EXHIBIT 10.1
FINANCING AGREEMENT
Dated as of August 13, 2004
by and among
METALLURG, INC.,
SHIELDALLOY METALLURGICAL CORPORATION,
as A Borrowers,
METALLURG HOLDINGS, INC.
as B Borrower,
EACH SUBSIDIARY LISTED AS AN "A GUARANTOR"
ON THE SIGNATURE PAGES HERETO,
as A Guarantors,
METALLURG, INC.,
as B Guarantor,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
MHR INSTITUTIONAL PARTNERS II LP,
as Collateral Agent and
as Administrative Agent
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS; CERTAIN TERMS............................................................................1
Section 1.01 Definitions........................................................................1
Section 1.02 Terms Generally...................................................................26
Section 1.03 Accounting and Other Terms........................................................27
Section 1.04 Time References...................................................................27
ARTICLE II THE LOANS...........................................................................................27
Section 2.01 Commitments.......................................................................27
Section 2.02 Making the Loans..................................................................28
Section 2.03 Repayment of Loans; Evidence of Debt..............................................29
Section 2.04 Interest..........................................................................30
Section 2.05 Reduction of Commitment; Prepayment of Loans......................................31
Section 2.06 Fees..............................................................................34
Section 2.07 [Intentionally Omitted]...........................................................35
Section 2.08 Taxes.............................................................................35
ARTICLE III LETTERS OF CREDIT..................................................................................37
Section 3.01 Letter of Credit Guaranty.........................................................37
Section 3.02 Participations....................................................................39
Section 3.03 Letters of Credit.................................................................41
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION...............................................................41
Section 4.01 Audit and Collateral Monitoring Fees..............................................41
Section 4.02 Payments; Computations and Statements.............................................42
Section 4.03 Sharing of Payments, Etc..........................................................43
Section 4.04 Apportionment of Payments.........................................................43
Section 4.05 Increased Costs and Reduced Return................................................45
Section 4.06 Joint and Several Liability of the A Borrowers....................................46
ARTICLE V CONDITIONS TO LOANS..................................................................................47
Section 5.01 Conditions Precedent to Effectiveness.............................................47
Section 5.02 Conditions Precedent to All Loans and Letters of Credit...........................51
ARTICLE VI REPRESENTATIONS AND WARRANTIES......................................................................52
Section 6.01 Representations and Warranties....................................................52
ARTICLE VII COVENANTS OF THE LOAN PARTIES......................................................................61
Section 7.01 Affirmative Covenants.............................................................61
Section 7.02 Negative Covenants................................................................70
Section 7.03 Financial Covenants...............................................................76
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL..........................................................77
Section 8.01 Collection of Accounts Receivable; Management of Collateral.......................77
Section 8.02 Accounts Receivable Documentation.................................................80
Section 8.03 Status of Accounts Receivable and Other Collateral................................80
Section 8.04 Collateral Custodian..............................................................80
- i -
ARTICLE IX EVENTS OF DEFAULT...................................................................................81
Section 9.01 Events of Default.................................................................81
ARTICLE X AGENTS ..............................................................................................85
Section 10.01 Appointment.......................................................................85
Section 10.02 Nature of Duties..................................................................86
Section 10.03 Rights, Exculpation, Etc..........................................................86
Section 10.04 Reliance..........................................................................87
Section 10.05 Indemnification...................................................................87
Section 10.06 Agents Individually...............................................................87
Section 10.07 Successor Agent...................................................................88
Section 10.08 Collateral Matters................................................................88
Section 10.09 Agency for Perfection.............................................................90
ARTICLE XI GUARANTY ...........................................................................................90
Section 11.01 Guaranty..........................................................................90
Section 11.02 Guaranty Absolute.................................................................91
Section 11.03 Waiver............................................................................92
Section 11.04 Continuing Guaranty; Assignments..................................................92
Section 11.05 Subrogation.......................................................................93
ARTICLE XII MISCELLANEOUS......................................................................................94
Section 12.01 Notices, Etc......................................................................94
Section 12.02 Amendments........................................................................95
Section 12.03 No Waiver; Remedies, Etc..........................................................95
Section 12.04 Expenses; Taxes; Attorneys' Fees..................................................96
Section 12.05 Right of Set-off..................................................................97
Section 12.06 Severability......................................................................97
Section 12.07 Assignments and Participations....................................................97
Section 12.08 Counterparts.....................................................................100
Section 12.09 GOVERNING LAW....................................................................100
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND
VENUE............................................................................101
Section 12.11 WAIVER OF JURY TRIAL, ETC........................................................101
Section 12.12 Consent by the Agents and Lenders................................................102
Section 12.13 No Party Deemed Drafter..........................................................102
Section 12.14 Reinstatement; Certain Payments..................................................102
Section 12.15 Indemnification..................................................................102
Section 12.16 MI as Agent for A Borrowers......................................................104
Section 12.17 Records..........................................................................104
Section 12.18 Binding Effect...................................................................104
Section 12.19 Interest.........................................................................104
Section 12.20 Confidentiality..................................................................106
Section 12.21 Integration......................................................................106
- ii -
SCHEDULE AND EXHIBITS
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Foreign Collateral Documents
Schedule 1.01(C) Existing L/Cs
Schedule 1.01(D) Inactive Subsidiaries
Schedule 6.01(e) Capitalization
Schedule 6.01(f) Litigation; Commercial Tort Claims
Schedule 6.01(i) ERISA Schedule 6.01(n) Permits
Schedule 6.01(o) Real Property
Schedule 6.01(q) Operating Lease Obligations
Schedule 6.01(r) Environmental Matters
Schedule 6.01(s) Insurance
Schedule 6.01(v) Bank Accounts
Schedule 6.01(w) Intellectual Property
Schedule 6.01(x) Material Contracts
Schedule 6.01(z) Employee and Labor Matters
Schedule 6.01(cc) Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN
Schedule 6.01(dd) Tradenames
Schedule 6.01(ee) Collateral Locations
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(e) Existing Investments
Schedule 7.02(k) Limitations on Dividends and Other Payment Restrictions
Schedule 8.01 Cash Management Banks and Cash Management Accounts
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Letter of Credit Application
Exhibit F Form of Letter of Assignment and Acceptance
Exhibit G Form of Borrowing Base Report
- iii -
FINANCING AGREEMENT
Financing Agreement, dated as of August 13, 2004, by and among
Metallurg, Inc., a Delaware corporation ("MI") and Shieldalloy Metallurgical
Corporation, a Delaware corporation ("SMC" and, together with MI, each an "A
Borrower" and collectively, the "A Borrowers"), each subsidiary of MI listed as
an "A Guarantor" on the signature pages hereto (each an "A Guarantor" and
collectively, the "A Guarantors"), Metallurg Holdings, Inc., a Delaware
corporation ("MHI" or the "B Borrower"), MI, in its capacity as the guarantor of
the B Borrower (in such capacity, the "B Guarantor"), the financial institutions
from time to time party hereto (each a "Lender" and collectively, the
"Lenders"), MHR Institutional Partners II LP, as collateral agent for the
Lenders and Fleet National Bank, as letter of credit issuer (in such capacity,
together with any successor collateral agent, the "Collateral Agent") and as
administrative agent for the Lenders (in such capacity, together with any
successor administrative agent, the "Administrative Agent" and together with the
Collateral Agent, each an "Agent" and collectively, the "Agents").
RECITALS
The A Borrowers have asked the Lenders to extend credit to the
A Borrowers consisting of term loans in the aggregate principal amount of
$31,000,000, which will include, among other things, a subfacility for the
issuance of letters of credit. The B Borrower has asked the Lenders to extend
credit to the B Borrower in an aggregate principal amount of $2,462,500. The
proceeds of the Term Loan A (as hereinafter defined) shall be used for general
working capital purposes of the A Borrowers, to provide credit support for
certain existing letters of credit issued prior to the date hereof and for the
issuance of new letters of credit, to make payments in connection with the TRC
Transaction (as hereinafter defined) and to pay fees and expenses related to
this Agreement. The proceeds of the Term Loan B (as hereinafter defined) shall
be used to fund a portion of the interest payable by the B Borrower in respect
of its 12.75% Senior Notes due 2008. The Lenders are severally, and not jointly,
willing to extend such credit to the A Borrowers and the B Borrower subject to
the conditions hereinafter set forth.
In consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"A Borrowers" has the meaning specified therefor in the
preamble hereto.
"A Guarantors" has the meaning specified therefor in the
preamble hereto.
"A Loan Party" means the A Borrowers and the A Guarantors.
-1-
"A Obligations" means the Obligations of the A Loan Parties.
"Account Debtor" means each debtor, customer or obligor in any
way obligated on or in connection with any Account Receivable.
"Account Receivable" means, with respect to any Person, any
and all rights of such Person to payment for goods sold and/or services
rendered, including accounts, general intangibles and any and all such rights
evidenced by chattel paper, instruments or documents, whether due or to become
due and whether or not earned by performance, and whether now or hereafter
acquired or arising in the future, and any supporting obligations in respect of
the foregoing and any proceeds arising from or relating to the foregoing.
"Action" has the meaning specified therefor in Section 12.12.
"Administrative Agent" has the meaning specified therefor in
the preamble hereto.
"Administrative Agent's Account" means an account at a bank
designated by the Administrative Agent from time to time as the account into
which the Loan Parties shall make all payments to the Administrative Agent for
the benefit of the Agents and the Lenders under this Agreement and the other
Loan Documents.
"Administrative Borrower" has the meaning specified therefor
in Section 12.16.
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender or the L/C Issuer be considered an "Affiliate" of any
Loan Party.
"After Acquired Property" has the meaning specified therefor
in Section 7.01(o).
"Agent" has the meaning specified therefor in the preamble
hereto.
"Agreement" means this Financing Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"ALPOCO" means The Aluminum Powder Company Ltd., a company
organized under the laws of the United Kingdom.
"Annual Plan" has the meaning specified therefor in Section
6.01(g)(ii)(A).
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the
Collateral Agent (and the Administrative
-2-
Agent, if applicable), in accordance with Section 12.07 hereof and substantially
in the form of Exhibit F hereto or such other form acceptable to the Collateral
Agent.
"Authorized Officer" means, with respect to any Person, the
chief executive officer, chief financial officer, president, senior executive
vice president or treasurer of such Person.
"B Borrower" has the meaning specified therefor in the
preamble hereto.
"B Guarantor" has the meaning specified therefor in the
preamble hereto.
"B Loan Party" means the B Borrower and the B Guarantor.
"B Obligations" means the Obligations of the B Loan Parties.
"Bankruptcy Code" means the United States Bankruptcy Code (11
U.S.C. 'SS' 101, et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Board of Directors" means, with respect to any Person, the
board of directors (or comparable managers) of such Person or any committee
thereof duly authorized to act on behalf of the board.
"Borrowers" means the A Borrowers and the B Borrower, each as
defined in the preamble hereto.
"Borrowing Base Report" means a report, with supporting
details satisfactory to the Administrative Agent, in the form of Exhibit G
attached hereto, with such changes thereto as are acceptable to the
Administrative Agent from time to time.
"Brazil Guaranty" means the Guaranty, dated the date hereof,
executed by CIF in favor of the Collateral Agent, as the same may be amended,
modified or supplemented from time to time.
"Brazil Collateral Documents" means each of the documents,
instruments and agreements listed on Part A of Schedule 1.01(B) attached hereto.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
to close.
"Capital Expenditures" means, with respect to any Person for
any period, the sum of (i) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or in a similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable during
such period, (ii) to the extent not covered by clause (i) above, the aggregate
of all expenditures by such Person
-3-
and its Subsidiaries during such period to acquire by purchase or otherwise the
business or fixed assets of, or the Capital Stock of, any other Person.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender, any Person controlling any Lender, or the L/C Issuer or the manner in
which any Lender, any Person controlling any Lender, or the L/C Issuer allocates
capital to any of its contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Capitalized Lease" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is (i)
required under GAAP to be capitalized on the balance sheet of such Person or
(ii) a transaction of a type commonly known as a "synthetic lease" (i.e. a lease
transaction that is treated as an operating lease for accounting purposes but
with respect to which payments of rent are intended to be treated as payments of
principal and interest on a loan for Federal income tax purposes).
"Capitalized Lease Obligations" means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash and Cash Equivalents" means all cash and any presently
existing or hereafter arising deposit account balances, certificates of deposit
or other financial instruments properly classified as cash equivalents under
GAAP.
"Cash Management Accounts" means those bank accounts of each
Borrower maintained at one or more Cash Management Banks listed on Schedule
8.01.
"Cash Management Agreements" means those certain cash
management service agreements in form and substance reasonably satisfactory to
the Administrative Agent, each of which is among one or more Borrowers, the
Administrative Agent and one of the Cash Management Banks.
"Cash Management Bank" has the meaning specified therefor in
Section 8.01.
"Change in Law" has the meaning specified therefor in Section
4.05(a).
-4-
"Change of Control" means each occurrence of any of the
following:
(a) the acquisition, directly or indirectly, by any person or
group (within the meaning of Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder of, beneficial ownership of more than 33% of the aggregate
outstanding voting power of the Capital Stock of MHI;
(b) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of MHI
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of MHI was approved by a vote
of at least a majority the directors of MHI then still in office who were either
directors at the beginning of such period, or whose election or nomination for
election was previously approved) cease for any reason to constitute a majority
of the Board of Directors of MHI;
(c) MHI shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting power of
the Capital Stock of MI (other than shares issued pursuant to the Metallurg,
Inc. Equity Compensation Plan as in effect on the Effective Date and as amended
from time to time with the prior written consent of the Required Lenders), free
and clear of all Liens (other than any Permitted Liens);
(d) except as otherwise permitted in Section 7.02(c)(i), MI
shall cease to have direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of 100% (or such lesser percentage of shares owned
as of the Effective Date) of the aggregate voting power of the Capital Stock of
each other A Loan Party, free and clear of all Liens (other than any Permitted
Liens);
(e) (i) any Loan Party consolidates or amalgamates with or
merges into another entity or conveys, transfers or leases all or substantially
all of its property and assets to another Person, except as otherwise permitted
in Section 7.02(c)(i), or (ii) any entity consolidates or amalgamates with or
merges into any Loan Party in a transaction pursuant to which the outstanding
voting Capital Stock of such Loan Party is reclassified or changed into or
exchanged for cash, securities or other property, other than any such
transaction described in this clause (ii) in which either (A) in the case of any
such transaction involving MHI, no person or group (within the meaning of
Section 13(d)(3) of the Exchange Act) other than a Permitted Holder has,
directly or indirectly, acquired beneficial ownership of more than 33% of the
aggregate outstanding voting Capital Stock of MHI or (B) in the case of any such
transaction involving a Loan Party other than MHI, MHI has direct or indirect
beneficial ownership of 100% (or, if less, the same percentage of shares owned
as of the Effective Date) of the aggregate voting power of all Capital Stock of
the resulting, surviving or transferee entity; or
(f) either Xxxxx Xxxxxxxxxxxxx or Xxxxxx Xxxxxxx shall cease
to be involved in the management of the business of MHI, and a successor
reasonably acceptable to the Collateral Agent and the Required Lenders is not
appointed on terms reasonably acceptable to the Collateral Agent and the
Required Lenders within 45 days of such cessation of involvement.
-5-
"CIF" means Companhia Industrial Fluminense, a corporation
organized under the laws of Brazil.
"CIF Authorized Transaction" means any distribution, purchase
or Disposition of assets by CIF in connection with its obligations under any of
the following agreements: (i) that certain agreement dated as of May 2, 2003
with Colorminas Calorificio e Mineracao S.A. ("Colorminas"), which entitles
Colorminas to receive 49.9% of the revenues from CIF's lithium feldspar
production line and, in the event of the termination of such agreement, to
receive the same percentage on the value of such line's assets; and (ii) an
agreement with Silver do Brasil Ltda. ("Silver"), which is in the process of
being formalized, and will entitle Silver to receive 15% of the revenues from
CIF's aluminum alloy production line and, in the event of the termination of
such agreement, to receive the same percentage of the value of such line's
assets. The rights of Colorminas and Silver under the foregoing agreements were
granted by CIF as compensation for, among other things, the cash or asset
contributions made by Colorminas and Silver to the referenced production lines
of CIF.
"Collateral" means all of the property and assets and all
interests therein and proceeds thereof now owned or hereafter acquired by any
Person upon which a Lien is granted or purported to be granted by such Person as
security for all or any part of the Obligations.
"Collateral Agent" has the meaning specified therefor in the
preamble hereto.
"Collateral Agent Advances" has the meaning specified therefor
in Section 10.08(a).
"Commitments" means, with respect to each Lender, such
Lender's, Term Loan A Commitment and Term Loan B Commitment.
"Concentration Account" means account number 00000000 of the
Administrative Borrower maintained at the Concentration Account Bank into which
cash received from the Cash Management Banks is wired as provided in Section
8.01.
"Concentration Account Agreement" means a Control Agreement
among the Administrative Borrower, the Concentration Account Bank and the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, with respect to the Concentration Account.
"Concentration Account Bank" means Fleet National Bank, or
such other Person or Persons as the Administrative Borrower (with the prior
written consent of the Administrative Agent) may designate from time to time.
"Conform Sale" has the meaning specified therefor in Section
7.02(c)(iv).
"Consolidated EBITDA" means, with respect to any Person for
any period, the Consolidated Net Income of such Person and its Consolidated
Subsidiaries for such period, plus or minus without duplication, the sum of the
following amounts of such Person and its Consolidated Subsidiaries for such
period and to the extent deducted or added, as the case may be, in determining
Consolidated Net Income of such Person for such period: (a) Consolidated
-6-
Net Interest Expense, (b) income or franchise tax expense or benefit, (c)
adjustments for minority interests, (d) income or loss from discontinued
operations, (e) restructuring expenses or reversals, (f) environmental expenses
or recoveries, (g) depreciation expense, (h) amortization expense excluding
amortization included in Consolidated Net Interest Expense and (i) gains or
losses from Dispositions.
"Consolidated Net Income" means, with respect to any Person
for any period, the net income (loss) of such Person and its Consolidated
Subsidiaries for such period, determined on a consolidated basis and in
accordance with GAAP, but excluding from the determination of Consolidated Net
Income (without duplication): (a) any extraordinary or non-recurring gains or
gains or losses from Dispositions, (b) non-cash restructuring charges, and (c)
interest income.
"Consolidated Net Interest Expense" means, with respect to any
Person for any period, gross interest expense of such Person and its
Consolidated Subsidiaries for such period determined on a consolidated basis and
in accordance with GAAP (including, without limitation, interest expense paid to
Affiliates of such Person), less the sum of interest income for such period.
"Consolidated Subsidiaries" means, with respect to any Person,
each Subsidiary of such Person, the accounts of which are consolidated with
those of such Person in such Person's consolidated financial statements.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any Indebtedness
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (i) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the primary obligation of a primary
obligor, (ii) the obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement, (iii) any obligation of such Person, whether or not contingent, (A)
to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (B) 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, (C) to purchase property, assets, 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 (D) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term "Contingent Obligation" shall not include any product warranties extended
in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation with respect to which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by the Board of Directors of such Person in
good faith.
-7-
"Control Agreement" means a control agreement, in form and
substance reasonably satisfactory to the Collateral Agent, executed and
delivered by MI, the Collateral Agent and the applicable bank with respect to a
deposit account.
"Current Value" has the meaning specified therefor in Section
7.01(o).
"Default" means an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms.
"Dollar," "Dollars" and the symbol "$" each means lawful money
of the United States of America.
"Domestic Loan Parties" means all Loan Parties exclusive of
Foreign Loan Parties.
"Effective Date" means the date, on or before August 13, 2004,
on which all of the conditions precedent set forth in Section 5.01 are satisfied
or waived and the initial Loans are made.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Domestic Loan Party or any of its
ERISA Affiliates.
"Environmental Claims" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, notice of violation,
judicial or administrative proceeding, judgment, or other written communication
from any governmental agency, department, bureau, office or other authority, or
any third party involving violations of Environmental Laws, Handling of
Hazardous Materials or Releases of Hazardous Materials from (i) any assets,
properties or businesses of any Loan Party or any predecessor in interest; (ii)
from adjoining properties or businesses; or (iii) from or onto any facilities
which received Hazardous Materials generated or Handled by any Loan Party, its
Subsidiaries or any predecessor in interest.
"Environmental Indemnitees" has the meaning specified therefor
in Section 7.01(j).
"Environmental Indemnity Agreement" means an Environmental
Indemnity Agreement, in form and substance satisfactory to the Agent, made by a
Loan Party and/or one of its Subsidiaries in favor of the Agent.
-8-
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as
amended; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et
seq., as amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended;
the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the
Occupational Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., as amended
(to the extent relating to exposure to Hazardous Materials); Toxic Substances
Control Act ("TOSCA"), 15 U.S.C. 2601 et seq., as amended; Hazardous Materials
Transportation Act, 49 U.S.C. 5101 et seq., as amended; the Federal Insecticide,
Fungicide, and Rodenticide Act("FIFRA"), 7 U.S.C. 136-136y et seq., as amended;
the Emergency Planning and Community Right-to-Know Act of 1986 (Title III of
XXXX or "EPCRA"); 42 U.S.C. 11001, et seq., as amended, and any other foreign,
federal, state, local or municipal laws, statutes, regulations, applicable
guidance documents, rules or ordinances imposing liability or establishing
standards of conduct for Handling of Hazardous Materials and the protection of
health and the environment.
"Environmental Liabilities" means any monetary obligations,
losses, liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Claim filed by any Governmental Authority or any third party which
relate to any violations of Environmental Laws, Handling of Hazardous Materials,
Remedial Actions, Releases or threatened Releases of Hazardous Materials from or
onto (i) any property presently or formerly owned by any Loan Party or any of
its Subsidiaries or a predecessor in interest, or (ii) any facility that
received Hazardous Materials that were generated or Handled by any Loan Party or
any of its Subsidiaries or a predecessor in interest.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities.
"Environmental Permits" means any permits, licenses,
certificates, exemptions, authorizations, registrations or approvals required by
any Governmental Authority or under Environmental Laws.
"Equipment" means "equipment" (as that term is defined in the
Uniform Commercial Code).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.
-9-
"Event of Default" means any of the events set forth in
Section 9.01.
"Excess Cash Flow" means, with respect to any Person for any
period, (i) Consolidated Net Income of such Person and its Consolidated
Subsidiaries (other than Excluded Persons) for such period, plus (ii) all
non-cash items of such Person and its Consolidated Subsidiaries (other than
Excluded Persons) deducted in determining Consolidated Net Income for such
period, less (iii) the sum of (without duplication) (A) all non-cash items of
such Person and its Consolidated Subsidiaries (other than Excluded Persons)
added to the calculation of Consolidated Net Income for such period, (B) all
scheduled and mandatory cash principal payments on the Loans made during such
period, and all scheduled cash principal payments on other Indebtedness of such
Person or any of its Consolidated Subsidiaries (other than Excluded Persons)
during such period to the extent such other Indebtedness is permitted to be
incurred, and such payments are permitted to be made, under this Agreement, (C)
the cash portion of Capital Expenditures made by such Person and its
Consolidated Subsidiaries (other than Excluded Persons) during such period to
the extent permitted to be made under this Agreement, (D) the excess, if any, of
Working Investment at the end of such period over Working Investment at the
beginning of such period (or minus the excess, if any, of Working Investment at
the beginning of such period over Working Investment at the end of such period),
(E) cash payments made to reduce environmental liabilities, and (F) cash
payments made for restructuring.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Person" means any Foreign Subsidiary to the extent
such Person is prohibited under the terms of a contract existing on the
Effective Date (or any contract replacing such existing contract so long as such
replacement contract is permitted under clause (b) of the definition of the term
"Permitted Indebtedness") or restricted by law from repatriating or remitting
its cash to the United States by transferring such cash, directly or indirectly,
to a Domestic Loan Party, provided that if any portion of such Person's cash is
permitted to be so repatriated or remitted, such Person (i) shall not be
included as an Excluded Person solely with respect to the portion of its cash
that is permitted to be so repatriated or remitted and (ii) shall be included as
an Excluded Person with respect to the remainder of its cash that is subject to
such restriction.
"Existing Lenders" means the lenders party to the Fleet Loan
Agreement.
"Existing L/Cs" means those certain outstanding Letters of
Credit listed on Schedule 1.01(C) attached hereto issued by Fleet National Bank
prior to the Effective Date for the account of SMC.
"Extraordinary Receipts" means any cash received by MHI or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds described in Section 2.05(c)(i), (ii) or (iii) hereof), including,
without limitation, (i) foreign, United States, state or local tax refunds
(excluding up to $500,000 of tax refunds received by such Persons during any
Fiscal Year that result from the overpayment of estimated taxes), (ii) pension
plan reversions, (iii) proceeds of insurance, (iv) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action, (v) condemnation awards (and payments in lieu thereof), (vi) indemnity
payments, (vii) payments (excluding any payments in
-10-
respect of the promissory note made, prior to the date hereof, by Mesa to the
order of MI or any of it Subsidiaries) received by such Persons on debt
securities and instruments issued by Persons that are not Affiliates of MHI or
any of its Subsidiaries and (viii) any purchase price adjustment received in
connection with any purchase agreement.
"Facility" means each parcel of real property owned by a
Domestic Loan Party and identified on Schedule 6.01(o), including, without
limitation, the land on which such facility is located, all buildings and other
improvements thereon, all fixtures located at or used in connection with such
facility, all whether now or hereafter existing.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal to, for each day during such period, 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 such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Field Survey and Audit" means a field survey and audit of the
Loan Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Collateral Agent, at the sole cost and expense
of the Borrowers.
"Final Maturity Date" means August 31, 2007, or such earlier
date on which any Loan shall become due and payable in accordance with the terms
of this Agreement and the other Loan Documents.
"Financial Statements" means (i) the audited consolidated
balance sheet of MI and its Consolidated Subsidiaries for the Fiscal Year ended
2003, and the related consolidated statement of operations, shareholders' equity
and cash flows for the Fiscal Year then ended, and (ii) the unaudited
consolidated balance sheet of MI and its Consolidated Subsidiaries for the 3
months ended March 31, 2004 and the related consolidated statement of
operations, shareholder's equity and cash flows for the 3 months then ended.
"Fiscal Year" means the fiscal year of MHI and its
Subsidiaries ending on December 31 of each year.
"Fleet Loan Agreement" means the Amended and Restated Loan
Agreement made as of October 29, 1999, by and among (a) MI, SMC and certain of
their Subsidiaries, (b) Fleet National Bank (f/k/a BankBoston, N.A.) and the
other lending institutions listed on Schedule 1 thereto, and (c) Fleet National
Bank as agent for itself and such other lending institutions, as such agreement
is in effect immediately prior to the Effective Date.
"Foreign Loan Party" means each of CIF, XXX, LSM and ALPOCO.
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction located outside the United States of America.
-11-
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis,
provided that for the purpose of Section 7.03 hereof and the definitions used
therein, "GAAP" shall mean generally accepted accounting principles in effect on
the date hereof and consistent with those used in the preparation of the
Financial Statements, provided, further, that if there occurs after the date of
this Agreement any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 7.03 hereof, the Agents and the Administrative
Borrower shall negotiate in good faith amendments to the provisions of this
Agreement that relate to the calculation of such covenant with the intent of
having the respective positions of the Lenders and the Borrowers after such
change in GAAP conform as nearly as possible to their respective positions as of
the date of this Agreement and, until any such amendments have been agreed upon,
the covenants in Section 7.03 hereof shall be calculated as if no such change in
GAAP has occurred.
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranteed Obligations" has the meaning specified therefor in
Section 11.01.
"Guarantor" means (i) each Person listed as a "Guarantor" on
the signature pages hereto, including the A Guarantors and the B Guarantor, (ii)
CIF, (iii) XXX, LSM and ALPOCO and (iv) each other Person which guarantees,
pursuant to Section 7.01(b) or otherwise, all or any part of the Obligations.
"Guaranty" means (i) the guaranty of each Guarantor party
hereto contained in ARTICLE XI hereof, (ii) the Brazil Guaranty, (iii) the UK
Guarantees, and (iv) each guaranty substantially in the form of Exhibit A, made
by any other Guarantor in favor of the Collateral Agent for the benefit of the
Agents and the Lenders and the L/C Issuer pursuant to Section 7.01(b) or
otherwise.
"Handle" or "Handling" means any manner of generating,
accumulating, storing, treating, disposing of, transporting, transferring,
labeling, handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, of any Hazardous Materials.
"Hazardous Material" shall include, without regard to amount
and/or concentration (i) any element, compound, or chemical that is defined,
listed or otherwise classified as a contaminant, pollutant, toxic pollutant,
toxic or hazardous substances, extremely hazardous substance or chemical under
Environmental Laws; (ii) any wastes regulated, defined, listed or otherwise
classified by Environmental Laws, including but not limited to hazardous waste,
agricultural wastes, biological waste, medical waste, biohazardous or infectious
waste, special waste, recyclable materials, sludge, used oils, construction and
demolition debris and solid waste; (iii) petroleum, petroleum-based or
petroleum-derived products; (iv) polychlorinated biphenyls; (v) any substance
exhibiting a hazardous waste characteristic including but not limited to
corrosivity, ignitibility, toxicity or reactivity as well as any radioactive or
explosive materials;
-12-
and (vi) any raw materials, building components, including but not limited to
asbestos-containing materials and manufactured products containing Hazardous
Materials.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Highest Lawful Rate" means, with respect to any Agent or any
Lender, the maximum non-usurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"Inactive Subsidiaries" means the Persons listed on Schedule
1.01(D).
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other accounts payable incurred in the
ordinary course of such Person's business and not outstanding for more than (a)
120 days after the date such payable was created or (b) 45 days after the due
date therefor); (iii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest payments
are customarily made; (iv) all reimbursement, payment or other obligations and
liabilities of such Person created or arising under any conditional sales or
other title retention agreement with respect to property used and/or acquired by
such Person, even though the rights and remedies of the lessor, seller and/or
lender thereunder may be limited to repossession or sale of such property; (v)
all Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Collateral Agent and in
accordance with accepted practice, of such Person under Hedging Agreements;
(viii) all monetary obligations under any receivables factoring, receivable
sales or similar transactions and all monetary obligations under any synthetic
lease, tax ownership/operating lease, off balance sheet financing or similar
financing; (ix) all Contingent Obligations; and (x) all obligations referred to
in clauses (i) through (ix) of this definition of another Person secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien upon property owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness. The Indebtedness of any Person shall include the Indebtedness of
any partnership of or joint venture in which such Person is a general partner or
a joint venturer to the extent such Person is liable therefor as a result of
such Person's ownership interest in such entity, except to the extent the terms
of such Indebtedness expressly provide that such Person is not liable therefor.
"Indemnified Matters" has the meaning specified therefor in
Section 12.15.
-13-
"Indemnitees" has the meaning specified therefor in Section
12.15.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended (or any successor statute thereto) and the regulations
thereunder.
"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.
"Key Products Report" means the sales and gross profits
analysis report prepared by MI on a consolidating basis for each reporting
Subsidiary and on a consolidated basis by worldwide groupings.
"Key Statistic Reports" means the key statistic report
prepared by MI on a consolidating basis for each reporting Subsidiary and on a
consolidated basis by worldwide groupings, reflecting, among other things, a key
ratio analysis and working capital/cycle analysis for such Persons.
"L/C Issuer" means Fleet National Bank or such other bank as
the Administrative Agent may select in its sole and absolute discretion.
"L/C Subfacility" means the difference between (i) the sum of
each Lender's Term Loan A2 Commitment and Term Loan A3 Commitment and (ii) the
aggregate principal amount of the Term Loan A2 and the Term Loan A3 outstanding
from time to time.
"Lease" means any lease of real property to which any Loan
Party or any of its Subsidiaries is a party as lessor or lessee.
"Lender" has the meaning specified therefor in the preamble
hereto.
"Letter of Credit" has the meaning specified therefor in
Section 3.01(a).
"Letter of Credit Application" has the meaning specified
therefor in Section 3.01(a).
"Letter of Credit Collateral Account" has the meaning
specified therefor in Section 3.01(b).
"Letter of Credit Fee" has the meaning specified therefor in
Section 3.03(b).
-14-
"Letter of Credit Guaranty" means one or more guaranties by
the Administrative Agent and/or any Lender in favor of the L/C Issuer
guaranteeing or relating to the Borrowers' obligations to the L/C Issuer under a
reimbursement agreement, Letter of Credit Application or other like document in
respect of any Letter of Credit, including, without limitation, the NJDEP L/C,
the Existing L/Cs and the New L/Cs.
"Letter of Credit Obligations" means, at any time and without
duplication, the sum of (i) the Reimbursement Obligations at such time, plus
(ii) the aggregate maximum amount available for drawing under the Letters of
Credit outstanding at such time, plus (iii) all amounts for which the
Administrative Agent and/or any Lender may be liable to the L/C Issuer pursuant
to any Letter of Credit Guaranty.
"Lien" means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
Lease and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.
"Loan" means any Term Loan A and any Term Loan B made by a
Lender to the A Borrowers or the B Borrower, as the case may be, pursuant to
ARTICLE II hereof.
"Loan Accounts" means Loan Account A and Loan Account B.
"Loan Account A" means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the A Borrowers, in which the A Borrowers will be charged with all
Loans made to, and all other A Obligations incurred by, the A Borrowers.
"Loan Account B" means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the B Borrower, in which the B Borrower will be charged with all
Loans made to, and all other B Obligations incurred by, the B Borrower.
"Loan Document" means this Agreement, any Guaranty, any
Security Agreement, any Pledge Agreement, any Mortgage, the Brazil Collateral
Documents, the UK Collateral Documents, any Letter of Credit Application, the
Reimbursement Agreement and any other agreement, instrument, and other document
executed and delivered by any Loan Party or any of its Subsidiaries pursuant
hereto or thereto or otherwise evidencing or securing any Loan, any Letter of
Credit Obligation or any other Obligation.
"Loan Party" means any Borrower and any Guarantor.
"LSM" means London & Scandinavian Metallurgical Co., Ltd., a
company organized under the laws of the United Kingdom.
"Material Adverse Effect" means a material adverse effect on
any of (i) the operations, business, assets, properties, condition (financial or
otherwise) or prospects of (A) MI or SMC or (B) the Loan Parties taken as a
whole, (ii) the ability of any Loan Party to perform
-15-
any of its obligations under any Loan Document to which it is a party, (iii) the
legality, validity or enforceability of this Agreement or any other Loan
Document, (iv) the rights and remedies of any Agent or any Lender or the L/C
Issuer under any Loan Document, or (v) the validity, perfection or priority of a
Lien in favor of the Collateral Agent for the benefit of the Lenders and the L/C
Issuer on any of the Collateral.
"Material Contract" means, with respect to any Person, (i)
each contract or agreement to which such Person or any of its Subsidiaries is a
party involving aggregate consideration payable to or by such Person or such
Subsidiary of $500,000 or more in any Fiscal Year (other than purchase orders in
the ordinary course of the business of such Person or such Subsidiary and other
than contracts that by their terms may be terminated by such Person or
Subsidiary in the ordinary course of its business upon less than 60 days' notice
without penalty or premium) and (ii) all other contracts or agreements material
to the business, operations, condition (financial or otherwise), performance,
prospects or properties of such Person or such Subsidiary, but excluding, in the
case of clauses (i) and (ii) above, any contracts evidencing Permitted
Indebtedness.
"XXX" means Metallurg Europe Limited, a company organized
under the laws of the United Kingdom.
"MHI" has the meaning specified therefor in the preamble
hereto.
"MHI Indenture" means the Indenture, dated as of July 13,
1998, between MHI and The Bank of New York (as successor trustee to United State
Trust Company of New York), pursuant to which MHI issued 12.75% Senior Discount
Notes due 2008, as Trustee, as such Indenture may be amended and supplemented
from time to time.
"MHI Notes" means the 12.75% Senior Discount Notes due 2008
issued by MHI pursuant to the MHI Indenture.
"MI" has the meaning specified therefor in the preamble
hereto.
"MI Indenture" means the Indenture, dated as of November 25,
1997, between MI and The Bank of New York (as successor trustee to IBJ Xxxxxxxx
Bank & Trust Company), as Trustee, with SMC, MHI, MSI and MIR(China), Inc., as
guarantors, pursuant to which MI issued 11% Senior Notes due 2007, as such
Indenture may be amended and supplemented from time to time.
"MIP II" has the meaning specified therefor in the preamble
hereto.
"Moody's" means Xxxxx'x Investors Service, Inc. and any
successor thereto.
"Mortgage" means a mortgage (including, without limitation, a
leasehold mortgage), deed of trust or deed to secure debt, in form and substance
satisfactory to the Collateral Agent, made by a Loan Party in favor of the
Collateral Agent for the benefit of the Agents and the relevant Lenders and the
L/C Issuer, securing the relevant Obligations and delivered to the Collateral
Agent pursuant to Section 5.01(d), Section 7.01(b), Section 7.01(o) or
otherwise.
-16-
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Domestic Loan Party or any of its
ERISA Affiliates has contributed to, or has been obligated to contribute, at any
time during the preceding six (6) years.
"Net Cash Proceeds" means, (i) with respect to any Disposition
by any Person or any of its Subsidiaries, the amount of cash received (directly
or indirectly) from time to time (whether as initial consideration or through
the payment or disposition of deferred consideration) by or on behalf of such
Person or such Subsidiary, in connection therewith after deducting therefrom
only (A) the amount of any Indebtedness secured by any Lien permitted by Section
7.02(a) on any asset (other than Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
Disposition (other than Indebtedness under this Agreement), (B) reasonable
expenses related thereto incurred by such Person or such Subsidiary in
connection therewith, (C) transfer taxes paid to any taxing authorities by such
Person or such Subsidiary in connection therewith, and (D) net income taxes to
be paid in connection with such Disposition (after taking into account any tax
credits or deductions and any tax sharing arrangements) and (ii) with respect to
the issuance or incurrence of any Indebtedness by any Person or any of its
Subsidiaries, or the sale or issuance by any Person or any of its Subsidiaries
of any shares of its Capital Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) reasonable expenses related thereto incurred by such Person
or such Subsidiary in connection therewith, (B) transfer taxes paid by such
Person or such Subsidiary in connection therewith and (C) net income taxes to be
paid in connection therewith (after taking into account any tax credits or
deductions and any tax sharing arrangements); in each case of clause (i) and
(ii) to the extent, but only to the extent, that the amounts so deducted are (x)
actually paid to a Person that, except in the case of reasonable out-of-pocket
expenses, is not an Affiliate of such Person or any of its Subsidiaries and (y)
properly attributable to such transaction or to the asset that is the subject
thereof.
"New L/Cs" means the Letters of Credit issued by the L/C
Issuer for the account of an A Borrower on or after the Effective Date pursuant
to ARTICLE III hereof.
"NJDEP L/C" means that certain Letter of Credit No. 50090378
issued by Fleet National Bank in the face amount of $14,819,000 for the account
of SMC in favor of the New Jersey Department of Environmental Protection.
"Obligations" means all present and future indebtedness,
obligations, and liabilities of each Loan Party to any of the Agents, the L/C
Issuer and the Lenders, whether or not the right of payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party include (a) the obligation (irrespective of
whether a claim therefor is allowed in an Insolvency Proceeding) to pay
principal, interest, reimbursement obligations, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by such
Person under the Loan Documents, and (b) the obligation of such
-17-
Person to reimburse any amount in respect of any of the foregoing that any Agent
or any Lender (in its sole discretion) may elect to pay or advance on behalf of
such Person.
"Operating Lease Obligations" means all obligations for the
payment of rent for any real or personal property under leases or agreements to
lease, other than Capitalized Lease Obligations.
"Other Taxes" has the meaning specified therefor in Section
2.08(b).
"Participant Register" has the meaning specified therefor in
Section 12.07(g).
"Payment Office" means the Administrative Agent's office
located at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other office or offices of the Administrative Agent as may be designated in
writing from time to time by the Administrative Agent to the Collateral Agent
and the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Holder" means Safeguard International Fund, LP, SCP
Private Equity Partners, Safeguard, Inc., Safeguard Company Investment
Partnership, L.P. and Affiliates of any of the foregoing Persons.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to any Agent, any Lender and the
L/C Issuer under this Agreement and the other Loan Documents;
(b) any Indebtedness listed on Schedule 7.02(b), and the
extension of maturity, refinancing or modification of the terms thereof;
provided, however, that (i) such extension, refinancing or modification is
pursuant to terms that are not less favorable to the Loan Parties and the
Lenders than the terms of the Indebtedness being extended, refinanced or
modified and (ii) after giving effect to such extension, refinancing or
modification, the amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification (or, with respect to any bank or similar credit facility, the
commitment to extend credit thereunder shall not exceed the commitments existing
immediately prior to such extension, refinancing or modification);
(c) Indebtedness evidenced by Capitalized Lease Obligations
entered into in order to finance Capital Expenditures made by the Loan Parties
in accordance with the provisions of Section 7.02(g), which Indebtedness, when
aggregated with the principal amount of all Indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed $5,000,000 at any
time outstanding;
(d) Indebtedness permitted by clause (e) of the definition of
"Permitted Lien";
(e) Indebtedness permitted under Section 7.02(e);
-18-
(f) Subordinated Indebtedness;
(g) Indebtedness under foreign currency and commodity Hedging
Agreements incurred in the ordinary course of business of the Loan Parties
consistent with prudent business practice and not for speculative purposes;
(h) Indebtedness owing to American International Group, Inc.
in connection with the TRC Transaction, provided that (i) the aggregate amount
of such Indebtedness does not exceed $2,000,000 and (ii) the terms and
conditions of such Indebtedness are acceptable to the Agents and the Lenders in
their sole discretion;
(i) Indebtedness in respect of letters of credit not otherwise
permitted under clause (a) above having an aggregate undrawn face amount not to
exceed $1,000,000, provided that the terms of such letters of credit are
acceptable to the Administrative Agent; and
(j) other unsecured Indebtedness in an aggregate amount of
$250,000 outstanding at any time.
"Permitted Investments" means (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case, maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii)
certificates of deposit maturing not more than 270 days after the date of issue,
issued by commercial banking institutions and money market or demand deposit
accounts maintained at commercial banking institutions, each of which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) repurchase agreements
having maturities of not more than 90 days from the date of acquisition which
are entered into with major money center banks included in the commercial
banking institutions described in clause (iii) above and which are secured by
readily marketable direct obligations of the United States Government or any
agency thereof, (v) money market accounts maintained with mutual funds having
assets in excess of $2,500,000,000; and (vi) tax exempt securities rated A or
better by Moody's or A+ or better by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the
payment of which is not required under Section 7.01(c);
(c) Liens imposed by law, such as landlord's (subject to
Section 7.01(m)), carriers', warehousemen's (subject to Section 7.01(m)),
mechanics', materialmen's and other similar Liens arising in the ordinary course
of business and securing obligations (other than Indebtedness for borrowed
money) that are not overdue by more than 30 days or are being contested in good
faith and by appropriate proceedings promptly initiated and diligently
conducted, and a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
-19-
(d) Liens described on Schedule 7.02(a), but not the extension
of coverage thereof to other property or the extension of maturity, refinancing
or other modification of the terms thereof or the increase of the Indebtedness
secured thereby except to the extent permitted by clause (b) of the definition
of "Permitted Indebtedness";
(e) (i) purchase money Liens on Equipment acquired or held by
any Loan Party or any of its Subsidiaries in the ordinary course of its business
to secure the purchase price of such Equipment or Indebtedness incurred solely
for the purpose of financing the acquisition of such Equipment or (ii) Liens
existing on such Equipment at the time of its acquisition; provided, however,
that (A) no such Lien shall extend to or cover any other property of any Loan
Party or any of its Subsidiaries, (B) the principal amount of the Indebtedness
secured by any such Lien shall not exceed the lesser of the fair market value or
the cost of the property so held or acquired and (C) the aggregate principal
amount of Indebtedness secured by any or all such Liens shall not exceed at any
one time outstanding $5,000,000;
(f) deposits and pledges of cash securing (i) obligations
incurred in respect of workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, (ii) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and statutory
obligations, (iii) obligations on surety or appeal bonds, but only to the extent
such deposits or pledges are incurred or otherwise arise in the ordinary course
of business and secure obligations not past due, or (iv) letter of credit
obligations permitted under clause (i) of the definition of "Permitted
Indebtedness";
(g) easements, zoning restrictions and similar encumbrances on
real property and minor irregularities in the title thereto that do not (i)
secure obligations for the payment of money or (ii) materially impair the value
of such property or its use by any Loan Party or any of its Subsidiaries in the
normal conduct of such Person's business;
(h) Liens on real property or Equipment securing Indebtedness
permitted by subsection (c) of the definition of Permitted Indebtedness;
(i) any interest of title of a lessor under leases permitted
by this Agreement; and
(j) Liens listed on Schedule B to any Title Insurance Policy
or title report delivered pursuant to Section 5.01(d), 7.01(b) or 7.01(o).
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
"Pledge Agreement" means a Pledge and Security Agreement made
by a Domestic Loan Party in favor of the Collateral Agent for the benefit of the
Agents and the relevant Lenders and the L/C Issuer, substantially in the form of
Exhibit C.
-20-
"Post-Default Rate" means a rate of interest per annum equal
to the rate of interest otherwise in effect from time to time pursuant to the
terms of this Agreement plus 3.0%, or, if a rate of interest is not otherwise in
effect, interest at the highest rate specified herein for any Loan then
outstanding prior to an Event of Default plus 3.0%.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make the Term
Loan A and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's Term Loan A
Commitment, by (ii) the Total Term Loan A Commitment, provided that if the Total
Term Loan A Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's portion of the Term Loan A
and the denominator shall be the aggregate unpaid principal amount of the Term
Loan A,
(b) with respect to a Lender's obligation to make the Term
Loan B and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's Term Loan B
Commitment, by (ii) the Total Term Loan B Commitment, provided that if the Total
Term Loan B Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's portion of the Term Loan B
and the denominator shall be the aggregate unpaid principal amount of the Term
Loan B,
(c) with respect to all other matters (including, without
limitation, the indemnification obligations arising under Section 10.05), the
percentage obtained by dividing (i) the unpaid principal amount of such Lender's
portion of the Term Loans, by (ii) the aggregate unpaid principal amount of the
Term Loans.
"Reference Bank" means JPMorgan Chase Bank, its successors or
any other commercial bank designated by the Administrative Agent to the
Administrative Borrower from time to time.
"Reference Rate" means the rate of interest publicly announced
by the Reference Bank in New York, New York from time to time as its reference
rate, base rate or prime rate. The reference rate, base rate or prime rate is
determined from time to time by the Reference Bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
the Reference Bank to any particular class or category of customers. Each change
in the Reference Rate shall be effective from and including the date such change
is publicly announced as being effective.
"Register" has the meaning specified therefor in Section
12.07(d).
"Registered Loan" has the meaning specified therefor in
Section 12.07(d).
"Regulation T", "Regulation U" and "Regulation X" mean,
respectively, Regulations T, U and X of the Board or any successor, as the same
may be amended or supplemented from time to time.
-21-
"Reimbursement Agreement" means the Letter of Credit and
Reimbursement Agreement, dated as of the date hereof, by and between the L/C
Issuer and MI, as such agreement may be amended, modified or supplemented from
time to time.
"Reimbursement Obligations" means, collectively, but without
duplication (i) all obligations of MI arising under the Reimbursement Agreement
and (ii) the obligation of each A Borrower to reimburse the Administrative Agent
or any Lender for amounts paid by the Administrative Agent or any Lender under a
Letter of Credit Guaranty in respect of any drawing made under any Letter of
Credit, together with interest thereon as provided in Section 2.04.
"Related Fund" means, with respect to any Lender, any fund or
account managed by such Lender or an Affiliate of such Lender or its investment
manager.
"Release" means any spilling, leaking, pumping, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping or
disposing of Hazardous Materials (including the abandonment or discarding of
barrels, containers or other closed receptacles containing Hazardous Materials)
into the environment, including, without limitation, the movement of Hazardous
Materials through or in the ambient air, soil, surface or ground water, or
property.
"Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
perform any other actions authorized by 42 U.S.C. 'SS' 9601.
"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice to the
PBGC under the regulations promulgated under such Section).
"Required Lenders" means Lenders whose Pro Rata Share
aggregate 51% or more as determined pursuant to clause (f) of the definition of
"Pro Rata Share".
"Rolling Forecast" has the meaning specified therefor in
Section 7.01(a)(vi).
"SEC" means the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Security Agreement" means a Security Agreement made by a
Domestic Loan Party in favor of the Collateral Agent for the benefit of the
Agents and the relevant Lenders and the L/C Issuer, substantially in the form of
Exhibit B.
"SMC" has the meaning specified therefor in the preamble
hereto.
-22-
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Subordinated Indebtedness" means Indebtedness of any Loan
Party which has been expressly subordinated in right of payment to all
Indebtedness of such Loan Party under the Loan Documents (i) by the execution
and delivery of a subordination agreement, in form and substance reasonably
satisfactory to the Collateral Agent and the Required Lenders, or (ii) otherwise
on terms and conditions (including, without limitation, subordination
provisions, payment terms, interest rates, covenants, remedies, defaults and
other material terms) satisfactory to the Collateral Agent and the Required
Lenders.
"Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, estate, association, joint venture or other business entity (i) the
accounts of which would be consolidated with those of such Person in such
Person's consolidated financial statements if such financial statements were
prepared in accordance with GAAP or (ii) of which more than 50% of (A) the
outstanding Capital Stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such Person, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
Person.
"Taxes" has the meaning specified therefor in Section 2.08(a).
"Term Loan A" means, collectively, the Term Loan A1, the Term
Loan A2 and the Term Loan A3.
"Term Loan A Closing Fee" has the meaning specified therefor
in Section 2.06(a).
"Term Loan A Commitment" means, with respect to each Lender,
the sum of such Lender's Term Loan A1 Commitment, Term Loan A2 Commitment and
Term Loan A3 Commitment.
"Term Loan A Maintenance Fee" has the meaning specified
therefor in Section 2.06(c).
"Term Loan A Monitoring Fee" has the meaning specified
therefor in Section 2.06(e).
"Term Loan A1" means, collectively, the loans made by the
Lenders to the A Borrowers on the Effective Date pursuant to Section 2.01(a)(i).
"Term Loan A1 Commitment" means, with respect to each Lender,
the commitment of such Lender to make the Term Loan A1 to the A Borrowers in the
amount set forth on Schedule 1.01(A) hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
-23-
"Term Loan A2" means, collectively, the loans made by the
Lenders to the A Borrowers on the TRC Transaction Effective Date pursuant to
Section 2.01(a)(ii).
"Term Loan A2 Commitment" means, with respect to each Lender,
the commitment of such Lender to make the Term Loan A2 to the A Borrowers in the
amount set forth on Schedule 1.01(A) hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
"Term Loan A3" means, collectively, the loans made by the
Lenders to the A Borrowers pursuant to Section 2.01(a)(iii).
"Term Loan A3 Commitment" means, with respect to each Lender,
the commitment of such Lender to make the Term Loan A3 to the A Borrowers in the
amount set forth o Schedule 1.01(A) hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
"Term Loan B " means, collectively, the Term Loan B1 and the
Term Loan B2.
"Term Loan B Commitment" means, with respect to each Lender,
the sum of such Lender's Term Loan B1 Commitment and Term Loan B2 Commitment.
"Term Loan B Maintenance Fee" has the meaning specified
therefor in Section 2.06(c).
"Term Loan B1" means, collectively, the loans made by the
Lenders to the B Borrower on the Effective Date pursuant to Section 2.01(a)(iv).
"Term Loan B1 Closing Fee" has the meaning specified therefor
in Section 2.06(b).
"Term Loan B1 Commitment" means, with respect to each Lender,
the commitment of such Lender to make the Term Loan B1 to the B Borrower in the
amount set forth on Schedule 1.01(A) hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
"Term Loan B2" means, collectively, the loans made by the
Lenders to the B Borrower pursuant to Section 2.01(a)(v).
"Term Loan B2 Commitment" means, with respect to each Lender,
the commitment of such Lender to make the Term Loan B2 to the B Borrower in the
amount set forth on Schedule 1.01(A) hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
"Term Loan B2 Funding Fee" has the meaning specified therefor
in Section 2.06(b).
"Term Loans" means, collectively, the Term Loan A and the Term
Loan B.
-24-
"Termination Event" means (i) a Reportable Event with respect
to any Employee Plan, (ii) any event that causes any Domestic Loan Party or any
of its ERISA Affiliates to incur liability under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975
of the Internal Revenue Code, (iii) the filing of a notice of intent to
terminate an Employee Plan or the treatment of an Employee Plan amendment as a
termination under Section 4041 of ERISA, (iv) the institution of proceedings by
the PBGC to terminate an Employee Plan, or (v) any other event or condition
which could reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Employee Plan.
"Title Insurance Policy" means a mortgagee's loan policy, in
form and substance satisfactory to the Collateral Agent, together with all
endorsements made from time to time thereto, issued by or on behalf of a title
insurance company satisfactory to the Collateral Agent, insuring the Lien
created by a Mortgage in an amount and on terms satisfactory to the Collateral
Agent, delivered to the Collateral Agent pursuant to Section 7.01(o).
"Total Term Loan A Commitment" means the sum of the amounts of
the Lenders' Term Loan A1 Commitment, Term Loan A2 Commitment and Term Loan A3
Commitment.
"Total Term Loan B Commitment" means the sum of the amounts of
the Lenders' Term Loan B1 Commitment and Term Loan B2 Commitment.
"Total Term Loan Commitment" means the sum of the amounts of
the Total Term Loan A Commitment and the Total Term Loan B Commitment.
"Transferee" has the meaning specified therefor in Section
2.08.
"TRC" means the TRC Companies, Inc., a Delaware corporation.
"TRC Transaction" means the assignment by the A Borrowers to
TRC (or an alternate indemnifier acceptable to the Lenders) of certain of the A
Borrowers' environmental remediation liabilities (contingent or otherwise) with
respect to the Facility located in Newfield, New Jersey, which transaction is
approved by the Required Lenders in their sole discretion and is effected
pursuant to documentation that is in form and substance satisfactory to the
Lenders.
"TRC Transaction Effective Date" means the date the TRC
Transaction is consummated.
"UK Authorized Transaction" shall mean the Disposition,
termination or dissolution of the business, operations and/or assets of LSM
located in Norway.
"UK Collateral" means the Collateral pledged by XXX, LSM and
ALPOCO in favor of the Collateral Agent pursuant to the UK Collateral Documents.
"UK Collateral Documents" means each of the documents,
instruments and agreements listed on Part B of Schedule 1.01(B) attached hereto.
-25-
"UK Guarantees" means, collectively, the Guarantee executed by
XXX, the Guarantee executed by LSM, and the Guarantee executed by ALPOCO, each
dated the date hereof and each in favor of the Collateral Agent.
"UK Intercreditor Agreement" means that certain Deed of
Subordination, dated on or about the date hereof, among Barclays Bank Plc, HSBC
Bank Plc, the Collateral Agent, LSM and ALPOCO.
"Uniform Commercial Code" has the meaning specified therefor
in Section 1.03.
"WARN" has the meaning specified therefor in Section 6.01(2).
"Working Investment" means, at any date of determination
thereof, (i) the sum, for any Person and its Consolidated Subsidiaries (other
than Excluded Persons), of (A) the unpaid face amount of all Accounts Receivable
of such Person and its Consolidated Subsidiaries (other than Excluded Persons)
as at such date of determination, plus (B) the aggregate amount of prepaid
expenses and other current assets of such Person and its Consolidated
Subsidiaries (other than Excluded Persons) as at such date of determination,
minus (ii) the sum, for such Person and its Consolidated Subsidiaries (other
than Excluded Persons), of (A) the unpaid amount of all accounts payable of such
Person and its Consolidated Subsidiaries (other than Excluded Persons) as at
such date of determination, plus (B) the aggregate amount of all accrued
expenses of such Person and its Consolidated Subsidiaries (other than Excluded
Persons) as at such date of determination (but, excluding from accounts payable
and accrued expenses, the current portion of long-term debt and all accrued
interest and taxes).
Section 1.02 Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible. References in this Agreement to
"determination" by any Agent include good faith estimates by such Agent (in the
case of quantitative determinations) and good faith beliefs by such Agent (in
the case of qualitative determinations).
-26-
Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as any Agent may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth:
(i) each Lender severally agrees to make the Term Loan A1 to the
A Borrowers on the Effective Date in an aggregate principal amount not to exceed
the amount of such Lender's Term Loan A1 Commitment;
(ii) each Lender severally agrees that, prior to the TRC
Transaction Effective Date, if the Administrative Agent makes any payment in
respect of the Letter of Credit Guaranty issued on the Effective Date as credit
support for the NJDEP L/C, such Lender will reimburse the Administrative Agent
in accordance with Section 3.02(a) and fund its Pro Rata Share of each such
payment under the Letter of Credit Guaranty, provided that the maximum aggregate
amount so funded by such Lender shall not exceed such Lender's Term Loan A2
Commitment. All amounts funded by each Lender in accordance with the immediately
preceding sentence shall constitute a part of the Term Loan A2 for all purposes
of this Agreement and the other Loan Documents as of the date of funding
thereof. On the TRC Transaction Effective Date, each Lender severally agrees
that, so long as the NJDEP L/C has been cancelled and the Letter of Credit
Guaranty issued as credit support therefor has been terminated, it shall make
the Term Loan A2 to the A Borrowers in an amount equal to such Lender's Term
Loan A2 Commitment minus the aggregate principal amount of the Term Loan A2
funded in accordance with the preceding sentence then outstanding, if any, made
by such Lender prior to the TRC Transaction Effective Date (or such lesser
amount as shall be required to consummate the TRC Transaction).
-27-
(iii) each Lender severally agrees that, if the Administrative
Agent makes any payment in respect of any Letter of Credit Guaranty issued on
the Effective Date as credit support for each of the Existing L/Cs or issued
after the Effective Date as credit support for any New L/C, such Lender will
reimburse the Administrative Agent in accordance with Section 3.02(a) and fund
its Pro Rata Share of each such payment under the Letter of Credit Guaranty,
provided that the maximum aggregate amount so funded by such Lender shall not
exceed such Lender's Term Loan A3 Commitment. All amounts funded by each Lender
in accordance with the immediately preceding sentence shall constitute a part of
the Term Loan A3 for all purposes of this Agreement and the other Loan Documents
as of the date of funding thereof.
(iv) each Lender severally agrees to make the Term Loan B1 to the
B Borrower on the Effective Date, in an amount equal to the amount of such
Lender's Term Loan B1 Commitment.
(v) each Lender severally agrees to make the Term Loan B2 to the
B Borrower on or before January 15, 2005 (or, at the B Borrower's election, on
or before February 15, 2005) by 11:00 a.m. (New York time) on the applicable
funding date, in an aggregate principal amount equal to the lesser of (A)
$787,500 and (B) the difference between (x) $1,600,000 and (y) the aggregate
amount of dividends paid by MI to MHI after the Effective Date, provided that
such Lender's Pro Rata Share of the Term Loan B2 shall not exceed its Term Loan
B2 Commitment.
(b) Notwithstanding the foregoing:
(i) The aggregate principal amount of the Term Loan A shall not
exceed at any time the Total Term Loan A Commitment and (B) the aggregate
principal amount of the Term Loan B shall not exceed at any time the Total Term
Loan B Commitment. Any principal amount of the Term Loans which is repaid or
prepaid may not be reborrowed.
(ii) The Lenders shall not be obligated to make the Term Loan B2
to the B Borrower unless and until MI shall be prohibited under the MI Indenture
from making dividend payments to MHI at the time of requested borrowing date for
the Term Loan B2.
Section 2.02 Making the Loans. Other than Loans to be made on the Effective
Date, the Administrative Borrower shall give the Administrative Agent prior
telephonic notice (immediately confirmed in writing, in substantially the form
of Exhibit D hereto (a "Notice of Borrowing")), not later than 12:00 noon (New
York City time) on the date which is six (6) Business Days prior to the date of
the proposed Loan (or such shorter period as the Administrative Agent is willing
to accommodate from time to time). Such Notice of Borrowing shall be irrevocable
and shall specify (i) the principal amount of the proposed Loan, (ii) the use of
proceeds of such proposed Loan, and (iii) the proposed borrowing date, which
must be a Business Day. The Administrative Agent and the Lenders may act without
liability upon the basis of written, telecopied or telephonic notice believed by
the Administrative Agent in good faith to be from the Administrative Borrower
(or from any Authorized Officer thereof designated in writing purportedly from
the Administrative Borrower to the Administrative Agent). Each Borrower
-28-
hereby waives the right to dispute the Administrative Agent's record of the
terms of any such telephonic Notice of Borrowing. The Administrative Agent and
each Lender shall be entitled to rely conclusively on any Authorized Officer's
authority to request a Loan on behalf of the Borrowers until the Administrative
Agent receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing.
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be
irrevocable and the Borrowers shall be bound to make a borrowing in accordance
therewith.
(c) Except as otherwise provided in this subsection 2.02(c), all Loans
under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Term Loan A Commitment and
Total Term Loan B Commitment, as the case may be, it being understood that no
Lender shall be responsible for any default by any other Lender in that other
Lender's obligations to make a Loan requested hereunder, nor shall the
Commitment of any Lender be increased or decreased as a result of the default by
any other Lender in that other Lender's obligation to make a Loan requested
hereunder, and each Lender shall be obligated to make the Loans required to be
made by it by the terms of this Agreement regardless of the failure by any other
Lender.
Section 2.03 Repayment of Loans; Evidence of Debt.
(a) The outstanding principal of (i) the Term Loan A shall be payable
by the A Borrowers in consecutive quarterly installments on the first day of
each fiscal quarter, commencing on October 1, 2005 and ending on the Final
Maturity Date, in the amount of $1,000,000; provided, however, that (A) the
Administrative Agent may, at least three (3) Business Days prior to any
installment payment date, notify the Administrative Borrower that the Required
Lenders have elected to waive the payment of such installment otherwise due on
the forthcoming payment date, in which case such installment shall not be made
and (B) the last such installment shall be in the amount necessary to repay in
full the unpaid principal amount of the Term Loan A and (ii) the Term Loan B
shall be repaid in full by the B Borrower on the Final Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Agents and the Lenders
and each Agent's and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent
-29-
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrowers to repay the Loans in accordance with the terms
of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the relevant Borrowers shall execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in a form
furnished by the Collateral Agent and reasonably acceptable to the
Administrative Borrower. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 12.07) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
Section 2.04 Interest. Term Loan A. Subject to the terms of this Agreement,
each Term Loan A shall bear interest on the principal amount thereof from time
to time outstanding from the date of such Loan until such principal amount
becomes due, at a rate per annum equal to 20%, provided that the portion of such
interest equal to 10% per annum shall be paid-in-kind by being added to the
outstanding principal amount of the Term Loan A. Any interest to be capitalized
shall be capitalized on the date such interest is to be paid pursuant to Section
2.04(d) and added to the then outstanding principal amount of the Term Loan A
and thereafter shall bear interest as provided hereunder as if it had originally
been part of the outstanding principal of the Term Loan A.
(b) Term Loan B. Subject to the terms of this Agreement, the Term
Loan B shall bear interest on the principal amount thereof from time to time
outstanding from the date of such Loan until such principal amount becomes due,
at a rate per annum equal to 20%, provided that all of such interest shall be
paid-in-kind by being added to the outstanding principal amount of the Term Loan
B. Any interest to be capitalized shall be capitalized on the date such interest
is to be paid pursuant to Section 2.04(d) and added to the then outstanding
principal amount of the Term Loan B and thereafter shall bear interest as
provided hereunder as if it had originally been part of the outstanding
principal of the Term Loan B.
(c) Post-Default Rate. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, (i) the principal
of, and all accrued and unpaid interest on, all Loans, fees, indemnities,
outstanding Reimbursement Obligations or any other Obligations of the Loan
Parties under this Agreement and the other Loan Documents, shall bear interest,
from the date such Event of Default occurred until the date such Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal at all times to the Post-Default Rate and (ii) the Letter of Credit
Fee provided for in Section 3.03(b) shall be increased to a rate per annum equal
at all times to the Post-Default Rate.
(d) Interest Payment. Interest on each Loan (other than capitalized
interest) shall be payable monthly, in arrears, on the last day of each month,
commencing on the last day of the month in which such Loan is made and at
maturity (whether upon demand, by acceleration or otherwise). Interest at the
Post-Default Rate shall be payable on demand, provided that any interest at the
Post-Default Rate in respect of the Term Loan B shall be paid-in-kind by being
added to the outstanding principal amount of the Term Loan B. Each Borrower
hereby
-30-
authorizes the Administrative Agent to, and the Administrative Agent may,
from time to time, charge the Loan Account A or Loan Account B, as applicable,
pursuant to Section 4.02 with the amount of any interest payment due hereunder.
(e) General. All interest shall be computed on the basis of a year of
360 days for the actual number of days, including the first day but excluding
the last day, elapsed.
Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) Term Loans. The Term Loan A1 Commitment and the Term Loan B1
Commitment, shall each terminate at 5:00 p.m. (New York City time) on the
Effective Date.
(ii) The Term Loan A2 Commitment shall terminate on the earlier
of (A) the TRC Transaction Effective Date and (B) the Final Maturity Date.
(iii) The Term Loan A3 Commitment shall terminate on the Final
Maturity Date.
(iv) The Term Loan B2 Commitment shall terminate on the earlier
of (A) the borrowing date of the Term Loan B2 and (B) February 15, 2005.
(b) Optional Prepayment.
(i) The A Borrowers may, at any time after July 31, 2005 and from
time to time thereafter, upon at least two (2) Business Days' prior written
notice to the Agents, prepay the principal of the Term Loan A, in whole or in
part, subject to the payment of a prepayment penalty on the date of such
prepayment as follows:
------------------------------------------------------------------------------
Prepayment Date Penalty Amount
------------------------------------------------------------------------------
After July 31, 2005 but on or prior to 12% of the principal amount of
July 31, 2006 the Loans so prepaid
------------------------------------------------------------------------------
After July 31, 2006 but prior to 10% of the principal amount of
July 31, 2007 the Loans so prepaid
------------------------------------------------------------------------------
Each prepayment made pursuant to this clause (b)(i) shall be accompanied by the
payment of accrued interest to the date of such payment on the amount prepaid.
Each prepayment of the Term Loan A pursuant to this Section 2.05(b)(i) shall be
applied against the remaining installments of principal due on the Term Loan A
in the inverse order of maturity.
(ii) The B Borrower may, upon at least two (2) Business Days'
prior written notice to the Agents, prepay without penalty or premium the
principal of the Term Loan B, in whole or in part.
-31-
(c) Mandatory Prepayment.
(i) Within ten (10) days of delivery to the Agents and the
Lenders of audited annual financial statements pursuant to Section 7.01(a)(ii),
commencing with the delivery to the Agents and the Lenders of the financial
statements for the Fiscal Year ended December 31, 2004, or, if such financial
statements are not delivered to the Agents and the Lenders on the date such
statements are required to be delivered pursuant to Section 7.01(a)(ii), ten
(10) days after the date such statements are required to be delivered to the
Agents and the Lenders pursuant to Section 7.01(a)(ii), the A Borrowers shall
prepay the outstanding principal amount of the Term Loan A in an amount equal to
50% of the Excess Cash Flow for such Fiscal Year. Any payments required to be
made under this paragraph (c)(i) shall be applied as set forth in Section
2.05(d).
(ii) Immediately upon any Disposition by any Loan Party or its
Subsidiaries (other than Excluded Persons) pursuant to Section 7.02(c)(ii)(B) or
(C) or Section 7.02(c)(iv), the A Borrowers shall prepay the outstanding
principal amount of the Term Loan A in an amount equal to 100% of the Net Cash
Proceeds received by such Person in connection with such Disposition to the
extent that the aggregate amount of Net Cash Proceeds received by all Loan
Parties and their Subsidiaries (and not paid to the Administrative Agent as a
prepayment of the Term Loan A) shall exceed for all such Dispositions since the
Effective Date $500,000, provided that, in the case of the Disposition permitted
under Section 7.02(c)(iv), $1,250,000 of the Net Cash Proceeds from such
Disposition received by SMC shall not be required to be so prepaid to the extent
(A) such proceeds are applied to purchase other assets used in SMC's business if
SMC delivers a certificate to the Administrative Agent within 30 days of such
event stating that such proceeds shall be applied to purchase other assets to be
used in SMC's business within a period specified in such certificate not to
exceed 180 days after the receipt of such proceeds (which certificate shall set
forth estimates of the proceeds to be so expended) and (B) such proceeds are
deposited in a deposit account subject to a Control Agreement but shall be
disbursed to SMC from time to time upon presentation to the Administrative Agent
of a purchase order, invoice or similar document evidencing the purchase of such
assets. If all or any portion of such proceeds not so applied to the prepayment
of the Term Loan A are not so used within the period specified in the relevant
certificate furnished pursuant hereto (not to exceed 180 days), such remaining
portion shall be applied to prepay the outstanding principal of the Term Loan A
on the last day of such specified period. Notwithstanding the foregoing, upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may apply such proceeds to the prepayment of the Term Loan
A. Nothing contained in this subsection (ii) shall permit any Loan Party or any
of its Subsidiaries to make a Disposition of any property other than in
accordance with Section 7.02(c). Any payments required to be made under this
paragraph (c)(ii) shall be applied as set forth in Section 2.05(d).
(iii) Upon the issuance or incurrence by any Loan Party (other
than MHI) or any of its Subsidiaries (other than Excluded Persons) of any
Subordinated Indebtedness, or the sale or issuance by any Loan Party or any of
its Subsidiaries of any shares of its Capital Stock (other than shares issued by
MHI pursuant to Section 7.02(h)), the A Borrowers shall prepay the outstanding
amount of the Term Loan A in an amount equal to 100% of the Net Cash Proceeds
received by such Person in connection therewith. The provisions of this
subsection (iii) shall not be deemed to be implied consent to any such issuance,
incurrence or
-32-
sale otherwise prohibited by the terms and conditions of this Agreement. Any
payments required to be made under this paragraph (c)(iii) shall be applied as
set forth in Section 2.05(d).
(iv) Upon the receipt by any Loan Party or any of its
Subsidiaries (other than Excluded Persons) of any Extraordinary Receipts, the A
Borrowers shall prepay the outstanding principal of the Term Loan A in an amount
equal to 100% of such Extraordinary Receipts, net of any reasonable expenses
incurred in collecting such Extraordinary Receipts and, in the case of any
Extraordinary Receipts comprising insurance proceeds, net of the amount of such
proceeds required to be paid to a Person holding a first priority, Permitted
Lien on the assets to which such proceeds relate, provided that, except during
the continuance of an Event of Default, up to $500,000 of Extraordinary Receipts
comprising insurance proceeds received by such Persons during any Fiscal Year
shall not be required to be so prepaid on the date such proceeds are received by
such Loan Party to the extent (A) such proceeds are used to replace or restore
the properties or assets used in such Person's business in respect of which such
proceeds were paid if the Administrative Borrower delivers a certificate to the
Administrative Agent within 30 days of such event stating that such proceeds
shall be used to replace or restore any such properties or assets to be used in
such Person's business within a period specified in such certificate not to
exceed 180 days after the receipt of such proceeds (which certificate shall set
forth estimates of the proceeds to be so expended) and (B) such proceeds are
deposited in a deposit account subject to a Control Agreement but shall be
disbursed to the applicable Loan Party from time to time upon presentation of a
purchase order, invoice or similar document evidencing the purchase of such
replacement assets. If all or any portion of such proceeds not so applied to the
prepayment of the Term Loan A are not so used within the period specified in the
relevant certificate furnished pursuant hereto (not to exceed 180 days), such
remaining portion shall be applied to prepay the outstanding principal of the
Term Loan A on the last day of such specified period. Notwithstanding the
foregoing, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may apply such proceeds to the prepayment of
the Term Loan A. Any payments required to be made under this paragraph (c)(iv)
shall be applied as set forth in Section 2.05(d).
(d) Application of Payments. Each prepayment of the Term Loan A
pursuant to Section 2.05(c) shall be applied against the remaining installments
of principal due on the Term Loan A in the inverse order of maturity.
(e) Interest and Fees. Any prepayment made pursuant to this
Section 2.05 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment, and if such prepayment would reduce the
amount of the outstanding Term Loan A to zero, such prepayment shall be
accompanied by the payment of all fees accrued to such date pursuant to Section
2.06.
(f) Cumulative Prepayments. Except as otherwise expressly provided in
this Section 2.05, payments with respect to any subsection of this Section 2.05
are in addition to payments made or required to be made under any other
subsection of this Section 2.05.
-33-
Section 2.06 Fees.
(a) Term Loan A Closing Fee. On or prior to the Effective Date, the A
Borrowers shall pay to the Administrative Agent for the account of the Lenders,
in accordance with their Pro Rata Shares, a non-refundable closing fee (the
"Term Loan A Closing Fee") equal to $650,000, which shall be deemed fully earned
when paid.
(b) Term Loan B1 Closing Fee; Term Loan B2 Funding Fee. On or prior to
the Effective Date, the B Borrower shall pay to the Administrative Agent for the
account of the Lenders, in accordance with their Pro Rata Shares, a
non-refundable closing fee (the "Term Loan B1 Closing Fee") equal to $75,000,
which shall be deemed fully earned when paid. On the funding date of the Term
Loan B2, the B Borrower shall pay to the Administrative Agent for the account of
the Lenders, in accordance with their Pro Rata Shares, a non-refundable funding
fee (the "Term Loan B2 Funding Fee") equal to $37,500, which shall be deemed
fully earned when paid.
(c) Term Loan A Maintenance Fee. From and after the Effective Date and
until the later of (i) the Final Maturity Date and (ii) the date on which all A
Obligations are paid in full, the A Borrowers shall pay to the Administrative
Agent for the account of the Lenders, in accordance with their Pro Rata Shares,
a non-refundable maintenance fee (the "Term Loan A Maintenance Fee") equal to
(i) $620,000, which shall be deemed fully earned when paid and which shall be
payable on December 31, 2004, and (ii) $310,000, which shall be deemed fully
earned when paid and which shall be payable semi-annually on the last calendar
day of each June and December thereafter.
(d) Term Loan B Maintenance Fee. From and after the Effective Date and
until the later of (i) the Final Maturity Date and (ii) the date on which all B
Obligations are paid in full, the B Borrower shall pay to the Administrative
Agent for the account of the Lenders, in accordance with their Pro Rata Shares,
a non-refundable maintenance fee (the "Term Loan B Maintenance Fee") equal to
(i) $49,250, which shall be deemed fully earned when paid and which shall be
payable on December 31, 2004 and (ii) $24,625, which shall be (A) deemed fully
earned when paid, (B) payable semi-annually on the last calendar day of each
June and December thereafter and (C) paid-in-kind on the applicable due date
therefor by adding such fee to the outstanding principal amount of the Term Loan
B.
(e) Term Loan A Monitoring Fee. From and after the Effective Date and
until the later of (i) the Final Maturity Date and (ii) the date on which all A
Obligations are paid in full, the A Borrowers shall pay to the Administrative
Agent for the account of the Agents, a non-refundable loan monitoring fee (the
"Term Loan A Monitoring Fee"), which fee shall be deemed fully earned when paid
and which shall be payable on the Effective Date and monthly in advance
thereafter on first day of each month commencing on September 1, 2004, in the
following amount:
-34-
------------------------------------------------------
Prior to December 31, 2004: $40,000
------------------------------------------------------
After December 31, 2004 but prior to $30,000
December 31, 2005:
------------------------------------------------------
After December 31, 2005 but prior to $20,000
August 31, 2007:
------------------------------------------------------
(f) TRC Commitment Fee. On or prior to the Effective Date, the A
Borrowers shall pay to the Administrative Agent for the account of the Lenders,
in accordance with their Pro Rata Shares, a non-refundable commitment fee with
respect to the TRC Transaction (the "TRC Commitment Fee") equal to $1,000,000,
which shall be deemed fully earned when paid.
(g) Method of Fee Payment. In lieu of paying any of the foregoing fees
in cash (including the fees described in Section 3.03(b)), the Borrowers may,
upon request and with the prior written consent of the Lenders, pay any such fee
in-kind by adding such fee to the outstanding principal amount of the applicable
Term Loan. Any fee to be capitalized shall be capitalized on the date such fee
is to be paid pursuant to this Section 2.06 and added to the then outstanding
principal amount of the applicable Term Loan and thereafter shall bear interest
as provided hereunder as if it had originally been part of the outstanding
principal of such Term Loan.
Section 2.07 [Intentionally Omitted]
Section 2.08 Taxes. (a) Any and all payments by any Loan Party under any
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on the net income of any Agent, any Lender or the L/C Issuer (or any transferee
or assignee thereof, including a participation holder (any such entity, a
"Transferee")) by the jurisdiction in which such Person is organized or has its
principal lending office (all such nonexcluded taxes, levies, imposts,
deductions, charges withholdings and liabilities, collectively or individually,
"Taxes"). If any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable under any Loan document to any Agent, any Lender or
the L/C Issuer (or any Transferee), (i) the sum payable shall be increased by
the amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.08) such Agent, such Lender or the L/C Issuer (or such
Transferee) shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make such deductions
and (iii) such Loan Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made under any Loan Document or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement ("Other Taxes"). Each Loan Party shall deliver to each Agent, each
Lender and the L/C Issuer official receipts in respect of any Taxes or Other
Taxes payable under any Loan Document promptly after payment of such Taxes or
Other Taxes.
-35-
(c) The Domestic Loan Parties hereby jointly and severally indemnify
and agree to hold each Agent, each Lender and the L/C Issuer harmless from and
against Taxes and Other Taxes (including, without limitation, Taxes and Other
Taxes imposed on any amounts payable under this Section 2.08) paid by such
Person on account of Obligations payable by it, whether or not such Taxes or
Other Taxes were correctly or legally asserted. Such indemnification shall be
paid within 10 days from the date on which any such Person makes written demand
therefor specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes.
(d) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to the Agents and the
Administrative Borrower two properly completed and duly executed copies of
either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case
of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8BEN, or any subsequent versions thereof or successors
thereto (and, if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of MHI and is not
a controlled foreign corporation related to MHI (within the meaning of Section
864(d)(4) of the Internal Revenue Code)), in each case claiming complete
exemption from U.S. Federal withholding tax on payments by the Loan Parties
under this Agreement. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Administrative Borrower or any Agent.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 2.08 that such Non-U.S. Lender is not legally able to deliver.
(e) The Domestic Loan Parties shall not be required to indemnify any
Non-U.S. Lender, or pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to this Agreement to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to the extent the indemnity payment or
additional amounts any Transferee, or Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such
-36-
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of clause (d) above.
(f) Any Lender (or Transferee) claiming any indemnity payment or
additional payment amounts payable pursuant to this Section 2.08 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by the
Administrative Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amount which may
thereafter accrue, would not require such Lender (or Transferee) to disclose any
information such Lender (or Transferee) deems confidential and would not, in the
sole determination of such Lender (or Transferee), be otherwise disadvantageous
to such Lender (or Transferee).
(g) The obligations of the Loan Parties under this Section 2.08 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
ARTICLE III
LETTERS OF CREDIT
Section 3.01 Letter of Credit Guaranty. In order to assist the Borrowers in
(i) maintaining the Existing L/Cs and NJDEP L/C and (ii) establishing or opening
New L/Cs, which shall not have expiration dates that exceed 365 days (or such
shorter date required by Section 3.01(b)(i)) from the date of issuance (each a
"Letter of Credit"), with the L/C Issuer, the A Borrowers have requested the
Administrative Agent and the Lenders (the "L/C Guarantors") to guarantee payment
or performance of such Letters of Credit and any drafts thereunder through the
issuance of a Letter of Credit Guaranty, thereby lending the Administrative
Agent's and the Lenders' credit to that of the A Borrowers, and the
Administrative Agent and the Lenders have agreed to do so. These arrangements
shall be coordinated by the Administrative Agent, subject to the terms and
conditions set forth below. The Administrative Agent shall not be required to be
the issuer of any Letter of Credit. The A Borrowers will be the account parties
for the application for each Letter of Credit, which shall be substantially in
the form of Exhibit E hereto or on a computer transmission system approved by
the Administrative Agent and the L/C Issuer, or such other written form or
computer transmission system as may from time to time be approved by the
Administrative Agent and the L/C Issuer, and shall be duly completed in a manner
and at a time reasonably acceptable to the Administrative Agent, together with
such other certificates, agreements, documents and other papers and information
as the Administrative Agent and the L/C Issuer may reasonably request (the
"Letter of Credit Application"). In the event of any conflict between the terms
of any Letter of Credit Application and this Agreement, for purposes of this
Agreement, the terms of this Agreement shall control.
(b) The aggregate Letter of Credit Obligations shall not exceed the
L/C Subfacility. In addition, the terms and conditions of all Letters of Credit
and all changes or modifications thereof by the A Borrowers and/or the L/C
Issuer shall in all respects be subject to the prior approval of the
Administrative Agent in the reasonable exercise of its sole and absolute
discretion; provided, however, that (i) the expiry date of all Letters of Credit
shall be no later
-37-
than five days prior to the Final Maturity Date (without giving effect to any
evergreen provision) unless, on or prior to five days prior to the Final
Maturity Date either (A) such Letters of Credit shall be cash collateralized in
an amount equal to 105% of the face amount of such Letters of Credit by deposit
of cash in such amount in an account under the sole and exclusive control of the
Administrative Agent or, at its option, the L/C Issuer, for the benefit of the
Administrative Agent and/or the L/C Issuer, as applicable (the "Letter of Credit
Collateral Account") or (B) the A Borrowers shall provide the Administrative
Agent and the Lenders with an indemnification, in form and substance reasonably
satisfactory to the Administrative Agent, from a commercial bank or other
financial institution acceptable to the Agents for any Letter of Credit
Obligations with respect to such Letters of Credit and (ii) the Letters of
Credit and all documentation in connection therewith shall be in form and
substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer.
(c) If the Administrative Agent or any L/C Guarantor is obligated to
advance funds under a Letter of Credit, the Administrative Agent may immediately
reimburse such disbursement by charging the Loan Account A as set forth below
unless such advanced funds are reimbursed with the proceeds of the Term Loans in
accordance with Section 2.01(a)(ii) and (iii) (or from cash collateral). In the
event that the Administrative Agent does not charge the Loan Account A or such
advanced funds are not reimbursed with the proceeds of Term Loans described in
Section 2.01(a)(ii) and (iii), the A Borrowers shall, upon demand by the
Administrative Agent, immediately reimburse such disbursement to the
Administrative Agent by paying to it an amount equal to such disbursement not
later than 2:00 p.m.(New York City time) on the date that such disbursement is
made, if the Administrative Borrower shall have received written or telephonic
notice of such disbursement prior to 12:00 noon (New York City time) on such
date, or, if such notice has not been received by the Administrative Borrower
prior to such time on such date, then no later than 2:00 p.m. (New York City
time) on the Business Day that the Administrative Borrower receives such notice,
if such notice is received prior to 12:00 noon (New York City time) on the date
of receipt. In the absence of such reimbursement, the Administrative Agent shall
have the right, without notice to the Borrowers, to charge the Loan Account A
with the amount of such disbursement and the Administrative Agent shall have the
right, without notice to the Borrowers, to charge the Loan Account A with the
amount of any and all other Indebtedness, liabilities and obligations of any
kind (including indemnification for breakage costs, capital adequacy and reserve
requirement charges) incurred by the Agents or the Lenders under the Letter of
Credit Guaranty (other than as a result of such Agent or Lenders breach
thereunder) or incurred by the L/C Issuer with respect to a Letter of Credit at
the earlier of (i) payment by the Administrative Agent or the Lenders under the
Letter of Credit Guaranty or (ii) the occurrence of any Event of Default. Any
amount charged to the Loan Account A shall be deemed an Term Loan A2 or an Term
Loan A3, as the case may be, hereunder made by the Lenders to the A Borrowers,
funded by the Administrative Agent on behalf of the Lenders and subject to
Section 2.02 of this Agreement. Any charges, fees, commissions, costs and
expenses charged to the Administrative Agent for the A Borrowers' account by the
L/C Issuer in connection with or arising out of Letters of Credit or
transactions relating thereto will be charged to the Loan Account A in full when
charged to or paid by the Administrative Agent and, when charged, shall be
conclusive on the A Borrowers absent manifest error. Each of the Lenders and the
A Borrowers agrees that the Administrative Agent shall have the right to make
such charges regardless of whether any Default or Event of Default shall have
occurred and be continuing or whether any of the conditions precedent in Section
5.02 have been satisfied. If any such
-38-
reimbursement of disbursements made by the Administrative Agent is not made by
the Administrative Agent by charging the Loan Account A and the A Borrowers
request and are entitled to obtain an Term Loan A to reimburse such
disbursements on the date such reimbursement is due, such reimbursement shall be
made no later than the time that the Administrative Agent makes the proceeds of
such Term Loan A available to the Borrowers.
(d) The A Borrowers understand that the Letter of Credit Guaranties
may require the Agents and the Lenders to indemnify the L/C Issuer for certain
costs or liabilities arising out of claims by the A Borrowers against the L/C
Issuer. The A Borrowers agree to jointly and severally unconditionally indemnify
each Agent and each Lender and hold each Agent and each Lender harmless from any
and all loss, claim or liability incurred by any Agent or any Lender arising
from any transactions or occurrences relating to Letters of Credit, any drafts
or acceptances thereunder, the Collateral relating thereto, and all Obligations
in respect thereof, including any such loss or claim due to any action taken by
the L/C Issuer, other than for any such loss, claim or liability arising out of
the gross negligence or willful misconduct or breach of the L/C Issuer, any
Agent or any Lender as determined by a final judgment of a court of competent
jurisdiction. The A Borrowers further agree to jointly and severally hold each
Agent and each Lender harmless from any errors or omission, negligence or
misconduct by the L/C Issuer. The A Borrowers agree to be bound by the L/C
Issuer's regulations and interpretations of any Letter of Credit that is the
subject of a Letter of Credit Guaranty and opened to or for any A Borrower's
account or by the Administrative Agent's interpretations of any Letter of Credit
issued for any A Borrower's account, even though such interpretation may be
different from such A Borrower's own, and the A Borrowers understand and agree
that the Agents, the Lenders, and the L/C Issuer shall not be liable for any
error, negligence, or mistake, whether of omission or commission, in following
any A Borrower's instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. The A Borrowers'
unconditional obligations to each Agent, each Lender and the L/C Issuer with
respect to Letters of Credit hereunder shall not be modified or diminished for
any reason or in any manner whatsoever, other than as a result of such Agent's,
such Lender's or the L/C Issuer's gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction. The A
Borrowers agree that any charges incurred by the Administrative Agent or the L/C
Issuer for the A Borrowers' account hereunder may be charged to the Loan
Account.
(e) Upon any payments made to the L/C Issuer under the Letter of
Credit Guaranty, the Agents or the Lenders, as the case may be, shall, without
prejudice to their rights under this Agreement (including that such unreimbursed
amounts shall constitute Loans hereunder), acquire by subrogation, any rights,
remedies, duties or obligations granted or undertaken by the A Borrowers in
favor of the L/C Issuer in any application for Letters of Credit, any standing
agreement relating to Letters of Credit or otherwise, all of which shall be
deemed to have been granted to the Agents and the Lenders and apply in all
respects to the Agents and the Lenders and shall be in addition to any rights,
remedies, duties or obligations contained herein.
Section 3.02 Participations.
(a) Purchase of Participations. Immediately upon issuance by the L/C
Issuer of any Letter of Credit pursuant to this Agreement, each Lender shall be
deemed to
-39-
have irrevocably and unconditionally purchased and received from the
Administrative Agent, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Pro Rata Share, in all obligations
of the Administrative Agent in such Letter of Credit (including, without
limitation, all Reimbursement Obligations of the A Borrowers with respect
thereto pursuant to the Letter of Credit Guaranty or otherwise).
(b) Charging of Payments. In the event that the Administrative Agent
or any Lender makes any payment in respect of the Letter of Credit Guaranty and
the A Borrowers shall not have repaid such amount to the Administrative Agent
(such repayment to be effected, at the A Borrowers' option, with either cash on
hand or the proceeds of the Term Loan A funded in accordance with Section
2.01(a)(ii) and (iii)), the Administrative Agent shall charge the Loan Account A
in the amount of the Reimbursement Obligation so paid, in accordance with
Section 3.01(c) and Section 4.02 of this Agreement.
(c) Obligations Irrevocable. The obligations of a Lender to make
payments to the Administrative Agent for the account of the Agents, the Lenders
or the L/C Issuer with respect to a Letter of Credit shall be irrevocable,
without any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the A Borrowers may have at any time against a beneficiary named in such
Letter of Credit or any transferee of such Letter of Credit (or any Person for
whom any such transferee may be acting), any Agent, any Lender, or any other
Person, whether in connection with this Agreement, such Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transactions between the A Borrowers or any other party and the
beneficiary named in such Letter of Credit);
(iii) any draft, certificate or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any failure by any Agent to provide any notices required
pursuant to this Agreement relating to such Letter of Credit;
(vi) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
(vii) the occurrence of any Default or Event of Default.
-40-
Section 3.03 Letters of Credit.
(a) Request for Issuance. The Administrative Borrower may, upon notice
in advance of such issuance but, in any event, not later than 12:00 p.m. New
York City time, at least two (2) Business Days in advance of the issuance
thereof, request the Administrative Agent to assist the A Borrowers in
establishing or opening a Letter of Credit by delivering to the Administrative
Agent, with a copy to the L/C Issuer, a Letter of Credit Application, together
with any necessary related documents. The Administrative Agent shall not provide
support, pursuant to the Letter of Credit Guaranty, if the Administrative Agent
shall have received written notice from the Collateral Agent or the Required
Lenders on the Business Day immediately preceding the proposed issuance date for
such Letter of Credit that one or more of the conditions precedent in Section
5.02 will not have been satisfied on such date, and the Administrative Agent
shall not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 5.02 have been satisfied.
(b) Letter of Credit Commitment Fee.
(i) The A Borrowers shall pay to the Administrative Agent for the
account of the Lenders, in accordance with the Lenders' Pro Rata Shares, a
non-refundable commitment fee equal to 4% per annum of the aggregate amount of
Letter of Credit Obligations outstanding on the last day of each month (the
"Letter of Credit Fee"), which shall be deemed fully earned when paid and shall
be payable on the first day of the immediately succeeding month, subject to
Section 2.06(g).
(ii) L/C Issuer Charges. The A Borrowers shall pay to the
Administrative Agent the standard charges assessed by the L/C Issuer in
connection with the issuance, administration, amendment, payment or cancellation
of Letters of Credit.
(iii) Charges to the Loan Account. The A Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent may, from
time to time, charge the Loan Account A pursuant to Section 3.01(c) and Section
4.02 of this Agreement with the amount of any Letter of Credit Fees or charges
due under this Section 3.03.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. The A Borrowers
acknowledge that pursuant to Section 7.01(f), representatives of the Agents may
visit any or all of the Loan Parties and/or conduct audits, inspections,
appraisals, valuations and/or field examinations of any or all of the Loan
Parties or the Collateral at any time and from time to time in a manner so as to
not unduly disrupt the business of the Loan Parties. The A Borrowers agree to
pay (i) the per diem costs of such examiners plus such examiner's out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
audits, inspections, valuations and field examinations and (ii) the cost of all
visits, audits, inspections, appraisals, valuations and field examinations
conducted by a third party on behalf of the Agents; provided that, so long as no
Event of Default has occurred and is continuing, the A Borrowers shall only be
required to
-41-
pay any amounts pursuant to clauses (i) and (ii) above for no more than four (4)
such audits, inspections, and field examinations and no more than two (2) such
appraisals or valuations, in each case conducted in any 12-month period.
Section 4.02 Payments; Computations and Statements. (a) The Borrowers will
make each payment under this Agreement not later than 12:00 p.m. (New York City
time) on the day when due, in lawful money of the United States of America and
in immediately available funds, to the Administrative Agent's Account. All
payments received by the Administrative Agent after 12:00 p.m. (New York City
time) on any Business Day will be credited to the Loan Account A or Loan Account
B, as applicable, on the next succeeding Business Day. All payments shall be
made by the Borrowers without set-off, counterclaim, deduction or other defense
to the Agents and the Lenders. Except as provided in Section 2.02 and Section
4.04, after receipt, the Administrative Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal ratably to the
Lenders in accordance with their Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Agent or Lender to such Agent or such
Lender, in each case to be applied in accordance with the terms of this
Agreement, provided that the Administrative Agent will cause to be distributed
all interest and fees received from or for the account of the Borrowers not less
than once each month and in any event promptly after receipt thereof. The
Lenders and the Borrowers hereby authorize the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the applicable Loan Account
of the relevant Borrowers with any amount due and payable by the Loan Parties
under any Loan Document. Each of the Lenders and the Borrowers agrees that the
Administrative Agent shall have the right to make such charges whether or not
any Default or Event of Default shall have occurred and be continuing or whether
any of the conditions precedent in Section 5.02 have been satisfied. Any amount
charged to the Loan Account of the A Borrowers shall be deemed an Term Loan A
hereunder made by the Lenders to the A Borrowers, funded by the Administrative
Agent on behalf of the Lenders. Any amount charged to the Loan Account B of the
B Borrower shall be deemed a Term Loan B hereunder made by the Lenders to the B
Borrower, funded by the Administrative Agent on behalf of the Lenders. The
Lenders and the Borrowers confirm that any charges which the Administrative
Agent may so make to the Loan Account of the Borrowers as herein provided will
be made as an accommodation to the Borrowers and solely at the Administrative
Agent's discretion, provided that the Administrative Agent shall from time to
time upon the request of the Collateral Agent, charge the Loan Account of the
Borrowers with any amount due and payable under any Loan Document. Whenever any
payment to be made under any such Loan Document shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be. All computations of fees
shall be made by the Administrative Agent on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such fees are payable. Each determination by
the Administrative Agent of an interest rate or fees hereunder shall be
conclusive and binding for all purposes in the absence of manifest error.
(b) The Administrative Agent shall provide the Administrative
Borrower, promptly after the end of each calendar month, a summary statement (in
the form from time to time used by the Administrative Agent) of the opening and
closing daily balances in the Loan Account A of the A Borrowers during such
month, the amounts and dates of all Loans
-42-
made to the A Borrowers during such month, the amounts and dates of all payments
on account of the A Loans to the A Borrowers during such month and the Loans to
which such payments were applied, the amount of interest accrued on the Loans to
the Borrowers during such month, any Letters of Credit issued by the L/C Issuer
for the account of the A Borrowers during such month, specifying the face amount
thereof, the amount of charges to the Loan Account A and/or Loans made to the A
Borrowers during such month to reimburse the Lenders for drawings made under
Letters of Credit, and the amount and nature of any charges to the Loan Account
A made during such month on account of fees, commissions, expenses and other A
Obligations. The Administrative Agent shall provide the B Borrower, promptly
after the end of each calendar month, a summary statement (in the form from time
to time used by the Administrative Agent) of the opening and closing daily
balances in the Loan Account B of the B Borrower during such month, the amounts
and dates of all Loans made to the B Borrower during such month, the amounts and
dates of all payments on account of the Term Loan B to the B Borrower during
such month and the Term Loan B to which such payments were applied, the amount
of interest accrued on the Term Loan B to the B Borrower during such month and
the amount and nature of any charges to the Loan Account B made during such
month on account of fees, commissions, expenses and other B Obligations. All
entries on any such statement shall be presumed to be correct and, forty-five
(45) days after the same is sent, shall be final and conclusive absent manifest
error.
Section 4.03 Sharing of Payments, Etc. Except as provided in Section 2.02
hereof, if any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered). The
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.03 may, to the fullest extent permitted by
law, exercise all of its rights (including the Lender's right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
Section 4.04 Apportionment of Payments. Subject to Section 2.02 hereof and
to any written agreements among the Agents and/or the Lenders and, with respect
to Section 4.04(b)(i), the L/C Issuer:
(a) all payments of principal and interest in respect of outstanding
Loans, all payments in respect of the Reimbursement Obligations, all payments of
fees (other than the fees set forth in Section 2.06 hereof, fees with respect to
Letters of Credit provided for in Section 3.03(b) and the audit and collateral
monitoring fees provided for in Section 4.01), and all other payments in respect
of any other Obligations, shall be allocated by the Administrative
-43-
Agent among such of the Agents and the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares (in the case of the Lenders) or
otherwise as provided herein or, in respect of payments not made on account of
Loans or Letter of Credit Obligations, as designated by the Person making
payment when the payment is made.
(b) (i) After the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall apply all payments in respect of any A
Obligations and all proceeds of the Collateral securing the A Obligations,
subject to the provisions of this Agreement, (i) first, ratably to pay the A
Obligations in respect of any fees (exclusive of fees payable under Section
2.05(b)), expense reimbursements or indemnities then due and payable to the
Agents or the L/C Issuer until paid in full; (ii) second, ratably to pay
interest then due and payable in respect of the Collateral Agent Advances until
paid in full; (iii) third, ratably to pay principal of the Collateral Agent
Advances then due and payable until paid in full; (iv) fourth, to pay interest
then due and payable to the L/C Issuer in respect of its portion of the
Reimbursement Obligations until paid in full; (v) fifth, to pay principal of the
Letter of Credit Obligations (or, to the extent such Obligations are contingent,
to provide cash collateral to the L/C Issuer in an amount up to 105% of such
Obligations) then due and payable to the L/C Issuer in respect of its portion of
the Letter of Credit Obligations until paid in full; (vi) sixth, ratably to pay
interest then due and payable to the Agents and the Lenders in respect of the
other Reimbursement Obligations until paid in full; (vii) seventh, ratably to
pay principal of the Letter of Credit Obligations then due and payable to the
Agents and the Lenders until paid in full; (viii) eighth, ratably to pay the A
Obligations in respect of any fees and indemnities then due and payable to the
Lenders until paid in full; (ix) ninth, ratably to pay interest then due and
payable in respect of the Term Loan A until paid in full; (x) tenth, ratably to
pay principal of the Term Loan A then due and payable until paid in full; and
(xi) eleventh, to the ratable payment of all other A Obligations then due and
payable.
(ii) After the occurrence and during the continuance of an Event
of Default, the Administrative Agent may, and upon the direction of the Required
Lenders shall, apply all payments in respect of any B Obligations and all
proceeds of Collateral pledged by MHI and MI to secure the B Obligations,
subject to the provisions of this Agreement, (i) first, ratably to pay the B
Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due and payable to the Agents until paid in full; (ii)
second, ratably to pay interest then due and payable in respect of the
Collateral Agent Advances until paid in full; (iii) third, ratably to pay
principal of the Collateral Agent Advances then due and payable until paid in
full; (iv) fourth, ratably to pay the B Obligations in respect of any fees and
indemnities then due and payable to the Lenders until paid in full; (v) fifth,
ratably to pay interest then due and payable in respect of the Term Loan B until
paid in full; (vi) sixth, ratably to pay principal of the Term Loan B then due
and payable until paid in full; and (vii) seventh, to the ratable payment of all
other B Obligations then due and payable.
(c) In each instance, so long as no Event of Default has occurred and
is continuing, Section 4.04(b) shall not be deemed to apply to any payment by
the Borrowers specified by the Administrative Borrower to the Administrative
Agent to be for the payment of the principal of or interest on a Term Loan or
other related Obligations then due and payable under any provision of this
Agreement or the prepayment of all or part of the principal of a Term Loan in
accordance with the terms and conditions of Section 2.05.
-44-
(d) For purposes of Section 4.04(b), "paid in full" means payment of
all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense reimbursements.
(e) In the event of a direct conflict between the priority provisions
of this Section 4.04 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that both such priority provisions in
such documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 4.04 shall control and govern.
Section 4.05 Increased Costs and Reduced Return. If any Lender, any Agent
or the L/C Issuer shall have determined that the adoption or implementation of,
or any change in, any law, rule, treaty or regulation, or any policy, guideline
or directive of, or any change in, the interpretation or administration thereof
by, any court, central bank or other administrative or Governmental Authority,
or compliance by any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer with any directive
of, or guideline from, any central bank or other Governmental Authority or the
introduction of, or change in, any accounting principles applicable to any
Lender, any Agent or the L/C Issuer or any Person controlling any such Lender,
any such Agent or the L/C Issuer (in each case, whether or not having the force
of law) (each a "Change in Law"), shall (i) subject such Lender, such Agent or
the L/C Issuer, or any Person controlling such Lender, such Agent or the L/C
Issuer to any tax, duty or other charge with respect to this Agreement or any
Loan made by such Lender or such Agent or any Letter of Credit issued by the L/C
Issuer, or change the basis of taxation of payments to such Lender, such Agent
or the L/C Issuer or any Person controlling such Lender, such Agent or the L/C
Issuer of any amounts payable hereunder (except for taxes on the overall net
income of such Lender, such Agent or the L/C Issuer or any Person controlling
such Lender, such Agent or the L/C Issuer), (ii) impose, modify or deem
applicable any reserve, special deposit or similar requirement against any Loan,
any Letter of Credit or against assets of or held by, or deposits with or for
the account of, or credit extended by, such Lender, such Agent or the L/C Issuer
or any Person controlling such Lender, such Agent or the L/C Issuer or (iii)
impose on such Lender, such Agent or the L/C Issuer or any Person controlling
such Lender, such Agent or the L/C Issuer any other condition regarding this
Agreement or any Loan or Letter of Credit, and the result of any event referred
to in clauses (i), (ii) or (iii) above shall be to increase the cost to such
Lender, such Agent or the L/C Issuer of making any Loan, issuing, guaranteeing
or participating in any Letter of Credit, or agreeing to make any Loan or issue,
guaranty or participate in any Letter of Credit, or to reduce any amount
received or receivable by such Lender, such Agent or the L/C Issuer hereunder,
then, upon demand by such Lender, such Agent or the L/C Issuer, the Borrowers
shall pay to such Lender, such Agent or the L/C Issuer such additional amounts
as will compensate such Lender, such Agent or the L/C Issuer for such increased
costs or reductions in amount.
(b) If any Lender, any Agent or the L/C Issuer shall have determined
that any Change in Law either (i) affects or would affect the amount of capital
required or expected to be maintained by such Lender, such Agent or the L/C
Issuer or any Person
-45-
controlling such Lender, such Agent or the L/C Issuer, and such Lender, such
Agent or the L/C Issuer determines that the amount of such capital is increased
as a direct or indirect consequence of any Loans made or maintained, Letters of
Credit issued or any guaranty or participation with respect thereto, such
Lender's, such Agent's or the L/C Issuer's or such other controlling Person's
other obligations hereunder, or (ii) has or would have the effect of reducing
the rate of return on such Lender's, such Agent's or the L/C Issuer's such other
controlling Person's capital to a level below that which such Lender, such Agent
or the L/C Issuer or such controlling Person could have achieved but for such
circumstances as a consequence of any Loans made or maintained, Letters of
Credit issued, or any guaranty or participation with respect thereto or any
agreement to make Loans, to issue Letters of Credit or such Lender's, such
Agent's or the L/C Issuer's or such other controlling Person's other obligations
hereunder (in each case, taking into consideration, such Lender's, such Agent's
or the L/C Issuer's or such other controlling Person's policies with respect to
capital adequacy), then, upon demand by such Lender, such Agent or the L/C
Issuer, the Borrowers shall pay to such Lender, such Agent or the L/C Issuer
from time to time such additional amounts as will compensate such Lender, such
Agent or the L/C Issuer for such cost of maintaining such increased capital or
such reduction in the rate of return on such Lender's, such Agent's or the L/C
Issuer's or such other controlling Person's capital.
(c) All amounts payable under this Section 4.05 shall bear interest
from the date that is ten (10) days after the date of demand by any Lender, any
Agent or the L/C Issuer until payment in full to such Lender, such Agent or the
L/C Issuer at the per annum rate set forth in Section 2.04(a). A certificate of
such Lender, such Agent or the L/C Issuer claiming compensation under this
Section 4.05, specifying the event herein above described and the nature of such
event shall be submitted by such Lender, such Agent or the L/C Issuer to the
Administrative Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, and such Lender's, such Agent's or the
L/C Issuer's reasons for invoking the provisions of this Section 4.05, and shall
be final and conclusive absent manifest error.
Section 4.06 Joint and Several Liability of the A Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the A Borrowers hereby accepts joint and several liability
hereunder for the A Obligations and under the other Loan Documents in
consideration of the financial accommodations to be provided by the Agents and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the A Borrowers and in
consideration of the undertakings of the other A Borrowers to accept joint and
several liability for the A Obligations. Each of the A Borrowers, jointly and
severally, hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other A
Borrowers, with respect to the payment and performance of all of the A
Obligations (including, without limitation, any A Obligations arising under this
Section 4.06), it being the intention of the parties hereto that all of the A
Obligations shall be the joint and several obligations of each of the A
Borrowers without preferences or distinction among them. If and to the extent
that any of the A Borrowers shall fail to make any payment with respect to any
of the A Obligations as and when due or to perform any of the A Obligations in
accordance with the terms thereof, then in each such event, the other A
Borrowers will make such payment with respect to, or perform, such A Obligation.
Subject to the terms and conditions hereof, the A Obligations of each of the A
Borrowers under the provisions of this Section 4.06 constitute the
-46-
absolute and unconditional, full recourse A Obligations of each of the A
Borrowers, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.
(b) The provisions of this Section 4.06 are made for the benefit of
the Agents, the Lenders and their successors and assigns, and may be enforced by
them from time to time against any or all of the A Borrowers as often as
occasion therefor may arise and without requirement on the part of the Agents,
the Lenders or such successors or assigns first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other A
Borrowers or to exhaust any remedies available to it or them against any of the
other A Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.06 shall remain in effect until all of the A Obligations shall
have been paid in full or otherwise fully satisfied.
(c) Each of the A Borrowers hereby agrees that it will not enforce any
of its rights of contribution or subrogation against the other A Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agents or the Lenders with respect to
any of the A Obligations or any Collateral, until such time as all of the A
Obligations have been paid in full in cash. Any claim which any A Borrower may
have against any other Borrower with respect to any payments to the Agents or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the A Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the A Obligations.
ARTICLE V
CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness. This Agreement shall
become effective as of the Business Day (the "Effective Date") when each of the
following conditions precedent shall have been satisfied in a manner
satisfactory to the Agents:
(a) Payment of Fees, Etc. The Borrowers shall have paid on or before
the date of this Agreement all fees, costs, expenses and taxes then payable
pursuant to Section 2.06 and Section 12.04.
(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in ARTICLE VI and in each other Loan Document, certificate or other
writing delivered to any Agent, any Lender or the L/C Issuer pursuant hereto or
thereto on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date, and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this Agreement or the other Loan Documents becoming effective
in accordance with its or their respective terms.
-47-
(c) Legality. The making of the initial Loans or the issuance of any
Letters of Credit shall not contravene any law, rule or regulation applicable to
any Agent, any Lender or the L/C Issuer.
(d) Delivery of Documents. The Collateral Agent shall have received on
or before the Effective Date the following, each in form and substance
satisfactory to the Collateral Agent and, unless indicated otherwise, dated the
Effective Date:
(i) a Security Agreement, duly executed by each Domestic Loan
Party;
(ii) a Pledge Agreement, duly executed by each Domestic Loan
Party, together with the original stock certificates representing all of the
common stock of such Loan Party's subsidiaries and all promissory notes payable
to such Loan Parties, accompanied by undated stock powers executed in blank and
other proper instruments of transfer;
(iii) each of the Brazil Collateral Documents and the UK
Collateral Documents, duly executed by the applicable Foreign Loan Parties party
thereto;
(iv) the UK Intercreditor Agreement, in form and substance
satisfactory to the Agents, duly executed by Barclays Bank Plc, HSBC Bank Plc,
LSM and ALPOCO, with respect to the Liens grant to the Collateral Agent on the
assets of LSM and ALPOCO;
(v) (A) the Brazil Guaranty and (B) the UK Guarantees, in each
case, duly executed by the applicable Foreign Loan Parties party thereto;
(vi) a Mortgage, duly executed by each applicable Domestic Loan
Party, with respect to each Facility;
(vii) the post-closing undertakings letter agreement, duly
executed by the Administrative Agent and the Borrowers;
(viii) financing statements on Form UCC-1 in a form ready to be
filed in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the security interests purported to be
created by each Security Agreement, each Pledge Agreement and each Mortgage;
(ix) certified copies of request for copies of information on
Form UCC-11, listing all effective financing statements which name as debtor any
Domestic Loan Party and which are filed in the offices referred to in paragraph
(viii) above, together with copies of such financing statements, none of which,
except as otherwise agreed in writing by the Collateral Agent, shall cover any
of the Collateral and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except as otherwise
agreed to in writing by the Collateral Agent, shall not show any such Liens;
(x) a copy of the resolutions of each Domestic Loan Party,
certified as of the Effective Date by an Authorized Officer or secretary
thereof, authorizing
-48-
(A) the borrowings hereunder and the transactions contemplated by the Loan
Documents to which such Loan Party is or will be a party, and (B) the execution,
delivery and performance by such Loan Party of each Loan Document to which such
Loan Party is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith;
(xi) a certificate of an Authorized Officer or secretary of each
Loan Party, certifying the names and true signatures of the representatives of
such Loan Party authorized to sign each Loan Document to which such Loan Party
is or will be a party and the other documents to be executed and delivered by
such Loan Party in connection herewith and therewith, together with evidence of
the incumbency of such authorized officers;
(xii) a certificate of the appropriate official(s) of the
jurisdiction of organization and each jurisdiction of foreign qualification of
each Domestic Loan Party as set forth on Schedule 6.01(cc) hereto certifying as
of a recent date not more than 30 days prior to the Effective Date as to the
subsistence in good standing of such Loan Party in such states;
(xiii) a true and complete copy of the charter, certificate of
formation, certificate of limited partnership or other publicly filed
organizational document of each Domestic Loan Party certified as of a recent
date not more than 30 days prior to the Effective Date by an appropriate
official of the jurisdiction of organization of such Loan Party which shall set
forth the same complete name of such Loan Party as is set forth herein and the
organizational number of such Loan Party, if an organized number is issued in
such jurisdiction;
(xiv) a copy of the charter and by-laws, limited liability
company agreement, operating agreement, agreement of limited partnership or
other organizational document of each Domestic Loan Party, together with all
amendments thereto, certified as of the Effective Date by an Authorized Officer
or secretary of such Loan Party;
(xv) an opinion of each of (A) Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx LLP, special counsel to the Loan Parties, (B) XXX XXX, Xxxxxx Xxxxxxx
counsel to the Loan Parties, and (C) Xxxxxxx e Cury Advogados, Brazil counsel to
the Loan Parties, in each case, as to such matters as the Collateral Agent may
request;
(xvi) "fairness" opinions rendered by Novahill Partners,
financial advisor to the Borrowers, addressed to the Board of Directors of MI
with respect to the Term Loan A and the Board of Directors of MHI with respect
to the Term Loan B;
(xvii) a certificate of an Authorized Officer of each Domestic
Loan Party, certifying as to the matters set forth in subsection (b) of this
Section 5.01;
(xviii) a copy (A) of the Financial Statements and (B) the
financial projections described in Section 6.01(g)(ii) hereof certified as of
the Effective Date by an Authorized Officer of MI as complying with the
representations and warranties set forth in Section 6.01(g)(ii);
(xix) evidence of the insurance coverage required by Section 7.01
and the terms of each Security Agreement and each Mortgage and such other
insurance
-49-
coverage with respect to the business and operations of the Loan Parties as the
Collateral Agent may reasonably request, in each case, where requested by the
Collateral Agent, with such endorsements as to the named insureds or loss payees
thereunder as the Collateral Agent may request and providing that such policy
may be terminated or canceled (by the insurer or the insured thereunder) only
upon 30 days' prior written notice to the Collateral Agent and each such named
insured or loss payee, together with evidence of the payment of all premiums due
in respect thereof for such period as the Collateral Agent may request;
(xx) collateral access agreements, in form and substance
satisfactory to the Collateral Agent, executed by the following warehousemen:
Burnham, Ruckert, Arrow and X.X Xxxx;
(xxi) copies of all Material Contracts as in effect on the
Effective Date, certified as true and correct copies thereof by an Authorized
Officer of the Administrative Borrower, together with a certificate of an
Authorized Officer of the Administrative Borrower stating that such agreements
remain in full force and effect and that none of the Loan Parties has breached
or defaulted in any of its obligations under such agreements, the breach or
default of which could reasonably be expected to have Material Adverse Effect;
(xxii) evidence of the payment in full of all Indebtedness under
the Fleet Loan Agreement, together with a termination and release agreement with
respect to the Fleet Loan Agreement and all related documents, duly executed by
the Loan Parties parties thereto and the Existing Lenders, together with a
satisfaction of mortgage for each mortgage filed by the Existing Lenders on any
Facility and UCC-3 termination statements for all UCC-1 financing statements
filed by the Existing Lenders and covering any portion of the Collateral;
(xxiii) a satisfactory environmental assessment (the "Phase I
ESA") of each domestic Facility;
(xxiv) such depository account, blocked account, lockbox account
and similar agreements and other documents, each in form and substance
satisfactory to the Agents, as the Agents may request with respect to the
Borrowers' cash management system;
(xxv) a Borrowing Base Report dated the Effective Date or such
earlier date accepted by the Administrative Agent; and
(xxvi) such other agreements, instruments, approvals, opinions
and other documents, each satisfactory to the Collateral Agent in form and
substance, as any Agent may reasonably request.
(e) Material Adverse Effect. The Collateral Agent shall have
determined, in its sole judgment, that no event or development shall have
occurred since December 31, 2003, which could be expected to have a Material
Adverse Effect.
(f) Approvals. All consents, authorizations and approvals of, and
filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Loans shall have been obtained and shall be in full force and effect; and no
law or regulation shall be applicable in the reasonable
-50-
judgment of the Agents that restrains, prevents, or imposes materially adverse
conditions upon the financing provided for under this Agreement or the
transactions contemplated thereby.
(g) Proceedings; Receipt of Documents. All proceedings in connection
with the making of the initial Loans or the issuance of the initial Letters of
Credit and the other transactions contemplated by this Agreement and the other
Loan Documents, and all documents incidental hereto and thereto, shall be
satisfactory to the Collateral Agent and its counsel, and the Collateral Agent
and such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Collateral Agent
or such counsel may reasonably request.
(h) Due Diligence. The Agents shall have completed their legal due
diligence with respect to each Loan Party and the results thereof shall be
acceptable to each Agent, in its sole and absolute discretion.
Section 5.02 Conditions Precedent to All Loans and Letters of Credit. The
obligation of any Agent or any Lender to make any Loan or of the Administrative
Agent to assist the Borrowers in establishing or opening any Letter of Credit
after the Effective Date is subject to the fulfillment, in a manner satisfactory
to the Administrative Agent, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have paid all fees,
costs, expenses and taxes then payable by the Borrowers pursuant to this
Agreement and the other Loan Documents, including, without limitation, Section
2.06 and Section 12.04 hereof.
(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Administrative
Borrower to the Administrative Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrowers' acceptance of the proceeds of such Loan, or
the submission by the Borrowers of a Letter of Credit Application with respect
to a Letter of Credit, and the issuance of such Letter of Credit, shall each be
deemed to be a representation and warranty by each Loan Party on the date of
such Loan or the date of issuance of such Letter of Credit that: (i) the
representations and warranties contained in ARTICLE VI and in each other Loan
Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan or such Letter
of Credit are true and correct on and as of such date as though made on and as
of such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date (in which case any such
representation or warranty shall be true and correct on and as of such earlier
date), (ii) at the time of and after giving effect to the making of such Loan
and the application of the proceeds thereof or at the time of issuance of such
Letter of Credit, no Default or Event of Default has occurred and is continuing
or would result from the making of the Loan to be made, or the issuance of such
Letter of Credit to be issued, on such date and (iii) the conditions set forth
in this Section 5.02 have been satisfied as of the date of such request.
(c) Legality. The making of such Loan or the issuance of such Letter
of Credit shall not contravene any law, rule or regulation applicable to any
Agent, any Lender or the L/C Issuer.
-51-
(d) Notices. The Administrative Agent shall have received (i) a Notice
of Borrowing pursuant to Section 2.02 hereof and (ii) a Letter of Credit
Application pursuant to Section 3.03 hereof, if applicable.
(e) Proceedings; Receipt of Documents. All proceedings in connection
with the making of such Loan or the issuance of such Letter of Credit and the
other transactions contemplated by this Agreement and the other Loan Documents,
and all documents incidental hereto and thereto, shall be satisfactory to the
Agents and their counsel, and the Agents and such counsel shall have received
all such agreements, instruments, approvals, opinions and other documents, and
such counterpart originals or certified or other copies of such documents, in
form and substance satisfactory to the Agents, as the Agents or such counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Domestic Loan Party
hereby represents and warrants to the Agents, the Lenders and the L/C Issuer as
follows:
(a) Organization, Good Standing, Etc. Each Domestic Loan Party (i) is
a corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrowers, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, other than in such jurisdictions where the
failure to be so qualified and in good standing could not reasonably be expected
to have a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law, (iii) do not and will not violate, contravene
or conflict with (A) the MHI Indenture, the MI Indenture or any other Material
Contract or (B) any other contractual restriction binding on or otherwise
affecting it or any of its properties, the violation of which could reasonably
be expected to have a Material Adverse Effect (iv) do not and will not result in
or require the creation of any Lien (other than pursuant to any Loan Document)
upon or with respect to any of its properties, and (v) do not and will not
result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
material to the conduct of its business as presently conducted.
-52-
(c) Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of any Loan Document to which it is or will be a party, other than,
in the case of the Foreign Loan Parties, such authorizations, approvals, notices
or filings described in this Agreement or the other Loan Documents.
(d) Enforceability of Loan Documents. This Agreement is, and each
other Loan Document to which any Loan Party is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally.
(e) Capitalization.
(i) Schedule 6.01(e) is a complete and correct description of the
name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of each Loan Party and its Subsidiaries in existence on the date hereof.
All of the issued and outstanding shares of Capital Stock of such Persons have
been validly issued and are fully paid and nonassessable, and the holders
thereof are not entitled to any preemptive, first refusal or other similar
rights except as set forth on Schedule 6.01(e). All such Capital Stock is owned
by the Persons indicated on such Schedule 6.01(e), free and clear of all Liens
except as set forth on Schedule 6.01(e). Except as indicated on Schedule
6.01(e), there are no (x) outstanding debt or equity securities of any such
Person convertible into or exchangeable for any shares of Capital Stock of such
Person, (y) warrants, options or other rights for the purchase or acquisition
from such Person any shares of Capital Stock of such Person, or (z) other
obligations of such Person to issue, directly or indirectly, any shares of
Capital Stock of such Person.
(ii) The Inactive Subsidiaries (A) have no business operations
and conduct no business and (B) own no assets except for assets with a fair
market value of less than $50,000 in the aggregate for any Inactive Subsidiary
or $100,000 in the aggregate for all Inactive Subsidiaries.
(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the best knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party before any
court or other Governmental Authority or any arbitrator that (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
(B) relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby and (ii) as of the Effective Date, none of the
Loan Parties holds any commercial tort claims in respect of which a claim has
been filed in a court of law or a written notice by an attorney has been given
to a potential defendant.
(g) Financial Condition.
(i) The Financial Statements, copies of which have been delivered
to each Agent and each Lender, fairly present the consolidated financial
condition of MI and its Subsidiaries as at the respective dates thereof and the
consolidated results of
-53-
operations of MI and its Subsidiaries for the fiscal periods ended on such
respective dates, all in accordance with GAAP and since December 31, 2003, no
event or development has occurred that has had or could have a Material Adverse
Effect.
(ii) MI has heretofore furnished to each Agent and each Lender
and the L/C Issuer (A) projected quarterly balance sheets, income statements and
statements of cash flows of MI and its Subsidiaries, for the period from January
1, 2004 through December 31, 2005 (the "Annual Plan"), and (B) projected annual
balance sheets, income statements and statements of cash flows of MI and its
Subsidiaries (prepared on a consolidating basis for each reporting Subsidiary
and on a consolidated basis by worldwide groupings) for the Fiscal Years ending
in 2005 through 2006 with accompanying schedules and commentary, which projected
financial statements shall be updated from time to time pursuant to Section
7.01(a)(v). Such projections, as so updated, shall be believed by MI at the time
furnished to be reasonable, shall have been prepared on a reasonable basis and
in good faith by MI, and shall have been based on assumptions believed by MI to
be reasonable at the time made and upon the best information then reasonably
available to MI, and MI shall not be aware of any facts or information that
would lead it to believe that such projections, as so updated, are incorrect or
misleading in any material respect.
(h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents, or in material violation of any law, rule, regulation,
judgment or order of any Governmental Authority applicable to it or any of its
property or assets, or any material term of the MHI Indenture, the MI Indenture
or any other Material Contract, and no Event of Default has occurred and is
continuing.
(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee
Plan is in substantial compliance with ERISA and the Internal Revenue Code, (ii)
no Termination Event has occurred, (iii) the most recent annual report (Form
5500 Series) with respect to each Employee Plan, including any required Schedule
B (Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agents, is complete and correct
and fairly presents the funding status of such Employee Plan, and since the date
of such report there has been no material adverse change in such funding status,
(iv) copies of each agreement entered into with the PBGC, the U.S. Department of
Labor or the Internal Revenue Service with respect to any Employee Plan have
been delivered to the Agents, (v) no Employee Plan had an accumulated or waived
funding deficiency or permitted decrease which would create a deficiency in its
funding standard account or has applied for an extension of any amortization
period within the meaning of Section 412 of the Internal Revenue Code at any
time during the previous 60 months, and (vi) no Lien imposed under the Internal
Revenue Code or ERISA exists or is likely to arise on account of any Employee
Plan within the meaning of Section 412 of the Internal Revenue Code. Except as
set forth on Schedule 6.01(i), no Domestic Loan Party or any of its ERISA
Affiliates has incurred any withdrawal liability under ERISA with respect to any
Multiemployer Plan, or is aware of any facts indicating that it or any of its
ERISA Affiliates may in the future incur any such withdrawal liability. No
Domestic Loan Party or any of its ERISA Affiliates nor any fiduciary of any
Employee Plan has (i) engaged in a nonexempt prohibited transaction described in
Sections 406 of ERISA or 4975 of the Internal Revenue Code that has resulted or
could reasonably be expected to result in a material liability under ERISA or
the Code, (ii) failed to pay any required installment or other
-54-
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such required installment or payment, (iii) engaged in a
transaction within the meaning of Section 4069 of ERISA or (iv) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Solely as of the Effective Date, there are no pending or, to the best
knowledge of any Domestic Loan Party, threatened claims, actions, proceedings or
lawsuits (other than claims for benefits in the normal course) asserted or
instituted against (i) any Employee Plan or its assets, (ii) any fiduciary with
respect to any Employee Plan, or (iii) any Domestic Loan Party or any of its
ERISA Affiliates with respect to any Employee Plan. Except as required by
Section 4980B of the Internal Revenue Code or as set forth on Schedule 6.01(i),
no Domestic Loan Party or any of its ERISA Affiliates maintains an employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides health
or welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of any Domestic Loan Party or any of its ERISA
Affiliates or coverage after a participant's termination of employment.
(j) Taxes, Etc. All Federal, state and local tax returns and other
reports required by applicable law to be filed by any Domestic Loan Party have
been filed, or extensions have been obtained, and all taxes, assessments and
other governmental charges imposed upon any Domestic Loan Party or any property
of any Domestic Loan Party and which have become due and payable on or prior to
the date hereof have been paid, except to the extent contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof on the Financial Statements
in accordance with GAAP.
(k) Regulations T, U and X. No Domestic Loan Party is or will be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation T, U or X), and no
proceeds of any Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(l) Nature of Business. No Loan Party is engaged in any business other
than the mining and selling of metal ores and/or the manufacturing and selling
principally of metallurgical products.
(m) Adverse Agreements, Etc. Except as set forth on any Schedule
hereto, no Loan Party is a party to any agreement or instrument, or subject to
any charter, limited liability company agreement, partnership agreement or other
corporate, partnership or limited liability company restriction or any judgment,
order, regulation, ruling or other requirement of a court or other Governmental
Authority, which could reasonably be expected to have a Material Adverse Effect.
(n) Permits, Etc. Except as set forth on Schedule 6.01(n), each Loan
Party has, and is in compliance with, all material permits, licenses,
authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business
currently owned, leased, managed or operated, or to be acquired, by such Person.
No condition exists or event has occurred which, in itself or with the
-55-
giving of notice or lapse of time or both, would result in the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect.
(o) Properties. (i) Each Loan Party has good and marketable title to,
valid freehold or leasehold interests in, or valid licenses to use, all property
and assets material to its business, free and clear of all Liens, except
Permitted Liens. All such properties and assets are in good working order and
condition, ordinary wear and tear excepted.
(ii) Schedule 6.01(o) sets forth a complete and accurate list,
as of the Effective Date, of the location, by state and street address (or by
land registry number), of all real property owned or leased by each Loan Party
and identifies the interest (freehold or fee or leasehold) of such Loan Party
therein. As of the Effective Date, each Loan Party has valid leasehold interests
in the Leases described on Schedule 6.01(o) to which it is a party. Schedule
6.01(o) sets forth with respect to each such Lease, the commencement date,
termination date, renewal options (if any) and annual base rents. Other than
expiration and termination in accordance with their terms, each such Lease is
valid and enforceable in accordance with its terms in all material respects and
is in full force and effect. No consent or approval of any landlord or other
third party in connection with any such Lease is necessary for any Loan Party to
enter into and execute the Loan Documents to which it is a party, except as set
forth on Schedule 6.01(o). To the best knowledge of any Loan Party, no other
party to any such Lease is in default of its obligations thereunder, and no Loan
Party (or any other party to any such Lease) has at any time delivered or
received any notice of default which remains uncured under any such Lease and,
as of the Effective Date, no event has occurred which, with the giving of notice
or the passage of time or both, would constitute a default under any such Lease.
(p) Full Disclosure. Each Loan Party has disclosed to the Agents all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the other reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to any Agent in
connection with the negotiation of this Agreement (including the Schedules
hereto) or delivered hereunder (as modified or supplemented by other information
so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which it was made, not misleading; provided that, with
respect to projected financial information, each Loan Party represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time prepared. There is no contingent liability or fact
that could reasonably be expected to have a Material Adverse Effect which has
not been set forth in a footnote included in the Financial Statements or a
Schedule hereto.
(q) Operating Lease Obligations. On the Effective Date, none of the
Loan Parties has any Operating Lease Obligations in excess of $100,000 per annum
with respect to any operating lease other than the Operating Lease Obligations
set forth on Schedule 6.01(q).
(r) Environmental Matters. Except as set forth on Schedule 6.01(r) or
to the extent any of the following could not reasonably be expected to have a
Material Adverse
-56-
Effect, (i) the operations of each Loan Party are in compliance, in all material
respects, with all Environmental Laws; (ii) there has been no Release at any of
the properties owned or operated by any Loan Party or, a predecessor in
interest, or at any disposal or treatment facility which received Hazardous
Materials generated by any Loan Party or any predecessor in interest; (iii) no
Environmental Action has been asserted against any Loan Party or any predecessor
in interest, nor does any Loan Party have knowledge or notice of any threatened
or pending Environmental Action against any Loan Party or any predecessor in
interest; (iv) no Environmental Actions have been asserted against any
facilities that may have received Hazardous Materials generated by any Loan
Party or any predecessor in interest; (v) no property now or formerly owned or
operated by a Loan Party has been used as a treatment or disposal site for any
Hazardous Material; (vi) no Loan Party has failed to report to the proper
Governmental Authority any Release which is required to be so reported by any
Environmental Laws; (vii) each Loan Party holds all licenses, permits and
approvals required under any Environmental Laws in connection with the operation
of the business carried on by it,; and (viii) no Loan Party has received any
notification pursuant to any Environmental Laws that (A) any work, repairs,
construction or Capital Expenditures are required to be made in respect as a
condition of continued compliance with any Environmental Laws, or any license,
permit or approval issued pursuant thereto or (B) any license, permit or
approval referred to above is about to be reviewed, made, subject to limitations
or conditions, revoked, withdrawn or terminated.
(s) Insurance. Each Loan Party keeps its property adequately insured
and maintains (i) insurance to such extent and against such risks, including
fire, as is customary with companies in the same or similar businesses, (ii)
workmen's compensation insurance in the amount required by applicable law, (iii)
public liability insurance, which shall include product liability insurance, in
the amount customary with companies in the same or similar business against
claims for personal injury or death on properties owned, occupied or controlled
by it, and (iv) such other insurance as may be required by law or as may be
reasonably required by the Collateral Agent, including, without limitation,
against larceny, embezzlement or other criminal misappropriation. Schedule
6.01(s) sets forth a list of all insurance maintained, as of the Effective Date,
by each Loan Party, as well as a summary of the terms of each such policy.
(t) Use of Proceeds. The proceeds of the Loans shall be used to (a)
refinance existing indebtedness of the Borrowers, (b) pay fees and expenses in
connection with this Agreement, (c) provide credit support for Existing L/Cs and
New L/Cs, (d) provide credit support for the NJDEP L/C and funding for the TRC
Transaction, (e) in the case of the Term Loan B, fund a portion of the interest
payable by MHI in respect of its 12.75% Senior Discount Notes due 2008 and (f)
fund working capital of the Borrowers. The Letters of Credit are and will be
used for general working capital purposes.
(u) [Intentionally Omitted]
(v) Location of Bank Accounts. Schedule 6.01(v) sets forth a complete
and accurate list as of the Effective Date of all deposit, checking and other
bank accounts, all securities and other accounts maintained with any broker
dealer and all other similar accounts maintained by each Loan Party, together
with a description thereof (i.e., the bank or broker dealer at which such
deposit or other account is maintained and the account number and the purpose
thereof).
-57-
(w) Intellectual Property. Except as set forth on Schedule 6.01(w),
each Loan Party owns or licenses or otherwise has the right to use all licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, tradenames, copyrights, copyright applications, franchises,
authorizations, non-governmental licenses and permits for intellectual property
rights, and other intellectual property rights that are necessary for the
operation of its business, to the knowledge of the applicable Loan Party without
infringement upon or conflict with the rights of any other Person with respect
thereto, except for such infringements and conflicts which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Set forth on Schedule 6.01(w) is a complete and accurate list as of the
Effective Date of all (i) domestic, with respect to Domestic Loan Parties, and
(ii) foreign, with respect to Foreign Loan Parties, material licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations,
non-governmental licenses and permits for intellectual property rights, and
other intellectual property rights of each Loan Party. To the knowledge of the
applicable Loan Party, no slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by any Loan Party infringes upon or conflicts with any rights owned
by any other Person, and no claim or litigation regarding any of the foregoing
is pending or threatened, except for such infringements and conflicts which
could not have, individually or in the aggregate, a Material Adverse Effect. To
the best knowledge of each Loan Party, no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
relating to intellectual property is pending or proposed, which, individually or
in the aggregate, could have a Material Adverse Effect.
(x) Material Contracts. Set forth on Schedule 6.01(x) is a complete and
accurate list as of the Effective Date of all Material Contracts of each Loan
Party showing the parties and subject matter thereof and amendments and
modifications thereto. Except as set forth on Schedule 6.01(x) and other than
terminations and expirations in accordance with their terms, each Material
Contract set forth on Schedule 6.01(x) (i) is in full force and effect and is
binding upon and enforceable against each Loan Party that is a party thereto
and, to the best knowledge of such Loan Party, all other parties thereto in
accordance with its terms, and (ii) is not in default in any material respect
due to the action of any Loan Party or, to the best knowledge of any Loan Party,
any other party thereto.
(y) Holding Company and Investment Company Acts. None of the Domestic
Loan Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(z) Employee and Labor Matters. Except as set forth on Schedule
6.01(z), solely as of the Effective Date, (A) there is (i) no unfair labor
practice complaint pending or, to the best knowledge of any Loan Party,
threatened against any Domestic Loan Party, before any Governmental Authority
and no grievance or arbitration proceeding pending or threatened against any
Domestic Loan Party which arises out of or under any collective bargaining
agreement, (ii) no strike, slowdown, stoppage or similar action or grievance
pending or, to the best knowledge of any Loan Party, threatened against any Loan
Party, (iii) to the best knowledge
-58-
of any Loan Party, no union representation question existing with respect to the
employees of any Domestic Loan Party and no union organizing activity taking
place with respect to any of the employees of any such Person; (B) no Domestic
Loan Party or any of its ERISA Affiliates has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act ("WARN")
or similar state law, which remains unpaid or unsatisfied; (C) the hours worked
and payments made to employees of any Domestic Loan Party have not been in
material violation of the Fair Labor Standards Act or any other applicable legal
requirements; and (D) all material payments due from any Domestic Loan Party on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of such Loan Party.
(aa) Customers and Suppliers. There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the
business relationship between (i) any Loan Party, on the one hand, and any
customer or any group thereof, on the other hand, whose agreements with any Loan
Party are individually or in the aggregate material to the business or
operations of such Loan Party, or (ii) any Loan Party, on the one hand, and any
material supplier thereof, on the other hand, whose agreements with any Loan
Party are individually or in the aggregate material to the business or
operations of such Loan Party; and there exists no present state of facts or
circumstances that could reasonably be expected to give rise to or result in any
such termination, cancellation, limitation, modification or change.
(bb) No Bankruptcy Filing. As of the date of the making of each Loan,
no Loan Party is intending to commence or preparing for the commencement of
either an Insolvency Proceeding or the liquidation of all or a major portion of
such Loan Party's assets or property except as permitted under Section 7.02(c),
and no Loan Party has any knowledge of any Person contemplating an Insolvency
Proceeding against it.
(cc) Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(cc) sets
forth a complete and accurate list as of the Effective Date of (i) the exact
legal name of each Loan Party, (ii) the jurisdiction of organization of each
Loan Party, (iii) the organizational identification number of each Loan Party
(or indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office
of each Loan Party, (vi) the federal employer identification number of each
Domestic Loan Party and (vii) each jurisdiction of foreign qualification of each
Domestic Loan Party.
(dd) Tradenames. Schedule 6.01(dd) hereto sets forth a complete and
accurate list as of the Effective Date of all tradenames, business names or
similar appellations used by each Domestic Loan Party or any of its divisions or
other business units during the past five years.
(ee) Locations of Collateral. There is no location at which any
Domestic Loan Party has any Collateral (except for Inventory in transit) other
than (i) those locations listed on Schedule 6.01(ee) and (ii) any other
locations approved in writing by the Collateral Agent from time to time or in
locations in the continental United States for which such Loan Party has
provided notice to the Agents in accordance with Section 7.01(l) and a written
subordination or waiver or collateral access agreement in accordance with
Section 7.01(m).
-59-
Schedule 6.01(ee) hereto contains a true, correct and complete list, as of the
Effective Date, of the legal names and addresses of each warehouse at which
Collateral of each Domestic Loan Party is stored. None of the receipts received
by any Domestic Loan Party from any warehouse states that the goods covered
thereby are to be delivered to bearer or to the order of a named Person or to a
named Person and such named Person's assigns.
(ff) Security Interests. Each Security Agreement creates in favor of
the Collateral Agent, for the benefit of the Agents and the relevant Lenders and
the L/C Issuer, a legal, valid and enforceable security interest in the
Collateral secured thereby. Upon the filing of the UCC-1 financing statements
described in Section 5.01(d)(vii) and the recording of the Collateral
Assignments for Security referred to in each Security Agreement in the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, such security interests in and Liens on the Collateral granted
thereby shall be perfected, first priority security interests (subject only to
Permitted Liens), and no further recordings or filings are or will be required
in connection with the creation, perfection or enforcement of such security
interests and Liens, other than (i) the filing of continuation statements in
accordance with applicable law, (ii) the recording of the Collateral Assignments
for Security pursuant to each Security Agreement in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, with
respect to after-acquired U.S. patent and trademark applications and
registrations and U.S. copyrights and (iii) all other actions that may be
required for Collateral located outside the United States of America or
registered under foreign laws.
(gg) Other Indebtedness. The A Obligations constitute "Permitted Debt"
under Section 4.3 of the MI Indenture. The B Obligations constitute "Permitted
Debt" under Section 4.3 of the MHI Indenture.
(hh) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material thereto
(other than immaterial inaccuracies that do not affect the substance thereof).
-60-
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Domestic Loan Party will, unless the
Required Lenders shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to each Agent and each
Lender and the L/C Issuer:
(i) as soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of MI and its
Consolidated Subsidiaries commencing with the first fiscal quarter of MI and its
Consolidated Subsidiaries ending after the Effective Date, (A) consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and consolidated and consolidating statements of cash flows of MI and
its Consolidated Subsidiaries as at the end of such quarter, and for the period
commencing at the end of the immediately preceding Fiscal Year and ending with
the end of such quarter, (B) Key Statistic Reports, and (C) a copy of Form 10-Q
as filed with the Securities and Exchange Commission and certified by an
Authorized Officer of MI as fairly presenting, in all material respects, the
financial position of MI and its Consolidated Subsidiaries as of the end of such
quarter and the results of operations and cash flows of MI and its Consolidated
Subsidiaries for such quarter, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of MI and
its Consolidated Subsidiaries furnished to the Agents and the Lenders and the
L/C Issuer, subject to the absence of footnotes and normal year-end adjustments;
(ii) as soon as available, and in any event within 90
days after the end of each Fiscal Year of MI and its Consolidated Subsidiaries,
(A) consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and consolidated and consolidating
statements of cash flows of MI and its Consolidated Subsidiaries as at the end
of such Fiscal Year, (B) Key Statistic Reports, and (C) a copy of Form 10-K as
filed with the Securities and Exchange Commission, all in reasonable detail and
prepared in accordance with GAAP, and accompanied by a report and an opinion,
prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of recognized standing selected by MI
and satisfactory to the Agents (which opinion shall be without (x) any
qualification or exception as to the scope of such audit, or (y) any
qualification which relates to the treatment or classification of any item and
which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of Section 7.03), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default under Section
7.03 and (2) if such accountants shall have obtained any knowledge of the
existence of an Event of Default or such Default, describing the nature thereof;
-61-
(iii) as soon as available, and in any event within
30 days after the end of each fiscal month of MI and its Consolidated
Subsidiaries commencing with the first fiscal month of MI and its Consolidated
Subsidiaries ending after the Effective Date, (A) internally prepared
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and consolidated and consolidating statements of cash
flows as at the end of such fiscal month, and for the period commencing at the
end of the immediately preceding Fiscal Year and ending with the end of such
fiscal month, (B) monthly Key Statistic Reports, and (C) a monthly summary
report setting forth in comparative form the summary results of operations
thereof versus the projected results set forth in the projections delivered
pursuant to clause (vi) of this Section 7.01(a), all in reasonable detail and
certified by an Authorized Officer of MI as fairly presenting, in all material
respects, the financial position of MI and its Consolidated Subsidiaries as at
the end of such fiscal month and the results of operations and cash flows of MI
and its Consolidated Subsidiaries for such fiscal month, in accordance with GAAP
applied in a manner consistent with that of the most recent audited financial
statements furnished to the Agents and the Lenders and the L/C Issuer, subject
to normal year-end adjustments;
(iv) simultaneously with the delivery of the
financial statements of MI and its Consolidated Subsidiaries required by clauses
(i), (ii) and (iii) of this Section 7.01(a), a certificate of an Authorized
Officer of MI (A) stating that such Authorized Officer has reviewed the
provisions of this Agreement and the other Loan Documents and has made or caused
to be made under his or her supervision a review of the condition and operations
of MI and its Consolidated Subsidiaries during the period covered by such
financial statements with a view to determining whether MI and its Consolidated
Subsidiaries were in compliance with all of the provisions of this Agreement and
such Loan Documents at the times such compliance is required hereby and thereby,
and that such review has not disclosed, and such Authorized Officer has no
knowledge of, the existence during such period of an Event of Default or Default
or, if an Event of Default or Default existed, describing the nature and period
of existence thereof and the action which MI and its Consolidated Subsidiaries
propose to take or have taken with respect thereto and (B) attaching a schedule
showing the calculation of the financial covenants specified in Section 7.03;
(v) (A) as soon as available and in any event not
later than December 31 of each calendar year, financial projections,
supplementing and superseding the Annual Plan referred to in Section
6.01(g)(ii)(A) and (B), prepared on a quarterly basis and otherwise in form and
substance satisfactory to the Agents, for the immediately succeeding Fiscal Year
for MI and its Consolidated Subsidiaries, and prepared on an annual basis for
the next immediately succeeding two Fiscal Years, all such financial projections
to be reasonable, to be prepared on a reasonable basis and in good faith, and to
be based on assumptions believed by MI to be reasonable at the time made and
from the best information then available to MI and (B) as soon as available, any
restatement by MI and its Consolidated Subsidiaries of any financial projections
delivered under (A) of this clause (vi) prior to the next scheduled delivery of
financial projections;
(vi) no more than three times during any Fiscal Year,
as soon as available and in any event no later than 30 days after the quarterly
management meetings, a
-62-
summarized analysis of key operating metrics (the "Rolling Forecast") which
Rolling Forecast shall update the Annual Plan most recently delivered to the
Agents;
(vii) promptly after submission to any Governmental
Authority, all documents and information furnished to such Governmental
Authority in connection with any material investigation of any Loan Party;
(viii) as soon as possible, and in any event within 3
Business Days after the occurrence of an Event of Default or Default or the
occurrence of any event or development that could reasonably be expected to have
a Material Adverse Effect, the written statement of an Authorized Officer of the
Administrative Borrower setting forth the details of such Event of Default or
Default or such other event or development that could reasonably be expected to
have a Material Adverse Effect and the action which the affected Loan Party
proposes to take with respect thereto;
(ix) within fifteen (15) days following the end of
each calendar month, a Borrowing Base Report, together with such other
supporting schedules and documentation as the Administrative Agent may
reasonably request.
(x) (A) as soon as possible and in any event within
10 days after any Domestic Loan Party or any ERISA Affiliate thereof knows or
has reason to know that (1) any Reportable Event with respect to any Employee
Plan has occurred, (2) any other Termination Event with respect to any Employee
Plan has occurred, or (3) an accumulated funding deficiency has been incurred or
an application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Plan, a statement of an Authorized
Officer of the Administrative Borrower setting forth the details of such
occurrence and the action, if any, which such Loan Party or such ERISA Affiliate
proposes to take with respect thereto, (B) promptly and in any event within 3
days after receipt thereof by any Domestic Loan Party or any ERISA Affiliate
thereof from the PBGC, copies of each notice received by any Domestic Loan Party
or any ERISA Affiliate thereof of the PBGC's intention to terminate any Plan or
to have a trustee appointed to administer any Plan, (C) promptly and in any
event within 10 days after the filing thereof with the Internal Revenue Service
if requested by any Agent, copies of each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each Employee Plan and
Multiemployer Plan, (D) promptly and in any event within 10 days after any Loan
Party or any ERISA Affiliate thereof knows or has reason to know that a required
installment within the meaning of Section 412 of the Internal Revenue Code has
not been made when due with respect to an Employee Plan, (E) promptly and in any
event within 3 days after receipt thereof by any Domestic Loan Party or any
ERISA Affiliate thereof from a sponsor of a Multiemployer Plan or from the PBGC,
a copy of each notice received by any Domestic Loan Party or any ERISA Affiliate
thereof concerning the imposition or amount of withdrawal liability under
Section 4202 of ERISA or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA, and (F) promptly and in any
event within 10 days after any Domestic Loan Party or any ERISA Affiliate
thereof sends notice of a plant closing or mass layoff (as defined in WARN) to
employees, copies of each such notice sent by such Loan Party or such ERISA
Affiliate thereof;
-63-
(xi) promptly after the commencement thereof but in
any event not later than 3 Business Days after service of process with respect
thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of
each action, suit or proceeding before any court or other Governmental Authority
or other regulatory body or any arbitrator which, if adversely determined, could
have a Material Adverse Effect;
(xii) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with any Material
Contract, including, without limitation, the MHI Indenture and the MI Indenture;
(xiii) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with the sale or
other Disposition of the Capital Stock of, or all or substantially all of the
assets of, any Loan Party;
(xiv) as soon as possible and in any event within 10
Business Days after preparation or delivery thereof, copies of the minutes of
each meeting of MI's Board of Directors together with copies of all reports and
similar summaries presented to the Board during such meeting, unless advised by
counsel to MI that to do would violate any applicable privilege notwithstanding
the terms of Section 12.20 hereto;
(xv) promptly after the sending or filing thereof,
copies of all statements, reports and other information any Loan Party sends to
any holders of its Indebtedness, including without limitations, the noteholders
under the MHI Indenture and the MI Indenture, or its securities or files with
the SEC or any national (domestic or foreign) securities exchange;
(xvi) promptly upon receipt thereof, copies of all
financial reports (including, without limitation, management letters), if any,
submitted to any Loan Party by its auditors in connection with any annual or
interim audit of the books thereof;
(xvii) promptly upon request, (A) additional working
capital data by Subsidiary and worldwide grouping, (B) the Key Products Report
and (C) monthly plan information; and
(xviii) promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of any Loan
Party as any Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security. Cause:
(i) each Subsidiary of any Domestic Loan Party not in
existence on the Effective Date, and each Subsidiary of any Domestic Loan Party
which is a non borrowing Subsidiary on the Effective Date or upon formation or
acquisition but later ceases to be a non borrowing Subsidiary (in each case
other than an Inactive Subsidiary), to execute and deliver to the Collateral
Agent promptly following its request (A) a Guaranty guaranteeing the A
Obligations, (B) a Security Agreement, (C) if such Subsidiary has any
Subsidiaries, a Pledge
-64-
Agreement together with (x) certificates evidencing all of the Capital Stock of
any Person owned by such Subsidiary, (y) undated stock powers executed in blank
with signature guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as the Collateral Agent may reasonably request in
respect of complying with any legend on any such certificate or any other matter
relating to such shares, (D) one or more Mortgages creating, on the real
property of such Subsidiary with a Current Value in excess of $100,000, a
perfected, first priority Lien (subject to Permitted Liens) on such real
property, a Title Insurance Policy covering such real property, a current ALTA
survey thereof and a surveyor's certificate, each in form and substance
satisfactory to the Collateral Agent, together with such other agreements,
instruments and documents as the Collateral Agent may reasonably require whether
comparable to the documents required under Section 7.01(o) or otherwise, and (E)
such other agreements, instruments, approvals, legal opinions or other documents
reasonably requested by the Collateral Agent in order to create, perfect,
establish the first priority of or otherwise protect any Lien purported to be
covered by any such Security Agreement, Pledge Agreement or Mortgage or
otherwise to effect the intent that such Subsidiary shall become bound by all of
the terms, covenants and agreements contained in the Loan Documents and that all
property and assets of such Subsidiary shall become Collateral for the A
Obligations; and
(ii) each owner of the Capital Stock of any such
Subsidiary to execute and deliver promptly and in any event within 10 days after
the formation or acquisition of such Subsidiary a Pledge Agreement, together
with (A) certificates evidencing all of the Capital Stock of such Subsidiary,
(B) undated stock powers or other appropriate instruments of assignment executed
in blank with signature guaranteed, (C) such opinion of counsel and such
approving certificate of such Subsidiary as the Collateral Agent may reasonably
request in respect of complying with any legend on any such certificate or any
other matter relating to such shares and (D) such other agreements, instruments,
approvals, legal opinions or other documents requested reasonably by the
Collateral Agent.
(c) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations, orders (including, without limitation, all Environmental
Laws), judgments and awards (including any settlement of any claim that, if
breached, could give rise to any of the foregoing), such compliance to include,
without limitation, (i) paying before the same become delinquent all taxes,
assessments and governmental charges or levies that are imposed upon it or upon
its income or profits or upon any of its properties, and (ii) paying all lawful
claims which if unpaid might become a Lien or charge upon any of its properties,
except, to the extent contested in good faith by proper proceedings which stay
the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves have been set aside for the
payment thereof in accordance with GAAP (or, in the case of any Foreign
Subsidiary, such generally accepted accounting principles applicable to it).
(d) Preservation of Existence, Etc. (i) Maintain and preserve,
and cause each of its Subsidiaries (other than Inactive Subsidiaries) to
maintain and preserve, its existence, and (ii) take all action to maintain its
rights and privileges, and become or remain, and cause each of its Subsidiaries
(other than Inactive Subsidiaries) to become or remain, duly qualified and in
good standing (or, in the case of any Foreign Subsidiary, duly incorporated) in
each jurisdiction in which the character of the properties owned or leased by it
or in which the
-65-
transaction of its business makes such qualification necessary, except, in each
case, as otherwise permitted by Section 7.02(c) and except, in the case of
clause (ii) above, to the extent the failure to do so could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(e) Keeping of Records and Books of Account. Keep, and cause
each of its Subsidiaries to keep, adequate records and books of account, with
complete entries made to permit the preparation of financial statements in
accordance with GAAP (or, in the case of any Foreign Subsidiary, such generally
accepted accounting principles applicable to it).
(f) Inspection Rights. Subject to the limitation set forth in
Section 4.01, permit, and cause each of its Subsidiaries to permit, the agents
and representatives of any Agent, at any time and from time to time during
normal business hours, at the expense of the Borrowers, to examine and make
copies of and abstracts from its records and books of account, to visit and
inspect its properties, to verify materials, leases, notes, accounts receivable,
deposit accounts and its other assets, to conduct audits, physical counts,
valuations, appraisals, Phase I Environmental Site Assessments (and, if
requested by the Collateral Agent based upon the results of any such Phase I
Environmental Site Assessment, a Phase II Environmental Site Assessment) or
examinations and to discuss its affairs, finances and accounts with any of its
directors, officers, managerial employees, independent accountants or any of its
other representatives. In furtherance of the foregoing, each Loan Party hereby
authorizes its independent accountants, and the independent accountants of each
of its Subsidiaries, to discuss the affairs, finances and accounts of such
Person (independently or together with representatives of such Person) with the
agents and representatives of any Agent in accordance with this Section 7.01(f).
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, and comply in all
material respects, and cause each of its Subsidiaries to comply in all material
respects, at all times with the provisions of all leases to which it is a party
as lessee or under which it occupies property, so as to prevent any loss or
forfeiture thereof or thereunder.
(h) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any Governmental
Authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event in amount, adequacy and scope reasonably
satisfactory to the Collateral Agents. All policies covering the Collateral are
to be made payable to the Collateral Agent for the benefit of the Agents and the
Lenders and the L/C Issuer, as its interests may appear, in case of loss, under
a standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Collateral Agent may require to fully
protect the interest of the Lenders and the L/C Issuer in the Collateral and to
any payments to be made under such policies. All certificates of insurance are
to be delivered to the Collateral Agent and the policies are to be
-66-
premium prepaid, with the loss payable and additional insured endorsement in
favor of the Collateral Agent and such other Persons as the Collateral Agent may
designate from time to time, and shall provide for not less than 30 days' prior
written notice to the Collateral Agent of the exercise of any right of
cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, the Collateral Agent may arrange for such insurance, but at the
Borrowers' expense and without any responsibility on the Collateral Agent's part
for obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. The Collateral Agent
shall be promptly notified of all changes to insurance policies, including,
without limitation, changes in coverage and insurance carriers. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the sole right, in the name of the Lenders and the L/C Issuer,
any Loan Party and its Subsidiaries, to file claims under any insurance
policies, to receive, receipt and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
(i) Obtaining of Permits, Etc. Obtain, maintain and preserve,
and cause each of its Subsidiaries to obtain, maintain and preserve, and take
all necessary action to timely renew, all material permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business.
(j) Environmental. (i) Keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens; (ii)
comply, and cause each of its Subsidiaries to comply, in all material respects,
with applicable Environmental Laws and provide to the Agents any documentation
of such compliance which the Collateral Agent may reasonably request; (iii)
provide the Agents written notice within 5 days of any Loan Party acquiring
knowledge of any Release of a Hazardous Material in excess of any reportable
quantity from or onto property owned or operated by it or any of its
Subsidiaries and take any Remedial Actions required by Environmental Laws to
xxxxx said Release; (iv) provide the Agents with written notice promptly and in
any event within 10 days of the receipt of any of the following: (A) notice that
an Environmental Lien has been filed against any property of any Loan Party or
any of its Subsidiaries; (B) commencement of any Environmental Action or notice
that an Environmental Action will be filed against any Loan Party or any of its
Subsidiaries; and (C) notice of a violation, citation or other administrative
order which could have a Material Adverse Effect and (v) defend, indemnify and
hold harmless the Agents and the Lenders and the L/C Issuer and their
transferees, and their respective employees, agents, officers and directors (the
"Environmental Indemnitees"), from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs or expenses (including, without
limitation, attorney and consultant fees, investigation and laboratory fees,
court costs and litigation expenses) arising out of (A) the generation,
presence, disposal, Release or threatened Release of any Hazardous Materials on,
under, in, originating or emanating from any property at any time owned or
operated by any Loan Party or any of its Subsidiaries (or its predecessors in
interest or title), (B) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to the presence or
Release of such Hazardous Materials, (C) any request for information,
investigation, lawsuit brought or threatened, settlement reached or order by a
Governmental Authority relating to the presence or Release of such Hazardous
Materials, (D) any violation of any Environmental Law and/or (E) any
Environmental Action filed against
-67-
any Agent or any Lender, except to the extent such claims, demands, penalties,
fines, liabilities, settlements, damages, costs or expenses may arise out of the
gross negligence or willful misconduct of such Environmental Indemnitees as
determined by a final judgment of a court of competent jurisdiction).
(k) Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of its Subsidiaries to take such action
and execute, acknowledge and deliver, at its sole cost and expense, such
agreements, instruments or other documents as any Agent may require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected Liens
(subject only to Permitted Liens) any of the Collateral, (iii) to establish and
maintain the validity and effectiveness of any of the Loan Documents and the
validity, perfection and priority of the Liens intended to be created thereby,
and (iv) to better assure, convey, grant, assign, transfer and confirm unto each
Agent, each Lender and the L/C Issuer the rights now or hereafter intended to be
granted to it under this Agreement or any other Loan Document. In furtherance of
the foregoing, to the maximum extent permitted by applicable law, each Loan
Party (i) authorizes each Agent to execute any such agreements, instruments or
other documents in such Loan Party's name and to file such agreements,
instruments or other documents in any appropriate filing office, (ii) authorizes
each Agent to file any financing statement required hereunder or under any other
Loan Document, and any continuation statement or amendment with respect thereto,
in any appropriate filing office without the signature of such Loan Party, and
(iii) ratifies the filing of any financing statement, and any continuation
statement or amendment with respect thereto, filed without the signature of such
Loan Party prior to the date hereof.
(l) Change in Collateral; Collateral Records. (i) Give the
Collateral Agent not less than 15 days' prior written notice of any change in
the location of any Collateral, other than to locations set forth on Schedule
6.01(ee), (ii) advise the Collateral Agent promptly, in sufficient detail, of
any material adverse change relating to the type, quantity or quality of the
Collateral or the Lien granted thereon and (iii) execute and deliver, and cause
each of its Subsidiaries to execute and deliver, to the Collateral Agent for the
benefit of the Agents and the Lenders and the L/C Issuer from time to time,
solely for the Collateral Agent's convenience in maintaining a record of
Collateral, such written statements and schedules as the Collateral Agent may
reasonably require, designating, identifying or describing the Collateral.
(m) Landlord Waivers; Collateral Access Agreements. (i) At any
time any Collateral with a book value in excess of $500,000 (when aggregated
with all other Collateral at the same location) is located on any real property
leased by a Domestic Loan Party (whether such real property is now existing or
acquired after the Effective Date), use commercially reasonable efforts to
obtain written subordinations or waivers, in form and substance satisfactory to
the Collateral Agent, of all present and future Liens to which the owner or
lessor of such premises may be entitled to assert against the Collateral; and
(ii) Use commercially reasonable efforts to obtain
written access agreements, in form and substance satisfactory to the Collateral
Agent, providing access to Collateral of any Domestic Loan Party with book value
in excess of $500,000 (when aggregated with all other Collateral at the same
location) located on any premises not owned by a
-68-
Domestic Loan Party in order to remove such Collateral from such premises during
an Event of Default.
(n) Subordination. Cause all Indebtedness and other
obligations now or hereafter owed by it to any of its Affiliates, to be
subordinated in right of payment and security to the Indebtedness and other
Obligations owing to the Agents and the Lenders and the L/C Issuer in accordance
with a subordination agreement in form and substance satisfactory to the Agents.
(o) After Acquired Real Property. Upon the acquisition by it
or any of its Subsidiaries after the date hereof of any interest (whether fee,
freehold or leasehold) in any real property (wherever located) (each such
interest being an "After Acquired Property") (x) with a Current Value (as
defined below) in excess of $100,000 in the case of a fee or freehold interest,
or (y) requiring the payment of annual rent exceeding in the aggregate $100,000
in the case of leasehold interest, immediately so notify the Collateral Agent,
setting forth with specificity a description of the interest acquired, the
location of the real property, any structures or improvements thereon and, in
the case of a fee or freehold interest in After Acquired Property, either an
appraisal or such Loan Party's good-faith estimate of the current value of such
After Acquired Property (for purposes of this Section, the "Current Value"). The
Collateral Agent shall notify such Loan Party whether it intends to require a
Mortgage and the other documents referred to below or in the case of leasehold,
a leasehold Mortgage or landlord's waiver (pursuant to Section 7.01(m) hereof).
Upon receipt of such notice requesting a Mortgage, the Person which has acquired
such After Acquired Property shall promptly furnish to the Collateral Agent,
upon its reasonable requests, the following, each in form and substance
satisfactory to the Collateral Agent: (i) a Mortgage with respect to such real
property and related assets located at the After Acquired Property, each duly
executed by such Person and in recordable form; (ii) evidence of the recording
of the Mortgage referred to in clause (i) above in such office or offices as may
be necessary or, in the opinion of the Collateral Agent, desirable to create and
perfect a valid and enforceable first priority lien on the property purported to
be covered thereby or to otherwise protect the rights of the Agents and the
Lenders and the L/C Issuer thereunder, (iii) a Title Insurance Policy but only
to the extent such Real Property has a Current Value in excess of $500,000, (iv)
a survey of such real property, certified to the Collateral Agent and to the
issuer of the Title Insurance Policy by a licensed professional surveyor
reasonably satisfactory to the Collateral Agent but only to the extent such Real
Property has a Current Value in excess of $500,000, (v) Phase I Environmental
Site Assessments with respect to such real property, certified to the Collateral
Agent by a company reasonably satisfactory to the Collateral Agent but only to
the extent such Real Property has a Current Value in excess of $500,000, (vi) in
the case of a leasehold interest, a certified copy of the lease between the
landlord and such Person with respect to such real property in which such Person
has a leasehold interest, and the certificate of occupancy with respect thereto,
(vii) in the case of a leasehold interest, an attornment and nondisturbance
agreement between the landlord (and any fee mortgagee) with respect to such real
property and the Collateral Agent, and (viii) such other documents or
instruments (including opinions of counsel) as the Collateral Agent may
reasonably require. The Borrowers shall pay all fees and expenses, including
reasonable attorneys' fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party's obligations under this Section
7.01(o).
-69-
(p) Fiscal Year. Cause the Fiscal Year of MHI and its
Subsidiaries to end on December 31 of each calendar year unless the Agents
consent to a change in such Fiscal Year (and appropriate related changes to this
Agreement).
(q) TRC Transaction. Use its best efforts to consummate the
TRC transaction as soon as practicable after the Effective Date.
Section 7.02 Negative Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Domestic Loan Party shall not, unless
the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired; file or suffer to exist under the Uniform Commercial Code or
any similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or any of its Subsidiaries or assign or
otherwise transfer, or permit any of its Subsidiaries to assign or otherwise
transfer, any account or other right to receive income; other than, as to all of
the above, Permitted Liens.
(b) Indebtedness. Create, incur, assume, guarantee or suffer
to exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.
(c) Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell,
lease or sublease, transfer or otherwise dispose of, whether in one transaction
or a series of related transactions, all or any part of its business, property
or assets, whether now owned or hereafter acquired (or agree to do any of the
foregoing), or purchase or otherwise acquire, whether in one transaction or a
series of related transactions, all or substantially all of the assets of any
Person (or any division thereof) (or agree to do any of the foregoing), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that
(i) (A) any Borrower (other than MHI or MI) may be
merged into or consolidated with another Borrower and (B) any wholly-owned
Subsidiary (other than a Borrower) of any Loan Party may be merged into such
Loan Party or another wholly-owned Subsidiary of such Loan Party, or may
consolidate with another wholly-owned Subsidiary of such Loan Party, in each
case, so long as (1) no other provision of this Agreement would be violated
thereby, (2) such Loan Party gives the Agents at least 45 days' prior written
notice of such merger or consolidation, (3) no Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction, (4) the rights of the Lenders and the L/C Issuer in any Collateral,
including, without limitation, the existence, perfection and priority of
-70-
any Lien thereon, are not adversely affected by such merger or consolidation and
(5) the surviving Subsidiary, if any, is joined as a Loan Party hereunder and is
a party to a Guaranty and a Security Agreement (or, if such Person is a Foreign
Subsidiary, it is a party to a comparable foreign document) and the Capital
Stock of which Subsidiary is the subject of a Pledge Agreement (or comparable
foreign document, as the case may be), in each case, which is in full force and
effect on the date of and immediately after giving effect to such merger or
consolidation;
(ii) any Loan Party and its Subsidiaries may (A) sell
Inventory in the ordinary course of business, (B) dispose of obsolete or
worn-out Equipment in the ordinary course of business and (C) sell or otherwise
dispose of other property or assets for cash in an aggregate amount not less
than the fair market value of such property or assets, provided that the Net
Cash Proceeds of such Dispositions, in the case of clauses (B) and (C) above, do
not exceed $250,000 in the aggregate in any twelve-month period and are paid to
the Administrative Agent for the benefit of the Lenders to the extent required
under the terms of Section 2.05(c)(ii);
(iii) (A) MI may, on or about the Effective Date,
sell to MHI the MHI Notes held by MI immediately prior to the Effective Date,
(B) each Inactive Subsidiary and Metallurg International Resources, LLC may sell
or otherwise dispose of its assets in connection with the winding down of its
business operations, (C) CIF may sell or otherwise dispose of assets used in its
lithium feldspar production line and its aluminum alloy production line to the
extent such sale or disposition constitutes a CIF Authorized Transaction, and
(D) LSM may sell or otherwise dispose of assets located in Norway to the extent
such sale or disposition constitutes a UK Authorized Transaction; and
(iv) SMC may sell the Conform machine and related
ancillary equipment to CIF (the "Conform Sale") so long as $1,250,000 of the Net
Cash Proceeds from such Disposition are paid to the Administrative Agent for the
benefit of the Lenders pursuant to the terms of Section 2.05(c)(ii).
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
Section 6.01(l).
(e) Loans, Advances, Investments, Etc. Make or commit or agree
to make any loan, advance, guarantee of obligations, other extension of credit
or capital contributions to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) investments existing on the date
hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the
amount thereof as set forth in such Schedule or any other modification of the
terms thereof, (ii) loans and advances by (A) an A Borrower to another A
Borrower, made in the ordinary course of business and (B) a Borrower to MHI for
any of the purposes for which dividends are permitted pursuant to clause (A) of
the proviso to Section 7.02(h) and (C) a Loan Party to its Subsidiaries and by
such Subsidiaries to such Loan Parties, made in the ordinary
-71-
course of business and not exceeding in the aggregate for all Loan Parties and
their Subsidiaries at any one time outstanding $100,000, (iii) loans and
advances by any Loan Party to its officers and employees, provided (A) that the
aggregate amount of all such loans and advances made by all Loan Parties that
are outstanding at any time does not exceed $50,000 and (B) each such loan and
advance is full recourse to the applicable officer or employee, (iv) Contingent
Obligations of a Loan Party in respect of its guaranty of the Indebtedness of
another Loan Party to the extent such Indebtedness constitutes Permitted
Indebtedness or its guaranty of any trade payables or ordinary operating
expenses of any other Loan Party, (v) investments consisting of Capital Stock,
obligations, securities or other property received by a Borrower or any of its
Subsidiaries in settlement of Accounts Receivable (created in the ordinary
course of business) from bankrupt or insolvent obligors, (vi) Permitted
Investments, (vii) Hedging Agreements permitted under clause (g) of the
definition of the term "Permitted Indebtedness", and (viii) payments permitted
under Section 7.02(h).
(f) Lease Obligations. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Effective Date owing by all Loan Parties and their Subsidiaries in any
Fiscal Year to exceed the amounts set forth in subsection (g) of this Section
7.02, and (B) Operating Lease Obligations which would not cause the aggregate
amount of all Operating Lease Obligations owing by all Loan Parties and their
Subsidiaries in any Fiscal Year to exceed $1,500,000.
(g) Capital Expenditures. Make or commit or agree to make, or
permit any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all Capital Expenditures made by the Loan Parties and their
Subsidiaries to exceed $5,000,000 in any Fiscal Year (the "Capital Expenditure
Limit"). Notwithstanding the foregoing, in the event Loan Parties and their
Subsidiaries do not expend the entire applicable Capital Expenditure Limit in
Fiscal Year 2004 or Fiscal Year 2005, the Loan Parties and their Subsidiaries
may carry forward to the immediately succeeding Fiscal Year up to $1,000,000 of
the unutilized portion of such applicable Capital Expenditure Limit, provided
that the amount carried forward shall be included in the Capital Expenditure
Limit for such succeeding Fiscal Year only during the first six months of such
Fiscal Year. All Capital Expenditures made by the Loan Parties and their
Subsidiaries shall first be applied to reduce the carry forward from the
previous Fiscal Year, if any, and then to reduce the applicable Capital
Expenditure Limit.
(h) Restricted Payments. (i) Declare or pay any dividend or
other distribution, direct or indirect, on account of any Capital Stock of any
Loan Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make
any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Capital Stock of any Loan Party or any direct or indirect parent of any Loan
Party, now or hereafter outstanding, (iii) make any payment to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights for
the purchase or acquisition of shares of any class of Capital Stock of any Loan
Party, now or hereafter outstanding, (iv) return any
-00-
Xxxxxxx Xxxxx to any shareholders or other equity holders of any Loan Party or
any of its Subsidiaries, or make any other distribution of property, assets,
shares of Capital Stock, warrants, rights, options, obligations or securities
thereto as such or (v) pay any management fees or any other fees or expenses
(including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management, consulting or other services agreement
to any of the shareholders or other equityholders of any Loan Party or any of
its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
of any Loan Party; provided, however, (A) any Loan Party may pay dividends to
MHI and/or MI (1) in amounts necessary to pay customary expenses of MHI and/or
MI in the ordinary course of its business as a public holding company (including
salaries and related reasonable and customary expenses incurred by employees of
MI) and (2) in amounts necessary to pay taxes when due and owing by MHI and/or
MI, (B) any Subsidiary of any Borrower (other than MHI) may pay dividends to
such Borrower, (C) MI may pay dividends to MHI in an amount necessary to enable
MHI to pay interest due on the MHI Notes (to extent such dividends are permitted
under the MI Indenture) and (D) MHI may pay dividends in the form of common
Capital Stock; provided that, in each case of clauses (A) through (D) above, at
the election of the Collateral Agent, which the Collateral Agent may and, upon
the direction of the Required Lenders, shall make by notice to the
Administrative Borrower, no such payment shall be made if an Event of Default
shall have occurred and be continuing or would result from the making of any
such payment.
(i) Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose that would
cause such Loan to be a margin loan under the provisions of Regulation T, U or X
of the Board.
(j) Transactions with Affiliates. Enter into, renew, extend or
be a party to, or permit any of its Subsidiaries to enter into, renew, extend or
be a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof as determined by the
Board of Directors of such Person, (ii) transactions with another Loan Party,
(iii) payment of reasonable and customary directors' fees and indemnities of
directors, officers and employees and (iv) transactions permitted by Sections
7.02(c), (e), (h) and (m).
(k) Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends
or to make any other distribution on any shares of Capital Stock of such
Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or
prepay or to subordinate any Indebtedness owed to any Loan Party or any of its
Subsidiaries, (iii) to make loans or advances to any Loan Party or any of its
Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party
or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the
foregoing; provided, however, that nothing in any of clauses (i) through (iv) of
this Section 7.02(k) shall prohibit or restrict compliance with:
-73-
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this
Agreement and described on Schedule 7.02(k) (and any agreement replacing such
existing agreement so long as such replacement agreement is permitted under
clause (b) of the definition of the term "Permitted Indebtedness");
(C) any applicable law, rule or regulation
(including, without limitation, applicable currency control laws and applicable
state corporate statutes restricting the payment of dividends in certain
circumstances);
(D) in the case of clause (iv) any agreement setting
forth customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of similar
property or assets; or
(E) in the case of clause (iv) any agreement,
instrument or other document evidencing a Permitted Lien from restricting on
customary terms the transfer of any property or assets subject thereto.
(l) Limitation on Issuance of Capital Stock. Except as
permitted by Section 7.02(c) or (h), issue or sell or enter into any agreement
or arrangement for the issuance and sale of, or permit any of its Subsidiaries
to issue or sell or enter into any agreement or arrangement for the issuance and
sale of, any shares of its Capital Stock, any securities convertible into or
exchangeable for its Capital Stock or any warrants; provided that the preceding
clause shall not apply to the issuance or sale by MHI of its own Capital Stock.
(m) Modifications of Indebtedness, Organizational Documents
and Certain Other Agreements; Etc. (i) Amend, modify or otherwise change (or
permit the amendment, modification or other change in any manner of) any of the
provisions of any of its or its Subsidiaries' Indebtedness (including, without
limitation, the MHI Indenture and the MI Indenture), or of any instrument or
agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date
originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provision, if
any, of such Indebtedness, or would otherwise be adverse to the Lenders or the
L/C Issuer in any respect, (ii) except for the Obligations and the purchase on
the Effective Date by MHI of the MHI Notes held by MI immediately prior to the
Effective Date, make any voluntary or optional payment, prepayment, redemption,
defeasance, sinking fund payment or other acquisition for value of any of its or
its Subsidiaries' Indebtedness (including, without limitation, by way of
depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when due),
or refund, refinance, replace or exchange any other Indebtedness for any such
Indebtedness (except to the extent such Indebtedness is otherwise expressly
permitted by the definition of "Permitted Indebtedness"), or, except for the
Obligations and other Permitted Indebtedness required to be prepaid in
connection with an asset disposition permitted hereunder, make any payment,
prepayment, redemption, defeasance, sinking fund payment or repurchase of any
-74-
outstanding Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any
notice with respect to any of the foregoing, (iii) except as permitted by
Section 7.02(c), amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN or (iv) amend, modify
or otherwise change its certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by it, with respect to any of its Capital Stock (including any
shareholders' agreement), or enter into any new agreement with respect to any of
its Capital Stock, except any such amendments, modifications or changes or any
such new agreements or arrangements pursuant to this clause (iv) that either
individually or in the aggregate, could not have a Material Adverse Effect.
(n) Investment Company Act of 1940. Engage in any business,
enter into any transaction, use any securities or take any other action or
permit any of its Subsidiaries to do any of the foregoing, that would cause it
or any of its Subsidiaries to become subject to the registration requirements of
the Investment Company Act of 1940, as amended, by virtue of being an
"investment company" or a company "controlled" by an "investment company" not
entitled to an exemption within the meaning of such Act.
(o) Compromise of Accounts Receivable. Compromise or adjust
any Account Receivable (or extend the time of payment thereof) or grant any
discounts, allowances or credits or permit any of its Subsidiaries to do so
other than, provided no Event of Default has occurred and is continuing, in the
ordinary course of its business.
(p) Properties. Permit any property subject to the Lien of the
Collateral Agent to become a fixture with respect to real property or to become
an accession with respect to other personal property with respect to which real
or personal property the Collateral Agent does not have a valid and perfected
Lien or has not received a written subordination or waiver in accordance with
Section 7.01(m)(i).
(q) ERISA. Except as could not reasonably be expected to have
a Material Adverse Effect, (i) engage, or permit any ERISA Affiliate to engage,
in any transaction described in Section 4069 of ERISA; (ii) engage, or permit
any ERISA Affiliate to engage, in any prohibited transaction described in
Section 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory
or class exemption is not available or a private exemption has not previously
been obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA
Affiliate to adopt any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable law;
(iv) fail to make any contribution or payment to any Multiemployer Plan which it
or any ERISA Affiliate may be required to make under any agreement relating to
such Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment.
(r) Environmental. Permit the use, Handling, generation,
storage, treatment, Release or disposal of Hazardous Materials at any property
owned or leased by it or
-75-
any of its Subsidiaries, except in compliance in all material respects with all
applicable Environmental Laws and so long as such use, Handling, generation,
storage, treatment, Release or disposal of Hazardous Materials could not
reasonably be expected to have a Material Adverse Effect.
(s) Certain Agreements. Agree to any material amendment or
other material change to or material waiver of any of its rights under any
Material Contract, including, without limitation, the MHI Indenture and the MI
Indenture.
(t) Excess Cash. Accumulate or maintain cash in bank accounts
(in excess of checks outstanding against such accounts and amounts necessary to
meet minimum balance requirements), cash equivalents or Permitted Investments of
the Loan Parties and their Subsidiaries (other than CIF, XXX, LSM and ALPOCO) in
an aggregate amount in excess of $1,000,000 (excluding amounts deposited into
the Cash Management Accounts) at any time.
(u) Inactive Subsidiaries. Permit any Inactive Subsidiary to
(i) become an active company, have operations or conduct business or (ii) own
any assets other than assets with a fair market value not in excess of $50,000
in the aggregate for any Inactive Subsidiary or $100,000 in the aggregate for
all Inactive Subsidiaries.
Section 7.03 Financial Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Loan Party shall not, unless the
Required Lenders shall otherwise consent in writing:
(a) Minimum Borrowing Base. Permit the "Total Borrowing Base"
(as defined in the Borrowing Base Report) of MI and SMC as of the last day of
each calendar month, commencing on August 31, 2004, to be less than $15,000,000,
as determined in accordance with the Borrowing Base Report most recently
delivered to the Administrative Agent pursuant to Section 7.01(a)(ix); provided
that, if at any time such Total Borrowing Base shall be less than $15,000,000,
the Loan Parties shall, on or before the twentieth (20th) day of the immediately
succeeding month, deliver cash to the Administrative Agent in an amount equal to
the difference of $15,000,000 less such Total Borrowing Base, which cash shall
collateralize the Obligations and be deposited in an account maintained by the
Administrative Agent until such time as the Total Borrowing Base (as reflected
in any monthly Borrowing Base Report delivered to the Administrative Agent after
the date such cash is so deposited) shall equal or exceed $15,000,000.
(b) Consolidated EBITDA. Permit Consolidated EBITDA of MI and
its Consolidated Subsidiaries for each period of four (4) consecutive fiscal
quarters of MI and its Consolidated Subsidiaries for which the last quarter ends
on a date set forth below (except the first test period shall be for the nine
(9) months ending September 30, 2004) to be less than the applicable amount set
forth below:
Applicable Period Consolidated EBITDA
----------------- -------------------
September 30, 2004 $ 8,095,000
-76-
Applicable Period Consolidated EBITDA
----------------- -------------------
December 31, 2004 $12,417,000
March 31, 2005 $14,960,000
June 30, 2005 $17,225,000
September 30, 2005 $19,000,000
December 31, 2005 $20,000,000
On the last day of each fiscal quarter $20,000,000
thereafter
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 Collection of Accounts Receivable; Management of
Collateral. The Borrowers shall (i) establish and maintain cash management
services of a type and on terms satisfactory to the Administrative Agent at one
or more of the banks set forth on Schedule 8.01 (each a "Cash Management Bank"),
and shall take such reasonable steps to enforce, collect and receive all amounts
owing on the Accounts Receivable of the Domestic Loan Parties, and (ii) deposit
or cause to be deposited promptly, and in any event no later than two Business
Days after the date of receipt thereof, all proceeds in respect of any
Collateral and all collections and other amounts received by any Domestic Loan
Party (including payments made by the Account Debtors directly to any Domestic
Loan Party) into a Cash Management Account or the Concentration Account.
(b) The Borrowers shall, with respect to each Cash Management
Account, deliver to the Administrative Agent either (i) a Cash Management
Agreement with respect to such Cash Management Account or (ii) evidence that the
Borrowers have provided to each Cash Management Bank at which such Cash
Management Account is located notice in writing of the Administrative Agent's
security interest in such Cash Management Account and irrevocable directions, in
form and substance satisfactory to the Administrative Agent, to send by
electronic funds transfer (including, but not limited to, ACH transfers) on each
Business Day to the Concentration Account all available funds on deposit in such
Cash Management Account. Notwithstanding the foregoing, promptly upon the
request of the Administrative Agent, each Borrower shall deliver a Cash
Management Agreement to the Administrative Agent with respect to any Cash
Management Account identified by the Administrative Agent. Each Cash Management
Agreement shall provide, among other things, that all available funds deposited
into the Cash Management Accounts covered thereby shall be sent by electronic
funds transfer (including, but not limited to, ACH transfers) on each Business
Day to the Concentration Account.
(c) Upon the terms and subject to the conditions set forth in
the Concentration Account Agreement with respect to the Concentration Account,
all amounts received in the Concentration Account shall, at the direction of the
Administrative Agent, be wired each Business Day into the Administrative Agent's
Account. The Administrative Agent
-77-
agrees that, so long as no Event of Default shall occur and be continuing, the
Administrative Agent will not direct the Concentration Account Bank to transfer
funds in the Concentration Account to the Administrative Agent's Account in
accordance with the immediately preceding sentence but shall allow such funds to
be used by the Borrowers and their Subsidiaries in the operation of their
businesses, subject to the terms of this Agreement.
(d) So long as no Default or Event of Default has occurred and
is continuing, the Administrative Borrower may amend Schedule 8.01 to add or
replace a Cash Management Bank or Cash Management Account; provided, however,
that (i) such prospective Cash Management Bank shall be reasonably satisfactory
to the Administrative Agent and the Administrative Agent shall have consented in
writing in advance to the opening of such Cash Management Account with the
prospective Cash Management Bank, and (ii) prior to the time of the opening of
such Cash Management Account, each Borrower and such prospective Cash Management
Bank shall have executed and delivered to the Administrative Agent a Cash
Management Agreement. Each Borrower shall close any of its Cash Management
Accounts (and establish replacement cash management accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days of notice from
the Administrative Agent that the creditworthiness of any Cash Management Bank
is no longer acceptable in the Administrative Agent's reasonable judgment, or as
promptly as practicable and in any event within 60 days of notice from the
Administrative Agent that the operating performance, funds transfer, or
availability procedures or performance of the Cash Management Bank with respect
to Cash Management Accounts or the Administrative Agent's liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in the Administrative Agent's reasonable judgment.
(e) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the relevant Obligations, and in which the Borrowers are
hereby deemed to have granted a Lien to the Administrative Agent. All checks,
drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received directly by any Borrower as proceeds of any Collateral
shall be held by such Borrower in trust for the Administrative Agent and upon
receipt be deposited by such Borrower in original form and no later than the
next Business Day after receipt thereof into the Concentration Account;
provided, however, except as provided in Section 2.05(c), all Net Cash Proceeds
received directly by such Borrower pursuant to an event described in Section
2.05(c)(ii), (iii) or (iv) shall be held by such Borrower in trust for the
Administrative Agent and upon receipt be deposited by the Borrower in original
form and no later than the next Business Day after receipt thereof into the
Administrative Agent's Account. A Borrower shall not commingle such collections
with such Borrower's own funds or the funds of any Subsidiary or Affiliate of
such Borrower or with the proceeds of any assets not included in the Collateral.
No checks, drafts or other instrument received by the Administrative Agent shall
constitute final payment to the Administrative Agent unless and until such
instruments have actually been collected.
(f) After the occurrence and during the continuance of an
Event of Default, the Administrative Agent may send a notice of assignment
and/or notice of the Administrative Agent's security interest to any and all
Account Debtors or third parties holding or otherwise concerned with any of the
Collateral, and thereafter so long as such Event of
-78-
Default is continuing, the Administrative Agent shall have the sole right to
collect the Accounts Receivable and/or take possession of the Collateral and the
books and records relating thereto.
(g) Each Domestic Loan Party hereby appoints the
Administrative Agent or its designee on behalf of the Administrative Agent as
the Domestic Loan Parties' attorney-in-fact with power exercisable during the
continuance of an Event of Default to endorse any Domestic Loan Party's name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Accounts Receivable, to sign any Domestic Loan Party's
name on any invoice or xxxx of lading relating to any of the Accounts
Receivable, drafts against Account Debtors with respect to Accounts Receivable,
assignments and verifications of Accounts Receivable and notices to Account
Debtors with respect to Accounts Receivable, to send verification of Accounts
Receivable, and to notify the Postal Service authorities to change the address
for delivery of mail addressed to any Domestic Loan Party to such address as the
Administrative Agent may designate and to do all other acts and things necessary
to carry out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of omission or commission (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction), or for any error of judgment or
mistake of fact or law; this power being coupled with an interest is irrevocable
until the Term Loans and other Obligations under the Loan Documents are paid in
full and all of the Loan Documents are terminated.
(h) Nothing herein contained shall be construed to constitute
the Administrative Agent as agent of any Loan Party for any purpose whatsoever,
and the Administrative Agent shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof (other than
from acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction). The Administrative Agent shall not, under any circumstance or in
any event whatsoever, have any liability for any error or omission or delay of
any kind occurring in the settlement, collection or payment of any of the
Accounts Receivable or any instrument received in payment thereof or for any
damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Administrative Agent, by
anything herein or in any assignment or otherwise, does not assume any of the
obligations under any contract or agreement assigned to the Administrative Agent
and shall not be responsible in any way for the performance by any Loan Party of
any of the terms and conditions thereof.
(i) If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, the Administrative Agent is hereby
authorized (but in no event obligated), after the occurrence and during the
continuance of an Event of Default, in its discretion to pay the amount thereof
to the proper taxing authority for the Loan Parties' account and to charge the
Loan Parties therefor.
(j) Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Administrative Agent herein provided,
and the obligations of the Loan Parties set forth herein, are cumulative of, may
be exercised singly or concurrently with, and are
-79-
not exclusive of, any other rights, remedies or obligations set forth in any
other Loan Document or as provided by law.
Section 8.02 Accounts Receivable Documentation. The Domestic Loan
Parties will at such intervals as the Administrative Agent may require, after
the occurrence and during the continuance of an Event of Default, execute and
deliver confirmatory written assignments of the Accounts Receivable to the
Administrative Agent and furnish such further schedules and/or information as
the Administrative Agent may require relating to the Accounts Receivable,
including, without limitation, sales invoices or the equivalent, credit memos
issued, remittance advices, reports and copies of deposit slips and copies of
original shipping or delivery receipts for all merchandise sold. In addition,
the Domestic Loan Parties shall notify the Administrative Agent of any material
non-compliance in respect of the representations, warranties and covenants
contained in Section 8.03. The items to be provided under this Section 8.02 are
to be in form reasonably satisfactory to the Administrative Agent and are to be
executed and delivered to the Administrative Agent from time to time solely for
its convenience in maintaining records of the Collateral. The Domestic Loan
Parties' failure to give any of such items to the Administrative Agent shall not
affect, terminate, modify or otherwise limit any Agent's Lien on the Collateral.
Section 8.03 Status of Accounts Receivable and Other Collateral. With
respect to Collateral of any Domestic Loan Party at the time the Collateral
becomes subject to any Agent's Lien, each Domestic Loan Party covenants,
represents and warrants: (a) such Loan Party shall be the sole owner, free and
clear of all Liens (except for the Permitted Liens), and, except as permitted in
any Loan Document, shall be fully authorized to sell, transfer, pledge and/or
grant a security interest in each and every item of said Collateral; (b) none of
the transactions underlying or giving rise to any Account Receivable shall
violate any applicable state or federal laws or regulations in any material
respect; (c) such Loan Party shall maintain books and records pertaining to said
Collateral in such detail, form and scope as the Administrative Agent shall
reasonably require; (d) such Loan Party shall immediately notify the
Administrative Agent if any Account Receivable arises out of contracts with any
Governmental Authority, and will execute any instruments and take any steps
reasonably required by the Administrative Agent in order that all monies due or
to become due under any such contract shall be assigned to the Administrative
Agent and notice thereof given to such Governmental Authority under the Federal
Assignment of Claims Act or any similar state or local law; (e) such Loan Party
will, immediately upon learning thereof, report to the Administrative Agent any
material loss or destruction of, or substantial damage to, any of the Collateral
having a value greater than $50,000, and any other matters affecting the value,
enforceability or collectibility of any of the Collateral; and (f) such Loan
Party is not and shall not be entitled to pledge the Administrative Agent's
credit on any purchases or for any purpose whatsoever.
Section 8.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent may at any time
and from time to time employ and maintain on the premises of any Loan Party a
custodian selected by the Administrative Agent who shall have full authority to
do all acts necessary to protect the Administrative Agent's interests and rights
under this Agreement and the Loan Documents. Each Loan Party hereby agrees to,
and to cause its Subsidiaries to, cooperate with any such custodian and to do
whatever the Administrative Agent may reasonably request to preserve the
-80-
Collateral. All costs and expenses incurred by the Administrative Agent by
reason of the employment of the custodian shall be the responsibility of the
Borrowers and charged to the Loan Account.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) any Borrower shall fail to pay (i) any principal of any
Loan, any Collateral Agent Advance or any Reimbursement Obligation when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) or (ii) any interest on any Loan or any Collateral Agent Advance or
any fee, indemnity or other amount payable under this Agreement or any other
Loan Document within 3 Business Days when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise);
(b) any representation or warranty made or deemed made by or
on behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate, or other document delivered to any Agent, any Lender or the L/C
Issuer pursuant to any Loan Document shall have been incorrect in any material
respect when made or deemed made;
(c) any Loan Party shall fail to perform or comply with any
covenant or agreement contained in ARTICLE VII applicable to it, or any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in any Security Agreement to which it is a party, any Pledge Agreement to which
it is a party, or any Mortgage to which it is a party;
(d) any Loan Party shall fail to perform or comply with any
other term, covenant or agreement contained in any Loan Document to be performed
or observed by it and, except as set forth in subsections (a), (b) and (c) of
this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 15 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by any Agent to such Loan Party;
(e) any Loan Party shall fail to pay any of its Indebtedness
(excluding Indebtedness evidenced by this Agreement) in excess of $200,000, or
any payment of principal, interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness, including, without
limitation, the MHI Indenture and the MI Indenture, or any other default under
any agreement or instrument relating to any such Indebtedness, or any other
event, shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment),
-81-
redeemed, purchased or defeased or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case, prior to
the stated maturity thereof;
(f) except as permitted under Section 7.02(c), any Loan Party
(i) shall institute any proceeding or voluntary case seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its property, (ii) shall be generally
not paying its debts as such debts become due or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general assignment for
the benefit of creditors, or (iv) shall take any action to authorize or effect
any of the actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against any Loan Party
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 45 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against any such Person or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur;
(h) any provision of any Loan Document shall at any time for
any reason (other than pursuant to the express terms thereof) cease to be valid
and binding on or enforceable against any Loan Party intended to be a party
thereto, or the validity or enforceability thereof shall be contested by any
party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;
(i) any Security Agreement, any Pledge Agreement, any Mortgage
or any other security document, after delivery thereof pursuant hereto, shall
for any reason fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien in favor of
the Collateral Agent for the benefit of the Agents and the Lenders and the L/C
Issuer on any Collateral purported to be covered thereby;
(j) [intentionally omitted]
(k) one or more judgments, orders or awards (or any settlement
of any claim that, if breached, could result in a judgment, order or award) for
the payment of money exceeding $200,000 in the aggregate shall be rendered
against any Loan Party and remain unsatisfied and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order, award or settlement, or (ii) there shall be a period of 15 consecutive
days after entry thereof during which a stay of enforcement of any such
judgment,
-82-
order, award or settlement, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that any such judgment, order, award or
settlement shall not give rise to an Event of Default under this subsection (k)
if and for so long as (A) the amount of such judgment, order, award or
settlement is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment, order, award or settlement;
(l) any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than fifteen (15)
days, if any such event or circumstance could be expected to have a Material
Adverse Effect as determined by the Agents in their sole discretion;
(m) any material damage to, or loss, theft or destruction of,
any Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Loan Party, if any such event or circumstance could be expected to have a
Material Adverse Effect as determined by the Agents in their sole discretion
exercised reasonably;
(n) except as permitted under Section 7.02(c), any cessation
of a substantial part of the business of any Loan Party for a period which
materially and adversely affects the ability of such Person to continue its
business on a profitable basis, if such cessation could be expected to have a
Material Adverse Effect as determined by the Agents in their sole discretion
exercised reasonably;
(o) the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by any Loan Party,
if such loss, suspension, revocation or failure to renew could be expected to
have a Material Adverse Effect as determined by the Agents in their sole
discretion exercised reasonably;
(p) any default or breach shall occur under any Material
Contract of any Loan Party, including, without limitation, the MHI Indenture and
the MI Indenture, and such default or breach, individually or when aggregated
with all such defaults or breaches, could be expected to have a Material Adverse
Effect as determined by the Agents in their sole discretion exercised
reasonably;
(q) the indictment or the threatened indictment of any Loan
Party under any criminal statute, or commencement or threatened commencement of
criminal or civil proceedings against any Loan Party, pursuant to which statute
or proceedings the penalties or remedies sought or available include forfeiture
to any Governmental Authority of any material portion of the property of such
Person;
(r) (A) any Domestic Loan Party or any of its ERISA Affiliates
shall have made a complete or partial withdrawal from a Multiemployer Plan, and,
as a result of such complete or partial withdrawal, any Domestic Loan Party or
any of its ERISA Affiliates incurs a
-83-
withdrawal liability in an annual amount exceeding $200,000; or (B) a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof any Domestic Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $200,000;
(s) any Termination Event with respect to any Employee Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
any Domestic Loan Party by any Agent, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value of
such Employee Plan's vested benefits exceeds the then current value of assets
allocable to such benefits in such Employee Plan by more than $200,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Internal Revenue Code, the liability is in excess of such
amount);
(t) any Loan Party shall be liable for any Environmental
Liabilities the payment of which could reasonably be expected to have a Material
Adverse Effect;
(u) a Change of Control shall have occurred;
(v) an "Event of Default" shall have occurred and be
continuing under the MHI Indenture or the MI Indenture; or
(w) an event or development occurs which could reasonably be
expected to have a Material Adverse Effect;
then, and in any such event, the Collateral Agent may, and shall at the
request of the Required Lenders, by notice to the Administrative Borrower, (i)
terminate or reduce all Commitments, whereupon all Commitments shall immediately
be so terminated or reduced, (ii) declare all or any portion of the Loans and
Reimbursement Obligations then outstanding to be due and payable, whereupon all
or such portion of the aggregate principal of all Loans and Reimbursement
Obligations, all accrued and unpaid interest thereon, all fees and all other
amounts payable under this Agreement and the other Loan Documents shall become
due and payable immediately, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Loan Party
and (iii) exercise any and all of its other rights and remedies under applicable
law, hereunder and under the other Loan Documents; provided, however, that upon
the occurrence of any Event of Default described in subsection (f) or (g) of
this Section 9.01 with respect to any Loan Party, without any notice to any Loan
Party or any other Person or any act by any Agent or any Lender, all Commitments
shall automatically terminate and all Loans and Reimbursement Obligations then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party. Subject to Section 4.04(b), Administrative Agent may, after the
occurrence and during the continuation of any Event of Default, require the
Borrowers to deposit with the Administrative Agent or, at its option, the L/C
Issuer, with respect to each Letter of Credit then outstanding cash in an amount
equal to 105% of the greatest amount for which such Letter of Credit may be
drawn. Such deposits shall be held by the Administrative Agent or, at its
option,
-84-
the L/C Issuer, in the Letter of Credit Collateral Account as security for, and
to provide for the payment of, the Letter of Credit Obligations.
ARTICLE X
AGENTS
Section 10.01 Appointment. Each Lender (and each subsequent maker of
any Loan by its making thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement, and the L/C Issuer hereby irrevocably
appoints and authorizes the Collateral Agent to perform the duties of the
Collateral Agent, including: (i) to receive on behalf of each Lender any payment
of principal of or interest on the Loans outstanding hereunder and all other
amounts accrued hereunder for the account of the Lenders and paid to such Agent,
and, subject to Section 2.02 of this Agreement, to distribute promptly to each
Lender its Pro Rata Share of all payments so received; (ii) to distribute to
each Lender and the L/C Issuer copies of all material notices and agreements
received by such Agent and not required to be delivered to each Lender and the
L/C Issuer pursuant to the terms of this Agreement, provided that the Agents
shall not have any liability to the Lenders or the L/C Issuer for any Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders
and the L/C Issuer; (iii) to maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations to the
Lenders, the Loans, and related matters and to maintain, in accordance with its
customary business practices, ledgers and records reflecting the status of the
Collateral and related matters; (iv) to execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to this Agreement or any other Loan Document; (v) to make the Loans and
Collateral Agent Advances, for such Agent or on behalf of the applicable Lenders
as provided in this Agreement or any other Loan Document; (vi) to perform,
exercise, and enforce any and all other rights and remedies of the Lenders and
the L/C Issuer with respect to the Loan Parties, the Obligations, or otherwise
related to any of same to the extent reasonably incidental to the exercise by
such Agent of the rights and remedies specifically authorized to be exercised by
such Agent by the terms of this Agreement or any other Loan Document; (vii) to
incur and pay such fees necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to this Agreement or any other
Loan Document; and (viii) subject to Section 10.03 of this Agreement, to take
such action as such Agent deems appropriate on behalf of the Lenders to
administer the Loans and the Loan Documents and to exercise such other powers
delegated to such Agent by the terms hereof or the other Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the
Loans), the Agents shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders and all makers of Loans; provided, however, that the
L/C Issuer shall
-85-
not be required to refuse to honor a drawing under any Letter of Credit and the
Agents shall not be required to take any action which, in the reasonable opinion
of any Agent, exposes such Agent to liability or which is contrary to this
Agreement or any other Loan Document or applicable law.
Section 10.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender and the L/C Issuer. Each Agent shall promptly notify each
Lender and the L/C Issuer any time that the Required Lenders have instructed
such Agent to act or refrain from acting pursuant hereto.
Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents (i)
may treat the payee of any Loan as the owner thereof until the Collateral Agent
receives written notice of the assignment or transfer thereof, pursuant to
Section 12.07 hereof, signed by such payee and in form satisfactory to the
Collateral Agent; (ii) may consult with legal counsel (including, without
limitation, counsel to any Agent or counsel to the Loan Parties), independent
public accountants, and other experts selected by any of them and shall not be
liable for any action taken or omitted to be taken in good faith by any of them
in accordance with the advice of such counsel or experts; (iii) make no warranty
or representation to any Lender or the L/C Issuer and shall not be responsible
to any Lender or the L/C Issuer for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) shall not be responsible to any Lender or the L/C
Issuer for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and
-86-
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Collateral Agent's Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Agents be responsible or liable to the Lenders or the L/C Issuer for any failure
to monitor or maintain any portion of the Collateral. The Agents shall not be
liable for any apportionment or distribution of payments made in good faith
pursuant to Section 4.04, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender or the L/C Issuer to whom payment was due but not made, shall be to
recover from other Lenders or the L/C Issuer any payment in excess of the amount
which they are determined to be entitled. The Agents may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the other Loan Documents the Agents are
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agents shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the Loan Documents until they
shall have received such instructions from the Required Lenders. Without
limiting the foregoing, none of the Lenders or the L/C Issuer shall have any
right of action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders.
Section 10.04 Reliance. Each Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05 Indemnification. To the extent that any Agent or the L/C
Issuer is not reimbursed and indemnified by any Loan Party, the Lenders will
reimburse and indemnify such Agent and the L/C Issuer from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against such Agent
or the L/C Issuer in any way relating to or arising out of this Agreement or any
of the other Loan Documents or any action taken or omitted by such Agent or the
L/C Issuer under this Agreement or any of the other Loan Documents, in
proportion to each Lender's Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 10.08; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final judicial determination that
such liability resulted from such Agent's or the L/C Issuer's gross negligence
or willful misconduct. The obligations of the Lenders under this Section 10.05
shall survive the payment in full of the Loans and the termination of this
Agreement.
Section 10.06 Agents Individually. With respect to its Pro Rata Share
of each of the Total Term Loan A Commitment and Total Term Loan B Commitment
hereunder and the Loans made by it, each Agent shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or maker
of a Loan. The terms "Lenders" or "Required Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include each Agent in its
individual
-87-
capacity as a Lender or one of the Required Lenders. Each Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Borrower as if it were not
acting as an Agent pursuant hereto without any duty to account to the other
Lenders.
Section 10.07 Successor Agent. (a) Each Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Administrative Borrower and each Lender and the L/C
Issuer. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any Agent's
resignation hereunder as an Agent, the provisions of this ARTICLE X shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring Agent, with the
consent of the other Agent shall then appoint a successor Agent who shall serve
as an Agent until such time, if any, as the Required Lenders, with the consent
of the other Agent, appoint a successor Agent as provided above.
Section 10.08 Collateral Matters.
(a) The Collateral Agent may from time to time make such
disbursements and advances ("Collateral Agent Advances") which the Collateral
Agent, in its sole discretion, deems necessary or desirable to preserve,
protect, prepare for sale or lease or dispose of the Collateral or any portion
thereof, to enhance the likelihood or maximize the amount of repayment by the
Borrowers of the Loans, Reimbursement Obligations, Letter of Credit Obligations
and other Obligations or to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement, including, without limitation, costs,
fees and expenses as described in Section 12.04. The Collateral Agent Advances
shall be repayable on demand and be secured by the Collateral and shall bear
interest at a rate per annum equal to the rate of interest then applicable to
the Term Loan A. The Collateral Agent Advances shall constitute Obligations
hereunder which may be charged to the applicable Loan Account in accordance with
Section 4.02. The Agent making such Collateral Agent Advance shall notify the
other Agent, each Lender and the Administrative Borrower in writing of each such
Collateral Agent Advance, which notice shall include a description of the
purpose of such Collateral Agent Advance. Without limitation to its obligations
pursuant to Section 10.05, each Lender agrees that it shall make available to
the Agent making such Collateral Agent Advance, upon such Agent's demand, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of each such Collateral Agent Advance. If such funds are not made
available to the Collateral Agent by such Lender, such Agent shall be entitled
to recover such funds on demand from such
-88-
Lender, together with interest thereon for each day from the date such payment
was due until the date such amount is paid to the Collateral Agent, at the
Federal Funds Rate for three Business Days and thereafter at the Reference Rate.
(b) The Lenders and the L/C Issuer hereby irrevocably
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien granted to or held by the Collateral Agent upon any Collateral upon
payment and satisfaction of all Loans, Reimbursement Obligations, Letter of
Credit Obligations (or the cash collateralization of all outstanding Letters of
Credit by an amount equal to 105% of the amount thereof), and all other
applicable Obligations which have matured and which the Collateral Agent has
been notified in writing are then due and payable; or constituting property
being sold or disposed of in the ordinary course of any Loan Party's business or
otherwise in compliance with the terms of this Agreement and the other Loan
Documents; or constituting property in which the Loan Parties owned no interest
at the time the Lien was granted or at any time thereafter; or if approved,
authorized or ratified in writing by the Required Lenders and the L/C Issuer.
Upon request by the Collateral Agent at any time, the requisite Lenders and the
L/C Issuer will confirm in writing the Collateral Agent's authority to release
particular types or items of Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by the
Lenders and the L/C Issuer (as set forth in Section 10.08(b)), each Lender
agrees to confirm in writing, upon request by the Collateral Agent, the
authority to release Collateral conferred upon the Collateral Agent under
Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from the
Lenders of its authority to release any particular item or types of Collateral,
and upon prior written request by any Loan Party, the Collateral Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Liens granted to the
Collateral Agent for the benefit of the Agents and the Lenders and the L/C
Issuer upon such Collateral; provided, however, that (i) the Collateral Agent
shall not be required to execute any such document on terms which, in the
Collateral Agent's opinion, would expose the Collateral Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Collateral Agent shall have no obligation whatsoever
to any Lender or the L/C Issuer to assure that the Collateral exists or is owned
by the Loan Parties or is cared for, protected or insured or has been encumbered
or that the Lien granted to the Collateral Agent pursuant to this Agreement or
any other Loan Document has been properly or sufficiently or lawfully created,
perfected, protected or enforced or is entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Collateral Agent in this
Section 10.08 or in any other Loan Document, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related thereto, the
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Collateral Agent's own interest in the Collateral as one
of the Lenders and that the Collateral
-89-
Agent shall have no duty or liability whatsoever to any other Lender or the L/C
Issuer, except as otherwise provided herein.
Section 10.09 Agency for Perfection. Each Agent, the L/C Issuer and
each Lender hereby appoints each other Agent, the L/C Issuer and each other
Lender as agent and bailee for the purpose of perfecting the security interests
in and liens upon the Collateral in assets which, in accordance with Article 9
of the Uniform Commercial Code, can be perfected only by possession or control
(or where the security interest of a secured party with possession or control
has priority over the security interest of another secured party) and each
Agent, the L/C Issuer and each Lender hereby acknowledges that it holds
possession of or otherwise controls any such Collateral for the benefit of the
Agents, the L/C Issuer and the Lenders as secured party, subject in the case of
Fleet National Bank to the terms of the Reimbursement Agreement and any cash
management agreement then in effect. Should the Administrative Agent, the L/C
Issuer or any Lender obtain possession or control of any such Collateral, the
Administrative Agent, the L/C Issuer or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent's request therefor shall
deliver possession or control of such Collateral to the Collateral Agent or in
accordance with the Collateral Agent's instructions. Without limiting the
generality of the foregoing, the Collateral Agent hereby appoints the
Administrative Agent as a sub-agent for the purpose of perfecting the Collateral
Agent's Liens on the Cash Management Accounts or on any other deposit accounts
or securities accounts of any Loan Party. In addition, the Collateral Agent
shall also have the power and authority hereunder to appoint such other
sub-agents as may be necessary or required under applicable state law or
otherwise to perform its duties and enforce its rights with respect to the
Collateral and under the Loan Documents. Each Loan Party by its execution and
delivery of this Agreement hereby consents to the foregoing.
Section 10.10 UK Collateral. Each Lender, the Administrative Agent and
the Collateral Agent agree that the Collateral Agent shall hold the UK
Collateral in trust for the Lenders and the L/C Issuer, the Administrative Agent
and the Collateral Agent on the terms contained in this Agreement and the UK
Collateral Documents. Each of the parties agrees that in acting as trustee the
Collateral Agent shall have only those duties, obligations and responsibilities
expressly specified in this Agreement or in the UK Collateral Documents (and no
others shall be implied).
ARTICLE XI
GUARANTY
Section 11.01 Guaranty. (a) Each A Guarantor that is a party hereto
hereby jointly and severally and unconditionally and irrevocably guarantees the
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all A Obligations of the A Borrowers now or hereafter existing
under any Loan Document, whether for principal, interest (including, without
limitation, all interest that accrues after the commencement of any Insolvency
Proceeding of any Loan Party irrespective of whether a claim therefor is allowed
in such Insolvency Proceeding), Letter of Credit Obligations, fees, commissions,
expense reimbursements, indemnifications or otherwise (such obligations, to the
extent not paid by the Borrowers, being the "Guaranteed A Obligations"), and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agents, the Lenders and the
-90-
L/C Issuer in enforcing any rights under the guaranty set forth in this ARTICLE
XI with respect to the A Obligations. Without limiting the generality of the
foregoing, each A Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed A Obligations and would be owed by the A
Borrowers to the Agents, the Lenders and the L/C Issuer under any Loan Document
but for the fact that they are unenforceable or not allowable due to the
existence of an Insolvency Proceeding involving any Loan Party.
(b) The B Guarantor unconditionally and irrevocably guarantees
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all B Obligations of the B Borrower now or hereafter existing
under any Loan Document, whether for principal, interest (including, without
limitation, all interest that accrues after the commencement of any Insolvency
Proceeding of any Loan Party irrespective of whether a claim therefor is allowed
in such Insolvency Proceeding), fees, commissions, expense reimbursements,
indemnifications or otherwise (such obligations, to the extent not paid by the B
Borrower, being the "Guaranteed B Obligations" and together with the Guaranteed
A Obligations, the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses) incurred by the
Agents, the Lenders and the L/C Issuer in enforcing any rights under the
guaranty set forth in this ARTICLE XI with respect to the B Obligations. Without
limiting the generality of the foregoing, the B Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed B Obligations and
would be owed by the B Borrower to the Agents, the Lenders and the L/C Issuer
under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any Loan
Party.
Section 11.02 Guaranty Absolute. Each A Guarantor jointly and severally
guarantees that the Guaranteed A Obligations and the B Guarantor guarantees the
Guaranteed B Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agents, the Lenders or the L/C Issuer with respect thereto. Each Guarantor
agrees that this ARTICLE XI constitutes a guaranty of payment when due and not
of collection and waives any right to require that any resort be made by any
Agent or any Lender to any Collateral. The obligations of each Guarantor under
this ARTICLE XI are independent of the Guaranteed Obligations of any other
Guarantor, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce such obligations, irrespective of whether any
action is brought against any Loan Party or whether any Loan Party is joined in
any such action or actions. The liability of each Guarantor under this ARTICLE
XI shall be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in
-91-
the Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense or other
right that any Guarantor may have at any time against any Person, including,
without limitation, any Agent, any Lender or the L/C Issuer;
(e) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agents, the Lenders or the L/C Issuer that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor
or surety.
This ARTICLE XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders, the L/C Issuer or any
other Person upon the insolvency, bankruptcy or reorganization of any Borrower
or otherwise, all as though such payment had not been made.
Section 11.03 Waiver. Each A and B Guarantor party hereto hereby waives
(i) promptness and diligence, (ii) notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this ARTICLE XI and any
requirement that the Agents, the Lenders or the L/C Issuer exhaust any right or
take any action against any Loan Party or any other Person or any Collateral,
(iii) any right to compel or direct any Agent, any Lender or the L/C Issuer to
seek payment or recovery of any amounts owed under this ARTICLE XI from any one
particular fund or source or to exhaust any right or take any action against any
other Loan Party, any other Person or any Collateral, (iv) any requirement that
any Agent, any Lender or the L/C Issuer protect, secure, perfect or insure any
security interest or Lien on any property subject thereto or exhaust any right
to take any action against any Loan Party, any other Person or any Collateral,
and (v) any other defense available to any Guarantor (other than the defense of
payment). Each Guarantor party hereto agrees that the Agents, the Lenders and
the L/C Issuer shall have no obligation to marshal any assets in favor of any
Guarantor or against, or in payment of, any or all of the Obligations. Each
Guarantor party hereto acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated herein and that the waiver
set forth in this Section 11.03 is knowingly made in contemplation of such
benefits. Each Guarantor hereby waives any right to revoke this ARTICLE XI, and
acknowledges that this ARTICLE XI is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
Section 11.04 Continuing Guaranty; Assignments. This ARTICLE XI is a
continuing guaranty and shall (a) remain in full force and effect until the
termination of all
-92-
Commitments and the indefeasible payment in full of all of the Guaranteed
Obligations, (b) be binding upon each A and B Guarantor party hereto, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Agents, the Lenders and the L/C Issuer and their permitted successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Lender may pledge, assign or otherwise transfer all or any portion of
its rights and obligations under this Agreement (including, without limitation,
all or any portion of its Commitments, its Loans, the Reimbursement Obligations,
the Letter of Credit Obligations and all other Obligations owing to it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted such Lender herein or otherwise, in each
case as provided in Section 12.07.
Section 11.05 Subrogation. No A or B Guarantor party hereto will
exercise any rights that it may now or hereafter acquire against any Loan Party
or any other guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this ARTICLE XI, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Agents, the Lenders and the L/C Issuer against any Loan Party or
any other guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from any Loan Party or any
other guarantor, directly or indirectly, in cash or other property or by set-off
or in any other manner, payment or security solely on account of such claim,
remedy or right, unless and until all of the Commitments have been terminated
and all of the Guaranteed Obligations have been indefeasibly paid in full. If
any amount shall be paid to any Guarantor in violation of the immediately
preceding sentence at any time prior to the termination of all of the
Commitments and the indefeasible payment in full of the Guaranteed Obligations,
such amount shall be held in trust for the benefit of the Agents, the Lenders
and the L/C Issuer and shall forthwith be paid to the Agents, the Lenders and
the L/C Issuer to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this ARTICLE XI, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this ARTICLE XI thereafter
arising. If (i) any Guarantor shall make payment to the Agents, the Lenders and
the L/C Issuer of all or any part of the Guaranteed Obligations, (ii) all of the
Commitments have been terminated, and (iii) all of the Guaranteed Obligations
have been indefeasibly paid in full, the Agents, the Lenders and the L/C Issuer
will, at such Guarantor's request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.
-93-
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (certified mail,
return receipt requested), telecopied or delivered by hand, Federal Express or
other reputable overnight courier, if to any Loan Party, at the following
address:
Metallurg, Inc.
1140 Avenue of the Americas
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Chief Financial Officer
Telephone: 000 000-0000
Telecopier: 000 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Telephone: 000 000-0000
Telecopier: 000 000-0000
if to either Agent, to it at the following address:
MHR Institutional Partners II LP
c/o MHR Fund Management LLC
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx and Xxxxx Fine
Telephone: 000 000-0000
Telecopier: 000 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: 000 000-0000
Telecopier: 000 000-0000
-94-
or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties complying as to delivery
with the terms of this Section 12.01. All such notices and other communications
shall be effective, (i) if mailed, when received or three days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered by hand, Federal Express or other
reputable overnight courier, upon delivery by hand or by reputable overnight
courier, except that notices to any Agent or the L/C Issuer pursuant to ARTICLE
II and ARTICLE III shall not be effective until received by such Agent or the
L/C Issuer, as the case may be.
Section 12.02 Amendments. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders or by the Collateral Agent with
the consent of the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall (i)
increase the Commitment of any Lender, reduce the principal of, or interest on,
the Loans or the Reimbursement Obligations payable to any Lender, reduce the
amount of any fee payable for the account of any Lender, or postpone or extend
any date fixed for any payment of principal of, or interest or fees on, the
Loans or Letter of Credit Obligations payable to any Lender, in each case
without the written consent of any Lender affected thereby, (ii) increase the
Total Commitment without the written consent of each Lender, (iii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that is required for the Lenders or any of them to take any action
hereunder, (iv) amend the definition of "Required Lenders" or "Pro Rata Share",
(v) release all or a substantial portion of the Collateral (except as otherwise
provided in this Agreement and the other Loan Documents), subordinate any Lien
granted in favor of the Collateral Agent for the benefit of the Agents and the
Lenders and the L/C Issuer, or release any Borrower or any Guarantor (except as
otherwise expressly provided in this Agreement), or (vi) amend, modify or waive
Section 4.04 or this Section 12.02 of this Agreement, in each case, without the
written consent of each Lender. Notwithstanding the foregoing, no amendment,
waiver or consent shall, unless in writing and signed by the L/C Issuer, (i)
amend the definition of "Letter of Credit Obligations", "Loan Documents," (but
only if, as a result of such amendment or modification, the term "Reimbursement
Agreement" was deleted therefrom) "Obligations" or "Reimbursement Obligations",
(ii) amend, modify or waive Section 4.04(b)(i) or this Section 12.02 or (iii)
affect the rights or duties of the L/C Issuer under this Agreement or the other
Loan Documents. Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing and signed by an Agent, affect the rights or duties of
such Agent (but not in its capacity as a Lender) under this Agreement or the
other Loan Documents.
Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agents and the Lenders and the L/C Issuer provided herein
and in the other Loan Documents are cumulative and are in addition to, and not
exclusive
-95-
of, any rights or remedies provided by law. The rights of the Agents and the
Lenders and the L/C Issuer under any Loan Document against any party thereto are
not conditional or contingent on any attempt by the Agents and the Lenders or
the L/C Issuer to exercise any of their rights under any other Loan Document
against such party or against any other Person.
Section 12.04 Expenses; Taxes; Attorneys' Fees. Subject to the
limitation set forth in Section 4.01, the Borrowers will pay on demand, all
costs and expenses incurred by or on behalf of each Agent (and, in the case of
clauses (b) through (f) and clauses (j) through (m) below, each Lender and the
L/C Issuer), regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client
charges and expenses of counsel for each Agent (and, in the case of clauses (b)
through (f) and clauses (j) through (m) below, each Lender and the L/C Issuer),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals arising from
or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including, without limitation, the preparation of any additional Loan Documents
pursuant to Section 7.01(b) or the review of any of the agreements, instruments
and documents referred to in Section 7.01(f)), (b) any requested amendments,
waivers or consents to this Agreement or the other Loan Documents whether or not
such documents become effective or are given, (c) the preservation and
protection of any of the Lenders' rights under this Agreement or the other Loan
Documents, (d) the defense of any claim or action asserted or brought against
any Agent or any Lender or the L/C Issuer by any Person that arises from or
relates to this Agreement, any other Loan Document, the claims of the Agents or
the Lenders or the L/C Issuer claims against any Loan Party, or any and all
matters in connection therewith, (e) the commencement or defense of, or
intervention in, any court proceeding arising from or related to this Agreement
or any other Loan Document, (f) the filing of any petition, complaint, answer,
motion or other pleading by any Agent or any Lender or the L/C Issuer, or the
taking of any action in respect of the Collateral or other security, in
connection with this Agreement or any other Loan Document, (g) the protection,
collection, lease, sale, taking possession of or liquidation of, any Collateral
or other security in connection with this Agreement or any other Loan Document,
(h) any attempt to enforce any Lien or security interest in any Collateral or
other security in connection with this Agreement or any other Loan Document, (i)
any attempt to collect from any Loan Party, (j) all liabilities and costs
arising from or in connection with the past, present or future operations of any
Loan Party involving any damage to real or personal property or natural
resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property, (k) any Environmental
Liabilities incurred in connection with the investigation, removal, cleanup
and/or remediation of any Hazardous Materials present or arising out of the
operations of any facility owned or operated by any Loan Party, (l) any
Environmental Liabilities incurred in connection with any Environmental Lien, or
(m) the receipt by any Agent or any Lender or the L/C Issuer of any advice from
professionals with respect to any of the foregoing, except, with respect to any
of the above categories, to the extent such costs or expenses result from the
gross negligence or willful misconduct of such Agent or Lender as determined by
a final judgment of a court of competent jurisdiction. Without limitation of the
foregoing or any other provision of any Loan Document: (x) the Borrowers agree
to pay all stamp, document, transfer, recording or filing taxes or fees and
similar impositions now or hereafter determined by any Agent or any Lender or
the L/C Issuer to be
-96-
payable in connection with this Agreement or any other Loan Document, and the
Borrowers agree to save each Agent and each Lender and the L/C Issuer harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions, (y) the Borrowers agree to pay all broker fees
that may become due in connection with the transactions contemplated by this
Agreement and the other Loan Documents and (z) if the Borrowers fail to perform
any covenant or agreement contained herein or in any other Loan Document, any
Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of such Agent incurred in connection therewith shall be reimbursed
on demand by the Borrowers.
Section 12.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Domestic
Loan Party (any such notice being expressly waived by the Loan Parties) and to
the fullest extent permitted by law, set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other Indebtedness at any time owing by such Agent or such Lender to or for the
credit or the account of any Loan Party against any and all obligations of the
Loan Parties either now or hereafter existing under any Loan Document,
irrespective of whether or not such Agent or such Lender shall have made any
demand hereunder or thereunder and although such obligations may be contingent
or unmatured, provided that nothing herein shall permit the proceeds of any
Collateral not securing the B Obligations (or any Loan Party's guaranty thereof)
to be applied to reduce the B Obligations. Each Agent and each Lender agrees to
notify such Loan Party promptly after any such set-off and application made by
such 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
Agents and the Lenders under this Section 12.05 are in addition to the other
rights and remedies (including other rights of set-off) which the Agents and the
Lenders may have under this Agreement or any other Loan Documents of law or
otherwise.
Section 12.06 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 portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.07 Assignments and Participations. (a) This Agreement and
the other Loan Documents shall be binding upon and inure to the benefit of each
Loan Party and each Agent and each Lender and their respective successors and
assigns; provided, however, that none of the Loan Parties may assign or transfer
any of its rights hereunder without the prior written consent of each Lender and
any such assignment without the Lenders' prior written consent shall be null and
void.
(b) Each Lender may assign to one or more other lenders or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments,
the Loans made by it and its Pro Rata Share of Letter of Credit Obligations);
provided, however, that (i) such assignment is in an amount which is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of
such Lender's Commitment) (except such minimum amount shall not apply to an
assignment by a Lender to (x) an Affiliate of such Lender or a Related Fund of
such Lender or (y) a group of new
-97-
Lenders, each of whom is an Affiliate or Related Fund of each other to the
extent the aggregate amount to be assigned to all such new Lenders is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof), (ii) the parties to
each such assignment shall execute and deliver to the Collateral Agent, for its
acceptance, an Assignment and Acceptance, together with any promissory note
subject to such assignment and such parties shall deliver to the Collateral
Agent a processing and recordation fee of $5,000 (except the payment of such fee
shall not be required in connection with an assignment by a Lender to an
Affiliate of such Lender or Related Fund of such Lender), (iii) except as
provided in subsections 12.07(b)(iv), any such assignment shall be made with the
written consent of the Collateral Agent, and (iv) no written consent of any
Agent) shall be required in connection with, any assignment by a Lender to an
Affiliate of such Lender or a Related Fund of such Lender. Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the delivery thereof to the Collateral Agent (and the Administrative
Agent, if applicable) (or such shorter period as shall be agreed to by the
Collateral Agent and the parties to such assignment), (A) the assignee
thereunder shall become a "Lender" hereunder and, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and 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 Lender shall cease to
be a party hereto). Notwithstanding anything contained to the contrary in this
Section 12.07(b), a Lender may assign any or all of its rights under the Loan
Documents to an Affiliate of such Lender or a Related Fund of such Lender
without delivering an Assignment and Acceptance to any Agent; provided, that (x)
the Borrowers and the Agents may continue to deal solely and directly with such
assigning Lender in connection with the interest so assigned until such Lender
and its assignee shall have executed and delivered an Assignment and Acceptance
to the Collateral Agent for recordation and (y) the failure of such assigning
Lender to deliver an Assignment and Acceptance to the Collateral Agent or any
other Person shall not affect the legality, validity or binding effect of such
assignment.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the assigning
Lender, any Agent or any Lender and based on such
-98-
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes the Agents to take such action as agents on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agents by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(d) The Collateral Agent shall, on behalf of the Borrowers,
maintain, or cause to be maintained, a copy of each Assignment and Acceptance
delivered to and accepted by it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans (the "Registered Loans") and Letter of Credit
Obligations owing to each Lender from time to time. Other than in connection
with an assignment by a Lender to an Affiliate of such Lender or a Related Fund
of such Lender, the entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers, the Agents and the
Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Administrative Borrower, any Lender and the
Administrative Agent at any reasonable time and from time to time upon
reasonable prior notice. In the case of any assignment by a Lender to an
Affiliate of such Lender or a Related Fund of such Lender, and which assignment
is not recorded in the Register, the assigning Lender shall, on behalf of the
Borrowers, maintain a comparable register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any promissory notes
subject to such assignment, the Collateral Agent (and the Administrative Agent,
if applicable) shall, if the Collateral Agent (and the Administrative Agent, if
applicable) consent (if applicable) to such assignment and if such Assignment
and Acceptance has been completed (i) accept such Assignment and Acceptance and
(ii) record the information contained therein in the Register.
(f) A Registered Loan (and the registered note, if any,
evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (or a comparable
register) (and each registered note shall expressly so provide). Any assignment
or sale of all or part of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by registration of such assignment or
sale on the Register (or a comparable register), together with the surrender of
the registered note, if any, evidencing the same duly endorsed by (or
accompanied by a written instrument of assignment or sale duly executed by) the
holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), the Agents shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary.
-99-
(g) In the event that any Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(h) Any foreign Person who purchases or is assigned or
participates in any portion of such Registered Loan shall comply with Section
2.08(d).
(i) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Commitments, the Loans made by it and its Pro Rata Share of
the Letter of Credit Obligations); provided, that (i) such Lender's obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the Borrowers, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents; and (iii) a participant shall not be entitled to require such Lender
to take or omit to take any action hereunder except (A) action directly
effecting an extension of the maturity dates or decrease in the principal amount
of the Loans or Letter of Credit Obligations, (B) action directly effecting an
extension of the due dates or a decrease in the rate of interest payable on the
Loans or the fees payable under this Agreement, or (C) actions directly
effecting a release of all or a substantial portion of the Collateral or any
Loan Party (except as set forth in Section 10.08 of this Agreement or any other
Loan Document). The Loan Parties agree that each participant shall be entitled
to the benefits of Section 2.08 and Section 4.05 of this Agreement with respect
to its participation in any portion of the Commitments and the Loans as if it
was a Lender.
Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile or electronic mail shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
electronic mail also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF
-100-
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH DOMESTIC LOAN PARTY
HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH DOMESTIC LOAN
PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN Section
12.01, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. The
DOMESTIC Loan Parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY DOMESTIC LOAN PARTY IN ANY OTHER JURISDICTION. EACH DOMESTIC
LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY DOMESTIC LOAN PARTY HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH DOMESTIC LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH DOMESTIC LOAN PARTY, EACH
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH DOMESTIC
LOAN PARTY CERTIFIES
-101-
THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT,
IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.
Section 12.12 Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of any Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which any Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
such Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.
Section 12.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 12.14 Reinstatement; Certain Payments. If any claim is ever
made upon any Agent, any Lender or the L/C Issuer for repayment or recovery of
any amount or amounts received by such Agent, such Lender or the L/C Issuer in
payment or on account of any of the Obligations, such Agent, such Lender or the
L/C Issuer shall give prompt notice of such claim to each other Agent and Lender
and the Administrative Borrower, and if such Agent, such Lender or the L/C
Issuer repays all or part of such amount by reason of (i) any judgment, decree
or order of any court or administrative body having jurisdiction over such
Agent, such Lender or the L/C Issuer or any of its property, or (ii) any good
faith settlement or compromise of any such claim effected by such Agent, such
Lender or the L/C Issuer with any such claimant, then and in such event each
Loan Party agrees that (A) any such judgment, decree, order, settlement or
compromise shall be binding upon it notwithstanding the cancellation of any
Indebtedness hereunder or under the other Loan Documents or the termination of
this Agreement or the other Loan Documents, and (B) it shall be and remain
liable to such Agent, such Lender or the L/C Issuer hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by such Agent, such Lender or the L/C Issuer.
Section 12.15 Indemnification.
(a) General Indemnity. In addition to each Domestic Loan
Party's other Obligations under this Agreement, each Domestic Loan Party agrees
to, jointly and severally, defend, protect, indemnify and hold harmless each
Agent, each Lender and the L/C Issuer and all of their respective officers,
directors, employees, attorneys, consultants and agents (collectively called the
"Indemnitees") from and against any and all losses, damages, liabilities,
obligations, penalties, fees, reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees, costs and expenses) incurred by such
Indemnitees, whether prior to or from and after the Effective Date, whether
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with any of the following: (i) the negotiation,
-102-
preparation, execution or performance or enforcement of this Agreement, any
other Loan Document or of any other document executed in connection with the
transactions contemplated by this Agreement, (ii) any Agent's or any Lender's
furnishing of funds to the Borrowers or the L/C Issuer's issuing of Letters of
Credit for the account of the Borrowers under this Agreement or the other Loan
Documents, including, without limitation, the management of any such Loans, the
Reimbursement Obligations or the Letter of Credit Obligations, (iii) any matter
relating to the financing transactions contemplated by this Agreement or the
other Loan Documents or by any document executed in connection with the
transactions contemplated by this Agreement or the other Loan Documents, or (iv)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (a) for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction; provided
further, that the foregoing indemnity from the B Borrower shall only apply to
such Indemnified Matters arising from or relating to the B Obligations.
(b) Environmental Indemnity. Without limiting Section 12.15(a)
hereof, each Domestic Loan Party agrees to, jointly and severally, defend,
indemnify, and hold harmless the Indemnitees against any and all Environmental
Liabilities and all other claims, demands, penalties, fines, liability
(including strict liability), losses, damages, costs and expenses (including
without limitation, reasonable legal fees and expenses, consultant fees and
laboratory fees), arising out of (i) any Releases or threatened Releases (x) at
any property presently or formerly owned or operated by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest, or (y) of any
Hazardous Materials generated and disposed of by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (ii) any
violations of Environmental Laws; (iii) any Environmental Action relating to any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(iv) any personal injury (including wrongful death) or property damage (real or
personal) arising out of exposure to Hazardous Materials used, handled,
generated, transported or disposed by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; and (v) any breach of any warranty
or representation regarding environmental matters made by the Loan Parties in
Section 6.01(r) or the breach of any covenant made by the Loan Parties in
Section 7.01(j). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 12.15 may be unenforceable because it is
violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
-103-
Section 12.16 MI as Agent for A Borrowers. Each A Borrower
hereby irrevocably appoints MI as the borrowing agent and attorney-in-fact for
the A Borrowers (the "Administrative Borrower") which appointment shall remain
in full force and effect unless and until the Agents shall have received prior
written notice signed by all of the A Borrowers that such appointment has been
revoked and that another A Borrower has been appointed Administrative Borrower.
Each A Borrower hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide to the Agents and receive from the Agents all notices
with respect to Loans obtained for the benefit of any A Borrower and all other
notices and instructions under this Agreement and (ii) to take such action as
the Administrative Borrower deems appropriate on its behalf to obtain Loans and
to exercise such other powers as are reasonably incidental thereto to carry out
the purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of the A Borrowers in a combined fashion, as more fully
set forth herein, is done solely as an accommodation to the A Borrowers in order
to utilize the collective borrowing powers of the A Borrowers in the most
efficient and economical manner and at their request, and that neither the
Agents nor the Lenders shall incur liability to the A Borrowers as a result
hereof. Each of the A Borrowers expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each A Borrower is dependent
on the continued successful performance of the integrated group. To induce the
Agents and the Lenders to do so, and in consideration thereof, each of the A
Borrowers hereby jointly and severally agrees to indemnify the Indemnitees and
hold the Indemnitees harmless against any and all liability, expense, loss or
claim of damage or injury, made against such Indemnitee by any of the A
Borrowers or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of the A Borrowers as herein
provided, (b) the Agents and the Lenders relying on any instructions of the
Administrative Borrower, or (c) any other action taken by any Agent or any
Lender hereunder or under the other Loan Documents.
Section 12.17 Records. The unpaid principal of and interest on
the Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to Section 2.06 hereof, including, without
limitation, Term Loan A Commitment Fee, the Term Loan A Closing Fee, the Term
Loan B1 Closing Fee, the Term Loan B2 Funding Fee, Term Loan A Maintenance Fee,
the Term Loan B Maintenance Fee, the TRC Commitment Fee, and the Letter of
Credit Fee, shall at all times be ascertained from the records of the Agents,
which shall be conclusive and binding absent manifest error.
Section 12.18 Binding Effect. This Agreement shall become
effective when it shall have been executed by each Loan Party party hereto, each
Agent and each Lender and the L/C Issuer and when the conditions precedent set
forth in Section 5.01 hereof have been satisfied or waived in writing by the
Agents, and thereafter shall be binding upon and inure to the benefit of each
Loan Party party hereto, each Agent and each Lender and the L/C Issuer, and
their respective successors and assigns, except that the Loan Parties shall not
have the right to assign their rights hereunder or any interest herein without
the prior written consent of each Lender and the L/C Issuer, and any assignment
by any Lender shall be governed by Section 12.07 hereof.
Section 12.19 Interest. It is the intention of the parties
hereto that each Agent and each Lender shall conform strictly to usury laws
applicable to it. Accordingly, if the transactions
-104-
contemplated hereby or by any other Loan Document would be usurious as to any
Agent or any Lender under laws applicable to it (including the laws of the
United States of America and the State of New York or any other jurisdiction
whose laws may be mandatorily applicable to such Agent or such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document or any agreement entered into in connection with or as security for the
Obligations, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under law applicable to any Agent or any Lender that
is contracted for, taken, reserved, charged or received by such Agent or such
Lender under this Agreement or any other Loan Document or agreements or
otherwise in connection with the Obligations shall under no circumstances exceed
the maximum amount allowed by such applicable law, any excess shall be canceled
automatically and if theretofore paid shall be credited by such Agent or such
Lender on the principal amount of the Obligations (or, to the extent that the
principal amount of the Obligations shall have been or would thereby be paid in
full, refunded by such Agent or such Lender, as applicable, to the Borrowers);
and (ii) in the event that the maturity of the Obligations is accelerated by
reason of any Event of Default under this Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Agent or any Lender may never
include more than the maximum amount allowed by such applicable law, and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically by such Agent or such Lender, as applicable, as of the date of
such acceleration or prepayment and, if theretofore paid, shall be credited by
such Agent or such Lender, as applicable, on the principal amount of the
Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by such Agent or such
Lender to the Borrowers). All sums paid or agreed to be paid to any Agent or any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.19 and (y)
in respect of any subsequent interest computation period the amount of interest
otherwise payable to such Agent or such Lender would be less than the amount of
interest payable to such Agent or such Lender computed at the Highest Lawful
Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.19.
For purposes of this Section 12.19, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrowers, on the one hand, and the Agents and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
-105-
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
Section 12.20 Confidentiality. Each Agent and each Lender agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any material non-public information supplied to it
by the Loan Parties (including all written minutes of meetings of MI's Board of
Directors to the extent copies of such minutes are furnished to any Agent or
Lender pursuant hereto) pursuant to this Agreement or the other Loan Documents
which is identified in writing by the Loan Parties as being confidential at the
time the same is delivered to such Person (and which at the time is not, and
does not thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to such
Person not to disclose such information), provided that nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for any Agent or
any Lender, (iii) to examiners, auditors, or accountants, (iv) in connection
with any litigation to which any Agent or any Lender is a party or (v) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first agrees,
in writing, to be bound by confidentiality provisions similar in substance to
this Section 12.20. Each Agent and each Lender agrees that, upon receipt of a
request or identification of the requirement for disclosure pursuant to clause
(iv) hereof, it will make reasonable efforts to keep the Loan Parties informed
of such request or identification; provided that the each Loan Party
acknowledges that each Agent and each Lender may make disclosure as required or
requested by any Governmental Authority or representative thereof and that each
Agent and each Lender may be subject to review by other regulatory agencies and
may be required to provide to, or otherwise make available for review by, the
representatives of such parties or agencies any such non-public information. In
addition, if any Agent or Lender is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any such non-public
information, such Agent or Lender agrees that it will provide the Administrative
Borrower with prompt notice of such request(s) (unless prohibited by law) so
that it (or any other Loan Party) may seek an appropriate protective order or
other appropriate remedy. In the event that such protective order or other
remedy is not obtained, the applicable Agent or Lender may furnish that portion
of the non-public information which, in consultation with counsel it concludes,
it is legally compelled to disclose.
Section 12.21 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-106-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
A BORROWERS:
METALLURG, Inc.
By:
------------------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL
CORPORATION
By:
------------------------------------------
Name:
Title:
B BORROWER:
METALLURG HOLDINGS, INC.
By:
------------------------------------------
Name:
Title:
A GUARANTORS:
METALLURG HOLDINGS CORPORATION
By:
------------------------------------------
Name:
Title:
METALLURG INTERNATIONAL RESOURCES,
LLC
By:
------------------------------------------
Name:
Title:
METALLURG SERVICES, INC.
By:
------------------------------------------
Name:
Title:
B GUARANTOR:
METALLURG, INC., in its capacity as B Guarantor
By:
------------------------------------------
Name:
Title:
COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND LENDER:
MHR INSTITUTIONAL PARTNERS II LP
By: MHR INSTITUTIONAL ADVISORS II LLC,
its General Partner
By:
------------------------------------------
Name:
Title:
LENDER:
MHR INSTITUTIONAL PARTNERS IIA LP
By: MHR INSTITUTIONAL ADVISORS II LLC,
its General Partner
By:
------------------------------------------
Name:
Title:
L/C ISSUER:
The L/C Issuer joins this Agreement solely for
the purpose of obtaining the benefits of this
Agreement in its favor and without assuming any
obligations under this Agreement
FLEET NATIONAL BANK
By:
------------------------------------------
Name:
Title:
Schedule 1.01(a)
Commitments
--------------------------------------------------------------------------------------------------------------
MHR Institutional MHR Institutional
Lender Partners II LP Partners II A LP TOTAL
--------------------------------------------------------------------------------------------------------------
Term A1 Loan Commitment $22,841,471 $ 7,158,529 $10,000,000
--------------------------------------------------------------------------------------------------------------
Term A2 Loan Commitment $ 4,262,206 $10,737,794 $15,000,000
--------------------------------------------------------------------------------------------------------------
Term A3 Loan Commitment $ 1,704,882 $ 4,295,118 $ 6,000,000
--------------------------------------------------------------------------------------------------------------
Term B1 Loan Commitment $ 475,946 $ 1,199,054 $ 1,675,000
--------------------------------------------------------------------------------------------------------------
Term B2 Loan Commitment $ 223,766 $ 563,734 $ 787,500
--------------------------------------------------------------------------------------------------------------
Total Commitment $ 9,508,271 $23,954,229 $33,462,500
--------------------------------------------------------------------------------------------------------------
Percentage 28.41471% 71.58529% 100%
--------------------------------------------------------------------------------------------------------------
