LOAN AND SECURITY AGREEMENT
Dated as of March 12, 2001
among
EACH OF THE FINANCIAL INSTITUTIONS PARTY HERETO,
as the Lenders,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as the Administrative Agent,
PNC BANK, NATIONAL ASSOCIATION,
as the Documentation Agent,
and
METALS RECEIVABLES CORPORATION,
as the Borrower
BANK OF AMERICA, NATIONAL ASSOCIATION
PNC BANK, NATIONAL ASSOCIATION
Co-Lead Arrangers and Co-Syndication Agents
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION OF THIS AGREEMENT...........................................................1
Section 1.1 Definitions.................................................................1
Section 1.2 Accounting Terms...........................................................20
Section 1.3 Interpretive Provisions....................................................20
ARTICLE 2 - LOANS.....................................................................................21
Section 2.1 Total Facility.............................................................21
Section 2.2 Revolving Loans............................................................21
Section 2.3 Bank Products..............................................................29
ARTICLE 3 - INTEREST AND FEES.........................................................................29
Section 3.1 Interest...................................................................29
Section 3.2 Conversion and Continuation Elections......................................30
Section 3.3 Maximum Interest Rate......................................................31
Section 3.4 Unused Line Fee............................................................32
Section 3.5 Other Fees.................................................................33
ARTICLE 4 - PAYMENTS AND PREPAYMENTS..................................................................33
Section 4.1 Revolving Loans............................................................33
Section 4.2 Reduction of Commitments; Termination of Facility..........................33
Section 4.3 Prepayments from Asset Dispositions........................................34
Section 4.4 Payments by the Borrower...................................................34
Section 4.5 Payments as Revolving Loans................................................34
Section 4.6 Apportionment, Application, and Reversal of Payments. ....................35
Section 4.7 Indemnity for Returned Payments............................................35
Section 4.8 The Agent's and the Lenders' Books and Records; Monthly
Statements.................................................................36
ARTICLE 5 - TAXES, YIELD PROTECTION, AND ILLEGALITY...................................................36
Section 5.1 Taxes......................................................................36
Section 5.2 Illegality.................................................................37
Section 5.3 Increased Costs and Reduction of Return....................................38
Section 5.4 Funding Losses.............................................................38
Section 5.5 Inability to Determine Rates...............................................39
Section 5.6 Certificates of Lenders....................................................39
Section 5.7 Survival...................................................................39
Section 5.8 Claims Under Section 5.1 and Section 5.3...................................39
Section 5.9 Replacement of Affected Lender.............................................39
ARTICLE 6 - COLLATERAL................................................................................40
Section 6.1 Grant of Security Interest.................................................40
Section 6.2 Perfection and Protection of Security Interest.............................41
Section 6.3 Location of Collateral.....................................................42
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Section 6.4 Title to, Liens on, and Sale and Use of Collateral.........................43
Section 6.5 Appraisals.................................................................43
Section 6.6 Access and Examination; Confidentiality....................................43
Section 6.7 Collateral Reporting.......................................................44
Section 6.8 Accounts...................................................................45
Section 6.9 Collection of Accounts; Payments...........................................47
Section 6.10 Inventory, Equipment, and Real Estate......................................48
Section 6.11 Documents, Instruments, and Chattel Paper..................................48
Section 6.12 Right to Cure..............................................................48
Section 6.13 Power of Attorney..........................................................48
Section 6.14 The Agent's and the Lenders' Rights, Duties, and Liabilities...............49
Section 6.15 Voting Rights, Distributions, Etc. in Respect of Investment Property.......49
Section 6.16 Revised UCC Article 9......................................................50
ARTICLE 7 - BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.........................................52
Section 7.1 Books and Records..........................................................52
Section 7.2 Financial Information......................................................52
Section 7.3 Notices to the Lenders.....................................................54
Section 7.4 Revisions or Updates to Schedules..........................................55
ARTICLE 8 - GENERAL WARRANTIES AND REPRESENTATIONS....................................................56
Section 8.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents; No Conflicts.......................................56
Section 8.2 Validity and Priority of Security Interest.................................57
Section 8.3 Organization and Qualification.............................................57
Section 8.4 Corporate Name; Prior Transactions.........................................57
Section 8.5 Capital Stock..............................................................57
Section 8.6 Financial Statements.......................................................57
Section 8.7 Solvency...................................................................57
Section 8.8 Debt.......................................................................58
Section 8.9 Title to Property..........................................................58
Section 8.10 Real Estate; Leases........................................................58
Section 8.11 Proprietary Rights.........................................................58
Section 8.12 Trade Names................................................................58
Section 8.13 Litigation.................................................................58
Section 8.14 Restrictive Agreements.....................................................58
Section 8.15 Labor Matters..............................................................58
Section 8.16 No Violation of Law........................................................59
Section 8.17 No Default.................................................................59
Section 8.18 ERISA Compliance...........................................................59
Section 8.19 Taxes......................................................................59
Section 8.20 Regulated Entities.........................................................59
Section 8.21 Use of Proceeds; Margin Regulations........................................59
Section 8.22 No Material Adverse Change.................................................59
Section 8.23 Full Disclosure............................................................59
Section 8.24 Material Agreements........................................................59
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Section 8.25 Bank Accounts..............................................................60
Section 8.26 Governmental Authorization.................................................60
Section 8.27 Investment Property........................................................60
Section 8.28 Indenture..................................................................60
ARTICLE 9 - AFFIRMATIVE AND NEGATIVE COVENANTS........................................................60
Section 9.1 Taxes and Other Obligations................................................60
Section 9.2 Existence and Good Standing................................................60
Section 9.3 Compliance with Law and Agreements; Maintenance of Licenses................61
Section 9.4 Maintenance of Property....................................................61
Section 9.5 Insurance..................................................................61
Section 9.6 Condemnation...............................................................62
Section 9.7 Environmental Laws.........................................................62
Section 9.8 Compliance with ERISA......................................................62
Section 9.9 Mergers, Consolidations, Sales, Acquisitions...............................62
Section 9.10 Distributions; Capital Change; Restricted Investments......................62
Section 9.11 Transactions Affecting Collateral or Obligations...........................62
Section 9.12 Guaranties.................................................................63
Section 9.13 Funded Debt................................................................63
Section 9.14 Prepayment of Debt.........................................................63
Section 9.15 Transactions with Affiliates...............................................63
Section 9.16 Investment Banking and Finder's Fees.......................................63
Section 9.17 Nature of Business Conducted...............................................63
Section 9.18 Liens......................................................................63
Section 9.19 Sale and Leaseback Transactions............................................63
Section 9.20 New Subsidiaries...........................................................63
Section 9.21 Fiscal Year................................................................64
Section 9.22 Capital Expenditures.......................................................64
Section 9.23 Operating Lease Obligations................................................64
Section 9.24 Minimum Availability.......................................................64
Section 9.25 Use of Proceeds............................................................64
Section 9.26 Further Assurances.........................................................64
Section 9.27 Bank and Documentation Agent as Depository.................................64
Section 9.28 Indenture..................................................................64
Section 9.29 RPA........................................................................64
Section 9.30 Borrower's Conduct of Business.............................................65
Section 9.31 Excess Cash................................................................66
ARTICLE 10 - CONDITIONS OF LENDING....................................................................66
Section 10.1 Conditions Precedent to Making of Revolving Loans on the
Closing Date...............................................................66
Section 10.2 Conditions Precedent to Each Revolving Loan................................70
ARTICLE 11 - DEFAULT REMEDIES.........................................................................71
Section 11.1 Events of Default..........................................................71
Section 11.2 Remedies...................................................................73
iii
ARTICLE 12 - TERM AND TERMINATION.....................................................................76
Section 12.1 Term and Termination.......................................................76
ARTICLE 13 - AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS;
SUCCESSORS............................................................................................76
Section 13.1 No Waivers; Cumulative Remedies............................................76
Section 13.2 Amendments and Waivers.....................................................77
Section 13.3 Assignments; Participations................................................78
ARTICLE 14 - THE AGENT................................................................................80
Section 14.1 Appointment and Authorization..............................................80
Section 14.2 Delegation of Duties.......................................................80
Section 14.3 Liability of the Agent.....................................................81
Section 14.4 Reliance by the Agent......................................................81
Section 14.5 Notice of Default..........................................................82
Section 14.6 Credit Decision............................................................82
Section 14.7 Indemnification............................................................82
Section 14.8 The Agent in Individual Capacity...........................................83
Section 14.9 Successor Agent............................................................83
Section 14.10 Withholding Tax............................................................84
Section 14.11 Co-Agents..................................................................85
Section 14.12 Collateral Matters.........................................................85
Section 14.13 Restrictions on Actions by Lenders; Sharing of Payments....................86
Section 14.14 Agency for Perfection......................................................87
Section 14.15 Payments by the Agent to the Lenders.......................................87
Section 14.16 Concerning the Collateral and the Related Loan Documents...................87
Section 14.17 Field Audit and Examination Reports; Disclaimer by Lenders.................87
Section 14.18 Relation Among Lenders.....................................................88
ARTICLE 15 - MISCELLANEOUS............................................................................88
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral.......................88
Section 15.2 Severability...............................................................88
Section 15.3 Governing Law; Choice of Forum.............................................89
Section 15.4 Waiver of Jury Trial.......................................................89
Section 15.5 Survival of Representations and Warranties.................................90
Section 15.6 Other Security and Guaranties..............................................90
Section 15.7 Fees and Expenses..........................................................90
Section 15.8 Notices....................................................................91
Section 15.9 Waiver of Notices..........................................................92
Section 15.10 Binding Effect.............................................................92
Section 15.11 Indemnity of the Agent and the Lenders by the Borrower.....................92
Section 15.12 Limitation of Liability....................................................93
Section 15.13 Final Agreement............................................................93
Section 15.14 Counterparts...............................................................94
iv
Section 15.15 Captions...................................................................94
Section 15.16 Right of Set-off...........................................................94
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Schedules:
Schedule 1.1(A) - Permitted Liens
Schedule 1.1(B) - Permitted Investments
Schedule 6.3 - Chief Executive Office; Location of Collateral
Schedule 8.3 - Organization and Qualification
Schedule 8.4 - Corporate Names
Schedule 8.5 - Capital Stock
Schedule 8.12 - Trade Names
Schedule 8.24 - Material Agreements
Schedule 8.25 - Bank Accounts
Exhibits:
Exhibit A - Form of Revolving Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Compliance Certificate
vi
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement, dated as of March 12, 2001, among the
financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "LENDER" and collectively as the
"LENDERS"), Bank of America, National Association with an office located at 000
Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx 00000, as administrative agent for the
Lenders (in its capacity as administrative agent, the "AGENT"), and Metals
Receivables Corporation, a Delaware corporation.
W I T N E S S E T H
A. The Borrower has requested the Lenders to make available to the
Borrower a revolving line of credit for loans in an aggregate amount of
$100,000,000 which line of credit the Borrower will use for the purposes set
forth in SECTION 9.25.
B. The Lenders have agreed to make available to the Borrower such
credit facility upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
Section 1.1 DEFINITIONS. As used herein:
"ACCOUNT" means, with respect to a Person, any of such Person's now
owned and hereafter acquired or arising accounts, as defined in the UCC,
including any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance, and "ACCOUNTS"
means, with respect to any such Person, all of the foregoing.
"ACCOUNT DEBTOR" means each Person obligated on an Account.
"ACH TRANSACTIONS" means any cash management or related services
including the automated clearing house transfer of funds by the Bank or the
Documentation Agent for the account of the Borrower pursuant to agreement or
overdrafts.
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, ten percent (10.0%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
LOAN AND SECURITY AGREEMENT - Page 1
"AGENT" means the Bank, solely in its capacity as the administrative
agent for the Lenders, and any successor administrative agent.
"AGENT ADVANCES" has the meaning specified in SECTION 2.2(i).
"AGENTS' LETTER" means that certain letter agreement, dated as of the
Closing Date, among the Borrower, the Agent, and the Documentation Agent, as
such letter agreement may be amended, restated, or otherwise modified from time
to time.
"AGENT'S LIENS" means the Liens in the Collateral granted to the Agent,
for the benefit of the Lenders, the Bank, the Documentation Agent, and the
Agent, pursuant to this Agreement and the other Loan Documents.
"AGENT-RELATED PERSONS" means the Agent, together with its Affiliates,
and the officers, directors, employees, agents, and attorneys-in-fact of the
Agent and its Affiliates.
"AGGREGATE REVOLVER OUTSTANDINGS" means, at any time: the sum of (a)
the unpaid balance of Revolving Loans and (b) the aggregate amount of Pending
Revolving Loans.
"AGREEMENT" means this Loan and Security Agreement as it may be amended
or otherwise modified from time to time.
"ANNIVERSARY DATE" means an anniversary of the Closing Date.
"APPLICABLE MARGIN" means, as of the Closing Date,
(a) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Rate Revolving Loans), zero percent
(0.00%) and
(b) with respect to LIBOR Rate Revolving Loans, two and
three-quarters percent (2.75%),
in each case subject to adjustment from time to time thereafter to the
applicable percentage specified corresponding to the "Fixed Charge Coverage
Ratio" (as defined in the Metals Loan Agreement) of the Parent, as set forth
below, respectively:
-------------------------------------------------------------------------------
Fixed Charge Coverage Ratio Base Rate LIBOR Rate
Revolving Loans Revolving Loans
and all other
Obligations
-------------------------------------------------------------------------------
Less than 1.00 to 1.00 0.00% 2.75%
-------------------------------------------------------------------------------
Greater than or equal to 1.00 0.00% 2.50%
to 1.00, but less than 1.30 to
1.00
-------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT - Page 2
-------------------------------------------------------------------------------
Fixed Charge Coverage Ratio Base Rate LIBOR Rate
Revolving Loans Revolving Loans
and all other
Obligations
-------------------------------------------------------------------------------
Fixed Charge Coverage Ratio Base Rate LIBOR Rate
Greater than or equal to 1.30 0.00% 2.25%
to 1.00
-------------------------------------------------------------------------------
For the purpose of determining any such adjustments to the Applicable Margin,
the Fixed Charge Coverage Ratio of the Parent shall be determined based upon the
Parent's "Financial Statements" (as defined in the Metals Loan Agreement) for
each of its respective Fiscal Quarters, beginning with the Fiscal Quarter ending
September 30, 2001, delivered to the Agent as required by the Metals Loan
Agreement, and any such adjustment, if any, shall become effective (A) with
respect to the Base Rate Revolving Loans and all other Obligations on and after
the first day of the calendar month following the calendar month in which such
Financial Statements of the Parent are delivered to the Agent and (B) with
respect to LIBOR Rate Revolving Loans as of the date on or after the first day
of the calendar month following the calendar month in which such Financial
Statements of the Parent are delivered to the Agent when any LIBOR Rate
Revolving Loan is made, continued, or converted, as the case may be.
"ASSIGNEE" has the meaning specified in SECTION 13.3(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION
13.3(a).
"ATTORNEY COSTS" means and includes all reasonable and customary fees,
expenses, and disbursements of any law firm or other counsel engaged by the
Agent, the allocated costs of internal legal services of the Agent, and the
reasonable expenses of internal counsel to the Agent.
"AVAILABLE CREDIT" means, at any time, (a) the Borrowing Base MINUS (b)
the Aggregate Revolver Outstandings.
"BANK" means Bank of America, National Association, a national banking
association, or any successor entity thereto.
"BANK PRODUCTS" means any one or more of the following types of
services or facilities extended to the Borrower by the Bank, the Documentation
Agent, or any Affiliate of the Bank or the Documentation Agent in reliance on
the Bank's or the Documentation Agent's, as applicable, agreement to indemnify
such Affiliate: (a) credit cards; (b) ACH Transactions; (c) Hedge Agreements;
and (d) foreign exchange contracts.
"BANK PRODUCT RESERVES" means all reserves which the Agent or the
Documentation Agent from time to time establishes in its sole discretion for the
Bank Products then provided or outstanding.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Section 101 ET SEQ.).
LOAN AND SECURITY AGREEMENT - Page 3
"BASE RATE" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Bank in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Bank
based upon various factors including the Bank's costs and desired return,
general economic conditions, and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"BASE RATE REVOLVING LOAN" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"BLOCKED ACCOUNT AGREEMENT" means an agreement among the Borrower, the
Agent, and a Clearing Bank, in form and substance satisfactory to the Agent,
concerning the collection of payments which represent the proceeds of Accounts
and other Collateral of the Borrower.
"BORROWER" means Metals Receivables Corporation, a Delaware
Corporation.
"BORROWING" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders, by the Bank (in the case of a Borrowing
funded by a Non-Ratable Loan), or by the Agent (in the case of a Borrowing
consisting of an Agent Advance) to the Borrower.
"BORROWING BASE" means, at any time, an amount equal to the lesser of
(a) the Maximum Revolver Amount or
(b) the sum of
(i) seventy percent (70.0%) of the Net Amount of
Eligible Accounts, MINUS
(ii) the sum of
(A) reserves for accrued and unpaid interest
on the Obligations,
(B) the Bank Product Reserves, and
(C) all other reserves which the Agent deems
necessary in the exercise of its reasonable credit
judgment to maintain with respect to the Borrower,
including reserves for any amounts which the Agent or
any Lender may be obligated to pay in the future for
the account of the Borrower.
"BORROWING BASE CERTIFICATE" means a certificate by a Responsible
Officer of the Borrower, substantially in the form of EXHIBIT B (or another form
acceptable to the Agent) setting forth the calculation of the Borrowing Base,
including a calculation of each component thereof (including, to
LOAN AND SECURITY AGREEMENT - Page 4
the extent the Borrower has received notice of any such reserve from the Agent,
any of the reserves included in such calculation pursuant to CLAUSE (b)(ii) of
the definition of Borrowing Base), all in such detail as shall be reasonably
satisfactory to the Agent. All calculations of the Borrowing Base in connection
with the preparation of any Borrowing Base Certificate shall originally be made
by the Borrower and certified to the Agent; PROVIDED that the Agent shall have
the right to review and adjust, in the exercise of its reasonable credit
judgment, any such calculation (a) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein, and (b) to the
extent that such calculation is not in accordance with this Agreement.
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Dallas, Texas, or Charlotte, North Carolina are required
or permitted to be closed, and (b) with respect to all notices, determinations,
fundings, and payments in connection with the LIBOR Rate or LIBOR Rate Revolving
Loans, any day that is a Business Day pursuant to CLAUSE (a) preceding and that
is also a day on which trading in Dollars is carried on by and between banks in
the London interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request, or
directive of any central bank or other Governmental Authority, or any other law,
rule, or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"CAPITAL EXPENDITURES" means expenditures (whether paid in cash or by
entering into any Debt, including any Capital Leases) by the Borrower that, in
accordance with GAAP, are required to be included in or reflected by the
property, plant, equipment, or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower.
"CAPITAL LEASE" means, with respect to any Person, any lease of
property which, in accordance with GAAP, should be reflected as a capital lease
on a balance sheet of such Person.
"CAPITAL STOCK" means any and all corporate stock, units, shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership (however designated)
issued by any Person.
"CHANGE OF CONTROL" means the occurrence of any of the following: (a)
the adoption of a plan relating to the liquidation or dissolution of the
Borrower; or (b) the acquisition by any Person other than the Parent of any
interest of the Capital Stock of the Borrower by way of merger or consolidation
or otherwise.
"CLEARING BANK" means the Bank, the Documentation Agent, or any other
banking institution with whom a Payment Account has been established pursuant to
a Blocked Account Agreement.
"CLOSING DATE" means the date of this Agreement.
LOAN AND SECURITY AGREEMENT - Page 5
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and the regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in SECTION 6.1.
"COMMITMENT" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "COMMITMENT" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder, or the most
recent Assignment and Acceptance such Lender is a party to, in accordance with
the provisions of SECTION 13.3, as such Commitment may be adjusted from time to
time in accordance with the provisions of SECTION 13.3, and "COMMITMENTS" means,
collectively, the aggregate amount of the Commitments of all of the Lenders.
"COMPLIANCE CERTIFICATE" has the meaning specified in SECTION 7.2(d).
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"CONVERSION/CONTINUATION DATE" means the effective date of (a) any
conversion of LIBOR Rate Revolving Loans to Base Rate Revolving Loans or of Base
Rate Revolving Loans to LIBOR Rate Revolving Loans or (b) any continuation of
LIBOR Rate Revolving Loans as LIBOR Rate Revolving Loans.
"COPYRIGHT, PATENT, AND TRADEMARK AGREEMENTS" means each Copyright
Security Agreement, Patent Security Agreement, and Trademark Security Agreement
executed and delivered by the Borrower to the Agent to evidence and perfect the
Agent's security interest in the Borrower's present and future copyrights,
patents, trademarks, and related licenses and rights, for the benefit of the
Agent and the Lenders.
"DEBT" means, without duplication, with respect to any Person (the
"subject Person"), all indebtedness, liabilities, and obligations of the subject
Person of any kind or nature, now or hereafter owing, arising, due, or payable,
howsoever evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise, and including, without in
any way limiting the generality of the foregoing: (a) indebtedness, liabilities,
and obligations to trade creditors; (b) in the case of the Borrower, all
Obligations; (c) all indebtedness, liabilities, and obligations of any other
Person, whether or not owed by the subject Person, secured by any Lien on the
subject Person's property, even though the subject Person shall not have assumed
or become liable for the payment thereof; PROVIDED, HOWEVER, that all such
indebtedness, liabilities, and obligations which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the subject Person prepared in
accordance with GAAP; (d) all indebtedness, liabilities, and obligations created
or arising under any Capital Lease or conditional sale or other title retention
agreement with respect to property used or acquired by the subject Person, even
if the rights and remedies of the lessor, seller, or lender thereunder are
limited to repossession of such property; PROVIDED, HOWEVER, that all such
LOAN AND SECURITY AGREEMENT - Page 6
indebtedness, liabilities, and obligations which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the subject Person prepared in
accordance with GAAP; and (e) all indebtedness, liabilities, and obligations
under Guaranties.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"DEFAULT RATE" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate PLUS (b) two
percent (2.0%). Each Default Rate shall be adjusted simultaneously with any
change in the applicable Interest Rate.
"DEFAULTING LENDER" has the meaning specified in SECTION 2.2(g)(ii).
"DISTRIBUTION" means, with respect to any Person: (a) the payment or
making of any dividend or other distribution of property in respect of such
Person's Capital Stock (or any options or warrants for, or other rights with
respect to, such Capital Stock); or (b) the redemption or other acquisition by
such Person of any Capital Stock (or any options or warrants for, or other
rights with respect to, such Capital Stock).
"DOCUMENTATION AGENT" means PNC Bank, National Association, a national
banking association.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"ELIGIBLE ACCOUNTS" means the Accounts of the Borrower which the Agent
in the exercise of its reasonable discretion determines to be Eligible Accounts.
Without limiting the discretion of the Agent to establish other criteria of
ineligibility, Eligible Accounts, at any time, shall not, unless the Agent in
its sole discretion elects, include any Account purchased by the Borrower from
an RPA Seller which would not be an "Eligible Account" (as defined in the Metals
Loan Agreement) based upon the hypothetical assumption that such Account had not
been purchased by the Borrower under the RPA but rather is owned by such RPA
Seller at such time, and if any such Account at any time would cease to be an
Eligible Account under the Metals Loan Agreement based upon such hypothetical
assumption, then such Account shall promptly be excluded from Eligible Accounts.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank, commercial finance
company, or other asset based lender having total assets in excess of
$1,000,000,000 and being reasonably acceptable to the Agent and, after the
"Initial Syndication" (as defined in the Agents' Letter) and if no Default or
Event of Default exists hereunder, the Borrower; (b) any Lender; (c) any
Affiliate of any Lender; and (d) if an Event of Default exists, any other Person
reasonably acceptable to the Agent.
LOAN AND SECURITY AGREEMENT - Page 7
"ENACTMENT STATE" means, from and after the effective date of its
enactment thereof, any state (or the District of Columbia) of the United States
that enacts Revised Article 9.
"ENVIRONMENTAL LAWS" means all federal, state, or local laws, statutes,
common law duties, rules, regulations, ordinances, and codes, together with all
administrative orders, directed duties, licenses, authorizations, and permits
of, and agreements with, any Governmental Authority, in each case relating to
environmental, health, safety, and land use matters.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"EQUIPMENT" means, with respect to a Person, all of such Person's now
owned and hereafter acquired machinery, equipment, as defined by the UCC,
furniture, furnishings, fixtures, and other tangible personal property (except
Inventory), including motor vehicles and other rolling stock with respect to
which a certificate of title has been issued, aircraft, dies, tools, jigs, and
office equipment, as well as all of such types of property leased by such Person
and all of such Person's rights and interests with respect thereto under such
leases (including, without limitation, options to purchase); together with all
present and future additions and accessions thereto, replacements therefor,
component and auxiliary parts and supplies used or to be used in connection
therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties, and rights with respect thereto, wherever
any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in reorganization, (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan, or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
LOAN AND SECURITY AGREEMENT - Page 8
"EVENT OF DEFAULT" has the meaning specified in SECTION 11.1.
"EXCESS CASH" means the amount by which available cash and Cash
Equivalents of the Borrower exceeds $250,000.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"EXISTING ARTICLE 9" means, with respect to the UCC as in effect in any
state (or the District of Columbia) of the United States, Article 9 of the UCC
as in effect in such jurisdiction from time to time prior to the date of
enactment by such state of Revised Article 9.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1.0%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; PROVIDED that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Bank on such day on such transactions as determined by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"FINANCIAL STATEMENTS" means, according to the context in which it is
used, the financial statements referred to in SECTION 8.6 or any other financial
statements required to be given to the Agent or the Lenders pursuant to this
Agreement.
"FISCAL QUARTER" means one of the four three (3) calendar month fiscal
measurement periods in each Fiscal Year.
"FISCAL PERIOD" means a calendar month.
"FISCAL YEAR" means the Borrower's fiscal year for financial accounting
purposes. The current Fiscal Year of the Borrower ends on December 31, 2001.
"FUNDED DEBT" means with respect to a Person, without duplication, (a)
all Debt of such Person for borrowed money, (b) all Debt of such Person
evidenced by bonds, notes, debentures, or other similar instruments, (c) the
amount of all Debt of such Person under Capital Leases, (d) the amount of all
Debt of such Person secured by a Lien existing on property owned by such Person
whether or not the Debt secured thereby has been assumed by such Person or is
non-recourse to such Person, (e) all Debt of such Person to redeem or retire any
Capital Stock of such Person; PROVIDED that the holder(s) of such Capital Stock
shall on the date of determination hold the right to redeem or retire such
Capital Stock for cash, (f) all Debt of such Person in respect of unfunded
vested
LOAN AND SECURITY AGREEMENT - Page 9
benefits under any Plan, (g) all obligations of such Person to pay the deferred
purchase price of property or services (excluding trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than ninety (90) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP), (h) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds, and similar instruments, and (i)
the imputed principal balance outstanding under any synthetic lease, tax
retention operating lease, off balance sheet loan, or similar off balance sheet
financing product to which such Person is a party, where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
United States accounting profession).
"GENERAL INTANGIBLES" means, with respect to a Person, all of such
Person's now owned or hereafter acquired general intangibles, as defined in the
UCC, choses in action and causes of action and all other intangible personal
property of such Person of every kind and nature (other than Accounts),
including, without limitation, all contract rights, Proprietary Rights,
corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, any funds which may
become due to such Person in connection with the termination of any Plan or
other employee benefit plan or any rights thereto and any other amounts payable
to such Person from any Plan or other employee benefit plan, rights and claims
against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, property, casualty or any similar type of
insurance and any proceeds thereof, proceeds of insurance covering the lives of
key employees on which such Person is beneficiary, and any letter of credit,
guarantee, claim, security interest, or other security held by or granted to
such Person. Without limiting any of the foregoing, "General Intangibles"
includes, with respect to the Borrower, the RPA Buyer Interest.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTY" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend, or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in
LOAN AND SECURITY AGREEMENT - Page 10
respect thereof, including any such obligations incurred through an agreement,
contingent or otherwise: (a) to purchase the guaranteed obligations or any
property constituting security therefor; (b) to advance or supply funds for the
purchase or payment of the guaranteed obligations or to maintain a working
capital or other balance sheet condition; or (c) to lease property or to
purchase any debt or equity securities or other property or services.
"HEDGE AGREEMENT" means any and all transactions, agreements, or
documents now existing or hereafter entered into, which provide for an interest
rate, credit, commodity, or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging a Person's exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations, or
commodity prices.
"INDENTURE" means that certain Indenture, dated as of February 11,
1998, by and among Metals USA, Inc., the "Guarantors" named therein, and U.S.
Trust Company of California, N.A., as trustee, as such indenture may be
amended, restated, supplemented, or otherwise modified from time to time.
"INTERCOMPANY ACCOUNTS" means all assets and liabilities, however
arising, which are due to the Borrower from, which are due from the Borrower to,
or which otherwise arise from any transaction by the Borrower with, any
Affiliate of the Borrower.
"INTEREST PERIOD" means, with respect to any LIBOR Rate Revolving Loan,
the period commencing on the Funding Date of such Revolving Loan or on the
Conversion/Continuation Date on which such Revolving Loan is converted into or
continued as a LIBOR Rate Revolving Loan, and ending on the date one, two, or
three months thereafter as selected by the Borrower in a Notice of Borrowing or
a Notice of Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Revolving
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"INTEREST RATE" means each or any of the interest rates, including the
Default Rate, set forth in SECTION 3.1.
"INVENTORY" means, with respect to a Person, all of such Person's now
owned and hereafter acquired inventory, as defined in the UCC, goods, and
merchandise, wherever located, in each case
LOAN AND SECURITY AGREEMENT - Page 11
to be furnished under any contract of service or held for sale or lease, all
returned goods, raw materials, other materials, and supplies of any kind,
nature, or description which are used or consumed in such Person's business or
used in connection with the packing, shipping, advertising, selling, or
finishing of such goods, merchandise, and other property, and all documents of
title or other documents representing them.
"INVESTMENT PROPERTY" means, with respect to a Person, all of such
Person's right, title, and interest in and to any and all investment property,
as defined in the UCC, including, without limitation, all (a) securities whether
certificated or uncertificated, (b) securities entitlements, (c) securities
accounts, (d) commodity contracts and (e) commodity accounts; together with all
other units, shares, partnership interests, membership interests, equity
interests, rights, or other equivalent evidences of ownership (howsoever
designated) issued by any Person.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"ISSUER" has the meaning specified in SECTION 6.2(d).
"LENDER" and "LENDERS" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Bank to the extent of any Non-Ratable Loan outstanding.
"LIBOR RATE" means, for any Interest Period, with respect to LIBOR Rate
Revolving Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = OFFSHORE BASE RATE
----------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1.0%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental, or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The
LIBOR Rate for each outstanding LIBOR Rate Revolving Loan
shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"OFFSHORE BASE RATE" means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not
available, the Offshore Base Rate shall be, for any Interest
LOAN AND SECURITY AGREEMENT - Page 12
Period, the rate per annum appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such
rates. If for any reason none of the foregoing rates is
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum determined by the Agent as the rate
of interest at which Dollar deposits in the approximate amount
of the LIBOR Rate Revolving Loan comprising part of such
Borrowing would be offered by the Bank's London Branch to
major banks in the offshore Dollar market at their request at
or about 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to
such Interest Period.
"LIBOR RATE REVOLVING LOAN" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"LIEN" means (a) any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment, or bailment for security purposes, (b) to the extent not included
under CLAUSE (a) preceding, any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease, or other title exception
or encumbrance affecting property, and (c) any contingent or other agreement to
provide any of the foregoing.
"LOAN ACCOUNT" means the loan account of the Borrower, which account
shall be maintained by the Agent.
"LOAN DOCUMENTS" means collectively this Agreement, the Revolving
Notes, the Agents' Letter, and each other agreement, certificate, document, or
instrument executed or delivered by the Borrower to the Agent or any Lender in
connection with this Agreement, the Obligations, or the Collateral whether prior
to, on, or after the Closing Date, and any and all renewals, extensions,
amendments, modifications, or restatements of any of the foregoing.
"MAJORITY LENDERS" means, as of any date of determination, the Lenders
whose Pro Rata Shares aggregate more than fifty percent (50.0%) as such
percentage is determined according to the definition of Pro Rata Share.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U, or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise), or prospects of the Borrower or of the Collateral, (b)
a material impairment of the ability of the Borrower to perform
LOAN AND SECURITY AGREEMENT - Page 13
under any Loan Document and to avoid any Event of Default, or (c) a material
adverse effect upon the legality, validity, binding effect, or enforceability
against the Borrower of any Loan Document.
"MAXIMUM RATE" means, at any time, the maximum rate of interest the
Lenders may lawfully contract for, charge, or receive in respect of the
Obligations as allowed by any Requirement of Law. For purposes of determining
the Maximum Rate under the Requirements of Law of the State of Texas, the
applicable rate ceiling shall be (a) the "weekly ceiling" described in and
computed in accordance with the provisions of Section 303.003 of the Texas
Finance Code, as amended or (b) if the parties subsequently contract as allowed
by any Requirement of Law, the "quarterly ceiling" or the "annualized ceiling"
computed pursuant to Section 303.008 of the Texas Finance Code, as amended;
PROVIDED, HOWEVER, that at any time the "weekly ceiling", the "quarterly
ceiling", or the "annualized ceiling" shall be less than eighteen percent
(18.0%) per annum or more than twenty-four percent (24.0%) per annum, the
provisions of Section 303.009(a) and Section 303.009(b) of the Texas Finance
Code, as amended, shall control for purposes of such determination, as
applicable.
"MAXIMUM REVOLVER AMOUNT" means $100,000,000.
"METALS LOAN AGREEMENT" means that certain Loan and Security Agreement,
dated concurrently herewith, among the Parent, each of the Subsidiaries of the
Parent party thereto, Bank of America, National Association as administrative
agent for the "Lenders" party thereto, and each of the lending institutions
party thereto as "Lenders", as such agreement may be amended, restated, or
otherwise modified from time to time.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"NEGATIVE PLEDGE" means any agreement, contract, or other arrangement
whereby the Borrower is prohibited from, or would otherwise be in default as a
result of, creating, assuming, incurring, or suffering to exist, directly or
indirectly, any Lien on any of its assets in favor of the Agent under the Loan
Documents.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, at any time, the gross amount
of Eligible Accounts less sales, excise, or similar taxes, and less returns,
discounts, claims, credits, and allowances of any nature at any time issued,
owing, granted, outstanding, available, or claimed.
"NON-RATABLE LOAN" and "NON-RATABLE LOANS" have the respective meanings
specified in SECTION 2.2(h).
"NOTICE OF BORROWING" has the meaning specified in SECTION 2.2(b).
"NOTICE OF CONVERSION/CONTINUATION" has the meaning specified in
SECTION 3.2(b).
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant
LOAN AND SECURITY AGREEMENT - Page 14
to this Agreement or any of the other Loan Documents, whether or not evidenced
by any note, or other instrument or document, whether arising from an extension
of credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification, or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees, and any other sums chargeable to the Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, all debts, liabilities, and obligations now or hereafter
arising from or in connection with Bank Products.
"OTHER TAXES" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges, or similar levies (excluding, in
the case of each Lender and the Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Lender's or the Agent's
net income) which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.
"PARENT" means Metals USA, Inc., a Delaware corporation.
"PARTICIPANT" means any commercial bank, financial institution, or
other Person not an Affiliate of the Borrower who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"PAYMENT ACCOUNT" means each bank account established pursuant to
SECTION 6.9, to which the funds of the Borrower (including proceeds of Accounts
and other Collateral) are deposited or credited, and which is maintained in the
name of the Agent or the Borrower as the Agent may determine, on terms
acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"PENDING REVOLVING LOANS" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Borrower or any ERISA Affiliate
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) calendar years.
"PERMITTED LIENS" means:
(a) the Agent's Liens;
LOAN AND SECURITY AGREEMENT - Page 15
(b) Liens on the Borrower's Accounts (and related "Records",
"Related Security", and "Collections" (as defined by the RPA)) in favor
of each RPA Seller securing the Borrower's obligations under the RPA
Seller Note owing to such RPA Seller, arising pursuant to Section 1.9
of the RPA, PROVIDED that each such Lien shall at all times be junior
and subordinate to the Agent's Liens; and
(c) Liens existing under the Metals Loan Agreement on the
Accounts purchased by the Borrower from the RPA Sellers, PROVIDED that
such Liens shall at all times be junior and subordinate to the Agent's
Lien.
"PERMITTED SUBORDINATED DEBT" means unsecured Debt owing by the
Borrower which is subordinated to payment of the Obligations on terms approved
in writing by the Agent and the Majority Lenders and any renewals,
modifications, or amendments thereof which are approved in writing by the
Majority Lenders.
"PERSON" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower sponsors or maintains or to which the Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"PRO RATA SHARE" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"PROPRIETARY RIGHTS" means, with respect to a Person, all of such
Person's now owned and hereafter arising or acquired licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service xxxx applications, and all licenses and rights related to
any of the foregoing, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present, and future infringement of any of the foregoing.
"REAL ESTATE" means, with respect to any Person, all of such Person's
now or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds, and future interests, together with all of
such Person's now and hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto, and the easements appurtenant thereto.
LOAN AND SECURITY AGREEMENT - Page 16
"RELEASE" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater, or Real Estate or other property.
"REPORTABLE EVENT" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule, or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject. In
respect of contracts relating to interest or finance charges that are made or
performed in the State of Texas, "Requirement of Law" includes the laws of the
United States, including, without limitation, 12 USC Sections 85 and 86(a), as
amended from time to time, and any other statute of the United States now or at
any time hereafter prescribing the maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas, including, without
limitation, Chapter 306 of the Texas Finance Code, if applicable, and if Chapter
306 of the Texas Finance Code is not applicable, Chapter 303 of the Texas
Finance Code, and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; PROVIDED that the parties hereto agree pursuant to Texas Finance Code
Section 346.004 that the provisions of Chapter 346 of the Texas Finance Code
shall not apply to the Revolving Loans, this Agreement, or any other Loan
Documents.
"RESPONSIBLE OFFICER" means, with respect to the Borrower, the chief
executive officer, president, chief financial officer, chief accounting officer,
treasurer, or controller and, in each case preceding, any other officer having
substantially the same authority and responsibility.
"RESTRICTED INVESTMENT" means, with respect to the Borrower, any
acquisition of any Funded Debt, equity interests, or securities by the Borrower
in exchange for cash or other property, whether in the form of an acquisition of
stock, debt, or other indebtedness or obligation, or a loan, advance, capital
contribution, or subscription, except the following: (a) direct obligations of
the United States, or any agency thereof, or obligations guaranteed by the
United States; PROVIDED that such obligations mature within one (1) year from
the date of acquisition thereof; (b) acquisitions of certificates of deposit
maturing within one (1) year from the date of acquisition, bankers' acceptances,
Eurodollar bank deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the laws of the
United States or any state thereof having capital and surplus aggregating at
least $100,000,000; (c) acquisitions of commercial paper given a rating of "A2"
or better by Standard & Poor's Corporation or "P2" or better by Xxxxx'x
Investors Service, Inc. and maturing not more than ninety (90) days from the
date of creation thereof; (d) Hedge Agreements entered into for the purpose of
hedging interest payable under this Agreement; (e) investments in mutual funds
substantially all of the assets of which are comprised of securities of the
types described in CLAUSES (a), (b), and (c) preceding; (f) existing investments
listed on the attached SCHEDULE 1.1(B); (g) the purchase of Accounts pursuant to
the RPA; and (h) loans by the Borrower to the Parent pursuant to CLAUSE (c)(II)
of SECTION 9.31.
LOAN AND SECURITY AGREEMENT - Page 17
"REVISED ARTICLE 9" means, with respect to the UCC as in effect in any
Enactment State, Uniform Commercial Code, Article 9, 1999 Official Text, as
enacted in such state.
"REVOLVING LOANS" has the meaning specified in SECTION 2.2 and includes
each Agent Advance and Non-Ratable Loan.
"REVOLVING NOTE" means a promissory note made by the Borrower payable
to the order of a Lender evidencing the obligation of the Borrower to pay the
aggregate unpaid principal amount of the Revolving Loans made to each of the
Borrower by such Lender (and any promissory note or notes that may be issued
from time to time in substitution, renewal, extension, replacement, or exchange
thereof whether payable to such Lender or to a different Lender in connection
with a Person becoming a Lender after the Closing Date or otherwise)
substantially in the form of EXHIBIT A, with all of the blanks properly
completed, either as originally executed or as such promissory note may be
renewed, extended, modified, amended, supplemented, or restated from time to
time.
"RPA" means that certain Receivables Purchase Agreement among the
Borrower and each of the RPA Sellers, as such agreement may be amended,
restated, or otherwise modified from time to time.
"RPA BUYER INTEREST" means all of the Borrower's right, title, and
interest (including, without limitation, any and all claims and rights to
payment) under the RPA (including rights and obligations, if any, in favor of
the Borrower under Section 7.17 thereof).
"RPA SELLER" means each "Originator" (as defined in the RPA) and its
successors and assigns, each additional Person which becomes an "Originator" (as
defined in the RPA) under the RPA with the written consent of the Agent and its
successors and assigns, and "RPA SELLERS" means more than one or all of such
Persons.
"RPA SELLER NOTE" means each promissory note executed by the Borrower
payable to an RPA Seller, evidencing the Borrower's obligation to repay each RPA
Seller all "Originator Revolving Loans" (as defined in the RPA) made to the
Borrower by each such RPA Seller pursuant to the RPA, as any such promissory
note may be renewed, amended, restated, or otherwise modified from time to time.
"SETTLEMENT" and "SETTLEMENT DATE" have the meanings specified in
SECTION 2.2(j)(i).
"SOLVENT" means, with respect to the Borrower, as of any date, that on
and as of such date (both before and after effecting the transactions
contemplated by this Agreement and making any Revolving Loans or taking any
other actions permitted by this Agreement proposed to be taken as of such date)
(a) the sum of the Borrower's debts is not greater than all of the Borrower's
property, at a fair valuation, (b) the sum of the Borrower's debts is not
greater than all of the Borrower's assets, at a fair valuation, (c) the Borrower
is generally paying its debts as they become due, (d) the Borrower is not
engaged or about to engage in any business or any transaction for which (i) its
property is an unreasonably small capital or (ii) the remaining assets of the
Borrower are
LOAN AND SECURITY AGREEMENT - Page 18
unreasonably small in relation to any such business or transaction, (e) the
Borrower does not intend to incur, anddoes not believe that it will incur, debts
that are or would be beyond its ability to pay as such debts mature or become
due, and (f) the Borrower does not intend to hinder, delay, or defraud any
creditor of the Borrower. For this purpose "debts" includes anything included
within the definition of "debt" as used in Section 548 of the United States
Bankruptcy Code or as defined or used by Section 24.002 or Section 24.003 of the
Texas Uniform Fraudulent Transfer Act, and "assets" has the meaning defined or
used by Section 24.002 of the Texas Uniform Fraudulent Transfer Act. Contingent,
unliquidated, or disputed obligations or liabilities (if any) are valued at the
amount which, in light of all relevant facts and circumstances, is reasonably
expected to become absolute, liquidated, or mature.
"STATED TERMINATION DATE" means March 12, 2004.
"SUBSIDIARY" means, with respect to any Person (the "subject Person"),
any corporation, association, partnership, limited liability company, joint
venture, or other business entity of which more than fifty percent (50.0%) of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the subject
Person, or one or more of the Subsidiaries of the subject Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Borrower.
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding, in the case of the Agent and each Lender, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
such Lender's net income in any jurisdiction (whether federal, state, or local
and including any political subdivision thereof) under the laws of which the
Agent or such Lender, as the case may be, is organized or maintains a lending
office.
"TERMINATION DATE" means the earliest to occur of (a) the Stated
Termination Date, (b) the date the Total Facility is terminated either by the
Borrower pursuant to SECTION 4.2 or by the Majority Lenders pursuant to SECTION
11.2, and (c) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.
"TOTAL FACILITY" has the meaning specified in SECTION 2.1.
"UCC" means the Uniform Commercial Code (or any successor statute), as
in effect from time to time, of the State of Texas or of any other state the
laws of which are required as a result thereof to be applied in connection with
the issue of perfection of security interests.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"UNITED STATES" means the United States of America.
LOAN AND SECURITY AGREEMENT - Page 19
"UNUSED LINE FEE" has the meaning specified in SECTION 3.4.
"UNUSED LINE FEE PERCENTAGE" means, as of the Closing Date, one-half
percent (0.50%), subject to adjustment from time to time thereafter to the
applicable percentage specified corresponding to the "Fixed Charge Coverage
Ratio" (as defined in the Metals Loan Agreement) of the Parent, as set forth
below, respectively:
Fixed Charge Coverage Ratio Unused Line Fee Percentage
--------------------------- --------------------------
Less than 1.00 to 1.00 0.50%
Greater than or equal to 1.00 to 1.00, but 0.375%
less than 1.30 to 1.00
Greater than or equal to 1.30 to 1.00 0.25%
For the purpose of determining any such adjustments to the Unused Line Fee
Percentage, the Fixed Charge Coverage Ratio of the Parent shall be determined
based upon the Parent's "Financial Statements" (as defined in the Metals Loan
Agreement) for each of its respective Fiscal Quarters, beginning with the Fiscal
Quarter ending September 30, 2001, delivered to the Agent as required by the
Metals Loan Agreement and any such adjustment, if any, shall become effective on
and after the first day of the calendar month following the calendar month in
which such Financial Statements of the Parent are delivered to the Agent.
"WHOLLY-OWNED SUBSIDIARY" when used to determine the relationship of a
Subsidiary to a Person, means a Subsidiary all of the issued and outstanding
Capital Stock (other than directors' qualifying shares) of which shall at the
time be owned by such Person or one or more of such Person's Wholly-Owned
Subsidiaries or by such Person and one or more of such Person's Wholly-Owned
Subsidiaries.
Section 1.2 ACCOUNTING TERMS. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the meaning
customarily given to such term in accordance with GAAP.
Section 1.3 INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms. Terms used herein
that are defined in the UCC and are not otherwise defined herein, shall
have the meaning specified therefor in the UCC.
(b) The words "hereof," "herein," "hereunder," and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, Schedule, and Exhibit references
are to this Agreement unless otherwise specified. The term "documents"
includes any and all instruments, documents, agreements, certificates,
indentures, notices, and other writings, however evidenced. The term
"including" is not limiting and means "including, without limitation."
In the computation of periods of time
LOAN AND SECURITY AGREEMENT - Page 20
from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but
excluding" and the word "through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing, or interpreting the
statute or regulation.
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation
of this Agreement.
(e) This Agreement and the other Loan Documents may use
several different limitations, tests, or measurements to regulate the
same or similar matters. All such limitations, tests, and measurements
are cumulative and shall each be performed in accordance with their
terms.
(f) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent,
the Lenders, and the Borrower and are the products of all parties.
Accordingly, they shall not be construed against the Agent, the
Lenders, or the Borrower merely because of the Agent's, the Lenders',
or the Borrower's involvement in their preparation.
ARTICLE 2
LOANS
Section 2.1 TOTAL FACILITY. Subject to all of the terms and conditions
of this Agreement, the Lenders severally agree to make available a total credit
facility of $100,000,000 (the "TOTAL FACILITY") for use by the Borrower from
time to time during the term of this Agreement. The Total Facility shall be
composed of a revolving line of credit consisting of Revolving Loans, as
described in SECTION 2.2.
Section 2.2 REVOLVING LOANS.
(a) AMOUNTS. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE 10, each Lender severally, but not
jointly, agrees, upon the Borrower's request from time to time on any
Business Day during the period from the Closing Date to the Termination
Date, to make revolving loans (the "REVOLVING LOANS") to the Borrower
in amounts not to exceed (except for the Bank with respect to
Non-Ratable Loans and except for the Agent with respect to Agent
Advances) such Lender's Pro Rata Share of the Borrowing Base. The
Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans in
LOAN AND SECURITY AGREEMENT - Page 21
excess of the Available Credit on one or more occasions, but if they do
so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Borrowing Base or to be obligated to exceed
such limits on any other occasion. If the Aggregate Revolver
Outstandings exceed the Borrowing Base, the Lenders may refuse to make
or otherwise restrict the making of Revolving Loans as the Lenders
determine until such excess has been eliminated, subject to the Agent's
authority, in its sole discretion, to make Agent Advances pursuant to
the terms of SECTION 2.2(i).
(b) PROCEDURE FOR BORROWING.
(i) Each Borrowing shall be made upon the Borrower's
irrevocable written notice delivered to the Agent in the form
of a notice of borrowing in the form attached hereto as
EXHIBIT C (a "NOTICE OF BORROWING"), which must be received by
the Agent prior to 11:00 a.m. (Dallas, Texas time) (y) three
(3) Business Days prior to the requested Funding Date in the
case of a LIBOR Rate Revolving Loan and (z) on the requested
Funding Date, in the case of a Base Rate Revolving Loan,
specifying:
(A) the amount of the Borrowing, which, if a
LIBOR Rate Revolving Loan, shall be in an amount that
is not less than $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and if a Base Rate
Revolving Loan, shall be in an amount that is not
less than $100,000 or an integral multiple of
$100,000 in excess thereof;
(B) the requested Funding Date, which shall
be a Business Day;
(C) whether the Revolving Loan requested is
to be a Base Rate Revolving Loan or a LIBOR Rate
Revolving Loan; PROVIDED that if the Borrower fails
to specify whether any Revolving Loan is to be a Base
Rate Revolving Loan or a LIBOR Rate Revolving Loan,
such request shall be deemed a request for a Base
Rate Revolving Loan;
(D) the duration of the Interest Period if
the requested Revolving Loan is to be a LIBOR Rate
Revolving Loan; PROVIDED that if the Borrower fails
to select the duration of the Interest Period with
respect to any requested LIBOR Rate Revolving Loan,
the Borrower shall be deemed to have requested such
Revolving Loan be made as a LIBOR Rate Revolving Loan
with an Interest Period of one month in duration; and
(E) the account (as acceptable to the Agent
pursuant to SECTION 2.2(c)) to which the proceeds of
such Borrowing are to be deposited, or wire transfer
instructions satisfactory to the Agent with respect
to any Borrowing which is permitted to be funded
directly to any Person other than the Borrower;
LOAN AND SECURITY AGREEMENT - Page 22
PROVIDED that if any Default or Event of Default exists at the
time of any request by the Borrower for a LIBOR Rate Revolving
Loan, the Borrower shall be deemed to have requested such
Revolving Loan be made as a Base Rate Revolving Loan. With
respect to any Borrowing to be made on the Closing Date,
unless otherwise agreed by the Agent and the Lenders such
Borrowing will consist of Base Rate Revolving Loans.
(ii) With respect to any request for Base Rate
Revolving Loans, in lieu of delivering the above-described
Notice of Borrowing, the Borrower may give the Agent
telephonic notice of such request by the required time, with
such telephonic notice to be confirmed in writing no later
than the Business Day following the giving of such telephonic
notice but the Agent at all times shall be entitled to rely on
such telephonic notice in making such Revolving Loans,
regardless of whether any such confirmation is received by the
Agent.
(c) DISBURSEMENT; RELIANCE UPON AUTHORITY. The Borrower shall
deliver to the Agent, prior to the Closing Date, a writing setting
forth the deposit account to which the Agent is authorized by the
Borrower to transfer the proceeds of the Revolving Loans requested
pursuant to this SECTION 2.2, which deposit account shall be reasonably
acceptable to the Agent, PROVIDED that at the request of the Borrower
or the Agent, proceeds of any Revolving Loan which is used for the
purpose of financing the purchase by the Borrower of Accounts from an
RPA Seller pursuant to the RPA shall be disbursed, for the account of
the Borrower, directly to an account of such RPA Seller. The Agent
shall be entitled to rely conclusively on any individual's request for
Revolving Loans on behalf of the Borrower, the proceeds of which are to
be transferred to the deposit account specified by the Borrower
pursuant to the immediately preceding sentence, until the Agent
receives written notice from the Borrower that the proceeds of the
Revolving Loans are to be sent to a different deposit account. The
Agent shall have no duty to verify the identity of any individual
representing himself or herself as a person authorized by the Borrower
to make such requests on its behalf.
(d) NO LIABILITY. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in
SECTION 2.2(b) and SECTION 2.2(c), which notice the Agent believes in
good faith to have been given by an officer or other person duly
authorized by the Borrower to request Revolving Loans on its behalf or
for otherwise acting in good faith under this SECTION 2.2, and the
crediting of Revolving Loans to the Borrower's deposit account, or wire
transfer to such Person as the Borrower shall direct, shall
conclusively establish the obligation of the Borrower to repay such
Revolving Loans as provided herein.
(e) NOTICE IRREVOCABLE. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to SECTION 2.2(b) shall be
irrevocable and the Borrower shall be bound to borrow the funds
requested therein in accordance therewith.
LOAN AND SECURITY AGREEMENT - Page 23
(f) THE AGENT'S ELECTION. Promptly after receipt of a Notice
of Borrowing (or telephonic notice in lieu thereof) pursuant to SECTION
2.2(b), the Agent shall elect, in its discretion, (i) to have the terms
of SECTION 2.2(g) apply to such requested Borrowing, or (ii) if
the requested Revolving Loan is a Base Rate Revolving Loan to request
the Bank to make a Non-Ratable Loan pursuant to the terms of SECTION
2.2(h) in the amount of the requested Borrowing; PROVIDED, HOWEVER,
that if the Bank declines in its sole discretion to make a Non-Ratable
Loan pursuant to SECTION 2.2(h), the Agent shall elect to have the
terms of SECTION 2.2(g) apply to such requested Borrowing.
(g) MAKING OF REVOLVING LOANS.
(i) In the event that the Agent shall elect to have
the terms of this SECTION 2.2(g) apply to a requested
Borrowing as described in SECTION 2.2(f) or otherwise, then
promptly after receipt of a Notice of Borrowing or telephonic
notice pursuant to SECTION 2.2(b), the Agent shall notify the
Lenders by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall
make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to the Agent in immediately
available funds, to such account of the Agent as the Agent may
designate, not later than 12:00 noon (Dallas, Texas time) on
the Funding Date applicable thereto. After the Agent's receipt
of the proceeds of such requested Borrowing, the Agent shall
make the proceeds of such requested Borrowing available to the
Borrower on the applicable Funding Date by transferring same
day funds equal to the proceeds of such Revolving Loans
received by the Agent to the deposit account designated
pursuant to SECTION 2.2(c) or disbursing such funds in such
other manner as the Borrower may direct to the Agent.
(ii) Unless the Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day
prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro
Rata Share of such Borrowing, the Agent may assume that each
Lender has made such amount available to the Agent in
immediately available funds on the Funding Date and the Agent
may (but shall not be so required), in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Lender shall
not have made its full amount available to the Agent in
immediately available funds and the Agent in such
circumstances has made available to the Borrower such amount,
that Lender shall on the Business Day following such Funding
Date make such amount available to the Agent, together with
interest at the Federal Funds Rate for each day during such
period. A notice by the Agent submitted to any Lender with
respect to amounts owing under this CLAUSE (ii) shall be
conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such
Lender's Revolving Loan for all purposes of this Agreement. If
such amount is not made available to the Agent on the Business
Day following the Funding Date, the Agent will notify the
Borrower of such failure to fund and, upon demand by the
LOAN AND SECURITY AGREEMENT - Page 24
Agent, the Borrower shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum
equal to the Interest Rate applicable at the time to the
Revolving Loans comprising such Borrowing. The failure of any
Lender to make any Revolving Loan on any Funding Date (any
such Lender, prior to the cure of such failure, being
hereinafter referred to as a "DEFAULTING LENDER") shall not
relieve any other Lender of any obligation hereunder to make
a Revolving Loan on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the
Revolving Loan to be made by such other Lender on any Funding
Date.
(iii) The Agent shall not be obligated to transfer to
a Defaulting Lender any payments made by the Borrower to the
Agent for the Defaulting Lender's benefit, nor shall a
Defaulting Lender be entitled to the sharing of any payments
hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may
hold and, in its discretion, re-lend to the Borrower the
amount of all such payments received or retained by it for the
account of such Defaulting Lender. Any amounts so re-lent to
the Borrower shall bear interest at the rate applicable to
Base Rate Revolving Loans and for all other purposes of this
Agreement shall be treated as if they were Revolving Loans,
PROVIDED, HOWEVER, that for purposes of voting or consenting
to matters with respect to the Loan Documents and determining
Pro Rata Shares, such Defaulting Lender shall be deemed not to
be a "Lender". Until a Defaulting Lender cures its failure to
fund its Pro Rata Share of any Borrowing (A) such Defaulting
Lender shall not be entitled to any portion of the Unused Line
Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of
such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative
Commitments. This Section shall remain effective with respect
to such Lender until such time as the Defaulting Lender shall
no longer be in default of any of its obligations under this
Agreement. The terms of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrower of its
duties and obligations hereunder.
(h) MAKING OF NON-RATABLE LOANS.
(i) Except in the case of LIBOR Rate Revolving Loans
requested by the Borrower, in the event the Agent shall elect,
with the consent of the Bank, to have the terms of this
SECTION 2.2(h) apply to a requested Borrowing as described in
SECTION 2.2(f), the Bank shall make a Revolving Loan in the
amount of such Borrowing (any such Revolving Loan made solely
by the Bank pursuant to this SECTION 2.2(h) being referred to
as a "NON-RATABLE LOAN" and such Revolving Loans being
referred to collectively as "NON-RATABLE LOANS") available to
the Borrower on the Funding Date applicable thereto by
transferring same day funds to the deposit account of the
Borrower, designated pursuant to SECTION 2.2(c). Each
Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Revolving Loans except that all
payments thereon shall be payable to the Bank solely for its
own
LOAN AND SECURITY AGREEMENT - Page 25
account (and for the account of the holder of any
participation interest with respect to such Revolving Loan).
The Agent shall not request the Bank to make any Non-Ratable
Loan if (A) the Agent shall have received written notice from
any Lender that one or more of the applicable conditions
precedent set forth in ARTICLE 10 will not be satisfied on
the requested Funding Date for the applicable Borrowing, or
(B) the Agent has received notice that a Default exists under
SECTION 9.24. The Agent shall not otherwise be required to
determine whether the applicable conditions precedent set
forth in ARTICLE 10 have been satisfied prior to making, in
its sole discretion, any Non-Ratable Loan.
(ii) The Non-Ratable Loans shall be secured by the
Agent's Liens in and to the Collateral, shall constitute
Revolving Loans and Obligations hereunder, and shall bear
interest at the rate applicable to the Revolving Loans from
time to time.
(i) AGENT ADVANCES.
(i) Subject to the limitations set forth in the
provisos contained in this SECTION 2.2(i) and SECTION 13.2,
the Agent is hereby authorized by the Borrower and the
Lenders, from time to time in the Agent's sole discretion, (A)
after the occurrence of a Default or an Event of Default, or
(B) at any time that any of the other applicable conditions
precedent set forth in ARTICLE 10 have not been satisfied, to
make Base Rate Revolving Loans to the Borrower on behalf of
the Lenders which the Agent, in its reasonable business
judgment, deems necessary or desirable (1) to preserve or
protect the Collateral, or any portion thereof, (2) to enhance
the likelihood of, or maximize the amount of, repayment of the
Revolving Loans and other Obligations, or (3) to pay any other
amount chargeable to the Borrower pursuant to the terms of
this Agreement, including costs, fees, and expenses as
described in SECTION 15.7 (any of the advances described in
this SECTION 2.2(i) being hereinafter referred to as "AGENT
ADVANCES"); PROVIDED that the Majority Lenders may at any time
revoke the Agent's authorization contained in this SECTION
2.2(i) to make Agent Advances, any such revocation to be in
writing and to become effective prospectively upon the Agent's
receipt thereof;
(ii) The Agent Advances shall be repayable on demand
and secured by the Agent's Liens in and to the Collateral,
shall constitute Revolving Loans and Obligations hereunder,
and shall bear interest at the rate applicable to Base Rate
Revolving Loans from time to time. The Agent shall notify each
Lender in writing of each Agent Advance; PROVIDED that any
delay or failure of the Agent in providing any such notice to
any Lender shall not result in any liability or constitute the
breach of any duty or obligation of the Agent hereunder.
(j) SETTLEMENT. Except as may be specifically provided
otherwise by this SECTION 2.2, it is agreed that each Lender's funded
portion of the Revolving Loans is intended by the Lenders to be equal
at all times to such Lender's Pro Rata Share of the outstanding
Revolving Loans. Notwithstanding such agreement, the Agent, the Bank,
and the Lenders
LOAN AND SECURITY AGREEMENT - Page 26
agree (which agreement shall not be for the benefit of
or enforceable by the Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, including the
Non-Ratable Loans and the Agent Advances, shall take place on a
periodic basis in accordance with the following provisions:
(i) The Agent shall request settlement (a
"SETTLEMENT") with the Lenders on at least a weekly basis, or
on a more frequent basis if so determined by the Agent, (A) on
behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent
Advance, and (C) with respect to collections received, in each
case, by notifying the Lenders of such requested Settlement by
telecopy, telephone, or other similar form of transmission, of
such requested Settlement, no later than 11:00 a.m. (Dallas,
Texas time) on the date of such requested Settlement (the
"SETTLEMENT DATE"). Each Lender (other than the Bank, in the
case of Non-Ratable Loans, and the Agent, in the case of Agent
Advances) shall make the amount of such Lender's Pro Rata
Share of the outstanding principal amount of the Non-Ratable
Loans and Agent Advances with respect to which Settlement is
requested available to the Agent, to such account of the Agent
as the Agent may designate, not later than 2:00 p.m. (Dallas,
Texas time), on the Settlement Date applicable thereto, which
may occur before or after the occurrence or during the
continuation of a Default or an Event of Default and whether
or not the applicable conditions precedent set forth in
ARTICLE 10 have then been satisfied. Such amounts made
available to the Agent shall be applied against the amounts of
the applicable Non-Ratable Loan or Agent Advance and, together
with the portion of such Non-Ratable Loan or Agent Advance
representing the Bank's Pro Rata Share thereof, shall
constitute Revolving Loans of the Lenders, respectively. If
any such amount is not made available to the Agent by any
Lender on the Settlement Date applicable thereto, the Agent
shall, on behalf of the Bank with respect to each outstanding
Non-Ratable Loan and for itself with respect to each Agent
Advance, be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after the
Settlement Date and thereafter at the Interest Rate then
applicable to Base Rate Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one
(1) Business Day after demand is made by the Agent (whether
before or after the occurrence of a Default or an Event of
Default and regardless of whether the Agent has requested a
Settlement with respect to a Non-Ratable Loan or Agent
Advance), each Lender (A) shall irrevocably and
unconditionally purchase and receive from the Bank or the
Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Non-Ratable Loan
or Agent Advance equal to such Lender's Pro Rata Share of such
Non-Ratable Loan or Agent Advance and (B) if Settlement has
not previously occurred with respect to such Non-Ratable Loans
or Agent Advances, upon demand by the Bank or the Agent, as
applicable, shall pay to the Bank or the Agent, as applicable,
as the purchase price of such participation an amount equal to
one-hundred percent (100%) of such Lender's Pro Rata Share of
such Non-Ratable
LOAN AND SECURITY AGREEMENT - Page 27
Loans or Agent Advances. If such amount is not in fact made
available to the Agent by any Lender, the Agent shall be
entitled to recover such amount on demand from such Lender
together with interest thereon at the Federal Funds Rate for
the first three (3) days from and after such demand and
thereafter at the Interest Rate then applicable to Base Rate
Revolving Loans.
(iii) From and after the date, if any, on which any
Lender purchases an undivided interest and participation in
any Non-Ratable Loan or Agent Advance pursuant to CLAUSE (II)
preceding, the Agent shall promptly distribute to such Lender
such Lender's Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent
in respect of such Non-Ratable Loan or Agent Advance.
(iv) Between Settlement Dates, to the extent no Agent
Advances are outstanding, the Agent may pay over to the Bank
any payments received by the Agent, which in accordance with
the terms of this Agreement would be applied to the reduction
of the Revolving Loans, for application to the Bank's
Revolving Loans including Non-Ratable Loans. If, as of any
Settlement Date, collections received since the then
immediately preceding Settlement Date have been applied to the
Bank's Revolving Loans (other than to Non-Ratable Loans or
Agent Advances in which a Lender has not yet funded its
purchase of a participation pursuant to SECTION 2.2(j)(ii), as
provided for in the previous sentence, the Bank shall pay to
the Agent for the accounts of the Lenders, to be applied to
the outstanding Revolving Loans of such Lenders, an amount
such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates,
the Bank with respect to Non-Ratable Loans, the Agent with
respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent
Advances, shall be entitled to interest at the applicable rate
or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent, and the
Lenders.
(k) NOTATION. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including
the Non-Ratable Loans owing to the Bank and the Agent Advances owing to
the Agent, from time to time. In addition, each Lender is authorized,
at such Lender's option, to note the date and amount of each payment or
prepayment of principal of such Lender's Revolving Loans in its books
and records, including computer records, such books and records
constituting presumptive evidence, absent manifest error, of the
accuracy of the information contained therein.
(l) LENDERS' FAILURE TO PERFORM. All Revolving Loans (other
than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is
understood that (i) no Lender shall be responsible for any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of
LOAN AND SECURITY AGREEMENT - Page 28
any failure by any other Lender to perform its obligation to make any
Revolving Loans hereunder, (ii) no failure by any Lender to perform
its obligation to make any Revolving Loans hereunder shall excuse any
other Lender from its obligation to make any Revolving Loans hereunder,
and (iii) the obligations of each Lender hereunder shall be several,
not joint and several.
(m) REVOLVING NOTES. The Borrower shall execute and deliver to
the Agent, on behalf of each Lender, effective as of the Closing Date
and on the date of the assignment of any portion of any Lender's
Revolving Loans, a Revolving Note, to evidence such Lender's Revolving
Loans, in the principal amount equal to the amount of such Lender's
Commitment with respect to the Revolving Loans.
Section 2.3 BANK PRODUCTS. The Borrower may request and the Bank or the
Documentation Agent (as applicable) may, in its sole and absolute discretion,
arrange for the Borrower to obtain from the Bank, the Documentation Agent, or
the Bank's or the Documentation Agent's (as applicable) Affiliates Bank
Products, although the Borrower is not required to do so. To the extent Bank
Products are provided by an Affiliate of the Bank or the Documentation Agent,
the Borrower agrees to indemnify and hold the Bank or the Documentation Agent
(as applicable) and the Lenders harmless from any and all costs and obligations
now or hereafter incurred by the Bank, the Documentation Agent, or any of the
Lenders which arise from the indemnity given by the Bank or the Documentation
Agent (as applicable) to its Affiliates related to such Bank Products. The
agreement contained in this Section shall survive termination of this Agreement.
The Borrower acknowledges and agrees that the obtaining of Bank Products from
the Bank, the Documentation Agent, or the Bank's or the Documentation Agent's
(as applicable) Affiliates (a) is in the sole and absolute discretion of the
Bank, the Documentation Agent, or their applicable Affiliates, and (b) is
subject to all rules and regulations of the Bank, the Documentation Agent, or
their applicable Affiliates.
ARTICLE 3
INTEREST AND FEES
Section 3.1 INTEREST.
(a) INTEREST RATES. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the
extent permitted by law, on accrued interest thereon not paid when due)
from the date made until paid in full in cash at a rate determined by
reference to the Base Rate or the LIBOR Rate, as applicable, and this
SECTION 3.1(a), but not to exceed the Maximum Rate. Any of the
Revolving Loans may be converted into, or continued as, Base Rate
Revolving Loans or LIBOR Rate Revolving Loans, subject to, and in the
manner provided in, SECTION 3.2. If at any time Revolving Loans are
outstanding with respect to which notice has not been delivered to the
Agent in accordance with the terms of this Agreement specifying the
basis for determining the interest rate applicable thereto, then those
Revolving Loans shall be Base Rate Revolving Loans and shall bear
interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the
LOAN AND SECURITY AGREEMENT - Page 29
Agent in accordance with this Agreement and such notice has become
effective. Except as otherwise provided herein, the outstanding
Obligations shall bear interest as follows:
(i) for all Base Rate Revolving Loans and other
Obligations (other than LIBOR Rate Revolving Loans) at a
fluctuating per annum rate equal to the lesser of (A) the Base
Rate PLUS the Applicable Margin or (B) the Maximum Rate; and
(ii) for all LIBOR Rate Revolving Loans at a per
annum rate equal to the lesser of (A) the LIBOR Rate PLUS the
Applicable Margin or (B) the Maximum Rate.
Each change in the Base Rate shall be reflected in the interest rate
described in CLAUSE (i) preceding as of the effective date of such
change. Subject to SECTION 3.3, all interest charges shall be computed
on the basis of a year of 360 days and actual days elapsed (which
results in more interest being paid than if computed on the basis of a
365-day year).
(b) DEFAULT RATE. During the existence of any Default or Event
of Default if the Agent or the Majority Lenders in their discretion so
elect, then, while such Default or Event of Default exists, the
Obligations shall bear interest at a rate per annum equal to the lesser
of (i) the Default Rate applicable thereto or (ii) the Maximum Rate.
(c) INTEREST PERIODS. After giving effect to any Borrowing,
conversion, or continuation of any LIBOR Rate Revolving Loan, there may
not be more than four (4) different Interest Periods in effect
hereunder; PROVIDED that in its discretion the Agent may agree to
permit the Borrower to maintain more than four (4) different Interest
Periods in effect hereunder.
Section 3.2 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may, upon irrevocable written notice to the
Agent in accordance with SECTION 3.2(b):
(i) elect, as of any Business Day, in the case of
Base Rate Revolving Loans to convert any such Revolving Loans
(or any part thereof in an amount not less than $5,000,000, or
that is in an integral multiple of $1,000,000 in excess
thereof) into LIBOR Rate Revolving Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Revolving Loans
having Interest Periods expiring on such day (or any part
thereof in an amount not less than $5,000,000, or that is in
an integral multiple of $1,000,000 in excess thereof) as LIBOR
Rate Revolving Loans;
PROVIDED that if at any time the aggregate amount of LIBOR Rate
Revolving Loans in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $5,000,000,
such LIBOR Rate Revolving Loans shall, effective as of the expiration
date of the applicable Interest Period, automatically convert into Base
Rate Revolving Loans.
LOAN AND SECURITY AGREEMENT - Page 30
(b) The Borrower shall deliver a notice of
conversion/continuation in the form of EXHIBIT D (a "NOTICE OF
CONVERSION/CONTINUATION") to be received by the Agent not later than
11:00 a.m. (Dallas, Texas time) at least three (3) Business Days in
advance of the Conversion/Continuation Date, if the Revolving Loans are
to be converted into or continued as LIBOR Rate Revolving Loans and
specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the Revolving Loans and the aggregate amount of
such Revolving Loans to be converted or renewed;
(iii) the type of Revolving Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Revolving Loans, the Borrower has failed to timely select
a new Interest Period to be applicable to such LIBOR Rate Revolving
Loans or if any Default or Event of Default then exists, the Borrower
shall be deemed to have elected to convert such LIBOR Rate Revolving
Loans into Base Rate Revolving Loans effective as of the expiration
date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Conversion/Continuation. All conversions and
continuations shall be made ratably according to the respective
outstanding principal amounts of the Revolving Loans with respect to
which the Notice of Conversion/Continuation was given held by each
Lender.
(e) During the existence of a Default or Event of Default, the
Borrower may not elect to have a Revolving Loan converted into or
continued as a LIBOR Rate Revolving Loan.
Section 3.3 MAXIMUM INTEREST RATE. If the Interest Rate, absent the
limitation set forth in this SECTION 3.3, would have exceeded the Maximum Rate,
then the Interest Rate shall be the Maximum Rate, and, if in the future, the
Interest Rate would otherwise be less than the Maximum Rate, then the Interest
Rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this SECTION 3.3, have been paid or accrued if the Interest Rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been paid or accrued if the Maximum
Rate had, at all times, been in effect or (ii) the amount of interest which
would have been paid or accrued had the interest rate otherwise set forth in
this Agreement, at all
LOAN AND SECURITY AGREEMENT - Page 31
times, been in effect over (b) the amount of interest actually paid or
accrued under this Agreement. Each of the Agent, the Lenders, and the
Borrower acknowledges, agrees, and declares that it is its intention to
expressly comply with all Requirements of Law in respect of limitations on
the amount or rate of interest that can legally be contracted for, charged,
or received under or in connection with the Loan Documents. Notwithstanding
anything to the contrary contained in any Loan Document (even if any such
provision expressly declares that it controls all other provisions of the
Loan Documents), in no contingency or event whatsoever shall the amount of
interest (including the aggregate of all charges, fees, benefits, or other
compensation which constitutes interest under any Requirement of Law) under
the Loan Documents paid by the Borrower, received by the Agent or any Lender,
agreed to be paid by the Borrower, or requested or demanded to be paid by the
Agent or any Lender, exceed the Maximum Rate, and all provisions of the Loan
Documents in respect of the contracting for, charging, or receiving
compensation for the use, forbearance, or detention of money shall be limited
as provided by this SECTION 3.3. In the event any such interest is paid to
the Agent or any Lender by the Borrower in an amount or at a rate which would
exceed the Maximum Rate, the Agent or such Lender, as the case may be, shall
automatically apply such excess to any unpaid amount of the Obligations other
than interest, in inverse order of maturity, or if the amount of such excess
exceeds said unpaid amount, such excess shall be paid to the Borrower. All
interest paid, or agreed to be paid, by the Borrower, or taken, reserved, or
received by the Agent or any Lender, shall be amortized, prorated, spread,
and allocated in respect of the Obligations throughout the full term of this
Agreement. Notwithstanding any provision contained in any of the Loan
Documents, or in any other related documents executed pursuant hereto,
neither the Agent nor any Lender shall ever be entitled to charge, receive,
take, reserve, collect, or apply as interest any amount which, together with
all other interest under the Loan Documents would result in a rate of
interest under the Loan Documents in excess of the Maximum Rate and, in the
event the Agent or any Lender ever charges, receives, takes, reserves,
collects, or applies any amount in respect of the Borrower that otherwise
would, together with all other interest under the Loan Documents, be in
excess of the Maximum Rate, such amount shall automatically be deemed to be
applied in reduction of the unpaid principal balance of the Obligations and,
if such principal balance is paid in full, any remaining excess shall
forthwith be paid to the Borrower. The Borrower, the Agent, and the Lenders
shall, to the maximum extent permitted under any Requirement of Law, (A)
characterize any non-principal payment as a standby fee, commitment fee,
prepayment charge, delinquency charge, expense, or reimbursement for a
third-party expense rather than as interest and (B) exclude prepayments,
acceleration, and the effects thereof. Nothing in any Loan Document shall be
construed or so operate as to require or obligate the Borrower to pay any
interest, fees, costs, or charges greater than is permitted by any
Requirement of Law. Subject to the foregoing, the Borrower hereby agrees that
the actual effective rate of interest from time to time existing under the
Loan Documents, including all amounts agreed to by the Borrower or charged or
received by the Agent or the Lenders pursuant to and in accordance with the
Loan Documents, which may be deemed to be interest under any Requirement of
Law, shall be deemed to be a rate which is agreed to and stipulated by the
Borrower and the Lenders in accordance with Requirements of Law.
Section 3.4 UNUSED LINE FEE. Until the Revolving Loans have been paid
in full and this Agreement terminated, the Borrower agrees to pay, on the first
day of each calendar month and on the Termination Date, to the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Shares, an
unused line fee (the "UNUSED LINE FEE") equal to the Unused Line Fee
LOAN AND SECURITY AGREEMENT - Page 32
Percentage multiplied by the amount by which the Maximum Revolver Amount
exceeded the sum of the average daily outstanding amount of the Revolving
Loans during the immediately preceding calendar month or shorter period if
calculated on the Termination Date. Subject to SECTION 3.3, the Unused Line
Fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed. For purposes of calculating the Unused Line Fee pursuant to
this SECTION 3.4, any payment received by the Agent (if received prior to
2:00 p.m. Dallas, Texas time) shall be deemed to be credited to the
Borrower's Loan Account on the date such payment is received by the Agent.
Section 3.5 OTHER FEES. The Borrower agrees to pay all other fees and
expenses set forth in the Agents' Letter.
ARTICLE 4
PAYMENTS AND PREPAYMENTS
Section 4.1 REVOLVING LOANS. The Borrower shall repay the outstanding
principal balance of the Revolving Loans together with all other Obligations,
including all accrued but unpaid interest thereon, on the Termination Date. The
Borrower may prepay the Revolving Loans at any time, and reborrow subject to the
terms of this Agreement; PROVIDED, HOWEVER, that with respect to any LIBOR Rate
Revolving Loans prepaid prior to the expiration date of the Interest Period
applicable thereto, the Borrower shall pay to the Agent, for the account of the
Lenders, the amounts described in SECTION 5.4. In addition, and without limiting
the generality of the foregoing, upon demand the Borrower shall pay to the
Agent, for the account of the Lenders, the amount, if any and without
duplication, by which the outstanding Revolving Loans exceed the Borrowing Base.
Accrued interest on the Revolving Loans shall be due and payable in arrears as
follows: (a) in the case of Base Rate Revolving Loans, on the first day of each
calendar month and on the Termination Date and; (b) in the case of LIBOR Rate
Revolving Loans and with respect to each such Revolving Loan (i) on the last day
of the Interest Period with respect thereto and (ii) on the Termination Date.
Section 4.2 REDUCTION OF COMMITMENTS; TERMINATION OF FACILITY.
(a) Except as provided in SECTION 4.2(b), the Borrower may not
reduce the Maximum Revolver Amount at any time.
(b) The Borrower may terminate this Agreement upon at least
thirty (30) days prior written notice thereof to the Agent and the
Lenders, upon (i) the payment in full of all outstanding Revolving
Loans, together with accrued and unpaid interest thereon, (ii) the
payment of the early termination fee set forth in the following
sentence, (iii) with respect to any LIBOR Rate Revolving Loans prepaid
in connection with such termination prior to the expiration date of the
Interest Period applicable thereto, the payment of the amounts
described in SECTION 5.4, and (iv) the payment in full in cash of all
other Obligations together with accrued and unpaid interest thereon.
Subject to SECTION 3.3, if this Agreement is terminated at any time
prior to the third Anniversary Date following the Closing Date, whether
pursuant to this Section or pursuant to SECTION 11.2, the Borrower
shall pay to the Agent, for the account of the Lenders, an early
termination fee in an amount equal to one-
LOAN AND SECURITY AGREEMENT - Page 33
quarter percent (0.25%) of the Maximum Revolver Amount. Notwithstanding
the foregoing, no such early termination fee shall be payable in the
event this Agreement is terminated in connection with refinancing of
the Obligations in a transaction in which the Bank and the
Documentation Agent, or any of their respective Affiliates, provides or
arranges replacement financing or acts as underwriter or arranger of
any public offering of debt or equity securities of the Parent the
proceeds of which are used to repay the Obligations.
Section 4.3 PREPAYMENTS FROM ASSET DISPOSITIONS. All proceeds or other
cash payments received by the Borrower pursuant to any transaction of merger,
reorganization, consolidation, transfer, sale, assignment, lease, or other
disposition allowed by SECTION 9.9, and all proceeds referenced in SECTIONS
9.5(c) and 9.6(b), shall be paid to the Agent, promptly upon such receipt, for
application to the outstanding principal balance of the Revolving Loans without
a corresponding reduction in the aggregate amount of the Commitments.
Section 4.4 PAYMENTS BY THE BORROWER.
(a) All payments to be made by the Borrower shall be made
without set-off, recoupment, or counterclaim. Except as otherwise
expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders at the Agent's address set
forth in SECTION 15.8, and shall be made in Dollars and in immediately
available funds, no later than 2:00 p.m. (Dallas, Texas time) on the
date specified herein. Any payment received by the Agent later than
2:00 p.m. (Dallas, Texas time) shall be deemed to have been received on
the following Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of
Interest Period, whenever any payment is due on a day other than a
Business Day, such payment shall be due on the following 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.
(c) Unless the Agent receives notice from the Borrower prior
to the date on which any payment is due to the Lenders that the
Borrower will not make such payment in full as and when required, the
Agent may assume that the Borrower has made such payment in full to the
Agent on such date in immediately available funds and the Agent may
(but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not
made such payment in full to the Agent, each Lender shall repay to the
Agent on demand such amount distributed to such Lender, together with
interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Lender until the date repaid.
Section 4.5 PAYMENTS AS REVOLVING LOANS. All payments of principal,
interest, fees, premiums, and other sums payable hereunder, including, without
limitation, all reimbursement for expenses pursuant to SECTION 15.7, may, at the
option of the Agent, in its sole discretion, subject only to the terms of this
SECTION 4.5, be paid from the proceeds of Revolving Loans made hereunder,
LOAN AND SECURITY AGREEMENT - Page 34
whether made following a request by the Borrower pursuant to SECTION 2.2 or a
deemed request as provided in this SECTION 4.5. The Borrower hereby
irrevocably authorizes the Agent to charge the Loan Account for the purpose
of paying principal, interest, fees, premiums, and other sums payable
hereunder, including, without limitation, reimbursing expenses pursuant to
SECTION 15.7, and agrees that all such amounts charged shall constitute
Revolving Loans (including Non-Ratable Loans and Agent Advances) and that all
such Revolving Loans so made shall be deemed to have been requested pursuant
to SECTION 2.2.
Section 4.6 APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS.
Except as otherwise expressly provided herein, aggregate principal and interest
payments shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Revolving Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders. All payments shall be remitted to the Agent and all
such payments not relating to principal or interest of specific Revolving Loans,
or not constituting payment of specific fees, and all proceeds of the Borrower's
Accounts or any other Collateral received by the Agent, shall be applied,
ratably, subject to the provisions of this Agreement, FIRST, to pay any fees,
indemnities, or expense reimbursements, then due to the Agent from the Borrower;
SECOND, to pay any fees or expense reimbursements then due to the Lenders from
the Borrower; THIRD, to pay interest due in respect of the Revolving Loans;
FOURTH, to pay or prepay principal of the Non-Ratable Loans and the Agent
Advances; FIFTH, to pay or prepay principal of the Revolving Loans (other than
the Non-Ratable Loans and the Agent Advances) and any amounts relating to Bank
Products; and SIXTH, to the payment of any other Obligation due to the Agent or
any Lender by the Borrower. Notwithstanding anything to the contrary contained
in this Agreement, unless so directed by the Borrower, or unless an Event of
Default is in existence, neither the Agent nor any Lender shall apply any
payment which it receives to any LIBOR Rate Revolving Loan except (a) on the
expiration date of the Interest Period applicable to any such LIBOR Rate
Revolving Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Revolving Loans. The Agent shall promptly distribute to
each Lender, pursuant to the applicable wire transfer instructions received from
each Lender in writing, such funds as it may be entitled to receive, subject to
a Settlement delay as provided for in SECTION 2.2(j). The Agent and the Lenders
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Obligations.
Section 4.7 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible set-off, or a diversion of trust funds, or for
any other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Borrower shall be liable to pay to the Agent and the Lenders, and the
Borrower hereby indemnifies the Agent and the Lenders and holds the Agent and
the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this SECTION 4.7 shall be and remain effective notwithstanding any
contrary action which may have been taken by the Agent or any Lender in reliance
upon such payment or application of proceeds, and any
LOAN AND SECURITY AGREEMENT - Page 35
such contrary action so taken shall be without prejudice to the Agent's and
the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final
and irrevocable. The provisions of this SECTION 4.7 shall survive the
termination of this Agreement.
Section 4.8 THE AGENT'S AND THE LENDERS' BOOKS AND RECORDS; MONTHLY
STATEMENTS. The Borrower agrees that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute presumptive proof thereof, irrespective
of whether any Obligation is also evidenced by a promissory note or other
instrument. The Agent will provide to the Borrower a monthly statement of
Revolving Loans, payments, and other transactions pursuant to this Agreement.
Such statement shall be deemed correct, accurate, and binding on the Borrower
and an account stated (except for reversals and reapplications of payments made
as provided in SECTION 4.6 and corrections of errors discovered by the Agent),
unless the Borrower notifies the Agent in writing to the contrary within thirty
(30) days after such statement is rendered. In the event a timely written notice
of objections is given by the Borrower, only the items to which exception is
expressly made will be considered to be disputed.
ARTICLE 5
TAXES, YIELD PROTECTION, AND ILLEGALITY
Section 5.1 TAXES.
(a) Any and all payments by or on behalf of the Borrower to
the Agent or any Lender under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrower shall pay all
Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by the Agent or any Lender and
any liability (including penalties, interest, additions to tax, and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within thirty (30) days after
the date the Agent or any Lender makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Agent or any Lender, then:
(i) the sum payable shall be increased as necessary
so that after making all required deductions and withholdings
(including, without limitation, deductions and withholdings
applicable to additional sums payable under this Section) the
Agent
LOAN AND SECURITY AGREEMENT - Page 36
or such Lender, as the case may be, receives an amount equal
to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount deducted
or withheld to the relevant taxing authority or other
authority in accordance with any Requirement of Law; and
(iv) the Borrower shall also pay to the Agent, for
the account of each Lender, or each Lender at the time
interest is paid, all additional amounts which the respective
Lender specifies as necessary to preserve the after-tax yield
such Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) Within thirty (30) days after the date of any payment by
the Borrower of Taxes or Other Taxes, the Borrower shall furnish the
Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to
the Agent or any Lender pursuant to SECTION 5.1(c), then the applicable
Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its lending
office so as to eliminate any such additional payment by the Borrower
which may thereafter accrue, if such change in the judgment of such
Lender is not otherwise disadvantageous to such Lender.
Section 5.2 ILLEGALITY.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for such Lender or its applicable lending
office to make LIBOR Rate Revolving Loans, then, on notice thereof by
such Lender to the Borrower through the Agent, any obligation of such
Lender to make LIBOR Rate Revolving Loans shall be suspended until such
Lender notifies the Agent and the Borrower that the circumstances
giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Revolving Loan, the Borrower shall, upon receipt of notice
of such fact and demand from such Lender (with a copy to the Agent),
prepay in full such LIBOR Rate Revolving Loans of such Lender then
outstanding, together with accrued and unpaid interest thereon and
amounts required under SECTION 5.4, either on the last day of the
Interest Period thereof, if such Lender may lawfully continue to
maintain such LIBOR Rate Revolving Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBOR Rate
Revolving Loans. If the Borrower is required to so prepay any LIBOR
Rate Revolving
LOAN AND SECURITY AGREEMENT - Page 37
Loans, then concurrently with such prepayment, the Borrower shall
borrow from the affected Lender, in the amount of such prepayment, a
Base Rate Revolving Loan.
Section 5.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender determines that due to either (i) the
introduction of or any change in the interpretation of any law or
regulation or (ii) the compliance by that Lender with any guideline or
request from any central bank or other Governmental Authority (whether
or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding, or
maintaining any LIBOR Rate Revolving Loans, then the Borrower shall be
liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent, for the account
of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank
or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Lender or any
corporation or other entity controlling such Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
or other entity controlling such Lender and (taking into consideration
such Lender's or such corporation's or other entity's policies with
respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitments, loans, credits, or obligations under
this Agreement, then, upon demand of such Lender to the Borrower
through the Agent, the Borrower shall pay to such Lender, from time to
time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase.
Section 5.4 FUNDING LOSSES. The Borrower shall reimburse each Lender
and hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Revolving Loan;
(b) the failure of the Borrower to borrow, continue, or
convert a Revolving Loan after the Borrower has given (or is deemed to
have given) a Notice of Borrowing or a Notice of
Conversion/Continuation (except as permitted by SECTION 5.5);
(c) the prepayment or other payment (including after
acceleration thereof) of any LIBOR Rate Revolving Loan on a day that is
not the last day of the relevant Interest Period;
LOAN AND SECURITY AGREEMENT - Page 38
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by such Lender to
maintain its LIBOR Rate Revolving Loans or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by any Lender in connection with the
foregoing.
Section 5.5 INABILITY TO DETERMINE RATES. If the Agent determines that
for any reason adequate and reasonable means do not exist for determining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR
Rate Revolving Loan, or that the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Rate Revolving Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Revolving Loan, the Agent
will promptly so notify the Borrower and each Lender. Thereafter, the obligation
of the Lenders to make or maintain LIBOR Rate Revolving Loans hereunder shall be
suspended until the Agent revokes such notice in writing. Upon receipt of a
notice pursuant to the first sentence of this Section, the Borrower may revoke
any Notice of Borrowing or Notice of Conversion/Continuation then submitted by
the Borrower. If the Borrower does not revoke any such Notice of Borrowing or
Notice of Conversion/Continuation, the Lenders shall make, convert, or continue
the Revolving Loans, as proposed by the Borrower, in the amount specified in the
applicable Notice of Borrowing or Notice of Conversion/Continuation submitted by
the Borrower, but such Revolving Loans shall be made, converted, or continued as
Base Rate Revolving Loans instead of LIBOR Rate Revolving Loans.
Section 5.6 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement
or compensation under this ARTICLE 5 shall deliver to the Borrower (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
Section 5.7 SURVIVAL. The agreements and obligations of the Borrower in
this ARTICLE 5 shall survive the payment of all other Obligations.
Section 5.8 CLAIMS UNDER SECTION 5.1 AND SECTION 5.3. Each Lender shall
notify the Borrower and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to payment of
any amount under SECTION 5.1 or SECTION 5.3 and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such payment and will not, in the judgment of such Lender be otherwise
disadvantageous to it.
Section 5.9 REPLACEMENT OF AFFECTED LENDER. Within thirty (30) days
after receipt by the Borrower of written notice and demand from any Lender for
any payment under the terms of SECTION 5.1 or SECTION 5.3 then, subject to this
SECTION 5.9, the Borrower may, at its option, notify the Agent and such Lender
(the "AFFECTED LENDER") of its intention to obtain, at the Borrower's sole
expense, a replacement Lender ("REPLACEMENT LENDER") to purchase the Affected
Lender's Loans and its obligations under the Loan Documents. Subject to this
SECTION 5.9, the Borrower shall, within thirty (30) days following the delivery
of such notice from the Borrower, cause the Replacement Lender to purchase (and
the Affected Lender hereby agrees to sell and convey to such Replacement Lender)
the Loans and other obligations of the Affected Lender and assume the Affected
Lender's Commitment and obligations hereunder in accordance with the terms of an
LOAN AND SECURITY AGREEMENT - Page 39
Assignment and Acceptance for cash in an aggregate amount equal to the
aggregate unpaid principal of the Loans and other Obligations held by such
Affected Lender, all unpaid interest and fees accrued thereon or with respect
thereto, and all other Obligations owed to such Affected Lender, including
amounts owed under SECTION 5.1 or SECTION 5.3 (but excluding any amount
pursuant to SECTION 4.2). Notwithstanding the foregoing, (a) the Borrower
shall continue to be obligated to pay to the Affected Lender in full all
amounts then demanded and due under SECTION 5.1 or SECTION 5.3 in accordance
with the terms of this Agreement, (b) neither the Agent nor any Lender shall
have any obligation to find a Replacement Lender, (c) the Replacement Lender
must be acceptable to the Agent in its reasonable discretion, and (d) the
Bank may not be replaced under this SECTION 5.9 without its consent. If the
Borrower elects to replace any Affected Lender, the Borrower must replace all
Affected Lenders as set forth in this Section, each such replacement to occur
within a reasonable period of time not to exceed sixty (60) days from the
date such Affected Lender requested any payment under SECTION 5.1 or SECTION
5.3.
ARTICLE 6
COLLATERAL
Section 6.1 GRANT OF SECURITY INTEREST.
(a) As security for the Obligations the Borrower hereby
collaterally assigns and grants to the Agent, for the benefit of the
Agent and the Lenders, a continuing security interest in, lien on,
collateral assignment of, and right of set-off against, all of the
following property and assets of the Borrower, whether now owned or
existing or hereafter acquired or arising, regardless of where located:
(i) all Accounts (including any credit
enhancement therefor);
(ii) all Inventory;
(iii) all contract rights, letters of credit,
chattel paper, instruments, notes, documents, and documents
of title;
(iv) all General Intangibles;
(v) all Equipment;
(vi) all Investment Property;
(vii) all money, cash, cash equivalents, securities,
and other property of any kind of the Borrower;
(viii) all of the Borrower's deposit accounts,
credits, and balances with and other claims against the Agent,
any Lender, any Affiliate of the Agent or any Lender,
LOAN AND SECURITY AGREEMENT - Page 40
or any other financial institution with which the Borrower
maintains deposits, including any Payment Accounts;
(ix) all books, records, and other property related
to or referring to any of the foregoing, including books,
records, account ledgers, data processing records, computer
software and other property, and General Intangibles at any
time evidencing or relating to any of the foregoing; and
(x) all accessions to, substitutions for, and
replacements, products, and proceeds of any of the foregoing,
including, but not limited to, proceeds of any insurance
policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the
foregoing.
All of the foregoing and all other property of the Borrower's in which
the Agent or any Lender may at any time be granted a Lien, is herein
collectively referred to as the "COLLATERAL."
(b) Without limiting SECTION 6.1(a), the Borrower hereby
collaterally assigns to the Agent, for the benefit of the Agent and the
Lenders, all rights, claims, remedies, and benefits of the Borrower
under the RPA; PROVIDED, HOWEVER, that neither the Agent nor any Lender
assumes any obligations under the RPA and its is expressly agreed that
neither the Agent nor any Lender shall have any obligations under the
RPA.
(c) The Obligations shall be secured by all of the Collateral.
Section 6.2 PERFECTION AND PROTECTION OF SECURITY INTEREST.
(a) The Borrower shall, at its expense, perform all steps
requested by the Agent at any time to perfect, maintain, protect, and
enforce the Agent's Liens, including: (i) executing, delivering, and/or
filing and recording financing or continuation statements, and
amendments thereof, in form and substance satisfactory to the Agent;
(ii) delivering to the Agent the originals of all instruments,
documents, and chattel paper, and all other Collateral of which the
Agent determines it should have physical possession in order to perfect
and protect the Agent's security interest therein, duly pledged,
endorsed, or assigned to the Agent without restriction; (iii)
delivering to the Agent (A) warehouse receipts covering any portion of
the Collateral located in warehouses and for which warehouse receipts
are issued and (B) if requested by the Agent, certificates of title
reflecting the Agent's Liens covering any portion of the Collateral for
which certificates of title have been issued; (iv) when an Event of
Default exists, transferring Inventory to warehouses or other locations
designated by the Agent; (v) delivering to the Agent all letters of
credit on which the Borrower is named beneficiary; and (vi) taking such
other steps as are reasonably deemed necessary or desirable by the
Agent to maintain and protect the Agent's Liens. To the extent
permitted by any Requirement of Law, the Agent may file, without the
Borrower's signature, one or more financing statements disclosing the
Agent's Liens. The Borrower agrees that
LOAN AND SECURITY AGREEMENT - Page 41
a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement executed and delivered by the
Borrower is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or
control of any warehouseman, bailee, or any of the Borrower's agents or
processors, then the Borrower shall notify the Agent thereof and shall,
at the request of the Agent, notify such Person of the Agent's security
interest in such Collateral and instruct such Person to hold all such
Collateral for the Agent's account subject to the Agent's instructions.
If at any time any Collateral is located at any operating facility of
the Borrower which is not owned by the Borrower, the Borrower shall
use commercially reasonable efforts to obtain written landlord lien
waivers or subordinations, in form and substance reasonably
satisfactory to the Agent, of all present and future Liens to which
the owner or lessor of such premises may be entitled to assert against
the Collateral; PROVIDED that in the event the Borrower is unable to
obtain any such written waiver or subordination, the Agent may, in its
discretion establish a reserve with respect to any such Collateral.
(c) From time to time, the Borrower shall, upon the Agent's
request, execute and deliver confirmatory written instruments pledging
to the Agent, for the benefit of the Agent and the Lenders, the
Collateral, but the failure to do so shall not affect or limit any
security interest or any other rights of the Agent or any Lender in and
to the Collateral with respect to the Borrower. So long as this
Agreement is in effect and until all Obligations have been fully
satisfied, the Agent's Liens shall continue in full force and effect in
all Collateral (whether or not deemed eligible for the purpose of
calculating the Available Credit or as the basis for any advance, loan,
extension of credit, or other financial accommodation).
(d) To the extent the Borrower is the owner of any Investment
Property that is Collateral (each such Person which issues any such
Investment Property being referred to herein as an "ISSUER"), the
Borrower agrees to cause the Issuer thereof to agree, as follows with
respect to such Investment Property:
(i) All such Investment Property issued by such
Issuer, all warrants, and all non-cash dividends and other
non-cash distributions in respect thereof at any time
registered in the name of, or otherwise deliverable to, the
Borrower, shall be delivered directly to the Agent, for the
account of the Borrower, at the Agent's address for notices
set forth in SECTION 15.8.
(ii) During the existence of any Event of Default,
all cash dividends, cash distributions, and other cash or cash
equivalents in respect of such Investment Property at any time
payable or deliverable to the Borrower shall be delivered
directly to the Agent, for the account of the Agent and the
Lenders, at the Agent's address for notices set forth in
SECTION 15.8.
(iii) Such Issuer will not acknowledge any transfer
or encumbrance in respect of such Investment Property to or in
favor of any Person other than the Agent or a Person
designated by the Agent in writing.
LOAN AND SECURITY AGREEMENT - Page 42
(iv) With respect to any of such Investment Property
at any time constituting an uncertificated security as defined
by the UCC, such Issuer will comply with instructions
originated by the Agent without further consent by the
registered owner thereof.
Section 6.3 LOCATION OF COLLATERAL. The Borrower represents and
warrants to the Agent and the Lenders that: (a) SCHEDULE 6.3 is a correct and
complete list of the Borrower's chief executive office, the location of its
books and records, the locations of the Collateral (other than Collateral in
the Agent's possession), and the locations of all of its other places of
business; and (b) SCHEDULE 6.3 correctly identifies any of such facilities and
locations that are not owned by the Borrower and sets forth the names of the
owners and lessors or sublessors of such facilities and locations. The Borrower
covenants and agrees that it will not (x) maintain any Collateral (other than
Collateral in the Agent's possession) at any location other than those locations
listed on SCHEDULE 6.3, (y) otherwise change or add to any of such locations, or
(z) change the location of its chief executive office from the location
identified in SCHEDULE 6.3, unless it gives the Agent at least thirty (30) days
prior written notice thereof and executes any and all financing statements and
other documents that the Agent reasonably requests in connection therewith. In
the event the Borrower requests to change or add any location of Collateral and
has provided the Agent with all financing statements and other documents
requested by the Agent in connection therewith, the Borrower shall prepare and
deliver to the Agent a revised SCHEDULE 6.3 which shall automatically be adopted
as SCHEDULE 6.3 for all purposes.
Section 6.4 TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. The
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that: (a) all of its Collateral is and will continue
to be owned by the Borrower free and clear of all Liens whatsoever, except for
Permitted Liens; (b) the Agent's Liens in the Collateral will not be subject to
any prior Lien; (c) the Borrower will use, store, and maintain the Collateral
with all reasonable care and will use such Collateral for lawful purposes only;
and (d) the Borrower will not, without the Agent's prior written approval, sell
or dispose of, or permit the sale or disposition of, any of the Collateral.
Section 6.5 APPRAISALS. Whenever a Default or Event of Default exists,
and at such other times not more frequently than once per year as the Agent
requests, the Borrower shall, at its expense and upon the Agent's request,
provide the Agent with appraisals or updates thereof of any or all of the
Collateral from credentialed appraisers, and prepared in a form and on a basis,
reasonably satisfactory to the Agent, such appraisals and updates to include,
without limitation, information required by Requirements of Law and by the
internal policies of the Lenders.
Section 6.6 ACCESS AND EXAMINATION; CONFIDENTIALITY.
(a) The Agent, accompanied by any Lender which so elects, may
at all reasonable times during regular business hours, and at any time
when a Default or Event of Default exists, have access to, examine,
audit, make extracts from or copies of, and inspect any or all of the
Borrower's records, files, and books of account and the Collateral, and
discuss the Borrower's affairs with the Borrower's officers and senior
management. The Borrower will
LOAN AND SECURITY AGREEMENT - Page 43
deliver to the Agent any instrument necessary for the Agent to obtain
records from any service bureau maintaining records for the Borrower.
The Agent may, and at the direction of the Majority Lenders shall, at
any time when a Default or Event of Default exists, and at the
Borrower's expense, make copies of all of the Borrower's books and
records, or require the Borrower to deliver such copies to the Agent.
The Agent may, without expense to the Agent, use such of the
Borrower's respective personnel, supplies, and premises as may be
reasonably necessary for maintaining or enforcing the Agent's Liens.
The Agent shall have the right, at any time, in the Agent's name or
in the name of a nominee of the Agent, to verify the validity,
amount, or any other matter relating to the Accounts, Inventory, or
other Collateral, by mail, telephone, or otherwise.
(b) The Borrower hereby consents that the Agent and each
Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this
Agreement, including the name and address of the Borrower and a general
description of the Borrower's business and may use the Borrower's name
in advertising and other promotional material.
(c) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the
Borrower and provided to the Agent or such Lender by or on behalf of
the Borrower, under this Agreement or any other Loan Document, except
to the extent that such information (i) was or becomes generally
available to the public other than as a result of disclosure by the
Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower; PROVIDED
that such source is not bound by a confidentiality agreement with the
Borrower known to the Agent or such Lender. Notwithstanding the
foregoing, the Agent and any Lender may disclose any such information
(1) at the request or pursuant to any requirement of any Governmental
Authority to which the Agent or such Lender is subject or in connection
with an examination of the Agent or such Lender by any such
Governmental Authority, (2) pursuant to subpoena or other court
process, (3) when required to do so in accordance with the provisions
of any applicable Requirement of Law; (4) to the extent reasonably
required in connection with any litigation or proceeding (including,
but not limited to, any bankruptcy proceeding) to which the Agent, any
Lender, or their respective Affiliates may be party, (5) to the extent
required in connection with the exercise of any remedy or enforcement
of any rights hereunder or under any other Loan Document, (6) to the
Agent's or such Lender's independent auditors, accountants, attorneys,
and other professional advisors, (7) to any prospective Participant or
Assignee, actual or potential, PROVIDED that such prospective
Participant or Assignee agrees to keep such information confidential to
the same extent required of the Agent and the Lenders hereunder, (8) as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower is a party or is deemed
a party with the Agent or such Lender, and (9) to its Affiliates.
Section 6.7 COLLATERAL REPORTING. The Borrower shall provide, or cause
to be provided, to the Agent the following documents on or before the twentieth
(20th) day of each Fiscal Period (unless specifically indicated otherwise), or
more frequently if requested by the Agent, for the
LOAN AND SECURITY AGREEMENT - Page 44
preceding Fiscal Period end, in form reasonably satisfactory to the Agent:
(a) a schedule of the Borrower's Accounts created or acquired since the last
such schedule and a Borrowing Base Certificate; PROVIDED that such schedule
and Borrowing Base Certificate may be provided by the Borrower more
frequently to redetermine Available Credit; (b) an aging of the Borrower's
Accounts together with a reconciliation to the previous calendar month end's
accounts receivable balance of the Borrower's Accounts and to its general
ledger; (c) an aging of the Borrower's accounts payable; (d) upon the Agent's
request, copies of invoices in connection with the Borrower's Accounts,
customer statements, credit memos, remittance advices and reports, deposit
slips, and shipping and delivery documents in connection with the Borrower's
Accounts acquired by the Borrower, purchase orders, and invoices; (f) upon
the Agent's request, a statement of the balance of each of the Intercompany
Accounts; (g) such other reports as to the Collateral as the Agent shall
reasonably request from time to time; and (h) with the delivery of each of
the foregoing, a certificate of the Borrower executed by a Responsible
Officer of the Borrower certifying as to the accuracy and completeness of the
foregoing. If any of the Borrower's records or reports of the Collateral are
prepared by an accounting service or other agent, the Borrower hereby
authorizes such service or agent to deliver such records, reports, and
related documents to the Agent, for distribution to the Lenders.
Section 6.8 ACCOUNTS. The Borrower covenants, agrees, represents, and
warrants as follows:
(a) With respect to the Borrower's Accounts: (i) each existing
Account (other than Accounts purchased from an RPA Seller) represents,
and each future Account (other than Accounts purchased from an RPA
Seller) will represent, a BONA FIDE sale or lease and delivery of goods
by the Borrower, or rendition of services by the Borrower, in the
ordinary course of the Borrower's business and, with respect to each
Account purchased by the Borrower from an RPA Seller under the RPA,
represents a BONA FIDE sale or lease and delivery of goods by such RPA
Seller, or rendition of services by such RPA Seller, in the ordinary
course of such RPA Seller's business; (ii) each existing Account is,
and each future Account will be, for a liquidated amount payable by the
Account Debtor thereon on the terms then in effect or in the schedule
thereof delivered to the Agent, without any offset, deduction, defense,
or counterclaim except those known to the Borrower and disclosed to the
Agent and the Lenders pursuant to this Agreement; (iii) no payment will
be received with respect to any Account, and no credit, discount, or
extension, or agreement therefor will be granted on any Account except
as reported to the Agent and the Lenders as required by this Agreement;
(iv) each copy of an invoice delivered to the Agent by the Borrower, or
by any RPA Seller on behalf of the Borrower pursuant to the RPA, will
be a genuine copy of the original invoice sent to the Account Debtor
named therein; and (v) all goods described in any invoice representing
a sale of goods will have been delivered to the Account Debtor and all
services of the Borrower, any RPA Seller, or any other Person described
in each invoice will have been performed.
(b) Neither the Borrower nor any RPA Seller shall re-date any
invoice or sale or make sales on extended dating beyond that customary
in the Borrower's or the applicable RPA Seller's business or extend or
modify any Account outside the ordinary course of
LOAN AND SECURITY AGREEMENT - Page 45
business. If the Borrower becomes aware of any matter adversely
affecting the collectibility of any Account or the Account Debtor
therefor involving an amount greater than $1,000,000, including
information regarding the Account Debtor's creditworthiness, the
Borrower will promptly so advise the Agent. The Borrower will cause
each RPA Seller to promptly advise the Agent if such RPA Seller
becomes aware of any matter adversely affecting the collectibility
of any Account purchased by the Borrower from such RPA Seller under
the RPA, or the Account Debtor therefor (including information
regarding the Account Debtor's creditworthiness) involving an
amount greater than $1,000,000.
(c) Neither the Borrower nor any RPA Seller shall, without the
Agent's prior written consent, accept any note or other instrument
(except a check or other instrument for the immediate payment of money)
with respect to any Account other than Accounts which (i) do not exceed
$1,000,000 individually and (ii) at the time of accepting such note or
other instrument are not less than ninety (90) days past due from the
date of the original invoice therefor. If the Agent consents to the
acceptance of any such instrument, it shall be considered as evidence
of the Account and not payment thereof and the Borrower will promptly
deliver, or cause any such RPA Seller to promptly deliver, such
instrument to the Agent, endorsed to the Agent in a manner satisfactory
in form and substance to the Agent. Regardless of the form of
presentment, demand, or notice of protest with respect thereto, the
Borrower shall remain liable thereon until such instrument is paid in
full.
(d) The Borrower shall notify the Agent promptly of all
offsets, deductions, defenses, or counterclaims in excess of $1,000,000
with any Account Debtor, and agrees to settle, contest, or adjust such
dispute or claim at no expense to the Agent or any Lender. No discount,
credit, or allowance shall be granted to any such Account Debtor
without the Agent's prior written consent, except for discounts,
credits, and allowances made or given in the ordinary course of the
Borrower's business when no Event of Default exists hereunder. The
Borrower shall promptly send the Agent a copy of each credit memorandum
in excess of $1,000,000. The Agent may at all times when an Event of
Default exists, settle or adjust disputes and claims directly with
Account Debtors of the Borrower for amounts and upon terms which the
Agent or the Majority Lenders, as applicable, shall consider advisable
and, in all cases, the Agent will credit the Loan Account with the net
amounts received by the Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to the
Borrower, any RPA Seller, or any other Person providing the Inventory
which gives rise to any Account, when no Event of Default exists, then
the Borrower shall promptly determine, or cause any such RPA Seller to
determine, the reason for such return and issue a credit memorandum to
the Account Debtor in the appropriate amount. The Borrower shall
immediately report to the Agent any such return involving an amount in
excess of $1,000,000. Each such report shall indicate the reasons for
the returns and the locations and condition of the returned Inventory.
In the event any Account Debtor returns Inventory to the Borrower, any
RPA Seller, or any other Person providing the Inventory which gives
rise to any Account, when an Event of Default exists, the Borrower,
upon the request of the Agent, shall, or shall cause any such RPA
Seller to: (i) hold the returned Inventory in trust for the Agent; (ii)
segregate all returned Inventory
LOAN AND SECURITY AGREEMENT - Page 46
from all of its other property; (iii) dispose of the returned
Inventory solely according to the Agent's written instructions; and
(iv) not issue any credits or allowances with respect thereto
without the Agent's prior written consent. All returned Inventory
owned by the Borrower (if any) shall be subject to the Agent's
Liens thereon. Whenever any Inventory is returned, the related
Account shall be deemed ineligible to the extent of the amount
owing by the Account Debtor with respect to such returned
Inventory.
Section 6.9 COLLECTION OF ACCOUNTS; PAYMENTS.
(a) Within ninety (90) days of the Closing Date, the Borrower
shall establish a lock-box service for collections of Accounts at
Clearing Banks acceptable to the Agent and subject to Blocked Account
Agreements and other documentation acceptable to the Agent. The
Borrower shall instruct, and with respect to all Accounts purchased
from an RPA Seller under the RPA will cause such RPA Seller to
instruct, all Account Debtors to make all payments directly to the
address established for each such lock-box service. If, notwithstanding
such instructions, the Borrower receives any proceeds of Accounts, it
shall receive such payments as the Agent's trustee, and shall
immediately deliver such payments to the Agent in their original form
duly endorsed in blank or deposit them into a Payment Account, as the
Agent may direct. All collections received in any lock-box or Payment
Account or directly by the Borrower or the Agent, and all funds in any
Payment Account or other account to which such collections are
deposited shall be subject to the Agent's sole control and withdrawals
by the Borrower shall not be permitted. The Agent or the Agent's
designee may, at any time after the occurrence of an Event of Default,
notify Account Debtors that the Accounts have been assigned to the
Agent and of the Agent's security interest therein, and may collect
them directly and charge the collection costs and expenses to the Loan
Account as a Revolving Loan. So long as an Event of Default exists, the
Borrower at the Agent's request, shall execute and deliver to the Agent
such documents as the Agent shall require to grant the Agent access to
any post office box in which collections of Accounts are received.
(b) With respect to Accounts purchased by the Borrower from an
RPA Seller, the Borrower has designated and appointed such RPA Seller
to service such Accounts pursuant to, and as provided, by the RPA. The
Borrower will cause each such RPA Seller to service such Accounts in
compliance with the RPA and in compliance the requirements of this
Agreement. The Agent may terminate such RPA Seller as servicer of any
such Accounts as provided by the RPA.
(c) All payments received by the Agent in a bank account
designated by the Borrower and the Agent will be the Agent's sole
property for its benefit and the benefit of the Lenders and will be
credited to the Loan Account (conditional upon final collection) on the
same day received (if received prior to 2:00 p.m. (Dallas, Texas time);
PROVIDED that the Borrower shall compensate the Bank for the cost of
collection and clearance of remittances applied to the Loan Account,
including interest for one (1) day, on all uncollected funds credited
to the Loan Account as provided by this SECTION 6.9(c).
LOAN AND SECURITY AGREEMENT - Page 47
(d) In the event all of the Obligations are repaid upon the
termination of this Agreement or upon acceleration of the Obligations,
other than through the Agent's receipt of payments on account of the
Accounts or proceeds of the other Collateral, such payment will be
credited (conditional upon final collection) to the Loan Account (i) on
the date of the Agent's receipt of such funds if such funds are
collected funds or (ii) one (1) Business Day after the Agent's receipt
of such funds if such funds are uncollected funds.
(e) The Borrower instructs the Agent to disburse all collected
funds in respect of proceeds of Accounts of the Borrower purchased from
an RPA Seller coming into the Agent's possession at any time when there
are no outstanding Obligations to the "Agent" (as defined in the Metals
Loan Agreement) for the account of the Borrower in respect of the
outstanding balance of the RPA Seller Note owing by the Borrower to
such RPA Seller, unless the Borrower has notified the Agent that there
is no loan balance on such Seller Note in which case such amounts shall
be disbursed to the Borrower if no Default or Event of Default is then
in existence, or if any Default or Event of Default is then in
existence, held as cash collateral for the Obligations, if any,
thereafter arising.
Section 6.10 INVENTORY, EQUIPMENT, AND REAL ESTATE. The Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that, other than Inventory subject to a return from an Account
Debtor, the Borrower will not own or maintain any Inventory, Equipment (in
excess of $100,000 in the aggregate), or Real Estate.
Section 6.11 DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. The Borrower
represents and warrants to the Agent and the Lenders that (a) all documents,
instruments, and chattel paper of the Borrower describing, evidencing, or
constituting Collateral, and all signatures and endorsements thereon, are and
will be complete, valid, and genuine, and (b) all goods evidenced by such
documents, instruments, and chattel paper are and will be owned by the Borrower
free and clear of all Liens other than Permitted Liens.
Section 6.12 RIGHT TO CURE. The Agent may, in its discretion, and
shall, at the direction of the Majority Lenders, pay any amount or do any act
required of the Borrower hereunder or under any other Loan Document in order to
preserve, protect, maintain, or enforce the Obligations, the Collateral or the
Agent's Liens therein, and which the Borrower fails to pay or do, including
payment of any judgment against the Borrower, any insurance premium, any
warehouse charge, any finishing or processing charge, any landlord's or bailee's
claim, and any other Lien upon or with respect to the Collateral. All payments
that the Agent makes under this Section and all out-of-pocket costs and expenses
that the Agent pays or incurs in connection with any action taken by it
hereunder shall be charged to the Loan Account as a Revolving Loan. Any payment
made or other action taken by the Agent under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to proceed
thereafter as herein provided.
Section 6.13 POWER OF ATTORNEY. The Borrower hereby appoints the Agent
and the Agent's designee as the Borrower's attorney, with power: (a) to endorse
the Borrower's name on any checks, notes, acceptances, money orders, or other
forms of payment or security that come into the Agent's or any Lender's
possession; (b) to sign the Borrower's name on any invoice, xxxx of lading,
LOAN AND SECURITY AGREEMENT - Page 48
warehouse receipt, or other document of title relating to any Collateral, on
drafts against customers, on assignments of Accounts, on notices of
assignment, financing statements, and other public records and to file any
such financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (c) so long as
any Event of Default exists, to notify the post office authorities to change
the address for delivery of the Borrower's mail to an address designated by
the Agent and to receive, open, and dispose of all mail addressed to the
Borrower; (d) to send requests for verification of Accounts to customers or
Account Debtors; (e) to clear Inventory through customs in the Borrower's
name, the Agent's name, or the name of the Agent's designee, and to sign and
deliver to customs officials powers of attorney in the Borrower's name for
such purpose; (f) with respect to Accounts purchased under the RPA, exercise
any right or action which the Borrower is entitled to exercise under the RPA,
in the Borrower's name, the Agent's name, or the name of the Agent's
designee, as the Agent determines is necessary to protect its interest in or,
at any time when an Event of Default is in existence, to collect, such
Accounts; and (g) to do all things the Agent determines are necessary to
carry out this Agreement. The Borrower ratifies and approves all acts of such
attorney. None of the Lenders, the Agent, nor their attorneys will be liable
for any acts or omissions or for any error of judgment or mistake of fact or
law other than any such liability arising from any such Person's gross
negligence or willful misconduct. This power, being coupled with an interest,
is irrevocable until this Agreement has been terminated and the Obligations
have been fully satisfied.
Section 6.14 THE AGENT'S AND THE LENDERS' RIGHTS, DUTIES, AND
LIABILITIES. The Borrower assumes all responsibility and liability arising
from or relating to the use, sale, or other disposition of the Collateral.
The Obligations shall not be affected by any failure of the Agent or any
Lender to take any steps to perfect the Agent's Liens or to collect or
realize upon the Collateral, nor shall loss of or damage to the Collateral
release the Borrower from any of the Obligations. Following the occurrence
and continuation of an Event of Default, the Agent may (but shall not be
required to), and at the direction of the Majority Lenders shall, without
notice to or consent from the Borrower xxx upon or otherwise collect, extend
the time for payment of, modify or amend the terms of, compromise or settle
for cash, credit, or otherwise upon any terms, grant other indulgences,
extensions, renewals, compositions, or releases, and take or omit to take any
other action with respect to the Collateral, any security therefor, any
agreement relating thereto, any insurance applicable thereto, or any Person
liable directly or indirectly in connection with any of the foregoing,
without discharging or otherwise affecting the liability of the Borrower for
the Obligations or under this Agreement or any other agreement now or
hereafter existing between the Agent and/or any Lender and the Borrower.
Section 6.15 VOTING RIGHTS, DISTRIBUTIONS, ETC. IN RESPECT OF
INVESTMENT PROPERTY.
(a) So long as no Event of Default exists (i) the Borrower
shall be entitled to exercise any and all voting and other consensual
rights (including, without limitation, the right to give consents,
waivers, and notifications in respect of any securities) pertaining to
its Investment Property or any part thereof; PROVIDED, HOWEVER, that
without the prior written consent of the Agent and the Majority
Lenders, no vote shall be cast or consent, waiver, or ratification
given or action taken which would (A) be inconsistent with or violate
any provision of this Agreement or any other Loan Document or (B)
amend, modify, or waive
LOAN AND SECURITY AGREEMENT - Page 49
any material term, provision, or condition of the certificate of
incorporation, bylaws, certificate of formation, or other charter
document or other agreement relating to, evidencing, providing for
the issuance of, or securing any such Investment Property, in any
manner that would impair such Investment Property, the
transferability thereof, or the Agent's Liens therein, and (ii) the
Borrower shall be entitled to receive and retain any and all
dividends and interest paid in respect of any of such Investment
Property (unless otherwise required by this Agreement).
(b) During the existence of an Event of Default, (i) the Agent
may, without notice to the Borrower or any other Person obligated for
payment of all or any part of the Obligations, transfer or register in
the name of the Agent or any of its nominees, for the benefit of the
Agent and the Lenders, any or all of the Collateral consisting of
Investment Property, the proceeds thereof (in cash or otherwise), and
all liens, security, rights, remedies, and claims of the Borrower with
respect thereto (as used in this SECTION 6.15 collectively, the
"PLEDGED COLLATERAL") held by the Agent hereunder, and the Agent or its
nominee may thereafter, after delivery of notice to the Borrower,
exercise all voting and corporate rights at any meeting of any
corporation, partnership, or other business entity issuing any of the
Pledged Collateral and any and all rights of conversion, exchange,
subscription, or any other rights, privileges, or options pertaining to
any of the Pledged Collateral as if it were the absolute owner thereof,
including, without limitation, the right to exchange at its discretion
any and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization, or other readjustment of any
corporation, partnership, or other business entity issuing any of such
Pledged Collateral or upon the exercise by any such issuer or the Agent
of any right, privilege, or option pertaining to any of the Pledged
Collateral, and in connection therewith, to deposit and deliver any and
all of the Pledged Collateral with any committee, depositary, transfer
agent, registrar, or other designated agency upon such terms and
conditions as it may determine, all without liability except to account
for property actually received by it, but the Agent shall have no duty
to exercise any of the aforesaid rights, privileges, or options, and
the Agent shall not be responsible for any failure to do so or delay in
so doing, (ii) after the Agent's giving of the notice specified in
CLAUSE (i) of this SECTION 6.15(b), all rights of the Borrower to
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to SECTION 6.15(a)(i) and to
receive the dividends, interest, and other distributions which it would
otherwise be authorized to receive and retain thereunder shall be
suspended until such Event of Default shall no longer exist, and all
such rights shall, until such Event of Default shall no longer exist,
thereupon become vested in the Agent which shall thereupon have the
sole right to exercise such voting and other consensual rights and to
receive and hold as Pledged Collateral such dividends, interest, and
other distributions, (iii) all dividends, interest, and other
distributions which are received by the Borrower contrary to the
provisions of this SECTION 6.15(b) shall be received in trust for the
benefit of the Agent, shall be segregated from other funds of the
Borrower and shall be forthwith paid over to the Agent as Collateral in
the same form as so received (with any necessary endorsement), and (iv)
the Borrower shall execute and deliver (or cause to be executed and
delivered) to the Agent all such proxies and other instruments as the
Agent may reasonably request for the purpose of enabling the Agent to
exercise the voting and other rights which it is entitled to exercise
pursuant to this SECTION 6.15(b) and to receive the
LOAN AND SECURITY AGREEMENT - Page 50
dividends, interest, and other distributions which it is entitled to
receive and retain pursuant to this SECTION 6.18(b). The foregoing
shall not in any way limit the Agent's power and authority granted
pursuant to SECTION 6.13.
Section 6.16 REVISED UCC ARTICLE 9. The parties to this Agreement
acknowledge that Revised Article 9 will become effective in the State of Texas
and in various other Enactment States on July 1, 2001, and that it may be
adopted and become effective in one or more other Enactment States at any time
thereafter. In anticipation of the effectiveness of Revised Article 9 in any
Enactment State and its resulting application to the Loan Documents or any
matters contemplated thereby, the Agent, the Lenders, and the Borrower hereby
agree as follows:
(a) ATTACHMENT. Without otherwise limiting any other provision
of this Agreement or of Part 7 of Revised Article 9, in applying the
law of any Enactment State at any time on and after the Enactment Date
with respect to such Enactment State (i) the Collateral includes,
without limitation, each of the following categories as defined by
Revised Article 9, and all property of the Borrower included therein at
any time owned or acquired: goods (including, without limitation,
inventory, equipment, fixtures, and accessions); instruments
(including, without limitation, promissory notes); documents of title;
accounts; chattel paper (whether tangible or electronic); deposit
accounts; letter-of-credit rights; commercial tort claims (to the
extent described in any notice delivered by the Borrower pursuant to
SECTION 6.16(c); investment property; general intangibles; leases;
money; supporting obligations; and proceeds; in each case wherever
located, and whenever owned or acquired, and (ii) the Agent's Lien in
all such property created under this Agreement (whether pursuant to
Existing Article 9 or other Requirement of Law) on the Closing Date
shall continue in full force and effect on and under and pursuant to
Revised Article 9 and other Requirements of Law.
(b) PERFECTION BY FILING. The Agent may, at any time and from
time to time, file financing statements, continuation statements, and
amendments thereto that describe the Collateral as "all assets" of the
Borrower, or words of similar effect, and which contain any other
information required pursuant to Revised Article 9 for the sufficiency
of filing office acceptance of any financing statement, continuation
statement, or amendment, and the Borrower agrees to furnish any such
information to the Agent promptly upon request. Any such financing
statement, continuation statement, or amendment may be signed by the
Agent on behalf of the Borrower and may be filed at any time in any
jurisdiction whether or not Revised Article 9 is then in effect in that
jurisdiction.
(c) OTHER PERFECTION, ETC. The Borrower shall, at any time and
from time to time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Agent may reasonably
request for the Agent (i) to obtain an acknowledgment, in form and
substance reasonably satisfactory to the Agent, of any bailee having
possession of any of the Collateral, stating that the bailee holds such
Collateral for the Agent, (ii) to obtain "control" of any investment
property, deposit accounts, letter-of-credit rights, or electronic
chattel paper (as such terms are defined by Revised Article 9 with
corresponding provisions thereof defining what constitutes "control"
for such items of Collateral), with any agreements
LOAN AND SECURITY AGREEMENT - Page 51
establishing control to be in form and substance reasonably
satisfactory to the Agent, and (iii) otherwise to insure the
continued perfection and priority of the Agent's security interest
in any of the Collateral and of the preservation of its rights
therein, whether in anticipation of or following the effectiveness
of Revised Article 9 in any jurisdiction. If the Borrower shall at
any time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, acquire a "commercial tort claim" (as such
term is defined in Revised Article 9) in excess of $1,000,000, the
Borrower shall promptly notify the Agent thereof in a writing,
therein providing a reasonable description and summary thereof, and
upon delivery thereof to the Agent, the Borrower shall be deemed to
thereby grant to the Agent (and the Borrower hereby
grants to the Agent) a security interest and lien in and to such
commercial tort claim and all proceeds thereof, all upon the terms of
and governed by this Agreement.
(d) SAVINGS CLAUSE. Nothing contained in this SECTION 6.16
shall be construed to narrow the scope of the Agent's Liens or the
perfection or priority thereof or to impair or otherwise limit any of
the rights, powers, privileges, or remedies of the Agent or any Lender
under the Loan Documents.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
Section 7.1 BOOKS AND RECORDS. The Borrower shall maintain, at all
times, correct and complete books, records, and accounts in which complete,
correct, and timely entries are made of its transactions in accordance with GAAP
applied consistently. The Borrower shall, by means of appropriate entries,
reflect in such accounts and in all Financial Statements proper liabilities and
reserves for all taxes and proper provision for depreciation and amortization of
property and bad debts, all in accordance with GAAP. The Borrower shall maintain
at all times books and records pertaining to the Collateral in such detail,
form, and scope as the Agent shall reasonably require, including, but not
limited to, records of (a) all payments received and all credits and extensions
granted with respect to the Accounts and (b) all other dealings affecting the
Collateral.
Section 7.2 FINANCIAL INFORMATION. The Borrower shall promptly furnish
to the Agent, all such information regarding the Borrower's financial and
business affairs as the Agent or any Lender (through the Agent) shall reasonably
request. Without limiting the foregoing, the Borrower will furnish, or cause to
be furnished, to the Agent the following in sufficient copies for distribution
by the Agent to each Lender and in such detail as the Agent or the Lenders shall
request.
(a) The Borrower will furnish, or cause to be furnished, as
soon as available, but in any event not later than ninety (90) days
after the close of each Fiscal Year, consolidating (with respect to the
Borrower only, unless otherwise reasonably requested by the Agent)
unaudited, balance sheets, statements of income, cash flow, and
stockholders' equity for the Parent and its Subsidiaries for such
Fiscal Year, the accompanying notes thereto, and setting forth in
comparative form figures for the previous Fiscal Year, all in
reasonable detail, fairly presenting the financial position and the
results of operations of the Parent and its
LOAN AND SECURITY AGREEMENT - Page 52
Subsidiaries as at the date thereof and for the Fiscal Year then
ended, and prepared in accordance with GAAP.
(b) The Borrower will furnish, or cause to be furnished, as
soon as available, but in any event not later than thirty (30) days
after the end of each Fiscal Period, other than any Fiscal Period which
is a Fiscal Quarter end and with respect to any such Fiscal Quarter end
within forty-five (45) days after the end of such Fiscal Quarter,
unaudited balance sheets of the Borrower as at the end of such Fiscal
Period or Fiscal Quarter, as applicable, and unaudited statements of
income and cash flow for the Borrower for such Fiscal Period or Fiscal
Quarter, as applicable, and for the period from the beginning of the
Fiscal Year to the end of such Fiscal Period or Fiscal Quarter, as
applicable, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrower as at the date
thereof and for such periods, and prepared in accordance with GAAP
(other than presentation of footnotes and subject to normal year-end
audit adjustments) applied consistently. The Borrower shall certify by
a certificate signed by its chief financial officer or chief
accounting officer that all such Financial Statements have been
prepared in accordance with GAAP and present fairly, subject to normal
year-end adjustments, the financial position of the Borrower as at the
dates thereof and its results of operations for the periods then ended.
(c) [Reserved].
(d) The Borrower will furnish, or cause to be furnished,
within forty-five days (45) of the last day of each Fiscal Quarter, a
certificate of the chief financial officer or chief accounting officer
of the Parent in the form of EXHIBIT F (a "COMPLIANCE CERTIFICATE")
stating that, except as explained in reasonable detail in such
certificate, (i) all of the representations and warranties of the
Borrower contained in this Agreement and the other Loan Documents are
correct and complete in all material respects as at the date of such
certificate as if made at such time, except for those that speak as of
a particular date, (ii) the Borrower is, at the date of such
certificate, in compliance in all material respects with all of its
covenants and agreements in this Agreement and the other Loan
Documents, and (iii) no Default or Event of Default then exists or
existed during the period covered by such Financial Statements. If such
certificate discloses that a representation or warranty is not correct
or complete, or that a covenant has not been complied with, or that a
Default or Event of Default existed or exists, such certificate shall
set forth what action the Borrower has taken or proposes to take with
respect thereto.
(e) Upon the Agent's request, the Borrower will furnish, or
cause to be furnished, promptly after filing with the PBGC and the IRS,
a copy of each annual report or other filing filed with respect to each
Plan of the Borrower (if any).
(f) The Borrower will furnish, or cause to be furnished,
promptly upon the filing thereof, copies of all reports, if any, to or
other documents filed by the Borrower with the Securities and Exchange
Commission under the Exchange Act, and all reports, notices, or
statements sent or received by the Borrower to or from the holders of
any equity interests of the Borrower (other than routine non-material
correspondence sent by shareholders of the
LOAN AND SECURITY AGREEMENT - Page 53
Borrower to the Borrower) or of any Funded Debt of the Borrower
registered under the Securities Act of 1933 or to or from the trustee
under any indenture under which the same is issued.
(g) The Borrower will furnish, or cause to be furnished, as
soon as available, but in any event not later than fifteen (15) days
after the Borrower's receipt thereof, a copy of all management reports
and management letters prepared by any independent certified public
accountants of the Borrower.
(h) The Borrower will furnish, or cause to be furnished,
promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which the Borrower makes
available to its shareholders or any holder of any Funded Debt (if
any).
(i) Upon the Agent's request, the Borrower will furnish, or
cause to be furnished, promptly after filing with the IRS, a copy of
each tax return filed by the Borrower.
(j) The Borrower will furnish, or cause to be furnished, such
additional information as the Agent and/or any Lender may from time to
time reasonably request regarding the financial and business affairs of
the Borrower.
Section 7.3 NOTICES TO THE LENDERS. The Borrower shall notify the
Agent and the Lenders in writing of the following matters at the following
times:
(a) promptly after becoming aware of any Default or Event of
Default;
(b) promptly after becoming aware of any event or circumstance
which could have, or has resulted in, a Material Adverse Effect;
(c) any change in the Borrower's name, state of organization,
or form of organization, trade names under which the Borrower may own,
create, or collect Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days
prior thereto;
(d) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know, that an ERISA Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of
the Code) has occurred, and, when known, any action taken or threatened
by the IRS, the DOL, or the PBGC with respect thereto;
(e) upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within
three (3) Business Days after the filing thereof with the PBGC, the
DOL, or the IRS, as applicable, copies of the following: (i) each
annual report (form 5500 series), including Schedule B thereto, filed
with the PBGC, the DOL, or the IRS with respect to each Plan, (ii) a
copy of each funding waiver request filed with the PBGC, the DOL or the
IRS with respect to any Plan and all communications received by the
Borrower or any ERISA Affiliate from the PBGC, the DOL, or the IRS with
respect to such
LOAN AND SECURITY AGREEMENT - Page 54
request, and (iii) a copy of each other filing or notice filed with
the PBGC, the DOL, or the IRS, with respect to each Plan of the
Borrower or any ERISA Affiliate;
(f) upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan,
and within three (3) Business Days after receipt thereof by the
Borrower or any ERISA Affiliate, copies of the following: (i) any
notices of the PBGC's intention to terminate a Plan or to have a
trustee appointed to administer such Plan; (ii) any favorable or
unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii)
any notice from a Multi-employer Plan regarding the imposition of
withdrawal liability;
(g) within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which
increase the Borrower's annual costs with respect thereto by an amount
in excess of $1,000,000, or the establishment of any new Plan or the
commencement of contributions in excess of $1,000,000 to any Plan to
which the Borrower or any ERISA Affiliate was not previously
contributing or (ii) any failure by the Borrower or any ERISA Affiliate
to make a required installment or any other required payment in excess
of $1,000,000 under Section 412 of the Code on or before the due date
for such installment or payment;
(h) within three (3) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that any of the following
events has or will occur: (i) a Multi-employer Plan has been or will be
terminated; (ii) the administrator or plan sponsor of a Multi-employer
Plan intends to terminate a Multi-employer Plan; or (iii) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multi-employer Plan;
(i) promptly upon commencement of any proceedings contesting
any tax, fee, assessment, or other governmental charge in excess of
$250,000; and
(j) promptly upon becoming aware of any "Default" (as defined
in the Metals Loan Agreement) or any "Event of Default" (as defined in
the Metals Loan Agreement) under the Metals Loan Agreement or any
"Termination Event" (as defined in the RPA) or any "Potential
Termination Event" (as defined in the RPA) under the RPA.
Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that the Borrower or any
ERISA Affiliate, as applicable, has taken or proposes to take with respect
thereto.
Section 7.4 REVISIONS OR UPDATES TO SCHEDULES. Should any of the
information or disclosures provided on any of the schedules originally
attached hereto become outdated or incorrect in any material respect, the
Borrower from time to time shall deliver to the Agent and the Lenders,
together with an officer's certificate of the type required pursuant to
SECTION 7.2(d), such revisions or updates to such schedule(s) whereupon such
schedules shall be deemed to be amended by such revisions or updates, as may
be necessary or appropriate to update or correct such schedule(s),
LOAN AND SECURITY AGREEMENT - Page 55
PROVIDED that, notwithstanding the foregoing, no such revisions
or updates shall be deemed to have amended, modified, or superseded any such
schedules as originally attached hereto, or to have cured any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such schedules, unless and until the Agent and the Majority Lenders shall
have accepted in writing such revisions or updates to any such schedules.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as set forth in the Schedules to this Agreement as they may be modified
from time to time pursuant to SECTION 7.4, and except as hereafter disclosed to
and accepted by the Majority Lenders in writing:
Section 8.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS
AGREEMENT AND THE LOAN DOCUMENTS; NO CONFLICTS. The Borrower has the power
and authority to execute, deliver, and perform this Agreement and the other
Loan Documents to which it is a party, to incur the Obligations, and to grant
to the Agent Liens upon the Collateral. The Borrower has taken all necessary
action to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents have been duly executed and delivered by the
Borrower, and constitute the legal, valid, and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms
without defense, set- off, or counterclaim, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws at the
time in effect affecting the rights of creditors generally and to the effect
of general principles of equity whether applied by a court of law or equity.
The Borrower's execution, delivery, and performance of this Agreement and the
other Loan Documents to which it is a party do not and will not conflict
with, or constitute a violation or breach of, or constitute a default under,
or result in or require the creation or imposition of any Lien upon the
property of the Borrower by reason of the terms of (a) any contract,
mortgage, Lien, lease, agreement, indenture (including, without limitation,
the Indenture), document, or instrument to which the Borrower is a party or
which is binding upon it, (b) any Requirement of Law applicable to the
Borrower, or (c) the certificate of incorporation or by-laws of the Borrower.
The Borrower's entering into this Agreement and incurrence of the Obligations
resulting from each Borrowing is not prohibited under the Subordinated Notes.
The Borrower's entering into this Agreement and incurrence of the Obligations
resulting from each Borrowing is not prohibited under the "Indenture" (as
defined in the Metals Loan Agreement). The Borrower has the power and
authority to execute, deliver, and perform the RPA. The Borrower has taken
all necessary action to authorize its execution, delivery, and performance of
the RPA. The RPA has been duly executed and delivered by the Borrower and
each of the RPA Sellers party thereto, and constitutes the legal, valid, and
binding obligations of the Borrower and such RPA Sellers, enforceable against
it in accordance with their respective terms, without defense, set-off, or
counterclaim, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting
the rights of creditors generally and to the effect of general principles of
equity whether applied by a court of law or equity. The Borrower's execution,
delivery, and performance of the RPA does not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or
LOAN AND SECURITY AGREEMENT - Page 56
result in or require the creation or imposition of any Lien upon the property
of the Borrower by reason of the terms of (i) any contract, mortgage, Lien,
lease, agreement, indenture, document, agreement, or instrument to which the
Borrower is a party or which is binding upon it, (ii) any Requirement of Law
applicable to the Borrower, or (iii) the certificate of incorporation or
by-laws of the Borrower.
Section 8.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The
provisions of this Agreement and the other Loan Documents create legal and
valid Liens on all the Collateral in favor of the Agent, for the benefit of
the Agent and the Lenders, and, to the extent any such Liens may be perfected
under the UCC, such Liens constitute perfected and continuing Liens on the
Collateral, securing all the Obligations, and enforceable against the
Borrower and all third parties, and having priority over all other Liens on
the Collateral except for Liens the perfection of which is outside the scope
of the UCC, Liens in certificated vehicles, and Liens perfected only by
possession to the extent the Agent has not obtained or does not maintain
possession of such Collateral.
Section 8.3 ORGANIZATION AND QUALIFICATION. The Borrower (a) is
duly incorporated and validly existing in good standing under the laws of the
State of Delaware, (b) is qualified to do business as a foreign business
entity and is in good standing in the jurisdictions set forth on SCHEDULE
8.3, which are the only jurisdictions in which qualification is necessary in
order for it to own or lease its property and conduct its business except for
any jurisdiction for which the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect, and (c) has all requisite power
and authority to conduct its business and to own its property as presently
conducted or owned.
Section 8.4 CORPORATE NAME; PRIOR TRANSACTIONS. Since the date of
its incorporation, the Borrower has not been known by or used any other
corporate or fictitious name, or been a party to any merger or consolidation,
or acquired all or substantially all of the assets of any Person, or acquired
any of its property outside of the ordinary course of business.
Section 8.5 CAPITAL STOCK. SCHEDULE 8.5 sets forth, as of the
Closing Date, a true and complete listing of each class of the Borrower's
authorized Capital Stock, of which all of such issued shares are validly
issued, outstanding, fully paid and non-assessable, and owned beneficially
and of record by the Parent. As of the Closing Date, the Borrower does not
any Capital stock of any Person.
Section 8.6 FINANCIAL STATEMENTS. The Borrower has delivered to the
Agent and the Lenders the balance sheet and related statements of income,
retained earnings, cash flow, and changes in stockholders equity for the
Borrower (i) as of December 31, 1999, and for the Fiscal Year then ended, and
(ii) as of December 31, 2000, and for the Fiscal Year then ended (in the case
of such December 31, 2000 statements, before any audit adjustments, if any).
The Borrower has also delivered to the Agent and the Lenders the unaudited
balance sheet and related statements of income and cash flow for the Borrower
as of December 31, 2000. All such financial statements have been prepared in
accordance with GAAP and fairly present the financial position of the
Borrower as at the dates thereof and its results of operations for the
periods then ended (except for the absence of applicable footnotes).
LOAN AND SECURITY AGREEMENT - Page 57
Section 8.7 SOLVENCY. The Borrower is Solvent prior to and after
giving effect to the making of the Revolving Loans to be made on the Closing
Date and shall remain Solvent during the term of this Agreement.
Section 8.8 DEBT. After giving effect to the making of the
Revolving Loans to be made on the Closing Date, the Borrower has no Funded
Debt, except (a) the Obligations, (b) as evidenced by the RPA Seller Notes,
and (c) under the RPA.
Section 8.9 TITLE TO PROPERTY. The Borrower has good, indefeasible,
and merchantable title to all of its property (including, without limitation,
all Accounts purchased from each RPA Seller under the RPA and the assets
reflected on the December 31, 2000 Financial Statements delivered to the
Agent and the Lenders, except as sold, transferred, or otherwise disposed of
in the ordinary course of business since the date thereof or as permitted by
this Agreement), free of all Liens except Permitted Liens.
Section 8.10 REAL ESTATE; LEASES. As of the Closing Date, the Borrower
is not a party to any lease or sublease of real or personal property, other than
an operating lease with the Parent for the Borrower's existing office space.
Section 8.11 PROPRIETARY RIGHTS. As of the Closing Date, the Borrower
does not own or hold any license to any Proprietary Rights. To the best of the
Borrower's knowledge, no slogan or other advertising device, product, process,
method, substance, part, or other material now employed, or now contemplated to
be employed, by the Borrower infringes upon any rights held by any other Person.
No claim or litigation regarding any of the foregoing is pending or threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard, or code is pending or, to the knowledge of the
Borrower, proposed, which, in either case, could reasonably be expected to have
a Material Adverse Effect.
Section 8.12 TRADE NAMES. All trade names or styles to which
instruments in payment of the Borrower's Accounts may be made payable, are
listed on SCHEDULE 8.12.
Section 8.13 LITIGATION. There is no pending, or to the best of the
Borrower's knowledge threatened, action, suit, proceeding, or counterclaim by
any Person, or investigation by any Governmental Authority, or any basis for any
of the foregoing, which could reasonably be expected to have a Material Adverse
Effect.
Section 8.14 RESTRICTIVE AGREEMENTS. The Borrower is not a party to
any contract or agreement, or subject to any charter or other corporate
restriction, which affects its ability to execute, deliver, and perform the
Loan Documents and repay the Obligations.
Section 8.15 LABOR MATTERS. As of the Closing Date (a) there is no
collective bargaining agreement or other labor contract covering employees of
the Borrower, (b) no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees
of the Borrower or for any similar purpose, and (c) there is no pending or
threatened, strike, work
LOAN AND SECURITY AGREEMENT - Page 58
stoppage, material unfair labor practice claim, or other material labor
dispute against or affecting the Borrower or its employees.
Section 8.16 NO VIOLATION OF LAW. The Borrower is not in violation
of any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it, including, without limitation, any Environmental Law, which
violation could reasonably be expected to have a Material Adverse Effect.
Section 8.17 NO DEFAULT. The Borrower is not in default with respect
to any agreement, document, or instrument to which the Borrower is a party or
by which it is bound, which default could have a Material Adverse Effect.
Section 8.18 ERISA COMPLIANCE. Since the date of its incorporation,
the Borrower has not sponsored, maintained, or contributed to any Plan
subject to regulation under ERISA.
Section 8.19 TAXES. The Borrower has filed all federal and other tax
returns and reports required to be filed (or appropriate extensions have been
timely filed), and has paid all federal and other taxes, assessments, fees,
and other governmental charges levied or imposed upon the Borrower or its
properties, income, or assets otherwise due and payable.
Section 8.20 REGULATED ENTITIES. Neither the Borrower nor the Parent
is an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940. The
Borrower is not a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility"
within the meaning of the Public Utility Holding Company Act of 1935, or a
regulated entity under the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or law, or any other federal or state statute
or regulation limiting its ability to incur indebtedness.
Section 8.21 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of
the Revolving Loans are to be used solely for the purposes specified in
SECTION 9.25. The Borrower is not engaged in the business of buying or
selling Margin Stock or extending credit for the purpose of buying or
carrying Margin Stock.
Section 8.22 NO MATERIAL ADVERSE CHANGE. No material adverse change
has occurred in the property, business, operations, or conditions (financial
or otherwise), profits, or prospects of the Borrower since the date of the
Financial Statements delivered to the Lenders pursuant to SECTION 8.6.
Section 8.23 FULL DISCLOSURE. None of the representations or
warranties made by the Borrower in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement, or certificate
furnished by or on behalf of the Borrower in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contain any
untrue statement of a material fact or omit any material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading as of the time
when made or delivered.
LOAN AND SECURITY AGREEMENT - Page 59
Section 8.24 MATERIAL AGREEMENTS. As of the Closing Date, SCHEDULE 8.24
sets forth all material agreements and contracts to which the Borrower is a
party or is bound.
Section 8.25 BANK ACCOUNTS. As of the Closing Date, SCHEDULE 8.25
contains a complete and accurate list of all bank accounts maintained by the
Borrower with any bank or other financial institution.
Section 8.26 GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery, or performance by, or enforcement against, the
Borrower of this Agreement or any other Loan Document except for those which
have been duly obtained by the Borrower, copies of which have been provided to
the Agent and the Lenders, and for filing of financing statements and mortgages.
Section 8.27 INVESTMENT PROPERTY. As of the Closing Date, the Borrower
does not own any Investment Property.
Section 8.28 INDENTURE. The Borrower is an "Unrestricted Subsidiary" as
defined in the Indenture.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that so long as any
of the Obligations remain outstanding or this Agreement is in effect unless
waived pursuant to SECTION 13.2 the Borrower will keep and perform each of the
following covenants:
Section 9.1 TAXES AND OTHER OBLIGATIONS. Except as otherwise
permitted by the terms of this Agreement, the Borrower shall (a) file when
due all tax returns and other reports which it is required to file, (b) pay,
or provide for the payment, when due, of all taxes, fees, assessments, and
other governmental charges against it or upon its property, income, and
franchises, make all required withholding and other tax deposits, and
establish adequate reserves for the payment of all such items, and provide to
the Agent and the Lenders, upon request, satisfactory evidence of its timely
compliance with the foregoing, and (c) pay when due all Funded Debt owed by
it and all claims of materialmen, mechanics, carriers, warehousemen,
landlords, processors, and other like Persons, and all other indebtedness
owed by it and perform and discharge in a timely manner all other obligations
undertaken by it; PROVIDED, HOWEVER, the Borrower need not pay any tax, fee,
assessment, or governmental charge, that (w) it is contesting in good faith
by appropriate proceedings diligently pursued, (x) the Borrower has
established proper reserves for as provided in accordance with GAAP, (y) no
Lien results from such non-payment, and (z) with respect to any such tax,
fee, assessment, or governmental charge in excess of $250,000, the Borrower
has notified the Agent in writing of any contest described in CLAUSE (w)
preceding.
LOAN AND SECURITY AGREEMENT - Page 60
Section 9.2 EXISTENCE AND GOOD STANDING. The Borrower shall
maintain its existence and its qualification and good standing in all
jurisdictions in which the failure to maintain such existence and
qualification or good standing could reasonably be expected to have a
Material Adverse Effect.
Section 9.3 COMPLIANCE WITH LAW AND AGREEMENTS; MAINTENANCE OF
LICENSES. The Borrower shall comply with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business except for
any noncompliance which could not reasonably be expected to have a Material
Adverse Effect. The Borrower shall obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property
and, except as could not reasonably be expected to have a Material Adverse
Effect, to conduct its business as conducted on the Closing Date. The
Borrower shall not modify, amend, or alter its certificate of incorporation
or bylaws in any respect that would impair its ability to comply with the
terms or provisions of the RPA or the Loan Documents.
Section 9.4 MAINTENANCE OF PROPERTY. The Borrower shall maintain
all of its property necessary and useful in the conduct of its business, in
good operating condition and repair, ordinary wear and tear excepted.
Section 9.5 INSURANCE.
(a) The Borrower shall maintain with financially sound and
reputable insurers insurance that is reasonably consistent with prudent
industry practice and acceptable to the Agent in its reasonable
discretion.
(b) For each of the insurance policies issued as required by
this SECTION 9.5 the Borrower shall cause the Agent, for the benefit of
the Agent and the Lenders, to be named as secured party or mortgagee
and loss payee or additional insured, in a manner acceptable to the
Agent. Each policy of insurance shall contain a clause or endorsement
requiring the insurer to give not less than thirty (30) days prior
written notice to the Agent in the event of cancellation of such policy
for any reason whatsoever and a clause or endorsement stating that the
interest of the Agent shall not be impaired or invalidated by any act
or neglect of the insured Person or the owner of any premises for
purposes more hazardous than are permitted by such policy. All premiums
for such insurance shall be paid by the Borrower when due, and
certificates of insurance and, if requested by the Agent, photocopies
of the policies shall be delivered to the Agent, in each case, in
sufficient quantity for distribution by the Agent to each of the
Lenders. If the Borrower fails to procure such insurance or to pay the
premiums therefor when due, the Agent may, and at the direction of the
Majority Lenders shall, do so from the proceeds of Revolving Loans.
(c) The Borrower shall promptly notify the Agent and the
Lenders of any loss, damage, or destruction to the Collateral in excess
of (A) $5,000,000 if covered by insurance or (B) $1,000,000 if not
covered by insurance. The Agent is hereby authorized to directly
collect all insurance proceeds in respect of Collateral and to apply
such proceeds, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the
LOAN AND SECURITY AGREEMENT - Page 61
collection or handling thereof, to the reduction of the Obligations in
the manner provided for in, and such proceeds shall be subject to the
provisions of, SECTION 4.3.
Section 9.6 CONDEMNATION.
(a) The Borrower shall, promptly upon learning of the
institution of any proceeding for the condemnation or other taking of
any of its property, notify the Agent of the pendency of such
proceeding, and agrees that the Agent may participate in any such
proceeding, and the Borrower from time to time will deliver to the
Agent all instruments reasonably requested by the Agent to permit such
participation.
(b) The Agent is hereby authorized to directly collect the
proceeds of any condemnation claim or award, and to apply or remit such
proceeds in the same manner as insurance proceeds under SECTION 9.5.
Section 9.7 ENVIRONMENTAL LAWS. The Borrower shall conduct its
business in material compliance with all Environmental Laws applicable to it.
The Borrower shall take prompt and appropriate action to respond to any
non-compliance with Environmental Laws and shall regularly report to the
Agent on such response.
Section 9.8 COMPLIANCE WITH ERISA. The Borrower shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance
in all material respects with the applicable provisions of ERISA, the Code,
and other federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) make all
required contributions to any Plan subject to Section 412 of the Code; (d)
not engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; and (e) not engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Section 9.9 MERGERS, CONSOLIDATIONS, SALES, ACQUISITIONS. The
Borrower shall not enter into any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise dispose of all
or any part of its property, or wind up, liquidate or dissolve, or agree to
do any of the foregoing; PROVIDED that notwithstanding the foregoing or any
other provision of this Agreement, as long as no Default or Event of Default
exists or would result therefrom, the Borrower may sell or otherwise dispose
of property, other than Accounts and the proceeds thereof, in the ordinary
course of business and otherwise as may be expressly permitted by this
Agreement. The inclusion of proceeds in the definition of Collateral shall
not be deemed to constitute the Agent's or any Lender's consent to any sale
or other disposition of the Collateral except as expressly permitted herein.
Section 9.10 DISTRIBUTIONS; CAPITAL CHANGE; RESTRICTED INVESTMENTS.
The Borrower shall not (a) directly or indirectly declare or make, or incur
any liability to make, any Distribution, except Distributions (subject to
SECTION 9.31) by the Borrower to the Parent and payments of the RPA Seller
Notes pursuant to the RPA, (b) make any change in its capital structure which
could have a Material Adverse Effect, or (c) make any Restricted Investment.
LOAN AND SECURITY AGREEMENT - Page 62
Section 9.11 TRANSACTIONS AFFECTING COLLATERAL OR OBLIGATIONS. The
Borrower shall not enter into any transaction which could reasonably be expected
to result in a Material Adverse Effect.
Section 9.12 GUARANTIES. The Borrower shall not make, issue, or become
liable on any Guaranty.
Section 9.13 FUNDED DEBT. The Borrower shall not incur or maintain any
Funded Debt, other than the Obligations and Funded Debt incurred pursuant to the
RPA.
Section 9.14 PREPAYMENT OF DEBT. The Borrower shall not voluntarily
prepay any Debt, except the Obligations in accordance with the terms of this
Agreement and Debt owing by the Borrower under the RPA Seller Notes.
Section 9.15 TRANSACTIONS WITH AFFILIATES. Except as set forth below,
the Borrower shall not sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate, or lend or advance money or property to any Affiliate, or invest in
(by capital contribution or otherwise) or purchase or repurchase any stock or
indebtedness, or any property, of any Affiliate, or become liable on any
Guaranty of the indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, the Borrower may enter into and perform its
obligations under the RPA, including, without limitation, purchase of Accounts
from the RPA Sellers pursuant to the terms of the RPA.
Section 9.16 INVESTMENT BANKING AND FINDER'S FEES. The Borrower shall
not pay or agree to pay, or reimburse any other party with respect to, any
investment banking or similar or related fee, underwriter's fee, finder's fee,
or broker's fee to any Person in connection with this Agreement other than
pursuant to the Agents' Letter. The Borrower shall defend and indemnify the
Agent and the Lenders against and hold them harmless from (a) all claims of any
Person that the Borrower is obligated to pay any such fees and (b) all costs and
expenses (including attorneys' fees) incurred by the Agent and/or any Lender in
connection therewith.
Section 9.17 NATURE OF BUSINESS CONDUCTED. The Borrower shall not
engage directly or indirectly, in any line of business or activity other than
the transactions contemplated and authorized by the RPA, including, without
limitation, the purchase and collection of Accounts as described in and with the
Persons party to the RPA.
Section 9.18 LIENS. The Borrower shall not create, incur, assume, or
permit to exist any Lien on any property now owned or hereafter acquired by it,
except Permitted Liens. The Borrower will not enter into or become subject to
any Negative Pledge.
Section 9.19 SALE AND LEASEBACK TRANSACTIONS. The Borrower shall not,
directly or indirectly, enter into any arrangement with any Person providing for
the Borrower to lease or rent property that the Borrower has sold or will sell
or otherwise transfer to such other Person.
LOAN AND SECURITY AGREEMENT - Page 63
Section 9.20 NEW SUBSIDIARIES. The Borrower shall not directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary.
Section 9.21 FISCAL YEAR. The Borrower shall not change the last day of
its Fiscal Year to any date other than the last day of the Parent's Fiscal Year
without prior notice to the Agent given concurrently with any required notice by
the Parent to the Securities and Exchange Commission.
Section 9.22 CAPITAL EXPENDITURES. The Borrower shall not make or incur
any Capital Expenditure.
Section 9.23 OPERATING LEASE OBLIGATIONS. The Borrower shall not enter
into, or suffer to exist, any lease of real or personal property as lessee or
sublessee, other than an operating lease with the Parent for the Borrower's
office space, subject to SECTION 9.30(c).
Section 9.24 MINIMUM AVAILABILITY. The Borrower shall not permit the
Availability, determined as of any day other than the Agreement Date, to be less
than zero Dollars.
Section 9.25 USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loans (a) to cause the termination of the certain Purchase Agreement (the
"FALCON PURCHASE AGREEMENT") dated as of January 21, 1999 between the Borrower
and Falcon Asset Securitization Corporation ("FALCON") and to finance the
repurchase by the Borrower from Falcon of all interests in the Borrower's
Accounts previously transferred by the Borrower under such Purchase Agreement,
(b) to pay the cash portion of the "Purchase Price" (as defined in the RPA)
payable by the Borrower for Accounts purchased pursuant to the RPA, (c) to make
payments on the Seller Notes, and (d) for the general business purposes of the
Borrower, and the Borrower shall not use any portion of the Revolving Loans,
directly or indirectly, (i) to buy or carry any Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to buy or
carry any Margin Stock, (iii) to extend credit for the purpose of buying or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act. Upon funding and
disbursement of the amounts pursuant to CLAUSE (i) preceding, the Falcon
Purchase Agreement shall be terminated.
Section 9.26 FURTHER ASSURANCES. The Borrower shall execute and
deliver, or cause to be executed and delivered, to the Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, reasonably request to carry
out the terms and conditions of this Agreement and the other Loan Documents.
Section 9.27 BANK AND DOCUMENTATION AGENT AS DEPOSITORY. The Borrower
shall maintain its master collection and operating accounts with the Bank. The
Borrower shall otherwise utilize either the Bank and/or the Documentation Agent
as its principal depository banks, including for the maintenance of
administrative, cash management, collection activity, and other deposit accounts
for the conduct of its business.
Section 9.28 INDENTURE. The Borrower at all times will remain an
"Unrestricted Subsidiary" as defined by the Indenture.
LOAN AND SECURITY AGREEMENT - Page 64
Section 9.29 RPA. The Borrower will not declare the "Termination
Date" (as defined by the RPA) under the RPA to have occurred without the
prior written consent of the Agent. The Borrower will not agree to modify or
amend, or waive any Termination Event or Potential Termination Event under,
the RPA, without the prior written consent of the Agent.
Section 9.30 BORROWER'S CONDUCT OF BUSINESS. The Borrower acknowledges
that the Agent and the Lenders are providing the Total Facility and entering
into the Loan Documents in reliance upon the Borrower's identity as a separate
legal entity from the Parent and the RPA Sellers. From and after the Closing
Date, the Borrower shall take all reasonable steps, including, without
limitation, all steps that the Agent or the Lenders may from time to time
reasonably request to maintain the Borrower's identity as separate legal entity
and to make it manifest to third parties that the Borrower is an entity with
assets and liabilities distinct from those of the Parent and the RPA Sellers and
not just a division of the Parent or any RPA Seller. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, the Borrower shall:
(a) conduct its own business in its own name and require that
all full-time employees of the Borrower identify themselves as such and
not as employees of the Parent or any RPA Seller (including, without
limitation, by means of providing appropriate employees with business
or identification cards identifying such employees as the Borrower's
employees;
(b) compensate all employees, consultants, and agents
directly, from the Borrower's bank accounts, for services provided to
the Parent or the RPA Sellers by such employees, consultants, and
agents and, to the extent any employee, consultant, or agent of the
Parent or the RPA Sellers is also an employee, consultant, or agent of
the Borrower, allocate the compensation of such employee, consultant,
or agent between the Parent or the applicable RPA Seller and the
Borrower on a basis which reflects the services rendered to the Parent
or the applicable RPA Seller and the Borrower;
(c) clearly identify its offices (by signage or otherwise) as
its offices and, if such offices are located in the offices of the
Parent or any RPA Seller, the Borrower shall lease such offices at a
fair market rent;
(d) have a separate telephone number and separate stationery,
invoices, and checks in its own name;
(e) conduct all transactions with the Parent and the RPA
Sellers (including, without limitation, any delegation of its
obligations under the RPA) strictly on an arm's-length basis and
allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between the
Parent and the RPA Sellers and the Borrower on the basis of actual use
to the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
LOAN AND SECURITY AGREEMENT - Page 65
(f) observe all corporate formalities as a distinct entity,
and ensure that all corporate actions relating to (i) the selection,
maintenance, or replacement of the Independent Director, (ii) the
dissolution or liquidation of the Borrower, or (iii) the initiation or
participation in, acquiescence in, or consent to any bankruptcy,
insolvency, reorganization, or similar proceeding involving the
Borrower, are duly authorized by unanimous vote of its board of
directors (including the Independent Director);
(g) maintain the Borrower's books and records separate from
those of the Parent and the RPA Sellers and otherwise readily
identifiable as its own assets rather than assets of the Parent or any
RPA Seller;
(h) except as herein specifically otherwise provided, not
commingle funds or other assets of the Borrower with those of the
Parent or any RPA Seller and not maintain bank accounts or other
depository accounts to which the Borrower is an account party, into
which the Borrower makes deposits or from which the Borrower has the
power to make withdrawals; and
(i) unless and as otherwise specifically provided in the RPA,
not permit the Borrower to pay any of the Parent's or any RPA Seller's
operating expenses.
Section 9.31 EXCESS CASH. On any day when the Borrower has Excess Cash,
the Borrower will use such Excess Cash (a) to make payments in reduction of the
Obligations, (b) at any time when there are no outstanding Obligations, at the
Borrower's option, (i) to pay the cash portion of the "Purchase Price" (as
defined in the RPA) payable by the Borrower for the purchase of Accounts under
the RPA or (ii) to repay Debt owing by the Borrower under the RPA Seller Notes
and (c) at any time when there is no amount owing in respect of the cash portion
of the "Purchase Price" (as defined in the RPA) payable by the Borrower for the
purchase of Accounts under the RPA and the unpaid outstanding balance of the RPA
Seller Notes is $0.00, at the Borrower's option (i) paid to the Parent as a
Distribution or (ii) loaned to the Parent. Pursuant to the RPA, the Borrower
will instruct the Agent to disburse any payments under CLAUSE (b)(ii) preceding
directly to the "Agent" (as defined in the Metals Loan Agreement) for the
account of the Borrower.
ARTICLE 10
CONDITIONS OF LENDING
Section 10.1 CONDITIONS PRECEDENT TO MAKING OF REVOLVING LOANS ON THE
CLOSING DATE. The obligation of the Lenders to make the initial Revolving Loans
on the Closing Date is subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent and each Lender:
(a) The Agent shall have received each of the following
documents, all of which shall be satisfactory in form and substance to
the Agent and the Lenders:
LOAN AND SECURITY AGREEMENT - Page 66
(i) certified copies of the certificate of
incorporation of the Borrower, with all amendments, if any,
certified by the appropriate Governmental Authority, and the
bylaws of the Borrower, certified by the corporate secretary
of the Borrower, as being true and correct and in effect on
the Closing Date;
(ii) certificates of incumbency and specimen
signatures with respect to each Person authorized to execute
and deliver this Agreement and the other Loan Documents on
behalf of the Borrower and each other Person executing any
document, certificate, or instrument to be delivered in
connection with this Agreement and the other Loan Documents
and each Person authorized to request Borrowings hereunder;
(iii) a certificate evidencing the existence of the
Borrower, and certificates evidencing the good standing of the
Borrower in the jurisdiction of its incorporation and in each
other jurisdiction in which it is required to be qualified as
a foreign business entity to transact its business as
presently conducted, PROVIDED that upon request by the
Borrower and with the consent of the Agent, certificates of
good standing for the Borrower in any state other than the
state of its incorporation and chief executive office, to the
extent not provided on the Closing Date, may be provided
within thirty (30) days of the Closing Date;
(iv) certified copies of all action taken by the
Borrower to authorize the execution, delivery, and performance
of this Agreement, the other Loan Documents, and the
Borrowings;
(v) a certificate of the Borrower signed by a
Responsible Officer:
(A) stating that all of the representations
and warranties made or deemed to be made under this
Agreement are true and correct as of the Closing
Date, after giving effect to the Revolving Loans to
be made at such time and the application of the
proceeds thereof,
(B) stating that no Default or Event of
Default exists,
(C) specifying the account of the Borrower
to which the Agent is authorized to transfer the
proceeds of the Revolving Loans, as required by
SECTION 2.2(c), and
(D) certifying as to such other factual
matters as may be reasonably requested by the Agent;
(vi) a Revolving Note payable to the order of each
Lender in the amount of its Commitment, duly executed and
delivered by the Borrower, complying with the requirements of
SECTION 2.2;
LOAN AND SECURITY AGREEMENT - Page 67
(vii) UCC financing statements and/or amendments to
existing UCC financing statements with respect to all
Collateral as may be requested by the Agent, duly executed by
the Borrower, in all jurisdictions that the Agent may deem
necessary or desirable in order to perfect the Agent's Lien
therein;
(viii) duly executed UCC-3 termination statements or
assignments and such other instruments, in form and substance
satisfactory to the Agent, as shall be necessary to terminate
and satisfy all Liens on the property of the Borrower except
Permitted Liens;
(ix) a Copyright, Patent, and Trademark Agreement
with respect to all Proprietary Rights, if any, owned by the
Borrower which must be registered with any Governmental
Authority to perfect the Agent's Liens in such Proprietary
Rights, duly executed by the Borrower, as applicable;
(x) a Borrowing Base Certificate effective as of the
Business Day preceding the day such initial Revolving Loans
are to be funded;
(xi) a landlord's or mortgagee's waiver and consent
agreement, in form and substance reasonably acceptable to the
Agent, duly executed on behalf of each landlord or mortgagee,
as the case may be, of Real Estate on which any Collateral is
located (PROVIDED, that the Borrower may defer delivery of any
such agreements for a period not to exceed ninety (90) days
from the Closing Date; PROVIDED, FURTHER, that thereafter the
Agent may, in its discretion, establish a reserve with respect
to any Collateral located on any Real Estate for which the
Agent has not received an acceptable waiver and consent
agreement);
(xii) on the Closing Date, a Blocked Account
Agreement duly executed by the Borrower, Bank One, N.A., and
the Agent with respect to the Borrower's Payment Account(s)
maintained by Bank One, N.A., and within ninety (90) days of
the Closing Date, each other Blocked Account Agreement duly
executed as requested by the Agent;
(xiii) a signed opinion of counsel for the Borrower,
opining as to such matters in connection with the transactions
contemplated by this Agreement as the Agent may reasonably
request, each such opinion to be in a form, scope, and
substance satisfactory to the Agent, the Lenders, and their
respective counsel;
(xiv) the Agent shall have received evidence, in
form, scope, and substance, reasonably satisfactory to the
Agent, of all insurance coverage as required by this
Agreement; and
(xv) such other documents and instruments as the
Agent or any Lender may reasonably request.
LOAN AND SECURITY AGREEMENT - Page 68
(b) This Agreement and the other Loan Documents shall have
been executed by each party thereto and the Borrower shall have
performed and complied with all covenants, agreements, and conditions
contained herein and in the other Loan Documents which are required to
be performed or complied with by the Borrower before or on the Closing
Date.
(c) Upon making the initial Revolving Loans (including such
Revolving Loans made to finance the fees, costs, and expenses then
payable under this Agreement) and with all its obligations current, the
Borrower shall have remaining Availability in an amount not less than
zero Dollars.
(d) All representations and warranties made hereunder and in
the other Loan Documents shall be true and correct on the Closing Date.
(e) No Default or Event of Default shall exist on the Closing
Date, or would exist after giving effect to the Revolving Loans to be
made on such date.
(f) The Borrower shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the
Loan Documents and the transactions contemplated thereby to the extent
invoiced.
(g) The Agent and the Lenders shall have had an opportunity,
if they so choose, to examine the books of account and other records
and files of the Borrower and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification
of Accounts and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to the Agent and the Lenders in
all respects.
(h) All proceedings taken in connection with the execution of
this Agreement, all other Loan Documents and all documents and papers
relating thereto shall be satisfactory in form, scope, and substance to
the Agent and the Lenders.
(i) No action, proceeding, investigation, regulation, or
legislation shall have been instituted, threatened, or proposed by or
before any Governmental Authority to enjoin, restrain, or prohibit, or
to obtain damages in respect of, or which is related to or arises out
of this Agreement or the consummation of the transactions contemplated
by this Agreement or which, in the Agent's or the Lenders' reasonable
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement.
The acceptance by the Borrower of any Revolving Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to the
effect that all of the conditions precedent to the making of such Revolving
Loans have been satisfied, with the same effect as delivery to the Agent and the
Lenders of a certificate signed by a Responsible Officer of the Borrower, dated
the Closing Date, to such effect. Execution and delivery to the Agent by a
Lender of a counterpart of this Agreement shall be deemed confirmation by such
Lender that (i) all conditions precedent in this SECTION 10.1 have been
fulfilled to the satisfaction of such Lender, (ii) the decision of such Lender
to execute and deliver to the Agent an executed counterpart of this
LOAN AND SECURITY AGREEMENT - Page 69
Agreement was made by such Lender independently and without reliance on the
Agent or any other Lender as to the satisfaction of any condition precedent
set forth in this SECTION 10.1, and (iii) all documents sent to such Lender
for approval, consent, or satisfaction were acceptable to such Lender.
Section 10.2 CONDITIONS PRECEDENT TO EACH REVOLVING LOAN. The
obligation of the Lenders to make each Revolving Loan, including the initial
Revolving Loans on the Closing Date, shall be subject to the further conditions
precedent that on and as of the date of any such Revolving Loan:
(a) the following statements shall be true, and the acceptance
by the Borrower of any Revolving Loan shall be deemed to be a statement
to the effect set forth in CLAUSE (i) and CLAUSE (ii) following with
the same effect as the delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrower, dated the
date of such Revolving Loan, stating that:
(i) the representations and warranties contained in
this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such Revolving Loan
as though made on and as of such date, other than any such
representation or warranty which relates to a specified prior
date and except to the extent the Agent and the Lenders have
been notified by the Borrower that any representation or
warranty is not correct and the Majority Lenders have
explicitly waived in writing compliance with such
representation or warranty;
(ii) no event has occurred and is continuing, or
would result from such Revolving Loan, which constitutes a
Default or an Event of Default; and
(iii) no "Termination Event" (as defined in the RPA)
exists under the RPA.
(b) The Agent shall have received satisfactory evidence that
the Agent has a valid, exclusive (other than Permitted Liens), and
perfected first priority security interest, lien, collateral
assignment, and pledge as of such date in all Collateral (to the extent
any such Liens may be perfected under the UCC (but excluding any Liens
on vehicles for which a certificate of title has been issued and Liens
perfected solely by possession, but only to the extent the Agent has
not requested perfection of its Liens in such vehicles or possession of
such Collateral); PROVIDED that upon the Agent's request, the Borrower
shall provide any additional agreement, document, instrument,
certificate, or other item relating to any other Collateral as may be
required for perfection under any Requirement of Law);
(c) As of the Closing Date and as of the date of funding such
Revolving Loan, there shall not have occurred or exist any event or
condition which constitutes a Material Adverse Effect.
The foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing the Bank or the Agent for such Lenders' Pro Rata
Share of any Non-Ratable Loan or Agent Advance made in accordance with the
provisions of SECTION 2.2(h) and SECTION 2.2(i).
LOAN AND SECURITY AGREEMENT - Page 70
ARTICLE 11
DEFAULT REMEDIES
Section 11.1 EVENTS OF DEFAULT. It shall constitute an event of default
("EVENT OF DEFAULT") if any one or more of the following shall occur for any
reason:
(a) any failure by the Borrower to pay the principal of or
interest or premium on any of the Obligations or any fee or other
amount owing hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any of the other Loan Documents, any
Financial Statement, or any certificate furnished by the Borrower at
any time to the Agent or any Lender shall prove to be untrue in any
material respect as of the date on which made, deemed made, or
furnished;
(c) any default shall occur in
(i) the observance or performance of any of the
covenants and agreements contained in SECTION 9.2 (insofar as
it requires the preservation of the existence of the Borrower)
or SECTION 9.9 through SECTION 9.31, or
(ii) the observance or performance of any of the
covenants and agreements contained in ARTICLE 6 or ARTICLE 7,
and such default shall continue for a period of three (3)
Business Days after written notice thereof has been given to
the Borrower by the Agent,
(iii) the observance or performance of any of the
covenants and agreements contained in this Agreement, other
than as referenced in SECTION 11.1(a), SECTION 11.1(b),
SECTION 11.1(c)(i), and SECTION 11.1(c)(ii) or any other Loan
Documents, or any other agreement entered into at any time to
which the Borrower and the Agent or any Lender are party
(including in respect of any Bank Products) and such default
shall continue for a period of twenty (20) days after written
notice thereof has been given to the Borrower by the Agent, or
if any such agreement or document shall terminate (other than
in accordance with its terms or the terms hereof or with the
written consent of the Agent and the Majority Lenders) or
become void or unenforceable, without the written consent of
the Agent and the Majority Lenders;
(d) default shall occur with respect to any Debt (other than
the Obligations) of the Borrower, or under any agreement or instrument
under or pursuant to which any such Debt may have been issued, created,
assumed, or guaranteed by the Borrower, and such default shall continue
for more than the period of grace, if any, therein specified, if the
effect thereof (with or without the giving of notice or further lapse
of time or both) is to accelerate, or to permit the holders of any such
Debt to accelerate, the maturity of any such Debt, or any such
LOAN AND SECURITY AGREEMENT - Page 71
Debt shall be declared due and payable or be required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof;
(e) the Borrower shall (i) file a voluntary petition in
bankruptcy or file a voluntary petition or an answer or otherwise
commence any action or proceeding seeking reorganization, arrangement,
or readjustment of its debts or for any other relief under the
Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or
consent to, approve of, or acquiesce in, any such petition, action, or
proceeding; (ii) apply for or acquiesce in the appointment of a
receiver, assignee, liquidator, sequestrator, custodian, monitor,
trustee, or similar officer for it or for all or any part of its
property; (iii) make an assignment for the benefit of creditors; or
(iv) be unable generally to pay its debts as they become due;
(f) an involuntary petition or proposal shall be filed or an
action or proceeding otherwise commenced (other than as referenced in
SECTION 11.1(e)) seeking reorganization, arrangement, consolidation, or
readjustment of the debts of the Borrower or for any other relief under
the Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing and
either (i) such petition, proposal, action, or proceeding shall not
have been dismissed within a period of sixty (60) days after its
commencement or (ii) an order for relief against the Borrower shall
have been entered in such proceeding;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee, or similar officer for the Borrower or for all or any
part of its property shall be appointed or a warrant of attachment,
execution, or similar process shall be issued against any part of the
property of the Borrower;
(h) the Borrower shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved, or wound-up or
shall commence or have commenced against it any action or proceeding
for dissolution, winding-up, or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower
shall be nationalized, expropriated, or condemned, seized, or otherwise
appropriated, or custody or control of such property or of the Borrower
shall be assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority,
except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;
(j) one or more judgments, orders, decrees, or arbitration
awards is entered against the Borrower involving liability in the
aggregate (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any
single or related or unrelated series of transactions, incidents or
conditions, of $5,000,000 or more, and the same shall remain
unsatisfied, unvacated, and unstayed pending appeal for a period of
thirty (30) days after the entry thereof;
LOAN AND SECURITY AGREEMENT - Page 72
(k) any loss, theft, damage, or destruction of any item or
items of Collateral or other property of the Borrower occurs which
reasonably could be expected to cause a Material Adverse Effect and is
not adequately covered by insurance;
(l) there occurs a Material Adverse Effect;
(m) there is filed against the Borrower any action, suit, or
proceeding under any federal or state racketeering statute (including
the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred
twenty (120) days, and (ii) could reasonably be expected to result in
the confiscation or forfeiture of any material portion of the
Collateral;
(n) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of
the Collateral intended to be secured thereby ceases to be, or is not,
valid, perfected, and prior to all other Liens (other than Permitted
Liens which are expressly permitted to have priority over the Agent's
Liens) or is terminated, revoked, or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension
Plan or Multi-employer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multi-employer Plan, or the PBGC in an aggregate
amount in excess of $1,000,000; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds
$1,000,000; or (iii) the Borrower or any ERISA Affiliate shall fail to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multi-employer Plan in an aggregate
amount in excess of $1,000,000;
(p) there occurs a Change of Control;
(q) any "Event of Default" (as defined in the Metals Loan
Agreement) occurs under the Metals Loan Agreement; or
(r) any "Termination Event" (as defined in the RPA) occurs
under the RPA.
Section 11.2 REMEDIES.
(a) If a Default or an Event of Default exists, the Agent may,
in its discretion, and shall, at the direction of the Majority Lenders,
do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower: (i) reduce the Maximum
Revolver Amount, or the advance rates against Eligible Accounts used in
computing the Borrowing Base, or reduce or increase one or more of the
other elements used in computing the Borrowing Base; and (ii) restrict
the amount of or refuse to make Revolving
LOAN AND SECURITY AGREEMENT - Page 73
Loans. If an Event of Default exists, the Agent shall, at the direction
of the Majority Lenders, do one or more of the following, in addition
to the actions described in the preceding sentence, at any time or
times and in any order, without notice to or demand on the Borrower:
(A) terminate the Commitments and this Agreement; (B) declare any or
all Obligations to be immediately due and payable; PROVIDED, HOWEVER,
that upon the occurrence of any Event of Default described in SECTION
11.1(e), SECTION 11.1(f), SECTION 11.1(g), or SECTION 11.1(h), the
Commitments shall automatically and immediately expire and all
Obligations shall automatically become immediately due and payable
without notice or demand of any kind; and (C) pursue its other rights
and remedies under the Loan Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i)
the Agent shall have for the benefit of the Lenders, in addition to all
other rights of the Agent and the Lenders, the rights and remedies of a
secured party under the UCC; (ii) the Agent may, at any time, take
possession of the Collateral and keep it on the Borrower's premises, at
no cost to the Agent or any Lender, or remove any part of it to such
other place or places as the Agent may desire, or the Borrower shall,
upon the Agent's demand, at the Borrower's cost, assemble the
Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit, or
otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an
announcement at the time and place of sale or of such postponed or
adjourned sale without giving a new notice of sale. Without in any way
requiring notice to be given in the following manner, the Borrower
agrees that any notice by the Agent of sale, disposition, or other
intended action hereunder or in connection herewith, whether required
by the UCC or otherwise, shall constitute reasonable notice to the
Borrower if such notice is mailed by registered or certified mail,
return receipt requested, postage prepaid, or is delivered personally
against receipt, at least five (5) days prior to such action to the
Borrower's address specified in or pursuant to SECTION 15.8. If any
Collateral is sold on terms other than payment in full at the time of
sale, no credit shall be given against the Obligations until the Agent
or the Lenders receive payment, and if the buyer defaults in payment,
the Agent may resell the Collateral without further notice to the
Borrower. In the event the Agent seeks to take possession of all or any
portion of the Collateral by judicial process, the Borrower irrevocably
waives: (A) the posting of any bond, surety, or security with respect
thereto which might otherwise be required; (B) any demand for
possession prior to the commencement of any suit or action to recover
the Collateral; and (C) any requirement that the Agent retain
possession and not dispose of any Collateral until after trial or final
judgment. The Borrower agrees that the Agent has no obligation to
preserve rights to the Collateral or marshal any Collateral for the
benefit of any Person. The Agent is hereby granted a license or other
right to use, without charge, the Borrower's labels, patents,
copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production
of, advertising or selling any Collateral, and the Borrower's rights
under all licenses and all franchise agreements shall inure to the
Agent's benefit for such purpose. The proceeds of sale shall be applied
first to all expenses of sale,
LOAN AND SECURITY AGREEMENT - Page 74
including attorneys' fees, and then to the Obligations. The Agent will
return any excess to the Borrower, and the Borrower shall remain
liable for any deficiency.
(c) Without limiting this SECTION 11.2 or any provision of the
RPA, if an Event of Default has occurred and is continuing the Agent
shall have the right to enforce the RPA and to exercise directly, in
the name of the Borrower or in the name of the Agent, as secured party,
all of the Borrower's rights, remedies, powers, and privileges under
the RPA.
(d) If an Event of Default occurs and is continuing, the
Borrower hereby waives all rights to notice and hearing prior to the
exercise by the Agent of the Agent's rights to repossess the Collateral
without judicial process or to replevy, attach, or levy upon the
Collateral without notice or hearing.
(e) The Borrower recognizes that the Agent may be unable to
effect a public sale of any or all of the Collateral or other property
to be sold by reason of certain prohibitions contained in the laws of
any jurisdiction outside the United States or in applicable federal or
state securities laws but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such Collateral or
other property to be sold for their own account for investment and not
with a view to the distribution or resale thereof. The Borrower
acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any
such private sale shall, to the extent permitted by law, be deemed to
have been made in a commercially reasonable manner. Unless required by
a Requirement of Law, the Agent shall not be under any obligation to
delay a sale of any of the Collateral or other property to be sold for
the period of time necessary to permit the issuer of such securities to
register such securities under the laws of any jurisdiction outside the
United States under any applicable federal or state securities laws,
even if such issuer would agree to do so. The Borrower further agrees
to do or cause to be done, to the extent that the Borrower may do so
under Requirements of Law, all such other acts and things as may be
necessary to make such sales or resales of any portion or all of the
Collateral or other property to be sold valid and binding and in
compliance with any and all Requirements of Law at the Borrower's
expense. The Borrower further agrees that a breach of any of the
covenants contained in this SECTION 11.2(e) will cause irreparable
injury to the Agent and the Lenders for which there is no adequate
remedy at law and, as a consequence, agrees that each covenant
contained in this SECTION 11.2(e) shall be specifically enforceable
against the Borrower and the Borrower hereby waives and agrees, to the
fullest extent permitted by law, not to assert as a defense against an
action for specific performance of such covenants that (i) the
Borrower's failure to perform such covenants will not cause irreparable
injury to the Agent and the Lenders or (ii) the Agent or the Lenders
have an adequate remedy at law in respect of such breach. The Borrower
further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by the Agent and the Lenders by reason
of a breach of any of the covenants contained in this SECTION 11.2(e)
and, consequently, agrees that, if the Borrower shall breach any of
such covenants and the Agent or the Lenders shall xxx for damages for
such breach, the Borrower shall pay to the Agent, for the benefit of
the Agent and the Lenders, as
LOAN AND SECURITY AGREEMENT - Page 75
liquidated damages and not as a penalty, an aggregate amount equal to
the value of the Collateral or other property to be sold on the date
the Agent shall demand compliance with this SECTION 11.2(e).
ARTICLE 12
TERM AND TERMINATION
Section 12.1 TERM AND TERMINATION. The term of this Agreement shall end
on the Stated Termination Date unless terminated or automatically extended as
provided in this Article. This Agreement shall automatically be renewed on the
Stated Termination Date for a renewal term of one year unless it is terminated
as provided in this Article. The Borrower, the Agent, and each Lender shall have
the right to terminate this Agreement, without premium or penalty, on the Stated
Termination Date or at the end of any such renewal term by giving the other
parties hereto written notice not less than thirty (30) days prior to the Stated
Termination Date by registered or certified mail. The Borrower may also
terminate this Agreement at any time if it: (a) gives the Agent and the Lenders
thirty (30) days prior written notice of termination by registered or certified
mail; and (b) pays and performs all Obligations, including, without limitation,
all fees (if any) required by SECTION 4.2 and any other fees payable under the
Loan Documents on or prior to the effective date of termination. The Agent upon
direction from the Majority Lenders may terminate this Agreement without notice
to the Borrower during the existence of an Event of Default. Upon the effective
date of termination of this Agreement for any reason whatsoever, all Obligations
(including all unpaid principal, accrued and unpaid interest, and any early
termination or prepayment fees but excluding indemnification obligations to the
extent no claim with respect thereto has been asserted and remains unsatisfied)
shall become immediately due and payable. Notwithstanding the termination of
this Agreement, until all Obligations are indefeasibly paid and performed in
full in cash, the Borrower shall remain bound by the terms of this Agreement and
shall not be relieved of any of its Obligations hereunder or under any other
Loan Document, and the Agent and the Lenders shall retain all their rights and
remedies hereunder (including, without limitation, the Agent's Liens in and all
rights and remedies with respect to all then existing and after-arising
Collateral).
ARTICLE 13
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
Section 13.1 NO WAIVERS; CUMULATIVE REMEDIES. No failure by the Agent
or any Lender to exercise any right, remedy, or option under this Agreement or
any present or future supplement hereto, or in any other agreement between or
among the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. Subject to
SECTION 13.2, no waiver by the Agent or any Lender will be effective unless it
is in writing, and then only to the extent specifically stated. No waiver by the
Agent or the Lenders on any occasion shall affect or diminish the Agent's and
each Lender's rights thereafter to require strict performance by the Borrower of
any provision of this Agreement. The Agent's and each Lender's rights under this
Agreement will be cumulative and not exclusive of any other right or remedy
which the Agent or any Lender may have.
LOAN AND SECURITY AGREEMENT - Page 76
Section 13.2 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Majority Lenders (or by the Agent
at the written request of the Majority Lenders) and the Borrower and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders and
the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or
other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Revolving Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Revolving Loans which is
required for the Lenders or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of the Borrowing Base;
(f) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(g) release Collateral other than as permitted by SECTION
14.12;
(h) change the definition of "Majority Lenders"; or
(i) increase the Maximum Revolver Amount;
PROVIDED, HOWEVER, the Agent may, in its sole discretion and notwithstanding the
limitations contained in CLAUSE (e) and CLAUSE (i) preceding and any other terms
of this Agreement, make Revolving Loans (including Agent Advances) in an amount
not to exceed five percent (5.0%) of the Maximum Revolver Amount and, PROVIDED
FURTHER, that no amendment, waiver, or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
LOAN AND SECURITY AGREEMENT - Page 77
Section 13.3 ASSIGNMENTS; PARTICIPATIONS.
(a) Any Lender may, with the written consent of the Agent
(which consent shall not be unreasonably withheld), assign and delegate
to one or more Eligible Assignees (PROVIDED that no consent of the
Agent shall be required in connection with any assignment and
delegation by a Lender to an Affiliate of such Lender) (each an
"ASSIGNEE") all, or any ratable part of all, of the Revolving Loans,
the Commitments, and the other rights and obligations of such Lender
hereunder (any such assignment and delegation being referred to herein
as an "ASSIGNMENT"), in a minimum amount of $2,222,222.22 (PROVIDED
that, unless an assignor Lender has assigned and delegated all of its
Revolving Loans and Commitments, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such assignor
Lender retains a Commitment in a minimum amount of $2,222,222.22);
PROVIDED, HOWEVER, that the Borrower and the Agent may continue to deal
solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information
with respect to the Assignee, shall have been given to the Borrower and
the Agent by such Lender and the Assignee; and (ii) such Lender and its
Assignee shall have delivered to the Borrower and the Agent an
Assignment and Acceptance in the form of EXHIBIT E ("ASSIGNMENT AND
ACCEPTANCE") together with any Note or Notes subject to such
assignment; PROVIDED, FURTHER, that the Lenders acknowledge and agree
that, on the Closing Date, each Lender is also a "Lender" (as defined
by the Metals Loan Agreement) under the Metals Loan Agreement with a
"Pro Rata Share" (as defined by the Metals Loan Agreement) under the
Metals Loan Agreement identical to its Pro Rata Share, and the Lenders
further agree that, in addition to and without limiting the foregoing
requirements for an Assignment, no such Assignment shall be made
unless, simultaneously with the effectiveness thereof, the assignor
Lender effects an "Assignment" (as defined by the Metals Loan
Agreement) to such Assignee under the Metals Loan Agreement and thereby
assigns and delegates to such Assignee, as an "Assignee" under the
Metals Loan Agreement, all or a ratable part of all, as the case may
be, of the "Revolving Loans" and "Commitments" (as such terms are
defined by the Metals Loan Agreement) and the other rights and
obligations of such assignor Lender as a "Lender" (as defined by the
Metals Loan Agreement) under the Metals Loan Agreement, so that at all
times the Pro Rata Share of each Lender, and the "Pro Rata Share" (as
defined by the Metals Loan Agreement) of each Lender as a "Lender"
under the Metals Loan Agreement, respectively, shall be identical.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and
Acceptance, (i) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents 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).
LOAN AND SECURITY AGREEMENT - Page 78
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder 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, such
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 the
execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document
furnished pursuant hereto or the attachment, perfection, or priority of
any Lien granted by the Borrower to the Agent or any Lender in the
Collateral; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the
Borrower 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, together with such other
documents and information as 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 Agent, such assigning Lender, or any other Lender, and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such Assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers, including the discretionary
rights and incidental power, as are reasonably incidental 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 are
required to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of
SECTION 13.3(a), this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of
the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time sell to one or more
Participants participating interests in any Revolving Loans, the
Commitment of that Lender, and the other interests of that Lender (the
"ORIGINATING LENDER") hereunder and under the other Loan Documents;
PROVIDED, HOWEVER, that (i) the originating Lender's obligations under
this Agreement shall remain unchanged, (ii) the originating Lender
shall remain solely responsible for the performance of such
obligations, (iii) the Borrower and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and
the other Loan Documents, and (iv) no Lender shall transfer or grant
any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, and (v) all amounts payable
by the Borrower hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall
LOAN AND SECURITY AGREEMENT - Page 79
have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent and subject to the same
limitation as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or
any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the
Federal Reserve Board or U.S. Treasury Regulation 31 CFR
Section 203.14, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.
ARTICLE 14
THE AGENT
Section 14.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
designates and appoints the Bank (acting in its capacity as the Agent) as its
agent under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. The Agent agrees to act as such on the express
conditions contained in this ARTICLE 14. The provisions of this ARTICLE 14 are
solely for the benefit of the Agent and the Lenders and the Borrower shall have
no rights as a third party beneficiary of any of the provisions contained herein
other than as expressly provided in SECTION 14.10 and SECTION 14.12.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
SECTION 2.2(i), and (c) the exercise of remedies pursuant to SECTION 11.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
LOAN AND SECURITY AGREEMENT - Page 80
Section 14.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent, employee, or
attorney-in-fact that it selects as long as such selection was made without
gross negligence or willful misconduct.
Section 14.3 LIABILITY OF THE AGENT. None of the Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation, or warranty made by the Borrower or any
Affiliate of the Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement, or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability, or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books, or records of the Borrower or any Affiliate of
the Borrower.
Section 14.4 RELIANCE BY THE AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, or
telephone message, statement, or other document or conversation
believed by it to be genuine and correct and to have been signed, sent,
or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless
it shall first receive such advice or concurrence of the Majority
Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or
consent of the Majority Lenders (or all Lenders if so required by
SECTION 13.2) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 10.1, each Lender that has executed this Agreement
shall be deemed to have consented to, approved, or accepted or to be
satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance, or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender.
LOAN AND SECURITY AGREEMENT - Page 81
Section 14.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Majority
Lenders in accordance with ARTICLE 11; PROVIDED, HOWEVER, that unless and until
the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable.
Section 14.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition, and creditworthiness of the
Borrower and its Affiliates, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition, and
creditworthiness of the Borrower. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition, or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
Section 14.7 INDEMNIFICATION. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, THE LENDERS SHALL INDEMNIFY UPON DEMAND
THE AGENT-RELATED PERSONS (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF
THE BORROWER AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWER TO DO SO),
PRO RATA, FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES AS SUCH TERM
IS DEFINED IN SECTION 15.11; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE
LIABLE FOR THE PAYMENT TO THE AGENT- RELATED PERSONS OF ANY PORTION OF SUCH
INDEMNIFIED LIABILITIES RESULTING SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT. Without limitation of the foregoing, each Lender shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or
LOAN AND SECURITY AGREEMENT - Page 82
legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by
or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the
Agent.
Section 14.8 THE AGENT IN INDIVIDUAL CAPACITY.
(a) The Bank and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with the Borrower
and its Affiliates as though the Bank were not the Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge
that, pursuant to such activities, the Bank or its Affiliates may
receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor
of the Borrower or such Affiliate) and acknowledge that the Agent and
the Bank shall be under no obligation to provide such information to
the Lenders. With respect to its Revolving Loans, the Bank shall have
the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
(b) Each of the Lenders acknowledges and agrees that the Bank
acts, and/or may in the future act, as administrative agent under the
Metals Loan Agreement. Each Lender hereby acknowledges and consents to
the Bank acting in such capacity and agrees that in connection with
acting in such capacity the Bank may take or refrain from taking any
action, and each of the Lenders hereby holds the Bank harmless in
connection with taking or refraining from taking any such action, which
the Bank in its sole discretion deems appropriate in the circumstances,
subject to the terms of the Metals Loan Agreement.
Section 14.9 SUCCESSOR AGENT. The Agent may resign as Agent upon thirty
(30) days notice to the Lenders and the Borrower, such resignation to be
effective upon the acceptance of a successor agent to its appointment as Agent.
In the event the Bank sells all of its Commitment and Revolving Loans as part of
a sale, transfer, or other disposition by the Bank of substantially all of its
loan portfolio, the Bank shall resign as Agent and such purchaser or transferee
shall become the successor Agent hereunder. If the Agent resigns under this
Agreement, subject to the proviso in the preceding sentence, the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this ARTICLE 14 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
LOAN AND SECURITY AGREEMENT - Page 83
Section 14.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership, or
trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of, United States withholding tax under Sections
1441 or 1442 of the Code, such Lender agrees with and in favor of the
Agent, to deliver to the Agent and the Borrower:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms 1001 and W-8 before the
payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9;
and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees to promptly notify the Agent and the Borrower of any
change in circumstances which would modify or render invalid any
claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such
Lender, such Lender agrees to notify the Agent and the Parent of the
percentage amount in which it is no longer the beneficial owner of
Obligations owing to such Lender. To the extent of such percentage
amount, the Agent and the Parent will treat such Lender's IRS Form 1001
as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements
imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent or the Borrower may withhold from any
interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms
or other documentation required by CLAUSE (a) of this Section are not
delivered to the
LOAN AND SECURITY AGREEMENT - Page 84
Agent and the Borrower, then the Agent or the Borrower may withhold
from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding
tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent or
the Borrower did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to
notify the Agent or the Borrower of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Lender shall indemnify the
Agent and the Borrower fully for all amounts paid, directly or
indirectly, by the Agent or the Borrower as tax or otherwise, including
penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this SECTION
14.10, together with all costs and expenses (including Attorney Costs).
The obligation of the Lenders under this SECTION 14.10(e) shall survive
the payment of all Obligations and the resignation or replacement of
the Agent.
Section 14.11 CO-AGENTS. None of the Lenders identified on the facing
page or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility, or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
Section 14.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Lien upon any
Collateral upon the termination of the Commitments and payment and
satisfaction in full of all Revolving Loans and all other Obligations.
Except as provided above, the Agent will not release any of the Agent's
Liens without the prior written authorization of the Lenders; PROVIDED
that the Agent may, in its discretion, release the Agent's Liens on
Collateral valued in the aggregate not in excess of $10,000,000 during
any one (1) year period without the prior written authorization of the
Lenders. Upon request by the Agent or the Borrower at any time, the
Lenders will confirm in writing the Agent's authority to release any
Agent's Liens upon particular types or items of Collateral pursuant to
this SECTION 14.12.
(b) Upon receipt by the Agent of any authorization required
pursuant to SECTION 14.12(a) from the Lenders of the Agent's authority
to release any Agent's Liens upon particular types or items of
Collateral, and upon at least five (5) Business Days prior written
request by the Borrower, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Agent's Liens upon such
Collateral; PROVIDED, HOWEVER, that (i) the Agent shall not be required
to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to
LOAN AND SECURITY AGREEMENT - Page 85
liability or create any obligation 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 Liens (other than those expressly being released)
upon (or obligations of the Borrower in respect of) all interests
retained by the Borrower, including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the
Borrower or is cared for, protected, or insured or has been encumbered,
or that the Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected, or enforced or are 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 Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any
act, omission, or event related thereto, the Agent may act in any
manner it may deem appropriate, in its sole discretion given the
Agent's own interest in the Collateral in its capacity as one of the
Lenders and that the Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing.
Section 14.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of the Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of all other Lenders,
set-off against the Obligations, any amounts owing by such Lender to
the Borrower or any accounts of the Borrower now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it
shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement
or against the Borrower, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, set-off, or otherwise, any proceeds of Collateral
or any payments with respect to the Obligations owing to such Lender
arising under, or relating to, this Agreement or the other Loan
Documents, except for any such proceeds or payments received by such
Lender from the Agent pursuant to the terms of this Agreement, or (ii)
payments from the Agent in excess of such Lender's ratable portion of
all such distributions by the Agent, such Lender shall promptly (A)
turn the same over to the Agent, in kind, and with such endorsements as
may be required to negotiate the same to the Agent, or in same day
funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable
provisions of this Agreement, or (B) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations
owed to the other Lenders so that such excess payment received shall be
applied ratably as among the Lenders in accordance with their Pro Rata
Shares; PROVIDED, HOWEVER, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase
LOAN AND SECURITY AGREEMENT - Page 86
price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is
required to pay interest in connection with the recovery of the excess
payment.
Section 14.14 AGENCY FOR PERFECTION. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC can be
perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent or otherwise deal with such Collateral in accordance with the Agent's
instructions.
Section 14.15 PAYMENTS BY THE AGENT TO THE LENDERS. All payments to be
made by the Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, in the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest on the Revolving Loans or otherwise.
Section 14.16 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS.
Each Lender authorizes and directs the Agent to enter into this Agreement and
the other Loan Documents for the benefit and obligation of the Agent and the
Lenders. Each Lender agrees that any action taken by the Agent or the Majority
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents, and the exercise by the Agent or the Majority Lenders, as
applicable, of their respective powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
Section 14.17 FIELD AUDIT AND EXAMINATION REPORTS; DISCLAIMER BY
LENDERS. By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit
or examination report (each a "REPORT" and collectively, "REPORTS")
prepared by the Agent;
(b) expressly agrees and acknowledges that neither the Bank
nor the Agent (i) makes any representation or warranty as to the
accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent, the Bank, or
other party performing any audit or examination will inspect only
specific information regarding the Borrower and will rely significantly
upon the Borrower's books and records, as well as on representations of
the Borrower's personnel;
LOAN AND SECURITY AGREEMENT - Page 87
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants, or
use any Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold the Agent and any such other Lender preparing a Report harmless
from any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection
with any loans or other credit accommodations that the indemnifying
Lender has made or may make to the Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a
loan or loans of the Borrower; and (ii) to pay and protect, and
indemnify, defend, and hold the Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including
Attorney Costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the
indemnifying Lender.
Section 14.18 RELATION AMONG LENDERS. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
ARTICLE 15
MISCELLANEOUS
Section 15.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against any Person liable therefor to collect the Obligations without
any prior recourse to the Collateral. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power, or
privilege hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power, or privilege.
Section 15.2 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement, any Loan Document, or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
LOAN AND SECURITY AGREEMENT - Page 88
Section 15.3 GOVERNING LAW; CHOICE OF FORUM.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED
THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE
EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN
ARTICLE 9 OF THE UCC) OF THE STATE OF TEXAS; PROVIDED THAT THE AGENT
AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE XXXXX XX XXXXX XX XX XXX XXXXXX XXXXXX FOR THE NORTHERN DISTRICT OF
TEXAS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
BORROWER, THE AGENT, AND THE LENDERS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE BORROWER, THE AGENT, AND THE LENDERS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED
HERETO. NOTWITHSTANDING THE FOREGOING (i) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE
AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE
ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (ii) EACH
OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS
DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
Section 15.4 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LENDERS,
AND THE AGENT IRREVOCABLY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT, OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. EACH OF THE BORROWER, THE LENDERS, AND THE AGENT AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
LOAN AND SECURITY AGREEMENT - Page 89
ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 15.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Borrower contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
Section 15.6 OTHER SECURITY AND GUARANTIES. The Agent, may, without
notice or demand and without affecting the Borrower's obligations hereunder,
from time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce, or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
Section 15.7 FEES AND EXPENSES. The Borrower agrees to pay to the
Agent, for its benefit, on demand, all costs and expenses that the Agent pays or
incurs in connection with the negotiation, preparation, syndication,
consummation, administration, enforcement, and termination of this Agreement or
any of the other Loan Documents, including: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and
expenses of lien and title searches and title insurance; (d) taxes, fees, and
other charges for filing financing statements and continuations, and other
actions to perfect, protect, and continue the Agent's Liens (including costs and
expenses paid or incurred by the Agent in connection with the consummation of
this Agreement); (e) sums paid or incurred to pay any amount or take any action
required of the Borrower under the Loan Documents that the Borrower fails to pay
or take; (f) costs of appraisals, inspections, and verifications of the
Collateral, including travel, lodging, and meals for inspections of the
Collateral and the Borrower's operations by the Agent plus the Agent's then
customary charge for field examinations and audits and the preparation of
reports thereof (such charge is currently $650 per day (or portion thereof) for
each agent or employee of the Agent with respect to each field examination or
audit); (g) costs and expenses of forwarding loan proceeds, collecting checks,
and other items of payment, and establishing and maintaining Payment Accounts
and lock boxes; (h) costs and expenses of preserving and protecting the
Collateral; and (i) costs and expenses (including Attorney Costs) paid or
incurred to obtain payment of the Obligations, enforce the Agent's Liens, sell
or otherwise realize upon the Collateral, and otherwise enforce the provisions
of the Loan Documents, or to defend any claims made or threatened against the
Agent or any Lender arising out of the transactions contemplated hereby
(including preparations for and consultations concerning any such matters). The
foregoing shall not be construed to limit any other provisions of the Loan
Documents
LOAN AND SECURITY AGREEMENT - Page 90
regarding costs and expenses to be paid by the Borrower. All of the foregoing
costs and expenses shall be charged to the Loan Account as Revolving Loans as
described in SECTION 4.5.
Section 15.8 NOTICES. Except as otherwise provided herein, all notices,
demands, and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
IF TO THE AGENT OR TO THE BANK:
Bank of America, National Association
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Commercial Finance Business Credit/Regional
Manager: URGENT
Telecopy No.: 000-000-0000
WITH A COPY TO:
Jenkens & Xxxxxxxxx, P.C.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy No.: 000-000-0000
IF TO THE BORROWER:
Metals Receivables Corporation
Xxxxx Xxxxxxxx, Xxxxx, 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy No.: 000-000-0000
WITH A COPY TO:
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxx
Telecopy No.: 000-000-0000
LOAN AND SECURITY AGREEMENT - Page 91
or to such other address as each party may designate for itself by like
notice. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration, or other communication to the persons
designated above to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval,
declaration, or other communication.
Section 15.9 WAIVER OF NOTICES. Unless otherwise expressly provided
herein, the Borrower waives presentment, notice of demand or dishonor, and
protest as to any instrument, notice of intent to accelerate the Obligations,
and notice of acceleration of the Obligations, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on
the Borrower which the Agent or any Lender may elect to give shall entitle
the Borrower to any or further notice or demand in the same, similar, or
other circumstances.
Section 15.10 BINDING EFFECT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; PROVIDED, HOWEVER, that no
interest herein may be assigned by the Borrower without the prior written
consent of the Agent and each Lender. The rights and benefits of the Agent
and the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.
Section 15.11 INDEMNITY OF THE AGENT AND THE LENDERS BY THE BORROWER.
(a) THE BORROWER AGREES TO DEFEND, INDEMNIFY, AND HOLD THE
AGENT-RELATED PERSONS AND EACH LENDER AND EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, AGENTS, AND ATTORNEYS-IN-FACT
(EACH, AN "INDEMNIFIED PERSON") HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES, AND DISBURSEMENTS
(INCLUDING ATTORNEY COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE REVOLVING
LOANS AND THE TERMINATION, RESIGNATION, OR REPLACEMENT OF THE AGENT OR
REPLACEMENT OF ANY LENDER) BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST ANY SUCH PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, OR THE
TRANSACTIONS CONTEMPLATED HEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY
SUCH PERSON UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING
WITH RESPECT TO ANY INVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING
ANY INSOLVENCY PROCEEDING OR APPELLATE PROCEEDING) RELATED TO OR
ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE
REVOLVING LOANS OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY
INDEMNIFIED PERSON IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY,
THE "INDEMNIFIED LIABILITIES"); PROVIDED THAT THE BORROWER SHALL HAVE
NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED
LOAN AND SECURITY AGREEMENT - Page 92
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES RESULTING SOLELY FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON.
THE AGREEMENTS IN THIS SECTION 15.11 SHALL SURVIVE PAYMENT OF ALL
OTHER OBLIGATIONS.
(b) THE BORROWER AGREES TO INDEMNIFY, DEFEND, AND HOLD
HARMLESS THE AGENT AND THE LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY
OR INDIRECTLY ARISING OUT OF THE USE, GENERATION, MANUFACTURE,
PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL,
OR PRESENCE OF A HAZARDOUS SUBSTANCE RELATING TO THE BORROWER'S
OPERATIONS, BUSINESS, OR PROPERTY. THIS INDEMNITY WILL APPLY WHETHER
THE HAZARDOUS SUBSTANCE IS ON, UNDER, OR ABOUT THE BORROWER'S PROPERTY
OR OPERATIONS OR PROPERTY LEASED TO THE BORROWER. THE INDEMNITY
INCLUDES BUT IS NOT LIMITED TO ATTORNEY COSTS. THE INDEMNITY EXTENDS TO
THE AGENT AND THE LENDERS, THEIR PARENTS, AFFILIATES, SUBSIDIARIES, AND
ALL OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS,
ATTORNEYS, AND ASSIGNS. "HAZARDOUS SUBSTANCES" MEANS ANY SUBSTANCE,
MATERIAL, OR WASTE THAT IS OR BECOMES DESIGNATED OR REGULATED AS
"TOXIC," "HAZARDOUS," "POLLUTANT," OR "CONTAMINANT" OR A SIMILAR
DESIGNATION OR REGULATION UNDER ANY FEDERAL, STATE, OR LOCAL LAW
(WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR OTHERWISE) OR
JUDICIAL OR ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING PETROLEUM
OR NATURAL GAS. THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL OTHER
OBLIGATIONS.
Section 15.12 LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE
BORROWER, ANY LENDER, OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND
THE BORROWER AND EACH LENDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO XXX UPON
ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
Section 15.13 FINAL AGREEMENT. This Agreement and the other Loan
Documents are intended by the Borrower, the Agent, and the Lenders to be the
final, complete, and exclusive expression of the agreement between them. This
Agreement and the other Loan Documents supersede any and all prior oral or
written agreements relating to the subject matter hereof and thereof. No
modification, rescission, waiver, release, or amendment of any provision of this
Agreement or any other Loan Document shall be made, except by a written
agreement signed by the Borrower and a duly authorized officer of each of the
Agent and the requisite Lenders.
LOAN AND SECURITY AGREEMENT - Page 93
THIS WRITTEN LOAN AND SECURITY AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 15.14 COUNTERPARTS. This Agreement and the other Loan Documents
may be executed in any number of counterparts, and by the Agent, each Lender,
and the Borrower in separate counterparts, each of which shall be an original,
but all of which shall together constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document, and a telecopy of any such executed signature page shall be valid
as an original.
Section 15.15 CAPTIONS. The captions contained in this Agreement and
the other Loan Documents are for convenience of reference only, are without
substantive meaning and should not be construed to modify, enlarge, or restrict
any provision.
Section 15.16 RIGHT OF SET-OFF. In addition to any rights and remedies
of the Lenders provided by law, if an Event of Default exists or the Revolving
Loans have been accelerated, each Lender is authorized at any time and from time
to time, without prior notice to the Borrower, any such notice being waived by
the Borrower to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Lender to or
for the credit or the account of the Borrower against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY
OF THE BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN
CONSENT OF THE AGENT.
[Remainder of page intentionally left blank]
LOAN AND SECURITY AGREEMENT - Page 94
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
BORROWER:
METALS RECEIVABLES CORPORATION
By:
-------------------------------
Xxxxx X. Xxxxxxx
Vice President
AGENT:
BANK OF AMERICA, NATIONAL
ASSOCIATION
By:
--------------------------
Xxx Xxxx
Senior Vice President
LENDERS:
COMMITMENT: $50,000,000 BANK OF AMERICA, NATIONAL
ASSOCIATION
By:
---------------------------
Xxx Xxxx
Senior Vice President
COMMITMENT: $50,000,000 PNC BANK, NATIONAL ASSOCIATION
By:
----------------------------
Xxxxxxx X. Xxxxx
Vice President
SCHEDULE 1.1
PERMITTED INVESTMENTS
NONE
SCHEDULE 6.3
CHIEF EXECUTIVE OFFICE; LOCATION OF COLLATERAL
Xxxxx Xxxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
SCHEDULE 8.3
ORGANIZATION AND QUALIFICATION
State of Incorporation: Delaware
Sole state of qualification: Texas
SCHEDULE 8.5
CAPITAL STOCK
NONE
SCHEDULE 8.12
TRADE NAMES
NONE
SCHEDULE 8.24
MATERIAL AGREEMENTS
Receivables Purchase Agreement dated as of March 12, 2001 among Metals
Receivables Corporation, as Buyer, and each of Metals USA Specialty Metals
Northcentral, Inc., Metals USA Plates and Shapes Southeast, Inc., Metals USA
Plates and Shapes Southcentral, Inc., Metals USA Carbon Flat Rolled, Inc. and
Metals USA Plates and Shapes, Southwest, Limited Partnership, as Originators
SCHEDULE 8.25
BANK ACCOUNTS; MERCHANT ACCOUNTS
