investments
described in clause (vi) of the definition of Permitted Investments; provided,
however, that such Investments will be included in the calculation of the
amount of Restricted Payments previously made for purposes of clause (3) above.
For purposes of this Section, (a) the amount of any Restricted Payment
declared, paid or distributed in property of the Borrower or any Restricted
Subsidiary will be deemed to be the net book value of any such property that is
intangible property and the Fair Market Value (as determined by and set forth
in a resolution of the Board of Directors) of any such property that is
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tangible property at the Restricted Payment Computation Date, in each case,
after deducting related reserves for depreciation, depletion and amortization;
(b) the amount of any Restricted Payment declared, paid or distributed in
obligations of the Borrower or any Restricted Subsidiary will be deemed to be
the principal amount of such obligations as of the date of the adoption of a
resolution by the board of directors of the Borrower or such Restricted
Subsidiary authorizing such Restricted Payment; and (c) a distribution to
holders of the Borrower's Equity Interests of (i) shares of Capital Stock or
other Equity Interests of any Restricted Subsidiary of the Borrower or (ii)
other assets of the Borrower, without, in either case, the receipt of
equivalent consideration therefor will be regarded as the equivalent of a cash
dividend equal to the excess of the Fair Market Value of the Equity Interests
or other assets being so distributed at the time of such distribution over the
consideration, if any, received therefor. Not later than the date of the
making of any such Restricted Payment, the Borrower shall deliver to the
Administrative Agent a certificate of an Authorized Officer certifying that
such Restricted Payment is permitted, attaching a copy of the applicable
resolution of the Board of Directors pursuant to which the value of the
Restricted Payment to be made was determined and setting forth the basis upon
which the calculations required by this Section were computed.
SECTION 7.2.4. Payment Restrictions Affecting Restricted
Subsidiaries. The Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (i) pay dividends or make any
other distribution to the Borrower or its Restricted Subsidiaries on its Equity
Interests, (ii) pay any Indebtedness owed to the Borrower or any other
Restricted Subsidiary, (iii) make loans or advances to the Borrower or any
other Restricted Subsidiary or (iv) transfer any of its property or assets to
the Borrower or any other Restricted Subsidiary, except:
(a) consensual encumbrances or restrictions contained in or
created pursuant to the Revolving Credit Agreement, the Security
Documents, the Intercreditor Agreement and other Existing
Indebtedness;
(b) consensual encumbrances or restrictions in the Senior
Notes (if any) and the Senior Note Indenture;
(c) any restriction, with respect to a Restricted Subsidiary
of the Borrower that is not a Subsidiary of the Borrower on the
Closing Date, in existence at the time such entity becomes a
Restricted Subsidiary of the Borrower; provided that such encumbrance
or restriction is not created in anticipation of or in connection with
such entity becoming a Subsidiary of the Borrower and is not
applicable to any Person or the properties or assets of any Person
other than a Person that becomes a Subsidiary;
(d) any encumbrances or restrictions pursuant to an
agreement effecting a refinancing of Indebtedness referred to in
clause (a) or (c) of this Section or contained in any amendment to any
agreement creating such Indebtedness, provided that the encumbrances
and restrictions contained in any such refinancing or amendment are
not materially more restrictive taken as a whole (as determined in
good faith by the chief financial officer of the Borrower) than those
provided for in such Indebtedness being refinanced or amended;
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(e) encumbrances or restrictions contained in any other
Indebtedness permitted to be incurred subsequent to the Closing Date
pursuant to Section 7.2.1, provided that any such encumbrances or
restrictions are not materially more restrictive taken as a whole (as
determined in good faith by the chief financial officer of the
Borrower) than the most restrictive of those provided for in the
Indebtedness referred to in clause (a) or (c) of this Section;
(f) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease;
(g) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary in compliance with the provisions hereof
pending the closing of such sale or disposition; or
(h) any encumbrance or restriction due to applicable law.
SECTION 7.2.5. Consolidation, Merger, etc. (a) The Borrower will not
consolidate with or merge into, or sell, assign, convey, lease or transfer all
or substantially all of its assets and those of its Subsidiaries taken as a
whole to, any Person, unless
(i) the resulting, surviving or transferee Person expressly
assumes all the obligations of the Borrower under this Agreement, the
Term Notes and each other Loan Document to which the Borrower is a
party pursuant to amendments in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders;
(ii) such Person is organized and existing under the laws of
the United States of America, a state thereof or the District of
Columbia;
(iii) at the time of the occurrence of such transaction and
after giving effect to such transaction on a pro forma basis, such
Person could incur $1.00 of additional Indebtedness pursuant to the
first sentence of Section 7.2.1 (assuming a market rate of interest
with respect to such additional Indebtedness);
(iv) at the time of the occurrence of such transaction and
after giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of such Person is equal to or greater than the
Consolidated Net Worth of the Borrower immediately prior to such
transaction;
(v) each Subsidiary Guarantor, to the extent applicable, will
acknowledge and confirm in writing that its Subsidiary Guaranty will
apply to such Person's obligations under this Agreement, the Term
Notes and each other Loan Document to which it is (or will become) a
party; and
(vi) immediately before and immediately after giving effect
to such transaction and treating any Indebtedness which becomes an
obligation of the Borrower or any of its Restricted Subsidiaries or of
such Person as a result of such transaction as having been incurred by
the Borrower or such Restricted Subsidiary or such Person, as the case
may
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be, at the time of such transaction, no Default or Event of Default
shall have occurred and be continuing.
The Borrower shall deliver to the Administrative Agent prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel, covering clauses (i), (ii), (v) and
(vi) above, stating that the proposed transaction and such amendments comply
with this Agreement.
(b) No Subsidiary Guarantor will, and the Borrower will not permit a
Subsidiary Guarantor to, in a single transaction or series of related
transactions merge or consolidate with or into any other Person (other than the
Borrower or any other Subsidiary Guarantor), or sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to any Person (other than the Borrower or any other Subsidiary
Guarantor) unless at the time and giving effect thereto: (i) either (1) such
Subsidiary Guarantor is the continuing corporation or (2) the Person (if other
than such Subsidiary Guarantor) formed by such consolidation or into which such
Subsidiary Guarantor is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition the properties and
assets of such Subsidiary Guarantor is a corporation duly organized and validly
existing under the laws of the United States of America, any state thereof or
the District of Columbia and expressly assumes all the obligations of such
Guarantor under the Subsidiary Guaranty and each other Loan Document to which
it is a party pursuant to amendments in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders; and (ii)
immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing. Such
Subsidiary Guarantor shall deliver to the Administrative Agent prior to the
consummation of the proposed transaction, in form and substance reasonably
satisfactory to the Administrative Agent, an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or disposition and such amendments, if
required, comply with this Agreement. The provisions of this paragraph (b)will
not apply to any transaction (including any Asset Sale made in accordance with
Section 7.2.6) with respect to any Subsidiary Guarantor if the Guaranty of such
Subsidiary Guarantor is released in connection with such transaction in
accordance with the applicable provisions of this Agreement and the other Loan
Documents. Upon any sale, exchange, transfer or other disposition to any Person
of all of the Borrower's or a Restricted Subsidiary's Equity Interests in, or
all or substantially all of the assets of, any Subsidiary Guarantor which is in
compliance with this Agreement and the other Loan Documents, such Subsidiary
Guarantor will be released from all its obligations under the Subsidiary
Guaranty.
(c) Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer or disposition of all or substantially all of
the properties and assets of the Borrower or any Subsidiary Guarantor in
accordance with the foregoing provisions of this Section 7.2.5, the successor
Person formed by such consolidation or into which the Borrower or such
Subsidiary Guarantor, as the case may be, is merged or the successor Person to
which such sale, assignment, conveyance, transfer, lease or disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Borrower or such Subsidiary Guarantor, as the case may be, under
this Agreement, the Term Notes and/or the Subsidiary Guaranty, as the case may
be, with the same effect as if such successor had been named as the Borrower or
such Subsidiary Guarantor, as the case may be, herein, in the Term Notes and/or
in the Subsidiary Guaranty, as the case may be. When a successor assumes all
the obligations of its predecessor under this Agreement, the Term Notes or the
Subsidiary Guaranty, as the case may be, the predecessor
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shall be released from those obligations; provided that in the case of a
transfer by lease, the predecessor shall not be released from the payment of
principal and interest on, or any other Obligation relating to, this Agreement,
the Term Notes or the Subsidiary Guaranty, as the case may be.
SECTION 7.2.6. Asset Dispositions, etc. (a) The Borrower will not,
and will not permit any Restricted Subsidiary to, make any Asset Sale (other
than to the Borrower or other Restricted Subsidiary) unless (i) the Borrower or
such Restricted Subsidiary receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the assets sold or otherwise
disposed of, and at least 80% of the consideration received by the Borrower or
such Restricted Subsidiary from such Asset Sale is in the form of cash and no
portion thereof shall consist of inventory or accounts receivable or other
property that would become subject to a Lien held by any other creditor of the
Borrower or of any Restricted Subsidiary of the Borrower; provided, however,
that the amount of any cash equivalent or note or other obligation received by
the Borrower or such Restricted Subsidiary from the transferee in any such
transaction that is converted within 90 days by the Borrower or such Restricted
Subsidiary into cash will be deemed upon such conversion to be cash for
purposes of this provision; (ii) to the extent such Asset Sale involves
Collateral, (x) the consent of the Required Lenders shall be obtained prior to
the consummation of such sale and (y) the Borrower shall cause the aggregate
cash proceeds received by the Borrower or such Restricted Subsidiary in respect
of such Asset Sale which are allocated to the Collateral, net of the items set
forth in clauses (i) through (vi) of the definition of Net Proceeds (the
"Collateral Proceeds") to be deposited with the Collateral Agent in the
Intercreditor Collateral Account as and when received by the Borrower or any of
its Restricted Subsidiaries and shall otherwise comply with the Intercreditor
Agreement provided, that no Senior Indebtedness other than the Obligations, the
Senior Notes or Indebtedness described in clause (j) of Section 7.2.2 may be
permanently repaid or prepaid out of, or on account of, any Collateral
Proceeds; and (iii) the Net Proceeds received by the Borrower or such
Restricted Subsidiary from such Asset Sale are applied in accordance with the
following paragraphs.
(b) When the aggregate amount of Net Proceeds from all Asset Sales
since the Closing Date exceeds $35,000,000, the Borrower shall apply, subject
to Section 3.1.2 and the provisions, if applicable, of the Intercreditor
Agreement, 100% of such Net Proceeds in excess of $35,000,000 (including,
without limitations, 100% of the Net Proceeds of each Asset Sale subsequent to
the Asset Sale which results in Net Proceeds from all Asset Sales since the
date hereof exceeding $35,000,000) to prepay the Term Loans on or prior to the
tenth Business Day following the date on which such Net Proceeds are received
by the Borrower or any of its Restricted Subsidiaries at a price equal to 100%
of the principal amount thereof, plus accrued interest thereon to the date of
prepayment.
(c) If all or a portion of the Net Proceeds of any Asset Sale are not
required to be applied to prepay the Term Loans pursuant to the preceding
paragraph (b), then the Borrower may, within 365 days of such Asset Sale,
invest such Net Proceeds in the Borrower or in one or more Restricted
Subsidiaries of the Borrower engaged in a Related Business. The amount of such
Net Proceeds not used to or invested as set forth in this paragraph shall be
applied by the Borrower, subject to Section 3.1.2 and the provisions, if
applicable, of the Intercreditor Agreement, to the prepayment of the Term Loans
on or prior to the tenth Business Day following the date such Net Proceeds are
not so used or invested at a price equal to 100% of the principal amount
thereof, plus accrued interest thereon to the date of prepayment; provided,
however, that to the extent
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such Net Proceeds are subject to Section 1009 of the Senior Note Indenture the
principal amount of Term Loans required to be prepaid on account of such Net
Proceeds shall not exceed the Pro Rata Share (as defined in the Intercreditor
Agreement) of such Net Proceeds applicable to the Term Loans.
(d) Until such time as the Net Proceeds from any Asset Sale are
applied in accordance with this Section, such Net Proceeds will be segregated
from the other assets of the Borrower and its Subsidiaries and invested in cash
or Eligible Investments, except that the Borrower or any Restricted Subsidiary
may use any Net Proceeds pending the utilization thereof in the manner (and
within the time period) described above, and (except as to Collateral Proceeds)
to repay revolving loans (under the Revolving Credit Agreement or otherwise)
without a permanent reduction of the commitment thereunder.
(e) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
restriction other than restrictions not more restrictive taken as a whole (as
determined in good faith by the chief financial officer of the Borrower) than
those in effect under Existing Indebtedness and the Revolving Credit Agreement
that would materially impair the ability of the Borrower to comply with the
provisions of this Section.
(f) If at any time any non-cash consideration (other than any such
consideration consisting of inventory, accounts receivable and certain related
assets securing or permitted to secure the Revolving Credit Agreement) is
received by the Borrower or any Restricted Subsidiary, as the case may be, in
connection with any Asset Sale of assets which includes Collateral, such non-
cash consideration shall be made subject to the Lien of the Security Documents
in the manner contemplated in the Intercreditor Agreement to the extent of the
purchase price allocated to the Collateral. If and when any such non-cash
consideration received from any Asset Sale (whether or not relating to
Collateral) is converted into or sold or otherwise disposed of for cash, then
such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Proceeds thereof shall be applied in accordance with this
Section 7.2.6.
(g) All Insurance Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered by the Borrower or a Restricted
Subsidiary, as the case may be, to the Collateral Agent contemporaneously with
receipt by the Borrower or such Restricted Subsidiary and be deposited into the
Intercreditor Collateral Account and applied in accordance with the applicable
provisions of the Intercreditor Agreement. Insurance Proceeds and Net Awards
so deposited that may be applied by the Borrower or a Restricted Subsidiary to
effect a Restoration of the affected Collateral under the applicable Security
Document may be withdrawn from the Intercreditor Collateral Account only in
accordance with the applicable provisions of the Intercreditor Agreement.
Insurance Proceeds and Net Awards so deposited that are not applied to effect a
Restoration of the affected Collateral under the applicable Security Document
may only be withdrawn in accordance with applicable provisions of the
Intercreditor Agreement.
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SECTION 7.2.7. Modification of Certain Agreements. The Borrower will
not, and will not permit any Restricted Subsidiary to, amend, modify or
supplement, or permit or consent to any amendment, modification or supplement
of, (i) the Security Documents in any manner or to any extent that would
constitute an Event of Default hereunder or under the Security Documents
(provided that this Agreement and the Security Documents may be amended,
modified or supplemented as set forth in Section 10.1), (ii) the Purchase
Agreement or any Acquisition Agreement, except to the extent such amendment,
modification or supplement would not have an adverse effect on the Lenders,
(iii) the Senior Notes or the Senior Note Indenture, except to the extent such
amendment, modification or supplement would not have a material adverse effect
on the Lenders (it being acknowledged by the Borrower that, without limitation,
any increase in the interest rate on the Senior Notes, any reduction in the
tenor or average life thereof and any modification of (including any addition
to) the covenants, defaults and remedies set forth therein (without a
corresponding modification to the covenants, defaults, defaults and remedies
applicable to the Obligations) which make such provisions more burdensome as a
whole to the Borrower and the Subsidiary Guarantors shall in each case be
deemed to be materially adverse to the Lenders) or (iv) the Revolving Credit
Agreement, except to the extent such amendment, modification or supplement
would not have a material adverse effect on the Lenders (it being acknowledged
by the Borrower that the extension or similar modification of any grace period
set forth therein shall in each case be deemed to be materially adverse to the
Lenders).
SECTION 7.2.8. Transactions with Affiliates. (a) The Borrower and
its Restricted Subsidiaries will not, directly or indirectly, enter into any
transaction or series of related transactions with or for the benefit of any of
their respective Affiliates other than with the Borrower or any Restricted
Subsidiaries, except on an arm's-length basis and if (x)(i) in the case of any
such transaction in which the aggregate rental value, remuneration or other
consideration (including the value of a loan), together with the aggregate
rental value, remuneration or other consideration (including the value of a
loan) of all such other transactions consummated in the year during which such
transaction is proposed to be consummated, exceeds $750,000, the Borrower
delivers Board Resolutions to the Administrative Agent evidencing that the
Board of Directors and the Independent Directors that are disinterested each
have (by a majority vote) determined in good faith that the aggregate rental
value, remuneration or other consideration (including the value of any loan)
inuring to the benefit of such Affiliate from any such transaction is not
greater than that which would be charged to or extended by the Borrower or its
Subsidiaries, as the case may be, on an arm's-length basis for similar
properties, assets, rights, goods or services by or to a Person not affiliated
with the Borrower or its Subsidiaries, as the case may be, and (ii) in the case
of any such transaction in which the aggregate rental value, remuneration or
other consideration (including the value of any loan), together with the
aggregate rental value, remuneration or other consideration (including the
value of any loan) of all such other transactions consummated in the year
during which such transactions are proposed to be consummated, exceeds
$7,500,000, the Borrower delivers to the Administrative Agent Board Resolutions
as described in clause (x)(i) above and an opinion of a nationally recognized
investment banking firm, unaffiliated with the Borrower and the Affiliate which
is party to such transaction, to the effect that the aggregate rental price,
remuneration or other consideration (including the value of a loan) inuring to
the benefit of such Affiliate from any such transaction is not greater than
that which would be charged to or extended by the Borrower or its Subsidiaries,
as the case may be, on an arm's-length basis for similar properties, assets,
rights, goods or services by or to a Person not affiliated with the Borrower or
its Subsidiaries, as the case may be, and (y) all such transactions referred to
in clauses (x)(i) and (ii) above are entered
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into in good faith. Any transaction required to be approved by Independent
Directors pursuant to the preceding paragraph must be approved by at least one
such Independent Director.
(b) The provisions of the preceding paragraph do not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 7.2.3, (ii) any
Investment made in Kemwater during a period of three years following the
Closing Date, provided that such Investment matures or is required to be
redeemed within one year of its being made, (iii) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors, (iv) loans or advances to
employees in the ordinary course of business consistent with past practices,
not to exceed $500,000 aggregate principal amount outstanding at any time, (v)
the payment of fees and compensation to, and indemnity provided on behalf of,
officers, directors, employees or consultants of the Borrower or any of its
Subsidiaries, as determined by the board of directors of the Borrower or any of
its Subsidiaries in good faith and (vi) Existing Affiliate Agreements,
including amendments thereto entered into after the Closing Date provided that
the terms of any such amendment either (A) are not, in the aggregate, less
favorable to the Borrower than the terms of such agreement prior to such
amendment, or (B) if such terms are, in the aggregate, less favorable to the
Borrower, such amendment satisfies the requirements of the preceding paragraph.
SECTION 7.2.9. Impairment of Security Interest. (a) The Borrower
will not, and will not cause or permit any Restricted Subsidiaries to, take or
omit to take any action which action or omission might or would have the result
of affecting or impairing the Liens and security interest in favor of the
Collateral Agent for the benefit of the Lenders with respect to the Collateral
and the Borrower will not grant to any Person, or suffer any Person to have any
interest whatsoever in the Collateral, in each case other than as otherwise
permitted by this Agreement or the Security Documents.
(b) The Borrower will not, and will not cause or permit any
Restricted Subsidiaries to, enter into any agreement or instrument that by its
terms requires that the proceeds received from any sale of Collateral be
applied to repay, redeem, defease or otherwise acquire or retire any
Indebtedness of any Person, other than pursuant to this Agreement, the Senior
Note Indenture or any instrument governing Indebtedness permitted to be secured
by a Lien on the Collateral pursuant to Section 7.2.2. A release of any of the
Collateral strictly in accordance with the terms and conditions of this
Agreement and the Security Documents will not be deemed for any purpose to be
an impairment of security under this Agreement.
SECTION 7.2.10. Stock of Subsidiaries. The Borrower (a) will not,
and will not permit any Wholly-Owned Restricted Subsidiary of the Borrower to,
transfer, convey, sell or otherwise dispose of any Capital Stock of any Wholly-
Owned Restricted Subsidiary of the Borrower (other than All-Pure and its
Subsidiaries) to any Person (other than the Borrower or a Wholly-Owned
Restricted Subsidiary of the Borrower), unless (i) such transfer, conveyance,
sale or other disposition is of all the Capital Stock of such Wholly-Owned
Restricted Subsidiary and (ii) the Net Proceeds from such transfer, conveyance,
sale, lease or other disposition are applied in accordance with Section 7.2.6,
and (b) will not permit any Wholly-Owned Restricted Subsidiary of the Borrower
(other than All-Pure and its Subsidiaries) to issue any of its Equity Interests
(other than, if necessary, Capital Stock constituting directors' qualifying
shares or interests held by directors or shares or interests required to be
held by foreign nationals, to the extent mandated
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by applicable law) to any Person other than to the Borrower or a Wholly-Owned
Restricted Subsidiary of the Borrower.
SECTION 7.2.11. Sale and Leaseback. The Borrower will not, and will
not permit any Restricted Subsidiary to, enter into any Sale and Leaseback
Transaction unless (i) at the time of the occurrence of such transaction and
after giving effect to such transaction and (x) in the case of a Sale and
Leaseback Transaction which is a Capitalized Lease Obligation, giving effect to
the Indebtedness in respect thereof, and (y) in the case of any other Sale and
Leaseback Transaction, giving effect to the Attributable Indebtedness in
respect thereof, the Borrower or such Restricted Subsidiary could incur $1.00
of additional Indebtedness pursuant to the first sentence of Section 7.2.1,
(ii) at the time of the occurrence of such transaction, the Borrower or such
Restricted Subsidiary could incur Indebtedness secured by a Lien on property in
a principal amount equal to or exceeding the Attributable Indebtedness in
respect of such Sale and Leaseback Transaction pursuant to Section 7.2.2, and
(iii) the transfer of assets in such Sale and Leaseback Transaction is
permitted by, and the Borrower applies the proceeds of such transaction in
compliance, with Section 7.2.6.
SECTION 7.2.12. Limitation on Applicability of Certain Covenants.
Notwithstanding anything to the contrary herein, the covenants set forth in
Sections 7.2.1, 7.2.2, 7.2.3, 7.2.4, 7.2.6, and 7.2.8 hereof shall not apply to
transactions effected pursuant to and in accordance with the Contingent Payment
Agreement and amounts related to such transactions shall not be required to be
included in any calculation required by any such covenant. Such transactions
include (i) any payment made by the Borrower or a Restricted Subsidiary, (ii)
any assets or property transferred by the Borrower or a Restricted Subsidiary,
(iii) the application of any proceeds received by the Borrower or any
Restricted Subsidiary in connection with any transfer of assets or property
made by such Person, (iv) any escrow or segregation of moneys to be paid by the
Borrower or a Restricted Subsidiary, (v) any Investment of such escrowed or
segregated moneys by the Borrower or a Restricted Subsidiary or any other
Investment under the Contingent Payment Agreement, (vi) any obligation of the
Borrower or a Restricted Subsidiary to make any such payments or to effect any
such escrow or segregation of moneys, (vii) any Indebtedness incurred by the
Borrower or a Restricted Subsidiary that is non-recourse to the assets of the
Borrower, such Restricted Subsidiary or any other Restricted Subsidiary, other
than the borrower's interest in Basic Investments, Inc., Victory Valley Land
Company, L.P., the Excess Land and/or any other assets or funds held under the
Contingent Payment Agreement, and as to which neither the Borrower nor any
Restricted Subsidiary (other than the borrower) provides credit support or is
directly or indirectly liable, or (viii) any Lien incurred by the Borrower or
any Restricted Subsidiary in connection with Indebtedness described in clause
(vii) above that does not extend to assets of the Borrower or any Restricted
Subsidiary other than such Person's interest in Basic Investments, Inc.,
Victory Valley Land Company, L.P., the Excess Land and/or any other assets or
funds held under the Contingent Payment Agreement.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
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SECTION 8.1.1. Non-Payment of Obligations. (a) The Borrower shall
default in the payment or prepayment of any principal of, or premium with
respect to, any Term Loan when due or (b) any Obligor (including the Borrower)
shall default (and such default shall continue unremedied for a period of five
Business Days) in the payment when due of any interest or fee with respect to
any Term Loan or any other monetary Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
the Borrower, any other Obligor or the Parent made or deemed to be made
hereunder or in any other Loan Document executed by it or any other writing or
certificate (including each Closing Date Certificate) furnished by or on behalf
of the Borrower, any other Obligor or Parent to any Agent, the Arranger or any
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to Article
V) is or shall be incorrect when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
Any Obligor (including the Borrower) shall default in the due performance and
observance of any of its obligations under Sections 7.1.7, 7.1.9, 7.2.1,
7.2.2, 7.2.3, 7.2.5, 7.2.6, 7.2.10 or 7.2.11.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
Any Obligor (including the Borrower) shall default in the due performance and
observance of any other agreement contained herein or in any other Loan
Document executed by it, and such default shall continue unremedied for a
period of 30 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent at the direction of the Required Lenders
specifying such default and demanding that it be remedied.
SECTION 8.1.5. Disaffirmation of Obligations. (a) The Borrower shall
either deny or disaffirm its obligations under this Agreement or any other Loan
Document or (b) any Subsidiary Guarantor or other Obligor shall either deny or
disaffirm its obligations under the Subsidiary Guarantor or any other Loan
Document executed by it.
SECTION 8.1.6. Effectiveness and Enforceability of Guarantees. The
Subsidiary Guaranty for any reason ceases to be, or is asserted in writing by
any Subsidiary Guarantor or the Borrower not to be, in full force and effect
and enforceable in accordance with its terms, except to the extent contemplated
in the Subsidiary Guaranty).
SECTION 8.1.7. Default on Other Indebtedness. A default shall occur
(i) in the payment when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness, other than Indebtedness
described in Section 8.1.1, of the Borrower or any of its Subsidiaries having a
principal amount in excess of $5,000,000 or (ii) a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause such Indebtedness to become
due and payable prior to its expressed maturity.
SECTION 8.1.8. Judgments. A final judgment or final judgments for
the payment of money are entered by a court or courts of competent jurisdiction
against the Borrower or any of its Restricted Subsidiaries and such judgment or
judgments remain undischarged, unbonded or unstayed for a period of sixty days,
provided that the aggregate of all such judgments (other than
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any judgment as to which, and only to the extent, a reputable insurance company
has acknowledged coverage of such claim in writing) equals or exceeds
$5,000,000.
SECTION 8.1.9. Bankruptcy, Insolvency, etc.
(a) The Borrower, any Subsidiary Guarantor or any other
Restricted Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case in which it is a debtor,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) admits in writing its inability to pay debts as
the same become due; or
(b) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Borrower, any
Subsidiary Guarantor or any other Restricted Subsidiary in an
involuntary case in which it is a debtor,
(ii) appoints a Custodian of the Borrower, any
Subsidiary Guarantor or any other Restricted Subsidiary or for
all or substantially all of their property,
(iii) orders the liquidation of the Borrower, any
Subsidiary Guarantor or any other Restricted Subsidiary,
and the order or decree remains unstayed and in effect for sixty days.
SECTION 8.1.10. Impairment of Security, etc. Any of the Security
Documents ceases to give the Collateral Agent a valid and perfected Lien of the
priority required thereby or the rights, powers and privileges purported to be
created thereby (other than in accordance with their respective terms), or any
of the Security Documents is declared null and void, or the Borrower, PCAC, PAI
or any other Obligor denies any of its obligations under any of the Security
Documents or any Collateral becomes subject to any Lien other than the Liens
created or permitted by the Security Documents or this Agreement.
SECTION 8.2. Action if Bankruptcy, etc. If any Event of Default
described in clause (a) or (b) of Section 8.1.9 shall occur the Term Loan
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Term Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
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SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than an Event of Default described in clause (a) or (b) of
Section 8.1.9) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Term Loans and other Obligations to be due
and payable and/or declare the Term Loan Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Term
Loans and other Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Term Loan Commitments shall
terminate.
ARTICLE IX
THE AGENTS
SECTION 9.1. Appointment of Agents. Each Lender hereby irrevocably
appoints DLJ as Syndication Agent, Salomon as Documentation Agent and BofA as
its Administrative Agent under and for purposes of this Agreement, the Term
Notes and each other Loan Document. Each Lender authorizes the Administrative
Agent to act on behalf of such Lender under this Agreement, the Term Notes and
each other Loan Document and, in the absence of other written instructions from
the Required Lenders received from time to time by the Administrative Agent
(with respect to which the Administrative Agent agrees that it will comply,
except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto.
The provisions of this Article IX are solely for the benefit of the Agents and
Lenders, and neither the Borrower nor any other Obligor shall have any rights
as a third-party beneficiary of any of the provisions hereof other than with
respect to an Agent's resignation. In performing their functions and duties
under this Agreement and each other Loan Document, the Agents shall act solely
as agents of the Lenders and do not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
the Borrower or any other Obligor.
SECTION 9.2. Nature of Duties of the Agents. The Agents shall have
no duties, obligations or responsibilities except those expressly set forth in
this Agreement and each other Loan Document. Neither the Agents nor any of
their officers, directors, employees or agents shall be liable for any action
taken or omitted by it as such hereunder or under each other Loan Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agents shall be mechanical
and administrative in nature; the Agents shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any other Loan Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agents
any obligations in respect of this Agreement or any other Loan Document except
as expressly set forth herein or therein. No duty to act, or refrain from
acting, and no other obligation whatsoever, shall be implied on the basis of or
imputed in respect of any right, power or authority granted to any Agent or
shall become effective in the event of any temporary or partial exercise of
such rights, power or authority.
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SECTION 9.3. General Immunity. Neither the Agents, the Arranger nor
any of their directors, officers, agents, attorneys or employees shall be
liable to any Lender for any action taken or omitted to be taken by it or them
under this Agreement or any other Loan Document or in connection herewith or
therewith except for its or their own willful misconduct or gross negligence.
Without limiting the generality of the foregoing, the Agents and the Arranger:
(i) shall not be responsible to the Lenders for any recitals, statements,
warranties or representations under this Agreement or any other Loan Document
or any agreement or document relative hereto or thereto or for the financial or
other condition of any Obligor, (ii) shall not be responsible for the
authenticity, accuracy, completeness, value, validity, effectiveness, due
execution, legality, genuineness, enforceability, collectibility or sufficiency
of this Agreement or any other Loan Document or any other agreements or any
assignments, certificates, requests, financial statements, projections,
notices, schedules or opinions of counsel executed and delivered pursuant
hereto or thereto, (iii) shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Loan Document on the part of Obligors or of any of the
terms of any such agreement by any party hereto or thereto and shall have no
duty to inspect the property (including the books and records) of any Obligor,
(iv) shall have no obligation whatsoever to the Lenders or to any other Person
to assure that the Collateral exists or is owned by the Borrower or another
Obligor or is cared for, protected or insured or that the Liens granted to the
Administrative Agent herein or in any other Loan Document or pursuant hereto or
thereto have been properly or sufficiently or lawfully created, perfected,
protected, enforced, realized upon or are entitled to any particular priority,
and (v) shall incur no liability under or in respect of this Agreement or any
other Loan Document or any other document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable,
telex, telecopier or similar form of facsimile transmission) believed by the
Agents to be genuine and signed or sent by the proper party. The Agents may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by the Agents and shall not be
liable for any action taken or omitted to be taken in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 9.4. Successor. Each of the Syndication Agent and the
Documentation Agent may resign as such upon one Business Day's notice to the
Borrower and the Administrative Agent. The Administrative Agent may resign as
such at any time upon at least 30 days' prior notice to the Borrower and all
Lenders. If the Administrative Agent at any time shall resign, the Required
Lenders may, with the prior consent of the Borrower (which consent shall not be
unreasonably withheld), appoint another Lender as a successor Administrative
Agent which shall thereupon become the Administrative Agent hereunder. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 20 days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the United States or a United States
branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from
the retiring Administrative Agent such documents of transfer and assignment as
such successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under
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this Agreement. After any retiring Administrative Agent's resignation
hereunder as the Administrative Agent, the provisions of (i) this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement, and (ii) Section
10.3 and Section 10.4 shall continue to inure to its benefit.
SECTION 9.5. Agents in their Capacity as Lenders. With respect to
their obligation (if any) to lend under this Agreement and each other Loan
Document, the Agents shall have the same rights and powers under this Agreement
and each other Loan Document as any Lender and may exercise the same as though
it were not an Agent. "Lender" or "Lenders" shall, unless the context otherwise
indicates, include each Agent in its capacity as a Lender hereunder. The
Agents, any Lender and their respective affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking or trust business
with the Borrower or any other Obligor, as if it were not an Agent or as if it
or they were not a Lender hereunder and without any duty to account therefor to
the other parties to this Agreement; provided, that the obligations of the
Borrower under such transactions shall not be deemed to be Obligations secured
by any Collateral without the prior written agreement of the Required Lenders.
In furtherance of the foregoing, each Lender acknowledges that, as of the date
hereof, (i) BofA is not a Lender under this Agreement, (ii) BofA is the sole
lender (and the administrative agent) under the Revolving Credit Agreement and
(iii) pursuant to the Revolving Credit Agreement, BofA is the beneficiary of
certain Liens on the inventory, receivables and related general intangibles of
the Borrower and its Subsidiaries.
SECTION 9.6. Actions by Each Agent. (a) Actual Knowledge. Each
Agent may assume that no Event of Default has occurred and is continuing,
unless such Agent has actual knowledge of the Event of Default, has received
notice from the Borrower or the Borrower's independent certified public
accountants stating the nature of the Event of Default, or has received notice
from a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing.
(b) Discretion to Act. Each Agent shall have the right to request
instructions from the Required Lenders by notice to each Lender. If such Agent
shall request instructions from the Required Lenders with respect to any act or
action (including the failure to act) in connection with this Agreement or any
other Loan Document, such Agent shall be entitled to refrain from such act or
taking such action unless and until it shall have received instructions from
the Required Lenders, and such Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against any Agent as a result of such Agent
acting or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of the Required Lenders. Each Agent may give
any notice required under Article VIII hereof without the consent of any of the
Lenders unless otherwise directed by the Required Lenders in writing and will,
at the direction of the Required Lenders, give any such notice required under
Article VIII. Except for any obligation expressly set forth in this Agreement
or any other Loan Document, each Agent may, but shall not be required to,
exercise its discretion to act or not act, except that such Agent shall be
required to act or not act upon the instructions of the Required Lenders
(unless all of the Lenders are required to provide such instructions as
provided in Section 10.1) and those instructions shall be binding upon each
Agent and all Lenders; provided, however, that each Agent shall not be required
to act or not act if to do so would expose such Agent to liability or would be
contrary to this Agreement or any other Loan Document or to applicable law.
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SECTION 9.7. Right to Indemnity. Each Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other
Loan Document or in relation hereto or thereto unless it shall first be
indemnified (upon requesting such indemnification) to its satisfaction by the
Lenders against any and all liability and expense which it may incur by reason
of taking or continuing to take any such action. The Lenders further agree to
indemnify each Agent ratably in accordance with their Percentages for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby, or the enforcement of any of the
terms hereof or thereof or of any other documents, and either not indemnified
by the Borrower pursuant to Section 10.4 or with respect to which the Borrower
has failed to fully honor its indemnification obligations under Section 10.4;
provided, however, that no such liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement results from such Agent's
gross negligence or willful misconduct. Each Lender agrees to reimburse each
Agent in the amount of its pro rata share of any out-of-pocket expenses for
which such Agent is entitled to receive, but has not received, reimbursement
pursuant to this Agreement. The agreements in this Section 9.7 shall survive
the payment and fulfillment of the Obligations and termination of this
Agreement.
SECTION 9.8. Collateral Agent. Each Lender consents and agrees to
all of the terms and provisions of the Intercreditor Agreement and the other
Security Documents, as the same may be in effect from time to time or may be
amended, supplemented or otherwise modified from time to time in accordance
with the provisions of the Security Documents and this Agreement, and
authorizes and directs the Collateral Agent to act as mortgagee or secured
party with respect thereto or to act as collateral agent pursuant to the
Intercreditor Agreement (including pursuant to the appointment thereof under
Section 2.1 of the Intercreditor Agreement).
SECTION 9.9. Suits to Protect Collateral. Subject to the provisions
of the Intercreditor Agreement, the Administrative Agent, acting at the written
direction of the Required Lenders, shall have power to institute and to
maintain, or direct the Collateral Agent to institute and maintain, such suits
and proceeds as the Administrative Agent may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of any of the Security Documents or this Agreement, and such suits and
proceedings as the Administrative Agent may deem expedient to preserve or
protect its interest and the interests of the Lenders in the Collateral
(including the power to institute and maintain suits or proceedings to restrain
the enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the Liens of the Collateral Agent in the Collateral or be prejudicial to
the interests of the Lender or the Administrative Agent).
SECTION 9.10. Determinations Relating to Collateral. In the event
(i) the Administrative Agent shall receive any written request from the
Borrower or any other Obligor under any Security Document for consent or
approval with respect to any matter relating to any Collateral or the
Borrower's or such Obligor's obligations with respect thereto or (ii) there
shall be due to or from the Administrative Agent under the provisions of any
Security Document, any performance or the delivery of any instrument or (iii)
the Administrative Agent shall become aware of any nonperformance by the
Borrower or any other Obligor of any covenant or any breach of any
representation or warranty for the Borrower or any other Obligor set forth in
any
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Security Document, then, in each such event, the Administrative Agent shall be
entitled, at the expense of the Borrower and subject to Section 9.6(b), to hire
experts, consultants, agents and attorneys (including internal counsel) to
advise the Administrative Agent on the manner in which the Administrative Agent
should respond to such request or render any requested performance or response
to such nonperformance or breach. The Administrative Agent shall be fully
protected in the taking of any action recommended or approved by any such
expert, consultant, agent or attorney (including internal counsel) or agreed to
by the Required Lenders pursuant to Section 9.6(b).
SECTION 9.11. Trust Moneys. To the extent Trust Moneys consist of
insurance proceeds or condemnation or other taking awards, any such moneys
which may be used to effect a restoration of the affected Collateral shall be
permitted to be withdrawn by the Borrower and paid by the Collateral Agent in
accordance with the Intercreditor Agreement.
SECTION 9.12. Release of Collateral. Each Lender hereby irrevocably
authorizes the Administrative Agent, at its option and in its discretion, to
release any and all guaranties of the Obligations and any Lien granted to or
held by or for the benefit of the Administrative Agent with respect to any
Restricted Subsidiary or Collateral (i) upon termination of the Lenders'
obligations to make Term Loans and payment and satisfaction of all Term Loans
and all other Obligations and which the Administrative Agent has been notified
in writing are then due and payable; (ii) constituting Collateral being sold or
disposed of if the Borrower certifies to the Administrative Agent pursuant to
an Officers' Certificate that the sale or disposition is made in compliance
with the terms of this Agreement and the other Loan Documents (and, absent any
actual knowledge of the Administrative Agent to the contrary, the
Administrative Agent may rely conclusively on any such certificate, without
further inquiry); (iii) as provided in Section 7.1.8(b); (iv) constituting
property in which the Borrower or any other Obligor owned no interest at the
time the Lien was granted and at all times thereafter; or (v) if approved,
authorized or ratified in writing by the Administrative Agent at the direction
of all Lenders. Upon request by the Administrative Agent at any time, each
Lender will confirm in writing the Administrative Agent's authority to release
particular types or items of Collateral pursuant to this Section 9.12.
Section 9.13. Application of Proceeds of Collateral. The
Administrative Agent shall apply the proceeds of any collection of the
Collateral payable to the Administrative Agent for the benefit of it and the
Lenders, first, to the payment of all costs and expenses incurred by the
Administrative Agent in connection with such collection or otherwise in
connection with this Agreement or any other Loan Document, including and
together with any amounts then due and payable to the Administrative Agent (in
its capacity as such) hereunder (including any amount then due and payable to
the Administrative Agent pursuant to its rights to indemnification under
Sections 10.4 and 9.7), and, second, to the payment in full of the Obligations
then due and payable to the Lenders (such payment to be distributed among the
Lenders pro rata in accordance with the amount of such Obligations owed to them
on the date of such distribution).
SECTION 9.14. Rights and Remedies to be Exercised by Administrative
Agent Only. In the event any remedy may be exercised with respect to this
Agreement or any other Loan Document or the Collateral, the Administrative
Agent shall pursue remedies designated by the Required Lenders subject to the
proviso set forth in Section 9.6(b). Each Lender agrees that no Lender shall
have any right individually to realize upon the security created by this
Agreement or any other Loan Document.
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SECTION 9.15. Credit Decisions. Each Lender acknowledges that it
has, independently of and without reliance upon each Agent, the Arranger and
each other Lender, and based on such Lender's review of the financial
information of the Borrower and each other Obligor, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its . Each
Lender also acknowledges that it will, independently of and without reliance
upon each Agent, the Arranger and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under
this Agreement or any other Loan Document. Except as otherwise expressly
provided for herein, the Agents shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, litigation, liabilities or business of the Parent, the
Borrower or any other Obligor.
SECTION 9.16. Copies, etc. The Administrative Agent shall give
prompt notice to each Lender of each notice or request required or permitted to
be given to the Administrative Agent by the Borrower pursuant to the terms of
this Agreement (unless concurrently delivered to the Lenders by the Borrower).
The Administrative Agent will distribute to each Lender each document or
instrument received for such Lender's account and copies of all other
communications received by the Administrative Agent from the Borrower for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of this Agreement (except to the extent any such Lender shall have
provided written notice to the Administrative Agent that it is not to receive
any such documents, instruments or communications). In the event such
information is so furnished by any Agent, such Agent shall have no duty to
confirm or verify its accuracy or completeness and shall have no liability
whatsoever with respect thereto.
SECTION 9.17. The Syndication Agent, the Documentation Agent and the
Administrative Agent. Notwithstanding anything else to the contrary contained
in this Agreement or any other Loan Document, the Agents, in their respective
capacities as such, each in such capacity, shall have no duties or
responsibilities under this Agreement or any other Loan Document nor any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Syndication Agent, the Documentation
Agent or the Administrative Agent, as applicable, in such capacity except as
are explicitly set forth herein or in the other Loan Documents.
SECTION 9.18. Agreement to Cooperate. Each Lender agrees to
cooperate to the end that the terms and provisions of this Agreement may be
promptly and fully carried out. The Lenders also agree, from time to time, at
the request of the Agents, to execute and deliver any and all other agreements,
documents or instruments and to take such other actions, all as may be
reasonably necessary or desirable to effectuate the terms, provisions and
intent of this Agreement and the other Loan Documents.
SECTION 9.19. Lenders to Act as Agents. If any Collateral or
proceeds thereof at any time comes into the possession or under the control of
any Lender, such Lender shall hold such Collateral or proceeds thereof as agent
for the joint benefit of the Lenders, and will, upon receipt therefor, deliver
such Collateral or proceeds thereof to the Administrative Agent.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 10.1, or clause (a) of Section 10.10,
change the definition of "Required Lenders", increase the Term Loan
Commitment Amount or the Percentage of any Lender, reduce any fees
described in Section 3.3, release any Subsidiary Guarantor from its
obligations under the Subsidiary Guaranty or release a substantial
portion of the Collateral (except in each case as otherwise
specifically provided in this Agreement, such Subsidiary Guaranty or
applicable Security Document) or extend the Term Loan Commitment
Termination Date shall be made without the consent of each Lender
adversely affected thereby;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on or
fees payable in respect of any Term Loan or reduce the principal
amount of or rate of interest on any Term Loan shall be made without
the consent of the holder of the Term Note evidencing such Term Loan;
or
(d) affect adversely the interests, rights or obligations of
any Agent or Arranger (in its capacity as Agent or Arranger), unless
consented to by such Agent or Arranger, as the case may be.
No failure or delay on the part of any Agent, any Lender or the holder of any
Term Note in exercising any power or right under this Agreement or any other
Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Agent, any Lender
or the holder of any Term Note under this Agreement or any other Loan Document
shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party
at its address or facsimile number set forth in Schedule II hereto or, in the
case of a Lender that becomes a party hereto after the date hereof, as set
forth in the Lender Assignment Agreement pursuant to which such Lender becomes
a Lender hereunder or at such other address or facsimile number as may be
designated by such party in a
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notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when transmitted (and electronic confirmation of receipt
thereof has been received).
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to
pay on demand all expenses of each of the Agents (including the fees and out-
of-pocket expenses of counsel to the Agents (including internal counsel) and of
local counsel, if any, who may be retained by counsel to the Agents) in
connection with
(a) the syndication by the Syndication Agent and the Arranger
of the Term Loans, the negotiation, preparation, execution and
delivery of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any other Loan
Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of each
Mortgage, each Pledge Agreement and the Security Agreement and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and
all other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof or of
such Mortgage, Pledge Agreement or Security Agreement; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agents and the Lenders
harmless from all liability for, any stamp or other similar taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Term Loans made hereunder or the issuance of the Term Notes or any other Loan
Documents. The Borrower also agrees to reimburse each Agent and each Lender
upon demand for all reasonable out-of-pocket expenses (including attorneys'
fees and legal expenses (including those of internal counsel)) incurred by such
Agent or such Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations,
(y) the enforcement of any Obligations and (z) any litigation relating to the
Obligations, this Agreement or any Loan Document.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Term Loan
Commitments, the Borrower hereby, to the fullest extent permitted under
applicable law, indemnifies, exonerates and holds each Agent, the Arranger and
each Lender and each of their respective Affiliates, and each of their
respective partners, officers, directors, employees and agents, and each other
Person controlling any of the foregoing within the meaning of either Section 15
of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended (collectively, the "Indemnified Parties"),
free and harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements
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(including those of internal counsel) (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Term Loan;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of
any determination by the Required Lenders pursuant to Article V not to
fund any Borrowing);
(c) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not such Agent, such Arranger or such Lender is
party thereto;
(d) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the Release by the Borrower or
any of its Subsidiaries of any Hazardous Material;
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any Subsidiary
thereof of any Hazardous Material (including any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under
any Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary; or
(f) with respect to BofA, any action taken by BofA in its
capacity as agent under the Revolving Credit Agreement,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders
under Section 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Term Loan Commitments. The representations and warranties made by the Borrower
and each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such other Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
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SECTION 10.7. Headings. The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
TERM NOTES AND, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED THEREIN, EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the
Term Notes and the other Loan Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect thereto. Upon
the execution and delivery of this Agreement by the parties hereto, all
obligations and liabilities of the Arranger under or relating or with respect
to the Commitment Letter shall be terminated and of no further force or
effect.
SECTION 10.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that (i) the Borrower may
not assign or transfer its rights or obligations hereunder without the prior
written consent of each of the Agents and all Lenders, and (ii) the rights of
sale, assignment and transfer of the Lenders are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Term Loans and Term Notes;
Participations in Term Loans and Term Notes. Each Lender may assign, or sell
participations in, its Term Loan and Term Loan Commitment to one or more other
Persons in accordance with this Section 10.11.
SECTION 10.11.1. Assignments. Any Lender (the "Assignor Lender"),
(a) with written notice to the Administrative Agent and the
written consents of the Borrower and the Syndication Agent (which
consents shall not be (i) unreasonably delayed or withheld or (ii)
required in the case of any assignments made by the Syndication Agent
or any of its Affiliates and which consent in the case of the
Borrower, shall be deemed to have been given in the absence of a
written notice delivered by the Borrower to the Administrative Agent,
on or before the fifth Business Day after receipt by the Borrower of
such Assignor Lender's request for consent, stating, in reasonable
detail, the reasons why the Borrower proposes to withhold such
consent), may at any time assign and delegate to one or more
commercial banks or other financial institutions (including funds
engaged in the business of investing in loans), and
(b) with notice to the Borrower, the Syndication Agent and
the Administrative Agent, but without the consent of the Borrower or
any Agent, may assign and delegate to any of its Affiliates or to any
other Lender or to any Person whose investment manager or investment
advisor is the investment manager or investment advisor of such Lender
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(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), all or any fraction of such Assignor
Lender's total Term Loans and Term Loan Commitment in a minimum aggregate
amount of (i) $1,000,000 or (ii) the then remaining amount of such Lender's
Term Loans and Term Loan Commitment; provided, however, that any such Assignee
Lender will comply, if applicable, with the provisions contained in the last
sentence of Section 4.6 and provided, further, however, that, the Borrower,
each other Obligor and the Agents shall be entitled to continue to deal solely
and directly with such Assignor Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
(i) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Borrower and the Agents by such Assignor Lender and such Assignee
Lender;
(ii) such Assignor Lender and such Assignee Lender shall have
executed and delivered to the Borrower and the Agents a Lender
Assignment Agreement, accepted by the Administrative Agent; and
(iii) the processing fees described below shall have been
paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the Assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within ten Business Days after its receipt of notice that the
Administrative Agent has accepted an executed Lender Assignment Agreement, the
Borrower shall execute and deliver to the Administrative Agent (for delivery to
the relevant Assignee Lender) a new Term Note evidencing such Assignee Lender's
assigned Term Loans and Term Loan Commitments and, if the Assignor Lender has
retained Term Loans and Term Loan Commitments hereunder, a replacement Term
Note in the principal amount of the Term Loans and Term Loan Commitments
retained by the Assignor Lender hereunder (such Term Note to be in exchange
for, but not in payment of, that Term Note then held by such Assignor Lender).
Each such Term Note shall be dated the date of the predecessor Term Note. The
Assignor Lender shall mark the predecessor Term Note "exchanged" and deliver it
to the Borrower. Accrued interest on that part of the predecessor Term Note
evidenced by the new Term Note, and accrued fees, shall be paid as provided in
the Lender Assignment Agreement. Accrued interest on that part of the
predecessor Term Note evidenced by the replacement Term Note shall be paid to
the Assignor Lender. Accrued interest and accrued fees shall be paid at the
same time or times provided in the predecessor Term Note and in this Agreement.
Such Assignor Lender or such Assignee Lender must also pay a processing fee to
the Administrative Agent upon delivery of any Lender Assignment Agreement in
the amount of $2,500, unless such assignment and delegation is by a Lender to
its Affiliate or if such assignment and delegation is by a Lender to a Federal
Reserve Bank, as provided below or is otherwise consented to by the
Administrative Agent. Any attempted assignment and delegation not made in
accordance with this Section 10.11.1 shall be null and void. Nothing contained
in
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this Section 10.11.1 shall prevent or prohibit any Lender from pledging its
rights (but not its obligations to make Loans) under this Agreement and/or its
Loans and/or its Term Note hereunder to a Federal Reserve Bank in support of
Borrowings made by such Lender from such Federal Reserve Bank.
SECTION 10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each such commercial bank and
other Person being herein called a "Participant") participating interests in
any of the Term Loans, Term Loan Commitments or other interests of such Lender
hereunder; provided, however, that
(a) no participation contemplated in this Section shall
relieve such Lender from its Term Loan Commitments or its other
obligations hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Term Loan Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Agents shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and
each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or
under any other Loan Document, except that such Lender may agree with
any Participant that such Lender will not, without such Participant's
consent, agree to (i) any reduction in the interest rate or amount of
fees that such Participant is otherwise entitled to, (ii) a decrease
in the principal amount, or an extension of the final Stated Maturity
Date, of any Term Loan in which such Participant has purchased a
participating interest or (iii) a release of all or substantially all
of the collateral security under the Loan Documents or any Subsidiary
Guarantor under any Subsidiary Guaranty, in each case except as
otherwise specifically provided in a Loan Document; and
(e) the Borrower shall not be required to pay any amount
under Section 4.6, that is greater than the amount which it would have
been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude any Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR
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WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS OR THE BORROWER RELATING THERETO
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE
BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES (TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW) SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
SECTION 10.14. Waiver of Jury Trial. THE AGENTS, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS OR THE BORROWER RELATING
THERETO. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
PIONEER AMERICAS ACQUISITION CORP.
By: /s/ PHILIP J. ABLOVE
--------------------------------------
Title: Vice President and Chief
Financial Officer
DLJ CAPITAL FUNDING, INC., as the
Syndication Agent and as Lender
By: /s/ HAROLD J. PHILIPS
--------------------------------------
Title: Managing Director
SALOMON BROTHERS HOLDING
COMPANY INC, as the Documentation
Agent and as Lender
By: /s/ RICHARD H. IVERS
--------------------------------------
Title: Managing Director
BANK OF AMERICA ILLINOIS, as the
Administrative Agent
By: /s/ DAVID A. JOHANSON
--------------------------------------
Title: Vice President