<PAGE>
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
- ----------- OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- ----------- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-13404
THE GENERAL CHEMICAL GROUP INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 02-0423437
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (603) 929-2606
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES __X__ NO____
The number of shares of Common Stock outstanding at May 1, 1999 was 16,773,192
The number of shares of Class B Common Stock outstanding at May 1, 1999 was
3,958,421
================================================================================
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 1999
INDEX
<TABLE>
<CAPTION>
PAGE NO.
-------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements of Operations - Three Months
Ended March 31, 1998 and 1999......................................... 1
Consolidated Balance Sheets - December 31, 1998 and
March 31, 1999........................................................ 2
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1999......................................... 3
Consolidated Statement of Changes in Equity - Three Months
Ended March 31, 1999.................................................. 4
Notes to the Consolidated Financial Statements......................... 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................. 8-10
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K.................................. 11
SIGNATURES................................................................. 12
EXHIBIT INDEX.............................................................. 13
EXHIBITS ................................................................. 14
</TABLE>
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------
1998 1999
---- ----
<S> <C> <C>
Net revenues...................................................... $ 62,343 $ 61,472
Cost of sales..................................................... 49,134 51,268
Selling, general and administrative expense....................... 3,928 4,047
-------- --------
Operating profit.................................................. 9,281 6,157
Interest expense.................................................. 2,916 2,669
Interest income................................................... 157 423
Foreign currency transaction (gains) losses....................... (172) (15)
Other expense, net................................................ 36 30
-------- --------
Income before income taxes and minority interest.................. 6,658 3,896
Minority interest................................................. 4,437 2,587
-------- --------
Income before income taxes........................................ 2,221 1,309
Income tax provision.............................................. 323 330
-------- --------
Net income............................................. $ 1,898 $ 979
======== ========
Earnings per common share:
Basic.................................................. $ .09 $ .05
======== ========
Assuming dilution...................................... $ .09 $ .05
======== ========
Dividends declared per share...................................... $ .05 $ .05
======== ========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-1-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
---- ----
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................................... $ 1,127 $ 1,249
Receivables, net............................................................ 58,601 58,766
Inventories................................................................. 25,508 22,571
Deferred income taxes....................................................... 4,392 4,383
Other current assets........................................................ 1,659 4,988
--------- ---------
Total current assets..................................................... 91,287 91,957
Property, plant and equipment, net................................................. 141,808 141,900
Other assets 15,619 16,687
--------- ---------
Total assets............................................................. $ 248,714 $ 250,544
========= =========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable............................................................. $ 24,298 $ 26,182
Accrued liabilities.......................................................... 25,146 27,923
Income taxes payable......................................................... 1,988 --
--------- ---------
Total current liabilities................................................ 51,432 54,105
Other liabilities.................................................................. 78,561 83,829
--------- ---------
Total liabilities........................................................ 129,993 137,934
Minority interest.................................................................. 43,429 45,090
--------- ---------
Equity:
Preferred Stock, $.01 par value; authorized 10,000,000
shares; none issued or outstanding.......................................... -- --
Common stock, $.01 par value; authorized 100,000,000
shares; issued: 12,654,489 shares at December 31, 1998 and
March 31, 1999.............................................................. 127 127
Class B Common Stock, $.01 par value; authorized
40,000,000 shares, issued and outstanding:
9,758,421 shares at December 31, 1998 and March 31, 1999..................... 97 97
Capital deficit.................................................................... (51,675) (60,026)
Accumulated other comprehensive income............................................. (2,840) (2,867)
Retained earnings.................................................................. 162,378 163,357
Treasury stock, at cost: 1,641,166 and 1,681,297 shares at
December 31, 1998 and March 31, 1999, respectively................................. (32,795) (33,168)
--------- --------
Total equity ...................................................................... 75,292 67,520
--------- ---------
Total liabilities and equity............................................. $ 248,714 $ 250,544
========= =========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-2-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1998 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................ $ 1,898 $ 979
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................................... 4,460 4,243
Decrease in receivables............................................. 13,126 271
Decrease in inventories............................................. 809 3,259
Increase (decrease) in accounts payable............................. (4,425) 1,558
Increase in accrued liabilities..................................... 3,646 619
(Decrease) in income taxes payable.................................. (1,217) (2,702)
Increase (decrease) in other liabilities and assets, net............ (7,125) 2,212
Increase in minority interest....................................... 4,396 1,661
--------- --------
Net cash provided by operating activities....................... 15,568 12,100
--------- --------
Cash flows from investing activities:
Capital expenditures.................................................. (2,545) (3,254)
Other financing activities........................................... (75) (373)
--------- --------
Net cash (used for) investing activities........................ (2,620) (3,627)
--------- --------
Cash flows from financing activities:
Net transactions with GenTek.......................................... (13,164) (8,351)
---------- --------
Net cash (used for) financing activities....................... (13,164) (8,351)
--------- --------
Increase (decrease) in cash and cash equivalents............................. (216) 122
Cash and cash equivalents at beginning of period............................. 1,352 1,127
--------- --------
Cash and cash equivalents at end of period................................... $ 1,136 $ 1,249
========= ========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-3-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
CLASS B OTHER
COMMON COMMON TREASURY CAPITAL COMPREHENSIVE RETAINED
STOCK STOCK STOCK DEFICIT INCOME (LOSS) EARNINGS TOTAL
----- ------ ----- ------- ------------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998....... $ 127 $ 97 $ (32,795) $ (182,057) $ (2,446) $162,378 $ (54,696)
Distribution of GenTek, Inc...... -- -- -- 130,382 (394) -- 129,988
-------- -------- --------- ---------- ---------- -------- ----------
Balance at December 31, 1998
(as adjusted)..................... 127 97 (32,795) (51,675) (2,840) 162,378 75,292
Net Income..................... -- -- -- -- -- 979 979
Transfers to GenTek................ -- -- -- (8,351) -- -- (8,351)
Comprehensive income............... -- -- -- -- (27) -- (27)
Purchase of Treasury Stock......... -- -- (373) -- -- -- (373)
-------- -------- --------- ---------- ---------- --------- ----------
Balance at March 31, 1999.......... $ 127 $ 97 $ (33,168) $ (60,026) $ (2,867) $ 163,357 $ 67,520
======== ======== ========= ========== ========== ========= ==========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-4-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1999
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
On April 30, 1999, The General Chemical Group Inc. ("GCG") completed
the separation of its Manufacturing and Performance Products Segments from its
Industrial Chemicals Segment through a distribution of stock of GenTek Inc. to
stockholders of GCG (the "Spinoff"). In connection with the Spinoff, GCG
transferred the Manufacturing and Performance Products Segments to a
wholly-owned subsidiary, GenTek Inc. ("GenTek"), and distributed the stock of
GenTek to shareholders of GCG. On April 30, 1999, GCG and GenTek became
separate, publicly-traded companies on the New York Stock Exchange. GCG
continues to trade using the GCG symbol. GCG owns and operates the Industrial
Chemicals Segment, and GenTek owns and operates the businesses comprising the
Manufacturing and Performance Products Segments.
On March 18, 1999, GCG filed with the Securities and Exchange
Commissions a report on Form 8-K with respect to the Spinoff, and on April 8,
1999 GenTek Inc. filed with the Securities and Exchange Commission an
Amendment No. 2 to Registration Statement on Form 10 to register its common
stock under the Securities Exchange Act of 1934. Both such Form 8-K and Form 10
are incorporated herein by reference.
The Spinoff was treated as a reverse spin-off for financial statement
purposes because a greater proportion of GCG's assets and operations are held by
GenTek after the Spinoff. Therefore, the Spinoff has been reflected, for
financial statement presentation, as if GCG is a new company consisting of the
Industrial Chemicals Segment.
The accompanying unaudited consolidated financial statements include
the accounts of GCG and its subsidiaries (collectively, the "Company"). These
unaudited financial statements have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission. The financial
statements do not include certain information and footnotes required by
generally accepted accounting principles. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the three
months ended March 31, 1999 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1999. The Company's financial
statements should be read in conjunction with the financial statements and the
notes thereto for the Industrial Chemicals Business for the year ended December
31, 1998 included in the Form 8-K and the Form 10.
For the purpose of governing certain ongoing relationships between the
Company and GenTek after the Spinoff and to provide mechanisms for an orderly
transition, the Company and GenTek have entered into various agreements.
Management believes that the agreements are comparable to those which would have
been reached in arm's length negotiations with unaffiliated parties.
Certain prior-period amounts have been reclassified to conform with the
current presentation.
NOTE 2 - COMPREHENSIVE INCOME
Total comprehensive income is comprised of net income and foreign
currency translation gains and losses. Total comprehensive income for the three
months ended March 31, 1998 and 1999 was $1,901 and $963, respectively.
-5-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
FOR THE QUARTER ENDED MARCH 31, 1999
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 3 - EARNINGS PER SHARE
The computation of basic earnings per share is based on the weighted
average number of common shares and contingently issuable shares outstanding
during the period. The computation of diluted earnings per share assumes the
foregoing and, in addition, the exercise of all stock options and restricted
units, using the treasury stock method.
The components of the denominator for basic earnings per common share
and diluted earnings per common share are reconciled as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1998 1999
---- ----
<S> <C> <C>
Basic earnings per common share:
Weighted average common shares outstanding................... 21,049,357 20,847,073
=========== ============
Diluted earnings per common share:
Weighted average common shares outstanding................... 21,049,357 20,847,073
Options and Restricted Units................................. 976,945 611,425
----------- ------------
Denominator for diluted earnings per common share..................... 22,026,302 21,458,498
=========== ============
</TABLE>
At March 31, 1998 and 1999 options to purchase 60,000 shares and
1,704,500 shares of common stock, respectively, were not included in the
computation of diluted earnings per common share because the exercise price was
greater than the average market price of the common shares. The options, which
expire during 2007 and 2008, were still outstanding at March 31, 1999.
NOTE 4 - ADDITIONAL FINANCIAL INFORMATION
The components of inventories were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
---- ----
(UNAUDITED)
<S> <C> <C>
Raw materials...................................... $ 3,480 $ 2,526
Work in process.................................... 1,839 2,199
Finished products.................................. 13,297 9,450
Supplies and containers............................ 6,892 8,396
----------- -----------
$ 25,508 $ 22,571
=========== ===========
</TABLE>
NOTE 5 - DIVIDENDS
On March 10, 1999, GCG's Board of Directors declared a quarterly cash
dividend of $.05 per share, payable April 5, 1999, to shareholders of record on
March 24, 1999. As a consequence of the Spinoff, the Board of Directors of GCG
does not expect to pay dividends in the near future. The dividend policies of
GCG are subject to change and will be based on, among other factors, its
operating results and financial requirements and the restrictions imposed by
its financing facilities.
-6-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)
FOR THE QUARTER ENDED MARCH 31, 1999
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 6 - RELATED PARTY TRANSACTIONS
MANAGEMENT AGREEMENT
GCG is party to a management agreement with Latona Associates (which is
controlled by a stockholder of GCG) under which GCG receives corporate
supervisory and administrative services and strategic guidance for a quarterly
fee. In connection with the Spinoff, Latona agreed to provide its services
separately to GCG and GenTek. The Industrial Chemicals Business' share of this
management fee is $285 and $146 for the three months ended March 31, 1998 and
1999, respectively.
OTHER TRANSACTIONS
GCG supplies soda ash to General Chemical Corporation ("GCC"), a
wholly-owned subsidiary of The General Chemical Group prior to the Spinoff, and
after the Spinoff, a wholly-owned subsidairy of GenTek. For the three months
ended March 31, 1998 and 1999, sales to GCC amounted to $1,298 and $931,
respectively.
NOTE 7 - GEOGRAPHIC INFORMATION
<TABLE>
<CAPTION>
TOTAL REVENUES OPERATING PROFIT
MARCH 31, MARCH 31,
--------- ---------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
United States............................. $ 48,450 $ 47,337 $ 7,960 $ 5,664
Foreign ................................. 19,754 21,933 1,321 493
Elimination .............................. (5,861) (7,798) -- --
----------- ----------- ---------- ----------
$ 62,343 $ 61,472 $ 9,281 $ 6,157
=========== =========== ========== ==========
</TABLE>
NOTE 8 - SUBSEQUENT EVENT
As of April 30, 1999, and in connection with the Spinoff, the Company's
subsidiary General Chemical Industrial Products Inc. ("GCIP") issued and sold
$100,000 aggregate principal amount of 10 5/8% Senior Subordinated Notes due
2009 and entered into an $85,000 revolving credit facility with certain lenders
party thereto, The Chase Manhattan Bank, as Administrative Agent, The Chase
Manhattan Bank of Canada, as Canadian Administrative Agent, The Bank of Nova
Scotia, as Syndication Agent, and The First National Bank of Chicago as
Documentation Agent.
-7-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
March 31, 1999 Compared with December 31, 1998
Financial Condition
Cash and cash equivalents were $1.2 million at March 31, 1999 compared
with $1.1 million at December 31, 1998. During the first three months of 1999,
the Company generated cash flow from operating activities of $12.1 million, and
used cash of $3.3 million for capital expenditures and transferred $8.4 million
to GenTek.
The Company had working capital of $37.9 million at March 31, 1999 as
compared with $39.9 million at December 31, 1998. This decrease in working
capital principally reflects lower inventories.
Results of Operations
Net revenues for the three month period ended March 31, 1999 were $61.5
million, versus $62.3 million for the comparable period in 1998. This decrease
is due to lower soda ash prices partially offset by higher calcium chloride
volumes.
Gross profit for the three month period ended March 31, 1999 decreased
$3.0 million to $10.2 million from $13.2 million for the comparable prior year
period. Gross profit as a percentage of sales decreased 4 percent to 17 percent
for the three months ended March 31, 1999 versus 21 percent for the three month
period ended March 31, 1998 primarily due to the above-mentioned lower soda ash
prices.
Selling, general and administrative expense as a percentage of net
revenues was 6 percent and 7 percent for the three months ended March 31, 1998
and 1999, respectively.
Interest expense for the three month period ended March 31, 1999 was
$2.7 million, which was $.2 million lower than the
comparable prior year level.
Interest income for the three month period ended March 31, 1999 was $.4
million, which was $.3 million higher than the comparable prior year level.
Minority interest for the three month period ended March 31, 1999 was
$2.6 million compared with $4.4 million for the three month period ended March
31, 1998, reflecting lower earnings due to weaker soda ash pricing of General
Chemical (Soda Ash) Partners.
Net income was $1.0 million for the three month period ended March 31,
1999, versus $1.9 million for the comparable period in 1998, for the foregoing
reasons.
-8-
<PAGE>
<PAGE>
YEAR 2000 ISSUE
Following the Spinoff, GenTek provides GCG with MIS and
MIS-supported functions, including MIS personnel, hardware and software on a
service contract basis through approximately December 31, 2001. During this
period, GenTek provides to the Company the services related to the
remediation of the Year 2000 problem. A Year 2000 problem will occur where
date-sensitive software uses two digit year date fields, sorting the Year 2000
("00") before Year 1999 ("99"). The Year 2000 problem can arise in hardware,
software or any other equipment or process that uses embedded software or other
technology. The failure of such systems to properly recognize dates after
December 31, 1999 could result in data corruption and processing errors.
The Company completed an assessment of its Year 2000 compliance status
in early 1997 and began work on its remediation program immediately thereafter.
GenTek, which is principally responsible for overseeing the MIS functions
through 2001, intends to continue the Year 2000 remediation program for both
GenTek and the Company and is expected to effect all conversion efforts needed
to prevent the potential impact of Year 2000 problems. The Company intends to
work on the separation of MIS functions after resolution of Year 2000 problems.
The Company anticipates that it will recruit its own MIS staff during 2001 and
that by approximately December, 2001 a separation of its MIS functions will be
completed.
The remediation program has been structured to address its Systems. The
Company has spent approximately $1.0 million to replace or reprogram existing
Systems and complete the Year 2000 compliance program for the MIS functions
serving both GenTek and the Company. All material Systems are Year 2000
compliant as of March 31, 1999 and substantially all Systems will be Year 2000
compliant by December 31, 1999. In the event that material Systems are not Year
2000 compliant, the Company may experience reductions or interruptions in
operations which could have a material adverse effect on the Company's results
of operations.
In addition, the Company is working with GenTek to determine the Year
2000 compliance status of its material vendors, suppliers and service providers,
including the railroad and trucking companies used to ship its products. Based
on currently available information, management does not anticipate any material
impact to the Company based on the failure of such third parties to be Year 2000
compliant. However, the process of evaluating the Year 2000 compliance status of
material third parties is continually ongoing and, therefore, no guaranty or
warranty can be made as to such third parties' future compliance status or its
potential effect on the Company. Management believes there exists a sufficient
number of suppliers of raw materials so that alternate sources will be available
if any supplier is unable to deliver raw materials due to the Year 2000 issue.
There can be no assurances, however, that such alternate sources will be able to
supply all the requirements in a timely manner or on terms comparable with those
of its current suppliers. If the railroads or trucking companies that ship the
Company's products fail to be Year 2000 compliant, the Company may not be able
to arrange alternative and timely means to ship its goods, which could lead to
interruptions or slowdowns in its business. The Company is preparing for the
possible use of alternative suppliers and means of transportation, possible
adjustment of raw material and product inventory levels and contingencies with
respect to potential energy source interruptions, all in an effort to minimize
the effects, if any, of Year 2000 related interruptions or slowdowns caused by
suppliers and transporters.
-9-
<PAGE>
<PAGE>
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not expect to enter into financial instruments for
trading purposes. The Company anticipates periodically entering into interest
rate swap agreements to effectively convert all or a portion of its
floating-rate debt to fixed-rate debt in order to reduce its exposure to
movements in interest rates. Such agreements would involve the exchange of fixed
and floating interest rate payments over the life of the agreement without the
exchange of the underlying principal amounts. The Company also anticipates
periodically entering into currency agreements to partially reduce its exposure
to movements in currency exchange rates. Swap agreements will only be entered
into with strong creditworthy parties.
-10-
<PAGE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
***2.1 Amendment No. 2 to Form 10 of GenTek Inc. for registration of
Securities of GenTek Inc.
***2.2 Separation Agreement among the Company, GenTek Inc., General Chemical
Industrial Products Inc. and General Chemical Corporation
***10.32 Employee Benefits Agreement among the Company, General Chemical
Industrial Products Inc. and General Chemical Corporation
***10.33 Tax Sharing Agreement between GenTek Inc. and the Company
***10.34 Intellectual Property Agreement between General Chemical Corporation,
the Company, GenTek Inc. and General Chemical Industrial Products Inc.
10.35 Amended and Restated Management Agreement between the Company and
Latona Associates Inc.
***10.36 Registration Rights Agreement between Paul Montrone and the Company,
as assumed by GenTek Inc. with respect to Common Stock of GenTek Inc.
10.37 Credit Agreement, dated as of April 30, 1999, among General Chemical
Industrial Products Inc. and General Chemical Canada Ltd. as
Borrowers, the several Lenders from time to time parties thereto, The
Chase Manhattan Bank, as Administrative Agent, The Chase Manhattan
Bank of Canada, as Canadian Administrative Agent, The Bank of Nova
Scotia, as Syndication Agent, and The First National Bank of Chicago
as Documentation Agent
10.38 Guarantee and Collateral Agreement, dated as of April 30, 1999, made
by General Chemical Industrial Products Inc. and certain of its
subsidiaries in favor of the Chase Manhattan Bank, as Collateral
Agent.
10.39 Indenture, dated as of April 30, 1999, between General Chemical
Industrial Products Inc. and U.S. National Trust Association, as
Trustee 10.40 Amended and Restated Management Agreement, dated April
28, 1999, between the Company and Latona Associates, Inc.
27 Financial Data Schedule
</TABLE>
- --------------
*** Incorporated by reference to GenTek Inc.'s Registration Statement Amendment
No. 2 on Form 10 (File No. 001-14789) filed with the Securities and Exchange
Commission on April 8, 1999.
(b) Report filed on Form 8-K.
On March 18, 1999, GCG filed a Form 8-K with the Securities and
Exchange Commission. Item 2 of the Form 8-K reported GCG's separation of
its Manufacturing and Performance Products Segments from its Industrial
Chemicals Segment through the Spinoff. GCG accomplished this spinoff by
transferring its Manufacturing and Performance Products Segments to its
subsidiary, GenTek Inc., and distributing the stock of GenTek Inc. to
shareholders of GCG. As a result of the Spinoff, GCG and GenTek Inc. became
separate, independent companies.
-11-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
THE GENERAL CHEMICAL GROUP INC.
------------------------------------------
Registrant
Date May 14, 1999 JOHN M. KEHOE, JR.
-------------------- ------------------------------------------
JOHN M. KEHOE, JR.
President and Chief Executive Officer
(Principal Executive Officer) and Director
Date May 14, 1999 STEWART A. FISHER
-------------------- ------------------------------------------
STEWART A. FISHER
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
</TABLE>
-12-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<S> <C> <C>
***2.1 Amendment No. 2 to Form 10 of GenTek Inc. for registration of
Securities of GenTek Inc. ............................................
***2.2 Separation Agreement among the Company, GenTek Inc., General Chemical
Industrial Products Inc. and General Chemical Corporation.............
***10.32 Employee Benefits Agreement among the Company, General Chemical
Industrial Products Inc. and General Chemical Corporation.............
***10.33 Tax Sharing Agreement between GenTek Inc. and the Company ............
***10.34 Intellectual Property Agreement between General Chemical Corporation,
the Company, GenTek Inc. and General Chemical Industrial Products
Inc...................................................................
10.35 Amended and Restated Management Agreement between the Company and
Latona Associates Inc. ...............................................Filed herewith Electronically
***10.36 Registration Rights Agreement between Paul Montrone and the Company,
as assumed by GenTek Inc. with respect to Common Stock of GenTek Inc..
10.37 Credit Agreement, dated as of April 30, 1999, among General Chemical
Industrial Products Inc. and General Chemical Canada Ltd. as
Borrowers, the several Lenders from time to time parties thereto, The
Chase Manhattan Bank, as Administrative Agent, The Chase Manhattan
Bank of Canada, as Canadian Administrative Agent, The Bank of Nova
Scotia, as Syndication Agent, and The First National Bank of Chicago
as Documentation Agent................................................Filed herewith Electronically
10.38 Guarantee and Collateral Agreement, dated as of April 30, 1999, made
by General Chemical Industrial Products Inc. and certain of its
subsidiaries in favor of the Chase Manhattan Bank, as Collateral
Agent.................................................................Filed herewith Electronically
10.39 Indenture, dated as of April 30, 1999, between General Chemical
Industrial Products Inc. and U.S. National Trust Association, as
Trustee...............................................................Filed herewith Electronically
27 Financial Data Schedule...............................................Filed herewith Electronically
</TABLE>
- ---------------
*** Incorporated by reference to GenTek Inc.'s Registration Statement Amendment
No. 2 on Form 10 (File No. 001-14789) filed with the Securities and
Exchange Commission on April 8, 1999.
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as ............................. 'SS'
<PAGE>
<PAGE>
EXHIBIT 10.35
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of April 30,
1999, between LATONA ASSOCIATES INC., a Delaware corporation ("Manager"), and
THE GENERAL CHEMICAL GROUP INC., a Delaware corporation (the "Company").
RECITALS
A. Manager and the Company are parties to a certain Management
Agreement, effective as of June 1, 1995 (as amended, the "Existing Management
Agreement"), pursuant to which the Manager has provided certain management
services and other services and advice to the Company and its subsidiaries.
B. The Company is separating certain of its businesses through a
spinoff of its subsidiary, GenTek Inc., to shareholders of the Company. After
such spinoff, GenTek Inc. will be a separate company.
C. The Company and Manager desire to modify the Existing Management
Agreement to reflect certain changes in their arrangements resulting from the
spinoff of GenTek Inc. Therefore, Manager and the Company desire to amend and
restate the Existing Management Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties to this Agreement hereby agree as follows:
1. Services of Manager. Subject to the terms and conditions of this
Agreement, Manager will provide the following services (collectively, the
"Services") to the Company:
(a) provide strategic management, business and financial
advisory services to the Company and its subsidiaries with respect to,
among other matters, the industrial chemicals business conducted by the
Company including strategic guidance and advice with respect to tax
employee benefits, insurance and risk management matters; and
(b) provide such other corporate services of such nature and
scope as the Company and Manager may reasonably agree upon from time to
time.
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In addition to the services of its own staff, Manager shall select
and, with the consent of the Company, engage on behalf of the Company the
services of other professionals and consultants in connection with the provision
of the services set forth above, including management consultants, bankers,
investment bankers, underwriters, accountants, actuaries, insurance brokers, tax
advisors, appraisers, risk management consultants and employee benefits
consultants and attorneys.
Manager may also obtain, on its own behalf, the services of
individuals and entities in connection with its provision of the Services, and
such third-party services shall be deemed to be provided by the Manager for
purposes of this Agreement.
2. Limitations on Manager's Authority. Manager will not be authorized
to manage the affairs of, act in the name of, direct the actions of employees of
or in any way bind the Company or any of its subsidiaries (unless otherwise
authorized in writing by the Company to do so). The management, policies and
operations of the Company and its subsidiaries will be the responsibility of the
directors and officers of the Company and its subsidiaries acting pursuant to
and in accordance with the relevant corporate charter and by-laws, and all
decisions relating to corporate matters will be made by the directors and
officers of the Company and its subsidiaries acting pursuant to and in
accordance with the relevant corporate charter and by-laws.
3. Independent Contractor Status. Manager will render and perform the
services under this Agreement as an independent contractor in accordance with
its own standards, subject to its compliance with the provisions of this
Agreement and with all applicable laws, ordinances and regulations.
4. Availability of Employees. Manager will make available to the
Company the services of such of its employees and consultants as are necessary,
in the reasonable judgment of the Manager, to the performance from time to time
of the Services, provided that the inability of the Manager to make available to
the Company a specific employee or consultant of the Manager for any reason,
including without limitation the death or disability of such employee or
consultant, the termination of an employment or consulting agreement with any
such person or the assignment of such employee or consultant to other duties,
shall not constitute a default hereunder.
5. Limited Liability of Manager. (a) Neither Manager nor any
director, officer, stockholder, employee or agent of Manager makes any express
or implied representation, warranty, or guarantee to the Company, to any of its
subsidiaries, to any of its stockholders or to any third party relating to the
services to be performed by Manager pursuant to this Agreement or the quality or
results of such services.
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(b) Manager shall not be liable to the Company, to any of its
subsidiaries, to any of its stockholders or to any third party for any expense,
claim, loss or damage, including, without limitations indirect, special,
consequential or exemplary damages suffered other than by reason of Manager's
intentional failure to perform the services to be performed by Manager pursuant
to this Agreement, or by reason of action taken by Manager which was in bad
faith and in a manner not reasonably believed by Manager to be in the best
interests of the Company.
(c) Manager shall not be liable to the Company, to any of its
subsidiaries, to any of its stockholders or to any third party for the
consequences of any failure to perform or delay in performing any of its
obligations under this Agreement if that failure shall be caused by events or
circumstances beyond its control including, without limitation, by strikes or
labor disputes; provided that Manager shall reasonably provide prompt notice to
the Company or its subsidiaries of such inability and the reasons therefor.
6. Indemnification. The Company will indemnify Manager and each
director, officer, stockholder, employee and agent of Manager against any
losses, claims, damages or liabilities (including legal or other expenses
reasonably incurred in investigating or defending against any such losses,
claims, damages or liabilities), joint or several ("Liabilities"), to which any
of such persons may become subject by reason of such person's being a director,
officer, stockholder, employee or agent of Manager (but only to the extent that
such Liabilities arise out of or relate to and with respect to Services);
provided that the party to be indemnified acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The Company may pay expenses (including attorneys' fees) incurred by
Manager and any director, officer, stockholder, employee and agent of Manager in
defending any civil, criminal, administrative or investigative action, suit or
proceedings, in advance of the final disposition of such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of a party which may
be entitled to indemnification to repay such amount if it shall be ultimately
determined that he is not entitled to be indemnified by the Company as
authorized in this Agreement.
7. Fee for Services; Expenses. Commencing on the effective date and
throughout the term hereof, the Company will pay to Manager a fixed fee for its
services under Section 1(a) hereof, payable quarterly, of $378,550 per quarter
(the "Management Fee"). Such Management Fee will be due and payable quarterly in
advance by the Company on the first business day of each calendar quarter during
the period in which Services are being provided. The Management Fee shall be
increased each year on the
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anniversary date of this Agreement by the rate of increase in the Consumer Price
Index for such year over the Consumer Price Index for the prior year. For
purposes of this Agreement, the "Consumer Price Index" means the Consumer Price
Index for the Boston Standard Metropolitan Statistical Area (All Items for Urban
Wage Earners and Clerical Workers), seasonally adjusted, as published by the
United States Department of Labor, Bureau of Labor Statistics, or a mutually
agreeable index if such index is no longer published or the method of
computation thereof is substantially modified.
In addition to the Management Fee referred to above, the Company will
pay or reimburse Manager for all out-of-pocket costs and expenses incurred in
fulfilling its obligations as they relate to the Company under this Agreement,
including any expenses of third parties engaged by Manager; provided that
Manager will not be entitled to reimbursement for compensation of its officers,
directors, employees, consultants or stockholders who provide services under
this Agreement.
In addition to the Management Fee, the Company will pay the Manager
fees and expenses in connection with all acquisitions, divestitures, joint
ventures, business combinations, investment and other transactions entered into
by the Company other than in the ordinary course of its business, in an amount
and on terms that are customarily received by nationally recognized investment
banking firms in similar transactions, as determined by the independent members
of the Company's Board of Directors.
8. Other Relationships. Nothing contained in this Agreement will, or
will be deemed to, prohibit, restrict or limit in any manner any business or
investment activities of Manager or the directors. officers, employees or
affiliates of Manager.
9. Assignment. This Agreement and all the provisions of it will be
binding on and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests and obligations under this Agreement may be assigned by
either party without the prior written consent of the other party to this
Agreement, which consent shall not be unreasonably withheld; provided however
that this Agreement may be assigned without the prior consent of the Company to
any person or entity that is an affiliate (as defined in the Securities Exchange
Act of 1934) of Paul M. Montrone. Nothing in this Agreement, whether expressed
or implied, may be construed to give any person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or in respect of
this Agreement.
10. Term; Effect of Termination. (a) This Agreement will be effective
on the date first written above and will continue for a term ending on December
31, 2004 (the "Term").
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(b) This Agreement may be terminated, at any time prior to the end of
the Term of this Agreement, as follows: (i) by mutual written consent of the
parties; (ii) by the Company, pursuant to written notice by the Company to
Manager, if Paul M. Montrone ceases to hold, directly or indirectly, shares of
the Company's capital stock constituting at least 20 percent of the aggregate
voting power of the Company's capital stock; or (iii) by the Company or the
Manager, if the non-terminating party ceases, or threatens to cease, to carry on
its business, or commits a material breach of this Agreement, and such breach is
not remedied within thirty (30) days after written notice of such breach.
(c) At the end of the Term of this Agreement, or in the event the
parties agree to an earlier termination of this Agreement (in each case the
"Termination Date"), each party will perform its obligations under this
Agreement accrued to the Termination Date, and the Company (i) will assume, pay
and honor all obligations to third parties engaged by Manager in connection with
its Services hereunder and (ii) will promptly pay Manager all accrued fees and
expenses and honor all indemnification obligations arising hereunder. On
termination, Manager will return to the Company any corporate records of the
Company and its subsidiaries.
11. Alternate Dispute Resolution/Arbitration
(a) Dispute Resolution. Any claim, dispute, difference or controversy
between the parties hereto arising out of, or relative to, this Agreement which
cannot be settled by reference to other terms of this Agreement or by mutual
understanding between the parties shall be submitted to alternative dispute
resolution as described in this Section 11.
(b) Pre-Arbitration Referral to Representatives.
(i) The dispute, claim or controversy arising out of or in relation
to this Agreement or the interpretation or breach thereof shall be resolved in
accordance with this Section 11, being subjected first to the procedure in this
subsection (b) then, if still unresolved, to binding arbitration in accordance
with subsection (c) below. Any party may cause a proceeding to be commenced by
giving written notice to the other party that it desires to do so (the date of
such notice is hereinafter referred to as the "Notice Date"). Each party shall
thereupon prepare a written statement (the "Statement") briefly describing such
party's position on the matter in dispute. For purposes hereof, the Company
designates its President and Chief Executive Officer and Manager designates Paul
M. Montrone (collectively, the "Representatives") as the individuals who shall
represent such parties. The Statement shall be prepared within fifteen (15) days
of the Notice Date and given to all parties.
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(ii) The Representatives shall, during the fifteen (15) day period
commencing on the fifteenth day after the Notice Date, meet and negotiate in
good faith in an attempt to resolve the matter in dispute. If such attempt
proves unsuccessful in the judgment of any party, such party may cause all
parties involved to pursue the procedure set forth below by delivering written
notice to them of such party's desire to do so within five (5) days after the
end of such negotiation period.
(c) Arbitration. Any dispute arising out of or relating to this
Agreement or the breach, termination or validity hereof which are not resolved
by the foregoing procedure shall be finally settled by arbitration conducted
expeditiously in accordance with the Center for Public Resources Rules for
Nonadministered Arbitration of Business Disputes (the "CPR Rules"). The Center
for Public Resources shall appoint a neutral advisor from its National CPR
Panel. The arbitration shall be governed by the United States Arbitration Act, 9
U.S.C. 'SS''SS'1-16, and judgment upon the award rendered by the arbitrators may
be entered by any court having jurisdiction thereof. The place of arbitration
shall be Boston, Massachusetts.
Such proceedings shall be administered by the neutral advisor in
accordance with the CPR Rules as he/she deems appropriate; however, such
proceedings shall be guided by the following agreed upon procedures:
(i) mandatory exchange of all relevant documents, to be accomplished
within forty-five (45) days of the initiation of the procedure;
(ii) no other discovery;
(iii) hearings before the neutral advisor which shall consist of a
summary presentation by each side of not more than three hours, such
hearings to take place on one or two days at a maximum; and
(iv) decision to be tendered not more than ten (10) days following
such hearings.
Notwithstanding anything to the contrary contained herein, the
provisions of subsection (c) shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.
The parties hereto (i) hereby irrevocably submit to the jurisdiction
of the United States District Court for the District of New Hampshire, for the
purpose of enforcing the award or decision in any such proceeding and (ii)
hereby waive, and agree not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
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property is exempt or immune from attachment or execution, that the suit, action
or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court, and (iii) hereby waive and agree
not to seek any review by any court of any other jurisdiction which may be
called upon to grant an enforcement of the judgment of any such court. The
parties hereto hereby consent to service of process by registered mail at the
address to which notices are to be given. Each of the Company and Manager agrees
that its submission to jurisdiction and its consent to service of process by
mail is made for the express benefit of the other parties hereto. Final judgment
against the Company or Manager in any such action, suit or proceeding may be
enforced in other jurisdictions by suit, action or proceeding on the judgment,
or in any other manner provided by or pursuant to the laws of such other
jurisdiction; provided, however, that any party may at its option bring suit, or
institute other judicial proceedings, in any state or federal court of the
United States or of any country or place where the other parties or their
assets, may be found.
The losing party shall bear all of the expenses incurred by both
parties in connection with any arbitration, including legal and other expenses,
unless the neutral advisor determines that it is appropriate for the parties to
share all or any part of the expenses incurred in connection with the
arbitration and the legal and other expenses, provided that any costs incurred
by a party to enforce an award of the neutral advisor pursuant to the foregoing
terms of this subsection (c) shall be borne by the parry resisting enforcement.
12. Notices. All notices, requests, demands and other communications
provided for by this Agreement must be in writing and will be deemed to have
been given at the time when hand delivered or mailed in any general or branch
United States post office enclosed in a registered or certified post-paid
envelope, addressed to the following addresses of the parties to this Agreement
or to such changed address as such party may have given the other party notice
as provided in this Agreement:
The Company:
The General Chemical Group Inc.
Liberty Lane
Hampton, New Hampshire 03842
Attention: President
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Manager:
Latona Associates Inc.
Liberty Lane
Hampton, New Hampshire 03842
Attention: President
13. Miscellaneous. (a) This Agreement, or any term or provision of
it, may only be amended, modified or waived by an instrument in writing signed
by the party against whom such amendment, modification or waiver is sought to be
enforced.
(b) The provisions of this Agreement will be construed in accordance
with and governed by the laws of the State of Delaware.
(c) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
(d) This Agreement is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments or writings.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
LATONA ASSOCIATES INC.
By: /s/ Todd M. DuChene
--------------------------
Name: Todd M. DuChene
Title: Vice President
THE GENERAL CHEMICAL GROUP INC.
By: /s/Stewart A. Fisher
---------------------------
Name: Stewart A. Fisher
Title: Vice President
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EXECUTION COPY
================================================================================
CREDIT AGREEMENT
among
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.,
GENERAL CHEMICAL CANADA LTD.,
The Several Lenders
from Time to Time Parties Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Administrative Agent,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent
Dated as of April 30, 1999
CHASE SECURITIES INC. and THE BANK OF NOVA SCOTIA, as Co-Arrangers
================================================================================
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND INTERPRETATION ................................ 2
1.1 Defined Terms ............................................... 2
1.2 Other Definitional Provisions ...............................31
1.3 Conflict Between Credit Agreement and other Loan Documents...32
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................32
2.1 Commitments ................................................ 32
2.2 Procedure for Borrowing .....................................32
2.3 Canadian B/A Loans; Acceptances .............................34
2.4 Reallocation ................................................37
2.5 Canadian Borrower ...........................................38
2.6 Repayment of Loans; Evidence of Debt ........................38
2.7 Commitment Fee ..............................................40
2.8 Optional Termination or Reduction of Commitments ............40
2.9 Optional Prepayments; Mandatory Prepayments and
Commitment Reductions .....................................41
2.10 Conversion and Continuation Options .........................43
2.11 Minimum Amounts of Tranches .................................44
2.12 Interest Rates and Payment Dates ............................44
2.13 Computation of Interest and Fees ............................45
2.14 Inability to Determine Interest Rate.........................46
2.15 Pro Rata Treatment and Payments..............................46
2.16 Illegality...................................................48
2.17 Requirements of Law..........................................48
2.18 Taxes........................................................50
2.19 Indemnity....................................................52
2.20 Change of Lending Office.....................................53
2.21 Replacement of Lenders under Certain Circumstances...........53
SECTION 3. LETTERS OF CREDIT..............................................54
3.1. L/C Commitment..............................................54
3.2. Procedure for Issuance of Letters of Credit.................55
3.3. Fees, Commissions and Other Charges.........................55
3.4. L/C Participations..........................................55
3.5. Reimbursement Obligation of the Borrowers...................56
3.6. Obligations Absolute........................................57
3.7. Letter of Credit Payments...................................58
3.8. Application.................................................58
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................58
4.1 Financial Condition..........................................58
4.2 No Change....................................................59
4.3 Corporate Existence; Compliance with Law.....................59
4.4 Corporate Power; Authorization; Enforceable Obligations......59
4.5 No Legal Bar.................................................60
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4.6 No Material Litigation.......................................60
4.7 No Default...................................................60
4.8 Ownership of Property; Liens.................................60
4.9 Intellectual Property........................................61
4.10 Taxes.......................................................61
4.11 Federal Regulations.........................................61
4.12 ERISA; Canadian Benefit and Pension Plans...................61
4.13 Investment Company Act; Other Regulations...................62
4.14 Subsidiaries................................................62
4.15 Purpose of Loans............................................62
4.16 Environmental Matters.......................................62
4.17 Soda Ash Partners...........................................64
4.18 Solvency....................................................64
4.19 Labor Matters...............................................64
4.20 Accuracy of Information, etc................................64
4.21 Security Documents..........................................65
4.22 Year 2000...................................................65
4.23 Industrial Chemicals Business...............................65
4.24 Senior Indebtedness.........................................65
SECTION 5. CONDITIONS PRECEDENT...........................................66
5.1 Conditions to Effectiveness..................................66
5.2 Conditions to Initial Loans and Letters of Credit............68
5.3 Conditions to Each Extension of Credit.......................69
SECTION 6. AFFIRMATIVE COVENANTS..........................................70
6.1 Financial Statements.........................................70
6.2 Certificates; Other Information..............................71
6.3 Payment of Obligations.......................................72
6.4 Conduct of Business and Maintenance of Existence.............72
6.5 Maintenance of Property; Insurance...........................72
6.6 Inspection of Property; Books and Records; Discussions.......72
6.7 Notices......................................................73
6.8 Environmental Laws...........................................73
6.9 Further Assurances...........................................74
6.10 Additional Collateral.......................................74
6.11 GC Canada Senior Notes......................................77
6.12 Canadian Pension Plans and Benefit Plans....................77
6.13 Post-Closing Real Estate Matters............................77
SECTION 7. NEGATIVE COVENANTS ............................................78
7.1 Financial Condition Covenants................................78
7.2 Limitation on Indebtedness...................................79
7.3 Limitation on Liens..........................................81
7.4 Limitation on Guarantee Obligations...........................83
7.5 Limitation on Fundamental Changes............................83
7.6 Limitation on Sale of Assets ................................83
7.7 Amendments to Spin-Off Documents.............................84
7.8 Limitations on Restricted Payments...........................84
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7.9 Limitation on Capital Expenditures...........................85
7.10 Limitation on Investments, Loans and Advances...............86
7.11 Limitations on Optional Payments and Modifications
of Agreements...............................................88
7.12 Limitation on Transactions with Affiliates..................89
7.13 Limitation on Sales and Leasebacks..........................90
7.14 Limitation on Changes in Fiscal Year........................90
7.15 Limitation on Negative Pledge Clauses.......................90
7.16 Limitation on Lines of Business.............................90
SECTION 8. EVENTS OF DEFAULT..............................................91
8.1 Events of Default............................................91
8.2 Certain Provisions Applicable to Letters of Credit...........94
8.3 Certain Waivers..............................................95
SECTION 9. THE AGENTS.....................................................95
9.1 Appointment..................................................95
9.2 Delegation of Duties.........................................95
9.3 Exculpatory Provisions.......................................96
9.4 Reliance by Administrative Agent.............................96
9.5 Notice of Default............................................96
9.6 Non-Reliance on Administrative Agent and Other Lenders.......97
9.7 Indemnification..............................................97
9.8 Administrative Agent in Its Individual Capacity..............98
9.9 Successor Administrative Agent...............................98
9.10 Canadian Administrative Agent...............................98
9.11 Documentation Agent and Syndication Agent...................99
SECTION 10. MISCELLANEOUS.................................................99
10.1 Amendments and Waivers......................................99
10.2 Notices....................................................100
10.3 No Waiver; Cumulative Remedies.............................102
10.4 Survival of Representations and Warranties.................102
10.5 Payment of Expenses and Taxes..............................102
10.6 Successors and Assigns; Participations and Assignments.....103
10.7 Adjustments; Set-off.......................................106
10.9 Severability ..............................................107
10.10 Integration ..............................................107
10.11 GOVERNING LAW.............................................107
10.12 Submission To Jurisdiction; Waivers.......................108
10.13 Acknowledgments...........................................108
10.14 WAIVERS OF JURY TRIAL.....................................109
10.15 Confidentiality...........................................109
10.16 Conversion of Currencies..................................109
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ANNEX A PRICING GRID
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SCHEDULES
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Schedule I Lenders, Commitments and Addresses
Schedule II Subsidiaries of the Company
Schedule III Outstanding Indebtedness; Existing Liens
Schedule IV Existing Letters of Credit
Schedule V Canadian Benefit Plans and Canadian Pension Plans
Schedule VI Canadian Mortgaged Properties
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EXHIBITS
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Exhibit A-1 Form of Opinion of Debevoise & Plimpton
Exhibit A-2 Form of Opinion of Blake, Cassels & Graydon
Exhibit A-3 Form of Opinion of General Counsel of Company
Exhibit B Form of Compliance Certificate
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E-1 Form of Guarantee and Collateral Agreement
Exhibit E-2 Form of Canadian Guarantee and Collateral
Agreement
Exhibit E-3 Form of Canadian Mortgage
Exhibit F-1 Form of Revolving Credit Note
Exhibit F-2 Form of Canadian Revolving Credit Note
Exhibit G Form of U.S. Tax Compliance Certificate
Exhibit H Form of Acceptance
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CREDIT AGREEMENT, dated as of April 30, 1999, among GENERAL
CHEMICAL INDUSTRIAL PRODUCTS INC., a Delaware corporation (the "Company"),
GENERAL CHEMICAL CANADA LTD., a Canadian corporation (the "Canadian Borrower"),
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders"), THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), THE CHASE MANHATTAN BANK OF CANADA, a Canadian
chartered bank, as Canadian administrative agent for the Lenders under the
Canadian Revolving Credit Facility (in such capacity, the "Canadian
Administrative Agent"), THE BANK OF NOVA SCOTIA, as syndication agent for the
Lenders (in such capacity, the "Syndication Agent"), and THE FIRST NATIONAL BANK
OF CHICAGO, as documentation agent for the Lenders (in such capacity, the
"Documentation Agent").
RECITALS
WHEREAS, pursuant to the Separation Agreement dated as of
April 15, 1999 (as amended, modified or supplemented from time to time in
accordance with subsection 7.7, the "Separation Agreement") between The General
Chemical Group Inc., a Delaware corporation ("Holdings"), and GenTek, Inc., a
Delaware corporation ("GenTek") which is a wholly-owned Subsidiary (such term
and the other capitalized terms used in these recitals having the meaning set
forth in this Agreement unless the context otherwise requires) of New Hampshire
Oak, a Delaware corporation ("Intermediate Holdings"), which is a wholly-owned
Subsidiary of Holdings, Holdings has agreed to separate and divide the existing
businesses of Holdings so that (a) the industrial chemicals businesses (the
"Industrial Chemicals Business") of Holdings shall be owned directly and
indirectly by the Company, and (b) the manufacturing and performance products
businesses of Holdings shall be owned directly and indirectly by GenTek;
WHEREAS, following the separation and division described in
the preceding paragraph (the "Separation") (a) Intermediate Holdings will
distribute to Holdings all of the Capital Stock of GenTek (the "NHO
Distribution") and (b) Holdings shall distribute, as a dividend to the holders
of the shares of its common stock, all of the Capital Stock of GenTek (the
transactions described in paragraph 1 above and this paragraph 2, all as more
particularly described in the Form 10 Filing, the "Spin-Off");
WHEREAS, pursuant to the Separation Agreement and in
connection with the Spin-Off, certain pre-existing indebtedness of Holdings, the
Company and GenTek and their respective Subsidiaries will be paid in full and
canceled and certain other transactions will be consummated (the Spin-Off and
the other transactions to be performed pursuant to and in connection with the
Spin-Off, the "Spin-Off Transactions");
WHEREAS, the Company has requested that the Lenders make
available to the Company an $85,000,000 five-year revolving credit facility (as
hereinafter defined, the "Revolving Credit Facility"), a portion of which will
be available to the Canadian Borrower as a revolving credit subfacility (the
"Canadian Revolving Credit Facility"), the proceeds of which will be used by the
Borrowers to finance working capital and general corporate purposes, including
financing permitted acquisitions and permitted investments and funding the
Spin-Off Transactions; and
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2
WHEREAS, the Lenders are willing to make available the
Revolving Credit Facility and the Canadian Revolving Credit Facility pursuant to
this Agreement upon the terms and conditions hereinafter set forth.
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
Chase as its prime rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of
interest charged by Chase in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under
the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 A.M., New York City time,
on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, 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 on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate, or both, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the ABR shall be
determined without regard to clause (b) or (c), or both, of the first
sentence of this definition, as
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3
appropriate, until the circumstances giving rise to such inability no
longer exist. Any change in the ABR due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day
of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Acceptance" and "B/A": a banker's acceptance or a depository
bill within the meaning of the Depository Bills and Notes Act (Canada),
in either case denominated in C$ issued by the Canadian Borrower and
accepted and, if applicable, purchased by a Canadian Revolving Credit
Lender in accordance with this Agreement.
"Acceptance Exposure": at any time, the aggregate face amount
of Canadian B/A Loans.
"Acceptance Reimbursement Obligations": the obligation of the
Canadian Borrower to reimburse the Canadian Revolving Credit Lenders
pursuant to subsections 2.3(h) and 2.3(i).
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
whether or not exercised, directly or indirectly, to direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise or through the direct or indirect ownership of
10% (or, for purposes of subsection 10.6, 50%) or more of any class of
Capital Stock of such Person.
"Agents": the collective reference to the Administrative
Agent, the Canadian Administrative Agent, the Documentation Agent and
the Syndication Agent.
"AGI": The Andover Group, Inc., a Delaware corporation.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Allocable Tax Obligations": (a) the Company's share (based on
the ratio of the book value of the Company and its Subsidiaries to the
book value of Holdings and its Subsidiaries (including the Company and
its Subsidiaries)) of any state or local taxes, other than taxes
imposed on or measured by income or receipts, that are imposed on
Holdings or Intermediate Holdings by virtue of Holdings or Intermediate
Holdings (as the case may be) (i) being incorporated in such state or
locality, (ii) having Capital Stock
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4
outstanding or (iii) owning the stock of the Company (but excluding
any taxes imposed on or attributable to any dividends received from
the Company), (b) any payments in respect of taxes required to be
made by Holdings under the Spin-Off Documents (less any refunds of
such taxes that are received by Holdings or Intermediate Holdings and
not repaid to the Company) and (c) any taxes of the Company or its
Subsidiaries that are measured by income and for which Holdings or
Intermediate Holdings is liable up to an amount not to exceed with
respect to such federal taxes, the amount of any such taxes that the
Company would have been required to pay on a consolidated basis if
the Company had filed a consolidated return on behalf of an affiliated
group (as defined in section 1504 of the Code) of which it was the
common parent, or with respect to such state, local and foreign taxes,
the amount of taxes that the Company would have been required to pay
if the Company and its eligible Subsidiaries had filed an unaffiliated,
combined or unitary return with respect to such state, local or
foreign taxes.
"Allocation Lender": either (a) an Affiliate of a Canadian
Revolving Credit Lender, which Affiliate has a Revolving Credit
Commitment or is the holder of Revolving Credit Loans, or (b) a
Canadian Revolving Credit Lender having such an Affiliate.
"Applicable Agent": (i) the Administrative Agent with respect
to the Revolving Credit Commitments and (ii) the Canadian
Administrative Agent with respect to the Canadian Revolving Credit
Commitments.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Type Applicable Margin
Eurodollar Loans 2.75%
Canadian B/A Loans (Stamping Fee) 2.75
ABR Loans 1.50
Canadian Base Rate Loans 1.50
Canadian Prime Rate Loans 1.50
provided, that on and after the first Adjustment Date after December
31, 1999, the Applicable Margin will be determined pursuant to the
Pricing Grid.
"Applicable Percentage": (x) with respect to any Revolving
Credit Lender, the percentage of the Total Revolving Credit
Commitments represented by such Revolving Credit Lender's Revolving
Credit Commitment, or (y) with respect to any Canadian Revolving
Credit Lender, the percentage of the Total Canadian Revolving Credit
Commitments represented by such Canadian Revolving Credit Lender's
Canadian Revolving Credit Commitment.
"Application": an application, in such form as the relevant
Issuing Bank may specify from time to time, requesting such Issuing
Bank to open a Letter of Credit.
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5
"Asset Sale": (a) any Disposition of any assets or rights
other than sales of (i) inventory in the ordinary course of business
consistent with past practices and (ii) obsolete assets, and (b) any
issuance or sale by the Company or any of its Subsidiaries of Equity
Interests of any of the Company's Subsidiaries, in the case of either
clause (a) or (b), whether in a single transaction or a series of
related transactions (x) that have a fair market value in excess of
$2,000,000 or (y) for net proceeds in excess of $2,000,000.
Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (A) a transfer of assets by (1) the Company to the
Canadian Borrower, a Subsidiary Guarantor or a Canadian Subsidiary
Guarantor, (2) a Subsidiary to the Company, the Canadian Borrower, a
Subsidiary Guarantor or a Canadian Subsidiary Guarantor or (3) a
Subsidiary (other than the Canadian Borrower) that is not a Subsidiary
Guarantor or a Canadian Subsidiary Guarantor to any Subsidiary that is
not a Subsidiary Guarantor or a Canadian Subsidiary Guarantor, (B) an
issuance of Equity Interests by (1) a Subsidiary to the Company, the
Canadian Borrower, a Subsidiary Guarantor or a Canadian Subsidiary
Guarantor or (2) a Subsidiary (other than the Canadian Borrower) that
is not a Subsidiary Guarantor or a Canadian Subsidiary Guarantor to
any other Subsidiary that is not a Subsidiary Guarantor or a Canadian
Subsidiary Guarantor, (C) a Lien that is permitted under subsection
7.3, (D) any Disposition constituting a Permitted Investment and (E)
any Disposition constituting a Mineral Rights Exchange.
"Assignee": as defined in subsection 10.6(c).
"Available Canadian Revolving Credit Commitment": as to any
Canadian Revolving Credit Lender at any time, an amount equal to the
excess, if any, of (a) such Lender's Canadian Revolving Credit
Commitment then in effect over (b) such Lender's Canadian Revolving
Extensions of Credit then outstanding.
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b)
such Lender's Revolving Extensions of Credit then outstanding.
"Board": the Board of Governors of the Federal Reserve System
and any successor thereto.
"Borrowers": the collective reference to the Company and the
Canadian Borrower; either of them, a "Borrower."
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.2, 2.3, 2.4 or 3.2 as a date on which a
Borrower requests the Lenders to make Loans hereunder or an Issuing
Bank to issue a Letter of Credit hereunder.
"Business": as defined in subsection 4.16.
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6
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close, (ii) with respect to notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) (or
clause (iii) with respect to Eurodollar Loans made by a Canadian
Revolving Credit Lender) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market,
and (iii) with respect to the making of Canadian Revolving Credit Loans
or the issuance of Letters of Credit under the Canadian Revolving
Credit Commitment, any payment in respect thereof, or any other dealing
in Canadian Dollars pursuant to this Agreement, any day which is a
Business Day described in clause (i) and which is also not a Saturday,
Sunday or other day on which chartered banks in Toronto, Ontario are
authorized or required by law to close.
"C$ Prime Rate": on any day, the annual rate of interest equal
to the annual rate of interest published from time to time by the
Canadian Administrative Agent as its prime rate in effect at its
principal office in Toronto on such day for determining interest rates
on C$ denominated commercial loans in Canada.
"Canadian Administrative Agent": Chase Canada and its
successors, as administrative agent for the Canadian Revolving Credit
Lenders and as collateral agent for the Canadian Revolving Credit
Lenders under the Canadian Security Documents.
"Canadian B/A Loan": a Canadian Revolving Credit Loan
comprised of Acceptances. The principal amount of any Canadian B/A Loan
shall be deemed to be the aggregate face amount of the relevant
Acceptances.
"Canadian Base Rate Loan": a Canadian Revolving Credit Loan
denominated in $ which bears interest based upon the US Base Rate.
"Canadian Benefit Plans": all material employee benefit plans
of any nature or kind whatsoever that are not Canadian Pension Plans
and are maintained or contributed to by any Borrower or any of its
respective Subsidiaries, in each case covering employees in Canada.
"Canadian Borrower": as defined in the preamble to this
Agreement.
"Canadian Borrower Obligations": the unpaid principal of and
interest on (including, without limitation, interest accruing after the
maturity of the Loans, Acceptance Reimbursement Obligations and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Canadian Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Loans made to the Canadian Borrower and
all other obligations and liabilities of the Canadian Borrower to the
Administrative Agent, the Canadian Administrative Agent or any Lender
(or, in the case of Interest Rate Protection
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7
Arrangements or Currency Agreements, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, of the Canadian
Borrower which may arise under, out of, or in connection with,
this Agreement, any other Loan Document, the Letters of Credit,
any Interest Rate Protection Arrangement or Currency Agreement
entered into with any Lender or any Affiliate of any Lender
or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent, the Canadian Administrative Agent or to any
Lender that are required to be paid by the Canadian Borrower pursuant
hereto) or otherwise.
"Canadian Dollars" and "C$": lawful currency of Canada.
"Canadian Guarantee and Collateral Agreement": the Canadian
Guarantee and Collateral Agreement to be executed and delivered by the
Canadian Borrower and each Canadian Subsidiary Guarantor, substantially
in the form of Exhibit E-2, as the same may be amended, supplemented or
otherwise modified from time to time.
"Canadian Holdings": General Chemical Canada Holding Inc., an
Ontario corporation.
"Canadian Mortgaged Properties": the real properties listed on
Schedule VI (which shall include the Canadian Borrower's plant and
"settling ponds/basins" located in Amherstburg, Ontario), as to which
the Canadian Administrative Agent for the benefit of the Canadian
Revolving Credit Lenders shall be granted a Lien pursuant to the
Canadian Mortgages.
"Canadian Mortgages": each of the Charge/Mortgage of Land, the
Fixed and Floating Charge Debenture, the Pledge Agreement and the
related documents, in each case made by the Canadian Borrower and/or
the Canadian Subsidiary Guarantors in favor of, or for the benefit of,
the Canadian Administrative Agent for the benefit of the Canadian
Revolving Credit Lenders, substantially in the form of Exhibit E-3
(with such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage is to be recorded), as the same may
be amended, supplemented or otherwise modified from time to time.
"Canadian Pension Plan": each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits
standards statute and/or regulation in Canada established, maintained
or contributed to by any Borrower or any of its respective Subsidiaries
for its employees or former employees.
"Canadian Prime Rate Loan": a Canadian Revolving Credit Loan
denominated in C$ which bears interest at a rate based upon the C$
Prime Rate.
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8
"Canadian Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Canadian Revolving Credit
Loans and participate in Letters of Credit issued under the Canadian
Revolving Credit Commitments in Dollars or Canadian Dollars, as
applicable, in an aggregate principal and/or face amount the Dollar
Equivalent Amount of which shall not exceed of the amount set forth
under the heading "Canadian Revolving Credit Commitment" opposite such
Lender's name on Schedule I, as the same may be changed from time to
time pursuant to the terms hereof. The Canadian Revolving Credit
Commitments shall be denominated in Dollars although extensions of
credit thereunder may be denominated in Dollars or Canadian Dollars as
provided in this Agreement.
"Canadian Revolving Credit Lender": each Lender which has a
Canadian Revolving Credit Commitment or which is the holder of Canadian
Revolving Credit Loans. Each Canadian Revolving Credit
Lender must be a Canadian Scheduled Lender.
"Canadian Revolving Credit Loans": as defined in subsection
2.1(b).
"Canadian Revolving Credit Percentage": as to any Canadian
Revolving Credit Lender at any time, the percentage which such Lender's
Canadian Revolving Credit Commitment then constitutes of the Total
Canadian Revolving Credit Commitments (or, at any time after the
Canadian Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender's
Canadian Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Canadian Revolving Credit Loans then
outstanding).
"Canadian Revolving Extensions of Credit": as to any Canadian
Revolving Credit Lender at any time, an amount equal to the Dollar
Equivalent Amount of the sum of (a) the aggregate principal amount of
all Canadian Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Canadian Revolving Credit Percentage
of the L/C Obligations then outstanding under the Canadian Revolving
Credit Commitments.
"Canadian Schedule I Lender": each Canadian Revolving Credit
Lender that is a bank listed on Schedule I to the Bank Act (Canada), as
amended.
"Canadian Schedule II Lender": each Canadian Revolving Credit
Lender that is a bank listed on Schedule II to the Bank Act (Canada),
as amended.
"Canadian Scheduled Lender": a Canadian Schedule I Lender or a
Canadian Schedule II Lender.
"Canadian Security Documents": the collective reference to the
Canadian Guarantee and Collateral Agreement, the Canadian Mortgages and
all other documents or instruments hereafter delivered to or for the
benefit of the Canadian Administrative Agent and the Canadian Revolving
Credit Lenders granting a Lien on any asset or assets
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9
of any Person to secure the obligations and liabilities of the Canadian
Borrower hereunder, under the Notes and/or under any of the other Loan
Documents or to secure any guarantee of any such obligations and
liabilities by any Canadian Subsidiary Guarantors.
"Canadian Subsidiary Guarantors": (a) NHO Canada, Canadian
Holdings and each Subsidiary of the Canadian Borrower 80% or more of
the common Equity Interests of which is owned directly or indirectly by
the Canadian Borrower, and (b) each other Subsidiary of Canadian
Holdings or the Canadian Borrower that becomes a party to the Canadian
Guarantee and Collateral Agreement.
"Capital Expenditures": as defined in subsection 7.9.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, options or other
rights to purchase any of the foregoing.
"Cash": money, currency or a credit balance in a deposit
account, in each case which is free of Liens (except Liens in favor of
the Administrative Agent and the Canadian Administrative Agent and
Liens consisting of bankers' set-off rights).
"Cash Equivalents: (i) any evidence of Indebtedness with a
maturity of two years or less issued or directly and fully guaranteed
or insured by the United States of America, Canada (or any province
thereof) or any agency or instrumentality of any of the foregoing
(provided that the full faith and credit of the United States of
America or Canada, as applicable, is pledged in support thereof); (ii)
certificates of deposit or acceptances with a maturity of one year or
less of any Lender or any financial institution that is a member of the
Federal Reserve System (or is a chartered bank incorporated in Canada)
having combined capital and surplus and undivided profits of not less
than $500,000,000; (iii) master notes, loan participations and
commercial paper with a maturity of two years or less issued by any
Lender or any corporation (except an Affiliate or Subsidiary of the
Company) organized under the laws of any State of the United States or
the District of Columbia or under the laws of Canada (or any province
thereof) and rated at least A-1 by S&P or at least P-1 by Moody's; (iv)
repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by
the United States Government or Canada (or any province therof) or
issued by any agency of the forgoing and backed by the full faith and
credit of the United States of America (or Canada, as applicable), in
each case maturing within one year from the date of acquisition;
provided that the terms of such agreements comply with the guidelines
set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; (v) time deposits of
foreign banks having a combined capital and surplus of not less than
$500,000,000; (vi) repurchase agreements with nationally recognized
securities dealers having total capital funds in excess of
$100,000,000; provided that the terms of such agreements comply with
the
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10
guidelines set forth in the Federal Financial Agreements of
Depository Institutions With Securities Dealers and Others, as adopted
by the Comptroller of the Currency on October 31, 1985; and (vii)
institutional money market funds investing principally in obligations
permitted in clauses (i)-(vi) above.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. 'SS' 327.3(d) (or
any successor provision) to the Federal Deposit Insurance Corporation
(or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United
States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars of $100,000 or more having a maturity of 30 days or more.
"Change in Control": (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders in the aggregate or an ESOP, is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 35% of the total voting power of
the Voting Stock of Holdings at any time that the Permitted Holders in
the aggregate "beneficially own" (as so defined), directly or
indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of Holdings than such other person and do not
have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors of
Holdings (for the purposes of this clause (i), such other person shall
be deemed to beneficially own any Voting Stock of a specified
corporation held by a parent corporation, if such other person
beneficially owns (as so defined), directly or indirectly, more than
35% of the total voting power of the Voting Stock of such parent
corporation and the Permitted Holders in the aggregate beneficially own
(as so defined), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of
the board of directors of such parent corporation); (ii) during any
period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of Holdings (together
with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of Holdings was
approved by either (A) a vote of 66-2/3% of the directors of Holdings
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved or (B) a vote of Permitted Holders who beneficially own,
directly or indirectly, a majority in the aggregate of the total voting
power of the Voting Stock of Holdings) cease for any reason to
constitute a majority of the Board of Directors of Holdings then in
office; or (iii) the occurrence of a "change of control" (however
denominated) under
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11
and as defined in any credit agreement, indenture or similar
agreement to which Holdings or any of its Subsidiaries is a party
providing for commitments of credit in excess of $10,000,000, if
the occurrence of such change of control results in a default or event
of default under such credit agreement, indenture or similar agreement
pursuant to the terms thereof (and such default or event of default has
not been cured within any applicable period set forth in such credit
agreement, indenture or similar agreement), or the lenders, noteholders
or other creditors have a right to have their loans, notes or other
extensions of credit repaid or repurchased by the Company or such
Subsidiary prior to the stated maturity thereof by reason of such
change of control (and such repayment or repurchase has not occurred in
accordance with such credit agreement, indenture or similar agreement).
"Chase": The Chase Manhattan Bank.
"Chase Canada": The Chase Manhattan Bank of Canada.
"Closing Date": as defined in subsection 5.2.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Agent": Chase in its capacity as collateral agent
under the Security Documents (other than the Canadian Security
Documents).
"Commitment": as to any Lender, the sum of the Revolving
Credit Commitment and the Canadian Revolving Credit Commitment of such
Lender; the Revolving Credit Commitments and the Canadian Revolving
Credit Commitments, collectively, the "Commitments".
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commitment Period": the period from and including the
Effective Date to the Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Company and which is treated as a single employer under
Section 414(b) or (c) of the Code.
"Company": as defined in the preamble to this Agreement.
"Company Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement
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12
Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Company, whether or not a
claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans made to the Company and all other
obligations and liabilities of the Company to the Administrative Agent,
the Canadian Administrative Agent or to any Lender (or, in the case of
Interest Rate Protection Arrangements or Currency Agreements, any
Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Interest
Rate Protection Arrangement or Currency Agreement entered into with any
Lender or any Affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel to the Administrative Agent, the
Canadian Administrative Agent or to any Lender that are required to be
paid by the Company pursuant hereto) or otherwise.
"Company Pro Forma Balance Sheet": as defined in subsection
4.1(b).
"Compliance Certificate": a certificate substantially in the
form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated March 1999 prepared in connection with the
Facilities.
"Consolidated Cash Flow": for any period, the aggregate of (i)
Consolidated Net Income for such period plus (ii) Consolidated Interest
Expense deducted in computing such Consolidated Net Income plus (iii)
Consolidated Tax Expense deducted in computing such Consolidated Net
Income plus (iv) Consolidated Non-Cash Charges deducted in computing
such Consolidated Net Income minus (v) the net gain incurred in the
retirement of Indebtedness plus (vi) the net loss incurred in the
retirement of Indebtedness minus (vii) Consolidated Non-Cash Gains
included in computing such Consolidated Net Income minus (viii) cash
gains from sales of assets (other than inventory) to the extent
included in computing such Consolidated Net Income plus (ix) cash
losses from sales of assets (other than inventory) to the extent
deducted in computing such Consolidated Net Income.
"Consolidated Interest Expense": for any period, the aggregate
of the interest expense of the Company and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP,
including amortization of original issue discount and the interest
portion of any deferred payment obligations, excluding, to the extent
included in computing interest expense, any amortization or write-off
of debt issuance costs.
"Consolidated Net Income": for any period, net income of the
Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, but excluding (i) any item
classified as an extraordinary, unusual or nonrecurring
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13
gain, loss or charge, including, but not limited to, any such item
related to, or arising in connection with, the Spin-Off, (ii) any
amortization of deferred financing costs, (iii) all deferred
financing costs written off and premiums paid in connection with
any early extinguishment of Indebtedness and (iv) non-cash gains
or losses resulting from fluctuations in currency exchange rates.
"Consolidated Net Worth": as of the date of determination, all
items which in accordance with GAAP would be included under
shareholders' equity on a consolidated balance sheet of the Company and
its Subsidiaries at such date.
"Consolidated Non-Cash Charges": for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company
and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Non-Cash Gains": for any period, the aggregate
non-cash revenue items of the Company and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets": as of any date of
determination, the total assets, less goodwill and other intangibles,
shown on the balance sheet of the Company and its Subsidiaries as of
the most recent date for which such a balance sheet has been delivered
pursuant to subsection 6.2(b), determined on a consolidated basis in
accordance with GAAP.
"Consolidated Tax Expense": for any period, the aggregate of
the U.S. federal, state and local income tax expense and foreign tax
expense of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Indebtedness": as of the date of
determination, all Indebtedness and Guarantee Obligations of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, except that Indebtedness and Guarantee
Obligations of the Company and its Subsidiaries in respect of
reclamation bonds, performance bonds, letters of credit (other than
Letters of Credit) and surety bonds (in each of the foregoing cases,
except to the extent financed by Indebtedness under this Agreement)
required by the applicable statutes or laws of the relevant
jurisdiction or by relevant Government Authorities (or, in the case of
such letters of credit, issued for insurance purposes) shall be
excluded for purposes of determining Consolidated Total Indebtedness.
"Contract Period": the term of a B/A selected by the Canadian
Borrower in accordance with subsection 2.3 commencing on the Borrowing
Date, rollover date or conversion date, as the case may be, of such B/A
and expiring on a Business Day which shall be either 30 days, 60 days,
90 days or 180 days thereafter, in all cases subject to availability,
provided that no Contract Period shall extend beyond the Termination
Date.
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14
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"CSI": Chase Securities Inc.
"Currency Agreement": with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement
or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Designated Issuer": Chase Manhattan Bank Delaware, a
Delaware banking corporation, in its individual capacity.
"Discount Proceeds": for any B/A, an amount (rounded to the
nearest whole cent, and with one-half of one cent being rounded up)
calculated on the applicable Borrowing Date, rollover date or
conversion date, as the case may be, by multiplying:
(i) the face amount of the B/A; by
(ii) the quotient of one divided by the sum of one plus
the product of:
1. the Discount Rate (expressed as a decimal) applicable
to such B/A, and
2. a fraction, the numerator of which is the number of
days in the Contract Period of the B/A (inclusive of
the first day and exclusive of the last day) and the
denominator of which is 365.
with such quotient being rounded up or down to the fifth decimal place
and .000005 being rounded up.
"Discount Rate": with respect to any issue of B/As with the
same maturity date, (a) for a Canadian Revolving Credit Lender that is
a Canadian Schedule I Lender, (i) the average B/A discount rate for
the appropriate term as quoted on Reuters Screen CDOR Page determined
at or about 10:00 A.M. (Toronto time) on that day or (ii) if the
discount rate for a particular term is not quoted on Reuters Screen
CDOR Page, the arithmetic average of the actual discount rates for
bankers' acceptances for the appropriate term accepted by the Schedule
I Reference Banks at or about 10:00 A.M. (Toronto time) on that day
and (b) for a Canadian Revolving Credit Lender that is a Canadian
Schedule II Lender, the actual discount rates applicable to B/As for
the appropriate term accepted by Chase Canada but not to exceed the
actual rate of discount determined in accordance with clause (a) above
plus 0.10%.
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15
"Disposition": with respect to any assets or rights, any
sale, lease, assignment, conveyance, transfer or other disposition
thereof (including, without limitation, by way of a sale and
leaseback).
"Dollar Equivalent Amount": with respect to (i) any Canadian
Revolving Credit Loan or Letter of Credit denominated in C$ or any B/A
or any payment obligation in respect thereof, the equivalent amount in
Dollars of such Canadian Revolving Credit Loan, Letter of Credit, B/A
or payment obligation as determined by the Canadian Administrative
Agent using the spot rate at which The Bank of Canada would, on such
date at or about 12:00 Noon (Toronto time), be prepared to sell a
similar amount of Canadian Dollars in Toronto (and if such date is not
a Business Day, on the immediately preceding Business Day) and (ii)
any amount denominated in Dollars, such amount in Dollars.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary organized under the
laws of the United States or any jurisdiction therein or thereof.
"Effective Date": as defined in subsection 5.1.
"Environmental Laws": any and all foreign, Federal, state,
provincial, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, guidelines, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common
law) regulating, relating to or imposing liability or standards of
conduct concerning protection of health, safety or the environment, as
now or may at any time hereafter be in effect.
"Equity Interests": Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital
Stock).
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ESOP": an employee stock ownership plan for the benefit of
the Company's or a Subsidiary's employees.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D
of the Board) maintained by a member bank of the Federal Reserve
System.
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16
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, (a) in the case of
the Revolving Credit Loans, the rate per annum equal to the rate at
which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, and (b) in the case of the Canadian Revolving Credit
Loans, the rate per annum equal to the rate at which Chase Canada is
offered Dollar deposits at or about 10:00 A.M., Toronto time, in each
case two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign
currency and exchange options in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, (i) in the case of a
Eurodollar Loan made by a Canadian Revolving Credit Lender, the
Eurodollar Base Rate, and (ii) otherwise, a rate per annum determined
for such day in accordance with the following formula (rounded upward
to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Excluded Issuer": any Subsidiary of the Company that is a
direct or indirect Subsidiary of a Foreign Subsidiary, a Foreign
Subsidiary Holding Company or Soda Ash Partners.
"Existing Credit Agreement": the Credit Agreement dated as
June 15, 1998 among Holdings, the lenders party thereto, Chase, as
administrative agent, and the other agents named therein.
"Extensions of Credit": the collective reference to the
Revolving Extensions of Credit and the Canadian Revolving Extensions
of Credit.
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17
"Facility": each of (a) the Revolving Credit Commitments and
the extensions of credit made thereunder (the "Revolving Credit
Facility") and (b) the Canadian Revolving Credit Commitments and the
extensions of credit made thereunder (the "Canadian Revolving Credit
Facility").
"Federal Funds Effective Rate": as defined in the definition
of "ABR."
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Foreign Subsidiary": any Subsidiary other than a Domestic
Subsidiary.
"Foreign Subsidiary Holding Company": any Domestic Subsidiary
that has no material assets other than the Capital Stock or other
securities of one or more Foreign Subsidiaries or other Foreign
Subsidiary Holding Companies, and other assets relating solely to an
ownership interest in such Capital Stock or other securities.
"Form 10 Filing": the Registration Statement on Form 10 (File
No. 001-14789), together with all Exhibits thereto, initially filed by
GenTek with the Securities and Exchange Commission on on January 27,
1999, as amended by Amendment No. 1 filed with the Securities and
Exchange Commission on March 22, 1999 and by Amendment No. 2 filed
with the Securities and Exchange Commission on April 8, 1999, with
respect to the Spin-Off.
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"GC Canada Senior Notes": the 9.09% Senior Notes of the
Canadian Borrower due May 20, 1999 in the original principal amount of
$52,000,000, as the same may be amended, modified, supplemented,
replaced or refinanced from time to time.
"GenTek": as defined in the recitals hereto.
"GenTek Credit Facility": the Credit Agreement, dated as of
the date hereof, among GenTek, Noma Acquisition Corp., The Chase
Manhattan Bank, as administrative agent, the Lenders parties thereto
and the other agents parties thereto.
"Governmental Authority": any nation or government, any
state, province or other political subdivision thereof and any entity
(including the National Association of Insurance Commissioners or a
Minister of the Crown) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by Intermediate
Holdings, the Company and each
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18
Subsidiary Guarantor, substantially in the form of Exhibit E-1, as
the same may be amended, supplemented or otherwise modified from
time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Company in good
faith.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, pollutants, contaminants, waste or
hazardous or toxic substances defined or regulated as such in or under
any Environmental Law, and including, without limitation, petroleum
products (including crude oil or any fraction thereof), asbestos in
friable form, polychlorinated biphenyls, and urea formaldehyde
insulation.
"Holdings": as defined in the recitals to this Agreement.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (d) all obligations of such Person under Financing Leases,
(e) all
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19
obligations of such Person in respect of acceptances issued or
created for the account of such Person and (f) the lesser of (i) all
liabilities secured by any Lien on any property owned by such Person
when such Person has not assumed or otherwise become liable for the
payment thereof and (ii) the fair market value of any such property;
provided that Indebtedness shall not be deemed to include any
indebtedness which has been "economically defeased" or "in-substance
defeased" within the meaning of and in accordance with Standard No. 76
of the Financial Accounting Standards Board.
"Industrial Chemicals Business": as defined in the recitals
to this Agreement.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": as at the last day of any fiscal
quarter of the Company, the Pro Forma Ratio of (a) Consolidated Cash
Flow for the period of four fiscal quarters ending on such day to (b)
Consolidated Interest Expense for the period of four fiscal quarters
ending on such day.
"Interest Payment Date": (a) as to any ABR Loan, Canadian
Prime Rate Loan or Canadian Base Rate Loan, the last day of each
March, June, September and December to occur while such Loan is
outstanding (or if such day is not a Business Day, the next succeeding
Business Day), (b) as to any Eurodollar Loan having an Interest Period
of three months or less, the last day of such Interest Period, (c) as
to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period, (d) as to any Loan (other than any ABR Loan, Canadian
Prime Rate Loan or Canadian Base Rate Loan or an Acceptance), the date
on which such Loan is converted into another Type of Loan or on which
any repayment or prepayment is made in respect thereof, (e) as to any
Revolving Credit Loan, the Termination Date or such earlier date as
the Revolving Credit Commitments shall terminate as provided herein
and (f) as to any Canadian Revolving Credit Loan, the Termination Date
or such earlier date as the Canadian Revolving Credit Commitments
shall terminate as provided herein.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower in its
notice of borrowing or notice of conversion, as the case may
be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one,
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20
two, three or six months thereafter, as selected by the
relevant Borrower by irrevocable notice to the Applicable
Agent not less than three Business Days prior to the last
day of then current Interest Period with respect thereto;
provided that, each of the foregoing provisions relating to Interest
Periods is subject to the following:
(1) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding 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 immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination
Date;
(3) 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 a calendar month; and
(4) the relevant Borrower shall select Interest Periods
so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.
"Interest Rate Protection Arrangement": as defined in the
definition of "Interest Rate Protection Obligations" below.
"Interest Rate Protection Obligations": the obligations of
any Person pursuant to any arrangement (an "Interest Rate Protection
Arrangement") with any other Person whereby, directly or indirectly,
such Person is entitled to receive from time to time periodic payments
calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by
such Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include without
limitation, interest rate swaps, caps, floors, collars and similar
agreements.
"Intermediate Holdings": as defined in the recitals hereto.
"Investment": as defined in subsection 7.10.
"IRS Ruling": the private letter ruling of the Internal
Revenue Service, dated March 16, 1999 and received by Holdings on
March 18, 1999, to the effect that the Spin-Off generally will be tax
free to Holdings and its shareholders, as more fully described in the
Form 10 Filing.
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21
"Issuing Bank": (a) with respect to any Letter of Credit
issued under the Revolving Credit Commitments, Chase or any Affiliate
thereof, including the Designated Issuer, or any successor thereto,
each in its capacity as issuer of any such Letter of Credit, and (b)
with respect to any Letter of Credit issued under the Canadian
Revolving Credit Commitments, a Canadian Revolving Credit Lender to be
agreed upon by the Canadian Administrative Agent and the Canadian
Borrower, or any successor thereto, in such Lender's (or such
successor's, as the case may be) capacity as issuer of any such Letter
of Credit.
"L/C Commitment": $15,000,000, as such amount may be reduced
from time to time in accordance with this Agreement.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the Dollar
Equivalent Amount of the sum of (a) the aggregate then undrawn and
unexpired amount of then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 3.5(a).
"Lenders": as defined in the preamble to this Agreement.
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": as at the last day of any fiscal quarter of
the Company, the Pro Forma Ratio of (a) Consolidated Total
Indebtedness as at such day to (b) Consolidated Cash Flow for the
period of four fiscal quarters ending on such day.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan Documents": the collective reference to this Agreement,
the Notes, the Applications and the Security Documents.
"Loan Parties": Intermediate Holdings, the Borrowers and each
of their respective Subsidiaries party to a Loan Document.
"Loans": any loan made by any Lender pursuant to this
Agreement.
"Majority Facility Lenders": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount
of the Total Revolving Extensions of Credit or Total Canadian
Revolving Extensions of Credit, as the case may be,
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22
outstanding under such Facility (or prior to any termination of a
Facility, the holders of more than 50% of the Commitments under such
Facility).
"Management Agreement": the Amended and Restated Management
Agreement dated as of April 30, 1999 between Holdings and Latona
Associates Inc., as such agreement may be amended, supplemented or
otherwise modified or replaced from time to time in accordance with
subsection 7.11.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole, or
(b) the validity or enforceability of this Agreement, any of the
Notes, any Application or any of the other Loan Documents or the
rights or remedies of the Administrative Agent, the Canadian
Administrative Agent or the Lenders hereunder or thereunder.
"Material Foreign Subsidiary": any Material Subsidiary
organized under the laws of any jurisdiction (other than the United
States or any jurisdiction therein).
"Material Subsidiary": at any date of determination, any
Subsidiary of the Company (i) the gross revenues of which aggregated
at least 5% of the aggregate gross revenues of the Company and its
Subsidiaries for the most recent period of twelve consecutive months
ending prior to such date or (ii) the book value of the assets of
which aggregated at least 10% of the aggregate book value of the
assets of the Company and its Subsidiaries as at the last day of the
most recently ended fiscal month of the Company.
"Maximum Canadian Revolving Credit Commitments": $60,000,000.
"Mineral Agreement": an agreement between the Company or a
Subsidiary of the Company and a customer of the Company or such
Subsidiary for the purpose of mining minerals pursuant to which the
Company or such Subsidiary contributes minerals leases to such Person,
or agrees to mine minerals for such Person, in the ordinary course of
business.
"Mineral Rights Exchange": any sale, conveyance, transfer or
other disposition, in the ordinary course of business of the Company
and its Subsidiaries, of leases, licenses or other interests in
mineral rights in exchange for other leases, licenses or interests in
mineral rights to be used by the Company and its Subsidiaries and
having an equivalent fair market value (taking into account the value
to the Company and its Subsidiaries of the location and quality of the
new mineral rights relative to the existing mineral rights).
"Moody's": Moody's Investors Services, Inc.
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23
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) when used in respect of any Asset
Sale or Recovery Event by or with respect to the Company or any of its
Subsidiaries, the gross proceeds received by such Person in Cash and
Cash Equivalents (including payment in respect of deferred payment
obligations but only when received in the form of Cash and Cash
Equivalents), from such Asset Sale or Recovery Event less (i) all
legal, accounting, title, recording and transfer tax expenses,
commissions and other customary fees and expenses incurred, and all
other federal, state and local taxes assessed, in connection
therewith, (ii) the principal amount of, premium, if any, and interest
on, any Indebtedness (other than the Loans and L/C Obligations) which
is secured by the assets which are the subject of such Asset Sale or
Recovery Event and which is required to be repaid in connection with
such Asset Sale or Recovery Event and (iii) amounts to be provided by
such Person as a reserve, in accordance with GAAP, against any
liabilities associated with any such Asset Sale or Recovery Event and
retained by such Person after such Asset Sale or Recovery Event,
including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters
or against any indemnification obligations associated with such Asset
Sale or Recovery Event, provided that any such net proceeds received
by Soda Ash Partners or any Subsidiary of Soda Ash Partners shall
constitute Net Cash Proceeds only when and to the extent such net
proceeds are distributed to the Company, and (b) when used in respect
of the incurrence of Indebtedness by the Company or any of its
Subsidiaries, the gross proceeds received by such Person in Cash and
Cash Equivalents from such incurrence less all legal expenses,
commissions and other fees and expenses incurred or to be incurred in
connection therewith.
"NHO Canada": NHO Canada Holding, Inc., a Delaware
corporation.
"NHO Distribution": as defined in the recitals hereto.
"1998 10-K": Holdings' annual report on Form 10-K filed with
the Securities and Exchange Commission for its fiscal year ended
December 31, 1998.
"Non-Excluded Taxes": as defined in subsection 2.18.
"Notes": the collective reference to any promissory notes
evidencing the Loans.
"Obligations": the collective reference to the Canadian
Borrower Obligations and the Company Obligations.
"Participant": as defined in subsection 10.6(b).
"Participating Bank": as applicable, (a) any Revolving Credit
Lender (other than the applicable Issuing Bank) with respect to its
participating interest in each Letter of
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24
Credit issued under the Revolving Credit Commitments; provided
that each Revolving Credit Lender (including the Issuing Bank,
if a Lender) shall be deemed to be a Participating Bank with
respect to any Letter of Credit issued by the Designated Issuer
and (b) any Canadian Revolving Credit Lender (other than the
applicable Issuing Bank) with respect to its participation
in each Letter of Credit issued under the Canadian Revolving
Credit Commitments.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": any acquisition made pursuant to
subsection 7.10(g).
"Permitted Designee": with respect to any Permitted Holder
(i) a spouse or a child (in the case of an individual) of such
Permitted Holder, (ii) any trust for the benefit of such Permitted
Holder or a spouse or child of such Permitted Holder, (iii) in the
event of the death or incompetence of such Permitted Holder, such
Permitted Holder's estate, heirs, executor, administrator, committee
or other court appointed representative, (iv) any foundation or not
for profit organization established by a Permitted Holder or (v) any
Person so long as a Permitted Holder is the "beneficial owner" (as
defined in clause (i) of the definition of "Change in Control") of at
least 51% of the Voting Stock of such Person.
"Permitted Holders": Paul M. Meister, Paul M. Montrone,
Richard R. Russell, John Kehoe, Jr. and their Permitted Designees.
"Permitted Investments": Investments permitted by subsection
7.10.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Productive Assets": assets (including Capital Stock of a
Person that directly or indirectly owns assets) of a kind used or
usable in the Company's business, or related to such business, as
conducted on the date of the relevant Asset Sale or Recovery Event.
"Pro Forma Ratio": as used in the definitions of "Interest
Coverage Ratio", "Leverage Ratio", "Pricing Ratio" and "Senior
Leverage Ratio", the ratio indicated
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25
determined using Consolidated Cash Flow, Consolidated
Interest Expense, Funded Debt and Consolidated Total Indebtedness,
as the case may be, each calculated (as provided herein as though
this Agreement had been effective at such time) for the
period indicated giving pro forma effect (as determined in good
faith by the Chief Financial Officer of the Company, based on
reasonable assumptions) to any of the following transactions that
shall have occurred after the beginning of such period as if such
transaction had occurred at the beginning of such period: (a) the
Spin-Off and the Refinancing Transactions; (b) any transaction
pursuant to which any Person becomes a Subsidiary of the Company or
the Company or any Subsidiary acquires all or substantially all of the
assets of any Person; or (c) any transaction of the type described in
the preceding clauses (a) and (b) by any Person that, since the
beginning of such period became a Subsidiary of the Company or was
merged with or into the Company or any Subsidiary of the Company.
"Properties": as defined in subsection 4.16.
"Quarterly Date": the last Business Day of each March, June,
September and December to occur while any Loan is outstanding.
"Reallocation Date": as defined in subsection 2.4(a).
"Reallocation Notice": as defined in subsection 2.4(a).
"Recovery Event": any settlement of or payment in excess of
$500,000 in any transaction or series of related transactions in
respect of any property or casualty insurance claim or any
condemnation proceeding relating to any asset of the Company or any of
its Subsidiaries.
"Redeemable Stock": any class or series of Capital Stock that
(i) by its terms or otherwise is required to be redeemed prior to May
15, 2004, (ii) is redeemable at the option of the holder thereof at
any time prior to May 15, 2004 or (iii) is exchangeable into any
Capital Stock described in clause (i) or (ii) above.
"Refinancing Transactions": the collective reference to (a)
the issue and sale of the Senior Subordinated Notes, (b) the
distribution by the Company to Holdings of a portion of the proceeds
of the issue and sale of the Senior Subordinated Notes, (c) the
initial borrowing hereunder by the Canadian Borrower and the repayment
in full of the GC Canada Senior Notes with the proceeds of such
borrowing, (d) the initial borrowing by GenTek under the GenTek Credit
Facility, (e) the loan by GenTek to GCC of the proceeds of such
borrowing and the repayment in full of outstanding amounts due
Holdings from GCC and (f) the repayment in full by Holdings (or the
applicable Subsidiary, as the case may be) of all amounts owing under,
and the termination of, the Existing Credit Agreement and all other
long-term Indebtedness of the Company and its Subsidiaries (other than
Indebtedness permitted to exist under subsection 7.2), and the
termination of all Liens thereunder (other than Liens permitted to
exist under subsection 7.3).
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26
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of each Borrower
to reimburse the Issuing Banks pursuant to subsection 3.5(a) for
amounts drawn under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the
Company or any of its Subsidiaries in connection therewith which are
not applied to reduce the Total Commitments pursuant to subsection
2.9(d) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Company has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Company (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of
the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
Productive Assets.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire Productive Assets.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring 360 days
after such Reinvestment Event and (b) the date on which the Company
shall have determined not to acquire Productive Assets with all or any
portion of the relevant Reinvestment Deferred Amount.
"Related Business": any business that is similar or
reasonably related to any business engaged in by the Company or any
Subsidiary, or any other business complementary or incidental thereto,
or a reasonably related development thereof.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31,
.32, .34 or .35 of PBGC Reg. 'SS' 4043.
"Required Lenders": at any time, Lenders the Total Credit
Percentages of which aggregate more than 50%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law,
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27
treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer": the chief executive officer, the
president or any vice president of a Borrower or Holdings or, with
respect to financial matters, the chief financial officer of a
Borrower or Holdings.
"Restricted Payments": as defined in subsection 7.8.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans to
the Company and participate in Letters of Credit issued for the
account of the Company, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule I, as the same may
be changed from time to time pursuant to the terms hereof.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the Total Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding, and (b) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding under the Revolving Credit
Commitments.
"Schedule I Reference Banks": The Bank of Nova Scotia.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Canadian Guarantee and
Collateral Agreement, the Canadian Mortgages and all other documents
or instruments hereafter delivered to or for the benefit of the
Administrative Agent, the Canadian Administrative Agent or the
Collateral Agent and the Lenders, including the Canadian Security
Documents, granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrowers hereunder,
under the Notes and/or under any of the other Loan Documents or to
secure any guarantee of any such obligations and liabilities.
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28
"Senior Leverage Ratio": as at the last day of any fiscal
quarter of the Company, the Pro Forma Ratio of (a) Consolidated Total
Indebtedness, less the aggregate outstanding principal amount of (i)
the Senior Subordinated Notes (or Refinancing Indebtedness in respect
thereof, as the case may be) and (ii) any other Indebtedness permitted
under subsection 7.2 constituting "Pari Passu Debt" or "Subordinated
Debt" as defined in the Senior Subordinated Note Indenture as in
effect on the Closing Date, as at such day to (b) Consolidated Cash
Flow for the period of four fiscal quarters ending on such day.
"Senior Subordinated Note Indenture": the Indenture entered
into by the Company in connection with the issuance of the Senior
Subordinated Notes, together with all instruments and other agreements
entered into by the Company in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with subsection 7.12.
"Senior Subordinated Notes": the subordinated notes of the
Company issued on the Closing Date pursuant to the Senior Subordinated
Note Indenture.
"Separation": as defined in the recitals hereto.
"Separation Agreement": as defined in the recitals hereto.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Soda Ash Parent Agreement": the Amended and Restated Parent
Guaranty and Transfer Agreement dated June 30, 1992 and executed by
New Hampshire Oak, Inc., ACI International Limited and TOSOH America,
Inc., as the same may be amended, modified or supplemented from time
to time.
"Soda Ash Partners": General Chemical (Soda Ash) Partners, a
Delaware general partnership.
"Soda Ash Partnership Agreement": the Second Amended and
Restated Partnership Agreement of General Chemical (Soda Ash)
Partners, dated June 30, 1992 and executed by General Chemical
Corporation, the Andover Group, Inc and TOSOH Wyoming, Inc., setting
forth the respective rights and duties of the general partners of Soda
Ash Partners, as such agreement may be amended, supplemented, replaced
or otherwise modified from time to time in accordance with subsection
7.12.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the
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29
insolvency of debtors, (b) the present fair saleable value of the
assets of such Person will, as of such date, be greater than
the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Spin-Off": as defined in the recitals hereto.
"Spin-Off Documents": the collective reference to (i) the
Separation Agreement and (ii) the Ancillary Agreements (as defined in
the Separation Agreement as in effect on the date hereof), as the
same may be amended, modified or supplemented from time to time.
"Spin-Off Transactions": as defined in the recitals to this
Agreement.
"S&P": Standard & Poor's Ratings Services Group, a division
of The McGraw-Hill Companies, Inc.
"Stamping Fee": a fee payable in C$ by the Canadian Borrower
to the Canadian Administrative Agent for the benefit of a Canadian
Revolving Credit Lender with respect to the acceptance of a B/A,
calculated on the face amount of the B/A at the rate per annum equal
to the Applicable Margin for Canadian B/A Loans on the basis of the
number of days in the applicable Contract Period (inclusive of the
first day and exclusive of the last day) and a year of 365 days.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company, which shall include,
without limitation, Soda Ash Partners.
"Subsidiary Guarantor": each Domestic Subsidiary of the
Company (other than Soda Ash Partners) (a) 80% or more of the common
Equity Interests of which is owned by the Company, directly or
indirectly (other than indirectly through any Foreign
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30
Subsidiary, any Foreign Subsidiary Holding Company or Soda Ash
Partners), (b) that is or becomes a party to the Guarantee and
Collateral Agreement or (c) that is designated by the Company as a
Subsidiary Guarantor and becomes a party to the Guarantee and
Collateral Agreement.
"Supply Partnership": any Person (a) in which the Company
beneficially owns Equity Interests and (b) which has been organized
for the purpose of toll manufacturing, marketing or selling industrial
chemical products, mining minerals and/or supplying energy, raw
materials or transportation services for the benefit of (x) the
Company and its Subsidiaries in the ordinary course of business, (y)
one or more of its customers or raw material (including energy)
suppliers and (z) if applicable, other Persons similarly situated as
the Company and its Subsidiaries with respect to such benefits.
"Termination Date": April 30, 2004.
"TOSOH": TOSOH Wyoming, Inc., a Delaware corporation.
"Total Canadian Revolving Credit Commitments": at any time,
the aggregate amount of the Canadian Revolving Credit Commitments then
in effect. The original amount of the Total Canadian Revolving Credit
Commitments as of the Effective Date is $60,000,000.
"Total Canadian Revolving Extensions of Credit": at any time,
the Dollar Equivalent Amount of the aggregate amount of the Canadian
Revolving Extensions of Credit of the Canadian Revolving Credit
Lenders outstanding at such time.
"Total Commitments": at any time, the aggregate amount of the
Revolving Credit Commitments and Canadian Revolving Credit Commitments
then in effect. The original amount of the Total Commitments as of the
Effective Date is $85,000,000.
"Total Credit Percentage": as to any Lender at any time, the
percentage of the aggregate Revolving Credit Commitments and Canadian
Revolving Credit Commitments then constituted by its Revolving Credit
Commitment and Canadian Revolving Credit Commitment (or, if the
Revolving Credit Commitments or Canadian Revolving Credit Commitments
have terminated or expired, the percentage of the aggregate Dollar
Equivalent Amount of outstanding Loans and interests in the
outstanding L/C Obligations then constituted by its outstanding Loans
and interests in outstanding L/C Obligations).
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
The original amount of the Total Revolving Credit Commitments as of
the Effective Date is $25,000,000.
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31
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders outstanding at such time.
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Revolving Credit Loan, its nature as an ABR
Loan or a Eurodollar Loan; and as to any Canadian Revolving Credit
Loan, its nature as a Canadian Prime Rate Loan, a Canadian Base Rate
Loan, a Eurodollar Loan or a Canadian B/A Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"US Base Rate": the rate of interest per annum in effect from
time to time that is equal to the greater of (a) the rate of interest
publicly announced by the Canadian Administrative Agent from time to
time as being its reference rate then in effect for determining
interests rates for commercial loans in Dollars made in Canada and (b)
the Federal Funds Effective Rate plus 1/2 of 1%.
"Voting Stock": Capital Stock of a Person normally entitled
to vote in the election of directors (or other persons exercising
similar functions) of such Person.
1.2 (a) Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes and the other Loan Documents or any certificate
or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes and the other Loan
Documents, and any certificate or other document made or delivered pursuant
hereto, accounting terms relating to Holdings and its Subsidiaries not defined
in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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32
1.3 Conflict Between Credit Agreement and other Loan
Documents . If there is any conflict between this Agreement and any other Loan
Document, this Agreement and such other Loan Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, this Agreement shall prevail
and control.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) (i) Subject to the terms and conditions
hereof, each Revolving Credit Lender severally agrees to make revolving credit
loans denominated in Dollars ("Revolving Credit Loans") to the Company from time
to time during the Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Lender's Revolving Credit Percentage
of then outstanding L/C Obligations under the Revolving Credit Commitments, does
not exceed the amount of such Lender's Revolving Credit Commitment. During the
Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(ii) The Revolving Credit Loans may from time to time be (A)
Eurodollar Loans, (B) ABR Loans or (C) a combination thereof, as determined by
the Company and notified to the Administrative Agent in accordance with
subsections 2.2 and 2.10, provided that no Loan shall be made as a Eurodollar
Loan after the day that is one month prior to the Termination Date.
(b) (i) Subject to the terms and conditions hereof, each
Canadian Revolving Credit Lender severally agrees to make revolving credit loans
denominated in Dollars or Canadian Dollars ("Canadian Revolving Credit Loans")
to the Canadian Borrower from time to time during the Commitment Period in an
aggregate principal amount having a Dollar Equivalent Amount at any one time
outstanding which, when added to such Lender's Canadian Revolving Credit
Percentage of then outstanding L/C Obligations under the Canadian Revolving
Credit Commitments, does not exceed the amount of such Lender's Canadian
Revolving Credit Commitment. During the Commitment Period the Canadian Borrower
may use the Canadian Revolving Credit Commitments by borrowing, prepaying the
Canadian Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(ii) The Canadian Revolving Credit Loans may from time to
time be (A) Canadian Base Rate Loans, (B) Eurodollar Loans, (C) Canadian Prime
Rate Loans, (D) Canadian B/A Loans or (E) a combination thereof, as determined
by the Canadian Borrower and notified to the Canadian Administrative Agent in
accordance with subsections 2.2, 2.3 and 2.10, provided that no Canadian B/A
Loan may be made after the day that is 30 days prior to the Termination Date.
2.2 Procedure for Borrowing. (a) The Company may borrow under
the Revolving Credit Commitments during the Commitment Period on any Business
Day, provided that the Company shall give the Administrative Agent irrevocable
notice (which notice must be
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33
received by the Administrative Agent prior to 11:00 A.M., New York City time,
(i) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be initially Eurodollar
Loans or (ii) one Business Day prior to the requested Borrowing Date,
otherwise), specifying (A) the amount to be borrowed, (B) the requested
Borrowing Date, (C) whether the borrowing is to be of Eurodollar Loans,
ABR Loans or a combination thereof and (D) if the borrowing is to be entirely
or partly of Eurodollar Loans, the amounts of such Type of Loan and the
lengths of the initial Interest Periods therefor. Each borrowing under the
Revolving Credit Commitments shall be in an amount equal to (x) in the case of
ABR Loans, $1,000,000 or a whole multiple thereof (or, if then Available
Revolving Credit Commitments are less than $1,000,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Upon receipt of any such notice from the Company,
the Administrative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the account of the
Company at the office of the Administrative Agent specified in subsection 10.2
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Company in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Company by the Administrative Agent
crediting the account of the Company on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Credit Lenders and in like funds as received by the Administrative
Agent.
(b) The Canadian Borrower may borrow under the Canadian
Revolving Credit Commitments during the Commitment Period on any Business Day,
provided that the Canadian Borrower shall give the Canadian Administrative Agent
irrevocable notice (which notice must be received by the Canadian Administrative
Agent prior to 11:00 A.M., Toronto time, (i) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Canadian Revolving
Credit Loans are to be initially Eurodollar Loans, (ii) two Business Days prior
to the requested Borrowing Date, if all or any part of the requested Canadian
Revolving Credit Loans are to be initially Canadian B/A Loans or (iii) one
Business Day prior to the requested Borrowing Date, otherwise), specifying (A)
the amount to be borrowed, (B) the requested Borrowing Date, (C) whether the
borrowing is to be of Canadian B/A Loans, Canadian Prime Rate Loans, Eurodollar
Loans, Canadian Base Rate Loans or a combination thereof, (D) whether the
requested Loans are to be denominated in Dollars or Canadian Dollars and (E) if
the borrowing is to be entirely or partly by way of Canadian B/A Loans, the
aggregate face amount of such B/As and the lengths of the initial Contract
Periods therefor. Each borrowing under the Canadian Revolving Credit Commitments
shall be in an amount equal to (w) in the case of Canadian Base Rate Loans,
$1,000,000 or a whole multiple thereof (or, if then Available Canadian Revolving
Credit Commitments are less than $1,000,000, such lesser amount), (x) in the
case of Canadian Prime Rate Loans, C$1,000,000 or a whole multiple thereof (or,
if the then Available Canadian Revolving Credit Commitments are less than
C$1,000,000, such lesser amount), (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then
Available Canadian Revolving Credit Commitments are less than $5,000,000, such
lesser amount) and (z) in the case of Canadian B/A Loans, C$5,000,000 or a whole
multiple of C$1,000,000 in excess thereof (or, if the then Available Canadian
Revolving Credit Commitments are less than C$5,000,000, such lesser amount).
Upon receipt of any such notice from the Canadian Borrower, the Canadian
Administrative Agent shall promptly notify
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each Canadian Revolving Credit Lender thereof. Each Canadian Revolving Credit
Lender will make the amount of its pro rata share of each borrowing available
to the Canadian Administrative Agent for the account of the Canadian Borrower
at the office of the Canadian Administrative Agent specified in subsection
10.2 prior to 12:00 Noon, Toronto time, on the Borrowing Date requested
by the Canadian Borrower in funds immediately available to the Canadian
Administrative Agent. Such borrowing will then be made available to the
Canadian Borrower by the Canadian Administrative Agent crediting the
account of the Canadian Borrower on the books of such office with the
aggregate of the amounts made available to the Canadian Administrative Agent
by the Canadian Revolving Credit Lenders and in like funds as received by
the Canadian Administrative Agent. Notwithstanding the foregoing, Canadian B/A
Loans shall be made in accordance with the provisions of subsection 2.3.
2.3 Canadian B/A Loans; Acceptances. (a) Subject to the terms
and conditions of this Agreement, the Canadian Borrower may request a Canadian
B/A Loan by presenting drafts for acceptance and purchase as B/As by the
Canadian Revolving Credit Lenders.
(b) No Contract Period with respect to a B/A shall extend
beyond the Termination Date.
(c) To facilitate availment of the Canadian B/A Loans, the
Canadian Borrower hereby appoints each Canadian Revolving Credit Lender as its
attorney to sign and endorse on its behalf, in handwriting or by facsimile or
mechanical signature as and when deemed necessary by such Canadian Revolving
Credit Lender, blank forms of B/As substantially in the form of Exhibit H. In
this respect, it is each Canadian Revolving Credit Lender's responsibility to
maintain an adequate supply of blank forms of B/As for acceptance under this
Agreement. The Canadian Borrower recognizes and agrees that all B/As signed
and/or endorsed on its behalf by a Canadian Revolving Credit Lender as required
hereunder shall bind the Canadian Borrower as fully and effectually as if signed
in the handwriting of and duly issued by the proper signing officers of the
Canadian Borrower. Each Canadian Revolving Credit Lender is hereby authorized to
issue such B/As endorsed in blank in such face amounts as may be determined by
such Canadian Revolving Credit Lender; provided that the aggregate amount
thereof is equal to the aggregate amount of B/As required by the Canadian
Borrower to be accepted and purchased by such Canadian Revolving Credit Lender.
No Canadian Revolving Credit Lender shall be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such instrument
except the gross negligence or wilful misconduct of the Canadian Revolving
Credit Lender or its officers, employees, agents or representatives. Each
Canadian Revolving Credit Lender shall maintain a record with respect to B/As
(a) received by it from the Canadian Administrative Agent in blank hereunder,
(b) voided by it for any reason, (c) accepted and purchased by it hereunder, and
(d) canceled at their respective maturities. Each Canadian Revolving Credit
Lender further agrees to retain such records in the manner and for the statutory
periods provided in the various provincial or federal statutes and regulations
which apply to such Canadian Revolving Credit Lender. Each Canadian Revolving
Credit Lender agrees to provide such records to the Canadian Borrower at the
Canadian Borrower's expense upon request. On request by or on behalf of the
Canadian Borrower, a Canadian Revolving Credit Lender shall cancel all forms of
B/A which have been pre-signed or pre-endorsed on behalf of the Canadian
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Borrower and which are held by the said Canadian Revolving Credit Lender and are
not required to be issued in accordance with the Canadian Borrower's irrevocable
notice.
(d) Drafts of the Canadian Borrower to be accepted as B/As
hereunder shall be signed as set forth in this subsection 2.3. Notwithstanding
that any Person whose signature appears on any B/A may no longer be an
authorized signatory for any of the Canadian Revolving Credit Lenders or the
Canadian Borrower at the date of issuance of a B/A, such signature shall
nevertheless be valid and sufficient for all purposes as if such authority had
remained in force at the time of such issuance and any such B/A so signed shall
be binding on the Canadian Borrower.
(e) Promptly following receipt of a notice of borrowing,
notice of rollover or notice of conversion by way of B/As, in accordance with
subsection 2.2(b), 2.3(h) or 2.3(k), as applicable, the Canadian Administrative
Agent shall so advise the Canadian Revolving Credit Lenders and shall advise
each Canadian Revolving Credit Lender of the aggregate face amount of the B/As
to be accepted by it and the applicable Contract Period (which shall be
identical for all Canadian Revolving Credit Lenders). The aggregate face amount
of the B/As to be accepted by a Canadian Revolving Credit Lender shall be an
integral multiple of C$100,000 and such face amount shall be in each Canadian
Revolving Credit Lender's Applicable Percentage of such Canadian B/A Loan;
provided, that the Canadian Administrative Agent may, in its sole discretion,
increase or reduce any Canadian Revolving Credit Lender's portion of such B/A to
the nearest C$100,000.
(f) Upon acceptance of a B/A by a Canadian Revolving Credit
Lender, such Canadian Revolving Credit Lender shall purchase, or arrange for a
resident of Canada under the Income Tax Act (Canada) to purchase, each B/A from
the Canadian Borrower at the Discount Rate for such Canadian Revolving Credit
Lender applicable to such B/A accepted by it and provide to the Canadian
Administrative Agent the Discount Proceeds for the account of the Canadian
Borrower. The Stamping Fee payable by such Canadian Borrower to a Canadian
Revolving Credit Lender under subsection 2.12 in respect of each B/A accepted by
such Canadian Revolving Credit Lender shall be set off against the Discount
Proceeds payable by the Canadian Revolving Credit Lender under this subsection
2.3.
(g) Each Canadian Revolving Credit Lender may at any time and
from time to time hold, sell, rediscount or otherwise dispose of any or all B/As
accepted and purchased by it.
(h) With respect to each Canadian B/A Loan which is
outstanding hereunder, at or before 11:00 a.m. (Toronto time) two Business Days
before the maturity date of such B/As, the Canadian Borrower shall notify the
Canadian Administrative Agent at the Canadian Administrative Agent's address set
forth in subsection 10.2 by irrevocable telephone notice, followed by a notice
of rollover on the same day, if the Canadian Borrower intends to issue B/As on
such maturity date to provide for the payment of such maturing B/As. If the
Canadian Borrower fails to notify the Canadian Administrative Agent of its
intention to issue B/As on such maturity date, the Canadian Borrower shall
provide on the maturity date of such B/As payment to the Canadian Administrative
Agent on behalf of the Canadian Revolving Credit Lenders of an amount equal to
the aggregate face amount of such B/As. If the Canadian Borrower fails to
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make such payment, such maturing B/As shall be deemed to have been converted on
their maturity date into a Canadian Prime Rate Loan in an amount equal to the
face amount of such B/As.
(i) The Canadian Borrower waives presentment for payment and
any other defense to payment of any amounts due to a Canadian Revolving Credit
Lender in respect of a B/A accepted and purchased by it pursuant to this
Agreement which might exist solely by reason of such B/A being held, at the
maturity thereof, by such Canadian Revolving Credit Lender in its own right and
the Canadian Borrower agrees not to claim any days of grace if such Canadian
Revolving Credit Lender as holder sues the Canadian Borrower on the B/A for
payment of the amount payable by the Canadian Borrower thereunder. On the
specified maturity date of a B/A, or such earlier date as may be required or
permitted pursuant to the provisions of this Agreement, the Canadian Borrower
shall pay the Canadian Revolving Credit Lender that has accepted and purchased
such B/A the full face amount of such B/A and after such payment, the Canadian
Borrower shall have no further liability in respect of such B/A and such
Canadian Revolving Credit Lender shall be entitled to all benefits of, and be
responsible for all payments due to third parties under, such B/A.
(j) If any Event of Default shall occur and be continuing and
the Loans are accelerated pursuant to Section 8, the Canadian Borrower shall, on
the Business Day it receives notice from the Canadian Administrative Agent,
deposit in an account with the Canadian Administrative Agent for the benefit of
the Canadian Revolving Credit Lenders, an amount in cash equal to its Acceptance
Exposure as of such date. Such deposit shall be held by the Canadian
Administrative Agent as collateral for the payment and performance of the
Canadian Borrower Obligations. So long as such Event of Default is continuing,
the Canadian Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Cash Equivalents, which
investments shall be made at the option and sole discretion of the Canadian
Administrative Agent, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall automatically be applied by the Canadian Administrative Agent
to reimburse the applicable Canadian Revolving Credit Lenders for Acceptance
Exposure and, if the maturity of the Loans has been accelerated, to satisfy the
Canadian Borrower Obligations. All remaining amounts on deposit shall be
returned to the Canadian Borrower within three Business Days after all Events of
Default have been cured or waived.
(k) The Canadian Borrower shall have the right at any time
upon irrevocable notice to the Canadian Administrative Agent not later than
11:00 A.M., Toronto time, two Business Days prior to conversion, to convert
Canadian Prime Rate Loans to Canadian B/A Loans, subject to the following
conditions:
(i) each conversion shall be made pro rata among the Canadian
Revolving Credit Lenders in accordance with the respective principal
amounts of the Canadian Prime Rate Loans comprising the converted
Loans;
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(ii) if less than all of the outstanding principal amount of
Canadian Prime Rate Loans shall be converted, the aggregate principal
amount converted shall not be less than C$5,000,000;
(iii) each conversion shall be effected by each Canadian
Revolving Credit Lender's converting the applicable principal amount
of its applicable Canadian Prime Rate Loans into Canadian B/A Loans
having Discount Proceeds equal to such principal amount, and accrued
interest on any Prime Rate Loans being converted shall be paid by the
Canadian Borrower at the time of conversion;
(iv) all Acceptances to be issued as a result of the
conversion of the Canadian Prime Rate Loans shall be issued in
accordance with the provisions of this subsection 2.3; and
(v) Canadian Prime Rate Loans may not be converted into
Canadian B/A Loans if a Default or an Event of Default has occurred
and is continuing and the Canadian Administrative Agent has determined
that such conversion is not appropriate.
(l) At the option of the Canadian Borrower and any Canadian
Revolving Credit Lender, Acceptances under this Agreement to be accepted by such
Canadian Revolving Credit Lender may be issued in the form of depository bills
for deposit with The Canadian Depository for Securities Limited pursuant to the
Depository Bills and Notes Act (Canada). All depository bills so issued shall be
governed by the provisions of this subsection 2.3.
2.4 Reallocation. (a) The Borrowers may, from time to time
during the Commitment Period (but not more than once per calendar quarter),
temporarily reduce, in whole or in part, or increase, the Canadian Revolving
Credit Commitments by giving an irrevocable joint written notice (each, a
"Reallocation Notice") to the Canadian Administrative Agent and the
Administrative Agent at least ten (10) Business Days prior to the day (which day
shall be a Business Day) specified in such notice as the effective date for such
reduction or increase in the Canadian Revolving Credit Commitments, which day
shall (unless otherwise agreed by all of the Canadian Revolving Credit Lenders
in their sole discretion) be the first Business Day of the next following
calendar quarter (the "Reallocation Date"). Any reductions or increases in the
Canadian Revolving Credit Commitments shall take effect on the Reallocation
Date. Each reduction or increase in the Canadian Revolving Credit Commitments
shall result in an automatic corresponding increase or reduction in the
Revolving Credit Commitments; provided that (A) the amount of the Canadian
Revolving Credit Commitments shall not, at any time, (i) be reduced to an amount
that is less than the Total Canadian Revolving Extensions of Credit at such time
or (ii) exceed the Maximum Canadian Revolving Credit Commitments, and (B) the
amount of the Revolving Credit Commitments shall not, at any time, (i) be
reduced to an amount that is less than the Total Revolving Extensions of Credit
at such time or (ii) exceed the Total Commitments as of the Effective Date, as
the Total Commitments may, from time to time, be permanently reduced or canceled
in accordance with subsection 2.8 or 2.9 and (C) the sum of the Revolving Credit
Commitments and the Canadian Revolving Credit Commitments shall not, at any
time, exceed the Total Commitments as of the Effective Date, as the Total
Commitments may, from
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time to time, be permanently reduced or canceled in accordance with subsection
2.8 or 2.9. Any amount of the Canadian Revolving Credit Commitments
reallocated under this subsection 2.4 as Revolving Credit Commitments
will not be available to the Canadian Borrower, and any amount of
the Revolving Credit Commitments reallocated under this subsection 2.4 as
Canadian Revolving Credit Commitments will not be available to the Company,
unless and until such amounts are reallocated back to the Canadian Revolving
Credit Commitments or the Revolving Credit Commitments, as the case may be, in
accordance with the terms and conditions of this subsection 2.4.
(b) The ability of the Borrowers to reallocate the Revolving
Credit Commitments and the Canadian Revolving Credit Commitments in accordance
with this subsubsection 2.4 shall be subject to the conditions that (A) the
representations and warranties set forth in each Loan Document shall be true and
correct in all material respects on and as of the date of such reallocation with
the same effect as though made on and as of such date, except to the extent that
such representations and warranties expressly relate to an earlier date and (B)
at the time of and immediately following such reduction or increase, no Event of
Default or Default shall have occurred and be continuing. Each Reallocation
Notice shall specify the amount (expressed in Dollars) of any reduction or
increase in the Canadian Revolving Credit Commitments and the corresponding
increase or reduction in the Revolving Credit Commitments. Each reallocation
requested under this subsection 2.4 shall be in a minimum aggregate principal
amount of $5,000,000 (or, if less, the remaining amount of the Total Canadian
Revolving Credit Commitments) and in integral multiples of $1,000,000. Each
reduction or increase in the Canadian Revolving Credit Commitments under this
subsection 2.4 shall be made ratably among the Canadian Revolving Credit Lenders
based on their respective Canadian Revolving Credit Commitments. Each reduction
or increase in the Revolving Credit Commitments under this subsection 2.4 shall
be made ratably among the Revolving Credit Lenders based on their respective
Revolving Credit Commitments. The Canadian Administrative Agent or the
Administrative Agent, as the case may be, shall promptly after receiving a
Reallocation Notice notify each Canadian Revolving Credit Lender or Revolving
Credit Lender, as the case may be, of the amount of its Canadian Revolving
Credit Commitment or Revolving Credit Commitment, as the case may be, to be
reallocated and the date of such reallocation.
2.5 Canadian Borrower. Notwithstanding anything in this
Agreement or in any other Loan Document to the contrary, wherever in this
Agreement or any other Loan Document a representation or warranty, indemnity,
covenant or other obligation is expressed to be given or made by or imposed upon
the Canadian Borrower, such representation, warranty, indemnity, covenant or
obligation shall in each case not impose on the Canadian Borrower any obligation
to give financial assistance by way of loan, guarantee, the giving of security,
the payment of money or otherwise within the meaning of Section 44 of the Canada
Business Corporations Act to or for the benefit of any person other than a
holding body corporate as referred to in clause 44(2)(c) of the Canada Business
Corporations Act.
2.6 Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender the then unpaid principal
amount of each Revolving Credit Loan of such Revolving Credit Lender on the
Termination Date (or such earlier date on which the Loans
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39
become due and payable pursuant to Section 8 or the Revolving Credit
Commitments are otherwise terminated). The Canadian Borrower hereby
unconditionally promises to pay to the Canadian Administrative Agent
for the account of the appropriate Canadian Revolving Credit Lender the
then unpaid principal amount of each Canadian Revolving Credit Loan of
such Canadian Revolving Credit Lender on the Termination Date (or
such earlier date on which the Loans became due and payable pursuant
to Section 8 or the Canadian Revolving Credit Commitments are otherwise
terminated). Each Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.12.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) (i) The Administrative Agent, on behalf of the Company,
shall maintain the Register pursuant to subsection 10.6(d), and a subaccount
therein for each Lender, in which shall be recorded (A) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (B) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Lender
hereunder and (C) both the amount of any sum received by the Administrative
Agent hereunder from the Company and each Lender's share thereof.
(ii) The Canadian Administrative Agent, on behalf of the
Canadian Borrower, shall maintain the Register pursuant to subsection 10.6(d),
and a subaccount therein for each Canadian Revolving Credit Lender, in which
shall be recorded (A) the amount of each Canadian Revolving Credit Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Contract
Period (if any) applicable thereto, (B) the amount of any principal or interest
due and payable or to become due and payable from the Canadian Borrower to each
Canadian Revolving Credit Lender hereunder and (C) both the amount of any sum
received by the Canadian Administrative Agent hereunder from the Canadian
Borrower and each Canadian Revolving Credit Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.6(b) shall, to the extent permitted
by applicable law and in the absence of manifest error, be prima facie evidence
of the existence and amounts of the obligations of each Borrower therein
recorded; provided, however, that the failure of any Lender, the Administrative
Agent or the Canadian Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
either Borrower to repay (with applicable interest) the Loans made to such
Borrower by such Lender in accordance with the terms of this Agreement.
(e) Each Borrower agrees that, upon the request to the
Applicable Agent by any Lender, such Borrower will execute and deliver to such
Lender a promissory note of such Borrower evidencing any Loans of such Lender,
substantially in the forms of Exhibit F-1 in the
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case of Revolving Credit Loans or F-2 in the case of Canadian Revolving
Credit Loans, with appropriate insertions as to date and principal amount.
2.7 Commitment Fee. (a) (i) Subject to subsection
2.15(b)(ii), the Company agrees to pay to the Administrative Agent for the
account of each Revolving Credit Lender a commitment fee in Dollars for the
period from and including the first day of the Commitment Period to the
Termination Date, computed at the Commitment Fee Rate on and after the Effective
Date, on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the Effective Date.
(ii) Subject to subsection 2.15(b)(ii), the Canadian Borrower
agrees to pay to the Canadian Administrative Agent for the account of each
Canadian Revolving Credit Lender a commitment fee in Dollars for the period from
and including the first day of the Commitment Period to the Termination Date,
computed at the Commitment Fee Rate on and after the Effective Date, on the
average daily amount of the Available Canadian Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date or such earlier date as the Canadian Revolving Credit
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the Effective Date.
(b) The Company agrees to pay to the Agents the fees in the
amounts and on the dates from time to time agreed to in writing by Holdings or
the Company and the respective Agents.
2.8 Optional Termination or Reduction of Commitments . The
Company shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate the Total Commitments or, from time to
time, to reduce the amount of the Total Commitments, provided that (i) in the
event of a partial reduction of the Total Commitments, such notice shall specify
how such reduction is to be applied to the Total Revolving Credit Commitments
and the Total Canadian Revolving Credit Commitments, and (ii) no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Loans made on the effective date thereof, (A) the
aggregate principal amount of the Revolving Credit Loans then outstanding, when
added to the then outstanding L/C Obligations under the Revolving Credit
Commitments, would exceed the Revolving Credit Commitments then in effect or (B)
the Dollar Equivalent Amount of the aggregate principal amount of the Canadian
Revolving Credit Loans then outstanding, when added to the then outstanding L/C
Obligations under the Canadian Revolving Credit Commitments, would exceed the
Canadian Revolving Credit Commitments then in effect. Any such partial reduction
of the Total Commitments, the Total Revolving Credit Commitments and/or the
Total Canadian Revolving Credit Commitments shall be in an amount equal to
$1,000,000 or a whole multiple thereof and shall reduce permanently the Total
Commitments and, subject to any reallocation permitted under subsection 2.4, the
Revolving Credit Commitments or the Canadian Revolving Credit Commitments, as
applicable, then in effect.
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41
2.9 Optional Prepayments; Mandatory Prepayments and
Commitment Reductions. (a) Each Borrower may on the last day of any Interest
Period with respect thereto, in the case of Eurodollar Loans, on the last day of
any Contract Period with respect thereto, in the case of Canadian B/A Loans, or
at any time and from time to time, in the case of ABR Loans, Canadian Base Rate
Loans and Canadian Prime Rate Loans, prepay the Loans, in whole or in part,
without premium or penalty, upon at least three Business Days' irrevocable
notice in the case of Eurodollar Loans, upon at least two Business Days'
irrevocable notice in the case of Canadian B/A Loans, and upon at least one
Business Day's irrevocable notice in the case of ABR Loans, Canadian Base Rate
Loans and Canadian Prime Rate Loans, to the Applicable Agent, specifying the
date and amount of prepayment and whether the prepayment is of (i) Revolving
Credit Loans, Canadian Revolving Credit Loans or a combination thereof and (ii)
Eurodollar Loans, ABR Loans, Canadian B/A Loans, Canadian Base Rate Loans,
Canadian Prime Rate Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice the
Applicable Agent shall promptly notify each affected Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with any amounts payable pursuant to
subsection 2.19.
(b) (i) If, at any time during the Commitment Period, the
Total Revolving Extensions of Credit exceed the Total Revolving Credit
Commitments then in effect, the Company shall, without notice or demand,
immediately repay the Revolving Credit Loans in an aggregate principal amount
equal to such excess, together with interest accrued to the date of such payment
or prepayment and any amounts payable under subsection 2.19. To the extent that
after giving effect to any prepayment of the Revolving Credit Loans required by
the preceding sentence, the Total Revolving Extensions of Credit exceed the
Total Revolving Credit Commitments then in effect, the Company shall, without
notice or demand, immediately cash collateralize the then outstanding L/C
Obligations under the Revolving Credit Commitments in an amount equal to such
excess in accordance with paragraph (f) below.
(ii) If, at any time during the Commitment Period, the Total
Canadian Revolving Extensions of Credit exceed the aggregate Canadian Revolving
Credit Commitments then in effect, the Canadian Borrower shall, without notice
or demand, immediately repay the Canadian Revolving Credit Loans (other than
Canadian B/A Loans) in an aggregate principal amount equal to such excess,
together with interest accrued to the date of such payment or prepayment and any
amounts payable under subsection 2.19. To the extent that after giving effect to
any prepayment of the Canadian Revolving Credit Loans required by the preceding
sentence, the Total Canadian Revolving Extensions of Credit exceed the Total
Canadian Revolving Credit Commitments then in effect, the Canadian Borrower
shall, without notice or demand, immediately cash collateralize the then
outstanding L/C Obligations under the Canadian Revolving Credit Commitments and
Acceptance Exposure in an amount equal to such excess in accordance with
paragraph (f) below.
(c) If any Capital Stock or Indebtedness shall be issued or
incurred by the Company or any of its Subsidiaries (other than Indebtedness
permitted to be incurred under subsection 7.2 as in effect on the Closing Date,
including Indebtedness the proceeds of which are used to finance Permitted
Acquisitions), an amount equal to (i) in the case of issuances of Capital Stock,
50%, and (ii) in the case of incurrences of Indebtedness, 100%, of the Net Cash
Proceeds
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thereof shall be applied on the date of such issuance or incurrence
toward the permanent reduction of the Total Commitments as set forth in
subsection 2.9(e).
(d) If on any date the Company or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then (i)
unless a Reinvestment Notice shall be delivered in respect thereof, such Net
Cash Proceeds shall be applied on such date toward the permanent reduction of
the Total Commitments as set forth in subsection 2.9(e) or (ii) if a
Reinvestment Notice has been delivered in respect thereof, on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the permanent
reduction of the Total Commitments as set forth in subsection 2.9(e).
Notwithstanding the foregoing, all Net Cash Proceeds in excess of $30,000,000
received in any fiscal year shall be applied toward the permanent reduction of
the Total Commitments as set forth in subsection 2.9(e).
(e) (i) Total Commitment reductions made pursuant to this
subsection 2.9 shall be applied to reduce the Total Revolving Credit Commitments
and the Total Canadian Revolving Credit Commitments in any order designated by
the Company, subject to any reallocation permitted under subsection 2.4.
(ii) Any such reduction of the Total Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans to
the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the Total Revolving Credit Commitments as so reduced, provided that if
the aggregate principal amount of Revolving Credit Loans then outstanding is
less than the amount of such excess (because L/C Obligations under the Revolving
Credit Commitments constitute a portion thereof), the Company shall, to the
extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders in accordance with
paragraph (f) below. The application of any prepayment pursuant to this
subsection shall be made first to ABR Loans and second to Eurodollar Loans. Each
prepayment of the Revolving Credit Loans under this subsection 2.9(e)(ii)
(except in the case of Revolving Credit Loans that are ABR Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid and any amounts payable under subsection 2.19.
(iii) Any such reduction of the Total Canadian Revolving
Credit Commitments shall be accompanied by prepayment of the Canadian Revolving
Credit Loans (other than Canadian B/A Loans) to the extent, if any, that the
Total Canadian Revolving Extensions of Credit exceed the amount of the Total
Canadian Revolving Credit Commitments as so reduced, provided that if the
aggregate principal amount of Canadian Revolving Credit Loans (other than
Canadian B/A Loans) then outstanding is less than the amount of such excess
(because Canadian B/A Loans or L/C Obligations under the Canadian Revolving
Credit Commitments constitute a portion thereof), the Canadian Borrower shall,
to the extent of the balance of such excess, replace outstanding Letters of
Credit, terminate outstanding Acceptances and/or deposit an amount in cash in a
cash collateral account established with the Canadian Administrative Agent for
the benefit of the Canadian Revolving Credit Lenders in accordance with
paragraph (f) below. Each prepayment of the Loans under this subsection 2.9
(e)(iii) shall be accompanied by accrued
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interest to the date of such prepayment on the amount prepaid and any amounts
payable under subsection 2.19.
(f) The cash collateralization of L/C Obligations and
Acceptance Reimbursement Obligations shall be accomplished by the applicable
Borrower's depositing an amount equal to such L/C Obligations or Acceptance
Reimbursement Obligations, as the case may be, in a cash collateral account
opened by the Applicable Agent. This account shall bear interest which shall, so
long as no Event of Default has occurred and is continuing, be payable to the
applicable Borrower (and, if an Event of Default shall have occurred, such
interest shall remain in such account until such Event of Default ceases to
exist or the Applicable Agent has applied such interest to payment of the
Company Obligations or the Canadian Borrower Obligations, as the case may be).
Neither Borrower shall have any right to withdraw any amount from such cash
collateral account; provided that, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, the Applicable Agent
shall, at the request of the applicable Borrower, from time to time, release an
amount of cash collateral equal to the excess of all cash collateral then on
deposit in such cash collateral account over the then applicable outstanding L/C
Obligations and Acceptance Reimbursement Obligations and accrued interest
thereon. Each Borrower hereby grants to the Applicable Agent, for the benefit of
the applicable Issuing Banks and the applicable Participating Banks, a security
interest in such cash collateral (in whatever form) and the proceeds thereof to
secure all such L/C Obligations. Amounts held in such cash collateral account
shall be applied by the Applicable Agent to the payment of such L/C Obligations
and Acceptance Reimbursement Obligations. Each Borrower shall execute and
deliver to the Applicable Agent, for the account of the applicable Issuing Banks
and Participating Banks, such further documents and instruments as the
Applicable Agent may reasonably request to evidence the creation and perfection
of such security interest in such cash collateral account.
(g) If, on any Quarterly Date, the outstanding balance of the
Total Canadian Revolving Extensions of Credit exceeds 105% of the Canadian
Revolving Credit Commitments (as a result of the fluctuation of currency values
or otherwise), the Canadian Borrower shall immediately repay the aggregate
outstanding Canadian Revolving Credit Loans (other than Canadian B/A Loans) to
the extent required to eliminate such excess. If any such excess remains after
repayment in full of such Canadian Revolving Credit Loans, the Canadian Borrower
shall provide cash collateral for the L/C Obligations under the Canadian
Revolving Credit Commitments and Acceptance Exposure in the manner set forth in
subsections 2.3(j) and 2.10(f), as applicable, to the extent required to
eliminate such excess.
2.10 Conversion and Continuation Options. (a) Either Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans, in the
case of the Company, or Canadian Base Rate Loans, in the case of the Canadian
Borrower, by giving the Applicable Agent at least two Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. Either Borrower may elect from time to time to convert ABR
Loans, in the case of the Company, or Canadian Base Rate Loans, in the case of
the Canadian Borrower, to Eurodollar Loans by giving the Applicable Agent at
least three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the
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length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Applicable Agent shall promptly notify
each affected Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans, in the case of the Company, or Canadian Base Rate Loans,
in the case of the Canadian Borrower, may be converted as provided
herein, provided that (i) no Loan may be converted into a Eurodollar Loan
under a particular Facility when any Event of Default has occurred and is
continuing and the Applicable Agent has or the Majority Facility Lenders
under such Facility have determined not to permit such conversions and
(ii) no Loan under a particular Facility may be converted into a Eurodollar Loan
after the date that is one month prior to the final scheduled termination or
maturity date of such Facility.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of then current Interest Period with respect thereto by the relevant
Borrower giving notice to the Applicable Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan under a particular Facility may be continued as
such (i) when any Event of Default has occurred and is continuing and the
Applicable Agent has or the Majority Facility Lenders under such Facility have
determined not to permit such continuations or (ii) after the date that is one
month prior to the final scheduled termination or maturity date of such Facility
and provided, further, that if the relevant Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans, in the case of the Company, or Canadian
Base Rate Loans, in the case of the Canadian Borrower, on the last day of such
then expiring Interest Period.
(c) Canadian B/A Loans and Canadian Prime Rate Loans may be
converted and continued as provided in subsection 2.3.
2.11 Minimum Amounts of Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods and
Contract Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof and the aggregate amount of any
Canadian B/A Loans having identical Contract Periods commencing on the same date
shall be equal to C$5,000,000 or a whole multiple of C$1,000,000 in excess
thereof.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) Each Acceptance shall be subject to a Stamping Fee
payable on the date of acceptance thereof.
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(d) Each Canadian Base Rate Loan shall bear interest at a
rate per annum equal to the US Base Rate plus the Applicable Margin.
(e) Each Canadian Prime Rate Loan shall bear interest at a
rate per annum equal to the Canadian Prime Rate plus the Applicable Margin.
(f) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum which is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection plus 2% (or, in the case of overdue Acceptance Reimbursement
Obligations, the rate that would be applicable to Canadian Prime Rate Loans plus
2%) or (y), to the extent permitted by applicable law, in the case of overdue
interest, commitment fee or other amount due in Dollars, the rate described in
paragraph (b) or (d) of this subsection for the applicable Facility (or, if
there is no applicable Facility, for the Revolving Credit Facility) plus 2%, in
each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment), or (z) to the extent permitted by applicable
law, in the case of overdue interest, commitment fee or other amount due in
Canadian Dollars, the rate described in paragraph (e) of this subsection plus
2%, in each case from the date of such non-payment until such amount is paid in
full (as well after as before judgment); provided that, for purposes of this
subsection 2.12(f), any amount secured by mortgages on real property, if
required by the Interest Act (Canada), shall bear interest at the same rate as
such principal or interest amount not in arrears.
(g) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (f) of this
subsection shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Commitment fees,
commissions and interest shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, Canadian Prime
Rate Loans and Canadian Base Rate Loans, interest thereon shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Applicable Agent shall as soon as practicable notify the relevant
Borrower and the affected Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the ABR,
the Canadian Prime Rate, the US Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Applicable Agent shall as soon as
practicable notify the affected Borrower and the affected Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent or the Canadian Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrowers and
the Lenders in the absence of manifest error. The Administrative Agent shall, at
the request of the Company, deliver to the Company a statement
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showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to subsection 2.12(a).
(c) For purposes of the Interest Act (Canada), whenever any
interest under this Agreement is calculated using an annual rate based on a
period which is less than the actual number of days in a year (the "Lesser
Period"), such rate determined pursuant to such calculation, when expressed as
an annual rate, is equivalent to (i) the applicable rate based on such Lesser
Period, (ii) multiplied by the actual number of days in the calendar year in
which the period for which such interest is payable ends, and (iii) divided by
the number of days in such Lesser Period. The rates of interest specified in
this Agreement are nominal rates and all interest payments and computations are
to be made without allowance or deduction for deemed reinvestment of interest.
2.14 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Applicable Agent shall have determined (which
determination shall be conclusive and binding upon the relevant
Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Interest Period, or
(b) the Applicable Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Applicable Agent shall give telecopy or telephonic notice thereof to the
relevant Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans under
such Facility shall be converted to or continued as ABR Loans, in the case of
the Company, or Canadian Base Rate Loans, in the case of the Canadian Borrower,
and (z) any outstanding Eurodollar Loans under such Facility shall be converted,
on the first day of such Interest Period, to ABR Loans, in the case of the
Company, or Canadian Base Rate Loans, in the case of the Canadian Borrower.
Until such notice has been withdrawn by the Applicable Agent, no further
Eurodollar Loans under such Facility shall be made or continued as such, nor
shall the relevant Borrower have the right to convert Loans under such Facility
to Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing by a
Borrower from the Lenders hereunder, each payment by a Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Revolving Credit Commitment
Percentages or Canadian Revolving Credit Commitment Percentages, as the case may
be, of the relevant Lenders. Each payment
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(other than prepayments) on account of principal of and interest on the Loans,
each payment in respect of fees payable hereunder and each payment in respect
of Reimbursement Obligations and Acceptance Reimbursement Obligations shall be
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders,
except to the extent otherwise required by clause (ii) of subsection
2.15(b), by subsection 2.18 or by subsection 2.21. All payments (including
prepayments) to be made by the Company hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off
or counterclaim and shall be made prior to 12:00 Noon, New York City time, on
the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in subsection 10.2, in
Dollars and in immediately available funds, and all payments (including
prepayments) to be made by the Canadian Borrower hereunder, whether on account
of principal, interest, fees or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 12:00 Noon, Toronto time, on the date
thereof to the Canadian Administrative Agent, for the account of the Lenders, at
the Canadian Administrative Agent's office specified in subsection 10.2, in
Dollars or Canadian Dollars, as required by the Loan Documents, and in
immediately available funds. Each of the Administrative Agent and the Canadian
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at then
applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless an Applicable Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to such
Applicable Agent, such applicable Agent may assume that such Lender is making
such amount available to such Applicable Agent, and such Applicable Agent may,
in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If such amount is not made available to such Applicable
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to such Applicable Agent, on demand, such amount with interest thereon at a rate
equal to (i) in the case of amounts to be made available in Dollars, the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to such Applicable Agent, and (ii) in the case of
amounts to be made available in Canadian Dollars, the Canadian Administrative
Agent's reasonable estimate of its average daily cost of funds. A certificate of
such Applicable Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to such Applicable
Agent by such Lender (any such Lender, a "Non-Funding Lender") within three
Business Days of such Borrowing Date, (i) the Applicable Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to ABR Loans (in the case of amounts to be made available in Dollars)
or to Canadian
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48
Prime Rate Loans (in the case of amounts to be made available in Canadian
Dollars), on demand, from the applicable Borrower, (ii) the commitment
fee of such Non-Funding Lender referred to in subsection 2.7 shall not accrue
during the period commencing on such Borrowing Date and ending on the date on
which such Non-Funding Lender makes available to the Applicable Agent its share
of such borrowing and (iii) the Company shall have the right to replace such
Non-Funding Lender in accordance with subsection 2.21.
(c) Each obligation of the Loan Parties under the Loan
Documents related to any Loans or Letters of Credit denominated in Dollars
(including reimbursement obligations, interest, fees and commissions) shall be
paid in Dollars. Each obligation of the Loan Parties under the Loan Documents
related to any Loans or Letters of Credit denominated in Canadian Dollars
(including reimbursement obligations, interests, fees and commissions) shall be
paid in Canadian Dollars.
2.16 Illegality. (a) Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by any central bank or other Governmental
Authority shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement (i) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans, in the case of the Company, or Canadian Base Rate Loans, in
the case of the Canadian Borrower, to Eurodollar Loans shall forthwith be
canceled; provided that any request by the relevant Borrower pursuant to
subsection 2.2 or 2.10 for a Eurodollar Loan shall, as to such Lender, be deemed
to be a request for an ABR Loan, in the case of the Company, or a Canadian Base
Rate Loan, in the case of the Canadian Borrower, and (ii) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically
to ABR Loans, in the case of the Company, or Canadian Base Rate Loans, in the
case of the Canadian Borrower, on the respective last days of then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of then current Interest Period with respect thereto,
the relevant Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.19.
(b) Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by any central bank or other Governmental Authority shall
make it unlawful for any Lender to create or maintain Acceptances as
contemplated by this Agreement (i) the commitment of such Lender hereunder to
accept drafts, purchase Acceptances, continue Acceptances as such and convert
Canadian Prime Rate Loans to Acceptances shall forthwith be canceled and (ii)
the full face amount of such Lender's then outstanding Acceptances, if any,
shall be converted automatically to Canadian Prime Rate Loans on the respective
maturities thereof, or within such earlier period as required by law.
2.17 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
by any central bank or other Governmental Authority or compliance by any Lender
with any request or directive (whether or
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49
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof (or, if later, the date on
which such Lender becomes a Lender):
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes and changes in the rate of net income taxes, branch
profits taxes or franchise taxes imposed in lieu of net income taxes
of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the relevant Borrower shall promptly
pay such Lender, within 15 days after receipt by such Borrower of a certificate
referred to in the second succeeding sentence, any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount receivable.
If any Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify the relevant Borrower, through the
Applicable Agent, of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this subsection
(setting forth in reasonable detail the calculation of such amounts) submitted
by such Lender, through the Applicable Agent, to the relevant Borrower shall be
conclusive in the absence of manifest error. This covenant shall survive for one
hundred eighty (180) days after the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof by any Governmental Authority or
compliance by such Lender or any corporation controlling such Lender with any
request, guideline or directive regarding capital adequacy (whether or not
having the force of law) from any Governmental Authority made subsequent to the
date hereof (or, if later, the date on which such Lender becomes a Lender) does
or shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount reasonably deemed by such Lender to be material, then from time to
time, after
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50
submission by such Lender to the applicable Borrower (with a copy to the
Applicable Agent) of a written request therefor (setting forth in reasonable
detail the calculation of amounts to be paid hereunder as a result thereof),
such Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
2.18 Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes or branch profits taxes or franchise taxes
imposed in lieu of net income taxes imposed on any Agent or any Lender as a
result of a present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to any Agent or any
Lender hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes, provided, however, that the Borrowers shall be entitled to deduct and
withhold any Non-Excluded Taxes and neither Borrower shall not be required to
increase any such amounts payable to any Revolving Credit Lender that fails to
comply with the requirements of paragraph (b) of this subsection. Each Lender
shall promptly notify the Company of a change in such Lender's tax status that
would require a Borrower to withhold and/or pay any amounts under this paragraph
(a). Whenever any Non-Excluded Taxes are payable by a Borrower, as promptly as
possible thereafter such Borrower shall send to the Applicable Agent for its own
account or for the account of such Agent or Lender, as the case may be, a
certified copy of an original official receipt received by such Borrower showing
payment thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Applicable Agent the
required receipts or other required documentary evidence within 30 days of
written request therefor by any Agent or such Lender and the date such receipt
or evidence first becomes available to such Borrower, such Borrower shall
indemnify the Agents and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Revolving Credit Lender that is not a United States
person as defined in Section 7701(a)(30) of the Code shall:
(X) (1) before the first payment date after it becomes a
party to this Agreement deliver to the Company and the Administrative
Agent two duly completed copies of (A) Internal Revenue Service Form
W-8BEN, in the case of a Lender claiming treaty benefits with respect
to payments under this Agreement and any Notes, or Internal
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51
Revenue Service Form W-8ECI, in the case of a Lender claiming
payments under this Agreement and any Notes are effectively
connected with the conduct of a trade or business within the
United States, or successor applicable form, as the case may
be, and covering all amounts receivable by it under this Agreement
and any Notes, together with such other forms, documentation
or certifications as may be necessary to establish an available
exemption from deduction or withholding of U.S. federal income
taxes with respect to payments under this Agreement and any Notes;
(ii) deliver to the Company and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form, documentation or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Company; and
(iii) obtain such extensions of time for filing and file such
forms, documentation or certifications as may reasonably be requested
by the Company or the Administrative Agent; and
(Y) in the case of any such Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of subsection 2.18(b)(X) above, (i)
represent to the Company (for the benefit of the Company and the
Agents) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Code, (ii) agree to furnish to the Company on or
before the date of any payment by the Company, with a copy to the
Administrative Agent, (A) a certificate substantially in the form of
Exhibit H (any such certificate a "U.S. Tax Compliance Certificate")
and (B) two accurate and complete original signed copies of Internal
Revenue Service Form W-8BEN, or successor applicable form certifying
to such Lender's legal entitlement at the date of such certificate to
an exemption from U.S. withholding tax under the provisions of Section
871(h) or 881(c) of the Code with respect to payments to be made under
this Agreement and any Notes (and to deliver to the Company and the
Administrative Agent two further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recently provided form, and, if
necessary, obtain any extensions of time reasonably requested by the
Company or the Administrative Agent for filing and completing such
forms), and (iii) agree, to the extent legally entitled to do so, upon
reasonable request by the Company, to provide to the Company (for the
benefit of the Company and the Agents) such other forms, documentation
or certification as may be reasonably required in order to establish
the legal entitlement of such Lender to an exemption from withholding
with respect to payments under this Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date on which such Lender becomes a Lender under this Agreement which
renders all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Company and the Administrative Agent. Such Lender shall certify (i)
in the case of a Lender claiming treaty benefits with respect
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payments under this Agreement and any Notes, or in the case of a Lender claiming
amounts receivable by it under this Agreement any Notes are effectively
connected with the conduct of a trade or business within the United States, that
it is entitled to receive payments under this Agreement and any Notes without
deduction or withholding of any United States federal income taxes and (ii) that
it is entitled to an exemption from United States backup withholding tax. Each
Person that shall become a Lender or a Participant pursuant to subsection 10.6
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms, documentation and certifications required pursuant to this
subsection, provided that in the case of a Participant such Participant shall
furnish all such required forms, documentation and certifications to the Lender
from which the related participation shall have been purchased, and such Lender
shall in turn furnish all such required forms, documentation and certifications
to the Borrowers and the Administrative Agent, together with such other forms
(including, without limitation, Internal Revenue Service Form W-8IMY),
documentation or certifications as may be necessary to establish an available
exemption from deduction or withholding of U.S. federal income taxes on payments
under this Agreement and any Notes.
(c) If any Lender, the Administrative Agent or the Canadian
Administrative Agent shall become aware in its sole and good faith judgment that
it is entitled to receive a refund in respect of Non-Excluded Taxes as to which
it has received additional amounts from either Borrower pursuant to subsection
2.18(a), it shall promptly notify such Borrower of the availability of such
refund and within 30 days after receipt of a request by such Borrower, apply for
such refund at such Borrower's expense. If any Lender, the Administrative Agent
or the Canadian Administrative Agent receives a refund in respect of
Non-Excluded Taxes as to which it has received additional amounts from either
Borrower pursuant to subsection 2.18(a), it shall promply repay such refund to
such Borrower, provided, however, that if any Lender, the Administrative Agent
or the Canadian Administrative Agent receives a refund which it must
subsequently return to the applicable taxing authority after such Borrower has
already been repaid, such Borrower agrees to promptly return the amount of such
repayment to the Lender, the Administrative Agent or the Canadian Administrative
Agent.
(d) For the purposes of this subsection 2.18 and subsection
2.17, a change in treaty, law, rule or regulation shall not include (i) the
ratification or entry into force of the income tax treaty between the United
States and Luxembourg or (ii) the new United States withholding regulations
(Treasury Decision 8734 and Treasury Decision 8804) which become effective on
January 1, 2000.
2.19 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any reasonably foreseeable loss or expense
which such Lender may sustain or incur caused by (a) default by such Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
such Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by such Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a payment or prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification shall include an amount equal to the
excess, if any, of (i) the amount of interest
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which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.20 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17 or
2.18(a) with respect to such Lender, it will, if requested by a Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event, including avoiding the need
for, or reducing the amounts of, additional costs of the Borrower pursuant to
subsection 2.17 or 2.18(a); provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this subsection shall affect or postpone any of the
obligations of either Borrower or the rights of any Lender pursuant to
subsection 2.17 or 2.18(a).
2.21 Replacement of Lenders under Certain Circumstances. Each
Borrower shall be permitted to replace any Lender (a) which requests
reimbursement for amounts owing pursuant to Section 2.17 or 2.18, (b) which
defaults in its obligation to make Loans or create Acceptances hereunder or (c)
if such Lender or its affiliated Allocation Lender shall be unable, for any
reason, to permit the Borrowers to effect a reallocation in accordance with
subsection 2.4; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall not have designated a different lending office under
subsection 2.20 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.17 or 2.18, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) such Borrower shall
be liable to such replaced Lender under subsection 2.19 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) if the Lender to be replaced has an
Acceptance Exposure and is to be replaced on any day other than the last day of
the applicable Contract Period, such Borrower shall cash collateralize such
Acceptance Exposure in a manner acceptable to such Lender, (vii) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to the Administrative Agent, (viii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of subsection 10.6
(provided that such Borrower shall be obligated to pay the registration and
processing fee referred to therein), (ix) until such time as such replacement
shall be consummated, such Borrower shall pay all additional amounts (if any)
required pursuant to subsection 2.17 or 2.18, as the case may be, (x) any such
replacement shall not be deemed to be a waiver of any rights which the
Borrowers, the Administrative Agent, the
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Canadian Administrative Agent or any other Lender shall have against the
replaced Lender and (xi) any Lender may be replaced only if its affiliated
Allocation Lender also is replaced in accordance with this subsection 2.21, and
any replacement financial institution in respect of such Allocation Lender shall
assume, or such financial institution together with its Affiliate shall assume
on a pro rata basis, each of the Commitments of such replaced Allocation
Lenders.
SECTION 3. LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Bank, in reliance on the agreements of the Lenders set
forth in subsection 3.4(a), agrees to issue letters of credit ("Letters of
Credit") for the account of a Borrower on any Business Day during the Commitment
Period in such form as may be approved from time to time by such Issuing Bank
and the Applicable Agent; provided that no Issuing Bank shall have any
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the sum of the L/C Obligations under the Revolving Credit
Commitments and the L/C Obligations under the Canadian Revolving Credit
Commitments would exceed the L/C Commitment, (ii) the aggregate Available
Revolving Credit Commitments would be less than zero or (iii) the aggregate
Available Canadian Revolving Credit Commitments would be less than zero.
(b) Letters of Credit issued for the account of the Company
shall be issued under the Revolving Credit Commitments, and Letters of Credit
issued for the account of the Canadian Borrower shall be issued under the
Canadian Revolving Credit Commitments. Each Letter of Credit issued under the
Revolving Credit Commitments shall be denominated in Dollars and each Letter of
Credit issued under the Canadian Revolving Credit Commitments shall be
denominated in Dollars or Canadian Dollars. Each Letter of Credit shall expire
no later than the earlier of (i) 365 days after its date of issuance and (ii)
five Business Days prior to the Termination Date, provided that any Letter of
Credit with a one-year term may provide for an annual renewal (which shall in no
event extend beyond the date referred to in clause (ii) above) if such renewal
is consented to by the applicable Issuing Bank and all conditions precedent to
the issuance of Letters of Credit are met at the time of such renewal.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, (i) if such Letter of
Credit is issued under the Revolving Credit Commitments, the laws of the State
of New York and (ii) if such Letter of Credit is issued under the Canadian
Revolving Credit Commitments, the laws of the Province of Ontario.
(d) No Issuing Bank shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Bank or any Participating Bank to exceed any limits imposed by, any
applicable Requirement of Law.
(e) The letters of credit listed on Schedule IV shall be
deemed to be Letters of Credit issued under this Agreement on the Closing Date.
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3.2. Procedure for Issuance of Letters of Credit. A Borrower
may from time to time request that an Issuing Bank issue a Letter of Credit by
delivering to such Issuing Bank (with a copy to the Applicable Agent) at its
address for notices specified herein an Application therefor, completed to the
satisfaction of such Issuing Bank and such Applicable Agent, and such other
certificates, documents and other papers and information as such Issuing Bank
may reasonably request. Upon receipt of any Application, such Issuing Bank will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall an Issuing Bank be required to issue any Letter
of Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by such Issuing Bank
and the applicable Borrower. The Issuing Bank shall furnish a copy of such
Letter of Credit to the applicable Borrower and to each applicable Participating
Bank promptly following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) Each Borrower
will pay a fee on all outstanding Letters of Credit issued for the account of
such Borrower at a per annum rate equal to the Applicable Margin then in effect
with respect to Eurodollar Loans under the Revolving Credit Facility, shared
ratably among the Revolving Credit Lenders or Canadian Revolving Credit Lenders,
as the case may be, and payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date. In addition, each Borrower shall pay to the
applicable Issuing Lender for its own account a fronting fee on all outstanding
Letters of Credit issued for the account of such Borrower of 1/8 of 1% per
annum, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees and commissions, each
Borrower shall pay or reimburse each Issuing Bank for such normal and customary
costs and expenses as are incurred or charged by such Issuing Bank in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit issued for the account of such Borrower; provided that such costs and
expenses are not paid by such Borrower under subsections 2.19, 3.5 and/or 10.5
of this Agreement.
3.4. L/C Participations. (a) Each Issuing Bank irrevocably
agrees to grant and hereby grants to each applicable Participating Bank, and, to
induce the Issuing Banks to issue Letters of Credit hereunder, each
Participating Bank irrevocably agrees to accept and purchase and hereby accepts
and purchases from each applicable Issuing Bank, on the terms and conditions
hereinafter stated, for such Participating Bank's own account and risk an
undivided interest equal to such Participating Bank's Applicable Percentage in
the relevant Issuing Bank's obligations and rights under each Letter of Credit
issued by it hereunder in accordance with the terms hereof and the amount of
each draft paid by such Issuing Bank thereunder. Each Participating Bank
unconditionally and irrevocably agrees with each applicable Issuing Bank that,
if a draft is paid under any Letter of Credit for which such Issuing Bank is not
reimbursed in full by the applicable Borrower in accordance with the terms of
this Agreement, such Participating Bank shall pay to such Issuing Bank upon
demand at such Issuing Bank's address
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56
for notices specified herein an amount equal to such Participating Bank's
Applicable Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) If any amount required to be paid by any Participating
Bank to an Issuing Bank pursuant to paragraph in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit is
paid to such Issuing Bank after the date such payment is due, such Participating
Bank shall pay to such Issuing Bank on demand an amount equal to the product of
(i) such amount, times (ii) (a) the daily average Federal funds rate, as quoted
by such Issuing Bank, with respect to Letters of Credit issued under the
Revolving Credit Commitments and (b) the average daily cost of funds as quoted
by such Issuing Bank with respect to Letters of Credit issued under the Canadian
Revolving Credit Commitments, in each case during the period from and including
the date such payment is required to the date on which such payment is
immediately available to such Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of an Issuing Bank submitted to
any Participating Bank with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Bank has made
payment under any Letter of Credit and has received from any Participating Bank
its pro rata share of such payment in accordance with subsection 3.4(a), such
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the Borrowers or otherwise, including proceeds of collateral
applied thereto by such Issuing Bank), or any payment of interest on account
thereof, such Issuing Bank will distribute to such Participating Bank its pro
rata share thereof; provided, however, that in the event that any such payment
received by an Issuing Bank shall be required to be returned by such Issuing
Bank, such Participating Bank shall return to such Issuing Bank the portion
thereof previously distributed by such Issuing Bank to it.
3.5. Reimbursement Obligation of the Borrowers. (a) Each
Borrower agrees to reimburse each Issuing Bank which has issued a Letter of
Credit for the account of such Borrower on each date on which such Issuing Bank
notifies such Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by such Issuing Bank for the amount of such draft so
paid and any stamp taxes, fees, charges or other costs or expenses incurred by
such Issuing Bank in connection with such payment. Each such payment shall be
made to such Issuing Bank at its address for notices specified herein in lawful
money of the United States of America or of Canada, as the case may be, and in
immediately available funds.
(b) Subject to paragraph (c) immediately below, interest
shall be payable on any and all amounts remaining unpaid by the applicable
Borrower under this Section from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate which would be payable on any outstanding (i) ABR Loans under the Revolving
Credit Facility which were then overdue in the case of Letters of Credit
denominated in Dollars and issued under the Revolving Credit Facility, (ii)
Canadian Prime Rate Loans under the Canadian Revolving Credit Facility which are
then overdue in the case of Letters of Credit denominated in Canadian Dollars
and (iii) Canadian Base Rate Loans under the Canadian Revolving Credit Facility
which are then overdue in the case of Letters of Credit denominated in Dollars
and issued under the Canadian Revolving Credit Facility.
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57
(c) So long as each of the conditions precedent specified in
subsection 5.3 is satisfied at such time, each drawing under any Letter of
Credit shall constitute a request by the applicable Borrower to the Applicable
Agent for a borrowing pursuant to subsection 2.2 of ABR Loans under the
Revolving Credit Facility or Canadian Prime Rate Loans or Canadian Base Rate
Loans under the Canadian Revolving Credit Facility, as the case may be, in an
amount equal to the lesser of (i) the then aggregate Available Revolving Credit
Commitments or the Available Canadian Revolving Credit Commitments, as the case
may be, and (ii) the amount of such drawing. The Borrowing Date with respect to
such borrowing shall be the date of such drawing. Each Revolving Credit Lender
or Canadian Revolving Credit Lender, as the case may be, will make the amount of
its pro rata share of such borrowing available to the Applicable Agent at its
office specified in subsection 10.2 by the close of business on such Borrowing
Date (if such Lender receives notice of such borrowing in sufficient time to
fund its portion of such borrowing on such Date, and otherwise on the next
Business Day) in funds immediately available to the Applicable Agent. Such funds
will then be made available by the Applicable Agent to the relevant Issuing Bank
in satisfaction of the applicable Borrower's obligation to reimburse such
Issuing Bank pursuant to clause (a) above. All ABR Loans deemed to be made
pursuant to this paragraph (c) shall constitute Revolving Credit Loans for all
purposes of this Agreement, and all Canadian Prime Rate Loans and Canadian Base
Rate Loans deemed made pursuant to this paragraph (c) shall constitute Canadian
Revolving Credit Loans for all purposes of this Agreement.
3.6. Obligations Absolute. (a) Each Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrowers may have or have had against any Issuing Bank or any
beneficiary of a Letter of Credit.
(b) Each Borrower also agrees with each Issuing Bank that
such Issuing Bank shall not be responsible for, and such Borrower's
Reimbursement Obligations under subsection 3.5(a) shall not be affected by,
among other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among the
Borrowers and any beneficiary of any Letter of Credit or any other party
to which such Letter of Credit may be transferred or any (iii) claims
whatsoever of either Borrower against any beneficiary of such Letter of
Credit or any such transferee.
(c) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) Each Borrower agrees that any action taken or omitted by
an Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York (in the case of Letters of Credit
Issued under the Revolving Credit Facility) or the Uniform Customs, as published
from time to time by the International Chamber of Commerce (in the case of
Letters of Credit Issued
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58
under the Canadian Revolving Credit Facility), shall be binding on such Borrower
and shall not result in any liability of such Issuing Bank to such Borrower.
3.7. Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the relevant Issuing Bank
shall promptly notify the applicable Borrower of the date and amount thereof.
The responsibility of any Issuing Bank to such Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with the
requirements of such Letter of Credit.
3.8. Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, each Borrower hereby represents and warrants to the Agents and each
Lender that:
4.1 Financial Condition. (a) The combined balance sheets of
the Industrial Chemicals Business as at December 31, 1998 and December 31, 1997
and the combined statements of operations, changes in equity (deficit) and cash
flows for the fiscal years ended on December 31, 1998, December 31, 1997 and
December 31, 1996, reported on by Deloitte & Touche LLP, copies of which have
heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the Industrial Chemicals
Business as at such dates, and the consolidated results of its operations and
its changes in equity (deficit) and consolidated cash flows for the fiscal years
then ended.
(b) The combined pro forma balance sheet of the Industrial
Chemicals Business as of December 31, 1998 (the "Company Pro Forma Balance
Sheet"), certified by a Responsible Officer, a copy of which has heretofore been
furnished to each Lender, presents fairly in all material respects the combined
financial condition of the Industrial Chemicals Business as of December 31, 1998
after giving effect to the Spin-Off Transactions.
(c) The unaudited consolidated balance sheets of the Canadian
Borrower and its consolidated Subsidiaries as at December 31, 1998 and December
31, 1997 and the consolidated statements of operations, changes in equity
(deficit) and cash flows for the fiscal years ended on December 31, 1998 and
December 31, 1997, copies of which have heretofore been furnished to each
Lender, present fairly in all material respects the consolidated financial
condition of the Canadian Borrower and its consolidated Subsidiaries as at such
dates, and the consolidated results of their operations and their changes in
equity (deficit) and consolidated cash flows for the fiscal years then ended.
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(d) All financial statements referred to in the preceding
paragraphs (a), (b) and (c), including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein and, in the case of unaudited
financial statements, except for the absence of footnotes thereto). Neither the
Company nor any of its consolidated Subsidiaries had, at the date of the Company
Pro Forma Balance Sheet and after giving effect to the Spin-Off Transactions,
any material Guarantee Obligation, contingent liability or liability for taxes,
or any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, except as reflected in the Company Pro Forma Balance Sheet or in
the notes thereto. Except as disclosed in the 1998 10-K, the Confidential
Information Memorandum or the Form 10 Filing during the period from December 31,
1998 to and including the date hereof there has been no sale, transfer or other
disposition by the Company or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Company and
its consolidated Subsidiaries at December 31, 1998.
4.2 No Change. Since December 31, 1998 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (other than any non-Domestic Subsidiary which is
not a Material Foreign Subsidiary) (a) is duly organized, validly existing and,
if applicable, in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation, if applicable, and, if applicable, in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to be so qualified and in good standing could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and (in the case
of each Borrower) to borrow hereunder and have the Letters of Credit issued for
its account and has taken all necessary action (in the case of each Borrower) to
authorize the borrowings and the issuance of the Letters of Credit for its
account on the terms and conditions of this Agreement and the Applications and
(in the case of each Loan Party) to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents. This Agreement has been, and each other
Loan Document will be, duly executed and delivered on behalf of the Loan Parties
party thereto. This Agreement constitutes,
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60
and each other Loan Document when executed and delivered will constitute, a
legal, valid and binding obligation of the Loan Parties party thereto
enforceable against such Loan Parties in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. (a) The execution, delivery and performance
of the Loan Documents, the borrowings hereunder and the use of the proceeds
thereof, after giving effect to the Spin-Off Transactions, will not violate any
Requirement of Law or material Contractual Obligation of the Company or of any
of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation, other than
any violations or Liens that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) As of the Closing Date (i) all governmental and
third-party approvals necessary or advisable in connection with the Spin-Off
Transactions, the financing contemplated in connection therewith and the
continuing operations of the Company and its Subsidiaries have been obtained,
other than any approvals that, if not obtained, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
and (ii) all applicable waiting periods have expired without any action being
taken or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Spin-Off Transactions or the
financing thereof.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrowers, threatened by or against the Company or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Company and its
Subsidiaries has (or upon the consummation of the Spin-Off Transactions will
have) good record and insurable title (and, with respect to real property
located in Canada, good and marketable title) in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of their
respective property is subject to any Lien except as permitted by subsection
7.3.
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4.9 Intellectual Property. The Company and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor do the
Borrowers know of any valid basis for any such claim, in each case, other than
those claims which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Borrowers and their Subsidiaries does not infringe on the rights
of any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
4.10 Taxes. Each of the Company and its Subsidiaries has
filed or caused to be filed all U.S. federal income tax returns and all other
material tax returns which, to the knowledge of the Company, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than those not yet delinquent, those with respect to which the
failure to pay could not reasonably be expected to have a Material Adverse
Effect and those the amount or validity of which are currently being contested
in good faith by appropriate proceedings diligently conducted and with respect
to which reserves in conformity with GAAP have been provided on the books of the
Company or its Subsidiaries, as the case may be); no tax Lien has been filed or
registered, and, to the knowledge of the Company, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U or for any
purpose which violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, each Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in Regulation U.
4.12 ERISA; Canadian Benefit and Pension Plans. Other than
the Reportable Events resulting from the Spin-Off Transactions, neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred and is continuing
on the date on which this representation is made or deemed made with respect to
any Single Employer Plan, and each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen and remains in effect against the assets of the Company or any Commonly
Controlled Entity, as of each date on which this representation is made or
deemed made. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an
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amount in excess of $19,000,000. Neither the Company nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Company or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
Notwithstanding the foregoing, there shall be no breach of the representations
set forth in this subsection 4.12 unless the amount of any liability of the
Company or any Commonly Controlled Entity which arises or which could reasonably
be expected to arise in connection with the matters giving rise to such breach,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect
(b) Schedule V sets forth, as of the Closing Date, all
Canadian Benefit Plans (other than, for greater certainty, universal plans
created by and to which the Borrowers and their respective Subsidiaries are
obligated to contribute by statute) and Canadian Pension Plans adopted by the
Borrowers and their respective Subsidiaries. The Canadian Pension Plans are duly
registered under the Income Tax Act (Canada) and all other applicable laws which
require registration and no event has occurred which is reasonably likely to
cause the loss of such registered status. All material obligations of the
Borrowers and their respective Subsidiaries (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with the Canadian Pension Plans and the funding agreements therefor
have been performed in a timely fashion. There have been no improper withdrawals
or applications of the assets of the Canadian Pension Plans or the Canadian
Benefit Plans. There are no outstanding disputes concerning the assets of the
Canadian Pension Plans or the Canadian Benefit Plans which could reasonably be
expected to have a Material Adverse Effect. On a solvency basis (using actuarial
methods and assumptions which are consistent with the valuations last filed with
the applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles), none of the Canadian Pension Plans is
under-funded by more than $8,000,000.
4.13 Investment Company Act; Other Regulations. Neither
Borrower is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
Neither Borrower is subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
4.14 Subsidiaries. Schedule II sets forth all the
Subsidiaries of the Company as of the Closing Date.
4.15 Purpose of Loans. The proceeds of the Loans and Letters
of Credit shall be used by each Borrower for working capital and general
corporate purposes of such Borrower, including financing Permitted Acquisitions
and Permitted Investments (and refinancing existing indebtedness in connection
with the Spin-Off Transactions).
4.16 Environmental Matters. To the best knowledge of the
Borrowers, the facilities and properties owned, leased or operated by the
Company or any of its Subsidiaries (the
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63
"Properties") do not contain any Hazardous Materials in amounts or
concentrations which constitute or constituted a violation of any Environmental
Law except in either case insofar as such violations in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(b) To the best knowledge of the Borrowers, the Properties
and all operations at the Properties are in compliance with all applicable
Environmental Laws except for instances of noncompliance that individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect, and there is no contamination at, under or about the Properties nor any
violation of any Environmental Law with respect to the Properties or the
business operated by the Company or any of its Subsidiaries (the "Business")
which in the aggregate could reasonably be expected to have a Material Adverse
Effect.
(c) Neither the Company nor any of its Subsidiaries has
received any written notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Properties or the Business,
nor do the Borrowers have knowledge that any such notice will be received or is
being threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to have a Material Adverse Effect.
(d) To the best knowledge of the Borrowers, no Hazardous
Materials have been transported or disposed of from the Properties in violation
of any Environmental Law, nor have any Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of any applicable Environmental Law except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to have a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrowers, threatened, under any
Environmental Law to which the Company or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to have a Material Adverse
Effect.
(f) To the best knowledge of the Borrowers, there has been no
release or threat of release of Hazardous Materials at or from the Properties,
or arising from or related to the operations of the Company or any Subsidiary in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably give rise to
liability under Environmental Laws except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, could not
reasonably be expected to have a Material Adverse Effect.
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4.17. Soda Ash Partners. Except as set forth in the Soda Ash
Partnership Agreement and the Soda Ash Parent Agreement, there are no
outstanding subscriptions, warrants, calls, options, rights (including
unsatisfied preemptive rights), commitments or agreements by which the Company
or any of its Subsidiaries, including Soda Ash Partners, is bound that permit or
entitle any Person to purchase or otherwise receive from or to be issued any
partnership interest in Soda Ash Partners or any security or obligation of any
kind convertible into any shares of partnership capital of Soda Ash Partners,
nor is Soda Ash Partners subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its partnership capital.
4.18 Solvency. Each Borrower, individually and together with
its Subsidiaries, is Solvent.
4.19 Labor Matters. There are no strikes or other labor
disputes against the Company or any of its Subsidiaries pending or, to the
knowledge of the Borrowers, threatened that in the aggregate could reasonably be
expected to have a Material Adverse Effect. Hours worked by and payment made to
employees of the Company and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters that in the aggregate could reasonably be expected to have a
Material Adverse Effect. All payments due from the Company or any of its
Subsidiaries on account of employee income taxes (including source deductions),
employment insurance, workers safety and insurance, employers' health tax,
vaction pay, employee health and welfare insurance and other social security or
statutory obligations that in the aggregate could reasonably be expected to have
a Material Adverse Effect if not paid have been paid or accrued as a liability
on the books of the Company or the relevant Subsidiary, and to the extent
required by GAAP.
4.20 Accuracy of Information, etc. None of this Agreement,
any other Loan Document, the Confidential Information Memorandum, the Form 10
Filing or any other document, certificate, information or statement furnished to
the Administrative Agent, the Canadian Administrative Agent or the Lenders or
any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum, as
of the date of this Agreement), any untrue statement of a material fact or, all
such material taken as a whole, omitted to state a material fact necessary in
order to make the statements contained herein or therein not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Company to be reasonable at the time made, it being recognized
by the Lenders that such financial information as it relates to future events is
not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount. There is no fact known to the Company that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum, the Form 10 Filing or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
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4.21 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest (or
hypothec, if applicable) in the Collateral described therein (other than the
Collateral described in subsection 3.2(l) thereof) and proceeds thereof. In the
case of the Pledged Stock described in the Guarantee and Collateral Agreement,
when stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified in the Guarantee and Collateral
Agreement, the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Company Obligations (as defined in the Guarantee and Collateral Agreement),
in each case prior and superior in right to any other Person (except, in the
case of Collateral other than Pledged Stock, Liens permitted by subsection 7.3).
(b) Each of the Canadian Security Documents is effective to
create in favor of the Canadian Administrative Agent, for the benefit of the
Canadian Revolving Credit Lenders, a legal, valid and enforceable security
interest (or hypothec, if applicable) in the Collateral described therein and
proceeds thereof. Upon completion of the actions set forth in each Canadian
Security Document, such Canadian Security Document, shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Canadian Borrower Obligations, in each case prior and superior in right to
any other Person (except Liens permitted by subsection 7.3).
4.22 Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the Company's and its
Subsidiaries' material computer systems and material equipment containing
embedded microchips (including systems and equipment supplied by others) and the
testing of all such material systems and equipment, as so reprogrammed, are
expected by the Company to be completed by June 30, 1999, and (ii) the Company's
and its Subsidiaries' other computer systems and equipment containing embedded
microchips, and the testing of such systems and equipment, as so reprogrammed,
are expected by the Company to be completed by December 15, 1999. The cost to
the Company of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company (including, without limitation,
reprogramming errors) will not result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the Company
and its Subsidiaries are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be able to interpret dates after
December 31, 1999.
4.23 Industrial Chemicals Business. On the Closing Date
(after giving effect to the Spin-Off Transactions), (a) the Industrial Chemicals
Business will be conducted by the Company and its Subsidiaries, and (b) the
Company and its Subsidiaries will be conducting no business other than the
Industrial Chemicals Business.
4.24 Senior Indebtedness. The Company Obligations constitute
"Senior Indebtedness" of the Company under and as defined in the Senior
Subordinated Note Indenture.
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SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions precedent
(the date of effectiveness, the "Effective Date"):
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower, (ii) each Security Document,
executed and delivered by a duly authorized officer of each Loan
Party, and (iii) for the account of each relevant Lender, Notes
conforming to the requirements hereof and executed by a duly
authorized officer of the applicable Borrower.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Company, of the Spin-Off
Documents, the Soda Ash Partnership Agreement, the Management
Agreement and such other documents or instruments as may be reasonably
requested by the Administrative Agent, including, without limitation,
a copy of any debt instrument, security agreement or other material
contract to which the Company or its Subsidiaries may be a party.
(c) Corporate Proceedings of each Loan Party. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions (or comparable authorizing
document), in form and substance satisfactory to the Administrative
Agent, of the Board of Directors (or comparable governing body) of
each Loan Party authorizing (i) the execution, delivery and
performance of the Loan Documents to which it is a party, and (ii) the
granting by it of the Liens created pursuant to the Security
Documents, certified by the Secretary or an Assistant Secretary of
such Loan Party as of the Effective Date, which certificate shall be
in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(d) Loan Party Incumbency Certificate. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of each Loan Party, dated the Effective Date, as to the
incumbency and signature of the officers of such Loan Party executing
any Loan Document reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Loan Party.
(e) Actions to Perfect Liens; Items Related to Canadian
Mortgages. (i) Each of the Administrative Agent and the Canadian
Administrative Agent shall be reasonably satisfied that all filings,
recordings, registrations and other actions (including actions
required under Canadian law), including, without limitation, the
filing of duly executed financing statements on form UCC-1, the
payment of all applicable filing and recording fees and expenses and
the delivery of stock certificates, necessary or, in the opinion of
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the Administrative Agent and the Canadian Administrative Agent,
desirable to perfect, preserve and protect the Liens created by the
Security Documents are in proper form for filing, registration,
recordation and completion, as applicable.
(ii) Except with respect to the matters to be completed after
the Closing Date in accordance with subsection 6.13, the Canadian
Administrative Agent shall have received (x) a title opinion from
counsel for the Canadian Borrower in respect of the Canadian Mortgaged
Properties reasonably satisfactory in form and substance to the
Canadian Administrative Agent and (y) evidence satisfactory to the
Canadian Administrative Agent that counterparts of the Canadian
Mortgages have been registered in all places to the extent necessary or
desirable, in the judgment of the Canadian Administrative Agent, to
create a valid and enforceable first priority Lien (subject to Liens
permitted pursuant to subsection 7.3) on each Canadian Mortgaged
Property in favor of the Canadian Administrative Agent for the benefit
of the Canadian Revolving Credit Lenders (or in favor of such other
trustee as may be required or desired under local law).
(f) Lien Searches. The Administrative Agent and the Canadian
Administrative Agent shall have received the results of a recent
search by a Person reasonably satisfactory to the Administrative Agent
and the Canadian Administrative Agent of the Uniform Commercial Code,
judgment and tax lien filings (and equivalent searches under Canadian
law) which may have been filed with respect to personal property of
the Holdings and its Subsidiaries, and such search shall reveal no
Liens other than Liens permitted by subsection 7.3 or otherwise
satisfactory to the Lenders.
(g) Financial Statements. The Lenders shall have received the
financial statements of the Company and the Canadian Borrower referred
to in subsection 4.1.
(h) Solvency. The Administrative Agent shall have received a
solvency opinion from an independent valuation firm reasonably
satisfactory to the Administrative Agent, in form and substance
satisfactory to the Lenders, as to the Solvency of the Company and its
Subsidiaries after giving effect to the Spin-Off and the other
transactions contemplated hereby.
(i) Business Plan. The Lenders shall have received a
certificate of a Responsible Officer of the Company confirming that
there has been no material change to the detailed business plan for
each fiscal year from 1999 through and including 2003 and the written
analysis of the business and prospects of each Borrower and its
Subsidiaries through the Termination Date previously delivered to the
Lenders.
(j) Environmental Report. The Administrative Agent shall have
received a Phase I environmental audit with respect to Soda Ash
Partner's Amherstburg and Green River chemical plants from an
independent environmental consulting firm reasonably satisfactory to
the Administrative Agent, in form and substance satisfactory to the
Lenders.
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(k) Conditions to Spin-Off. The Separation shall have been
completed and each of the other conditions to the consummation of the
Spin-Off set forth in Section 3.06 of the Separation Agreement (other
than the completion of the Refinancing Transactions and the NHO
Distribution) shall have been satisfied, including, but not limited
to, the condition that the IRS Ruling shall not have been withdrawn or
modified and shall be in full force and effect.
(l) Ratings Letter. The Administrative Agent shall have
received a copy of a letter from S&P or Moody's, as the case may be,
addressed to the Company and confirming that the Facilities have been
assigned a rating of at least B+ by S&P or at least B1 by Moody's.
(m) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of subsection
5.2(b) of the Guarantee and Collateral Agreement, subsection 6.2(2) of
the Canadian Guarantee and Collateral Agreement and subsection 13(4)
of the Fixed and Floating Charge Debenture.
5.2 Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender to make its initial Loans and the obligation of each
Issuing Lender to issue its initial Letter of Credit are subject to the
satisfaction, immediately prior to or concurrently with the making of such Loans
or the issuance of such Letter of Credit, as the case may be, of the following
conditions precedent (the date of the initial Extensions of Credit, the "Closing
Date"):
(a) Effective Date. The conditions set forth in subsection
5.1 shall have been satisfied in accordance with the terms hereof.
(b) Consummation of Spin-Off. Concurrently with the initial
borrowing hereunder by the Canadian Borrower, the Refinancing
Transactions shall be completed and thereupon the NHO Distribution
shall be effected and the Spin-Off shall be consummated, in all
material respects in accordance with the Form 10 Filing and the
Separation Agreement, and neither the Form 10 Filing nor the
Separation Agreement shall have been amended in any manner which has
had a material adverse effect on the structure or syndication of, or
the credit analysis with respect to, the Facilities without the
consent of the Administrative Agent. Upon the consummation of the
Spin-Off, the corporate and capital structure of Holdings and each
Loan Party shall be, in all material respects, as set forth in the
Form 10 Filing.
(c) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Debevoise & Plimpton,
special counsel to the Borrowers and the other Loan Parties,
substantially in the form of Exhibit A-1;
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(ii) the executed legal opinion of Blake, Cassels & Graydon,
special counsel to the Canadian Borrower and the other Loan Parties,
substantially in the form of Exhibit A-2;
(iii) the executed legal opinion of Michael R. Herman,
General Counsel of the Company, substantially in the form of Exhibit
A-3;
(iv) the executed legal opinion of local counsel in New
Jersey, in form and substance satisfactory to the Administrative
Agent; and
(v) the executed legal opinion of Kirwin Partners, in form
and substance satisfactory to the Canadian Administrative Agent, with
respect to the Canadian Mortgaged Properties.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(d) Fees. The Administrative Agent, the Canadian
Administrative Agent, the Syndication Agent, the Documentation Agent
and the Lenders shall have received all fees to be received from, or
reimbursed to them by, Holdings or the Borrowers on the Closing Date.
5.3 Conditions to Each Extension of Credit. The agreement of
each Lender and each Issuing Bank to make any extension of credit requested to
be made by it on any date (including, without limitation, its initial extension
of credit) is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrowers and the other
Loan Parties in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on
and as of such date (except for changes permitted by this Agreement
and except that representations and warranties originally made as of a
specified date shall be true and correct as of such specified date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by a Borrower hereunder, each issuance of a Letter of Credit
hereunder and the effectiveness of this Agreement under subsection 5.1, shall
constitute a representation and warranty by each Borrower as of the date of such
extension of credit or such initial effectiveness under subsection 5.1, as the
case may be, that the conditions contained in this subsection 5.3 have been
satisfied. No event shall be deemed an extension of credit unless such event
results in an increase in the total principal amount of Loans outstanding or in
the total face amount of Letters of Credit outstanding.
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SECTION 6. AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as the Commitments
remain in effect, any Note or any Letter of Credit remains outstanding and
unpaid or any other amount is owing to any Lender, the Administrative Agent or
the Canadian Administrative Agent hereunder, each Borrower (or, in the case of
subsection 6.13, the Canadian Borrower) shall and (except in the case of
delivery of financial information, reports and notices and the matters set forth
in subsection 6.13) shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company, and the related
consolidated statements of operations, changes in equity (deficit) and
cash flows for such year, setting forth in each case in compare form
the figures for the previous year, reported on, without a "going
concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Deloitte & Touche LLP or other
independent certified public accountants of nationally recognized
standing;
(b) as soon as available, but in any event not later than 60
days after the end of each of the first three quarterly periods of
each fiscal year of the Company (commencing with the second quarterly
period of the 1999 fiscal year), the unaudited consolidated balance
sheet of the Company and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
operations, changes in equity (deficit) and cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in compare form the figures for
the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments) and as having been prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such officer and disclosed
therein); and
(c) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Canadian Borrower, a copy of
the consolidated balance sheet of the Canadian Borrower as at the end
of such year and the related consolidated statements of operations,
changes in equity (deficit) and cash flows for such year, setting
forth in each case in compare form the figures for the previous year;
and
(d) as soon as available, but in any event not later than 60
days after the end of each of the first three quarterly periods of
each fiscal year of the Canadian Borrower (commencing with the second
quarterly period of the 1999 fiscal year), the unaudited consolidated
balance sheet of the Canadian Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of operations, changes in equity (deficit) and
cash flows for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible
Officer as being fairly
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stated in all material respects (subject to normal year-end audit
adjustments) and as having been prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such officer and disclosed
therein).
All such financial statements shall present fairly in all material respects the
consolidated financial condition of each of the Company and the Canadian
Borrower and their respective consolidated Subsidiaries as at the applicable
dates, and the consolidated results of their operations, their changes in equity
(deficit) and their consolidated cash flows for the periods reflected therein,
and shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 6.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
such accountants obtained no knowledge of any Default or Event of
Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a) and 6.1(b), a Compliance
Certificate, executed by a Responsible Officer, (i) demonstrating
compliance with the covenants contained in subsections 7.1, 7.2(g),
7.2(j), 7.6, 7.8, 7.9, 7.10(g) and 7.10(i), (ii) setting forth
calculations of the Interest Coverage Ratio, the Leverage Ratio and
the Senior Leverage Ratio as of the last day of the most recent fiscal
quarter covered by such financial statements and (iii) stating that,
to the best of such Responsible Officer's knowledge, the Company
during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and in the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate;
(c) within five days after the same are filed, copies of all
financial statements and reports which Holdings, Intermediate Holdings
or the Company may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority; and
promptly, all press releases and other written statements made
available generally by Holdings, Intermediate Holdings, the Company or
any of its Subsidiaries to the public concerning material developments
in the business of the Company or any of its Subsidiaries;
(d) promptly upon receipt thereof, copies of all reports
submitted to the Company by its independent certified public
accountants in connection with each annual, interim or special audit
of the financial statements of the Company made by such accountants,
including, without limitation, the comment letter submitted by such
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accountants to management in connection with their annual audit; and
the Company agrees to obtain such a letter in connection with each of
its annual audits;
(e) if requested by the Administrative Agent, promptly after
the filing thereof by a Borrower or any of its Subsidiaries with any
applicable Governmental Authority, copies of each annual and other
return, report or valuation with respect to each Canadian Pension
Plan; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings diligently conducted and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Company or its
Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business primarily of the same general types as now
conducted by it or in any Related Business and preserve, renew and keep in full
force and effect the corporate existence of each Borrower and each Material
Subsidiary; and take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except as otherwise permitted pursuant to subsection 7.5, and comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to maintain such rights, privileges and franchises and to comply with
Contractual Obligations and Requirements of Law could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all material
property useful and necessary in its business in good working order and
condition; maintain with financially sound and reputable insurance companies
insurance (to the extent available at commercially reasonable rates) on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to each Lender, upon written request, full
information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender upon reasonable prior notice and at reasonable
times to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Company and its Subsidiaries with officers
and employees of the Company and its Subsidiaries and with its independent
certified public accountants (each Lender will, in accordance with subsection
10.15, maintain the confidentiality of all information obtained by it pursuant
to this subsection 6.6).
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6.7 Notices. Promptly give notice to the Administrative
Agent, the Canadian Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any default or event of default under any Contractual
Obligation of Holdings or any or any of its Subsidiaries which if not
cured could reasonably be expected to have a Material Adverse Effect;
(c) any litigation, investigation or proceeding affecting
Holdings or any of its Subsidiaries (i) which is reasonably likely to
involve a payment of $10,000,000 or more not covered by insurance,
(ii) in which injunctive or similar relief reasonably likely to have a
Material Adverse Effect is reasonably likely to be obtained or (iii)
which if not cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse Effect;
(d) (i) the following events, as soon as possible and in any
event within 30 days after the Company knows or has reason to know
thereof: (x) the occurrence or expected occurrence of any Reportable
Event (other than Reportable Events resulting from the Spin-Off
Transactions) with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (y) the institution of
proceedings or the taking of any other action by the PBGC or the
Company or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan and (ii) (w) any failure to
make a contribution to any Canadian Pension Plan required by the terms
of such plan or applicable law, in a timely manner, (x) any
termination of any Canadian Pension Plan, (y) any material direction,
order, notice, ruling or opinion that the Borrowers or any of their
Subsidiaries shall receive from from any applicable Governmental
Authority indicating that any Canadian Pension Plan is in default
under any applicable law, together with a copy thereof, and (z) if
requested by the Administrative Agent, a copy of any actuarial report
prepared in respect of any Canadian Pension Plan; and
(e) any development or event known to the Company which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and ensure that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
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applicable Environmental Laws, except for such instances of noncompliance that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except for instances in which the obligation to comply or to conduct such
investigations, studies, sampling, testing or remedial actions is being
contested in good faith before a court or administrative body of competent
jurisdiction or in which the failure to so comply or to conduct such activities
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
6.9 Further Assurances. At any time and from time to time,
upon the Administrative Agent's request and at the expense of the Company,
promptly and duly execute and deliver or cause to be executed and delivered any
and all further instruments and documents and take such further action as the
Administrative Agent may reasonably request to effect the purpose of the
Security Documents, including, without limitation, the filing of any financing
or continuation statements under the Uniform Commercial Code or other applicable
laws in effect in any jurisdiction.
6.10 Additional Collateral. (a) With respect to any property
acquired after the Closing Date by the Company or any Subsidiary Guarantor
(other than (x) any property described in paragraph (b), (c), (d), (e), (f) or
(g) below, (y) any property subject to a Lien expressly permitted by subsection
7.3(g) and (z) property acquired by any Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $500,000
acquired after the Closing Date by the Company or any Subsidiary Guarantor
(other than (x) any such real property subject to a Lien expressly permitted by
Section 7.3(g) and (z) real property acquired by any Foreign Subsidiary),
promptly (i) execute and deliver a first priority mortgage or deed of trust, as
applicable, in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably
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satisfactory to the Administrative Agent and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary or Foreign Subsidiary Holding Company) created or acquired after the
Closing Date (which, for the purposes of this paragraph, shall include any
existing Subsidiary that ceases to be a Foreign Subsidiary or that becomes a
Subsidiary described in clause (a) of the definition of "Subsidiary Guarantor"),
by the Company or any Subsidiary Guarantor, promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary which is
owned by the Company or any Subsidiary Guarantor, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Company or such Subsidiary Guarantor, as the case may be, (iii)
if 80% or more of the Equity Interests of such new Subsidiary are owned,
directly or indirectly (other than indirectly through any Foreign Subsidiary) by
the Company or any Subsidiary Guarantor, cause such new Subsidiary (A) to become
a party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or reasonably advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary, including, without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance reasonably satisfactory to
the Administrative Agent.
(d) With respect to any new Foreign Subsidiary or Foreign
Subsidiary Holding Company (other than any Excluded Issuer) created or acquired
after the Closing Date by the Company or any Subsidiary Guarantor, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable in order to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in the Capital Stock of
such new Foreign Subsidiary which is owned by the Company or any Subsidiary
Guarantor (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Company or such Subsidiary
Guarantor, as the case may be, and take such other action as may be necessary
or, in the opinion of the Administrative Agent, desirable under applicable law
to perfect the Lien of the Administrative Agent thereon, and (iii) if requested
by the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
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76
(e) With respect to any property acquired after the Closing
Date by the Canadian Borrower or any Canadian Subsidiary Guarantor (other than
any property subject to a Lien expressly permitted by subsection 7.3(g)) as to
which the Canadian Administrative Agent, for the benefit of the Canadian
Revolving Credit Lenders, does not have a perfected Lien, promptly (i) execute
and deliver to the Canadian Administrative Agent such amendments to the Canadian
Guarantee and Collateral Agreement or such other documents as the Canadian
Administrative Agent deems necessary or advisable to grant to the Canadian
Administrative Agent, for the benefit of the Canadian Revolving Credit Lenders,
a security interest in such property and (ii) take all actions necessary or
advisable to grant to the Canadian Administrative Agent, for the benefit of the
Canadian Revolving Credit Lenders, a perfected first priority security interest
(or hypothec, if applicable) in such property, including filings and other
actions as may be required by the Canadian Guarantee and Collateral Agreement or
by law or as may be requested by the Canadian Administrative Agent.
(f) With respect to any fee or similar ownership interest in
any real property having a value (together with improvements thereof) of at
least $500,000 or the equivalent amount thereof in Canadian Dollars acquired
after the Closing Date by the Canadian Borrower or any of its Subsidiaries
(other than any such real property subject to a Lien expressly permitted by
Section 7.3(g)), promptly (i) execute and deliver a first priority mortgage,
deed of trust or hypothec, as applicable, in favor of the Canadian
Administrative Agent, for the benefit of the Canadian Revolving Credit Lenders,
or in favor of the Canadian Revolving Credit Lenders (if such real property is
located in the Province of Quebec) covering such real property, (ii) if
requested by the Canadian Administrative Agent, provide the Canadian Revolving
Credit Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Canadian
Administrative Agent) as well as a current as-built survey thereof, together
with a surveyor's certificate, and (y) any consents or estoppels reasonably
deemed necessary or advisable by the Canadian Administrative Agent in connection
with such mortgage, deed of trust or hypothec, each of the foregoing in form and
substance reasonably satisfactory to the Canadian Administrative Agent, and
(iii) if requested by the Canadian Administrative Agent, deliver to it legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Canadian
Administrative Agent.
(g) With respect to any new Subsidiary created or acquired
after the Closing Date (which, for the purposes of this paragraph, shall include
any existing Subsidiary that becomes a Subsidiary described in clause (a) of the
definition of "Canadian Subsidiary Guarantor") by the Canadian Borrower or any
Canadian Subsidiary Guarantor, promptly (i) execute and deliver to the Canadian
Administrative Agent such amendments to the Canadian Guarantee and Collateral
Agreement as the Canadian Administrative Agent deems necessary or advisable in
order to grant to the Canadian Administrative Agent, for the benefit of the
Canadian Revolving Credit Lenders, a perfected first priority security interest
in the Capital Stock of such new Subsidiary which is owned by the Canadian
Borrower or any Canadian Subsidiary Guarantor, (ii) if 80% or more of the Equity
Interests of such new Subsidiary are owned by the Canadian Borrower or any
Canadian Subsidiary Guarantor, cause such new Subsidiary (A) to
<PAGE>
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77
become a party to the Canadian Guarantee and Collateral Agreement, (B) to comply
with the terms and provisions of the Canadian Guarantee and Collateral Agreement
with respect to the registration of shares of such Capital Stock and the
delivery to the Canadian Administrative Agent of certificates representing such
Capital Stock, and (C) to take such other actions as may be necessary or
advisable to grant to the Canadian Administrative Agent, for the benefit of the
Canadian Revolving Credit Lenders, a perfected first priority security interest
in the Collateral described in the Canadian Guarantee and Collateral Agreement
with respect to such new Subsidiary, and (iii) if requested by the Canadian
Administrative Agent, deliver to the Canadian Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance reasonably satisfactory to the Canadian Administrative Agent.
6.11 GC Canada Senior Notes. Cause the GC Canada Senior
Notes to be redeemed in full on or prior to May 15, 1999 and notify the
Administrative Agent of such redemption promptly following the occurrence
thereof.
6.12 Canadian Pension Plans and Benefit Plans. (a) For each
Canadian Pension Plan existing on the Effective Date, ensure that such plan
retains its registered status (except to the extent that the Borrowers shall
have given notice of the termination of such plan in accordance with subsection
6.7(d)) under and is administered in a timely manner in all respects in
accordance with the applicable pension plan text, funding agreement, the Income
Tax Act (Canada) and all other applicable laws.
(b) For each Canadian Pension Plan hereafter adopted by the
Borrowers and their Subsidiaries which is required to be registered under the
Income Tax Act (Canada) or any other applicable laws, use its best efforts to
seek and receive confirmation in writing from the applicable Governmental
Authorities to the effect that such plan is unconditionally registered under the
Income Tax Act (Canada) and such other applicable laws.
(c) For each Canadian Pension Plan and Canadian Benefit Plan
hereafter adopted by the Borrowers and their Subsidiaries, in a timely fashion
perform in all material respects all obligations (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with such plan and the funding media therefor.
6.13 Post-Closing Real Estate Matters. (a) Use its best
efforts to obtain, deliver and register, on or prior to May 21, 1999, at its
sole expense, discharges of claims for lien and orders vacating certificates of
action, as mutually agreed upon by the Canadian Administrative Agent and the
Canadian Borrower on the Closing Date, and deliver evidence, in form and
substance reasonably satisfactory to the Canadian Administrative Agent, that
such claims for lien and certificates of action have been discharged and
vacated.
(b) Within 60 days following the Closing Date, deliver to the
Canadian Administrative Agent an up-to-date survey for each of the Canadian
Mortgaged Properties prepared, signed and sealed by an Ontario Land Surveyor,
setting out bearings, boundaries and dimensions of the lands, front, rear and
side yard dimensions and setbacks, the location of monuments and the buildings
on the lands, the location of entrances to and exits from the lands,
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78
all rights-of-way and easements referable to the lands, any encroachments over
the locations and the location of all fences on or separating the lands from
adjacent lands, together with a surveyor's certificate setting out the area of
the lands, or as otherwise reasonably acceptable to the Canadian Administrative
Agent.
(c) On or prior to June 4, 1999 (subject to the customary
cooperation of all relevant third parties), cause to be delivered to the
Canadian Administrative Agent a summary of all off-title search results with
respect to the Canadian Mortgaged Properties as reasonably requested by the
Canadian Administrative Agent.
(d) Within 60 days following the Closing Date, cause to be
delivered to the Canadian Administrative Agent with respect to the Canadian
Mortgaged Property known as the "settling ponds/basins" located in Amherstburg,
Ontario, the items listed in subsection 5.1(e)(ii).
(e) Within 150 days following the Closing Date, obtain and
deliver to the Canadian Administrative Agent a title opinion of Kirwin &
Partners in form and substance satisfactory to the Canadian Administrative Agent
in respect of each of the Canadian Mortgaged Properties, including, without
limitation, confirmation that: (i) subject to (x) the items (a) through (f) set
forth in paragraph (2) of the opinion of Kirwin & Partners delivered on the
Closing Date pursuant to subsection 5.2(c)(v) and item (h) set forth in such
paragraph (2) (unless the Canadian Borrower has failed to use best efforts to
eliminate the exception set forth in such item (h)) and (y) Liens permitted
pursuant to subsection 7.3, the Canadian Borrower has good and marketable title
in fee simple to the Canadian Mortgaged Properties and that no part thereof has
been forfeited to the Crown and (ii) to the extent records are available from
the applicable governmental agency, each of the corporate owners in the chain of
title was validly subsisting during its period of ownership.
(f) Undertake to execute and deliver additional security
documents, together with legal opinions in respect thereof, in form and
substance as reasonably requested by counsel to the Canadian Administrative
Agent, in order to perfect the Liens granted on property of the Canadian
Borrower under the Canadian Security Documents to the extent that such property
is located outside of Ontario, within 10 Business Days of receipt of such
request by the Canadian Borrower.
SECTION 7. NEGATIVE COVENANTS
Each Borrower hereby agrees that, so long as the Revolving
Credit Commitments and the Canadian Revolving Credit Commitments remain in
effect, any Loans, any Letter of Credit or Reimbursement Obligations remains
outstanding and unpaid or any other amount is owing to any Lender, the
Administrative Agent or the Canadian Administrative Agent hereunder, such
Borrower shall not, and (except with respect to subsection 7.1) shall not permit
any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
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79
(a) Senior Leverage Ratio. Permit the Senior Leverage Ratio
as at the last day of any fiscal quarter of the Company occurring
during any period set forth below to be greater than the ratio set
forth below opposite such period:
<TABLE>
<CAPTION>
Period Senior Leverage Ratio
<S> <C>
July 1, 1999 - December 31, 1999 2.50 : 1.00
January 1, 2000 - December 31, 2000 2.25 : 1.00
January 1, 2001 - December 31, 2001 2.00 : 1.00
January 1, 2002 - December 31, 2002 2.00 : 1.00
January 1, 2003 - Termination Date 2.00 : 1.00.
</TABLE>
(b) Leverage Ratio. Permit the Leverage Ratio as at the last
day of any fiscal quarter of the Company occurring during any period
set forth below to be greater than the ratio set forth below opposite
such period:
<TABLE>
<CAPTION>
Period Leverage Ratio
<S> <C>
July 1, 1999 - December 31, 1999 5.40 : 1.00
January 1, 2000 - December 31, 2000 5.25 : 1.00
January 1, 2001 - December 31, 2001 5.00 : 1.00
January 1, 2002 - December 31, 2002 5.00 : 1.00
January 1, 2003 - Termination Date 5.00 : 1.00.
</TABLE>
(c) Interest Coverage Ratio. Permit the Interest Coverage
Ratio as at the last day of any fiscal quarter of the Company
occurring during any period set forth below to be less than the ratio
set forth below opposite such period:
<TABLE>
<CAPTION>
Period Interest Coverage Ratio
<S> <C>
July 1, 1999 - December 31, 1999 1.60 : 1.00
January 1, 2000 - December 31, 2000 1.75 : 1.00
January 1, 2001 - December 31, 2001 2.00 : 1.00
January 1, 2002 - December 31, 2002 2.25 : 1.00
January 1, 2003 - Termination Date 2.25 : 1.00.
</TABLE>
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) (i) Indebtedness of the Borrowers under this Agreement
and (ii) Indebtedness of the Company in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000;
(b) subject to subsection 6.11, Indebtedness of the Canadian
Borrower under the GC Canada Senior Notes in an aggregate principal
amount not to exceed $52,000,000 as long as such Indebtedness is fully
defeased or cash collateralized;
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80
(c) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary; provided that any
such Indebtedness of a Subsidiary (other than the Canadian Borrower,
any Subsidiary Guarantor or any Canadian Subsidiary Guarantor) to the
Company, a Subsidiary Guarantor or a Canadian Subsidiary Guarantor
shall be evidenced by a non-negotiable senior promissory note having
terms reasonably satisfactory to the Administrative Agent;
(d) Indebtedness of a Person which becomes a Subsidiary after
the date hereof, provided that (i) such Indebtedness existed at the
time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such Person by the Company, no Default or Event of
Default shall have occurred and be continuing;
(e) (i) Interest Rate Protection Obligations of the Company
entered into to hedge actual interest rate exposure and not for
speculative purposes to the extent that the notional principal amount
thereof does not exceed the amount of Indebtedness being hedged, (ii)
Interest Rate Protection Obligations of the Canadian Borrower entered
into to hedge actual interest rate exposure and not for speculative
purposes to the extent that the notional principal amount thereof does
not exceed the amount of Indebtedness being hedged and (iii) Guarantee
Obligations (x) by Subsidiaries of the Company in respect of the
Company's obligations described in the preceding clause (i) and (y) by
the Company or any Subsidiary of the Canadian Borrower's obligations
described in the preceding clause (ii) as long as the aggregate amount
of such Guarantee Obligations described in this clause (iii) (as
measured by the relevant swap termination values) does not exceed
$2,500,000;
(f) Indebtedness under Currency Agreements; provided that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company or
the Canadian Borrower outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(g) Indebtedness of the Company or any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets
(whether pursuant to a loan, a Financing Lease or otherwise) in an
aggregate principal amount at any time outstanding not exceeding as to
the Company and its Subsidiaries the greater of (x) $15,000,000 and
(y) 5% of Consolidated Tangible Assets;
(g-1) obligations of the Company or any Subsidiary under
energy or commodity hedge, exchange or similar agreements entered into
in the ordinary course of business for the purpose of hedging the risk
to the Company and its Subsidiaries of fluctuations in the cost of
natural gas, other energy inputs or commodities used in the ordinary
course of business of the Company and its Subsidiaries;
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81
(h) Indebtedness of the Company or any of its Subsidiaries at
any time outstanding incurred in the ordinary course of business in
respect of reclamation bonds, performance bonds, letters of credit and
surety bonds provided by the Company or any of its Subsidiaries
required by and in compliance with the applicable statutes or laws of
the relevant jurisdiction or by relevant Governmental Authorities;
(i) Indebtedness outstanding on the date hereof and listed on
Schedule III and, until the Closing Date, Indebtedness outstanding
under the Existing Credit Agreement;
(j) Indebtedness of the Company or any of its Subsidiaries
not otherwise permitted under this subsection 7.2 in an aggregate
principal amount not to exceed $25,000,000 at any time outstanding;
and
(k). any Indebtedness ("Refinancing Indebtedness") incurred
in connection with the extension, renewal, substitution, refinancing
or replacement of any Indebtedness referred to in clauses (a)(ii) and
(b) through (i) above; provided that (i) the principal amount of such
Refinancing Indebtedness does not exceed the aggregate principal
amount of, plus accrued interest on, the Indebtedness being extended,
renewed, substituted, refinanced or replaced, plus the reasonable
amount of fees, underwriting discount, premiums and all other costs
and expenses reasonably incurred in connection therewith, (ii) such
Refinancing Indebtedness does not require an increase in amortization
payments payable by the Company or its Subsidiaries at any time prior
to May 15, 2004, (iii) such Refinancing Indebtedness contains terms
which, taken as a whole, are not less favorable to the Company and its
Subsidairies than the terms of the Indebtedness being extended,
renewed, substituted, refinanced or replaced and (iv) the only
obligors on the applicable Refinancing Indebtedness are the obligors
on the Indebtedness being refinanced unless otherwise permitted by
subsections 7.2 and 7.4.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted,
provided that (i) adequate reserves with respect thereto are
maintained on the books of the Company or its Subsidiaries, as the
case may be, in conformity with GAAP and (ii) such Liens remain
unfiled or unregistered, as the case may be;
(b) any carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens incidental to construction,
maintenance, use or operation arising in the ordinary course of
business which (i) secure amounts not overdue for a period of more
than 60 days or (ii) are being contested in good faith by appropriate
proceedings diligently conducted and which do not exceed $1,000,000 in
the aggregate at any time;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation; and any attachment, judgment or similar
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82
Lien unless the writ, judgment or other process it secures shall not,
within 60 days after the entry thereof, have been discharged or the
execution thereof stayed pending appeal, or shall not have been
discharged within 60 days after the expiration of any such stay;
(d) (i) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business and (ii) purchase-money Liens on inventory incurred in the
ordinary course of business and Liens on inventory held by third
parties on consignment or a similar basis, in each case incurred in
the ordinary course of business, provided that the aggregate fair
market value of all inventory at any time subject to Liens described
in this clause (ii) shall not exceed $5,000,000;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which exist
on the date hereof or which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the value
of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Company or such Subsidiary;
(f) (i) until the Closing Date, Liens securing Indebtedness
under the Existing Credit Agreement, and (ii) Liens in existence on
the date hereof listed on Schedule III, provided that no such Lien is
spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries permitted by subsection 7.2(g) incurred in the ordinary
course of business to finance the acquisition of fixed or capital
assets, provided that (i) such Liens shall be created within 180 days
after the acquisition of such fixed or capital assets, (ii) such Liens
do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness
secured thereby is not increased and (iv) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 80% of
the fair value (as determined in good faith by the Company and
evidenced by a certificate of a Responsible Officer) of such property
at the time it was acquired;
(h) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by subsection 7.2(d), provided that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created
in anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary (except after-acquired property to the extent
such Lien includes after-acquired property) and (iii) the amount of
Indebtedness secured thereby is not increased;
(i) Liens created pursuant to the Security Documents;
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83
(j) Liens securing Refinancing Indebtedness permitted by
subsection 7.2(k) provided that (i) such Liens cover only the property
securing the Indebtedness being refinanced and (ii) the principal
amount of Indebtedness secured thereby is not increased, except as
permitted by subsection 7.2(k); and
(k) other Liens (other than on property constituting
Collateral) securing up to $15,000,000 of obligations.
7.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation, unless such obligation would
be permitted to be incurred as Indebtedness of such Person pursuant to
subsection 7.2.
7.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) (i) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided that the Company shall
be the continuing or surviving corporation), (ii) any Subsidiary of
the Company may be merged, consolidated or amalgamated with or into a
Subsidiary Guarantor or a Canadian Subsidiary Guarantor (provided that
a Subsidiary Guarantor or a Canadian Subsidiary Guarantor shall be the
continuing or surviving corporation or, if such Subsidiary is the
Canadian Borrower, that the Canadian Borrower shall be the continuing
or surviving corporation) and (iii) any Subsidiary of the Company
(other than the Canadian Borrower) that is not a Subsidiary Guarantor
or a Canadian Subsidiary Guarantor may be merged, consolidated or
amalgamated with or into another Subsidiary that is not a Subsidiary
Guarantor or a Canadian Subsidiary Guarantor;
(b) (i) any Subsidiary may sell, lease, transfer or otherwise
dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Company, the Canadian Borrower, a
Subsidiary Guarantor or a Canadian Subsidiary Guarantor and (ii) any
Subsidiary of the Company (other than the Canadian Borrower) that is
not a Subsidiary Guarantor or a Canadian Subsidiary Guarantor may
sell, lease, transfer or otherwise dispose of all or substantially all
of its assets (upon voluntary liquidation or otherwise) to another
Subsidiary that is not a Subsidiary Guarantor or a Canadian Subsidiary
Guarantor; and
(c) in order to consummate an acquisition permitted by
subsection 7.10(g), the Company or a Subsidiary may be merged with the
acquired company as long as the surviving company is (i) the Company
(if the Company consummates any such transaction) or the Canadian
Borrower (if the Canadian Borrower consummates any such transaction)
or (ii) otherwise, a Subsidiary Guarantor or a Canadian Subsidiary
Guarantor.
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84
7.6 Limitation on Sale of Assets. Consummate any Asset Sale
except for the Disposition of assets and rights whose aggregate book value shall
not exceed 15% of the aggregate book value of the consolidated assets of the
Company and its Subsidiaries as of the Closing Date (after giving effect to the
Spin-Off Transactions) during the term of this Agreement; provided that (i) the
requirements of subsection 2.9(d) are complied with in connection therewith and
(ii) at least 80% of the consideration received by the Company or the applicable
Subsidiary, as the case may be, pursuant to such Asset Sale is in the form of
cash or Cash Equivalents.
7.7 Amendments to Spin-Off Documents. Amend, supplement or
otherwise modify the terms and conditions of the Spin-Off Documents (other than
the Management Agreement) except for any such amendment, supplement or
modification that could not reasonably be expected to have a Material Adverse
Effect or materially adversely affect the ability of the Loan Parties to perform
their respective obligations under the Loan Documents.
7.8 Limitations on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Company or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Company or any Subsidiary (collectively, "Restricted
Payments"), except that:
(a) (i) any Subsidiary may make Restricted Payments to the
Company, the Canadian Borrower, any Subsidiary Guarantor or any
Canadian Subsidiary Guarantor, (ii) the Company and the Canadian
Borrower may make Restricted Payments to any Subsidiary Guarantor or
any Canadian Subsidiary Guarantor, (iii) the Company may make
Restricted Payments to the Canadian Borrower, (iv) the Canadian
Borrower may make Restricted Payments to the Company, (v) any
Subsidiary (other than the Canadian Borrower) that is not a Subsidiary
Guarantor or a Canadian Subsidiary Guarantor may make Restricted
Payments to any other Subsidiary that is not a Subsidiary Guarantor or
a Canadian Subsidiary Guarantor and (vi) Soda Ash Partners may make
Restricted Payments pursuant to the Soda Ash Partnership Agreement;
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Company may pay dividends to
Intermediate Holdings as long as Intermediate Holdings concurrently
pays such dividends to Holdings in order to permit Holdings to purchase
Holdings' common stock or common stock options from present or former
officers or employees of Holdings, the Company or any Subsidiary upon
the death, disability or termination of employment of such officer or
employee, provided, that the aggregate amount of payments under this
paragraph (b) after the date hereof (net of any proceeds received by
Holdings and contributed to the Company after the date hereof in
connection with resales of any common stock or common stock options so
purchased) shall not exceed $8,000,000;
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85
(c) the Company may pay dividends to Intermediate Holdings to
be used directly by Intermediate Holdings, or paid by Intermediate
Holdings to Holdings and used by Holdings, to (i) pay Holdings' costs
(including all professional fees and expenses) incurred to comply with
its reporting obligations under federal or state laws, including any
reports filed with respect to the Securities Act, Exchange Act or the
respective rules and regulations promulgated thereunder, (ii) make
payments in respect of Holdings' directors and officers insurance
coverage, (iii) make payments in respect of indemnification obligations
under any Contractual Obligation or Requirement of Law owing to (x)
directors and officers of Holdings or (y) to employees or other Persons
to the extent, in the case of this clause (y), such payments relate to
services performed by any such Person on behalf of the Company and its
Subsidiaries, (iv) pay all reasonable fees and expenses payable by it
and relating to the Industrial Chemicals Business in connection with
the Spin-Off, (v) pay amounts due pursuant to the Management Agreement,
(vi) pay any amounts payable under the Spin-Off Documents, (vi) pay the
Allocable Tax Obligations and (vii) pay Holdings' and Intermediate
Holdings' other operational and corporate overhead expenses incurred in
the ordinary course of business to the extent such expenses relate to
acting as a holding company for the Company and its Subsidiaries or to
the operation of the Company and its Subsidiaries; and
(d) in addition to the Restricted Payments otherwise permitted
under this subsection 7.8, the Company shall be permitted to make (i)
so long as the Leverage Ratio reflected on the most recent Compliance
Certificate delivered pursuant to subsection 6.2(b) is less than 3.50
to 1.00, (x) Restricted Payments in an amount not to exceed the
aggregate Net Cash Proceeds, to the extent not required to be applied
to reduce the Total Commitments pursuant to subsection 2.9(c), received
by the Company from any issue and sale (other than to a Subsidiary of
the Company) of Equity Interests of the Company or capital contribution
to the Company, less the aggregate amount of (A) any Investments made
pursuant to subsection 7.10(g-1) and (B) any Capital Expenditures made
pursuant to subsection 7.9(c)(i), and (y) in any fiscal quarter of the
Company, Restricted Payments not exceeding in the aggregate 50% of
Consolidated Net Income for the four preceding fiscal quarters less the
aggregate amount of any Capital Expenditures made pursuant to
subsection 7.9(c)(ii), and (ii) additional Restricted Payments in an
aggregate amount not to exceed $5,000,000 during the term of this
Agreement.
7.9 Limitation on Capital Expenditures. Make or commit to
make (by way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or capital
assets (excluding any such asset acquired in connection with normal replacement
and maintenance programs properly charged to current operations) ("Capital
Expenditures") except (a) from the proceeds of any Reinvestment Deferred Amount,
(b) for expenditures in connection with the acquisition of mineral leases not
exceeding $5,000,000 in the aggregate during the term of this Agreement, (c) so
long as the Leverage Ratio reflected on the most recent Compliance Certificate
delivered pursuant to subsection 6.2(b) is less than 3.50 to 1.00, (i) Capital
Expenditures in an amount not to exceed the aggregate Net Cash Proceeds, to the
extent not required to be applied to reduce the Total Commitments pursuant to
subsection 2.9(c), received by the Company from any issue and sale (other than
to a Subsidiary of the
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86
Company) of Equity Interests of the Company or capital contribution to the
Company, less the aggregate amount of (A) any Investments made pursuant to
subsection 7.10(g-1) and (B) any Restricted Payments made pursuant to subsection
7.8(d)(i)(x), and (ii) in any fiscal quarter of the Company, Capital
Expenditures in an amount not exceeding in the aggregate 50% of Consolidated Net
Income for the four preceding fiscal quarters less the aggregate amount of any
Restricted Payments made pursuant to subsection 7.8(d)(i)(y), and (d) for
expenditures in the ordinary course of business not exceeding, in the aggregate
for the Company and its Subsidiaries during any period set forth below, the sum
of (i) the amount set forth opposite such period below:
<TABLE>
<CAPTION>
Period Amount
<S> <C>
July 1, 1999 - December 31, 1999 $20,000,000
January 1, 2000 - December 31, 2000 $19,000,000
January 1, 2001 - December 31, 2001 $19,000,000
January 1, 2002 - December 31, 2002 $17,000,000
January 1, 2003 - Termination Date $15,000,000
</TABLE>
and (ii) beginning with the period from January 1, 2000 to December 31, 2000,
any portion of such amount that was not so expended in any prior period
(provided that Capital Expenditures made pursuant to this clause (d) during any
period shall be deemed made, first, in respect of amounts permitted for such
period as provided in the chart above and, second, in respect of amounts carried
over from the prior period); provided that, for purposes of applying this
subsection 7.9, the amount of any Capital Expenditures made by Soda Ash Partners
shall be deemed to be in an amount equal to 51% of such amount.
7.10 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person
(each of the foregoing an "Investment"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash and Cash Equivalents;
(c) loans and advances to employees of the Company or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business;
(d) (i) Investments of the Company and its Subsidiaries in
Subsidiaries of the Company as such investments are in effect on the
date hereof and (ii) loans and advances by Subsidiaries of the Company
to the Company;
(e) (i) Investments by the Company in the Canadian Borrower,
a Subsidiary Guarantor or a Canadian Subsidiary Guarantor, (ii)
Investments by Subsidiaries of the Company in the Company, the
Canadian Borrower, a Subsidiary Guarantor or a Canadian Subsidiary
Guarantor and (iii) Investments by Subsidiaries of the Company (other
than
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87
the Canadian Borrower) that are not Subsidiary Guarantors or
Canadian Subsidiary Guarantors in other Subsidiaries that are not
Subsidiary Guarantors or Canadian Subsidiary Guarantors;
(f) Investments in the Capital Stock or the assets of Soda
Ash Partners; provided that, except in the case of an Investment
required pursuant to a capital call under the Soda Ash Partnership
Agreement, at the time of the making of such Investment no Default or
Event of Default shall have occurred and be continuing or shall result
therefrom;
(g) Investments consisting of the acquisition of all or
substantially all of the assets of, or a majority of the common Equity
Interests of, a Person or division or line of business of a Person if
immediately after giving effect thereto (i) no Default or Event of
Default shall have occurred and be continuing or would result
therefrom, (ii) the Company shall be in compliance, on a pro forma
basis after giving effect to such acquisition, with the covenants
contained in subsection 7.1 recomputed as at the last day of the most
recently ended fiscal quarter of the Company as if such acquisition
had occurred on the first day of each relevant period for testing such
compliance, and the Company shall have delivered to the Administrative
Agent, a certificate of its chief financial officer to such effect
accompanied by all relevant financial information for such
acquisition, (iii) if such acquisition is of assets other than Capital
Stock, the acquiring Person shall be a Grantor under the Guarantee and
Collateral Agreement (and/or other applicable Security Documents) and
(iv) if such acquisition is of Equity Interests of another Person,
such other Person shall become a Subsidiary Guarantor or a Canadian
Subsidiary Guarantor, as the case may be; provided that (x) no
acquisition may be made of the Capital Stock of any public company
unless the Board of Directors (or other governing body) of such
company approves such acquisition at the time it is commenced and (y)
the aggregate consideration paid (including, without limitation, (A)
the amount of cash paid in connection with each such acquisition, (B)
the value (as determined for purposes of each such acquisition in
accordance with the applicable acquisition agreement) of all Capital
Stock of the Company and its Subsidiaries issued in connection with
each such acquisition and (C) the principal amount (or, if less, the
accreted value) at the time of each such acquisition of all
Indebtedness assumed by the Company or its Subsidiaries with respect
thereto) by the Company and its Subsidiaries in respect of all
acquisitions made pursuant to this subsection 7.10(g) during the term
of this Agreement shall not exceed $10,000,000;
(g-1) in addition to the Investments otherwise permitted under
this subsection 7.10, so long as the Leverage Ratio reflected on the
most recent Compliance Certificate delivered pursuant to subsection
6.2(b) is less than 3.50 to 1.00, Investments in an amount not to
exceed the aggregate Net Cash Proceeds, to the extent not required to
be applied to reduce the Total Commitments pursuant to subsection
2.9(c), received by the Company from any issue and sale (other than to
a Subsidiary of the Company) of Equity Interests of the Company or
capital contribution to the Company, less the aggregate amount of (A)
any Restricted Payments made pursuant to subsection 7.8(d)(i)(x) and
(B) any Capital Expenditures made pursuant to subsection 7.9(c)(i);
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88
(g-2) any Investment in any Supply Partnership in an
aggregate amount at any time outstanding not to exceed 10% of
Consolidated Tangible Assets;
(g-3) any Investment pursuant to a Mineral Agreement;
(g-4) securities or other Investments received in settlement
of debts created in the ordinary course of business and owing to the
Company or any Subsidiary, or as a result of foreclosure, perfection or
enforcement of any Lien, or in satisfaction of judgments, including in
connection with any bankruptcy proceeding or other reorganization of
another Person;
(g-5) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers' compensation,
performance and other similar deposits;
(g-6) Investments in connection with any Currency Agreements,
Interest Rate Protection Arrangements or energy or commodity hedge,
exchange or similar agreements, provided, in each case, that such
agreement, arrangement, hedge or exchange is otherwise permitted under
subsection 7.2;
(g-7) promissory notes received as a portion of the
consideration for any Asset Sale consummated in accordance with
subsection 7.6;
(h) Capital Expenditures made pursuant to and in accordance
with subsection 7.9; and
(i) in addition to the Investments otherwise permitted by
this subsection 7.10, Investments not to exceed in the aggregate at
any time outstanding the greater of $10,000,000 and 5% of Consolidated
Tangible Assets, if immediately after giving effect thereto (i) no
Default or Event of Default shall have occurred and be continuing or
would result therefrom, and (ii) the Company shall be in compliance on
a pro forma basis after giving effect to such Investment, with the
covenants contained in subsection 7.1 recomputed as at the last day of
the most recently ended fiscal quarter of the Company as if such
Investment had occurred on the first day of each relevant period for
testing such compliance, and the Company shall have delivered to the
Administrative Agent, a certificate of its chief financial officer to
such effect accompanied by all relevant financial information for such
acquisition; provided that no acquisition may be made of the Capital
Stock of any public company unless the Board of Directors (or other
governing body) of such company approves such acquisition at the time
it is commenced.
7.11 Limitations on Optional Payments and Modifications of
Agreements.(a) Make any optional payment or prepayment on or redemption,
defeasance or purchase of any Indebtedness or Guarantee Obligations, in each
case, which are subordinated to any Obligations (or, if applicable, any
guarantee thereof), except, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, in connection with the
extension, renewal,
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89
substitution, refinancing or replacement of any such Indebtedness with
Refinancing Indebtedness (as defined in and to the extent permitted by
subsection 7.2(k)), (b) amend, modify or change, or consent or agree to any
amendment, modification or change to, any of the terms of any Indebtedness which
is subordinated to any of the Obligations (or any guarantee thereof) in any
material respect or in any way that is materially adverse to the interests of
the Lenders or the Company, (c) amend, modify or change, or consent to any
amendment, modification or change to (i) any of the terms of the Soda Ash
Partnership Agreement that is materially adverse to the interests of the Lenders
or the Borrowers or their Subsidiaries or the Management Agreement in any
material respect or in any way that is in the aggregate materially adverse to
the interests of the Lenders or the Borrowers or (ii) any of the terms of the
Security Documents, except pursuant to the terms thereof. The Company shall
provide the Administrative Agent and each Lender with prior written notice of
(i) any payment, prepayment, redemption, defeasance or purchase of any
Indebtedness or Guarantee Obligation pursuant to clause (a) above and (ii) any
amendment, modification or change to any of the terms of any Indebtedness of the
Company and its Subsidiaries or of any agreement referred to in clause (c)
above.
(b) Notwithstanding paragraph (a) above, (i) make or offer to
make any payment, prepayment, repurchase or redemption of or otherwise defease
or segregate funds with respect to the Senior Subordinated Notes, provided that
the Company may make regularly scheduled payments of interest on the Senior
Subordinated Notes, (ii) consent to any amendment, modification or change to the
Senior Subordinated Notes of the Senior Subordinated Note Indenture which
adversely affects the Lenders or (iii) designate any Indebtedness (other than
obligations of the Loan Parties pursuant to the Loan Documents) as "Designated
Senior Indebtedness" for the purposes of the Senior Subordinated Note Indenture.
7.12 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement or, in the case
of any of the Spin-Off Transactions, described in the Form 10 Filing, (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms in the aggregate no less favorable to the Company or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided that (i)
the Company may enter into the Management Agreement and renewals, modifications,
replacements or amendments of such agreement permitted by subsection 7.11, (ii)
the Company and its Subsidiaries may enter into the Spin-Off Documents and
renewals, modifications, replacements or amendments thereof permitted by
subsection 7.7 and (iii) the restrictions set forth in this subsection 7.12
shall not apply to (1) transactions pursuant to the Management Agreement or any
Spin-Off Document, (2) any employment or separation agreement, collective
bargaining agreement, benefit plan, program or arrangement, related trust
agreement or any other similar arrangement for or with an employee, officer or
director entered into by the Company or any Subsidiary in the ordinary course of
business, (3) sales of soda ash, calcium chloride and other products to GenTek
and its Subsidiaries pursuant to agreements in existence on the Closing Date,
(4) payments of indemnification or contribution required by any Contractual
Obligation or Requirement of Law and made to any directors, officers, employees
or agents of the Company or any Subsidiary as determined in good faith by
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90
the Board of Directors of the Company or such Subsidiary, (5) any Restricted
Payment otherwise permitted under subsection 7.8, (6) any payment of
compensation, or any issuance, grant or award of stock, options, other equity
related interests or other securities to employees, officers or directors in the
ordinary course of business and (7) any transaction in the ordinary course of
business between the Company or any Subsidiary and any Affiliate that is a joint
venture or similar entity (including a supply partnership and Mineral Agreement)
in which the Company and/or a Subsidiary has an Investment and which is
primarily engaged in a Related Business.
7.13 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary, except as otherwise permitted under subsection 7.2(g).
7.14 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Company to end on a day other than December 31, unless this
Agreement shall have been amended as necessary to restore the parties hereto as
nearly as possible to their respective positions prior to such change in fiscal
year.
7.15 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement which prohibits or limits the ability of the Company or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan Documents, (b) any
agreement of any Person which becomes a Subsidiary of the Company or to which
the Company or any Subsidiary becomes subject after the date hereof in
connection with a Permitted Acquisition, which agreement was not created in
anticipation thereof, including, but not limited to, any such agreement
governing acquired Indebtedness permitted under subsection 7.2(d), provided that
any agreement so permitted in accordance with this clause (b) shall apply only
to the property or assets acquired, directly or indirectly, by the Company
pursuant to such Permitted Acquisition, (c) agreements that restrict in a
customary manner the subletting, assignment or transfer of any property or asset
that is subject to a lease, license or similar contract, or the assignment or
transfer of any lease, license or other contract, (d) customary provisions
restricting dispositions of real property interests set forth in any easement or
similar agreements, (e) agreements in connection with the sale or disposition of
any assets of the Company or the sale or disposition of a Subsidiary (or any of
its property or assets), in any such case as permitted under this Agreement,
pending the closing of such sale or disposition, (f) any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby) and (g) agreements governing Indebtedness permitted
to be incurred pursuant to subsection 7.2 which contain only restrictions
customary for such type of Indebtedness, including agreements creating Liens
permitted to be incurred pursuant to subsection 7.3, provided that, in the case
of any agreement described in this clause (g), such agreement does not prohibit
or limit in any manner the ability of Intermediate Holdings, the Company or any
of its
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91
Subsidiaries to create, incur, assume or suffer to exist any Lien securing any
Obligations on any Collateral.
7.16 Limitation on Lines of Business. Enter into any
significant business, either directly or through any Subsidiary, except for
those businesses which are primarily of the same general types as those in which
the Company and its Subsidiaries are engaged on the date of this Agreement or
which are Related Businesses.
SECTION 8. EVENTS OF DEFAULT
8.1 Events of Default. If any of the following events shall
occur and be continuing:
(a) The applicable Borrower shall fail to pay any principal
of any Loan or any Reimbursement Obligation or Acceptance
Reimbursement Obligation when due in accordance with the terms
thereof; or the Borrowers shall fail to pay any interest on any Loan,
or any other amount payable on account thereof hereunder, within three
Business Days after any such interest or other amount becomes due in
accordance with the terms thereof; or
(b) Any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been incorrect or misleading in any material respect on
or as of the date made or deemed made; or
(c) Either Borrower or any other Loan Party shall default in
the observance or performance of any agreement contained in subsection
6.11 or Section 7 hereof (other than subsections 7.3 and 7.7); or
(d) Either Borrower or any other Loan Party shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after written notice to
the Company by the Administrative Agent; or
(e) The Company or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on any Indebtedness (other
than the Loans, the Reimbursement Obligations and the Acceptance
Reimbursement Obligations) or in the payment of any Guarantee
Obligation, aggregating $5,000,000 or more, beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition following any applicable grace periods
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92
relating to any Indebtedness or Guarantee Obligation referred to in
clause (i) immediately above or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
any Indebtedness referred to in clause (i) immediately above or
beneficiary or beneficiaries of such Guarantee Obligation referred to
in clause (i) immediately above (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice, lapse of time or both if required, such
Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable, provided, however, that if the
default described in this clause (ii) is cured, the Event of Default
under this clause (ii) shall be simultaneously cured; or
(f) (i) (A) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (B) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan or any Lien in favor of the PBGC or a
Plan shall arise on the assets of the Company or any Commonly
Controlled Entity, (C) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (D) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (E) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (F) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (A)
through (F) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(ii) (A) a Borrower or any of its Subsidiaries fails to remit
in a timely manner any amount payable to a Canadian Pension Plan, (B) a
Borrower or any of its Subsidiaries receives, directly or indirectly,
payment of any amount from a Canadian Pension Plan, (C) any Canadian
Pension Plan is terminated, wound up or otherwise ceases to be
registered under the Income Tax Act (Canada) or the applicable
provincial pension benefits standards legislation, or (D) any other
similar event or condition shall occur or exist with respect to a
Canadian Pension Plan; and in each case in clauses (A) through (D)
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material
Adverse Effect; or
(g) One or more judgments or decrees shall be entered against
Holdings or any of its Subsidiaries involving in the aggregate a
liability (to the extent not paid or covered by insurance less any
applicable and customary retention or deductible) of $5,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
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93
(h) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect (other than pursuant to the
terms hereof or thereof), or either Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert in
writing or (ii) the Lien created by any of the Security Documents on
any material portion of the Collateral shall cease to be enforceable
and of the same effect and priority purported to be created thereby
and, if such condition is correctable, such condition is not corrected
within 30 days; or
(i) Any guarantee under the Guarantee and Collateral
Agreement or the Canadian Guarantee and Collateral Agreement shall
cease for any reason to be in full force and effect (other than
pursuant to the terms hereof or thereof) or any Loan Party shall so
assert in writing; or
(j) A Change in Control shall have occurred; or
(k) Holdings shall cease to own legally and beneficially 100%
of each class of Capital Stock of Intermediate Holdings free of Liens;
Intermediate Holdings shall cease to own legally and beneficially 100%
of each class of Capital Stock of the Company free of Liens (except
for Liens created pursuant to the Security Documents); the Company
shall cease to beneficially own 100% of each class of Capital Stock of
the Canadian Borrower free of Liens (except for Liens created pursuant
to the Security Documents); or the Company shall cease to beneficially
own at least 51% of the economic interest in, or shall cease to be the
sole managing partner of, Soda Ash Partners; or
(l) the Senior Subordinated Notes shall cease, for any
reason, to be validly subordinated to the Company Obligations, as
provided in the Senior Subordinated Note Indenture, or any Loan Party,
any Affiliate of any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert and,
in the event of such assertion by the trustee or such holders, the
Company does not within 30 days thereof deliver to the Administrative
Agent an opinion of counsel (such counsel to be reasonably
satisfactory to the Administrative Agent) stating that the
subordination provisions of the Senior Subordinated Note Indenture are
legal, valid and binding; or
(m) (i) The Company, NHO Canada, Canadian Holdings, the
Canadian Borrower or any of the Company's Material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of
its assets, or the Company, NHO Canada, Canadian Holdings, the
Canadian Borrower or any of the Company's Material Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be
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94
commenced against the Company, NHO Canada, Canadian Holdings, the
Canadian Borrower or any of the Company's Material Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against the Company, NHO Canada, Canadian Holdings, the
Canadian Borrower or any of the Company's Material Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Company, NHO Canada, Canadian Holdings, the Canadian
Borrower or any of the Company's Material Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Company, NHO Canada, Canadian Holdings, the
Canadian Borrower or any of the Company's Material Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event:
(A) if such event is an Event of Default specified in clause
(i) or (ii) of paragraph (m) of this subsection 8.1 with respect to either
Borrower, automatically the Revolving Credit Commitments and the Canadian
Revolving Credit Commitments shall immediately terminate and the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder, and all face amounts of Acceptances not drawn
upon, expired, demanded or matured, in accordance with subsection 2.3(j)) shall
immediately become due and payable; and
(B) if such event is any other Event of Default specified in
this subsection 8.1, any or all of the following actions may be taken: (i) with
the consent of the Required Lenders, the Administrative Agent and/or the
Canadian Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent and/or the Canadian Administrative Agent shall, by
notice to the Borrowers declare the Revolving Credit Commitments and the
Canadian Revolving Credit Commitments to be terminated forthwith, whereupon the
Revolving Credit Commitments and the Canadian Revolving Credit Commitments shall
immediately terminate and (ii) with the consent of the Required Lenders, the
Administrative Agent and/or the Canadian Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent and/or the Canadian
Administrative Agent shall, by notice to the Borrowers, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing on account
thereof under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder, and all face amounts of Acceptances not drawn upon,
expired, demanded or matured, in accordance with subsection 2.3(j)) to be due
and payable forthwith, whereupon the same shall immediately become due and
payable.
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95
8.2 Certain Provisions Applicable to Letters of Credit. With
respect to all Letters of Credit issued from the account of a Borrower with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to subsection 8.1, such Borrower shall at such time
deposit in a cash collateral account opened by the Applicable Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Each Borrower hereby grants to each Applicable Agent, for the benefit of
the applicable Issuing Banks and the applicable Participating Banks, a security
interest in such cash collateral to secure all obligations of such Borrower in
respect of such Letters of Credit under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by the
Applicable Agent to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
obligations of such Borrower hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrowers
hereunder and under the Notes shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to the applicable Borrower.
Each Borrower shall execute and deliver to the Applicable Agent, for the account
of the applicable Issuing Banks and the applicable Participating Banks, such
further documents and instruments as the Applicable Agent may request to
evidence the creation and perfection of such security interest in such cash
collateral account.
8.3 Certain Waivers. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind
with respect to matters set forth in this Section are hereby expressly waived.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints Chase as the Administrative Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes Chase, as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and in the other Loan
Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent. The Designated Issuer in its capacity as such
shall be entitled to the same rights under this Section 9 as accrue to the
Administrative Agent as if it were named in place of the Administrative Agent.
In acting as Collateral Agent Chase shall be entitled to the rights and benefits
of, and subject to the obligations set forth for, the Administrative Agent in
this Section 9, mutatis mutandis, which Section is hereby incorporated by
reference, mutatis mutandis, in each of the Security Documents.
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9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the Notes or any
other Loan Document or for any failure of either Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of either Borrower.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Required
Lenders as it deems appropriate against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes and the other Loan
Documents if acting in accordance with a request of the Required Lenders as it
deems appropriate, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Notes.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice
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97
of default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default
or Event of Default, or any acceleration of any amounts due hereunder, as
shall be reasonably directed by the Required Lenders; provided that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default, Event of
Default or acceleration as it shall deem advisable in the best interests of
the relevant Lenders. To the extent that, as a result of the exercise by it
of any remedies with respect to any Collateral, the Administrative Agent shall
receive or realize any amounts, it shall distribute such amounts ratably among
the Lenders by reference to the aggregate amounts accrued and unpaid that are
outstanding under the Agreement and the other Loan Documents and owing to the
respective Lenders (after deducting and applying any amounts then owing to the
Administrative Agent or on account of expenses of the Administrative Agent
previously paid by any Lender), and if the portion to be so distributed to any
Lenders shall exceed the sum then due and payable to such Lenders, such excess
shall be held by the Administrative Agent in a collateral account for such
Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of any
Loan Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers. Each Lender acknowledges and agrees to
comply with the provisions of subsection 10.6 applicable to such Lender. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of either Borrower which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers and without limiting the obligation of the Borrowers and the other
Loan Parties to do so), ratably according to their respective Total Credit
Percentages in effect on the date on which indemnification is sought
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98
under this subsection (or, if indemnification is sought after the date upon
which the Revolving Credit Commitments and Canadian Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Total Credit Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising
out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct. The obligations to indemnify
an Issuing Lender shall be ratable among the Revolving Credit Lenders, in the
case of the Revolving Credit Commitments, or the Canadian Revolving Credit
Lenders, in the case of the Canadian Revolving Credit Commitments, in accordance
with their respective Applicable Percentages (or, if the Commitments have been
terminated, the outstanding principal amount of their respective Total
Extensions of Credit). The agreements in this subsection shall survive the
payment of the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers and the other
Loan Parties as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and the
Company. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Majority Facility Lenders
with respect to the Revolving Credit Facility shall appoint from among the
Revolving Credit Lenders a successor agent for such Lenders, which successor
agent shall be approved by the Company (such approval not to be unreasonable
withheld), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loan. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this subsection
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
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99
9.10 Canadian Administrative Agent. Each Canadian Revolving
Credit Lender hereby irrevocably designates and appoints Chase Canada as the
Canadian Administrative Agent under this Agreement and the other Loan Documents,
and each such Canadian Revolving Credit Lender irrevocably authorizes Chase
Canada, as Canadian Administrative Agent for such Lender, to take such action on
its behalf under the provisions of the Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Canadian Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other provisions as are reasonably
incidental thereto. Each Canadian Revolving Credit Lender and the Borrowers
hereby agree and confirm that the provisions of this Section 9 shall apply to
Chase Canada as the Canadian Administrative Agent upon the same terms and
subject to the same conditions as apply to Chase in acting as Administrative
Agent and as Collateral Agent in this Section 9, mutatis mutandis; provided that
any successor Canadian Administrative Agent shall be a bank with an office in
Toronto, Canada having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank which is also a Canadian Revolving Credit
Lender.
9.11 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any rights or
obligations under the Loan Documents in their capacities as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent and the Canadian Administrative Agent
may, from time to time, (a) enter into with the Borrowers and the other Loan
Parties written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrowers and the other Loan Parties hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative
Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) (x) reduce the amount or extend the scheduled date of
maturity of any Loan or any Reimbursement Obligation or any Acceptance
Reimbursement Obligation or of any scheduled installment thereof, or
(y) reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the
amount or (z) extend the expiration date of any Lender's Revolving
Credit Commitment or Canadian Revolving Credit Commitment, in each
case, without the written consent of each Lender directly affected
thereby;
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100
(ii) amend, modify or waive any provision of subsection 9.5
or this subsection 10.1 or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or
transfer by any Loan Party of any of its rights and obligations under
this Agreement and the other Loan Documents (other than pursuant to a
transaction permitted by subsection 7.5), in each case, without the
written consent of all the Lenders;
(iii) release the Company, the Canadian Borrower, any
Subsidiary Guarantor, any Canadian Subsidiary Guarantor or any other
Loan Party that is a Material Subsidiary from its obligations under
any Security Document or release all or substantially all of the
Collateral, in either case without the consent of each Lender, in each
case except as expressly permitted hereby or by the other Loan
Documents;
(iv) amend, modify or waive any provision of Section 9
without the written consent of the then Administrative Agent and, if
affected thereby, the Canadian Administrative Agent and the Designated
Issuer;
(v) amend, modify or waive the order of application of
prepayments specified in subsection 2.9(e) without the written consent
of the Majority Facility Lenders under each Facility adversely
affected thereby;
(vi) amend, modify or waive the provisions of Section 3, any
Letter of Credit or any L/C Obligation without the written consent of
each relevant Issuing Lender; or
(vii) amend the first two sentences of subsection 2.15(a)
without the written consent of each Lender adversely affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Administrative Agent, the Canadian Administrative Agent and all
future holders of the Notes. In the case of any waiver, the Borrowers, the
Lenders, the Administrative Agent and the Canadian Administrative Agent shall be
restored to their former position and rights hereunder and under the outstanding
Notes and any other Loan Documents, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or four days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received (provided it is also mailed), addressed as follows in the case of the
Borrowers, the Administrative Agent and the Canadian Administrative Agent, and
as set forth in Schedule I in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto and
any future holders of the Notes:
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101
The Company: General Chemical Industrial Products Inc.
90 East Halsey Road
Parsippany, New Jersey 07054
Attention: Chief Financial Officer
Telecopy: (973) 515-1997
The Canadian Borrower: General Chemical Canada Ltd.
201 City Center Drive, 11th Floor
Mississauga, Ontario, Canada L5B 3A3
Attention: President
Telecopy: (905) 896-9365
with a copy to:
The General Chemical Group Inc.
90 East Halsey Road
Parsippany, New Jersey 07054
Attention: General Counsel
Telecopy: (973) 515-3244
The Administrative Agent: The Chase Manhattan Bank
270 Park Avenue, 38th Floor
New York, New York 10017
Attention: Elizabeth Swerz
Telecopy: (212) 270-7939
with a copy to: The Chase Manhattan Bank
c/o The Loan and Agency Services Group
One Chase Manhattan Plaza
New York, New York 10081
Attention: Dan Fischer
Telecopy: (212) 552-5777
The Canadian Administrative
Agent: The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Toronto, Ontario M5X 1A4
Attention: Funding Officer
Vice President
Telecopy: 416-216-4162
416-216-4161
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The Issuing Banks: Chase Manhattan Bank Delaware
1201 North Market Street
8th Floor
Wilmington, Delaware 19801
Attention: Michael Handago
Telecopy: (302) 428-3390
The Chase Manhattan Bank
270 Park Avenue, 38th Floor
New York, New York 10017
Attention: Elizabeth Swerz
Telecopy: (212) 270-7939
provided that any notice, request or demand to or upon the Administrative Agent,
the Issuing Banks or the Lenders pursuant to subsection 2.2, 2.3, 2.4, 2.8, 2.9,
2.10 or 3.2 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent, the
Canadian Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrowers agree (a)
to pay or reimburse the Administrative Agent, the Canadian Administrative Agent
and the Issuing Banks for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, the Canadian
Administrative Agent and the Issuing Banks in the amounts agreed to with such
counsel, (b) to pay or reimburse the Issuing Banks, the Administrative Agent,
the Canadian Administrative Agent and, if a Default or an Event of Default shall
have occurred and be continuing, each Lender for all their reasonable
out-of-pocket costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, to the Canadian
Administrative Agent, to the Issuing Banks and, if a
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103
Default or an Event of Default shall have occurred and be continuing, to the
several Lenders, (c) to pay, indemnify, and hold each Lender, the Issuing Banks,
the Administrative Agent and the Canadian Administrative Agent harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting directly from any delay not caused by the Administrative Agent,
the Canadian Administrative Agent, any Issuing Bank or the Lenders in paying,
stamp, excise and other documentary taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Issuing Banks,
the Administrative Agent and the Canadian Administrative Agent and each of
their officers, directors, employees and agents harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, out-of-pocket expenses or disbursements of any kind
or nature whatsoever incurred in connection with the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of Holdings, any of
its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the Borrowers
shall have no obligation hereunder to the Administrative Agent, the Canadian
Administrative Agent, any Issuing Bank, any Lender with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of the
Administrative Agent, the Canadian Administrative Agent, such Issuing Bank
or any such Lender (ii) legal proceedings commenced against the Administrative
Agent, the Canadian Administrative Agent, any Issuing Bank or any such Lender
by any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such or
(iii) legal proceedings commenced against the Administrative Agent, the Canadian
Administrative Agent, any Issuing Bank or any Lender by the Borrowers or any of
their Affiliates, in which the Borrowers or such Affiliate is the prevailing
party (unless the Administrative Agent, the Canadian Administrative Agent, such
Issuing Bank or such Lender is also a prevailing party, in which case the
indemnification obligations of the Borrowers hereunder shall be adjusted to
reflect the relative recoveries and faults of the parties to such litigation).
The Borrowers shall have no obligation under this subsection 10.5 for the
consequential damages of the Administrative Agent, the Canadian Administrative
Agent, any Issuing Bank any Lender. The agreements in this subsection shall
survive repayment of the Loans, and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Issuing Banks, the Administrative Agent, the Canadian
Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that a Borrower may not assign or transfer any of
its rights or obligations under this Agreement (except in a transaction
permitted by subsection 7.5) without the prior written consent of each Lender.
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104
(b) Any Lender may, in the ordinary course of its business
and in accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Revolving Credit Commitment,
Canadian Revolving Credit Commitment or L/C Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement and the other Loan
Documents, and the Borrowers, the Administrative Agent and the Canadian
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents; provided that such Lender shall reserve solely unto
itself, and shall not grant to any Participant, any part or all of its right to
agree to the amendment, modification or waiver of any of the terms of this
Agreement or other Loan Document or any document related thereto, except for any
such amendment, modification or waiver that would reduce the principal of, or
interest on the Loans, participating interests in the Letters of Credit or any
fees payable hereunder, in each case subject to such participation, or postpone
the date of the final maturity of, or any scheduled date fixed for payment of
interest on, the Loans, any Reimbursement Obligation or any Acceptance
Reimbursement Obligation, in each case to the extent subject to such
participation. Each Borrower agrees that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note, provided
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as provided
in subsection 10.7(a) as fully as if it were a Lender hereunder. Each Borrower
also agrees that each Participant shall be entitled to the benefits of
subsections 2.17, 2.18 and 2.19 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Lender;
provided that, in the case of subsection 2.18, such Participant shall have
complied with the requirements of said subsection as if it were a Lender, except
with respect to the furnishing of forms, documentation and certifications, in
which case such Participant shall have complied with the requirements of
subsection 2.18(b), and provided, further, that no Participant shall be entitled
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any Affiliate thereof, or,
with the consent of the Company, the applicable Issuing Banks and the
Administrative Agent (which in each case shall not be unreasonably withheld), to
an additional bank, fund (as long as such fund invests in bank loans) or other
financial institution (an "Assignee") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit
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105
C, executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an Affiliate thereof, by the Company,
the applicable Issuing Banks and the Administrative Agent) and delivered to
the Administrative Agent (which shall deliver a copy to the Canadian
Administrative Agent) for its acceptance and recording in the Register. Any
such assignment by any Lender to any Person which is not then a Lender or an
Affiliate thereof shall be in a minimum aggregate amount equal to at least
$5,000,000 (or the Dollar Equivalent Amount with respect thereto) (or, if
less, all of a Lender's interest under this Agreement), unless otherwise
agreed by the Company and the Administrative Agent, and, after giving effect
to any such assignment, the assigning Lender and its Affiliates shall have
Commitments of at least $5,000,000, unless otherwise agreed by the Company
and the Administrative Agent. Interests under the Canadian Revolving
Credit Commitments may be assigned only to Canadian Scheduled Lenders.
Notwithstanding any other provision of this subsection 10.6, (i) no Canadian
Schedule I Lender having both a Revolving Credit Commitment and a Canadian
Revolving Credit Commitment shall be permitted to assign any portion of its
interests under this Agreement unless, after giving effect to such assignment,
such Lender shall be able to comply with a reallocation of Commitments pursuant
to subsection 2.4, (ii) no Lender may assign any portion of its interests under
this Agreement unless, after giving effect to such assignment, such Lender,
together with its affiliated Allocation Lender, shall be able to comply with a
reallocation of Commitments pursuant to subsection 2.4 and (iii) no Assignee
shall receive any assignment of rights and obligations under this Agreement
unless, after giving effect to such assignment, such Assignee (or such Assignee
together with a Lender that is an Affiliate thereof) shall be able to comply
with a reallocation of Commitments pursuant to subsection 2.4. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Revolving Credit Commitment and/or Canadian Revolving Credit Commitments
as set forth therein, and (y) the assigning Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this subsection to the contrary,
the consent of the Company to an assignment shall not be required at any time
when an Event of Default under paragraph (a) or (n) of subsection 8.1 shall have
occurred and be continuing.
(d) Each of the Administrative Agent and the Canadian
Administrative Agent shall maintain at its address referred to in subsection
10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Administrative Agent, the
Canadian Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a
<PAGE>
<PAGE>
106
Note shall be registered on the Register only upon surrender for registration
of assignment or transfer of the Note evidencing such Loan, accompanied by
a duly executed Assignment and Acceptance; thereupon one or more new Notes
in the same aggregate principal amount shall be issued to the designated
Assignee, and the old Notes shall be returned by the Administrative Agent
to the Company marked "cancelled". The Register shall be available for
inspection by the Borrowers or any Lender at any reasonable time and from time
to time upon reasonable prior notice. It is understood that the Canadian
Administrative Agent shall be required to maintain the Register only with
respect to the Canadian Revolving Credit Commitments and the Administrative
Agent may, but shall not be required to, maintain the Register with respect to
Canadian Revolving Credit Commitments and extensions of credit thereunder.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an Affiliate thereof, by the Company, the applicable
Issuing Banks and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $3,500 (which the
fee shall not be payable in connection with an assignment by a Lender to an
Affiliate thereof), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Borrowers. On or prior to such
effective date, the applicable Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent or the Canadian Administrative
Agent, as the case may be (in exchange for the Notes of the assigning Lender),
new Notes to the order of such Assignee in an amount equal to the Revolving
Credit Commitment and/or Canadian Revolving Credit Commitment, as the case may
be, assumed or acquired by it pursuant to such Assignment and Acceptance and, if
the assigning Lender has retained a Revolving Credit Commitment and/or Canadian
Revolving Credit Commitment, as the case may be, upon request, new Notes to the
order of the assigning Lender in an amount equal to the Revolving Credit
Commitment and/or Canadian Revolving Credit Commitment, as the case may be,
retained by it hereunder. Such new Notes shall be dated the Effective Date and
shall otherwise be in the form of the Notes replaced thereby.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 10.15, any and all financial information
in such Lender's possession concerning the Borrowers and their Affiliates which
has been delivered to such Lender by or on behalf of the Borrowers pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrowers
and their Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
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107
10.7 Adjustments; Set-off. Except to the extent that this
Agreement and the other Loan Documents provide for payments to be allocated to a
particular Lender or to the Lenders under a particular Facility, if any Lender
(a "Benefitted Lender") shall at any time receive any payment of all or part of
the Obligations owing to it, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in subsection 8.1(n), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Obligations, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Obligations, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law so long as a Default or an Event of Default shall have occurred
and be continuing, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by either
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of such Borrower. Each Lender agrees
promptly to notify the applicable Borrower and the Administrative Agent after
any such set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Company and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrowers, the Agents, the Issuing
Banks and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by
<PAGE>
<PAGE>
108
the Agents, the Issuing Banks or any Lender relative to subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY STATED OTHERWISE IN A LOAN DOCUMENT) AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY STATED OTHERWISE IN A LOAN DOCUMENT) SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof and the courts of the Province of
Ontario;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in subsection 10.2
or at such other address of which the Administrative Agent or the
Canadian Administrative Agent, as the case may be, shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages; provided that any such waiver shall
not apply with respect to claims arising from the gross negligence or
willful misconduct of the Administrative Agent, the Canadian
Administrative Agent, any Issuing Bank or any Lender.
10.13 Acknowledgments. Each Borrower hereby acknowledges
<PAGE>
<PAGE>
109
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent, the Canadian
Administrative Agent nor any Lender has any fiduciary relationship
with or duty to either Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent, the Canadian Administrative
Agent and Lenders, on one hand, and the Borrowers, on the other hand,
in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrowers and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. EACH BORROWER, THE
ADMINISTRATIVE AGENT, THE CANADIAN ADMINISTRATIVE AGENT, THE ISSUING BANKS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep
confidential all non-public information provided to it by either Borrower or any
Loan Party pursuant to this Agreement or any Loan Document or in connection with
the transactions contemplated by this Agreement or any Loan Document that is
designated by a Borrower in writing as confidential; provided that nothing
herein shall prevent any Lender from disclosing any such information (i) to the
Administrative Agent, the Canadian Administrative Agent or any other Lender,
(ii) to any Transferee which executes a Confidentiality Agreement substantially
in the form of Exhibit D hereto, (iii) to its employees, directors, agents,
attorneys, accountants and other professional advisors, (iv) upon the request or
demand of any Governmental Authority (including, without limitation, the
National Association of Insurance Commissioners) having jurisdiction over such
Lender, (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vi) which has been publicly disclosed other than in breach by such Lender of
this Agreement, (vii) in connection with the exercise of any remedy hereunder,
(viii) in connection with periodic regulatory examinations, (ix) in connection
with any litigation to which such Lender may be a party, (x) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty (A) has been approved in
writing by the Company and (B) agrees in a writing enforceable by the Company to
be bound by the provisions of this subsection 10.15) and (xi) if, prior to such
information having been so provided or obtained, such information was already in
the Administrative Agent's, the Canadian Administrative Agent's, or a Lender's
possession on a nonconfidential basis without a duty of confidentiality to such
Borrower or any Loan Party being violated.
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110
10.16 Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
or under any other Loan Document in Dollars or Canadian Dollars into another
currency, the parties hereto agree, to the fullest extent that they may legally
and effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent or the
Canadian Administrative Agent, as the case may be, could purchase Dollars or
Canadian Dollars, as the case may be, with such other currency in New York, New
York or Toronto, Canada, as the case may be, on the Business Day immediately
preceding the day on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due
to the Administrative Agent, the Canadian Administrative Agent, any Lender or
any Issuing Bank hereunder or under any other Loan Document in Dollars shall, to
the extent permitted by applicable law, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt of any sum adjudged to be so due in the judgment
currency the Administrative Agent, the Canadian Administrative Agent, such
Lender or such Issuing Bank may in accordance with normal banking procedures
purchase Dollars in the amount originally due to the Administrative Agent, the
Canadian Administrative Agent, such Lender or such Issuing Bank with the
judgment currency. If the amount of Dollars so purchased is less than the sum
originally due to the Administrative Agent, the Canadian Administrative Agent,
such Lender or such Issuing Bank, the applicable Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent, the Canadian Administrative Agent, such Lender or such
Issuing Bank against the resulting loss, and if the amount of Dollars so
purchased exceeds the sum originally due to such Person in Dollars, such Person
shall permit such excess to the Company.
(c) The obligation of each Borrower in respect of any sum due
to the Canadian Administrative Agent, the Administrative Agent, any Canadian
Revolving Credit Lender or any Issuing Bank hereunder or under any other Loan
Document in Canadian Dollars shall, to the extent permitted by applicable law,
notwithstanding any judgment in a currency other than Canadian Dollars, be
discharged only to the extent that on the Business Day following receipt of any
sum adjudged to be so due in the judgment currency the Canadian Administrative
Agent, the Administrative Agent, such Canadian Revolving Credit Lender or such
Issuing Bank may in accordance with normal banking procedures purchase Canadian
Dollars in the amount originally due to the Canadian Administrative Agent, the
Administrative Agent, such Canadian Revolving Credit Lender or such Issuing Bank
with the judgment currency. If the amount of Canadian Dollars so purchased is
less than the sum originally due to the Canadian Administrative Agent, the
Administrative Agent, such Canadian Revolving Credit Lender or such Issuing
Bank, each Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Canadian Administrative Agent, the
Administrative Agent, such Canadian Revolving Credit Lender or such Issuing Bank
against the resulting loss.
<PAGE>
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111
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
GENERAL CHEMICAL INDUSTRIAL
PRODUCTS INC.
By: ___________________________________
Title:
GENERAL CHEMICAL CANADA LTD.
By: ___________________________________
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent, as an
Issuing Bank and as a Lender
By: ___________________________________
Title:
THE CHASE MANHATTAN BANK OF
CANADA, as Canadian Administrative
Agent and as a Lender
By: ___________________________________
Title:
CHASE MANHATTAN BANK DELAWARE,
as an Issuing Bank
By: ___________________________________
Title:
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112
THE BANK OF NOVA SCOTIA, as
Syndication Agent and as a
Lender
By: ___________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent and as a
Lender
By: ___________________________________
Title:
<PAGE>
<PAGE>
Annex A
PRICING GRID FOR LOANS AND COMMITMENT FEES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Applicable Margin for
Applicable Margin for ABR Loans, Canadian Base
Eurodollar Loans Rate Loans and Canadian
Pricing Ratio and Stamping Fee Prime Rate Loans Commitment Fee Rate
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
> 5.25 3.25% 2.00% .500%
- --------------------------------------------------------------------------------------------------------------------
> 4.75 < 5.25 3.00 1.75 .500
-
- --------------------------------------------------------------------------------------------------------------------
> 4.25 < 4.75 2.75 1.50 .500
-
- --------------------------------------------------------------------------------------------------------------------
> 3.75 < 4.25 2.50 1.25 .500
-
- --------------------------------------------------------------------------------------------------------------------
3.75 2.25 1.00 .500
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Changes in the Applicable Margin and Commitment Fee Rate resulting from changes
in the Pricing Ratio (as defined below) shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 60th day after
the end of each of the first three quarterly periods of each fiscal year or the
90th day after the end of each fiscal year, as the case may be), beginning with
the financial statements delivered for the fiscal quarter ending December 31,
1999, and shall remain in effect until the next change to be effected pursuant
to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Pricing Ratio as at the end of the fiscal period
that would have been covered thereby shall for the purposes of this definition
be deemed to be greater than 5.25 to 1. In addition, at all times while an Event
of Default shall have occurred and be continuing, the Pricing Ratio shall for
the purposes of this definition be deemed to be greater than 5.25 to 1. Each
determination of the Pricing Ratio pursuant to this definition shall be made
with respect to the period of four consecutive fiscal quarters of the Company
ending at the end of the period covered by the relevant financial statements.
"Pricing Ratio" means, as at the last day of any fiscal quarter of the Company,
the Pro Forma Ratio of (a) Funded Debt as at such day to (b) Consolidated Cash
Flow for the period of four fiscal quarters ending on such day.
"Funded Debt" means, as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current
<PAGE>
<PAGE>
sinking fund payments in respect of such Indebtedness whether or not required
to be paid within one year from the date of its creation and, in the case of
a Borrower, Indebtedness in respect of the Loans. Notwithstanding anything
in the foregoing to the contrary, Funded Debt shall exclude Indebtedness and
Guarantee Obligations of a Person in respect of reclamation bonds, performance
bonds, letters of credit and surety bonds required by the applicable statutes
or laws of the relevant jurisdiction or by relevant Government Authorities
(or, in the case of such letters of credit, issued for insurance purposes).
<PAGE>
<PAGE>
=================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of April 30, 1999
=================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINED TERMS............................................2
1.1 Definitions............................................2
1.2 Other Definitional Provisions..........................8
SECTION 2. GUARANTEE................................................9
2.1 Guarantee..............................................9
2.2 Right of Contribution.................................10
2.3 No Subrogation........................................11
2.4 Amendments, etc. with respect to Obligations..........11
2.5 Guarantee Absolute and Unconditional..................12
2.6 Reinstatement.........................................13
2.7 Payments..............................................13
SECTION 3. GRANTS OF SECURITY INTERESTS............................13
3.1 Grant by Parent.......................................13
3.2 Grant by Other Grantors...............................13
SECTION 4. REPRESENTATIONS AND WARRANTIES..........................14
4.1 Title; No Other Liens.................................14
4.2 Perfected First Priority Liens........................15
4.3 Chief Executive Office................................15
4.4 Inventory and Equipment...............................15
4.5 Farm Products.........................................15
4.6 Investment Property...................................15
4.7 Receivables...........................................16
4.8 Contracts.............................................16
4.9 Intellectual Property.................................17
4.10 Vehicles.............................................17
SECTION 5. COVENANTS...............................................17
5.1 Delivery of Instruments, Certificated
Securities and Chattel Paper..........................18
5.2 Maintenance of Insurance..............................18
5.3 Payment of Obligations................................18
5.4 Maintenance of Perfected Security Interest;
Further Documentation.................................19
5.5 Changes in Locations, Name, etc.......................19
5.6 Notices...............................................20
5.7 Investment Property...................................20
5.8 Receivables...........................................21
5.9 Contracts.............................................21
</TABLE>
i
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
5.10 Intellectual Property................................21
SECTION 6. REMEDIAL PROVISIONS.....................................22
6.1 Certain Matters Relating to Receivables...............22
6.2 Communications with Obligors; Grantors Remain Liable..23
6.3 Pledged Stock.........................................24
6.4 Proceeds to be Turned Over To Collateral Agent........25
6.5 Application of Proceeds...............................25
6.6 Code and Other Remedies...............................25
6.7 Private Sales.........................................26
6.8 Waiver; Deficiency....................................27
SECTION 7. THE COLLATERAL AGENT....................................27
7.1 Collateral Agent's Appointment as Attorney-in-Fact,
etc...................................................27
7.2 Duty of Collateral Agent..............................29
7.3 Execution of Financing Statements.....................29
7.4 Authority of Collateral Agent.........................29
SECTION 8. MISCELLANEOUS...........................................30
8.1 Amendments in Writing.................................30
8.2 Notices...............................................30
8.3 No Waiver by Course of Conduct; Cumulative Remedies...30
8.4 Enforcement Expenses; Indemnification.................30
8.5 Successors and Assigns................................31
8.6 Set-Off...............................................31
8.7 Counterparts..........................................31
8.8 Severability..........................................31
8.9 Section Headings......................................32
8.10 Integration..........................................32
8.11 GOVERNING LAW........................................32
8.12 Submission To Jurisdiction; Waivers..................32
8.13 Acknowledgements.....................................33
8.14 Additional Grantors..................................33
8.15 Releases.............................................33
8.16 WAIVER OF JURY TRIAL.................................34
8.17 Conversion of Currencies.............................34
</TABLE>
ii
<PAGE>
<PAGE>
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Locations of Records Concerning Receivables
Schedule 8 Locations of Records Concerning Contracts
iii
<PAGE>
<PAGE>
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of April 30,
1999, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Grantors") in favor of
THE CHASE MANHATTAN BANK, as Collateral Agent (in such capacity, the "Collateral
Agent") for the Administrative Agent (for the benefit of the Revolving Credit
Lenders) and the Canadian Administrative Agent (for the benefit of the Canadian
Revolving Credit Lenders), for the ratable benefit of the Lenders under the
Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of April
30, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among General Chemical Industrial Products Inc. (the
"Company"), General Chemical Canada Ltd. (the "Canadian Borrower"), the banks
and other financial institutions from time to time parties thereto (the
"Lenders"), The Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") for the Revolving Credit Lenders (as defined
therein), and The Chase Manhattan Bank of Canada, as Canadian Administrative
Agent (in such capacity, the "Canadian Administrative Agent") for the Canadian
Revolving Credit Lenders (as defined therein), the Lenders have severally agreed
to make extensions of credit to the Borrowers upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Canadian Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the
<PAGE>
<PAGE>
2
Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms are used herein as defined
in the New York UCC: Accounts, Certificated Security, Chattel Paper, Documents,
Equipment, Farm Products, Instruments and Inventory; provided that such terms
shall not include any assets or property now owned or at any time hereinafter
acquired by Soda Ash Partners, including assets and property acquired by any
Grantor acting solely as an agent or the Managing Partner of Soda Ash Partners
pursuant to the Soda Ash Partnership Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Canadian Borrower Obligations": the collective reference to
the unpaid principal of and interest on the Loans made to the Canadian
Borrower and reimbursement obligations in respect of Letters of Credit
issued under the Canadian Revolving Credit Commitments and all other
obligations and liabilities of the Canadian Borrower (including,
without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of such Loans, the
Acceptance Reimbursement Obligations and such reimbursement obligations
and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Canadian Borrower whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to
the Administrative Agent, the Canadian Administrative Agent or any
Lender (or, in the case of any Lender Hedge Agreement, any Affiliate of
any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, any Lender
Hedge Agreement or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent, to the
Canadian Administrative Agent or to any Lender that are required to be
paid by the Candian Borrower pursuant to the terms of any of the
foregoing agreements).
"Certificated Security": the collective reference to (i) any
"certificated security" as defined in Section 8-102 of the New York UCC
and (ii) all limited liability company
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3
certificates, partnership interest certificates and certificated
options therefor that may be issued or granted by any Issuer.
"Collateral": as defined in Section 3.2.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Company Obligations": the collective reference to the unpaid
principal of and interest on the Loans made to the Company and
reimbursement obligations in respect of Letters of Credit under the
Revolving Credit Commitments and all other obligations and liabilities
of the Company (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the
maturity of such Loans and reimbursement obligations and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the
Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent,
the Canadian Administrative Agent or any Lender (or, in the case of any
Lender Hedge Agreement, any Affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents,
any Letter of Credit, any Lender Hedge Agreement or any other document
made, delivered or given in connection with any of the foregoing, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Administrative Agent, to the Canadian Administrative Agent or to
any Lender that are required to be paid by the Company pursuant to the
terms of any of the foregoing agreements).
"Contracts": with respect to any Grantor, each Spin-Off
Document to which it is a party and all other contracts and agreements
to which it is a party (except for the contracts and agreements listed
in Schedule 7), as the same may be amended, supplemented or otherwise
modified from time to time, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor
to damages arising thereunder and (iii) all rights of such Grantor to
perform and to exercise all remedies thereunder, except that Contracts
shall not include any contracts or agreements entered into by any
Grantor acting solely as an agent or the Managing Partner of Soda Ash
Partners pursuant to the Soda Ash Partnership Agreement.
"Copyrights": with respect to any Grantor, all of such
Grantor's right, title and interest in and to (i) all copyrights
arising under the laws of the United States or any political
subdivision thereof, whether registered or unregistered and whether
published or unpublished (including, without limitation, those listed
in Schedule 6), all registrations
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4
and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right
to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution, except that Deposit Account
shall not include any Deposit Account as defined in the Uniform
Commercial Code of any applicable jurisdiction that is maintained by
(i) Soda Ash Partners or (ii) any Grantor, to the extent that such
Deposit Account contains assets or property of Soda Ash Partners being
held in such Deposit Account by such Grantor acting solely as an agent
or the Managing Partner of Soda Ash Partners pursuant to the Soda Ash
Partnership Agreement.
"Excluded Equity Interests": Equity Interests, together with
any shares, stock certificates, options or rights of any nature
whatsoever in respect of any Equity Interests, that represent (i) more
than 65% of the total outstanding Voting Stock of any Foreign
Subsidiary or Foreign Subsidiary Holding Company that is not an
Excluded Issuer or (ii) any Voting Stock of an Excluded Issuer.
"Excluded Issuer": any Subsidiary of the Company that is a
direct or indirect Subsidiary of a Foreign Subsidiary, a Foreign
Subsidiary Holding Company or Soda Ash Partners.
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Foreign Subsidiary Holding Company": any Domestic Subsidiary
that has no material assets other than the Capital Stock or other
securities of one or more Foreign Subsidiaries or other Foreign
Subsidiary Holding Companies, and other assets relating solely to an
ownership interest in such Capital Stock or other securities.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary or any Foreign Subsidiary Holding Company.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the New York UCC (other than (a) any
Excluded Equity Interests and (b) any such "general intangibles" of
Soda Ash Partners or any Grantor acting solely as an agent or the
Managing Partner of Soda Ash Partners pursuant to the Soda Ash
Partnership
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5
Agreement), and in any event, including, without limitation, with
respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is
a party or under which such Grantor has any right, title or interest or
to which such Grantor or any property of such Grantor is subject, as
the same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (i) all rights of such Grantor
to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages
arising thereunder and (iii) all rights of such Grantor to perform and
to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement
in its right, title and interest in such contract, agreement,
instrument or indenture is not prohibited by such contract, agreement,
instrument or indenture without the consent of any other party thereto,
would not give any other party to such contract, agreement, instrument
or indenture the right to terminate its obligations thereunder, or is
permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate
such Grantor to obtain such consents); provided, that the foregoing
limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent, to the Canadian Administrative
Agent or to any Lender that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to (i) each Grantor
other than the Borrowers and (ii) with respect to the Canadian Borrower
Obligations, the Company.
"Intellectual Property": with respect to any Grantor, the
collective reference to such Grantor's Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trade Secrets, Trademarks and Trademark
Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to the Company or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-115 of the
New York UCC (other than any such
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6
"investment property" consisting of, or in respect of, any Excluded
Equity Interests) and (ii) whether or not constituting "investment
property" as so defined, all Pledged Interests, all Pledged Notes and
all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property; provided that in no event shall "Issuers" include
any Excluded Issuers.
"Lender Hedge Agreements": all interest rate swaps, caps or
collar agreements or similar arrangements entered into by a Borrower
with any Lender (or any Affiliate of any Lender) providing for
protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Company, the Company
Obligations, (ii) in the case of the Canadian Borrower, the Canadian
Borrower Obligations, and (iii) in the case of each Guarantor, its
Guarantor Obligations (including its guarantee of the Canadian
Borrower Obligations pursuant to this Agreement).
"Parent": New Hampshire Oak, Inc., a Delaware corporation.
"Parent Pledged Collateral": as defined in Section 3.1.
"Parent Pledged Stock": the shares of Capital Stock listed on
Schedule 2 opposite the name "General Chemical Industrial Products
Inc." under the column headed "Issuer", together with any other shares,
stock certificates, options or rights of any nature whatsoever in
respect of the Capital Stock of the Company that may be issued or
granted to, or held by, the Parent while this Agreement is in effect.
"Patents": (a) with respect to any Grantor, all of such
Grantor's right, title and interest in and to (i) all letters patent of
the United States or any political subdivision thereof, all reissues
and extensions thereof and all goodwill associated therewith,
including, without limitation, any of the foregoing referred to in
Schedule 6, and (ii) all applications for letters patent of the United
States and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing referred
to in Schedule 6, and (b) all rights to obtain any reissues or
extensions of the foregoing.
"Patent License": with respect to any Grantor, all of such
Grantor's right, title and interest in, to and under all agreements,
whether written or oral, providing for the grant by or to any Grantor
of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent, including, without limitation, any of the
foregoing referred to in Schedule 6.
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7
"Pledged Interests": the collective reference to:
(i) all right, title and interest, now existing or hereafter
acquired, of each Grantor in any limited liability company or
partnership but not any of its obligations from time to time as a
member or partner therein, including rights under any agreement
creating or organizing any limited liability company or partnership;
(ii) any and all moneys due and to become due to each Grantor
now or in the future or by way of a distribution made to such Grantor
in its capacity as a member or partner of or the owner of any limited
liability company or partnership interest in any limited liability
company or partnership or otherwise in respect of such Grantor's
interest as member of any limited liability company or partner in any
partnership or the owner of any limited liability company or
partnership interest;
(iii) any other property of any limited liability company or
partnership to which any Grantor now or in the future may be entitled
in its capacity as a member or partner of or the owner of any limited
liability company or partnership interest in any such limited liability
company or partnership by way of distribution, return of capital or
otherwise; and
(iv) any other claim which each Grantor now has or may have in
the future in its capacity as a member or partner of or the owner of
any limited liability company or partnership interest against any such
limited liability company or partnership interest or its property;
provided that in no event shall "Pledged Interests" include any
Excluded Equity Interests.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes in a principal amount in excess of $50,000 issued to
or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the
ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2 and all other shares of Capital Stock issued by any Issuer,
together with any other shares, stock certificates, options or rights
of any nature whatsoever in respect of the Capital Stock of any Issuer
that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; provided that in no event shall "Pledged Stock"
include any Excluded Equity Interests.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
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8
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account), except that
Receivables shall not include any such rights of Soda Ash Partners or
any Grantor acting solely as an agent or the Managing Partner of Soda
Ash Partners pursuant to the Soda Ash Partnership Agreement.
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": with respect to any Grantor, all of such
Grantor's right, title and interest in and to (i) all trademarks, trade
names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other source or
business identifiers, and all goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States or any State thereof, and
all common- law rights related thereto, including, without limitation,
any of the foregoing referred to in Schedule 6, and (ii) the right to
obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
"Trade Secrets": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States trade
secrets, including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical
information, and all rights of any kind whatsoever accruing thereunder
or pertaining thereto.
"Uncertificated Security": as defined in Section 8-102 of the
New York UCC.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title
law of any state and, in any event including, without limitation, all
tires and other appurtenances to any of the foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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9
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) (i) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the Collateral
Agent, for the benefit of the Administrative Agent (for the ratable benefit of
the Revolving Credit Lenders and their respective successors, indorsees,
transferees and assigns), the prompt and complete payment and performance by the
Company when due (whether at the stated maturity, by acceleration or otherwise)
of the Company Obligations; provided that, notwithstanding any other provision
to the contrary herein and notwithstanding the aggregate amount of the Company
Obligations at any time or from time to time payable or to be payable by the
Company to any Agent or any Lender, the liability of the Parent at any time to
the Agents and the Lenders hereunder shall be limited to the amount of proceeds
received by the Agents and the Lenders in respect of any sale of the Parent
Pledged Stock pursuant hereto and to the other Loan Documents in accordance with
applicable law.
(ii) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Collateral Agent, for the
benefit of the Canadian Administrative Agent (for the ratable benefit of the
Canadian Revolving Credit Lenders and their respective successors, indorsees,
transferees and assigns), the prompt and complete payment and performance by the
Canadian Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the Canadian Borrower Obligations; provided that, notwithstanding
any other provision to the contrary herein and notwithstanding the aggregate
amount of the Canadian Borrower Obligations at any time or from time to time
payable or to be payable by the Canadian Borrower to any Agent or any Lender,
the liability of the Parent at any time to the Agents and the Lenders hereunder
shall be limited to the amount of proceeds received by the Agents and the
Lenders in respect of any sale of the Parent Pledged Stock pursuant hereto and
to the other Loan Documents in accordance with applicable law.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor or, as the case may be, by the the Company under
applicable federal and state laws relating to the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2).
(c) Each Guarantor agrees that the Company Obligations and the
Canadian Borrower Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent or any Lender hereunder.
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10
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Company Obligations, all the Canadian
Borrower Obligations and the obligations of each Guarantor under the guarantee
contained in this Section 2 shall have been satisfied by payment in full, no
Letter of Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Company may be free from any Company Obligations and/or the Canadian
Borrower may be free from any Canadian Borrower Obligations.
(e) No payment made by the Company, the Canadian Borrower, any
of the Guarantors, any other guarantor or any other Person or received or
collected by the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or any Lender from the Company, the Canadian Borrower, any
of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Company Obligations or
the Canadian Borrower Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Company Obligations or the Canadian Borrower Obligations, as
the case may be, or any payment received or collected from such Guarantor in
respect of the Company Obligations or the Canadian Borrower Obligations, as the
case may be), remain liable for the Company Obligations and the Canadian
Borrower Obligations up to the maximum liability of such Guarantor hereunder
until the Company Obligations and the Canadian Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
(f) Without limitation of the foregoing, the Company, as a
Guarantor hereunder, unconditionally and irrevocably guarantees to the
Collateral Agent, for the benefit of the Canadian Administrative Agent (for the
ratable benefit of the Canadian Revolving Credit Lenders and their respective
successors, indorsees, transferees and assigns), the prompt and complete payment
and performance by the Canadian Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Canadian Borrower Obligations.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby
agrees that to the extent that a Subsidiary Guarantor shall have paid more than
its proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section shall
in no respect limit the obligations and liabilities of any Subsidiary Guarantor
to the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent and the Lenders, and each Subsidiary Guarantor shall remain liable to the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent
and the Lenders for the full amount guaranteed by such Subsidiary Guarantor
hereunder.
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11
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of
the rights of the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or any Lender against the Company, the Canadian Borrower or
any other Guarantor or any collateral security or guarantee or right of offset
held by the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or any Lender for the payment of the Company Obligations or
the Canadian Borrower Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company, the Canadian
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Collateral Agent, the Administrative
Agent, the Canadian Administrative Agent and the Lenders by the Company and the
Canadian Borrower are paid in full, no Letter of Credit shall be outstanding and
the Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Company
Obligations or all of the Canadian Borrower Obligations shall not have been paid
in full, such amount shall be held by such Guarantor in trust for the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Collateral Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
Collateral Agent, if required), to be applied against such Obligations, whether
matured or unmatured, in such order as the Collateral Agent may determine.
2.4 Amendments, etc. with respect to Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Company
Obligations or the Canadian Borrower Obligations made by the Administrative
Agent, the Canadian Administrative Agent or any Lender may be rescinded by the
Administrative Agent, the Canadian Administrative Agent or such Lender and any
of such Obligations continued, and such Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent, the
Canadian Administrative Agent or any Lender, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent and the Canadian Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent or any Lender for the payment of such Obligations
may be sold, exchanged, waived, surrendered or released. Neither the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Company Obligations, for the Canadian
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
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12
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Company Obligations and the Canadian Borrower Obligations and notice of
or proof of reliance by the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent or any Lender upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Company Obligations, the Canadian Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between each of the Company and the Canadian
Borrower and any of the Guarantors, on the one hand, and each of the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Company, the Canadian Borrower or
any of the Guarantors with respect to the Company Obligations and the Canadian
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Company Obligations, any of the Canadian Borrower Obligations, or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Company, the Canadian Borrower or any other Person against the Collateral Agent,
the Administrative Agent, the Canadian Administrative Agent or any Lender, or
(c) any other circumstance whatsoever (other than indefeasible payment in full
in cash of the Company Obligations or the Canadian Borrower Obligations, as the
case may be) (with or without notice to or knowledge of the Company, the
Canadian Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the Company
Obligations, of the Canadian Borrower for the Canadian Borrower Obligations, or
of such Guarantor under the guarantee contained in this Section 2, in bankruptcy
or in any other instance. When making any demand hereunder or otherwise pursuing
its rights and remedies hereunder against any Guarantor, the Collateral Agent,
the Administrative Agent, the Canadian Administrative Agent or any Lender may,
but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Company, the Canadian
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Company Obligations or for the Canadian Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent or
any Lender to make any such demand, to pursue such other rights or remedies or
to collect any payments from the Company, the Canadian Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Company, the Canadian Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or
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13
available as a matter of law, of the the Collateral Agent, the Administrative
Agent, the Canadian Administrative Agent or any Lender against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Company Obligations or Canadian
Borrower Obligations is rescinded or must otherwise be restored or returned by
the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company, the Canadian Borrower or any Guarantor, or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Company, the Canadian Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Collateral Agent without set-off or counterclaim
in Dollars at the office of the Collateral Agent located at 270 Park Avenue, New
York, New York 10017.
SECTION 3. GRANTS OF SECURITY INTERESTS
3.1 Grant by Parent. The Parent hereby assigns and transfers
to the Collateral Agent, and hereby grants to the Collateral Agent, on behalf of
the Administrative Agent and the Canadian Administrative Agent for the ratable
benefit of the Lenders, a security interest in all of the Parent Pledged Stock
now owned or at any time hereafter acquired by the Parent or in which the Parent
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Parent Pledged Collateral"), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Parent's Obligations.
3.2 Grant by Other Grantors. Each Grantor (other than the
Parent) hereby assigns and transfers to the Collateral Agent, and hereby grants
to the Collateral Agent, on behalf of the Administrative Agent and the Canadian
Administrative Agent for the ratable benefit of the Lenders, a security interest
in, all of the following property now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, together with the Parent
Pledged Collateral, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
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14
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all other property not otherwise described above;
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing
; provided that in no event shall the Collateral include any Excluded
Equity Interests.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Canadian
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby represents and warrants to the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent
and each Lender that:
4.1 Title; No Other Liens. Except for the security interest
granted to the Collateral Agent, on behalf of the Administrative Agent and the
Canadian Administrative Agent for the ratable benefit of the Lenders, pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Credit Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Collateral Agent, on behalf of the Administrative Agent and the Canadian
Administrative Agent for the ratable benefit of the Lenders, pursuant to this
Agreement or with respect to Liens permitted by the Credit Agreement.
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15
4.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the Collateral
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral in favor of the Collateral Agent, on
behalf of the Administrative Agent and the Canadian Administrative Agent for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by operation of
law.
4.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
4.5 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute (in the case of the Parent Pledged
Stock, as of the date of this Agreement) all the issued and outstanding shares
of all classes of the Capital Stock of each Issuer owned by such Grantor or, in
the case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding
Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement or Liens
permitted by the Credit Agreement.
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16
4.7 Receivables. (a) The places where such Grantor keeps its
records concerning such Grantor's Receivables constituting Collateral are listed
on Schedule 8 or such other location or locations of which such Grantor shall
have provided prior written notice to the Collateral Agent pursuant to Section
5.5 hereof.
(b) Except in the case of Receivables in an amount not in
excess of $50,000 in the aggregate at any time outstanding and any other
Receivables with respect to which the applicable Grantor has complied with the
Federal Assignment of Claims Act, none of the obligors on any Receivables is a
Governmental Authority.
(c) The amount represented by such Grantor to the Lenders from
time to time as owing to such Grantor in respect of the Receivables will at such
times be the correct amount, in all material respects, actually owing by such
account debtor or debtors thereunder, except to the extent that appropriate
reserves therefor have been established on the books of such Grantor in
accordance with GAAP.
4.8 Contracts. (a) No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in connection
with the execution, delivery and performance of this Agreement, except (in the
case of Contracts other than the Spin-Off Documents) where the failure to obtain
any such consents, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(b) Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the parties thereto, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing, except
(in the case of Contracts other than the Spin-Off Documents) where the failure
of any Contracts, individually or in the aggregate, to be in full force and
effect or constitute valid and legally enforceable obligations of the parties
thereto could not reasonably be expected to have a Material Adverse Effect.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, or where the failure to have obtained such consent or
authorization or to make such filing or take such action, could not reasonably
be expected to have a Material Adverse Effect.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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17
(e) The right, title and interest of such Grantor in, to and
under the Contracts are not subject to any defenses, offsets, counterclaims or
claims that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(f) The places where such Grantor keeps its records concerning
such Grantor's Contracts are listed on Schedule 9 or such other location or
locations of which such Grantor shall have provided prior written notice to the
Collateral Agent pursuant to Section 5.5 hereof.
4.9 Intellectual Property. (a) Schedule 6 lists all material
United States Patents and Trademarks registered, or pending registration, in the
United States Patent and Trademark Office and owned by such Grantor in its own
name on the date hereof, and all material Trademark Licenses and Patent Licenses
(including, without limitation, material Trademark Licenses for registered
Trademarks and material Patent Licenses for registered Patents) to which such
Grantor is a party on the date hereof.
(b) On the date hereof, each patent, patent application,
trademark registration and trademark application of such Grantor set forth on
Schedule 6 is valid, subsisting, unexpired and enforceable, and has not been
abandoned, and, to the best of each Grantor's knowledge, does not infringe the
intellectual property rights of any other Person, in each case except in any
respect that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(c) To the knowledge of each Grantor, no holding, decision or
judgment has been rendered by any Governmental Authority which would limit,
cancel or question the validity of, or such Grantor's rights in, any
Intellectual Property set forth on Schedule 6 in any respect that could
reasonably be expected to have a Material Adverse Effect.
(d) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property set forth on Schedule 6 or
such Grantor's ownership interest therein, or (ii) which, if adversely
determined, would have a Material Adverse Effect.
4.10 Vehicles. The aggregate book value of all Vehicles owned
by all Grantors is less than $50,000.
SECTION 5. COVENANTS
Each Grantor other than the Parent (and, solely with respect
to subsections 5.7(a) and (b), the Parent) covenants and agrees with the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent
and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
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18
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall
be immediately delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement; provided that in no event shall any Excluded Equity Interests be
required to be pledged hereunder.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
against business interruption and insuring such Grantor's Inventory and
Equipment against loss by fire, explosion, theft and such other casualties as
may be reasonably satisfactory to the Collateral Agent and (ii) to the extent
requested by the Collateral Agent, insuring such Grantor, the Collateral Agent,
the Administrative Agent, the Canadian Administrative Agent and the Lenders
against liability for personal injury and property damage relating to such
Inventory, Equipment and Vehicles, such policies to be in such form and amounts
and having such coverage as may be reasonably satisfactory to the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders.
(b) All such insurance shall (i) provide that the insured
shall make commercially reasonable efforts to give at least 30 days' prior
written notice to the Collateral Agent before any cancellation, material
reduction in amount or material change in coverage thereof shall be effective,
(ii) name the Collateral Agent and the Canadian Administrative Agent (and the
Lenders in respect of any Quebec coverages) as their interests may appear, as
insured party or loss payee and, with respect to Canadian coverages, contain the
standard mortgage clause by the insurer (in the form approved by the insurance
bureau of Canada) that any loss thereunder shall be payable to the Collateral
Agent and the Canadian Administrative Agent (and the Lenders in respect of any
Quebec coverages), as applicable, (iii) if reasonably requested by the
Collateral Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the Collateral Agent.
(c) The Company shall deliver to the Collateral Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
substantially concurrently with each delivery of the Company's audited annual
financial statements and such supplemental reports with respect thereto as the
Collateral Agent may from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor and such proceedings
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19
could not reasonably be expected to result in the sale, forfeiture or loss of
any material portion of the Collateral or any interest therein.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement in such Grantor's Collateral as a perfected security interest
having at least the priority described in Section 4.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent and the Lenders from
time to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection
therewith as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written
request of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver for filing or recordation, as
applicable, such further instruments and documents and take such further actions
as the Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and
any other relevant Collateral, taking any actions necessary to enable the
Collateral Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Collateral Agent and delivery
to the Collateral Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 5 showing any additional
location of which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5 (other than (A)
Inventory or Equipment being conveyed, sold, leased, assigned,
transferred or otherwise disposed of as permitted by the Credit
Agreement and (B) mobile goods);
(ii) change its jurisdiction of organization or the location
of its chief executive office or sole place of business from that
referred to in Section 4.3; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become misleading.
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20
5.6 Notices. Such Grantor will advise the Collateral Agent,
the Administrative Agent, the Canadian Administrative Agent and the Lenders
promptly, in reasonable detail, of (a) any Lien (other than security interests
created hereby or Liens permitted under the Credit Agreement) on any of the
Collateral which would adversely affect the ability of the Collateral Agent to
exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent and the Lenders, hold the same in trust for the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent
and the Lenders and deliver the same forthwith to the Collateral Agent in the
exact form received, duly indorsed by such Grantor to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Collateral Agent so requests,
signature guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent, be delivered to the Collateral Agent
to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Lenders, segregated from
other funds of such Grantor, as additional collateral security for the
Obligations. Notwithstanding anything to the contrary in this Section 5.7(a), in
no event shall any Excluded Equity Interests be required to be pledged
hereunder.
(b) Without the prior written consent of the Collateral Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Investment Property or Proceeds thereof (except
pursuant to a transaction permitted by the
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21
Credit Agreement), (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or permitted by the Credit Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Collateral Agent to sell, assign or transfer any of the
Investment Property or Proceeds thereof. It is understood that nothing in this
Section 5.7(b) shall prohibit any Grantor from entering into any agreement
providing for a sale or disposition of any Investment Property that is permitted
under the Credit Agreement and, prior to the consummation of such sale or
disposition, is made subject to the rights of the Collateral Agent hereunder.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Investment Property issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it.
5.8 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable unless such extensions, compromises, settlements,
releases, credits, discounts, amendments, supplements or modifications could not
reasonably be expected to materially adversely affect the value of the
Receivables constituting Collateral taken as a whole.
(b) Such Grantor will deliver to the Collateral Agent a copy
of each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
5.9 Contracts. Such Grantor will perform and comply in all
material respects with all its obligations under the Contracts.
5.10 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will not knowingly do any act that uses any material
Intellectual Property to infringe the intellectual property rights of any other
Person.
(b) Such Grantor will notify the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any Intellectual Property owned by such Grantor may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or the United
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22
States Copyright Office or any court or tribunal in the United States) regarding
such Grantor's ownership of, or the validity of, any Intellectual Property or
such Grantor's right to register the same or to own and maintain the same,
except in each case in which such Grantor has reasonably determined that any of
the foregoing is not of material economic value to it.
(c) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any material Intellectual Property owned by such Grantor with
the United States Patent and Trademark Office or the United States Copyright
Office, such Grantor shall report such filing to the Collateral Agent within 30
days after the last day of the fiscal year in which such filing occurs. Upon
request of the Collateral Agent, such Grantor shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as the
Collateral Agent may request to evidence the Collateral Agent's and the Lenders'
security interest in any Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.
(d) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Intellectual Property
owned by such Grantor, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability, except in each
case in which such Grantor has reasonably determined that any of the foregoing
is not of material economic value to it.
(e) In the event that any Intellectual Property owned by such
Grantor is infringed, misappropriated or diluted by a third party, such Grantor
shall, unless such Grantor has reasonably determined that such Intellectual
Property is not of material economic value to it, promptly notify the Collateral
Agent after it learns thereof and take such actions as such Grantor shall
reasonably deem appropriate under the circumstances to protect such Intellectual
Property, including suing for infringement, misappropriation or dilution,
seeking injunctive relief where appropriate and recovering any and all damages
for such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Collateral Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Collateral Agent may require in connection with such test verifications. At
any time and from time to time, upon the Collateral Agent's request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish to the
Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables.
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(b) The Collateral Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Collateral Agent's direction
and control, and the Collateral Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Collateral Agent if required, in a Collateral
Account maintained under the sole dominion and control of the Collateral Agent,
subject to withdrawal by the Collateral Agent for the account of the Lenders
only as provided in Section , and (ii) until so turned over, shall be held by
such Grantor in trust for the Collateral Agent and the Lenders, segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables shall
be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) At the Collateral Agent's request, each Grantor shall
deliver to the Collateral Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a)
The Collateral Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Collateral Agent's satisfaction the existence, amount
and terms of any Receivables or Contracts.
(b) Upon the request of the Collateral Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Collateral Agent for the
ratable benefit of the Lenders and that payments in respect thereof shall be
made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent nor any Lender shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent or
any Lender of any payment relating thereto, nor shall the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to
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enforce any performance or to collect the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Sections 6.1(b) and 6.3(b), each Grantor shall
be permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate right exercised or other action
taken which, in the Collateral Agent's reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Collateral Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right
to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in such order as the Collateral Agent may determine, as provided in
Section 6.5, and (ii) any or all of the Investment Property shall be registered
in the name of the Collateral Agent or its nominee, and the Collateral Agent or
its nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by any Grantor or the Collateral
Agent of any right, privilege or option pertaining to such Investment Property,
and in connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Collateral Agent
may determine), all without liability (other than for its gross negligence or
willful misconduct) except to account for property actually received by it, but
the Collateral Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral
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Agent. In addition, and without limitation of the foregoing, each Grantor hereby
authorizes and instructs each Issuer of any Investment Property consisting of
Uncertificated Securities (including the Pledged Interests) pledged by such
Grantor hereunder to comply with any instruction (as defined in Section 8-102 of
the New York UCC) issued to such Issuer by the Collateral Agent with respect to
all or any part of such Uncertificated Securities without further consent by any
Grantor.
6.4 Proceeds to be Turned Over To Collateral Agent. In
addition to the rights of the Collateral Agent and the Lenders specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, and the Collateral Agent shall have instructed
the Grantor to do so, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent and the Lenders, segregated from other funds of such Grantor,
and shall, forthwith upon receipt by such Grantor, be turned over to the
Collateral Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Collateral Agent, if required). All Proceeds received by the
Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while held
by the Collateral Agent in a Collateral Account (or by such Grantor in trust for
the Collateral Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Company and the Collateral Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Collateral Agent's
election, the Collateral Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the Collateral
Agent may elect, and any part of such funds which the Collateral Agent elects
not so to apply and deems not required as collateral security for the
Obligations shall be paid over from time to time by the Collateral Agent to the
Company or to whomsoever may be lawfully entitled to receive the same. Any
balance of such Proceeds remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Company or to whomsoever may be lawfully
entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Collateral Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the
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26
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Collateral Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Collateral Agent or any Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent's request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Collateral Agent
shall apply the net proceeds of any action taken by it pursuant to this Section,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Collateral Agent may elect, and only
after such application and after the payment by the Collateral Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the New York UCC, need the Collateral Agent account for
the surplus, if any, to any Grantor. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Collateral Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
6.7 Private Sales. (a) Each Grantor recognizes that the
Collateral Agent may be unable to effect a public sale of any or all the Pledged
Stock and Pledged Interests, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no obligation to delay a
sale of any of the Pledged Stock or Pledged Interests for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock and Pledged Interests pursuant to this
Section valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Collateral
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27
Agent and the Lenders, that the Collateral Agent and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
New York UCC. Each Grantor (other than the Parent) shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the reasonable fees and
disbursements of any attorneys employed by the Collateral Agent or any Lender to
collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Collateral Agent
for the purpose of collecting any and all such moneys due under any
Receivable or Contract or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence
the Collateral Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
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28
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Collateral Agent or as the Collateral
Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate;
(7) assign any Copyright, Patent or Trademark (along with the goodwill
of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its
sole discretion determine; and (8) generally, sell, transfer, pledge
and make any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the Collateral Agent
were the absolute owner thereof for all purposes, and do, at the
Collateral Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's and the Lenders' security interests therein and to
effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The reasonable expenses of the Collateral Agent incurred
in connection with actions undertaken as provided in this Section 7.1 shall be
payable by such Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement
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29
are coupled with an interest and are irrevocable until this Agreement is
terminated and the security interests created hereby are released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent,
the Administrative Agent, the Canadian Administrative Agent, any Lender nor any
of their respective officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent and the Lenders hereunder are solely to protect
the Collateral Agent's, the Administrative Agent's, the Canadian Administrative
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or any Lender to exercise any such powers. The Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New York UCC and any other applicable law, each Grantor authorizes
the Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Collateral
Agent determines appropriate to perfect the security interests of the Collateral
Agent under this Agreement. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Collateral Agent. Each Grantor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
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SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with subsection 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1, unless and until such
Guarantor shall change such address by notice to the Collateral Agent given in
accordance with subsection 10.2 of the Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent or
such Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Collateral Agent, the
Administrative Agent and the Canadian Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel toeach of the Collateral Agent, the Administrative Agent
and the Canadian Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay not caused by the Administrative Agent, the Canadian
Administrative Agent or the Lenders in paying, any and all stamp, excise, sales
or other taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions contemplated
by this Agreement.
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(c) Each Guarantor agrees to pay, and to save the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Company would
be required to do so pursuant to subsection 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent and the Lenders and their successors and assigns; provided that no Grantor
may assign, transfer or delegate any of its rights or obligations under this
Agreement (except in transactions permitted under subsection 7.5 of the Credit
Agreement) without the prior written consent of the Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent
and each Lender, without notice to such Grantor or any other Grantor, any such
notice being expressly waived by each Grantor to the extent permitted by
applicable law, upon any amount becoming due and payable by such Grantor
hereunder (whether at the stated maturity, by acceleration or otherwise), to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent or such Lender to or for the credit or the account of such
Grantor. The Collateral Agent, the Administrative Agent, the Canadian
Administrative Agent and each Lender agrees promptly to notify such Grantor
after any such set-off and the application made by the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent or such Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Collateral Agent, the Administrative
Agent, the Canadian Administrative Agent and each Lender under this Section 8.6
are in addition to other rights and remedies provided by law (including, without
limitation, other rights of set-off) which the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
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such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Collateral Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages; provided that any such waiver shall not apply
with respect to claims arising from the gross negligence or willful
misconduct of the Collateral Agent, the Administrative Agent, the
Canadian Administrative Agent, any Issuing Bank or any Lender.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Collateral Agent, the Administrative Agent,
the Canadian Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Grantors, on the one hand, and the
Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
8.14 Additional Grantors. Each Subsidiary of the Company that
is required to become a party to this Agreement pursuant to subsection 6.10 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans and the other
Obligations shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Collateral Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Collateral Agent shall deliver to
such Grantor any Collateral held by the Collateral Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Collateral Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on
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such Collateral and, if such Collateral is held by the Collateral Agent
hereunder, deliver such Collateral to such Grantor or as such Grantor shall
otherwise direct. At the request and sole expense of the Company, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Company shall have delivered to the Collateral Agent, at least
ten Business Days prior to the date of the proposed release, a written request
for release identifying the relevant Subsidiary Guarantor and the terms of the
sale or other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Company stating that such transaction is in compliance with the Credit Agreement
and the other Loan Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.17 Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
in Dollars or Canadian Dollars into another currency, the parties hereto agree,
to the fullest extent that they may legally and effectively do so, that the rate
of exchange used shall be that at which in accordance with normal banking
procedures the Collateral Agent, the Administrative Agent or the Canadian
Administrative Agent, as the case may be, could purchase Dollars or Canadian
Dollars, as the case may be, with such other currency in New York, New York or
Toronto, Canada, as the case may be, on the Business Day immediately preceding
the day on which final judgment is given.
(b) The obligation of each Grantor in respect of any sum due
to the Collateral Agent, the Administrative Agent, the Canadian Administrative
Agent, any Lender or any Issuing Bank hereunder in Dollars shall, to the extent
permitted by applicable law, notwithstanding any judgment in a currency other
than Dollars, be discharged only to the extent that on the Business Day
following receipt of any sum adjudged to be so due in the judgment currency the
Collateral Agent, the Administrative Agent, the Canadian Administrative Agent,
such Lender or such Issuing Bank may in accordance with normal banking
procedures purchase Dollars in the amount originally due to the Collateral
Agent, the Administrative Agent, the Canadian Administrative Agent, such Lender
or such Issuing Bank with the judgment currency. If the amount of Dollars so
purchased is less than the sum originally due to the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent, such Lender or such
Issuing Bank, the applicable Grantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Collateral Agent, the
Administrative Agent, the Canadian Administrative Agent, such Lender or such
Issuing Bank against the resulting loss.
(c) The obligation of each Grantor in respect of any sum due
to the Collateral Agent, the Canadian Administrative Agent, the Administrative
Agent, any Canadian Revolving Credit Lender or any Issuing Bank hereunder in
Canadian Dollars shall, to the extent permitted
<PAGE>
<PAGE>
35
by applicable law, notwithstanding any judgment in a currency other than
Canadian Dollars, be discharged only to the extent that on the Business Day
following receipt of any sum adjudged to be so due in the judgment currency the
Collateral Agent, the Canadian Administrative Agent, the Administrative Agent,
such Canadian Revolving Credit Lender or such Issuing Bank may in accordance
with normal banking procedures purchase Canadian Dollars in the amount
originally due to the Collateral Agent, the Canadian Administrative Agent, the
Administrative Agent, such Canadian Revolving Credit Lender or such Issuing Bank
with the judgment currency. If the amount of Canadian Dollars so purchased is
less than the sum originally due to the Collateral Agent, the Canadian
Administrative Agent, the Administrative Agent, such Canadian Revolving Credit
Lender or such Issuing Bank, each Grantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Collateral Agent, the
Canadian Administrative Agent, the Administrative Agent, such Canadian Revolving
Credit Lender or such Issuing Bank against the resulting loss.
<PAGE>
<PAGE>
36
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
GENERAL CHEMICAL INDUSTRIAL
PRODUCTS INC.
By:
--------------------------------
Name:
Title:
GENERAL CHEMICAL (SODA ASH) INC.
By:
--------------------------------
Name:
Title:
GENERAL CHEMICAL INTERNATIONAL INC.
By:
--------------------------------
Name:
Title:
NEW HAMPSHIRE OAK, INC.
By:
--------------------------------
Name:
Title:
<PAGE>
<PAGE>
37
THE CHASE MANHATTAN BANK,
as Collateral
Agent
By:
--------------------------------
Name:
Title:
<PAGE>
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of April 30 , 1999 (the "Agreement"), made by
the Grantors parties thereto for the benefit of The Chase Manhattan Bank, as
Collateral Agent. The undersigned agrees for the benefit of the Collateral
Agent, on behalf of the Administrative Agent and the Canadian Administrative
Agent for the ratable benefit of the Lenders, as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.7(a) of the
Agreement.
3. The terms of Sections 6.3(c) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Sections 6.3(c) or 6.7 of the Agreement.
[NAME OF ISSUER]
By
------------------------------------
Name:
Title:
Address for Notices:
------------------------------------
------------------------------------
------------------------------------
Fax:
Date:
----------------------
<PAGE>
<PAGE>
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, ____, made
by ______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of THE CHASE MANHATTAN BANK, as Collateral Agent (in such
capacity, the "Collateral Agent") for the Administrative Agent (for the benefit
of the Revolving Credit Lenders) and the Canadian Administrative Agent (for the
benefit of the Canadian Revolving Credit Lenders), for the ratable benefit of
the Lenders under the Credit Agreement referred to below. All capitalized terms
not defined herein shall have the meaning ascribed to them in such Credit
Agreement.
W I T N E S S E T H :
WHEREAS, General Chemical Industrial Products Inc. (the
"Company"), General Chemical Canada Ltd. (the "Canadian Borrower"), the banks
and other financial institutions from time to time parties thereto (the
"Lenders"), The Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") for the Revolving Credit Lenders (as defined
therein), and The Chase Manhattan Bank of Canada, as Canadian Administrative
Agent (in such capacity, the "Canadian Administrative Agent") for the Canadian
Revolving Credit Lenders (as defined therein) have entered into the Credit
Agreement, dated as of April 30, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company
and certain of its Subsidiaries (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of April 30, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Collateral Agent for the benefit of
the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor
<PAGE>
<PAGE>
2
and, without limiting the generality of the foregoing, hereby expressly assumes
all obligations and liabilities of a Grantor thereunder. The information set
forth in Annex 1-A hereto is hereby added to the information set forth in the
Schedules to the Guarantee and Collateral Agreement. The Additional Grantor
hereby represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
------------------------------------
Name:
Title:
<PAGE>
<PAGE>
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
<PAGE>
<PAGE>
================================================================================
INDENTURE
Dated as of April 30, 1999
Between
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC., as Issuer
and
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
------------------
$100,000,000
10 5/8% Senior Subordinated Notes due 2009, Series A
10 5/8% Senior Subordinated Notes due 2009, Series B
================================================================================
<PAGE>
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
- --------------- ---------
<S> <C>
'SS' 310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.08, 7.10.
(b)..................................................... 7.08; 7.10; 11.02
(c)..................................................... N.A.
'SS' 311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
'SS' 312(a)..................................................... 2.05
(b)..................................................... 11.03
(c)..................................................... 11.03
'SS' 313(a)..................................................... 7.06
(b)(1).................................................. 7.06
(b)(2).................................................. 7.06
(c)..................................................... 7.06; 11.02
(d)..................................................... 7.06
'SS' 314(a)..................................................... 4.11; 4.12; 11.02
(b)..................................................... N.A.
(c)(1).................................................. 11.04
(c)(2).................................................. 11.04
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 11.05
(f)..................................................... N.A.
'SS' 315(a)..................................................... 7.01(b)
(b)..................................................... 7.05; 11.02
(c)..................................................... 7.01(a)
(d)..................................................... 7.01(c)
(e)..................................................... 6.11
'SS' 316(a)(last sentence)...................................... 2.09
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. N.A.
(b)..................................................... 6.07
(c)..................................................... 10.04
'SS' 317(a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.04
'SS' 318(a).................................................... 11.01
</TABLE>
- ----------------
N.A. MEANS NOT APPLICABLE.
NOTE: THIS CROSS-REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THE INDENTURE.
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01. Definitions.........................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..................30
SECTION 1.03. Rules of Construction..............................................31
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating....................................................31
SECTION 2.02. Execution and Authentication.......................................33
SECTION 2.03. Registrar and Paying Agent.........................................34
SECTION 2.04. Paying Agent To Hold Assets in Trust...............................34
SECTION 2.05. Securityholder Lists...............................................35
SECTION 2.06. Transfer and Exchange..............................................35
SECTION 2.07. Replacement Securities.............................................36
SECTION 2.08. Outstanding Securities.............................................36
SECTION 2.09. Treasury Securities................................................37
SECTION 2.10. Temporary Securities...............................................37
SECTION 2.11. Cancellation.......................................................38
SECTION 2.12. Defaulted Interest.................................................38
SECTION 2.13. CUSIP Number.......................................................38
SECTION 2.14. Deposit of Moneys..................................................39
SECTION 2.15. Book-Entry Provisions for Global Securities........................39
SECTION 2.16. Registration of Transfers and Exchanges............................40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.................................................46
SECTION 3.02. Selection of Securities To Be Redeemed.............................46
SECTION 3.03. Notice of Redemption...............................................46
SECTION 3.04. Effect of Notice of Redemption.....................................47
SECTION 3.05. Deposit of Redemption Price........................................48
SECTION 3.06. Securities Redeemed in Part........................................48
</TABLE>
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<TABLE>
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ARTICLE FOUR
COVENANTS
<S> <C> <C>
SECTION 4.01. Payment of Securities..............................................48
SECTION 4.02. Maintenance of Office or Agency....................................49
SECTION 4.03. Transactions with Affiliates.......................................49
SECTION 4.04. Limitation on Incurrence of Indebtedness and
Preferred Equity Interests......................................50
SECTION 4.05. Disposition of Proceeds of Asset Sales.............................53
SECTION 4.06. Limitation on Restricted Payments..................................55
SECTION 4.07. Corporate Existence................................................59
SECTION 4.08. Payment of Taxes and Other Claims..................................59
SECTION 4.09. Notice of Defaults.................................................60
SECTION 4.10. Maintenance of Properties and Insurance............................60
SECTION 4.11. Compliance Certificate.............................................61
SECTION 4.12. Provision of Financial Information.................................61
SECTION 4.13. Waiver of Stay, Extension or Usury Laws............................62
SECTION 4.14. Change of Control..................................................62
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.....................63
SECTION 4.16. Limitations on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries..................63
SECTION 4.17. Designation of Unrestricted Subsidiaries...........................65
SECTION 4.18. Limitation on Liens................................................66
SECTION 4.19. Limitation on Lines of Business....................................66
SECTION 4.20. Ownership of GCSAP.................................................67
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.......................................67
SECTION 5.02. Successor Corporation Substituted..................................68
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..................................................68
SECTION 6.02. Acceleration.......................................................70
SECTION 6.03. Other Remedies.....................................................71
SECTION 6.04. Waiver of Default..................................................72
</TABLE>
-ii-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 6.05. Control by Majority................................................72
SECTION 6.06. Limitation on Suits................................................73
SECTION 6.07. Rights of Holders To Receive Payment...............................73
SECTION 6.08. Collection Suit by Trustee.........................................73
SECTION 6.09. Trustee May File Proofs of Claim...................................74
SECTION 6.10. Priorities.........................................................74
SECTION 6.11. Undertaking for Costs..............................................75
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee..................................................75
SECTION 7.02. Rights of Trustee..................................................76
SECTION 7.03. Individual Rights of Trustee.......................................77
SECTION 7.04. Trustee's Disclaimer...............................................78
SECTION 7.05. Notice of Defaults.................................................78
SECTION 7.06. Reports by Trustee to Holders......................................78
SECTION 7.07. Compensation and Indemnity.........................................78
SECTION 7.08. Replacement of Trustee.............................................80
SECTION 7.09. Successor Trustee by Merger, etc...................................81
SECTION 7.10. Eligibility; Disqualification......................................81
SECTION 7.11. Preferential Collection of Claims Against Company..................81
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.....................82
SECTION 8.02. No Payment on Securities in Certain Circumstances..................82
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.....................83
SECTION 8.04. Subrogation........................................................85
SECTION 8.05. Obligations of Company Unconditional...............................85
SECTION 8.06. Notice to Trustee..................................................86
SECTION 8.07. Reliance on Judicial Order or Certificate of
Liquidating Agent...............................................87
SECTION 8.08. Trustee's Relation to Senior Indebtedness..........................87
SECTION 8.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness....................................................88
SECTION 8.10. Securityholders Authorize Trustee To Effectuate
Subordination of Securities.....................................88
SECTION 8.11. This Article Not To Prevent Events of Default......................88
</TABLE>
-iii-
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<TABLE>
<CAPTION>
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<S> <C> <C>
SECTION 8.12. Trustee's Compensation Not Prejudiced..............................88
SECTION 8.13. No Waiver of Subordination Provisions..............................88
SECTION 8.14. Subordination Provisions Not Applicable to Money
Held in Trust for Securityholders; Payments May
Be Paid Prior to Dissolution....................................89
SECTION 8.15. Acceleration of Securities.........................................89
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations...............................90
SECTION 9.02. Application of Trust Money.........................................91
SECTION 9.03. Repayment to Company...............................................92
SECTION 9.04. Reinstatement......................................................92
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.........................................92
SECTION 10.02. With Consent of Holders............................................93
SECTION 10.03. Compliance with Trust Indenture Act................................95
SECTION 10.04. Revocation and Effect of Consents..................................95
SECTION 10.05. Notation on or Exchange of Securities..............................96
SECTION 10.06. Trustee To Sign Amendments, etc....................................96
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.......................................96
SECTION 11.02. Notices............................................................97
SECTION 11.03. Communications by Holders with Other Holders.......................99
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.................99
SECTION 11.05. Statements Required in Certificate or Opinion......................99
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.........................100
SECTION 11.07. Governing Law.....................................................100
SECTION 11.08. No Recourse Against Others........................................100
SECTION 11.09. Successors........................................................100
SECTION 11.10. Counterpart Originals.............................................100
SECTION 11.11. Severability......................................................100
</TABLE>
-iv-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
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----
<S> <C> <C>
SECTION 11.12. No Adverse Interpretation of Other Agreements.....................101
SECTION 11.13. Legal Holidays....................................................101
SIGNATURES.........................................................................S-1
EXHIBIT A Form of Series A Security.............................................A-1
EXHIBIT B Form of Series B Security.............................................B-1
EXHIBIT C Form of Legend for Global Securities..................................C-1
EXHIBIT D Form of Transfer Certificate..........................................D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited Investors...E-1
EXHIBIT F Form of Certificate for Regulation S Transfers........................F-1
</TABLE>
- -----------------
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART
OF THE INDENTURE.
-v-
<PAGE>
<PAGE>
INDENTURE dated as of April 30, 1999, between GENERAL CHEMICAL
INDUSTRIAL PRODUCTS INC., a Delaware corporation (the "Company"), and U.S. BANK
TRUST NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Acquisition from such Person or (b) existing at
the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Company or any Restricted Subsidiary; provided
that such Indebtedness was not Incurred by such Person in connection with or in
contemplation of such Acquisition, merger or consolidation or such Person
becoming a Restricted Subsidiary.
"Acquired Person" means, with respect to any specified Person,
any other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated with or merged into the Company
or any Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute substantially
all of an operating unit or line of business of such Person or which is
otherwise outside of the ordinary course of business.
"Additional Interest" has the meaning provided in the
Registration Rights Agreement.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative
<PAGE>
<PAGE>
-2-
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean 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 (i) beneficial ownership of
10.0% or more of the then outstanding Equity Interests of a Person shall be
deemed to be control for purposes of compliance with Section 4.03; and (ii) no
individual, other than a director of the Company or GCG or an officer of the
Company with a policy making function, shall be deemed an Affiliate of the
Company or any of its Subsidiaries, solely by reason of such individual's
employment, position or responsibilities by or with respect to the Company or
any of its Subsidiaries; provided, further, no Person holding Equity Interests
in GCSAP or in any Person in which GCSAP holds any Equity Interest will be
considered to be an Affiliate of the Company solely by reason of directly or
indirectly owning such Equity Interests for so long as GCSAP shall be a
Restricted Subsidiary.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"ALCAD Partnership" means the partnership between Church & Dwight
Co., Inc. and GCSAP pursuant to the Partnership Agreement dated December 29,
1981, as the same has been and may after the Issue Date be amended, restated or
supplemented from time to time.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Restricted Subsidiary, in
one transaction or a series of related transactions, of (i) any Equity Interest
of any Restricted Subsidiary; (ii) any material license, franchise or other
authorization of the Company or any Restricted Subsidiary; (iii) any assets of
the Company or any Restricted Subsidiary which constitute substantially all of
an operating unit or line of business of the Company or any Restricted
Subsidiary; or (iv) any other property or asset of the Company or any Restricted
Subsidiary outside of the ordinary course of business (including the receipt of
proceeds paid on account of the loss of or damage to any property or asset and
awards of compensation for any asset taken by condemnation, eminent domain or
similar proceedings). For the purposes of this definition, the term "Asset Sale"
shall not include (a) any transaction consummated in compliance with Section
5.01 and the creation of any Lien not prohibited by Section 4.18; provided,
however, that any transaction consummated in compliance with Section 5.01
involving a sale, conveyance, assignment, transfer, lease or other disposal of
less than all of the properties or assets of the Company shall be deemed to be
an Asset Sale with respect to the properties or assets of the Company and
<PAGE>
<PAGE>
-3-
the Restricted Subsidiaries that are not so sold, conveyed, assigned,
transferred, leased or otherwise disposed of in such transaction; (b) sales of
property or equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or any
Restricted Subsidiary; (c) any transaction consummated in compliance with
Section 4.06; (d) any disposition or series of related dispositions for
aggregate consideration not to exceed $1,000,000; (e) sales of accounts
receivable for cash for financing purposes; (f) any sale, conveyance, transfer
or other disposition of leases, licenses or other interests in mineral rights in
exchange for other leases, licenses or interests in mineral rights to be used by
the Company and the Restricted Subsidiaries and having an equivalent Fair Market
Value (taking into account the value to the Company or any Restricted Subsidiary
of the location and quality of the new mineral rights relative to the existing
mineral rights); and (g) any sale, conveyance, transfer, lease or other
disposition constituting a Permitted Investment in a Supply Joint Venture.
"Bankruptcy Law" see Section 6.01.
"Board of Directors" means the Board of Directors of the Company
or any Guarantor, as the case may be, or any authorized committee of such Board
of Directors.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means a day that is not a Saturday, a Sunday or a
day on which banking institutions in Chicago, Illinois or New York, New York are
not required to be open.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Cash Equivalents" means: (a) U.S. dollars and any other currency
that is convertible into U.S. dollars without legal restrictions and which is
utilized by the Company or any of the Restricted Subsidiaries in the ordinary
course of its business; (b) securities issued or directly and fully guaranteed
or insured by the U.S. government or any agency or instrumentality thereof
having maturities of not more than 365 days from the date of acquisition; (c)
certificates of deposit and time deposits with maturities of 365 days or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
365 days and overnight bank deposits, in each case with any commercial bank
having capital and surplus in excess of $500.0 million (or the foreign currency
equivalent thereof); (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (b) and
(c) above entered into with any financial institution
<PAGE>
<PAGE>
-4-
meeting the qualifications specified in clause (c) above; and (e) commercial
paper rated P-1, A-1 or the equivalent thereof by Moody's Investors Service,
Inc. or Standard & Poor's Corporation, respectively, and in each case maturing
within 365 days after the date of acquisition.
"Change of Control" means the occurrence of any of the following:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders in the aggregate, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority of the total voting power
of the Voting Equity Interests of the Company (including any successor thereto
under this Indenture); (b) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation involving the
Company), in one or a series of related transactions, of all or substantially
all of the assets of the Company and its Subsidiaries taken as a whole to any
"person" (as such term is used in Section 13(d)(3) of the Exchange Act) other
than one or more Permitted Holders; (c) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 66 2/3% of the directors of the Company then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved or approved
by a vote of Permitted Holders who beneficially own, directly or indirectly, a
majority in the aggregate of the total voting power of the Voting Equity
Interests of the Company) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (d) the adoption of a plan
relating to the liquidation or dissolution of the Company.
"Change of Control Date" see Section 4.14.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters ending prior
to the date of such determination for which consolidated financial statements of
the Company are available (the "Four Quar-
<PAGE>
<PAGE>
-5-
ter Period") to (ii) Consolidated Interest Expense for such Four Quarter Period;
provided, however, that (1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such Four Quarter Period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such
Four Quarter Period shall be calculated after giving effect on a pro forma basis
to such Indebtedness as if such Indebtedness had been Incurred on the first day
of such Four Quarter Period (except that in making such computation, the amount
of Indebtedness under any revolving credit facility outstanding on the date of
such calculation shall be computed based on (A) the average daily balance of
such Indebtedness during such Four Quarter Period or such shorter period for
which such facility was outstanding or (B) if such facility was created after
the end of such Four Quarter Period, the average daily balance of such
Indebtedness during the period from the date of creation of such facility to the
date of such calculation) and the discharge of any other Indebtedness repaid,
repurchased or otherwise discharged with the proceeds of such new Indebtedness
as if such discharge had occurred on the first day of such Four Quarter Period,
(2) if since the beginning of such Four Quarter Period the Company or any
Restricted Subsidiary shall have made any Asset Sale, the Consolidated EBITDA
for such Four Quarter Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Sale for such Four Quarter Period or increased by an
amount equal to the Consolidated EBITDA (if negative) directly attributable
thereto for such Four Quarter Period and Consolidated Interest Expense for such
Four Quarter Period shall be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased or otherwise discharged with respect
to the Company and its continuing Restricted Subsidiaries in connection with
such Asset Sale for such Four Quarter Period (or, if the Equity Interests of any
Restricted Subsidiary are sold, the Consolidated Interest Expense for such Four
Quarter Period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale), (3) if since the
beginning of such Four Quarter Period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Acquisition of assets, including any
Acquisition occurring in connection with a transaction causing a calculation to
be made hereunder, Consolidated EBITDA and Consolidated Interest Expense for
such Four Quarter Period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such Acquisition
occurred on the first day of such Four Quarter Period and (4) if since the
beginning of such Four Quarter Period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such Four Quarter Period) shall have made any
Asset Sale or any Acquisition that would have required an adjustment pursuant to
clause (2) or (3) above if made by the Company or a Re-
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stricted Subsidiary during such Four Quarter Period, Consolidated EBITDA and
Consolidated Interest Expense for such Four Quarter Period shall be calculated
after giving pro forma effect thereto as if such Asset Sale or Acquisition
occurred on, with respect to any Acquisition, the first day of such Four Quarter
Period and, with respect to any Asset Sale, the day prior to the first day of
such Four Quarter Period. For purposes of this definition, whenever pro forma
effect is to be given to an Acquisition, the amount of income or earnings and
any cost savings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in accordance with Regulation S-X
under the Securities Act. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest expense on such Indebtedness
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any
agreement under which Hedging Obligations relating to interest are outstanding
applicable to such Indebtedness). In giving effect to any Indebtedness to be
Incurred, if such Indebtedness bears, at the option of the Company or a
Restricted Subsidiary, a rate of interest based on a prime or similar rate, a
eurocurrency interbank offered rate or other fixed or floating rate, the
interest expense on such Indebtedness shall be calculated by applying such
optional rate as the Company may designate. Interest on a Capital Lease
Obligation shall be deemed to accrue at an interest rate determined in good
faith by a responsible financial or accounting officer of the Company to be the
rate of interest implicit in such Capital Lease Obligation in accordance with
GAAP.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, minus (A) any non-cash item increasing Consolidated Net
Income during such period (other than any non-cash item arising from the
reversal of an accrual or reserve previously established in respect of a
non-cash item), plus (B) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Income Tax Expense for such
period; (ii) Consolidated Interest Expense for such period; (iii) depreciation
expense for such period; (iv) amortization expense for such period (other than
in respect of amortization or write-off of debt issuance costs to the extent not
constituting Consolidated Interest Expense); and (v) all other non-cash items
reducing Consolidated Net Income for such period (other than any non-cash item
requiring an accrual or a reserve for cash disbursements in any future period);
provided that, in determining Consolidated EBITDA, there shall only be included
that portion of the items referred to in clause (A) or (B) related to, or
arising in connection with, any Person all of whose Equity Interests are not
beneficially owned directly or indirectly by the Company (a "Specified Person")
that is proportionate to the amount of the net income (loss) of the Specified
Person included in Consolidated Net Income for such period.
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"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for federal, state, local and foreign
income taxes payable by the Company and the Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest expense
of the Company and the Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP (excluding, except to the extent
provided in clause (b) or (d) below, amortization or write-off of debt issuance
costs), including, without limitation, (a) any amortization of debt discount,
(b) the net cost under Hedging Obligations relating to interest (including any
amortization of discounts), (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and (e) all
capitalized interest and all accrued interest, and (ii) to the extent Incurred
by the Company and the Restricted Subsidiaries in such period but not included
in such interest expense, without duplication, (x) the interest component of
Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued
by the Company and the Restricted Subsidiaries during such period as determined
on a consolidated basis in accordance with GAAP and (y) dividends and
distributions paid, accrued and/or scheduled to be paid or accrued in respect of
Disqualified Equity Interests of the Company or Preferred Equity Interests of
any Restricted Subsidiary (other than, in each case, (i) any such dividends or
distributions in Qualified Equity Interests of the Company or (ii) any such
dividends or distributions paid or payable to the Company or a Restricted
Subsidiary) during such period as determined on a consolidated basis in
accordance with GAAP. In determining Consolidated Interest Expense, there shall
only be included that portion of the items referred to in clause (i) or (ii)
related to, or arising in connection with, any Specified Person that is
proportionate to the amount of the net income (loss) of the Specified Person
included in Consolidated Net Income for such period.
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Company and the Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP; provided, however, that there shall
be excluded from such Consolidated Net Income: (i) any net income (loss) of any
Person that is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(iii) below) and (B) the Company's equity in a net loss of any such Person
(other than an Unrestricted Subsidiary) for such period
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-8-
shall be included in determining such Consolidated Net Income; (ii) for purposes
of Section 4.06, any net income (loss) of any Person acquired by the Company or
a Restricted Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition; (iii) any net income (loss) of any
Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions or loans or advances by such Restricted Subsidiary, directly or
indirectly, to the Company except that (A) subject to the limitations contained
in (iv) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or a Restricted
Subsidiary as a dividend (subject, in the case of a dividend that could have
been made to another Restricted Subsidiary, to the limitation contained in
clause (i)) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income; (iv) any gain or loss realized upon the sale or other disposition of
any asset of the Company or the Restricted Subsidiaries (including pursuant to
any sale/leaseback transaction) that is not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon the sale or other
disposition of any Equity Interests of any Person; (v) the cumulative effect of
a change in accounting principles; (vi) any item classified as an extraordinary,
unusual or nonrecurring gain, loss or charge, including, but not limited to, any
such item related to, or arising in connection with the Spin-Off (as defined in
the Offering Memorandum) or to any Asset Sale or Acquisition by the Company or
any Restricted Subsidiary after the Issue Date (in each case on an after-tax
basis); (vii) all deferred financing costs written off and premiums paid in
connection with any early extinguishment of Indebtedness; and (viii) any
non-cash compensation charge arising from any grant of stock, stock options or
other equity-based awards.
"Consolidated Tangible Assets" means, as of any date of
determination, the total assets, less goodwill and other intangibles shown on
the balance sheet of the Company and the Restricted Subsidiaries as of the most
recent date for which such a balance sheet is available, determined on a
consolidated basis in accordance with GAAP.
"consolidation" means the consolidation of the accounts of each
of the Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term "consolidated" has a correlative
meaning.
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"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 13.02 or such other address as the Trustee
may give notice to the Company.
"Credit Facility" means the Credit Agreement, dated as of April
30, 1999, among the Company, General Chemical Canada Ltd., the lenders and
agents named therein and The Chase Manhattan Bank, as Administrative Agent,
including any deferrals, renewals, extensions, replacements, refinancings or
refundings thereof, or amendments, modifications or supplements thereto and any
agreement providing therefor (including any restatements thereof and any
increases in the amount of commitments thereunder), whether by or with the same
or any other lender, creditor, group of lenders or group of creditors, and
including related notes, guaranty and note agreements, collateral security
documents and other instruments and agreements executed in connection therewith.
"Custodian" see Section 6.01.
"Default" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"Defeasance Trust Payment" see Section 8.01.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (a) any Indebtedness
outstanding under the Credit Facility and (b) any other Senior Indebtedness
which, at the time of determination, has an aggregate principal amount
outstanding, together with any commitments to lend additional amounts, of at
least $15.0 million, if the instrument governing such Senior Indebtedness
expressly states that such Indebtedness is "Designated Senior Indebtedness" for
purposes of this Indenture and an officers' certificate of the Company setting
forth such designation by the Company has been filed with the Trustee.
"Designation" see Section 4.17.
"Designation Amount" see Section 4.17.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
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"Disqualified Equity Interest" means any Equity Interest to the
extent that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable,
at the option of the holder thereof, in whole or in part, or exchangeable into
Indebtedness on or prior to the Maturity Date; provided, however, any Equity
Interests that would not constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of a "change of
control" occurring prior to the final stated maturity of the Securities shall
not constitute Disqualified Equity Interests if the "change of control"
provisions applicable to such Capital Stock are not more favorable to the
holders of such Capital Stock than Section 4.14.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, and membership interests in such Person, including any Preferred Equity
Interests.
"Equity Issuance" means any public or private issuance of Equity
Interests of GCG or the Company (including by the Company to NHO or GCG);
provided that, in the case of an Equity Issuance by GCG, the proceeds thereof in
an amount not less than the amount of funds to be used to optionally redeem
Securities must be contributed as common equity to the Company.
"ESOP" means an employee stock ownership plan for the benefit of
the employees of the Company or its Subsidiaries.
"Event of Default" see Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 10 5/8% Senior Subordinated Notes
due 2009, Series B, to be issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement.
"Existing Indebtedness" means any Indebtedness of the Company and
the Restricted Subsidiaries in existence on the Issue Date until such amounts
are repaid.
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"Expiration Date" has the meaning set forth in the definition of
"Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined conclusively by the Board
of Directors of the Company acting in good faith, and shall be evidenced by
resolutions of the Board of Directors of the Company delivered to the Trustee.
"Four Quarter Period" has the meaning set forth in the definition
of "Consolidated Coverage Ratio" above.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated EBITDA,"
"Consolidated Interest Expense," "Consolidated Tangible Assets" and
"Consolidated Net Income" and all defined terms in this Indenture to the extent
used in or relating to any of the foregoing definitions, and all ratios and
computations based on any of the foregoing definitions) and as in effect from
time to time (for all other purposes of this Indenture), including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP as consistently
applied. In calculating any of "Consolidated Net Income," "Consolidated Coverage
Ratio," "Consolidated Interest Expense" and "Consolidated Tangible Assets" and
all defined terms used in or relating to the foregoing for periods that include
periods prior to the Issue Date, information found in or derived from combined
financial statements of the Industrial Chemicals Business (as defined in the
Offering Memorandum) prepared on a basis consistent with those included in the
Offering Memorandum shall be utilized.
"GCG" means The General Chemical Group Inc. and any successor
thereto for so long as it directly or indirectly owns a majority of the Equity
Interests and Voting Equity Interests of the Company.
"GCSAP" means General Chemical (Soda Ash) Partners and any
successor thereto.
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-12-
"Global Securities" means one or more IAI Global Securities,
Regulation S Global Securities and 144A Global Securities.
"guaranty" means, as applied to any obligation, (i) a guaranty
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guaranty shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) other agreements
or arrangements relating to fluctuations in interest rates and (iii) foreign
currency, commodity or energy hedge, exchange or similar agreements (agreements
referred to in this definition being referred to herein as "Hedging
Agreements").
"Holder" means the registered holder of any Security.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
to Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guaranty or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall
have meanings correlative to the foregoing); provided, however, that a change in
generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an
Incurrence of such Indebtedness and that neither the accrual of interest nor the
accretion of original issue discount shall be deemed an Incurrence of
Indebtedness (although the amount of such accrual or accretion at any date at
which an outstanding amount of Indebtedness is to be calculated shall be
included in the calculation of such outstanding principal amount). Indebtedness
of any Acquired Person or any of its Subsidiaries existing at the time such
Acquired Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary), whether or not such
Indebtedness was Incurred in con-
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nection with, as a result of, or in contemplation of, such Acquired Person
becoming a Restricted Subsidiary (or being merged into or consolidated with the
Company or any Restricted Subsidiary), shall be deemed Incurred at the time any
such Acquired Person becomes a Restricted Subsidiary or merges into or
consolidates with the Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services and every conditional sale obligation (but excluding (x)
trade accounts payable incurred in the ordinary course of business and payable
in accordance with industry practices or (y) other accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith); (e) every Capital Lease Obligation of such Person; (f)
every net obligation under Hedging Obligations of such Person; and (g) every
obligation of the type referred to in clauses (a) through (f) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor, guarantor or otherwise. Indebtedness (a) shall never be calculated
taking into account any cash and Cash Equivalents held by such Person; (b) shall
not include obligations of any Person (w) arising from reclamation obligations,
or any bonding thereof, to the extent such reclamation obligations are due after
the final Stated Maturity of the Securities, (x) arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business, provided that such obligations are extinguished within two Business
Days of their Incurrence, (y) resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business and consistent
with past business practices and (z) under stand-by letters of credit to the
extent collateralized by cash or Cash Equivalents; (c) which provides that an
amount less than the principal amount thereof shall be due upon any declaration
of acceleration thereof shall be deemed to be Incurred or outstanding in an
amount equal to the accreted value thereof at the date of determination; (d)
shall include the liquidation preference and any mandatory redemption payment
obligations in respect of any Disqualified Equity Interests of the Company or
any Restricted Subsidiary; and (e) shall not include obligations under
performance bonds, performance guaranties, surety bonds and appeal bonds,
letters of credit or similar obligations, incurred in the ordinary course of
business. For purposes of determining compliance with any U.S.
dollar-denominated restriction on the Incurrence of Indebtedness denominated in
a
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foreign currency, the U.S. dollar-equivalent principal amount of such
Indebtedness Incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was Incurred
if such Indebtedness is Incurred to refinance other Indebtedness denominated in
a foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced. The principal amount of
any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
respective Indebtedness is denominated that is in effect on the date of such
refinancing.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Independent Financial Advisor" means a nationally recognized,
accounting, appraisal, investment banking firm or consultant that is, in the
judgment of the Company's Board of Directors, qualified to perform the task for
which it has been engaged (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company and (ii) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the task for which it
is to be engaged.
"Initial Purchasers" means Chase Securities Inc., BT Alex. Brown
Incorporated and ING Baring Furman Selz LLC.
"Initial Securities" means the 10 5/8% Senior Subordinated Notes
due 2009, Series A, of the Company.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of any
cash interest and any Additional Interest on the Securities.
"Interest Payment Date" means each semiannual interest payment
date on May 1 and November 1 of each year, commencing November 1, 1999.
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"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the April
15 or October 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guaranty or other extension of credit (other than trade
receivables created on customary terms in the ordinary course of business) or
capital contribution to (by means of transfers of cash or other property or
assets to others or payments for property or services for the account or use of
others, or otherwise), or purchase or acquisition of capital stock, bonds,
notes, debentures or other securities or evidences of Indebtedness issued by,
any other Person. Unless the context otherwise requires, the amount of any
Investment shall be the original cost of such Investment, plus the cost of all
additions thereto, and minus the amount of any portion of such Investment repaid
to such Person in cash as a repayment of principal or a return of capital, as
the case may be, but without any other adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
In determining the amount of any Investment constituting a guaranty, the maximum
potential amount of such guaranty shall be considered the amount of the
Investment and, in determining the amount of any Investment involving a transfer
of any property or asset other than cash, such property shall be valued at its
Fair Market Value at the time of such transfer. A guaranty of performance by the
Company or any Restricted Subsidiary in the delivery of the product or material
requirements of a customer or third party in the ordinary course of business
shall not constitute an Investment.
"Issue Date" means the original issue date of the Securities,
April 30, 1999.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof and any agreement to give any security interest).
"Management Agreement" means the management agreement as in
effect on the Issue Date between GCG and Latona Associates Inc. (and its
permitted successors and assigns thereunder), as it may be amended, modified or
replaced after the Issue Date with the approval of a majority of the
disinterested directors of GCG or the Company.
"Maturity Date" means May 1, 2009.
"Mineral Agreement" means an agreement between the Company or a
Restricted Subsidiary of the Company and a customer of the Company or such
Restricted Subsidiary (that is not an Affiliate of the Company) for the purpose
of mining minerals pursu-
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ant to which the Company or such Restricted Subsidiary contributes minerals
leases to such Person (that is not a Affiliate of the Company), or agrees to
mine minerals for such Person, in the ordinary course of the Company or such
Restricted Subsidiary's business.
"Net Cash Proceeds" means the aggregate proceeds in the form of
cash or Cash Equivalents received by the Company or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or Cash Equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale; (d) amounts deemed, in good faith, appropriate by the Board of
Directors of the Company to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve); and (e)
with respect to Asset Sales by Restricted Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Restricted
Subsidiary.
"NHO" means New Hampshire Oak, Inc., a Delaware corporation, or
any successor thereto for so long as it directly or indirectly beneficially owns
a majority of the Voting Equity Interests and Equity Interests in the Company.
"Obligations" means any principal, interest (including, with
respect to Designated Senior Indebtedness only, Post-Petition Interest),
penalties, fees, indemnifications, reimbursement obligations, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent by
or on behalf of the Company by first-class mail, postage prepaid, to each holder
at his address appearing in the register for the Securities on the date of the
Offer offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Expiration Date") of the Offer to Purchase,
which shall be not less than 20 Business Days nor more than 60 days after the
date
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of such Offer, and a settlement date (the "Purchase Date") for purchase of
Securities to occur no later than five Business Days after the Expiration Date.
The Company shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be mailed
by the Company or, at the Company's request, by the Trustee in the name and at
the expense of the Company. The Offer shall contain all the information required
by applicable law to be included therein. The Offer shall also contain
information concerning the business of the Company and its Subsidiaries which
the Company in good faith believes will enable such Holders to make an informed
decision with respect to the Offer to Purchase (which at a minimum will include
(i) the most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the documents required to be filed with the Trustee pursuant to
this Indenture (which requirements may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring the Company to make the Offer to Purchase), (iii) if applicable,
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring the Company to make the Offer to Purchase and (iv) any
other information required by applicable law to be included therein). The Offer
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to Purchase is
being made; (2) the Expiration Date and the Purchase Date; (3) the aggregate
principal amount of the outstanding Securities offered to be purchased by the
Company pursuant to the Offer to Purchase (including, if less than 100%, the
manner by which such amount has been determined pursuant to the Section of this
Indenture requiring the Offer to Purchase) (the "Purchase Amount"); (4) the
purchase price to be paid by the Company for each $1,000 aggregate principal
amount of Securities accepted for payment (as specified pursuant to this
Indenture) (the "Purchase Price"); (5) that the Holder may tender all or any
portion of the Securities registered in the name of such Holder and that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount; (6) the place or places where Securities are to be
surrendered for tender pursuant to the Offer to Purchase; (7) that interest on
any Security not tendered or tendered but not purchased by the Company pursuant
to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date
the Purchase Price will become due and payable upon each Security being accepted
for payment pursuant to the Offer to Purchase and that interest thereon shall
cease to accrue on and after the Purchase Date; (9) that each Holder electing to
tender all or any portion of a Security pursuant to the Offer to Purchase will
be required to surrender such Security at the place or places specified in the
Offer prior to the close of business on the Expiration Date (such Security
being, if the Company or the Trustee so requires, duly endorsed by, or
accompanied by a written instrument
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-18-
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing); (10) that
Holders will be entitled to withdraw all or any portion of Securities tendered
if the Company (or its Paying Agent) receives, not later than the close of
business on the fifth Business Day next preceding the Expiration Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder tendered, the
certificate number of the Security the Holder tendered and a statement that such
Holder is withdrawing all or a portion of his tender; (11) that (a) if
Securities in an aggregate principal amount less than or equal to the Purchase
Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase,
the Company shall purchase all such Securities and (b) if Securities in an
aggregate principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase Amount on
a pro rata basis (with such adjustments as may be deemed appropriate so that
only Securities in denominations of $1,000 principal amount or integral
multiples thereof shall be purchased); and (12) that in the case of any Holder
whose Security is purchased only in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"Offering Memorandum" means the Company's Offering Memorandum
dated April 22, 1999 for $100,000,000 of Securities.
"Officer" means the Chairman, any Vice Chairman, the President,
any Vice President, the Chief Financial Officer, the Treasurer, or the Secretary
of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 11.04 and 11.05.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
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"Pari Passu Debt" means Indebtedness of the Company that
constitutes neither Senior Indebtedness nor Subordinated Indebtedness.
"Pari Passu Debt Pro Rata Share" means the amount of the
applicable Net Cash Proceeds obtained by multiplying the amount of such Net Cash
Proceeds by a fraction, (i) the numerator of which is the aggregate accreted
value and/or principal amount, as the case may be, of all Pari Passu Debt
outstanding at the time of the applicable Asset Sale with respect to which the
Company is required to use Net Cash Proceeds to repay or make an offer to
purchase or repay and (ii) the denominator of which is the sum of (a) the
aggregate principal amount of all Securities outstanding at the time of the
applicable Asset Sale and (b) the aggregate principal amount or the aggregate
accreted value, as the case may be, of all Pari Passu Debt outstanding at the
time of the applicable Offer to Purchase with respect to which the Company is
required to use the applicable Net Cash Proceeds to offer to repay or make an
offer to purchase or repay.
"Participant" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Notice" see Section 8.02(a).
"Payment Blockage Period" see Section 8.02(a).
"Permitted Designee" with respect to any Permitted Holder means
(A) a spouse or child (in the case of an individual) of such Permitted Holder,
(B) any trust principally for the benefit of such Permitted Holder or a spouse
or child of such Permitted Holder, (C) in the event of death or incompetence of
a Permitted Holder, such Permitted Holder's estate, heirs, executor,
administrator, committee or other court appointed representative, (D) any
foundation or not-for-profit organization established by a Permitted Holder, or
(E) any Person so long as one or more Permitted Holders in the aggregate own a
majority of the voting power of the Voting Stock of such Person.
"Permitted Equity Incentive Payments" means (i) distributions,
loans or advances made to NHO for distribution to GCG to the extent used to fund
the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of GCG held by any member of the Company's or any of its
Subsidiaries' management pursuant to any management equity subscription
agreement or stock option agreement in effect as of the date of this Indenture
and as the same may be amended, modified or replaced in accordance with Section
4.03; (ii) payments of any amounts to an ESOP or other stock plan for employees
of the Company or any of its Subsidiaries; and (iii) payments to members of
management of the Company and its Subsidiaries pursuant to equity incentive
plans of GCG to
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the extent such payments are reflected as expenses in the calculation of
Consolidated Net Income; provided that the aggregate amount of payments made
under the preceding clauses (i), (ii) and (iii) shall not exceed the sum of $3.0
million in any calendar year plus the Net Cash Proceeds received by the Company
since the Issue Date from, or as a capital contribution from, the issuance or
sale to employees of the Company and its Subsidiaries of Qualified Equity
Interests, to the extent such Net Cash Proceeds are not and have not been
included in any calculation under clause (c)(2) of the first paragraph (a) or
under any clause (other than clause (v)) of the second paragraph of Section
4.06.
"Permitted Hedging Obligations" means any Hedging Obligations
that are Incurred (a) in the ordinary course of business and (b) for the purpose
of hedging (x) interest rate risk to the Company or any Restricted Subsidiary
with respect to any fixed or floating rate Indebtedness of the Company or any
Restricted Subsidiary (including all Hedging Obligations Incurred in connection
with the Credit Facility), (y) currency risk to the Company or any Restricted
Subsidiary with respect to Indebtedness of the Company or a Restricted
Subsidiary or the cost of goods and services used by the Company or a Restricted
Subsidiary in the ordinary course of business or (z) the risk to the Company and
the Restricted Subsidiaries of fluctuations in the cost of natural gas, other
energy inputs or commodities used in the ordinary course of business of the
Company and the Restricted Subsidiaries.
"Permitted Holder" means Paul M. Meister and Paul M. Montrone and
their respective Permitted Designees.
"Permitted Indebtedness" see Section 4.04.
"Permitted Investments" means (a) any Investment in the Company,
any Restricted Subsidiary or a Person that becomes a Restricted Subsidiary, or
is merged with or into or consolidated with the Company or a Restricted
Subsidiary (provided the Company or a Restricted Subsidiary is the survivor), as
a result of or in connection with such Investment; (b) Cash Equivalents; (c)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (d) loans and advances to employees made in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding; (e) Permitted Hedging Obligations; (f) bonds, notes, debentures or
other securities received as consideration from any Asset Sale that is subject
to and made in compliance with Section 4.05, any sale or other disposition of
assets not to exceed $1.0 million outstanding at any time or the sale of
property or equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or any
Restricted Subsidiary; (g) transactions with officers, directors and employees
of the Company or any Restricted Subsidiary entered into in the ordinary course
of business (including compensation
<PAGE>
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or employee benefit arrangements with any such director or employee); (h) any
Investment to the extent that the consideration therefor consists of Qualified
Equity Interests of the Company or Equity Interests of GCG or NHO; (i)
Investments in Persons primarily engaged in a Related Business in an aggregate
amount at any time outstanding not to exceed the greater of (x) $10.0 million or
(y) 5% of Consolidated Tangible Assets; (j) securities or other Investments
received in settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary, or as a result of
foreclosure, perfection or enforcement of any Lien, or in satisfaction of
judgments, including in connection with any bankruptcy proceeding or other
reorganization of another Person; (k) any Investment in any Supply Partnership
in an aggregate amount at any time outstanding not to exceed 10% of Consolidated
Tangible Assets; and (l) any Investment pursuant to a Mineral Agreement.
"Permitted Junior Securities" means any securities of the Company
or any other Person provided for by a plan of reorganization or readjustment
succeeding to the assets and liabilities of the Company that are (i) equity
securities without special covenants or (ii) subordinated in right of payment to
all Senior Indebtedness that may at the time be outstanding, to substantially
the same extent as, or to a greater extent than, the Securities are subordinated
as provided in this Indenture, in any event pursuant to a court order so
providing and as to which (a) the rate of interest on such securities shall not
exceed the effective rate of interest on the Securities on the date of this
Indenture, (b) such securities shall not be entitled to the benefits of
covenants or defaults materially more beneficial to the holders of such
securities than those in effect with respect to the Securities on the Issue Date
and (c) such securities shall not provide for amortization (including sinking
fund and mandatory prepayment provisions) commencing prior to the date one year
following the final scheduled maturity date of the Senior Indebtedness (as
modified by the plan of reorganization or readjustment pursuant to which such
securities are issued); provided that, in each case with respect to clauses (i)
and (ii) above, (x) if a new corporation results from any such reorganization or
readjustment, such corporation assumes all Senior Indebtedness that will be
outstanding after giving effect thereto and (y) the rights of the holders of the
Senior Indebtedness are not, without the consent of such holders, altered or
impaired, including, without limitation, such rights being impaired within the
meaning of Section 1124 of Title 11 of the United States Code, or any impairment
of the right to receive interest accruing during the pendency of a bankruptcy or
insolvency proceeding, including proceedings under Title 11 of the United States
Code.
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company
or any Restricted Subsidiary; provided, however, that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
secure any property or assets of the Company or
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-22-
any Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger or consolidation; (b) Liens imposed by law such as
carriers', warehousemen's and mechanics' Liens and other similar Liens arising
in the ordinary course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith and by
appropriate proceedings; (c) Liens existing on the Issue Date; (d) Liens
securing only the Securities; (e) Liens in favor of the Company or any
Restricted Subsidiary; (f) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or the nonpayment of which in the
aggregate would not reasonably be expected to have a material adverse effect on
the Company and the Restricted Subsidiaries or that are being contested in good
faith by appropriate proceedings; provided, however, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (g) easements, reservation of rights of way, restrictions
and other similar easements, licenses, restrictions on the use of properties, or
minor imperfections of title that in the aggregate do not in any case materially
detract from the properties subject thereto or interfere with the ordinary
conduct of the business of the Company and the Restricted Subsidiaries; (h)
pledges, deposits or Liens in connection with workers' compensation,
unemployment insurance and other social security and other similar legislation
or other insurance-related obligations (including, without limitation, pledges
or deposits securing liability to insurance carriers under insurance or
self-insurance arrangements); (i) pledges, deposits or Liens to secure the
performance of bids, tenders, trade, government or other contracts (other than
for borrowed money), obligations for utilities, leases, licenses, statutory
obligations, completion guarantees, surety, judgment, appeal or performance
bonds, other similar bonds, instruments or obligations, and other obligations of
a like nature incurred in the ordinary course of business; (j)(A) mortgages,
liens, security interests, restrictions, encumbrances or any other matters of
record that have been placed by any developer, landlord or other third party on
property over which the Company or any Restricted Subsidiary has easement rights
or on any leased property and subordination or similar agreements relating
thereto and (B) any condemnation or eminent domain proceedings affecting any
real property; (k) Liens arising out of judgments, decrees, orders or awards not
constituting any Event of Default in respect of which the Company shall in good
faith be prosecuting an appeal or proceedings for review, which appeal or
proceedings shall not have been finally terminated, or if the period within
which such appeal or proceedings may be initiated shall not have expired; (l)
Liens securing Hedging Obligations Incurred in compliance with Section 4.04; (m)
Liens securing Purchase Money Indebtedness; provided, however, that (I) such
Liens secure Indebtedness in an amount not in excess of the original purchase
price or the original cost of any such assets or repair, addition or improvement
thereto (plus an amount equal to the reasonable fees and expenses in connection
with the incurrence of such Indebtedness), (II) such Liens do not extend to any
other assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or
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thereon) repaired, added to or improved), (III) the Incurrence of such
Indebtedness is permitted by Section 4.04 and (IV) such Liens attach within 180
days of such purchase, construction, installation, repair, addition or
improvement; (n) Liens to secure any refinancings, renewals, extensions,
modifications or replacements (collectively, "refinancing") (or successive
refinancings), in whole or in part, of any Indebtedness secured by Liens
referred to in the clauses above so long as such Lien does not extend to any
other property (other than improvements thereto); (o) Liens securing letters of
credit entered into in the ordinary course of business and consistent with past
business practice; and (p) Liens on and pledges of the Equity Interests of any
Unrestricted Subsidiary securing any Indebtedness of such Unrestricted
Subsidiary.
"Permitted Partnership Transaction" means (i) payments or other
transactions made pursuant to the General Chemical (Soda Ash) Partnership
Agreement, as in effect on the date of this Indenture or as amended from time to
time in accordance with its terms; provided that any such amendment does not
contain terms that are materially more adverse in the aggregate to the Holders
than those in effect on the date of this Indenture; and (ii) transactions
between the Company and GCSAP which are on terms as favorable in aggregate to
the Company than those that would be obtainable at the time for a comparable
transaction in arm's-length dealings with an unrelated third person so long as
no Affiliate (other than the Company or a Restricted Subsidiary) directly or
indirectly has a beneficial Equity Interest in GCSAP.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of the Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of the Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable fees, underwriting
discount, premiums and all other costs and expenses incurred in connection
therewith); (ii) except in the case of Senior Indebtedness or Indebtedness of a
Restricted Subsidiary, such Permitted Refinancing Indebtedness has a final
maturity date not earlier than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Securities, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in right of
payment to, the Securities on terms at least as favorable to the Holders as
those contained in the documentation governing the Indebted-
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ness being extended, refinanced, renewed, replaced, defeased or refunded; (iv)
GCSAP and its Subsidiaries may only Incur such Indebtedness to extend,
refinance, renew, replace, defease or refund their own Indebtedness; and (v)
Preferred Equity Interest of a Restricted Subsidiary may not be refinanced,
replaced, defeased or refunded with Indebtedness.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities
in registered form.
"Post-Petition Interest" means, with respect to any Indebtedness
of any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any bankruptcy, insolvency or liquidation proceeding against
such Person in accordance with and at the contract rate (including, without
limitation, any rate applicable upon default) specified in the agreement or
instrument creating, evidencing or governing such Indebtedness, whether or not,
pursuant to applicable law or otherwise, the claim for such interest is allowed
as a claim in such bankruptcy, insolvency or liquidation proceeding.
"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person. Preferred Equity
Interests of any Acquired Person or any of its Subsidiaries existing at the time
such Acquired Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary) shall be deemed
issued at such time.
"principal" of a debt security means the principal of the
security, plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" have the meaning provided in
Sections 2(b) of the Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth
on the Initial Securities in the form set forth on Exhibit A hereto.
"Purchase Agreement" means the Purchase Agreement dated as of
April 22, 1999 by and among the Company and the Initial Purchasers.
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"Purchase Amount" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary Incurred for the purpose of financing all or any
part of the acquisition (whether directly or through the acquisition of the
Equity Interests of any Person), leasing, construction or improvement of any
property, plant or equipment used in the business of the Company or any
Restricted Subsidiary; provided that the aggregate principal amount of such
Indebtedness does not exceed such purchase price or cost.
"Purchase Price" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Qualified Equity Interest" in any Person means any Equity
Interest in such Person other than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Registrar" see Section 2.03.
"Registration" means a registered exchange offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of April 30, 1999 by and among the
Company and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
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"Regulation S Global Security" means the Regulation S Temporary
Global Security and the Regulation S Permanent Global Security.
"Regulation S Permanent Global Security" means a permanent global
security in registered form representing the outstanding principal amount of the
Regulation S Temporary Global Security upon expiration of the Restricted Period.
"Regulation S Temporary Global Security" means a temporary global
security in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S.
"Related Business" means (a) those businesses in which the
Company or any of the Restricted Subsidiaries is engaged on the Issue Date, or
that are similar or reasonably related, complementary or incidental thereto or
extensions or developments thereof and (b) any business (the "Other Business")
which forms a part of a business (the "Acquired Business") which is acquired by
the Company or any of the Restricted Subsidiaries if (i) the primary intent of
the Company or such Restricted Subsidiary was to acquire that portion of the
Acquired Business which meets the requirements of clause (a) of this definition
and (ii) the Company believed that it would not have been able to acquire such
portion of the Acquired Business if the Other Business was not also acquired.
"Related Taxes" means (x) the Company's share (based on the ratio
of the book value of the Company and its subsidiaries to the book value of GCG
and its subsidiaries (including the Company and its subsidiaries)) of any state
or local taxes, other than taxes imposed on or measured by income or receipts,
that are imposed on GCG or NHO by virtue of GCG or NHO (as the case may be) (1)
being incorporated in such state or locality, (2) having capital stock
outstanding or (3) owning the stock of the Company (but excluding any taxes
imposed on or attributable to any dividends received from the Company), (y) any
payments in respect of Taxes required to be made by GCG under the Tax Sharing
Agreement (less any refunds of such taxes that are received by GCG or NHO and
are not repaid to the Company) and (z) any Taxes of the Company or its
Subsidiaries that are measured by income and for which GCG and NHO are liable up
to an amount not to exceed with respect to such federal taxes, the amount of any
such taxes that the Company would have been required to pay on a consolidated
basis if the Company had filed a consolidated return on behalf of an affiliated
group (as defined in section 1504 of the Code) of which it was the common
parent, or with respect to such state, local and foreign taxes, the amount of
taxes that the Company would have been required to pay if the Company and its
eligible Subsidiaries had filed an affiliated, combined or unitary return with
respect to such state, local or foreign taxes.
"Required Filing Dates" see Section 4.12.
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"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Payments" see Section 4.06.
"Restricted Period" means the "distribution compliance period"
applicable to the Company described in Regulation S.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that
has not been designated by the Board of Directors of the Company, by a Board
Resolution of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to Section 4.17. Any such designation may be revoked by a
Board Resolution of the Company delivered to the Trustee, subject to the
provisions of Section 4.17.
"Revocation" see Section 4.17.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Securityholder" has the same meaning as Holder.
"Senior Indebtedness" means, at any date, (a) all Obligations of
the Company under the Credit Facility; (b) all Hedging Obligations of the
Company; (c) all Obligations of the Company under stand-by letters of credit;
and (d) all Obligations under other Indebtedness of the Company including
principal, premium, if any, and interest on such Indebtedness, unless the
instrument under which such Indebtedness of the Company for money borrowed is
Incurred expressly provides that such Indebtedness for money borrowed is not
senior or superior in right of payment to the Securities, and all renewals,
extensions, modifications, amendments or refinancings thereof. Notwithstanding
the foregoing, Senior In-
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debtedness shall not include (a) to the extent that it may constitute
Indebtedness, any Obligation for federal, state, local, foreign or other taxes;
(b) any Indebtedness of the Company to any Subsidiary of the Company, unless and
for so long as such Indebtedness has been pledged to secure Obligations under
the Credit Facility or other Senior Indebtedness; (c) any Obligation in respect
of any trade payable Incurred for the purchase of goods or materials, or for
services obtained, in the ordinary course of business; (d) Indebtedness
evidenced by the Securities; (e) Indebtedness of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness of the
Company; (f) to the extent that it may constitute Indebtedness, any obligation
owing under leases (other than Capital Lease Obligations), subleases or licenses
or Management Agreements; and (g) any obligation that by operation of law is
subordinate to any general unsecured obligations of the Company.
"Separation Agreements" means, collectively, the Separation
Agreement dated April 15, 1999 among GenTek, the Company, General Chemical
Corporation and GCG, the Employee Benefits Agreement dated April 28, 1999
between GenTek and GCG, the Transition Support Agreement dated April 28, 1999
between GenTek and GCG, the Sublease Agreement dated April 28, 1999 between
General Chemical Corporation and the Company and the Intellectual Property
Agreement dated April 28, 1999 among GenTek, GCG, General Chemical Corporation
and the Company and does not include the Tax Sharing Agreement.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subordinated Indebtedness" means, with respect to the Company,
any Indebtedness of the Company which is expressly subordinated in right of
payment to the Securities.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person. Notwithstanding the
foregoing, for so long as the Company is permitted to consolidate the ALCAD
Partnership in its consolidated financial statements and the ALCAD Partnership
and related agreements provide for the distribution of profits to the Company
and the Restricted Subsidiaries on terms that are not adverse in any material
respect from the perspective of Holders than those in effect on the Issue Date,
the Company will be permitted to treat the ALCAD Partnership as a Subsidiary for
all purposes of this Indenture.
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"Supply Partnership" means any Person (a) in which the Company
beneficially owns less than a majority of the Voting Equity Interests, and (b)
which has been organized for the purpose of toll manufacturing, marketing or
selling industrial chemical products, mining minerals and/or supplying energy,
raw materials or transportation services for the benefit of (x) the Company and
the Restricted Subsidiaries in the ordinary course and (y) one or more of its
customers or raw material (including energy) suppliers that is not an Affiliate
of the Company and (z) if applicable, other persons similarly situated as the
Company and the Restricted Subsidiary with respect to such benefits.
"Surviving Person" means, with respect to any Person involved in
or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated
April 28, 1999 between GenTek and GCG, as the same may be amended, modified or
replaced in accordance with this Indenture.
"Taxes" means any federal, state, local or foreign taxes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 10.03) until such time as this Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and thereafter means such successor.
"United States Government Obligations" means direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
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"Unrestricted Securities" means one or more Securities that do
not and are not required to bear the Private Placement Legend in the form set
forth in Exhibit A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.17. Any such designation may be revoked
by a Board Resolution of the Company delivered to a Trustee, subject to the
provisions of Section 4.17.
"Unutilized Net Cash Proceeds" see Section 4.05(a).
"Voting Equity Interests" means Equity Interests in a corporation
or other Person either (x) with voting power under ordinary circumstances
entitling the holders thereof to vote for the election of the Board of Directors
or other governing body of such corporation or Person or (y) for purposes of the
definition of "Change of Control" only, directly or indirectly accompanied with
other rights to direct the policies, management or affairs of such Person
pursuant to contract or otherwise.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Company.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certifi-
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cate of authentication thereof shall be substantially in the form of Exhibit B
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. The Company and the Trustee shall approve
the form of the Securities and any notation, legend or endorsement on them. Each
Security shall be dated the date of its issuance and shall show the date of its
authentication.
Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more 144A Global Securities and
Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Regulation S Temporary Global Securities,
substantially in the form set forth in Exhibit A hereto, deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and shall bear the legend
set forth in Exhibit C hereto. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
The Restricted Period for the Regulation S Temporary Global
Security shall be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depository, together with copies of certificates from the
Euroclear System and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Security (except to the extent of
any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Security or an IAI Global Security) and (ii) receipt of an Opinion
of Counsel. Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Security shall be exchanged for
beneficial interests in the Regulation S Permanent Global Security.
Simultaneously with the authentication of the Regulation S Permanent Global
Security, the Trustee shall cancel the Regulation S Temporary Global Security.
The aggregate principal amount of the Regulation S Temporary Global Security and
the Regulation S Permanent Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall
be applicable to transfers of beneficial interests in the Regulation S Temporary
Global Security and the Regulation S Permanent Global Security that are held by
participants through Euroclear or Cedel Bank.
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SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Officer's signature, the Securities for
the Company by manual or facsimile signature.
If an Officer or an Assistant Secretary whose signature is on a
Security was an Officer or an Assistant Secretary, as the case may be, at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Securities for
original issue in an aggregate principal amount not to exceed $100,000,000, (ii)
Private Exchange Securities from time to time only in exchange for a like
principal amount of Initial Securities and (iii) Unrestricted Securities from
time to time only in exchange for (A) a like principal amount of Initial
Securities or (B) a like principal amount of Private Exchange Securities, in
each case upon a written order of the Company in the form of an Officers'
Certificate. Each such written order shall specify the amount of Securities to
be authenticated and the date on which the Securities are to be authenticated,
whether the Securities are to be Initial Securities, Private Exchange Securities
or Unrestricted Securities and whether the Securities are to be issued as
Physical Securities or Global Securities and such other information as the
Trustee may reasonably request. The aggregate principal amount of Securities
outstanding at any time may not exceed $100,000,000, except as provided in
Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Any such appointment shall
be evidenced by an instrument in writing signed by a Trust Officer, a copy of
which instrument shall be promptly furnished to the Company. Unless otherwise
provided in the appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
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authenticating agent shall have the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"), (b)
Securities may be presented or surrendered for payment (the "Paying Agent") and
(c) notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term "Paying
Agent" includes any additional Paying Agent. Except as provided herein, the
Company or any of its Affiliates may act as Paying Agent, Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent, other than the
Trustee, to agree in writing that each Paying Agent shall hold in trust, for the
benefit of Holders or the Trustee, all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. The Company at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the
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Paying Agent shall have no further liability for such assets. If the Company or
any of its respective Affiliates acts as Paying Agent, it shall, on or before
each due date of the principal of or interest on the Securities, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of principal or interest on any
Security and remaining unclaimed for two years after such principal and interest
has become due and payable shall be paid to the Company at its request, or, if
then held by the Company, shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, unless an applicable abandoned property law
designates another person and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Interest Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such
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transfer taxes or other governmental charge payable upon exchanges or transfers
pursuant to Section 2.02, 2.10, 3.06, 4.05, 4.14, or 10.05). The Registrar or
co-Registrar shall not be required to register the transfer or exchange of any
Security (i) during a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Securities and ending at the close of
business on the day of such mailing and (ii) selected for redemption in whole or
in part pursuant to Article Three hereof, except the unredeemed portion of any
Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whatsoever whether or not the Security shall be overdue, and neither
the Company, the Trustee nor any such Agent shall be affected by notice to the
contrary. Any Holder of a beneficial interest in a Global Security shall, by
acceptance of such beneficial interest in a Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Depository (or its agent), and
that ownership of a beneficial interest in a Global Security shall be required
to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced The Company may
charge such Holder for any tax or governmental charge that may be imposed in
relation thereto and for its reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
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If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Maturity Date the
Paying Agent holds money sufficient to pay all of the principal and interest due
on the Securities (or part thereof) payable on that date, and is not prohibited
from paying such money to the Holders pursuant to the terms of this Indenture,
then on and after that date such Securities (or part thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any of its Affiliates shall be disregarded,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
that a Trust Officer of the Trustee actually knows are so owned shall be
disregarded.
The Company shall notify the Trustee, in writing, when it or any
of its Affiliates repurchases or otherwise acquires Securities, of the aggregate
principal amount of such Securities so repurchased or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities upon receipt
of a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
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SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
from time to time on demand at the rate of interest then borne by the
Securities.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior
to the expiration of the 30-day period set forth in Section 6.01(b) shall be
paid to Holders as of the Interest Record Date for the Interest Payment Date for
which interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number
if generally in use and, if so, the Trustee shall use the CUSIP number in
notices of redemption or exchange as a convenience to Holders; provided ,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number
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printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment
Date, Redemption Date, Purchase Date and the Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such Interest Payment Date, Redemption Date,
Purchase Date or Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date, Purchase Date or Maturity Date, as the case may
be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Company notifies the Trustee that the Depository is unwilling or unable to
continue as Depository for any Global Security and a successor Depository is not
appointed by the Company within 90 days of such notice, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Physical Securities or (iii) an Event of Default has occurred
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and is continuing and the Registrar has received a request from the Depository
to issue Physical Securities, provided that in no event shall the Regulation S
Temporary Global Security be exchanged by the Company for Physical Securities
prior to (x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903 under the Securities
Act as stated in an Opinion of Counsel.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for Registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in
writing; and
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(II) in the case of Physical Securities the offer and sale of
which have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company,
by the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the
Registrar or co-Registrar by a Holder for Registration in
the name of such Holder, without transfer, a certification
from such Holder to that effect (substantially in the form
of Exhibit D hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee letter of
representation substantially in the form of Exhibit E
hereto and, at the option of the Company or the Trustee,
an Opinion of Counsel reasonably satisfactory to the
Company or the Trustee, as the case may be, to the effect
that such transfer is in compliance with the Securities
Act; or
(D) if such Physical Security is being transferred in reliance
on Regulation S, delivery of a certification to that
effect (substantially in the form of Exhibit D hereto) and
a transferor certificate for Regulation S transfer
substantially in the form of Exhibit F hereto and, at the
option of the Company or the Trustee, an Opinion of
Counsel reasonably satisfactory to the Company or the
Trustee, as the case may be, to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company or the
Trustee, an Opinion of Counsel reasonably satisfactory to
the Company or the Trustee, as the case may be, to the
effect that such transfer is in compliance with the
Securities Act; or
(F) if such Physical Security is being transferred in reliance
on another exemption from the registration requirements
of the Securities Act, a
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certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company or the
Trustee, an Opinion of Counsel reasonably acceptable to
the Company or the Trustee, as the case may be, to the
effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security the offer and sale
of which has not been registered under the Securities Act may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D
hereto, that such Physical Security is being transferred
(I) to a QIB, (II) to an Accredited Investor, (III) in an
offshore transaction in reliance on Regulation S and, with
respect to (II) and (III), at the option of the Company or
the Trustee, an Opinion of Counsel reasonably acceptable
to the Company or the Trustee, as the case may be, to the
effect that such transfer is in compliance with the
Securities Act; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to make,
an endorsement on the applicable Global Security to
reflect an increase in the aggregate amount of the
Securities represented by the Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no 144A Global Security, IAI
Global Security or Regulation S Global Security, as the case may be, is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor; provided, however, that, prior to the expiration
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of the Restricted Period, transfers of beneficial interests in the Regulation S
Temporary Global Security may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon receipt by the
Registrar or Co-Registrar of written instructions, or such other instruction as
is customary for the Depository, from the Depository or its nominee, requesting
the registration of transfer of an interest in a 144A Global Security, an IAI
Global Security or a Regulation S Global Security, as the case may be, to
another type of Global Security, together with the applicable Global Securities
(or, if the applicable type of Global Security required to represent the
interest as requested to be transferred is not then outstanding, only the Global
Security representing the interest being transferred), the Registrar or
Co-Registrar shall cancel such Global Securities (or Global Security) and the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate new Global Securities of
the types so cancelled (or the type so cancelled and applicable type required to
represent the interest as requested to be transferred) reflecting the applicable
increase and decrease of the principal amount of Securities represented by such
types of Global Securities, giving effect to such transfer. If the applicable
type of Global Security required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Company shall
issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate a new Global Security of such type in
principal amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Physical
Security; provided, however, that prior to the Registration, a
transferee that is a QIB or Institutional Accredited Investor may not
exchange a beneficial interest in Global Security for a Physical
Security; provided that in no event shall Physical Securities be issued
upon the transfer or exchange of beneficial interests in the Regulation
S Temporary Global Security prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act as
stated in an Opinion of Counsel. Upon receipt by the Registrar or
co-Registrar of written instructions, or such other form of instructions
as is customary for the Depository, from the Depository or its nominee
on behalf of any Person (subject to the previous sentence) having a
beneficial interest in a Global Security and upon receipt by the Trustee
of a written order or such other form of instructions as is customary
for the Depository or the Person designated by the Depository as having
such a beneficial interest containing registration instructions and, in
the case of any such transfer or exchange of a beneficial interest in
Securities the offer and
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sale of which have not been registered under the Securities Act, the
following additional information and documents:
(A) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (substantially in the form
of Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (substantially in the form of Exhibit D
hereto) and, at the option of the Company, an Opinion of
Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the
Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction,
the Company will execute and, upon receipt of an authentication order in
the form of an Officers' Certificate in accordance with Section 2.02,
the Trustee will authenticate and deliver to the transferee a Physical
Security in the appropriate principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar or co-Registrar in writing. The
Registrar or co-Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, ex-
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change or replacement of Securities bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver only Securities that bear the Private
Placement Legend unless, and the Trustee is hereby authorized to deliver
Securities without the Private Placement Legend if, (i) there is delivered to
the Trustee an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act;(ii) such Security has been sold pursuant to an effective
registration statement under the Securities Act (including pursuant to a
Registration); or (iii) the date of such transfer, exchange or replacement is
two years after the later of (x) the Issue Date and (y) the last date that the
Company or any affiliate (as defined in Rule 144 under the Securities Act) of
the Company was the owner of such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Participants
or beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5
or 6 of the Securities at the applicable redemption price set forth thereon, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed. The Company shall give such notice to the
Trustee at least 10 days before giving notice of such Redemption pursuant to
Section 3.03 (unless a shorter notice shall be agreed to by the Trustee in
writing), together with an Officers' Certificate stating that such redemption
will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of the Depository)
based on the aggregate principal amount of Securities held by each Holder,
unless such method is otherwise prohibited. The Trustee shall make the selection
from the Securities then outstanding, subject to redemption and not previously
called for redemption.
The Trustee may select for redemption pursuant to paragraph 5 or
6 of the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company in writing promptly of the
Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail to each
Holder whose Secu-
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rities are to be redeemed at such Holder's registered address; provided,
however, that notice of a redemption pursuant to paragraph 6 of the Securities
shall be mailed to each Holder whose Securities are to be redeemed no later than
90 days after the date of the Closing of the relevant Equity Issuance.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to
the Paying Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or 6 of
the Securities, if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, after
the Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
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SECTION 3.05. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit
with the Paying Agent (or if the Company is its own Paying Agent, shall, on or
before the Redemption Date, segregate and hold in trust) money sufficient to pay
the redemption price of and accrued interest, if any, on all Securities to be
redeemed on that date other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation.
On and after Redemption Date, if money sufficient to pay the
redemption price of the Securities called for redemption is deposited by the
Company to the Paying Agent, the Securities (or portions thereof) called for
redemption will cease to accrue interest and the only remaining right of the
Holders will be to receive payment of the redemption price, and subject to the
last sentence of this Section 3.05, any accrued and unpaid interest to the
Redemption Date. If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of the Company to deposit with the Paying Agent money sufficient to
pay the redemption price thereof, the principal and accrued and unpaid interest,
if any, thereon shall, until paid or duly provided for, bear interest as
provided in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part (with if
the Company or the Trustee so reasonably require, due endorsement by, or a
written instrument of transfer in form reasonably satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), the Trustee shall authenticate for the Holder a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities, this Indenture and the
Registration Rights Agreement. An installment of principal or interest shall be
considered paid on the date due if the Trustee or Paying Agent holds on that
date money designated for and sufficient to pay the in-
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stallment in full and is not prohibited from paying such money to the Holders of
the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the
same rate per annum borne by the Securities. The Company shall pay cash interest
on overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City
of New York, the office or agency required under Section 2.03. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Article Eleven.
The Company hereby initially designates the Trustee as its office or agency in
The Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.03. Transactions with Affiliates.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, conduct any business or enter
into any transaction (or series of related transactions) with or for the benefit
of any of the respective Affiliates of GCG or the Company (each an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms, taken as a
whole, which are no less favorable to the Company or such Restricted Subsidiary,
as the case may be, than would be available at the time in a comparable
transaction with an unaffiliated third party, (ii) if such Affiliate Transaction
or series of related Affiliate Transactions (other than any such Affiliate
Transactions between the Company or a Restricted Subsidiary in the ordinary
course of business) involves aggregate payments or other consideration having a
Fair Market Value in excess of $5.0 million, such Affiliate Transaction is in
writing and a majority of the members of the Board of Directors of the Company
or GCG that are disinterested with respect to such Affiliate Transaction shall
have approved such Affiliate Transaction and determined that such Affiliate
Transaction complies with the foregoing provisions and (iii) if such Affiliate
Transaction or series of related Affiliate Transactions involves aggregate
payments or other consideration having a Fair Market Value in excess of $10.0
million, the Company shall have obtained a written opinion from an Independent
Financial Advisor (which is delivered to the Trustee) stating that the terms of
such Affiliate Transaction are fair, from a financial point of view, to the
Company or the Restricted Subsidiary involved in such Affiliate Transaction, as
the case may be.
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Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) any employment or separation agreement,
collective bargaining agreement, benefit plan, program or arrangement, related
trust agreement or any other similar arrangement for or with any employee,
officer or director entered into by the Company or any Restricted Subsidiary in
the ordinary course of business, whether before or after the Issue Date; (ii)
loans or other advances in an aggregate principal amount not to exceed $1.0
million at any one time outstanding; (iii) transactions between or among the
Company and/or the Restricted Subsidiaries; provided that no Person that is an
Affiliate of GCG or the Company other than a Restricted Subsidiary directly or
indirectly has a beneficial Equity Interest in such Restricted Subsidiary; (iv)
the payment of reasonable director compensation and expenses to Persons who are
not otherwise Affiliates of the Company; (v) sales of soda ash, calcium chloride
and other products to GenTek and its Subsidiaries pursuant to existing
agreements or in the ordinary course of business on terms in aggregate no less
favorable than would be available in a comparable transaction at the time with
an unaffiliated third party; (vi) payments made pursuant to the Refinancing
Transactions or the Separation Agreements or the Tax Sharing Agreement as such
agreements are in effect on the Issue Date; (vii) payments not to exceed $1.5
million per year (subject to increase as provided for in the Management
Agreement as in effect on the Issue Date) pursuant to the Management Agreement
as in effect on the Issue Date and other payments of fees for services rendered
from an Affiliate which have been approved by a majority of the disinterested
directors of GCG or the Company; (viii) payments of indemnification or
contribution made to any directors, officers, employees or agents of the Company
or any Restricted Subsidiary as determined in good faith by the Board of
Directors of the Company or such Restricted Subsidiary; (ix) any dividend or
distribution permitted pursuant to Section 4.06; (x) the payment of
compensation, performance of indemnification or contribution obligations, or any
issuance, grant or award of stock, options, other equity-related interests or
other securities, to employees, officers or directors in the ordinary course of
business; (xi) any transaction in the ordinary course of business between the
Company and any Restricted Subsidiary and any Affiliate that is a joint venture
or similar entity (including a Supply Partnership and Mineral Agreement) in
which the Company and/or a Restricted Subsidiary has an Investment and which is
primarily engaged in a Related Business, provided that no Person that is an
Affiliate of GCG or the Company (other than a Restricted Subsidiary) directly or
indirectly has a beneficial interest in any Equity Interests in such joint
venture or similar entity; and (xii) Permitted Partnership Transactions.
SECTION 4.04. Limitation on Incurrence of Indebtedness and Preferred Equity
Interests.
This Indenture shall provide that (i) the Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur any
Indebtedness and
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(ii) the Company shall not permit any Restricted Subsidiary to issue any
Preferred Equity Interests; provided, however, that the Company and or any
Restricted Subsidiary (other than GCSAP and its Subsidiaries) may Incur
Indebtedness (other than Preferred Equity Interests of a Restricted Subsidiary)
if, at the time of and immediately after giving pro forma effect to such
Incurrence of Indebtedness and the application of the proceeds therefrom, the
Company's Consolidated Coverage Ratio would be greater than or equal to 2.0 to
1.0.
The provisions of the first paragraph of this covenant shall not
apply to the Incurrence of any of the following items of Indebtedness
(collectively, "Permitted Indebtedness"):
(i) the Incurrence by the Company or any Restricted Subsidiary
(other than GCSAP and its Subsidiaries) of Indebtedness under the Credit
Facility; provided that the aggregate principal amount of Indebtedness
(with letters of credit being deemed to have a principal amount at any
time equal to the aggregate then undrawn and unexpired amount thereof
plus the aggregate amount of drawings thereunder that have not then been
reimbursed) outstanding under the Credit Facility after giving effect to
such Incurrence does not exceed an amount equal to (x) $85.0 million,
plus (y) in the case of a Credit Facility constituting a refinancing (or
a successive refinancing) of the initial Credit Facility an amount equal
to the amount of reasonable fees, underwriting discounts, premiums and
other costs and expenses incurred in connection with such refinancing,
less (z) the aggregate principal amount of such Indebtedness repaid from
the net cash proceeds of any Asset Sale to the extent reducing the
commitments of the lenders thereunder;
(ii) the Incurrence by the Company or any Restricted Subsidiary of
Indebtedness under this Indenture;
(iii) the Incurrence by the Company or any Restricted Subsidiary of
Purchase Money Indebtedness or Capital Lease Obligations; provided that,
after giving effect to any such Incurrence, the aggregate principal
amount (or accreted value, as applicable) of all outstanding
Indebtedness Incurred under this clause (iii), when aggregated with all
outstanding Permitted Refinancing Indebtedness (including any successive
refinancings) Incurred under clause (iv) below to refinance Indebtedness
Incurred under this clause (iii), does not exceed at any time
outstanding the greater of (x) $15.0 million and (y) 5% of Consolidated
Tangible Assets;
(iv) the Incurrence by the Company or any Restricted Subsidiary of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace, Indebtedness that was
Incurred under the first paragraph hereof or clause (ii) or (iii) of
this paragraph;
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(v) the Incurrence or issuance by the Company or any Restricted
Subsidiary of intercompany Indebtedness or Preferred Equity Interests
between or among the Company and any of the Restricted Subsidiaries;
provided that (a) if the Company is the obligor on any such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the
Securities and (b)(x) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness or Preferred Equity
Interests being held by a Person other than the Company or a Restricted
Subsidiary thereof and (y) any sale or other transfer of any such
Indebtedness or Preferred Equity Interests to a Person that is neither
the Company nor a Restricted Subsidiary thereof shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness or issuance of
Preferred Equity Interests by the Company or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause (v);
(vi) the Incurrence by the Company or any Restricted Subsidiary of
Permitted Hedging Obligations;
(vii) the Incurrence by the Company or any Restricted Subsidiary of
Indebtedness represented by trade letters of credit, performance or
surety bonds, completion guarantees or similar arrangements, in each
case, in the ordinary course of business; and
(viii) the Incurrence by the Company or any Restricted Subsidiary
(other than GCSAP and its Subsidiaries) of additional Indebtedness and
the issuance by any Restricted Subsidiary of Preferred Equity Interests
in an aggregate principal amount or liquidation preference or other
priority claim (or accreted value, as applicable) at any time
outstanding not to exceed $15.0 million at any one time outstanding.
For purposes of determining compliance with this covenant, (x) in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Indebtedness described in clauses (i) through (viii)
above or is entitled to be Incurred pursuant to the first paragraph of this
covenant, the Company shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this covenant at the time of
Incurrence or issuance or at the time of any subsequent Incurrence or issuance
and (y) to avoid duplication, with respect to any item of Indebtedness, any
other obligation of the obligor on such Indebtedness (or of any other Person
that could have Incurred such Indebtedness under this covenant) arising under
any guaranty, Lien or letter of credit, bankers' acceptance or other similar
instrument or obligation supporting such Indebtedness shall be disregarded to
the extent that such guaranty, Lien or letter of credit, bankers' acceptance or
other similar instrument or obligation secures the principal amount of such
Indebtedness and the Incurrence of such Indebtedness has otherwise been included
in determining compliance with this covenant.
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SECTION 4.05. Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, 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 (ii) at least 75% of such
consideration consists of cash or Cash Equivalents; provided that the principal
amount (or accreted value) of any (i) Indebtedness (other than any Subordinated
Indebtedness or Pari Passu Debt) of the Company or any Restricted Subsidiary
that is actually assumed by the transferee in such Asset Sale and from which the
Company and the Restricted Subsidiaries are fully and unconditionally released
shall be deemed to be cash for purposes of determining the percentage of cash
consideration received by the Company or the Restricted Subsidiaries and (ii)
notes or other similar obligations received by the Company or the Restricted
Subsidiaries from such transferee that are immediately converted, sold or
exchanged (or are converted, sold or exchanged within thirty days of the related
Asset Sale) by the Company or the Restricted Subsidiaries into cash shall be
deemed to be cash in an amount equal to the net cash proceeds realized upon such
conversion, sale or exchange for purposes of determining the percentage of cash
consideration received by the Company or the Restricted Subsidiaries.
With respect to any Asset Sale, the Company or such Restricted
Subsidiary, as the case may be, may (i) apply the Net Cash Proceeds of such
Asset Sale within 365 days of receipt thereof to repay Senior Indebtedness, (ii)
apply the Net Cash Proceeds of such Asset Sale to acquire, construct or improve
properties and capital assets to be used in a Related Business or to acquire
Equity Interests in any Person which thereby becomes a Restricted Subsidiary
whose assets consist primarily of properties and capital assets used in a
Related Business or (iii) apply the Net Cash Proceeds of any Asset Sale within
365 days of receipt thereof to repay Pari Passu Debt not exceeding the Pari
Passu Debt Pro Rata Share. Notwithstanding the foregoing, in the event a
Restricted Subsidiary that is not a Wholly-Owned Restricted Subsidiary dividends
or distributes to all of its stockholders on a pro rata basis any Net Cash
Proceeds to the Company or another Restricted Subsidiary, the Company or such
Restricted Subsidiary need only apply its share of such Net Cash Proceeds in
accordance with the preceding clause (i), (ii) or (iii).
To the extent all or part of the Net Cash Proceeds of any Asset
Sale are not applied within 365 days of such Asset Sale as described in clause
(i), (ii) or (iii) or the proviso of the first paragraph of this Section 4.05
(such Net Cash Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall,
within 20 days after such 365th day, make an Offer to Purchase all outstanding
Securities up to a maximum principal amount (expressed as a multiple of $1,000)
of Securities equal to such Unutilized Net Cash Proceeds, at a purchase price in
cash equal to 100% of the principal amount thereof, plus accrued and unpaid
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interest thereon, if any, to the Purchase Date; provided, however, that the
Offer to Purchase may be deferred until there are aggregate Unutilized Net Cash
Proceeds equal to or in excess of $10.0 million, at which time the entire amount
of such Unutilized Net Cash Proceeds, and not just the amount in excess of $10.0
million, shall be applied as required pursuant to this paragraph. Each Holder
shall be entitled to tender all or any portion of the Securities owned by such
Holder pursuant to the Offer to Purchase, subject to the requirement that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount and subject to any proration among tendering Holders as
described in paragraph (b) below.
(b) With respect to any Offer to Purchase effected pursuant to
this Section 4.05, among the Securities, to the extent the aggregate principal
amount of Securities tendered pursuant to such Offer to Purchase exceeds the
Unutilized Net Cash Proceeds to be applied to the repurchase thereof, such
Securities shall be purchased pro rata based on the aggregate principal amount
of such Securities tendered by each Holder. To the extent the Unutilized Net
Cash Proceeds exceed the aggregate amount of Securities tendered by the Holders
of the Securities pursuant to such Offer to Purchase, the Company may retain and
utilize any portion of the Unutilized Net Cash Proceeds not applied to
repurchase the Securities for any purpose consistent with the other terms of
this Indenture.
(c) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) subject to paragraph (b) of this Section 4.05,
accept for payment all Securities validly tendered pursuant to the Offer, (ii)
deposit with the Paying Agent or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.04, money sufficient
to pay the Purchase Price of all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee for cancellation all
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent (or the Company, if so acting) shall promptly mail or deliver to Holders
of Securities so accepted, payment in an amount equal to the Purchase Price for
such Securities, and the Trustee shall promptly authenticate and mail or deliver
to each Holder of Securities a new Security or Securities equal in principal
amount to any unpurchased portion of the Security surrendered as requested by
the Holder. Any Security not accepted for payment shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Offer on or as soon as practicable after the
Purchase Date.
(d) In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase oc-
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curring as a result of such compliance shall not be deemed a Default or an Event
of Default.
SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution in
respect of any Equity Interests of the Company or any Restricted
Subsidiary or make any payment or distribution to the direct or indirect
holders (in their capacities as such) of Equity Interests of the Company
or any Restricted Subsidiary (other than (x) any dividends,
distributions and payments made to the Company or any Restricted
Subsidiary, (y) dividends or distributions payable to any Person solely
in Qualified Equity Interests of the Company or in options, warrants or
other rights to purchase Qualified Equity Interests of the Company and
(z) the payment of any dividend or distribution on a pro rata basis to
all holders of Equity Interests in a Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests (other than any Equity Interests owned by the Company
or any Restricted Subsidiary) of (x) the Company or (y) any Restricted
Subsidiary to the extent such Equity Interests of the Restricted
Subsidiary are owned by an Affiliate of the Company (other than a
Restricted Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make any
principal payment on, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated
Indebtedness (other than (x) any Subordinated Indebtedness held by the
Company or any Restricted Subsidiary and (y) any purchase, redemption,
defeasance or other acquisition or retirement for value in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such
acquisition or retirement); or
(iv) make any Investment (other than a Permitted Investment) in
any Person
(any such payment or any other action described in (i), (ii), (iii) or (iv)
each, a "Restricted Payment"), unless
(a) no Default shall have occurred and be continuing at the time
of or immediately after giving effect to such Restricted Payment;
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(b) immediately after giving effect to such Restricted Payment,
the Company would be able to Incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the Consolidated Coverage
Ratio of the first paragraph of Section 4.04; and
(c) immediately after giving effect to such Restricted Payment,
the aggregate amount of all Restricted Payments declared or made on or
after the Issue Date does not exceed an amount equal to the sum of (1)
50% of cumulative Consolidated Net Income determined for the period
(taken as one accounting period) from April 1, 1999 and ending on the
last day of the most recent fiscal quarter immediately preceding the
date of such Restricted Payment for which consolidated financial
statements of the Company are available (or, if such cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate net cash proceeds received by the Company either (x)
as capital contributions to the Company after the Issue Date or (y) from
the issue and sale (other than to a Subsidiary of the Company) of
Qualified Equity Interests of the Company after the Issue Date
(excluding the net cash proceeds (x) from any issuance or sale of
Qualified Equity Interests or capital contribution if such net cash
proceeds are to be made the subject of an optional redemption prior to
May 1, 2002 or (y) from any issuance or sale of Equity Interests or
capital contribution financed, directly or indirectly, using funds
borrowed from the Company or any Subsidiary of the Company until and to
the extent such borrowing is repaid), plus (3) the principal amount (or
accreted amount (determined in accordance with GAAP), if less) of any
Indebtedness of the Company or any Restricted Subsidiary Incurred after
the Issue Date which has been converted into or exchanged for Qualified
Equity Interests of the Company, plus (4) in the case of the disposition
or repayment of any Investment constituting a Restricted Payment made
after the Issue Date, an amount (to the extent not included in the
computation of Consolidated Net Income) equal to the lesser of (x) the
return of capital with respect to such Investment and (y) the amount of
such Investment which was treated as a Restricted Payment, in either
case, less the cost of the disposition of such Investment and net of
taxes to the extent such costs and taxes exceed the amount, if any, by
which the proceeds of such disposition or repayment exceed the lesser of
the amounts referred to in the preceding such clauses (x) and (y) of
this clause (4), plus (5) so long as the Designation thereof was treated
as a Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary as to which a Revocation has occurred in
accordance with Section 4.17, the lesser of (x) the Fair Market Value of
the Investment of the Company or any Restricted Subsidiary in such
Subsidiary as of the date of such Revocation or (y) the Designation
Amount with respect to such Designation, plus (6) to the extent not
included in the computation of Consolidated Net Income, the amount of
cash dividends or cash distributions (other
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than to permit the Company or a Restricted Subsidiary to pay taxes)
received from any Unrestricted Subsidiary since the Issue Date, minus
(7) the greater of (x) $0 and (y) the Designation Amount (measured as of
the date of Designation) with respect to any Subsidiary of the Company
which has been Designated as an Unrestricted Subsidiary after the Issue
Date in accordance with Section 4.17, plus (8) $5.0 million.
For purposes of the preceding clause (c), the value of the aggregate net
proceeds received by the Company upon the issuance of Capital Stock either upon
the conversion of convertible Indebtedness or in exchange for outstanding
Indebtedness or upon the exercise of options, warrants or rights will be the net
proceeds received upon the issuance of such Indebtedness, options warrants or
rights plus the incremental amount received by the Company upon the conversion,
exchange or exercise thereof. For purposes of this covenant, the amount of any
Restricted Payment, if other than cash, shall be the Fair Market Value of the
asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment.
The foregoing provisions will not prevent (i) the payment of any
dividend or distribution on, or redemption of, Equity Interests within 60 days
after the date of declaration of such dividend or distribution or the giving of
formal notice of such redemption, if at the date of such declaration or giving
of such formal notice such payment or redemption would comply with the
provisions of this Indenture; (ii) the purchase, redemption, retirement or other
acquisition of any Equity Interests in exchange for, or out of the net cash
proceeds of the substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of, Qualified Equity Interests of the Company or a
substantially concurrent capital contribution to the Company; provided, that any
such net cash proceeds and the value of any Qualified Equity Interests issued in
exchange for such retired Equity Interests are excluded from clause (c)(2) of
the preceding paragraph; (iii) the purchase, redemption, retirement, defeasance
or other acquisition of Subordinated Indebtedness, or any other payment thereon,
made in exchange for, or out of the net cash proceeds of (x) a substantially
concurrent issue and sale (other than to a Subsidiary of the Company) of,
Qualified Equity Interests of the Company or a substantially concurrent capital
contribution to the Company; provided, that any such net cash proceeds and the
value of any Qualified Equity Interests issued in exchange for Subordinated
Indebtedness are excluded from clauses (c)(2) and (c)(3) of the preceding
paragraph or (y) a substantially concurrent issue and sale of other Subordinated
Indebtedness having no stated maturity for the payment of principal thereof
prior to the 91st day following the final stated maturity of the Securities;
(iv) the distribution to be made to NHO for distribution to GCG out of the net
proceeds from the issuance of the Securities (as described under "Use of
Proceeds" in the Offering Memorandum); (v) Permitted Equity Incentive Payments;
(vi) payments in connection with Permitted Partnership Transactions; (vii)
distributions, loans or advances to NHO for distribution to
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GCG to fund payments, or payments made on behalf of GCG, pursuant to the
terms of the Separation Agreements, as the same may be amended, modified or
replaced in accordance with this Indenture; (viii) for any tax period in which
the Company is included in any consolidated, combined, affiliated or unitary
group of GCG or NHO or, in the case of payments described in clause (y) of the
definition of Related Taxes, for any tax period to which the Tax Sharing
Agreement applies, payments to GCG or NHO in an amount equal to the amount of
Related Taxes for such period, less the aggregate amount of such Taxes paid or
to be paid directly by the Company or its Subsidiaries for such period and less
any refunds of such Taxes (in respect of such period or any prior period (or
portion thereof) beginning after the Issue Date) that were received by GCG or
NHO and were not repaid to the Company; (ix) the making of distributions, loans
or advances to NHO for distribution to GCG to permit GCG to (A) pay its costs
(including all professional fees and expenses) incurred to comply with its
reporting obligations under federal or state laws, including any reports filed
with respect to the Securities Act, Exchange Act or the respective rules and
regulations promulgated thereunder, (B) make payments in respect of its
directors and officers insurance coverage and as customary compensation to the
independent directors of GCG, (C) make payments in respect of indemnification
obligations under GCG's charter or by-laws or pursuant to written agreements
owing (1) to directors and officers of GCG or (2) to employees or other Persons
to the extent, in the case of this sub-clause (2), such payments relate to
services performed by any such Person for the Company and its Subsidiaries, (D)
pay all reasonable fees and expenses payable by it and relating to the
Industrial Chemicals Business (as defined in the Offering Memorandum) in
connection with the Spin-Off (as defined in the Offering Memorandum), (E) pay
amounts due pursuant to the Management Agreement in an amount not to exceed $1.5
million per year (subject to increase as provided for therein on the Issue Date)
and other fees payable under the Management Agreement to the extent approved by
disinterested directors of GCG or the Company in accordance with Section 4.03,
(F) pay its other operational expenses (other than Taxes) incurred in the
ordinary course of business to the extent such expenses relate to acting as a
holding company for the Company and its Subsidiaries or to the operation of the
Company and its Subsidiaries; (x) any Investment constituting a Restricted
Payment in any Person that is made out of the net cash proceeds received by the
Company either as (x) a substantially concurrent capital contribution or (y) a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of Qualified Equity Interests of the Company, provided that such net
cash proceeds are excluded from clause (c)(2) of the preceding paragraph; and
(xi) any purchase, redemption, repurchase, defeasance or other acquisition or
retirement of Subordinated Indebtedness to the extent required by the agreement
governing such Subordinated Indebtedness, following the occurrence of a Change
of Control (or other similar event described therein as a "change of control"),
but only if the Company shall have complied with Section 4.14 and, if required,
purchased all Securities tendered pursuant to the offer to repurchase all the
Securities required thereby, prior to purchasing or repaying such Subor-
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dinated Indebtedness; provided, however, that in the case of each of clauses
(ii), (iii), (v), (x) and (xi), no Default shall have occurred and be continuing
or would arise therefrom.
In determining the amount of Restricted Payments permissible
under this covenant, amounts expended pursuant to clauses (i), (v), (ix) (other
than subclause (D) thereof) and (xi) of the immediately preceding paragraph
shall be included as Restricted Payments and amounts expended pursuant to any
other clauses shall be excluded; provided, however, that amounts expended
pursuant to clause (ix) shall only be included as Restricted Payments to the
extent of 50% of such amounts, on an after tax basis, that have not been
deducted in arriving at Consolidated Net Income. The amount of any non-cash
Restricted Payment shall be deemed to be equal to the Fair Market Value thereof
at the date of the making of such Restricted Payment. For purposes of
determining compliance with Section 4.06, in the event that a Restricted Payment
meets the criteria of more than one of the exceptions described in clauses (i)
through (xi) above or is entitled to be made pursuant to the first paragraph of
this Section 4.06, the Company may, in its sole discretion, classify such
Restricted Payment in any manner that complies with this Section 4.06 at the
time of such Restricted Payment.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each such Restricted Subsidiary and the rights (charter and statutory) and
material franchises of the Company and the Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Restricted Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and
will not be, adverse in any material respect to the Holders; provided, further,
however, that a determination of the Board of Directors of the Company shall not
be required in the event of a merger of one or more Wholly Owned Restricted
Subsidiaries of the Company with or into another Wholly Owned Restricted
Subsidiary of the Company or another Person, if the surviving Person is a Wholly
Owned Restricted Subsidiary of the Company organized under the laws of the
United States or a State thereof or of the District of Columbia.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental
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charges levied or imposed upon the Company or any Restricted Subsidiary or upon
the income, profits or property of the Company or any Restricted Subsidiary and
(2) all lawful claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a material liability, or Lien upon the property, of
the Company or any Restricted Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of
its Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall, within 30 days of the occurrence thereof, give written notice to the
Trustee of such declaration, the status of such default or event and what action
the Company is taking or proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall, within 30 days of the occurrence thereof, deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or
leased to it or any Restricted Subsidiary and used or useful in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in normal condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 4.10 shall prevent the Company or any
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors or of the board of
directors of the Restricted Subsidiary concerned, or of an officer (or other
agent employed by the Company or of any Restricted Subsidiary) of the Company or
such Restricted Subsidiary having managerial responsibility for any such
property, desirable in the conduct of the business of the Company or any
Restricted Subsidiary, and if such discontinuance or disposal is not adverse in
any material respect to the Holders.
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(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, and workers' compensation
insurance.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, the certificate
shall describe all such Defaults or Events of Default, their status and the
action the Company is taking or proposes to take with respect thereto.
SECTION 4.12. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d)
of the Exchange Act, or any successor provision thereto, the Company shall file
with the SEC if permitted by SEC practice and applicable law and regulations, so
long as any Securities remain outstanding, the annual reports, quarterly reports
and other documents which the Company would have been required to file with the
SEC pursuant to such Section 13(a) or 15(d) (each, an "Exchange Act Report") or
any successor provision thereto if the Company were so subject, such documents
to be filed with the SEC on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company shall also in any event
(a) within 15 days of each Required Filing Date (whether or not permitted or
required to be filed with the SEC) (i) transmit (or cause to be transmitted) by
mail to all Holders, as their names and addresses appear in the Security
register, without cost to such Holders, and (ii) file with the Trustee, copies
of the annual reports, quarterly reports and other documents (without exhibits)
which the Company is required to file with the SEC pursuant to the preceding
sentence, or, if such filing is not so permitted (or, prior to the consummation
of the Exchange Offer, when the Company is not subject to Section 13(d) or 15(d)
of the Exchange Act), information and data of a similar nature, and (b) if,
notwithstanding the preceding sentence, filing such documents by the Company
with the SEC is not permitted by SEC practice or applicable law or regulations,
promptly upon written request supply copies of such documents to any Holder. In
addition, for so long as any Securities remain outstanding, until the completion
of the Exchange Offer or the effectiveness of a Shelf Regis-
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tration Statement, as the case may be, the Company will furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, and, to any beneficial holder of Securities, if not obtainable
from the SEC, information of the type that would be filed with the SEC pursuant
to the foregoing provisions, upon the request of any such holder. The Company
shall also comply with 'SS' 314(a) of the TIA.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company from paying
all or any portion of the principal of and/or interest, if any, on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.14. Change of Control.
(a) Following the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 30 days after the Change of Control Date, make
an Offer to Purchase all Securities then outstanding, and shall purchase all
Securities validly tendered, at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the Purchase Date (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant Interest
Payment Date). The Company's obligations may be satisfied if a third party makes
the Offer to Purchase in the manner, at the times and otherwise in compliance
with the requirements of this Indenture applicable to an Offer to Purchase made
by the Company and purchases all Securities validly tendered and not withdrawn
under such Offer to Purchase. Each Holder shall be entitled to tender all or any
portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its
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own Paying Agent, segregate and hold in trust as provided in Section 2.04, money
sufficient to pay the Purchase Price of all Securities or portions thereof so
accepted and (iii) deliver or cause to be delivered to the Trustee for
cancellation all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent (or the Company, if so acting) shall promptly mail or deliver
to Holders of Securities so accepted, payment in an amount equal to the Purchase
Price for such Securities, and the Trustee shall promptly authenticate and mail
or deliver to each Holder of Securities a new Security or Securities equal in
principal amount to any unpurchased portion of the Security surrendered as
requested by the Holder. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof.
(c) If the Company makes an Offer to Purchase, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable Federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed, and any violation of the provisions of this Indenture relating to such
Offer to Purchase occurring as a result of such compliance shall not be deemed a
Default or an Event of Default.
(d) The Trustee shall be under no obligation to ascertain the
occurrence of a Change of Control or to give notice with respect thereto. The
Trustee may conclusively assume, in the absence of written notice to the
contrary from the Company, that no Change of Control has occurred.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
The Company shall not, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
other Indebtedness of the Company.
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (b) make loans or advances to, or guaranty any
Indebtedness or other obliga-
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tions of, the Company or any other Restricted Subsidiary or (c) transfer any of
its properties or assets to the Company or any other Restricted Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i)
the Credit Facility as in effect on the Issue Date and any amendments,
restatements, renewals, replacements or refinancings thereof; provided, however,
that any such amendment, restatement, renewal, replacement or refinancing is not
materially more restrictive in the aggregate with respect to such encumbrances
or restrictions than those contained in the Credit Facility on the Issue Date,
as determined by the Board of Directors of the Company; (ii) applicable law;
(iii) any instrument governing Indebtedness or Equity Interests of an Acquired
Person acquired by the Company or any Restricted Subsidiary as in effect at the
time of such acquisition (except to the extent any such Indebtedness or Equity
Interests were Incurred by such Acquired Person in connection with, as a result
of or in contemplation of such acquisition); provided, however, that such
encumbrances and restrictions are not applicable to any Restricted Subsidiary,
or the properties or assets of any Restricted Subsidiary, other than the
Acquired Person; (iv)(A) non-assignment provisions that restrict in a customary
manner the subletting, assignment or transfer of any property or asset that is
subject to a lease, license or similar contract, or the assignment or transfer
of any lease, license or other contract, (B) customary provisions restricting
dispositions of real property interests set forth in any easement or similar
agreements of the Company or any Restricted Subsidiary or (C) restrictions on
cash or other deposits or net worth imposed by customers under agreements
entered into in the ordinary course of business; (v) Purchase Money Indebtedness
or Capital Lease Obligations permitted under Section 4.04 and Section 4.18 that
only imposes encumbrances and restrictions on the property so acquired; (vi) any
agreement for the sale or disposition of the Equity Interests or assets of any
Restricted Subsidiary; provided, however, that such encumbrances and
restrictions described in this clause (vi) are only applicable to such
Restricted Subsidiary or assets, as applicable, and any such sale or disposition
is made in compliance with Section 4.05 to the extent applicable thereto; (vii)
Permitted Refinancing Indebtedness permitted under clause (iv) of the second
paragraph of Section 4.04; provided, however, that such encumbrances and
restrictions contained in the agreements governing such Indebtedness are not
materially more restrictive in the aggregate than those contained in the
agreements governing the Indebtedness being refinanced immediately prior to such
refinancing, as determined by the Board of Directors of the Company; (viii) this
Indenture or contained in any other indenture governing debt securities that are
not materially more restrictive than those contained in this Indenture, as
determined by the Board of Directors of the Company or (ix) customary
restrictions contained in Indebtedness of a Restricted Subsidiary which is
permitted to be Incurred under this Indenture.
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SECTION 4.17. Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any Subsidiary
of the Company (other than GCSAP and its Subsidiaries or any Subsidiary which
owns Equity Interests in GCSAP or any of its Subsidiaries) as an "Unrestricted
Subsidiary" under this Indenture (a "Designation") only if:
(i) no Default shall have occurred and be continuing at the time
of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation,
the Company could Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the
first paragraph of Section 4.04; and
(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
Section 4.06 in an amount (the "Designation Amount") equal to the Fair
Market Value of the Investment of the Company and the Restricted
Subsidiaries in such Subsidiary on such date.
Neither the Company nor any Restricted Subsidiary shall at any
time (x) provide credit support for, subject any of its property or assets
(other than the Equity Interests of any Unrestricted Subsidiary) to the
satisfaction of, or guaranty, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary,
except for any non-recourse guaranty given solely to support the pledge by the
Company or any Restricted Subsidiary of the capital stock of any Unrestricted
Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall be automatically
deemed to be Unrestricted Subsidiaries.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time
of and after giving effect to such Revocation;
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(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture; and
(iii) any transaction (or series of related transactions) between
such Subsidiary and any of its Affiliates that occurred while such
Subsidiary was an Unrestricted Subsidiary would be permitted by Section
4.03 as if such transaction (or series of related transactions) had
occurred at the time of such Revocation.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company, delivered to the Trustee certifying compliance with
the foregoing provisions.
SECTION 4.18. Limitation on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, assume, incur, create or suffer to exist
any Liens of any kind against or upon any of their respective properties or
assets, whether owned on the Issue Date or thereafter acquired, or any proceeds
therefrom, to secure any Indebtedness (an "Initial Lien") unless
contemporaneously therewith effective provision is made, in the case of the
Company, to secure the Securities and all other amounts due under this
Indenture, equally and ratably with such Indebtedness (or, in the event that
such Indebtedness is subordinated in right of payment to the Securities, prior
to such Indebtedness) with a Lien on the same properties and assets securing
such Indebtedness for so long as such Indebtedness is secured by such Lien,
except for (i) Liens securing any Senior Indebtedness or any guaranty of Senior
Indebtedness by any Restricted Subsidiary and (ii) Permitted Liens. Any Lien
created in favor of the Securities pursuant hereto will be automatically and
unconditionally released and discharged upon (i) the unconditional release and
discharge of the Initial Lien to which it relates or (ii) any sale, exchange or
transfer to any Person that is not an Affiliate of the Company or any Restricted
Subsidiary of the property or assets secured by such Initial Lien, or of all of
the Equity Interests held by the Company and the Restricted Subsidiaries in, or
all or substantially all of the assets of, the Restricted Subsidiary whose
property or assets were the subject of such Lien, provided that, in the case of
this clause (ii), the provisions of Section 4.05 are complied with in connection
with such sale, exchange or transfer.
SECTION 4.19. Limitation on Lines of Business.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary, directly or indirectly, to, engage in any business other
than a Related Business.
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SECTION 4.20. Ownership of GCSAP.
The Company shall at all times maintain direct or indirect record
and beneficial ownership of not less than 51% of the Equity Interests and will
at all times remain as the Managing General Partner of GCSAP with rights and
duties under the GCSAP Partnership Agreement that are not materially adverse in
any respect from those in effect on the Issue Date from the perspective of
Holders. For so long as this covenant is complied with, GCSAP will be deemed a
Subsidiary of the Company for all purposes of this Indenture.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
The Company shall not consolidate with or merge with or into
(whether or not the Company is the Surviving Person) any other Person and the
Company shall not and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's and the Restricted Subsidiaries' properties
and assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries) to any Person in a single transaction or series of
related transactions, unless: (i) either (x) the Company shall be the Surviving
Person or (y) the Surviving Person (if other than the Company) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on all the Securities
and the performance and observance of every covenant of this Indenture and the
Registration Rights Agreement to be performed or observed on the part of the
Company; (ii) immediately thereafter, no Default shall have occurred and be
continuing; (iii) immediately after giving effect to any such transaction
including the Incurrence by the Company or any Restricted Subsidiary, directly
or indirectly, of additional Indebtedness (and treating any Indebtedness not
previously an obligation of the Company or any Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur, on a pro forma
basis after giving effect to such transaction as if it had occurred at the
beginning of the four quarter period immediately preceding such transaction for
which consolidated financial statements of the Company are available, at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under the
Consolidated Coverage Ratio of the first paragraph of Section 4.04; and (iv) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of
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Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.
Notwithstanding the foregoing clause (iii) of the immediately
preceding paragraph, any Restricted Subsidiary may consolidate with, merge into
or transfer all or part of its properties and assets to the Company.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries the Equity Interests of which constitute all or
substantially all the properties and assets of the Company shall be deemed to be
the transfer of all or substantially all the properties and assets of the
Company.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in Section 5.01 in which the Company is
not the Surviving Person and the Surviving Person is to assume all the
Obligations of the Company under the Securities, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture, such
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Company and the Company shall be discharged from
its Obligations under this Indenture and the Securities.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes
of this Indenture:
(a) failure to pay principal of (or premium, if any, on) any
Security when due (whether or not prohibited by the provisions of
Article Eight);
(b) failure to pay any interest on any Security when due,
continued for 30 days or more (whether or not prohibited by the
provisions of Article Eight);
(c) default in the payment of principal of or interest on any
Security required to be purchased pursuant to any Offer to Purchase
required by this Indenture when
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due and payable or failure to pay on the Purchase Date the Purchase
Price for any Security validly tendered pursuant to any Offer to
Purchase (whether or not prohibited by the provisions of Article Eight);
(d) failure to perform or comply with any of the provisions of
Section 4.20 and Section 5.01;
(e) subject to the last paragraph of this Section 6.01, failure
to perform any other covenant or agreement of the Company under this
Indenture or in the Securities;
(f) default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any of
the Restricted Subsidiaries having an outstanding principal amount of
$5.0 million or more individually or in the aggregate that have resulted
in the acceleration of the payment of such Indebtedness or failure by
the Company or any of the Restricted Subsidiaries to pay principal when
due at the stated maturity of any such Indebtedness;
(g) the rendering of a final judgment or judgments (not subject
to appeal) against the Company or any of the Restricted Subsidiaries in
an amount of $5.0 million or more (net of any amounts covered by
reputable and creditworthy insurance companies) which remain
undischarged or unstayed for a period of 60 days after the date on which
the right to appeal has expired;
(h) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law: (i) admits in writing its
inability to pay its debts generally as they become due; (ii) commences
a voluntary case or proceeding; (iii) consents to the entry of an order
for relief against it in an involuntary case or proceeding; (iv)
consents or acquiesces in the institution of a bankruptcy or insolvency
proceeding against it; (v) consents to the appointment of a Custodian of
it or for all or substantially all of its property; or (vi) makes a
general assignment for the benefit of its creditors, or any of them
takes any action to authorize or effect any of the foregoing; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company or
any Restricted Subsidiary in an involuntary case or proceeding; (ii)
appoints a Custodian of the Company or any Restricted Subsidiary for all
or substantially all of its property; or (iii) orders the liquidation of
the Company or any Restricted Subsidiary; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal,
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then the Event of Default hereunder by reason of the entry of such order
or decree shall be deemed to have been cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A Default under clause (e) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the outstanding Securities notify the Company and the
Trustee, of the Default in writing and the Company does not cure the Default
continued for 45 days or more after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default." Such notice shall be given by the Trustee if so requested
by the Holders of at least 25% in principal amount of the Securities then
outstanding. When a Default is cured, it ceases.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than
an Event of Default specified in clause (h) or (i) of Section 6.01 with respect
to the Company) occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of the outstanding Securities by notice in
writing to the Company (and to the Trustee if given by the Holders) may declare
the unpaid principal of (and premium, if any) and accrued interest to the date
of acceleration on all outstanding Securities to be due and payable immediately
and, upon any such declaration, such principal amount (and premium, if any) and
accrued interest, notwithstanding anything contained in this Indenture or the
Securities to the contrary, shall become immediately due and payable; provided,
however, that so long as the Credit Facility shall be in full force, if an Event
of Default shall have occurred and be continuing (other than an Event of Default
specified in clause (h) or (i) of Section 6.01 with respect to the Company), the
Securities shall not become due and payable until the earlier to occur of (x)
five Business Days following delivery of a written notice by the Trustee of such
acceleration of the Securities to the agent under the Credit Facility and (y)
the acceleration (ipso facto or otherwise) of any Indebtedness under the Credit
Facility.
If an Event of Default specified in clause (h) or (i) of Section
6.01 with respect to the Company occurs, all unpaid principal of (and premium,
if any) and accrued interest on all outstanding Securities shall ipso facto
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
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Notwithstanding the foregoing, in the event of a declaration of
acceleration in respect of the Securities because an Event of Default specified
in clause (f) of Section 6.01 shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or paid or such
Event of Default shall have been cured or waived by the holders of such
Indebtedness and written notice of such discharge, cure or waiver, as the case
may be, shall have been given to the Trustee by the Company or by the requisite
holders of such Indebtedness or a trustee, fiduciary or agent for such holders,
within 60 days after such declaration of acceleration in respect of the
Securities and (a) no Person shall have commenced judicial proceedings to
foreclose upon assets of the Company or any of the Restricted Subsidiaries or
shall have exercised any right under applicable law or applicable security
documents to take ownership of any of such assets in lieu of foreclosure and (b)
no other Event of Default with respect to the Securities shall have occurred
which has not been cured or waived during such 60-day period.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of and interest on the Securities which has become
due solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
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SECTION 6.04. Waiver of Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (a), (b) and (c) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
10.02. The Company shall deliver to the Trustee an Officers' Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this Section
6.04 shall be in lieu of 'SS' 316(a)(1)(B) of the TIA and such 'SS' 316(a)(1)(B)
of the TIA is hereby expressly excluded from this Indenture and the Securities,
as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
that may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss
or expense caused by taking such action or following such direction. This
Section 6.05 shall be in lieu of 'SS' 316(a)(1)(A) of the TIA, and such
'SS' 316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture
and the Securities, as permitted by the TIA.
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SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and premium, if any or interest
on a Security, on or after the respective due dates expressed in the Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful, interest
on overdue installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover the costs
and ex-
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penses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Securities), its creditors or its property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders of Senior Indebtedness to the extent required
by Article 8 hereof;
Third: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Fourth: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of
such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
conforming to the requirements of this Indenture; however, in the case
of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to the provisions of Section 11.05. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence
of any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney.
(i) The Trustee shall not be deemed to have notice of any Event
of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless the Trustee shall have received written notice thereof
at the Corporate Trust Office of the Trustee, and such notice references
the Securities and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee,
subject to Section 7.10 hereof. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
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SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and
the Trustee knows of such Defaults or Events of Default, the Trustee shall mail
to each Securityholder notice of the Default or Event of Default within 30 days
after the occurrence thereof or 30 days after it is known to a Trust Officer or
written notice of it is received by the Trustee. Except in the case of a Default
or an Event of Default in payment of principal of or interest on any Security or
a Default or Event of Default in complying with Section 5.01, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of
Securityholders. This Section 7.05 shall be in lieu of the proviso to ss. 315(b)
of the TIA and such proviso to 'SS' 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA 'SS' 313(a), within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such May 15 that complies
with TIA 'SS' 313(a). The Trustee also shall comply with TIA 'SS' 313(b), (c)
and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, dis-
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bursements and expenses of its agents and counsel) incurred or made by it in
addition to the compensation for its services except any such disbursements,
expenses and advances as may be attributable to the Trustee's negligence or bad
faith. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents, accountants, experts and counsel and any
taxes or other expenses incurred by a trust created pursuant to Section 9.01
hereof.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence, bad faith or willful
misconduct. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. However, the failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense (and may employ its own counsel) at the Company's
expense; provided, however, that the Company's reimbursement obligation with
respect to counsel employed by the Trustee will be limited to the reasonable
fees and expenses of such counsel.
The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee as a result of the violation of this Indenture by the
Trustee.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities or the Purchase Price or redemption price of any Securities to be
purchased pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the
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resignation or removal of any Trustee, the discharge of the Company's
obligations pursuant to Article Nine and any rejection or termination under any
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(c) a custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA 'SS''SS' 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA 'SS' 310(b), the Trustee and the Company shall comply with the provisions
of TIA 'SS' 310(b); provided, however, that there shall be excluded from the
operation of TIA 'SS' 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth
in TIA 'SS' 310(b)(1) are met. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, the Trustee
shall resign immediately in the manner and with the effect hereinbefore
specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA 'SS' 311(a), excluding any
creditor relationship listed in TIA 'SS' 311(b). A Trustee who has resigned or
been removed shall be subject to TIA 'SS' 311(a) to the extent indicated
therein.
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ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
all Securities shall be issued subject to the provisions of this Article Eight;
and each person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that all payments
of the principal of, premium of, if any, and interest on and other Obligations
relating to the Securities by or on behalf of the Company shall, to the extent
and in the manner set forth in this Article Eight, be subordinated and junior in
right of payment to the prior payment in full in cash of all amounts payable
under Senior Indebtedness.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment (excluding any payment in, or
distribution of, Permitted Junior Securities and excluding any payment from
funds held in trust for the benefit of the Holders pursuant to Article Nine (a
"Defeasance Trust Payment")) by or on behalf of the Company or any Subsidiary of
the Company of principal of, premium, if any, or interest on, or other
Obligations with respect to, the Securities, whether pursuant to the terms of
the Securities, upon acceleration, pursuant to an Offer to Purchase, redemption,
defeasance, other purchase or otherwise, will be made if, at the time of such
payment, there exists a default in the payment of all or any portion of the
Obligations on any Designated Senior Indebtedness, whether at maturity, on
account of mandatory prepayment, acceleration or otherwise, and such default
shall not have been cured or waived or the benefits of this sentence waived by
or on behalf of the holders of such Designated Senior Indebtedness. In addition,
during the continuance of any event of default (other than a payment default
described in the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Trustee of written notice (a "Payment
Blockage Notice") from the holder or holders of such Designated Senior
Indebtedness or the trustee or agent acting on behalf of the holders of such
Designated Senior Indebtedness, then, unless and until such event of default has
been cured or waived or has ceased to exist or such Designated Senior
Indebtedness has been discharged or repaid in full in cash or the benefits of
these provisions have been waived by the holders of such Designated Senior
Indebtedness, no direct or indirect payment (excluding any payment in, or
distribution of, Permitted Junior Securities and excluding any Defeasance Trust
Payment) will be made by or on behalf of the Company of
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principal of, premium, if any, or interest on, or other Obligations with respect
to, the Securities, to such Holders, during a period (a "Payment Blockage
Period") commencing on the date of receipt of such notice by the Trustee and
ending 179 days thereafter.
Notwithstanding anything in the subordination provisions of this
Indenture or the Securities to the contrary, (x) in no event will a Payment
Blockage Period extend beyond 179 days from the date the Payment Blockage Notice
in respect thereof was given, (y) there shall be a period of at least 181
consecutive days in each 360-day period when no Payment Blockage Period is in
effect and (z) not more than one Payment Blockage Period may be commenced with
respect to the Securities during any period of 365 consecutive days. No event of
default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period (to the extent the holder of Designated
Senior Indebtedness, or trustee or agent, giving notice commencing such Payment
Blockage Period had knowledge of such existing or continuing event of default)
may be, or be made, the basis for the commencement of any other Payment Blockage
Period by the holder or holders of such Designated Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Senior Indebtedness,
whether or not within a period of 365 consecutive days, unless such event of
default has been cured or waived for a period of not less than 90 consecutive
days.
(b) In the event that, notwithstanding the foregoing, any payment
or distribution shall be received by the Trustee or any Holder when such payment
or distribution is prohibited by Section 8.02(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Designated Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Designated Senior Indebtedness may have been issued, as their
respective interests may appear.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of
the Company of any kind or character, whether in cash, property or securities
(excluding any payment in, or distribution of, Permitted Junior Securities and
excluding Defeasance Trust Payment), upon any dissolution or winding-up or total
liquidation or reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership or other proceedings, all Senior
Indebtedness shall first be paid in full in cash before the Holders or the
Trustee on behalf of such Holders shall be entitled to receive any payment by or
on behalf of the Company of the principal of, premium, if any, or interest on,
or other Obligations with respect to, the Securities, or any payment by or on
behalf of the Company to acquire any of the Securities or related Obligations
for cash, property or securities, or any payment or distribution by or on behalf
of the Company with respect to the Securities of any cash,
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property or securities (excluding any payment in, or distribution of, Permitted
Junior Securities and excluding any Defeasance Trust Payment). Before any
payment may be made by, or on behalf of, the Company of the principal of,
premium, if any, or interest on, or other Obligations with respect to the
Securities upon any such dissolution or winding-up or total liquidation or
reorganization or in bankruptcy, insolvency, receivership or other proceedings,
any payment in, or distribution of, assets or securities of the Company of any
kind or character, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment), to which the Holders or the Trustee on their behalf
would be entitled, but for the subordination provisions of this Indenture, shall
be made by the Company or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Senior Indebtedness (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full in cash after giving
effect to any prior or concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment in, or distribution of, Permitted Junior
Securities and excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Securities at a time when such payment or distribution
is prohibited by Section 8.03(a) and before all obligations in respect of Senior
Indebtedness are paid in full in cash, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders)
or their respective representatives, or to the trustee or trustees or agent or
agents under any indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be
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deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 8.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment in cash satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company made on such Senior Indebtedness until the
principal of and interest on the Securities shall be paid in full in cash; and,
for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee on their behalf would be entitled
except for the provisions of this Article Eight, and no payment over pursuant to
the provisions of this Article Eight to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee on their behalf shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of this
Article Eight are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Eight shall have been applied, pursuant to the provisions of this
Article Eight, to the payment of all amounts payable under Senior Indebtedness,
then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Senior Indebtedness.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Holder of any Security or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the
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rights, if any, under this Article Eight of the holders of the Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article Eight shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due and
payable prior to their stated maturity pursuant to Section 6.01 or to pursue any
rights or remedies hereunder; provided, however, that all Senior Indebtedness
then due and payable shall first be paid in full in cash before the Holders of
the Securities or the Trustee are entitled to receive any direct or indirect
payment from the Company of principal of or interest on the Securities.
SECTION 8.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article Eight. The Trustee shall not be charged with knowledge of the
existence of any event of default with respect to any Senior Indebtedness or of
any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of the Company,
or by a holder of Senior Indebtedness or trustee or agent therefor; and prior to
the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided, however, that
if the Trustee shall not have received the notice provided for in this Section
8.06 at least two Business Days prior to the date upon which by the terms of
this Indenture any moneys shall become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any
Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Company and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.06 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eight, the Trustee may request
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such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article Eight, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred
to in this Article Eight, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Eight.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Eight with respect to any Senior Indebtedness
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eight, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Section 8.03(b)). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article Eight or otherwise. Each Paying Agent shall be subject to the same
obligations under this Article Eight as is the Trustee.
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SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provisions of this Article Eight are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.
SECTION 8.10. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Eight, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the filing of a claim for the unpaid balance
of its or his Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article Eight
shall not be construed as preventing the occurrence of an Event of Default
specified in clauses (a), (b) or (c) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in
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this Article Eight or the obligations hereunder of the Holders of the Securities
to the holders of Senior Indebtedness, do any one or more of the following: (a)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness or any instrument evidencing the same or
any agreement under which Senior Indebtedness is outstanding or secured; (b)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust for
Securityholders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Article Nine shall be
for the sole benefit of the Holders and shall not be subject to this Article
Eight.
Nothing contained in this Article Eight or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Sections 8.02 and 8.03, from making payments of principal of and interest on
the Securities or from depositing with the Trustee any moneys for such payments
or from effecting a termination of the Company's obligations under the
Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.02(b) or in Section 8.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event
of Default, the Company shall promptly notify holders of the Designated Senior
Indebtedness of the acceleration.
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ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
Subject to the provisions of Article Eight, the Company may
terminate its substantive obligations in respect of the Securities by delivering
all outstanding Securities to the Trustee for cancellation and paying all sums
payable by it on account of principal of, premium, if any and interest on all
Securities or otherwise. In addition to the foregoing, subject to the provisions
of Article Eight with respect to the creation of the defeasance trust provided
for in the following clause (i), the Company may, provided that no Default has
occurred and is continuing or would arise therefrom (or, with respect to a
Default with respect to the Company specified in Section 6.01(h) or (i), occurs
at any time on or prior to the 91st calendar day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until
after such 91st day)) under this Indenture and provided that no default under
any Senior Indebtedness would result therefrom, terminate its substantive
obligations in respect of Article Four (other than Sections 4.01, 4.02, and
4.07) and Article Five hereof and any Event of Default specified in Section 6.01
(c), (d), (e), (f) or (g) by (i) depositing with the Trustee, under the terms of
an irrevocable trust agreement, money or United States Government Obligations
sufficient (without reinvestment) to pay all remaining Indebtedness on the
Securities to redemption or maturity, as the case may be, (ii) delivering to the
Trustee either an Opinion of Counsel or a ruling directed to the Trustee from
the Internal Revenue Service to the effect that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and termination of obligations, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 9.01 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and (iv) delivering to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
compliance with all conditions precedent provided for herein. In addition,
subject to the provisions of Article Eight with respect to the creation of the
defeasance trust provided for in the following clause (i), the Company may,
provided that no Default has occurred and is continuing or would arise therefrom
(or, with respect to a Default with respect to the Company specified in Section
6.01(h) or (i), occurs at any time on or prior to the 91st calendar day after
the date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st day)) under this Indenture and provided
that no default under any Senior Indebtedness would arise therefrom, terminate
all of its substantive obligations in respect of the Securities (including its
obligations to pay the principal of and interest on the
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Securities) by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or United States Government Obligations
sufficient (without reinvestment) to pay all remaining Indebtedness on the
Securities to redemption or maturity, as the case may be, (ii) delivering to the
Trustee either a ruling directed to the Trustee from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and termination of
obligations or an Opinion of Counsel addressed to the Trustee based upon such a
ruling or based on a change in the applicable Federal tax law since the date of
this Indenture to such effect, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 9.01 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act and
(iv) delivering to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating compliance with all conditions precedent provided for
herein.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12 and 2.13.
4.02, 7.07, 7.08, 9.03 and 9.04 shall survive until the Securities are no longer
outstanding. Thereafter the Company's obligations in Sections 7.07, 9.03 and
9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 9.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
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SECTION 9.03. Repayment to Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay
to the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years. After
payment to the Company, Securityholders entitled to money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person and all liability of the Trustee or Paying Agent
with respect to such money shall thereupon cease.
SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 9.01 until
such time as the Trustee is permitted to apply all such money or United States
Government Obligations in accordance with Section 9.01; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or United States Government Obligations held by the
Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company, when authorized by a resolution of their respective
Boards of Directors, and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
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(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit
or rights to the Holders;
(f) to make any change that does not adversely affect the rights
of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(h) to secure the Securities pursuant to the requirements of
Section 4.18 or otherwise.
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company when authorized by a
resolution of their respective Boards of Directors, and the Trustee may amend or
supplement this Indenture or the Securities with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
(including consents obtained in connection with a tender offer or exchange offer
for the Securities). Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Securities (including consents obtained in
connection with a tender offer or exchange offer for the Securities) may waive
compliance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(a) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional redemption
or repurchase provisions of any Security or this Indenture in a manner
adverse to the Holders of the Securities;
(b) reduce the principal amount (or premium) of any Security;
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(c) reduce the rate of or extend the time for payment of interest
on any Security;
(d) change the place or currency of payment of the principal of
(or premium) or interest on any Security;
(e) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or
this Section 10.02 (other than to add sections of this Indenture or the
Securities which may not be amended, supplemented or waived without the
consent of each Securityholder affected);
(f) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any
Default;
(g) waive a Default in the payment of the principal of or
interest on or redemption or purchase payment with respect to any
Security (except a rescission of acceleration of the Securities by the
Holders as provided in Section 6.02 and a waiver of the payment default
that resulted from such acceleration);
(h) modify the ranking or priority of the Securities or modify
the definition of Senior Indebtedness or amend or modify any of the
provisions of Article Eight in any manner adverse to the Holders; or
(i) modify the provisions relating to any Offer to Purchase
required pursuant to Section 4.05 or 4.14 in a manner materially adverse
to the Holders affected thereby.
An amendment under this Section 10.02 may not make any change
under Article Eight hereof that adversely affects in any material respect the
rights of any holder of Senior Indebtedness then outstanding unless the holders
of such Senior Indebtedness (or any group or representative thereof authorized
to give a consent) shall have consented to such change.
It shall not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail
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such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such amendment, supplement or waiver.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 120 days
after such record date (except as to any supplemental indenture, agreement or
instrument or waiver entered into, or any other action taken in respect of such
consent, prior to the expiration of such 120 day period).
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (a) through (j) of Section 10.02. In that case the amendment, supplement
or waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
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SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee shall (if required by the Company and in accordance with
the specific direction of the Company) require the Holder of the Security to
deliver it to the Trustee. The Trustee shall (if required by the Company and in
accordance with the specific direction of the Company) place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Security shall not affect the validity and effect of
such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee shall execute any such amendment, supplement or waiver which does not
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise. If such amendment, supplement or waiver adversely
affects the Trustee's rights, duties or immunities under the Indenture, the
Trustee may, but need not sign such amendment, supplement or waiver.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA 'SS''SS' 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included unless
expressly excluded by this
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Indenture) are a part of and govern this Indenture, whether or not physically
contained herein.
SECTION 11.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company:
General Chemical Industrial Products Inc.
Liberty Lane
Hampton, New Hampshire 03842
Attention: Stewart Fisher
Facsimile: (973) 515-1997
Telephone: (973) 515-3253
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York
Attention: George E. B. Maguire, Esq.
Facsimile: (212) 909-6072
Telephone: (212) 909-6836
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if to the Trustee:
U.S. Bank Trust National Association
111 E. Wacker Drive
Suite 3000
Chicago, IL 60601
Attention: Corporate Trust Administration
Facsimile: (312) 228-9401
Telephone: (312) 229-9418
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid,
to a Holder including any notice delivered in connection with TIA 'SS' 310(b),
TIA 'SS' 313(c), TIA 'SS' 314(a) and TIA 'SS' 315(b), shall be mailed to him at
his address as set forth on the Security Register and shall be sufficiently
given to him if so mailed within the time prescribed. To the extent required by
the TIA, any notice or communication shall also be mailed to any Person
described in TIA 'SS' 313(c).
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of regular mail service, or
by reason of any other cause, it shall be impossible to mail notice of any event
as required by any provision of this Indenture, then such notification as shall
be made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.
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SECTION 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA 'SS' 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA 'SS' 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory
to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to
the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with except that, in the case of
any such application or request as to which the furnishing of such
documents is specifically required by any provisions of this Indenture
relating to such particular application or request, no additional
certificate or opinion need be furnished.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 4.11) shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, 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
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(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 11.07. Governing Law.
The laws of the State of New York shall govern this Indenture and
the Securities without regard to principles of conflicts of law.
SECTION 11.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company or any
of its Affiliates, as such under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability, which waiver and release are part of the consideration for
issuance of the Securities.
SECTION 11.09. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.10. Counterpart Originals.
The parties may sign any number of counterparts of this
Indenture. Each signed counterparts shall be an original, but all of them
together represent the same agreement.
SECTION 11.11. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
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SECTION 11.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[SIGNATURE PAGES FOLLOW]
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S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
By: __________________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Trustee
By: __________________________________________
Name:
Title:
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EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000 FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND, IN
A-1
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THE CASE OF THE FOREGOING CAUSE (E), A CERTIFICATE OF TRANSFER (A FORM OF WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE) COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-2
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GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
10 5/8% SENIOR SUBORDINATED NOTE
DUE MAY 1, 2009, SERIES A
CUSIP NO.:[ ]
NO. [ ] $[ ]
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC., a Delaware corporation
(the "Company", which term includes any successor corporation), for value
received promises to pay to [ ] or registered assigns, the principal sum of [ ]
Dollars, on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing on
November 1, 1999.
Interest Record Dates: April 15 and October 15
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
A-3
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
By: ____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
DATED: April 30, 1999
A-4
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 5/8% Senior Subordinated Notes due May 1,
2009, Series A, described in the within-mentioned Indenture.
DATED: April 30, 1999
U.S. BANK NATIONAL TRUST ASSOCIATION,
as Trustee
By: ________________________________
Authorized Signatory
A-5
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(REVERSE OF SECURITY)
GENERAL CHEMICAL INDUSTRIAL PRODUCTS, INC.
10 5/8% SENIOR SUBORDINATED NOTE
DUE MAY 1, 2009, SERIES A
1. INTEREST.
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. Cash interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from April 30, 1999. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing November 1,
1999. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are cancelled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company shall
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by wire transfer
of Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. PAYING AGENT AND REGISTRAR.
Initially, U.S. Bank Trust National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar
A-6
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<PAGE>
without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Paying Agent or
Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
April 30, 1999 (the "Indenture"), by and between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities of
the Company designated as its 10 5/8% Senior Subordinated Notes due 2009, Series
A (the "Initial Securities"), limited (except as otherwise provided in the
Indenture) in aggregate principal amount to $100,000,000, which may be issued
under the Indenture. The Securities include the Initial Securities, the Private
Exchange Securities (as defined in the Indenture) and the Unrestricted
Securities (as defined below) issued in exchange for the Initial Securities
pursuant to the Registration Rights Agreement. The Initial Securities, the
Private Exchange Securities and the Unrestricted Securities are treated as a
single class of securities under the Indenture. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. 'SS''SS' 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture (except as otherwise
indicated in the Indenture) until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which the Indenture is
qualified under the TIA. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and holders of Securities are referred
to the Indenture and the TIA for a statement of them. The Securities are general
unsecured obligations of the Company. The Securities are subordinated in right
of payment to all Senior Indebtedness of the Company to the extent and in the
manner provided in the Indenture. Each Holder of a Security, by accepting a
Security, agrees to such subordination, authorizes the Trustee to give effect to
such subordination and appoints the Trustee as attorney-in-fact for such
purpose.
A-7
<PAGE>
<PAGE>
5. OPTIONAL REDEMPTION.
The Securities will be redeemable at the option of the Company,
in whole or in part, at any time on or after May 1, 2004, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the twelve-month
period beginning on May 1, of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
----------------------------- -----------
<S> <C>
2004.......................... 105.313%
2005.......................... 103.542%
2006.......................... 101.771%
2007 and thereafter........... 100.000%
</TABLE>
6. OPTIONAL REDEMPTION UPON EQUITY ISSUANCE.
In addition, at any time and from time to time on or prior to May
1, 2002, the Company may redeem in the aggregate up to 35% of the originally
issued aggregate principal amount of the Securities with the net cash proceeds
of one or more Equity Issuances, at a redemption price in cash equal to 110.625%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of redemption (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 65% of the originally issued aggregate
principal amount of the Securities must remain outstanding immediately after
giving effect to each such redemption (excluding any Securities held by the
Company or any of its Affiliates). Notice of any such redemption must be given
within 90 days after the date of the closing of the relevant Equity Issuance.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be re-
A-8
<PAGE>
<PAGE>
deemed. A new Security in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Security. On and after the Redemption Date, interest will cease to
accrue on Securities or portions thereof called for redemption so long as the
Company has deposited with the Paying Agent for the Securities funds in
satisfaction of the redemption price pursuant to the Indenture and the Paying
Agent is not prohibited from paying such funds to the Holders pursuant to the
terms of the Indenture.
8. CHANGE OF CONTROL OFFER.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. LIMITATION ON DISPOSITION OF ASSETS.
The Company is, subject to certain conditions, obligated to make
an Offer to Purchase Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the Interest
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the proceeds of certain asset dispositions.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
A-9
<PAGE>
<PAGE>
12. UNCLAIMED FUNDS.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Company at its written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
13. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Company may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or supplement the
Indenture and the Securities to, among other things, cure any ambiguity, defect
or inconsistency, to effect the assumption by such successor Person of the
obligations of the Company as specified in the Indenture, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder of a Security.
15. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must report
annually to the Trustee on compliance with such limitations.
A-10
<PAGE>
<PAGE>
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed
A-11
<PAGE>
<PAGE>
on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement, the Company will
be obligated upon the occurrence of certain events to consummate an exchange
offer pursuant to which the Holder of this Security shall have the right to
exchange this Security for a 10 5/8% Senior Subordinated Note due 2009, Series
B, of the Company (an "Unrestricted Security") which have been registered under
the Securities Act, in like principal amount and having terms identical in all
material respects to the Initial Securities. The Holders shall be entitled to
receive certain additional interest payments in the event such exchange offer is
not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
23. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture and
this Security thereof without regard to principles of conflicts of laws.
A-12
<PAGE>
<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint________________________________________________________
agent to transfer this security on the books of the company. The agent may
substitute another to act for him.
Dated:___________________ Signed:______________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
________________________________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE>
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
SECTION 4.05 [ ]
SECTION 4.14 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state
the amount: $_____________
Dated:___________________ Your Signature:____________________________
(Signed exactly as name
appears on the other side
of this Security)
Signature Guarantee:
________________________________________________________________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
<PAGE>
EXHIBIT B
[FORM OF SERIES B SECURITY]
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
10 5/8% SENIOR SUBORDINATED NOTE
DUE MAY 1, 2009, SERIES B
CUSIP NO.:[ ]
No. [ ] $[ ]
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC., a Delaware corporation
(the "Company", which term includes any successor corporation), for value
received promises to pay to [ ] or registered assigns, the principal sum of [ ]
Dollars, on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing on
November 1, 1999.
Interest Record Dates: April 15 and October 15
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
B-1
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
GENERAL CHEMICAL INDUSTRIAL
PRODUCTS INC.
BY:
-----------------------------
NAME:
TITLE:
BY:
-----------------------------
NAME:
TITLE:
DATED: [ ]
B-2
<PAGE>
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 5/8% Senior Subordinated Notes due May 1,
2009, Series B, described in the within-mentioned Indenture.
DATED: [ ]
U.S. BANK NATIONAL TRUST
ASSOCIATION, as Trustee
By:
----------------------------------
Authorized Signatory
B-3
<PAGE>
<PAGE>
(REVERSE OF SECURITY)
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
10 5/8% SENIOR SUBORDINATED NOTE
DUE MAY 1, 2009, SERIES B
1. INTEREST.
GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. Cash interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from April 30, 1999. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing November 1,
1999. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are cancelled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company shall
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by wire transfer
of Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. PAYING AGENT AND REGISTRAR.
Initially, U.S. Bank National Trust Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar
B-4
<PAGE>
<PAGE>
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Paying Agent or Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
April 30, 1999 (the "Indenture"), by and among the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities of
the Company designated as its 10 5/8% Senior Subordinated Notes due 2009, Series
B (the "Unrestricted Securities"), limited (except as otherwise provided in the
Indenture) in aggregate principal amount to $100,000,000, which may be issued
under the Indenture. The Securities include the 10 5/8% Senior Subordinated
Notes due 2009, Series A (the "Initial Securities"), the Private Exchange
Securities (as defined in the Indenture) and the Unrestricted Securities. The
Initial Securities, the Private Exchange Securities and the Unrestricted
Securities are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
'SS''SS' 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture
(except as otherwise indicated in the Indenture) until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and holders of
Securities are referred to the Indenture and the TIA for a statement of them.
The Securities are general unsecured obligations of the Company. The Securities
are subordinated in right of payment to all Senior Indebtedness of the Company
to the extent and in the manner provided in the Indenture. Each Holder of a
Security, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
B-5
<PAGE>
<PAGE>
5. OPTIONAL REDEMPTION.
The Securities will be redeemable at the option of the Company,
in whole or in part, at any time on or after May 1, 2004, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the twelve-month
period beginning on May 1 of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
----------------------------- ---------
<S> <C>
2004.......................... 105.313%
2005.......................... 103.542%
2006.......................... 101.771%
2007 and thereafter........... 100.000%
</TABLE>
6. Optional Redemption upon Equity Issuance.
In addition, at any time and from time to time on or prior to May
1, 2002, the Company may redeem in the aggregate up to 35% of the originally
issued aggregate principal amount of the Securities with the net cash proceeds
of one or more Equity Issuances at a redemption price in cash equal to 110.625%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of redemption (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 65% of the originally issued aggregate
principal amount of the Securities must remain outstanding immediately after
giving effect to each such redemption (excluding any Securities held by the
Company or any of its Affiliates). Notice of any such redemption must be given
within 90 days after the date of the closing of the relevant Equity Issuance.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be re-
B-6
<PAGE>
<PAGE>
deemed. A new Security in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Security. On and after the Redemption Date, interest will cease to
accrue on Securities or portions thereof called for redemption so long as the
Company has deposited with the Paying Agent for the Securities funds in
satisfaction of the redemption price pursuant to the Indenture and the Paying
Agent is not prohibited from paying such funds to the Holders pursuant to the
terms of the Indenture.
8. CHANGE OF CONTROL OFFER.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. LIMITATION ON DISPOSITION OF ASSETS.
The Company is, subject to certain conditions, obligated to make
an Offer to Purchase Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the Interest
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the proceeds of certain asset dispositions.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
B-7
<PAGE>
<PAGE>
12. UNCLAIMED FUNDS.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Company at its written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
13. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Company may be discharged from their obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or supplement the
Indenture and the Securities to, among other things, cure any ambiguity, defect
or inconsistency, to effect the assumption by such successor Person of the
obligation of the Company as specified in the Indenture, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder of a Security.
15. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must report
annually to the Trustee on compliance with such limitations.
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all
B-8
<PAGE>
<PAGE>
the Securities to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Securities may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee is
not obligated to enforce the Indenture or the Securities unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
B-9
<PAGE>
<PAGE>
22. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture and
this Security without regard to principles of conflicts of laws.
B-10
<PAGE>
<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this security to
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- ------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
------------------------------------------------------
agent to transfer this security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:_______________________________
(Signed exactly as name appears
on the other side of this security)
Signature Guarantee:
____________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE>
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
SECTION 4.05 [ ]
SECTION 4.14 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state
the amount: $_____________
DATED:___________________ YOUR SIGNATURE:________________________________
(SIGNED EXACTLY AS NAME APPEARS
ON THE OTHER SIDE OF THIS SECURITY)
SIGNATURE GUARANTEE:
_____________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
<PAGE>
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in the
case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN SECTION 2.16 OF THE INDENTURE.
C-1
<PAGE>
<PAGE>
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10 5/8% Senior Subordinated Notes due 2009
(the "Securities"), of General Chemical Industrial Products Inc.
----------------------------------------------------------------
This Certificate relates to $_______ principal amount of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[ ] has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require Registration under the
Securities Act of 1933, as amended (the "Act"), because*:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
[ ] Such Security is being transferred in reliance on Rule 144 under the
Act.
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the Registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of
D-1
<PAGE>
<PAGE>
Counsel to the effect that such transfer does not require Registration under the
Securities Act accompanies this certification.]
--------------------------------
[INSERT NAME OF TRANSFEROR]
By: ___________________________
[Authorized Signatory]
Date: ________________________
*Check applicable box.
D-2
<PAGE>
<PAGE>
EXHIBIT E
Form of Transferee Letter of Representation
General Chemical Industrial Products Inc.
c/o U.S. Bank National Trust Association
111 E. Wacker Drive
Chicago, IL 60601
Attention: Corporate Trust Administration
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 10 5/8% Senior Subordinated Notes due 2009 (the
"Securities") of General Chemical Industrial Products Inc. (the "Company"). Upon
transfer, the Securities would be registered in the name of the new beneficial
owner as follows:
Name: _____________________________________
Address: __________________________________
Taxpayer ID Number: _______________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or
E-2
<PAGE>
<PAGE>
any predecessor thereto) (the "Resale Restriction Termination Date") only (a) to
the Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, that is purchasing for its own account or for the account of
such an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE:
By:______________________________
E-2
<PAGE>
<PAGE>
EXHIBIT F
Form of Certificate to be
Delivered in Connection
with Regulation S Transfers
----------------, ----
GENERAL CHEMICAL INDUSTRIAL
PRODUCTS INC.
c/o U.S. BANK TRUST NATIONAL
ASSOCIATION
111 E. Wacker Drive
Chicago, IL 60601
RE: GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC.
(The "Company") 10 5/8% Senior Subordinated Notes Due
2009 (The "Securities")
----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable;
F-1
<PAGE>
<PAGE>
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: ___________________________
[Authorized Signatory]
F-2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the period ended March 31, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000929697
<NAME> THE GENERAL CHEMICAL GROUP INC.
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<PERIOD-TYPE> 3-MOS
<CASH> 1,249
<SECURITIES> 0
<RECEIVABLES> 61,432
<ALLOWANCES> 2,666
<INVENTORY> 22,571
<CURRENT-ASSETS> 91,957
<PP&E> 286,036
<DEPRECIATION> 144,136
<TOTAL-ASSETS> 250,544
<CURRENT-LIABILITIES> 54,105
<BONDS> 0
0
0
<COMMON> 224
<OTHER-SE> 67,296
<TOTAL-LIABILITY-AND-EQUITY> 250,544
<SALES> 61,472
<TOTAL-REVENUES> 61,472
<CGS> 51,268
<TOTAL-COSTS> 51,268
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,669
<INCOME-PRETAX> 1,309
<INCOME-TAX> 330
<INCOME-CONTINUING> 979
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 979
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
