1
EXHIBIT (4)(a)
--------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of December 29, 2000
among
LACLEDE STEEL COMPANY and,
LACLEDE CHAIN MANUFACTURING COMPANY
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
XXXXXX FINANCIAL, INC.
as Co-Agent and Lender,
CONGRESS FINANCIAL CORPORATION (CENTRAL),
as Co-Agent and Lender
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT....................................................
1.1 Credit Facilities....................................................
1.2 Letters of Credit....................................................
1.3 Prepayments..........................................................
1.4 Use of Proceeds......................................................
1.5 Interest and Applicable Margins......................................
1.6 Eligible Accounts....................................................
1.7 Eligible Inventory...................................................
1.8 Cash Management Systems..............................................
1.9 Fees.................................................................
1.10 Receipt of Payments..................................................
1.11 Application and Allocation of Payments...............................
1.12 Loan Account and Accounting..........................................
1.13 Indemnity............................................................
1.14 Access...............................................................
1.15 Taxes................................................................
1.16 Capital Adequacy; Increased Costs; Illegality........................
1.17 Single Loan..........................................................
2. CONDITIONS PRECEDENT..........................................................
2.1 Conditions to the Initial Loans......................................
2.2 Further Conditions to Each Loan......................................
3. REPRESENTATIONS AND WARRANTIES................................................
3.1 Corporate Existence; Compliance with Law.............................
3.2 Executive Offices, Collateral Locations, FEIN........................
3.3 Corporate Power, Authorization, Enforceable Obligations..............
3.4 Financial Statements and Projections.................................
3.5 Material Adverse Effect..............................................
3.6 Ownership of Property; Liens.........................................
3.7 Labor Matters........................................................
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness.....................................................
3.9 Government Regulation................................................
3.10 Margin Regulations...................................................
3.11 Taxes................................................................
3.12 ERISA................................................................
3.13 No Litigation........................................................
3.14 Brokers..............................................................
3.15 Intellectual Property................................................
3.16 Full Disclosure......................................................
3.17 Environmental Matters................................................
3.18 Insurance............................................................
3.19 Deposit and Disbursement Accounts....................................
3.20 Government Contracts.................................................
3.21 Customer and Trade Relations.........................................
2
3
Page
----
3.22 Agreements and Other Documents.......................................
3.23 Solvency.............................................................
3.24 Subordinated Debt....................................................
4. FINANCIAL STATEMENTS AND INFORMATION..........................................
4.1 Reports and Notices..................................................
4.2 Communication with Accountants.......................................
5. AFFIRMATIVE COVENANTS.........................................................
5.1 Maintenance of Existence and Conduct of Business.....................
5.2 Payment of Charges...................................................
5.3 Books and Records....................................................
5.4 Insurance; Damage to or Destruction of Collateral....................
5.5 Compliance with Laws.................................................
5.6 Supplemental Disclosure..............................................
5.7 Intellectual Property................................................
5.8 Environmental Matters................................................
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases............................................
5.10 Further Assurances...................................................
6. NEGATIVE COVENANTS............................................................
6.1 Mergers, Subsidiaries, Etc...........................................
6.2 Investments; Loans and Advances......................................
6.3 Indebtedness.........................................................
6.4 Employee Loans and Affiliate Transactions............................
6.5 Capital Structure and Business.......................................
6.6 Guaranteed Indebtedness..............................................
6.7 Liens................................................................
6.8 Sale of Stock and Assets.............................................
6.9 ERISA................................................................
6.10 Financial Covenants..................................................
6.11 Hazardous Materials..................................................
6.12 Sale-Leasebacks......................................................
6.13 Cancellation of Indebtedness.........................................
6.14 Restricted Payments..................................................
6.15 Change of Corporate Name or Location; Change of Fiscal Year..........
6.16 No Impairment of Intercompany Transfers..............................
6.17 No Speculative Transactions..........................................
6.18 Leases; Real Estate Purchases........................................
6.19 Changes Relating to Subordinated Debt; Material Contracts............
6.20 Credit Parties Other Than Borrower...................................
7. TERM..........................................................................
7.1 Termination..........................................................
7.2 Survival of Obligations Upon Termination of Financing Arrangements...
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES........................................
8.1 Events of Default....................................................
3
4
Page
----
8.2 Remedies.............................................................
8.3 Waivers by Credit Parties............................................
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...........................
9.1 Assignment and Participations........................................
9.2 Appointment of Agent.................................................
9.3 Agent's Reliance, Etc................................................
9.4 GE Capital and Affiliates............................................
9.5 Lender Credit Decision...............................................
9.6 Indemnification......................................................
9.7 Successor Agent......................................................
9.8 Setoff and Sharing of Payments.......................................
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert...........................................................
9.10 Co-Agents............................................................
10. SUCCESSORS AND ASSIGNS........................................................
10.1 Successors and Assigns...............................................
11. MISCELLANEOUS.................................................................
11.1 Complete Agreement; Modification of Agreement........................
11.2 Amendments and Waivers...............................................
11.3 Fees and Expenses....................................................
11.4 No Waiver............................................................
11.5 Remedies.............................................................
11.6 Severability.........................................................
11.7 Conflict of Terms....................................................
11.8 Confidentiality......................................................
11.9 GOVERNING LAW........................................................
11.10 Notices..............................................................
11.11 Section Titles.......................................................
11.12 Counterparts.........................................................
11.13 WAIVER OF JURY TRIAL.................................................
11.14 Press Releases and Related Matters...................................
11.15 Reinstatement........................................................
11.16 Advice of Counsel....................................................
11.17 No Strict Construction...............................................
12. CROSS-GUARANTY................................................................
12.1 Cross-Guaranty.......................................................
12.2 Waivers by Borrowers.................................................
12.3 Benefit of Guaranty..................................................
12.4 Subordination of Subrogation, Etc....................................
12.5 Election of Remedies.................................................
12.6 Limitation...........................................................
12.7 Contribution with Respect to Guaranty Obligations....................
12.8 Liability Cumulative.................................................
4
5
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) - Commitments as of Closing Date
Annex K (from Annex A -
Identified Projects definition) - Identified Projects
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(i) - Form of Term Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 - Application for Documentary Letter of Credit
Exhibit B-3 - Application and Agreement for Documentary Letter
of Credit
Schedule 1.1 - Agent's Representatives
Schedule 1.1(b) - Ratable Shares of each Borrower
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(A) - Financial Statements
Disclosure Schedule 3.4(B) - Pro Forma
Disclosure Schedule 3.4(C) - Projections
Disclosure Schedule 3.5 - Material Adverse Effect
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
5
6
EXHIBIT A
This CREDIT AGREEMENT (this "Agreement"), dated as of December 29, 2000 among
Laclede Steel Company, a Delaware corporation ("Laclede Steel"), and Laclede
Chain Manufacturing Company, a Delaware corporation ("Laclede Chain") and
(Laclede Steel and Laclede Chain are sometimes collectively referred to herein
as the "Borrowers" and individually as a "Borrower"); the other Credit Parties
signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
(in its individual capacity, "GE Capital"), for itself, as Lender, and as Agent
for Lenders, Xxxxxx Financial, Inc., for itself, as Lender, and as Co-Agent,
Congress Financial Corporation (Central), for itself, as Lender, and as
Co-Agent, and the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrowers have requested that Lenders extend revolving and term credit
facilities to Borrowers of up to Sixty-One Million Five Hundred Thousand Dollars
($61,500,000) in the aggregate for the purpose of refinancing certain
indebtedness of Borrowers and to provide (a) working capital financing for
Borrowers, (b) funds for other general corporate purposes of Borrowers and (c)
funds for other purposes permitted hereunder; and for these purposes, Lenders
are willing to make certain loans and other extensions of credit to Borrowers of
up to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrowers have agreed to secure all of their obligations under the Loan
Documents by granting to Agent, for the benefit of Agent and Lenders, a security
interest in and lien upon all of their existing and after-acquired personal and
real property; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Disclosure Schedules, Exhibits and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
AMOUNT AND TERMS OF CREDIT
Credit Facilities.
REVOLVING CREDIT FACILITY.
Subject to the terms and conditions hereof, each Revolving Lender agrees to make
available to Borrowers from time to time until the Commitment Termination Date
its Pro Rata Share of advances (each, a "Revolving Credit Advance"). The Pro
Rata Share of the Revolving Loan of any Revolving Lender shall not at any time
exceed its separate Revolving Loan Commitment. The obligations of each Revolving
Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrowers may borrow, repay and reborrow under this
2
7
Section 1.1(a); provided that the amount of any Revolving Credit Advance to be
made at any time shall not exceed Borrowing Availability at such time. Borrowing
Availability may be reduced by Reserves imposed by Agent in its reasonable
credit judgment. Moreover, the sum of the Revolving Loan and Swing Line Loan
outstanding to any Borrower shall not exceed at any time that Borrower's
separate Borrowing Base. Each Revolving Credit Advance shall be made on notice
by Borrower Representative on behalf of the applicable Borrower to one of the
representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than (1) 11:00 a.m. (Chicago
time) on the Business Day of the proposed Revolving Credit Advance, in the case
of an Index Rate Loan, or (2) 11:00 a.m. (Chicago time) on the date which is 3
Business Days prior to the proposed Revolving Credit Advance, in the case of a
LIBOR Loan. Each such notice (a "Notice of Revolving Credit Advance") must be
given in writing (by telecopy or overnight courier) substantially in the form of
Exhibit 1.1(a)(i), and shall include the information required in such Exhibit
and such other information as may be required by Agent. If any Borrower desires
to have the Revolving Credit Advances bear interest by reference to a LIBOR
Rate, Borrower Representative must comply with Section 1.5(e).
Except as provided in Section 1.12, each Borrower shall execute and deliver to
each Revolving Lender a note to evidence the Revolving Loan Commitment of that
Revolving Lender. Each note shall be in the principal amount of the Revolving
Loan Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
obligation of the applicable Borrower to pay the amount of the applicable
Revolving Lender's Revolving Loan Commitment or, if less, such Revolving
Lender's Pro Rata Share of the aggregate unpaid principal amount of all
Revolving Credit Advances to such Borrower together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the aggregate Revolving
Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date. Anything in this Agreement to the contrary notwithstanding, at the request
of Borrower Representative, in its discretion Agent may (but shall have
absolutely no obligation to), make Revolving Credit Advances to Borrowers on
behalf of Revolving Lenders in amounts that cause the outstanding balance of the
aggregate Revolving Loan to exceed the Aggregate Borrowing Base (less the Swing
Line Loan) or which cause the outstanding balance of the Revolving Loan owing by
any Borrower to exceed that Borrower's separate Borrowing Base (less the Swing
Line Loan advanced to that Borrower) (any such excess Revolving Credit Advances
are herein referred to collectively as "Overadvances"); provided that (A) no
such event or occurrence shall cause or constitute a waiver of Agent's, Swing
Line Lender's or Revolving Lenders' right to refuse to make any further
Overadvances, Swing Line Advances or Revolving Credit Advances, or incur any
Letter of Credit Obligations, as the case may be, at any time that an
Overadvance exists, and (B) no Overadvance shall result in a Default or Event of
Default based on Borrowers' failure to comply with Section 1.3(b)(i) for so long
as Agent permits such Overadvance to be outstanding, but solely with respect to
the amount of such Overadvance. In addition, Overadvances may be made even if
the conditions to lending set forth in Section 2 have not been met. All
Overadvances shall constitute Index Rate Loans, shall bear interest at the
Default Rate and shall be payable on demand. Except as otherwise provided in
Section 1.11(b), the authority of Agent to make Overadvances is limited to an
aggregate amount not to exceed $1,500,000 at any time. Such Overadvances shall
not cause the aggregate Revolving Loan to exceed the
3
8
Maximum Amount, and may be revoked prospectively by a written notice to Agent
signed by Revolving Lenders holding more than 50% of the Revolving Loan
Commitments.
TERM LOAN.
Subject to the terms and conditions hereof, each Term Lender agrees to make a
term loan (the "Term Loan") on the Closing Date to Laclede Steel in the amount
of the applicable Term Lender's Term Loan Commitment. The obligations of each
Term Lender hereunder shall be several and not joint. Each such Term Loan shall
be evidenced by a promissory note substantially in the form of Exhibit 1.1(b)(i)
(each a "Term Note" and collectively the "Term Notes"), and, except as provided
in Section 1.12, Laclede Steel shall execute and deliver a Term Note to each
Term Lender. Each Term Note shall represent the obligation of Laclede Steel to
pay the applicable Term Lender's Term Loan Commitment, together with interest
thereon as prescribed in Section 1.5. The aggregate principal amount of the Term
Loan advanced to Laclede Steel shall be the primary obligation of Laclede Steel
(but shall also be guaranteed by the other Borrower pursuant to Section 12).
Laclede Steel shall repay the Term Loan in eleven (11) consecutive quarterly
installments on the first day of March, June, September and December of each
year, commencing March 1, 2001, as follows:
Payment Installment
Dates Amounts
------- -----------
March 1, 2001 $325,000
June 1, 2001 $325,000
September 1, 2001 $325,000
December 1, 2001 $325,000
March 1, 2002 $325,000
June 1, 2002 $325,000
September 1, 2002 $325,000
December 1, 2002 $325,000
March 1, 2003 $325,000
June 1, 2003 $325,000
September 1, 2003 $325,000
The final installment due on December 29, 2003 shall be in the amount of
$2,925,000 or, if different, the remaining principal balance of the Term Loan.
(3) Notwithstanding Section 1.1(b)(ii), the aggregate outstanding principal
balance of the Term Loan shall be due and payable in full in immediately
available funds on the Commitment Termination Date, if not sooner paid in full.
No payment with respect to the Term Loan may be reborrowed.
(4) Each payment of principal with respect to the Term Loan shall be paid
to Agent for the ratable benefit of each Term Lender making a Term Loan, ratably
in proportion to each such Term Lender's respective Term Loan Commitment.
SWING LINE FACILITY.
Agent shall notify the Swing Line Lender upon Agent's receipt of any Notice of
Revolving Credit Advance. Subject to the terms and conditions hereof, the Swing
Line Lender may, in its
4
9
discretion, make available from time to time until the Commitment Termination
Date advances (each, a "Swing Line Advance") in accordance with any such notice.
The provisions of this Section 1.1(c) shall not relieve Revolving Lenders of
their obligations to make Revolving Credit Advances under Section 1.1(a);
provided that if the Swing Line Lender makes a Swing Line Advance pursuant to
any such notice, such Swing Line Advance shall be in lieu of any Revolving
Credit Advance that otherwise may be made by Revolving Credit Lenders pursuant
to such notice. The aggregate amount of Swing Line Advances outstanding shall
not exceed at any time the lesser of (A) the Swing Line Commitment and (B) the
lesser of the Maximum Amount and (except for Overadvances) the Aggregate
Borrowing Base, in each case, less the outstanding balance of the Revolving Loan
at such time ("Swing Line Availability"). Moreover, except for Overadvances, the
Swing Line Loan outstanding to any Borrower shall not exceed at any time that
Borrower's separate Borrowing Base less the Revolving Loan outstanding to such
Borrower. Until the Commitment Termination Date, Borrowers may from time to time
borrow, repay and reborrow under this Section 1.1(c). Each Swing Line Advance
shall be made pursuant to a Notice of Revolving Credit Advance delivered to
Agent by Borrower Representative on behalf of the applicable Borrower in
accordance with Section 1.1(a). Any such notice must be given no later than
11:00 a.m. (Chicago time) on the Business Day of the proposed Swing Line
Advance. Unless the Swing Line Lender has received at least one Business Day's
prior written notice from Requisite Revolving Lenders instructing it not to make
a Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure
of any condition precedent set forth in Sections 2.2, be entitled to fund that
Swing Line Advance, and to have each Revolving Lender make Revolving Credit
Advances in accordance with Section 1.1(c)(iii) or purchase participating
interests in accordance with Section 1.1(c)(iv). Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. Borrowers shall repay the aggregate
outstanding principal amount of the Swing Line Loan upon demand therefor by
Agent.
Each Borrower shall execute and deliver to the Swing Line Lender a promissory
note to evidence the Swing Line Commitment. Each note shall be in the principal
amount of the Swing Line Commitment of the Swing Line Lender, dated the Closing
Date and substantially in the form of Exhibit 1.1(c)(ii) (each a "Swing Line
Note" and, collectively, the "Swing Line Notes"). Each Swing Line Note shall
represent the obligation of each Borrower to pay the amount of the Swing Line
Commitment or, if less, the aggregate unpaid principal amount of all Swing Line
Advances made to such Borrower together with interest thereon as prescribed in
Section 1.5. The entire unpaid balance of the Swing Line Loan and all other
noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.
The Swing Line Lender, at any time and from time to time in its sole and
absolute discretion, but not less frequently than weekly, shall on behalf of any
Borrower (and each Borrower hereby irrevocably authorizes the Swing Line Lender
to so act on its behalf) request each Revolving Lender (including the Swing Line
Lender) to make a Revolving Credit Advance to each Borrower (which shall be an
Index Rate Loan) in an amount equal to that Revolving Lender's Pro Rata Share of
the principal amount of the applicable Borrower's Swing Line Loan (the "Refunded
Swing Line Loan") outstanding on the date such notice is given. Unless any of
the events described in Sections 8.1(h) or 8.1(i) has occurred (in which event
the procedures of Section 1.1(c)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving
5
10
Lender shall disburse directly to Agent, its Pro Rata Share of a Revolving
Credit Advance on behalf of the Swing Line Lender prior to 2:00 p.m. (Chicago
time) in immediately available funds on the Business Day next succeeding the
date that notice is given. The proceeds of those Revolving Credit Advances shall
be immediately paid to the Swing Line Lender and applied to repay the Refunded
Swing Line Loan of the applicable Borrower. If, prior to refunding a Swing Line
Loan with a Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the
events described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made for the benefit of the
applicable Borrower, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan to such Borrower in an amount
equal to its Pro Rata Share of such Swing Line Loan. Upon request, each
Revolving Lender shall promptly transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation interest. Each
Revolving Lender's obligation to make Revolving Credit Advances in accordance
with Section 1.1(c)(iii) and to purchase participation interests in accordance
with Section 1.1(c)(iv) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right that such Revolving Lender may have against
the Swing Line Lender, any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of any Borrower to satisfy the conditions precedent
to borrowing set forth in this Agreement at any time or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Revolving Lender does not make available to Agent or the
Swing Line Lender, as applicable, the amount required pursuant to Sections
1.1(c)(iii) or 1.1(c)(iv), as the case may be, the Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender, together
with interest thereon for each day from the date of non-payment until such
amount is paid in full at the Federal Funds Rate for the first two Business Days
and at the Index Rate thereafter.
RELIANCE ON NOTICES; APPOINTMENT OF BORROWER REPRESENTATIVE. AGENT SHALL BE
ENTITLED TO RELY UPON, AND SHALL BE FULLY PROTECTED IN RELYING UPON, ANY NOTICE
OF REVOLVING CREDIT ADVANCE, NOTICE OF CONVERSION/CONTINUATION OR SIMILAR NOTICE
BELIEVED BY AGENT TO BE GENUINE. AGENT MAY ASSUME THAT EACH PERSON EXECUTING AND
DELIVERING ANY NOTICE IN ACCORDANCE HEREWITH WAS DULY AUTHORIZED, UNLESS THE
RESPONSIBLE INDIVIDUAL ACTING THEREON FOR AGENT HAS ACTUAL KNOWLEDGE TO THE
CONTRARY. EACH BORROWER HEREBY DESIGNATES LACLEDE STEEL AS ITS REPRESENTATIVE
AND AGENT ON ITS BEHALF FOR THE PURPOSES OF ISSUING NOTICES OF REVOLVING CREDIT
ADVANCES AND NOTICES OF CONVERSION/CONTINUATION, GIVING INSTRUCTIONS WITH
RESPECT TO THE DISBURSEMENT OF THE PROCEEDS OF THE LOANS, SELECTING INTEREST
RATE OPTIONS, REQUESTING LETTERS OF CREDIT, GIVING AND RECEIVING ALL OTHER
NOTICES AND CONSENTS HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS AND
TAKING ALL OTHER ACTIONS (INCLUDING IN RESPECT OF COMPLIANCE WITH COVENANTS) ON
BEHALF OF ANY BORROWER OR BORROWERS UNDER THE LOAN DOCUMENTS. BORROWER
REPRESENTATIVE HEREBY ACCEPTS SUCH APPOINTMENT. AGENT AND EACH LENDER MAY REGARD
ANY NOTICE OR OTHER COMMUNICATION PURSUANT TO ANY LOAN DOCUMENT FROM BORROWER
REPRESENTATIVE AS A NOTICE OR COMMUNICATION FROM ALL BORROWERS, AND MAY GIVE
6
11
ANY NOTICE OR COMMUNICATION REQUIRED OR PERMITTED TO BE GIVEN TO ANY BORROWER OR
BORROWERS HEREUNDER TO BORROWER REPRESENTATIVE ON BEHALF OF SUCH BORROWER OR
BORROWERS. EACH BORROWER AGREES THAT EACH NOTICE, ELECTION, REPRESENTATION AND
WARRANTY, COVENANT, AGREEMENT AND UNDERTAKING MADE ON ITS BEHALF BY BORROWER
REPRESENTATIVE SHALL BE DEEMED FOR ALL PURPOSES TO HAVE BEEN MADE BY SUCH
BORROWER AND SHALL BE BINDING UPON AND ENFORCEABLE AGAINST SUCH BORROWER TO THE
SAME EXTENT AS IF THE SAME HAD BEEN MADE DIRECTLY BY SUCH BORROWER.
Letters of Credit. Subject to and in accordance with the terms and conditions
contained herein and in Annex B, Borrower Representative, on behalf of the
applicable Borrower, shall have the right to request, and Revolving Lenders
agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of each Borrower.
Prepayments.
(A) VOLUNTARY PREPAYMENTS. BORROWERS MAY AT ANY TIME ON AT LEAST 5
BUSINESS DAYS' PRIOR WRITTEN NOTICE BY BORROWER REPRESENTATIVE TO AGENT
VOLUNTARILY PREPAY ALL OR PART OF THE TERM LOAN; PROVIDED THAT ANY SUCH
PREPAYMENTS SHALL BE IN A MINIMUM AMOUNT OF $500,000 AND INTEGRAL MULTIPLES
OF $250,000 IN EXCESS OF SUCH AMOUNT. IN ADDITION, BORROWERS MAY AT ANY
TIME ON AT LEAST 10 BUSINESS DAYS' PRIOR WRITTEN NOTICE BY BORROWER
REPRESENTATIVE TO AGENT TERMINATE THE REVOLVING LOAN COMMITMENT; PROVIDED
THAT UPON SUCH TERMINATION, ALL LOANS AND OTHER OBLIGATIONS SHALL BE
IMMEDIATELY DUE AND PAYABLE IN FULL AND ALL LETTER OF CREDIT OBLIGATIONS
SHALL BE CASH COLLATERALIZED OR OTHERWISE SATISFIED IN ACCORDANCE WITH
ANNEX B. ANY SUCH VOLUNTARY PREPAYMENT AND ANY SUCH TERMINATION OF THE
REVOLVING LOAN COMMITMENT MUST BE ACCOMPANIED BY THE PAYMENT OF THE FEE
REQUIRED BY SECTION 1.9(C), IF ANY, PLUS THE PAYMENT OF ANY LIBOR FUNDING
BREAKAGE COSTS IN ACCORDANCE WITH SECTION 1.13(B). UPON ANY SUCH PREPAYMENT
AND TERMINATION OF THE REVOLVING LOAN COMMITMENT, EACH BORROWER'S RIGHT TO
REQUEST REVOLVING CREDIT ADVANCES, OR REQUEST THAT LETTER OF CREDIT
OBLIGATIONS BE INCURRED ON ITS BEHALF, OR REQUEST SWING LINE ADVANCES,
SHALL SIMULTANEOUSLY BE TERMINATED. ANY PARTIAL PREPAYMENTS OF THE TERM
LOAN SHALL BE APPLIED TO PREPAY THE SCHEDULED INSTALLMENTS OF THE TERM LOAN
IN INVERSE ORDER OF MATURITY.
(B) MANDATORY PREPAYMENTS.
If at any time the aggregate outstanding balances of the Revolving Loan and the
Swing Line Loan exceed the lesser of (A) the Maximum Amount and (B) the
Aggregate Borrowing Base, Borrowers shall immediately repay the aggregate
outstanding Revolving Credit Advances to the extent required to eliminate such
excess. If any such excess remains after repayment in full of the aggregate
outstanding Revolving Credit Advances, Borrowers shall provide cash collateral
for the Letter of Credit Obligations in the manner set forth in Annex B to the
extent required to eliminate such excess. Furthermore, if, at any time, the
outstanding balance of the Revolving Loan of any Borrower exceeds that
Borrower's separate Borrowing Base less the outstanding
7
12
balance of the Swing Line Loan of that Borrower, the applicable Borrower shall
immediately repay its Revolving Credit Advances in the amount of such excess
(and, if necessary, shall provide cash collateral for its Letter of Credit
Obligations as described above). Notwithstanding the foregoing, any Overadvance
made pursuant to Section 1.1(a)(iii) shall be repaid only on demand.
Immediately upon receipt by any Credit Party of proceeds of any asset
disposition (excluding proceeds of asset dispositions permitted by Section 6.8
(a)) or any sale of Stock of any Subsidiary of any Credit Party in excess of
$200,000 in the aggregate in any year, Borrowers shall prepay the Loans in an
amount equal to all such proceeds, net of (A) commissions and other reasonable
and customary transaction costs, fees and expenses properly attributable to such
transaction and payable by Borrowers in connection therewith (in each case, paid
to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if
any, and (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c).
If Laclede Steel issues Stock (other than Stock issued to employees or directors
of either Borrower), or receives any equity contributions to its capital, no
later than the Business Day following the date of receipt of the proceeds
thereof, Laclede Steel shall prepay the Loans in an amount equal to all such
proceeds, net of underwriting discounts and commissions and other reasonable
costs paid to non-Affiliates in connection therewith; provided, however, that
such proceeds need not be applied pursuant hereto to the extent, and only the
extent, the Lenders, in their sole discretion, have otherwise agreed. Any such
prepayment shall be applied in accordance with Section 1.3(c).
(C) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. ANY PREPAYMENTS MADE BY
ANY BORROWER PURSUANT TO SECTIONS 1.3(B)(II) OR (B)(III) ABOVE SHALL BE APPLIED
AS FOLLOWS: FIRST, TO FEES AND REIMBURSABLE EXPENSES OF AGENT THEN DUE AND
PAYABLE PURSUANT TO ANY OF THE LOAN DOCUMENTS; SECOND, IF SUCH PREPAYMENT IS
MADE BY LACLEDE STEEL, TO INTEREST THEN DUE AND PAYABLE ON THE TERM LOAN; THIRD,
IF SUCH PREPAYMENT IS MADE BY LACLEDE STEEL, TO PREPAY THE SCHEDULED PRINCIPAL
INSTALLMENTS OF THE TERM LOAN IN INVERSE ORDER OF MATURITY, UNTIL THE TERM LOAN
HAS BEEN PREPAID IN FULL; FOURTH, TO INTEREST THEN DUE AND PAYABLE ON THAT
BORROWER'S SWING LINE LOAN; FIFTH, TO THE PRINCIPAL BALANCE OF THE SWING LINE
LOAN OUTSTANDING TO THAT BORROWER UNTIL THE SAME HAS BEEN REPAID IN FULL; SIXTH,
TO INTEREST THEN DUE AND PAYABLE ON REVOLVING CREDIT ADVANCES MADE TO THAT
BORROWER; SEVENTH, TO THE PRINCIPAL BALANCE OF REVOLVING CREDIT ADVANCES
OUTSTANDING TO THAT BORROWER UNTIL THE SAME HAS BEEN PAID IN FULL; EIGHTH, TO
ANY LETTER OF CREDIT OBLIGATIONS OF SUCH BORROWER TO PROVIDE CASH COLLATERAL
THEREFOR IN THE MANNER SET FORTH IN ANNEX B, UNTIL ALL SUCH LETTER OF CREDIT
OBLIGATIONS HAVE BEEN FULLY CASH COLLATERALIZED IN THE MANNER SET FORTH IN ANNEX
B; NINTH, TO INTEREST DUE AND PAYABLE ON THE SWING LINE LOAN OF THE OTHER
BORROWER; TENTH, TO THE PRINCIPAL BALANCES OF THE SWING LINE LOAN OUTSTANDING TO
THE OTHER BORROWER, UNTIL THE SAME HAVE BEEN REPAID IN FULL; ELEVENTH, TO
INTEREST THEN DUE AND PAYABLE ON THE REVOLVING CREDIT ADVANCES OUTSTANDING TO
THE OTHER BORROWER; TWELFTH, TO THE PRINCIPAL BALANCE OF THE REVOLVING CREDIT
ADVANCES MADE TO THE OTHER
8
13
BORROWER, UNTIL THE SAME HAS BEEN PAID IN FULL, AND LAST TO ANY LETTER OF CREDIT
OBLIGATIONS OF THE OTHER BORROWER, TO PROVIDE CASH COLLATERAL THEREFOR IN THE
MANNER SET FORTH IN ANNEX B, UNTIL ALL SUCH LETTER OF CREDIT OBLIGATIONS HAVE
BEEN FULLY CASH COLLATERALIZED. NEITHER THE REVOLVING LOAN COMMITMENT NOR THE
SWING LINE COMMITMENT SHALL BE PERMANENTLY REDUCED BY THE AMOUNT OF ANY SUCH
PREPAYMENTS.
(D) APPLICATION OF PREPAYMENTS FROM INSURANCE AND CONDEMNATION PROCEEDS.
PREPAYMENTS FROM INSURANCE OR CONDEMNATION PROCEEDS IN ACCORDANCE WITH SECTION
5.4(C) AND THE MORTGAGE(S), RESPECTIVELY, SHALL BE APPLIED AS FOLLOWS: INSURANCE
PROCEEDS FROM CASUALTIES OR LOSSES TO CASH OR INVENTORY SHALL BE APPLIED, FIRST,
TO THE SWING LINE LOANS AND, SECOND, TO THE REVOLVING CREDIT ADVANCES OF THE
BORROWER THAT INCURRED SUCH CASUALTIES OR LOSSES; INSURANCE OR CONDEMNATION
PROCEEDS FROM CASUALTIES OR LOSSES TO EQUIPMENT, FIXTURES AND REAL ESTATE SHALL
BE APPLIED TO SCHEDULED INSTALLMENTS OF THE TERM LOAN OF THE BORROWER THAT
INCURRED SUCH CASUALTIES OR LOSSES IN INVERSE ORDER OF MATURITY. NEITHER THE
REVOLVING LOAN COMMITMENT NOR THE SWING LINE LOAN COMMITMENT SHALL BE
PERMANENTLY REDUCED BY THE AMOUNT OF ANY SUCH PREPAYMENTS. IF INSURANCE OR
CONDEMNATION PROCEEDS RECEIVED BY A PARTICULAR BORROWER EXCEED THE OUTSTANDING
PRINCIPAL BALANCES OF THE LOANS TO THAT BORROWER OR IF THE PRECISE AMOUNT OF
INSURANCE OR CONDEMNATION PROCEEDS ALLOCABLE TO INVENTORY AS COMPARED TO
EQUIPMENT, FIXTURES AND REAL ESTATE ARE NOT OTHERWISE DETERMINED, THE ALLOCATION
AND APPLICATION OF THOSE PROCEEDS SHALL BE DETERMINED BY AGENT, SUBJECT TO THE
APPROVAL OF REQUISITE LENDERS.
(E) NO IMPLIED CONSENT. NOTHING IN THIS SECTION 1.3 SHALL BE CONSTRUED TO
CONSTITUTE AGENT'S OR ANY LENDER'S CONSENT TO ANY TRANSACTION THAT IS NOT
PERMITTED BY OTHER PROVISIONS OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
Use of Proceeds. Borrowers shall utilize the proceeds of the Term Loan, the
Revolving Loan and the Swing Line Advances solely for the Refinancing (and to
pay any related transaction expenses), and for the financing of Borrowers'
ordinary working capital and general corporate needs. Disclosure Schedule (1.4)
contains a description of Borrowers' sources and uses of funds as of the Closing
Date, including Loans and Letter of Credit Obligations to be made or incurred on
that date, and a funds flow memorandum detailing how funds from each source are
to be transferred to particular uses.
Interest and Applicable Margins.
BORROWERS SHALL PAY INTEREST TO AGENT, FOR THE RATABLE BENEFIT OF LENDERS IN
ACCORDANCE WITH THE VARIOUS LOANS BEING MADE BY EACH LENDER, IN ARREARS ON EACH
APPLICABLE INTEREST PAYMENT DATE, AT THE FOLLOWING RATES: (I) WITH RESPECT TO
THE REVOLVING CREDIT ADVANCES, THE INDEX RATE PLUS THE APPLICABLE REVOLVER INDEX
MARGIN PER ANNUM OR, AT THE ELECTION OF BORROWER REPRESENTATIVE, THE APPLICABLE
LIBOR RATE PLUS THE APPLICABLE REVOLVER LIBOR MARGIN PER ANNUM, BASED ON THE
AGGREGATE REVOLVING CREDIT ADVANCES OUTSTANDING FROM TIME TO TIME; (II) WITH
9
14
RESPECT TO THE TERM LOAN, THE INDEX RATE PLUS THE APPLICABLE TERM LOAN INDEX
MARGIN PER ANNUM OR, AT THE ELECTION OF BORROWER REPRESENTATIVE, THE APPLICABLE
LIBOR RATE PLUS THE APPLICABLE TERM LOAN LIBOR MARGIN PER ANNUM; AND (III) WITH
RESPECT TO THE SWING LINE LOAN, THE INDEX RATE PLUS THE APPLICABLE REVOLVER
INDEX MARGIN PER ANNUM.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 1.50%
Applicable Revolver LIBOR Margin 3.00%
Applicable Term Loan Index Margin 2.50%
Applicable Term Loan LIBOR Margin 5.00%
Applicable L/C Margin 3.00%
Applicable Unused Line Fee Margin 0.50%
10
15
IF ANY PAYMENT ON ANY LOAN BECOMES DUE AND PAYABLE ON A DAY OTHER THAN A
BUSINESS DAY, THE MATURITY THEREOF WILL BE EXTENDED TO THE NEXT SUCCEEDING
BUSINESS DAY (EXCEPT AS SET FORTH IN THE DEFINITION OF LIBOR PERIOD) AND, WITH
RESPECT TO PAYMENTS OF PRINCIPAL, INTEREST THEREON SHALL BE PAYABLE AT THE THEN
APPLICABLE RATE DURING SUCH EXTENSION.
ALL COMPUTATIONS OF FEES CALCULATED ON A PER ANNUM BASIS AND INTEREST SHALL BE
MADE BY AGENT ON THE BASIS OF A 360-DAY YEAR, IN EACH CASE FOR THE ACTUAL NUMBER
OF DAYS OCCURRING IN THE PERIOD FOR WHICH SUCH INTEREST AND FEES ARE PAYABLE.
THE INDEX RATE IS A FLOATING RATE DETERMINED FOR EACH DAY. EACH DETERMINATION BY
AGENT OF AN INTEREST RATE AND FEES HEREUNDER SHALL BE FINAL, BINDING AND
CONCLUSIVE ON BORROWERS, ABSENT MANIFEST ERROR.
SO LONG AS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING UNDER SECTION
8.1(A), (H) OR (I) OR SO LONG AS ANY OTHER EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING AND AT THE ELECTION OF AGENT (OR UPON THE WRITTEN REQUEST OF
REQUISITE LENDERS) CONFIRMED BY WRITTEN NOTICE FROM AGENT TO BORROWER
REPRESENTATIVE, THE INTEREST RATES APPLICABLE TO THE LOANS AND THE LETTER OF
CREDIT FEES SHALL BE INCREASED BY TWO PERCENTAGE POINTS (2%) PER ANNUM ABOVE THE
RATES OF INTEREST OR THE RATE OF SUCH FEES OTHERWISE APPLICABLE HEREUNDER
("DEFAULT RATE"), AND ALL OUTSTANDING OBLIGATIONS SHALL BEAR INTEREST AT THE
DEFAULT RATE APPLICABLE TO SUCH OBLIGATIONS. INTEREST AND LETTER OF CREDIT FEES
AT THE DEFAULT RATE SHALL ACCRUE FROM THE INITIAL DATE OF SUCH EVENT OF DEFAULT
UNTIL THAT EVENT OF DEFAULT IS CURED OR WAIVED AND SHALL BE PAYABLE UPON DEMAND.
SUBJECT TO THE CONDITIONS PRECEDENT SET FORTH IN SECTION 2.2, BORROWER
REPRESENTATIVE SHALL HAVE THE OPTION TO (I) REQUEST THAT ANY REVOLVING CREDIT
ADVANCE BE MADE AS A LIBOR LOAN, (II) CONVERT AT ANY TIME ALL OR ANY PART OF
OUTSTANDING LOANS (OTHER THAN THE SWING LINE LOAN) FROM INDEX RATE LOANS TO
LIBOR LOANS, (III) CONVERT ANY LIBOR LOAN TO AN INDEX RATE LOAN, SUBJECT TO
PAYMENT OF LIBOR BREAKAGE COSTS IN ACCORDANCE WITH SECTION 1.13(B) IF SUCH
CONVERSION IS MADE PRIOR TO THE EXPIRATION OF THE LIBOR PERIOD APPLICABLE
THERETO, OR (IV) CONTINUE ALL OR ANY PORTION OF ANY LOAN (OTHER THAN THE SWING
LINE LOAN) AS A LIBOR LOAN UPON THE EXPIRATION OF THE APPLICABLE LIBOR PERIOD
AND THE SUCCEEDING LIBOR PERIOD OF THAT CONTINUED LOAN SHALL COMMENCE ON THE
FIRST DAY AFTER THE LAST DAY OF THE LIBOR PERIOD OF THE LOAN TO BE CONTINUED.
ANY LOAN OR GROUP OF LOANS HAVING THE SAME PROPOSED LIBOR PERIOD TO BE MADE OR
CONTINUED AS, OR CONVERTED INTO, A LIBOR LOAN MUST BE IN A MINIMUM AMOUNT OF
$5,000,000 AND INTEGRAL MULTIPLES OF $500,000 IN EXCESS OF SUCH AMOUNT. ANY SUCH
ELECTION MUST BE MADE BY 11:00 A.M. (CHICAGO TIME) ON THE 3RD BUSINESS DAY PRIOR
TO (1) THE DATE OF ANY PROPOSED ADVANCE WHICH IS TO BEAR INTEREST AT THE LIBOR
RATE, (2) THE END OF EACH LIBOR PERIOD WITH RESPECT TO ANY LIBOR LOANS TO BE
CONTINUED AS SUCH, OR (3) THE DATE ON WHICH BORROWER REPRESENTATIVE WISHES TO
CONVERT ANY INDEX RATE LOAN TO A LIBOR LOAN FOR A LIBOR PERIOD DESIGNATED BY
11
16
BORROWER REPRESENTATIVE IN SUCH ELECTION. IF NO ELECTION IS RECEIVED WITH
RESPECT TO A LIBOR LOAN BY 11:00 A.M. (CHICAGO TIME) ON THE 3RD BUSINESS DAY
PRIOR TO THE END OF THE LIBOR PERIOD WITH RESPECT THERETO (OR IF A DEFAULT OR AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR IF THE ADDITIONAL CONDITIONS
PRECEDENT SET FORTH IN SECTION 2.2 SHALL NOT HAVE BEEN SATISFIED), THAT LIBOR
LOAN SHALL BE CONVERTED TO AN INDEX RATE LOAN AT THE END OF ITS LIBOR PERIOD.
BORROWER REPRESENTATIVE MUST MAKE SUCH ELECTION BY NOTICE TO AGENT IN WRITING,
BY TELECOPY OR OVERNIGHT COURIER. IN THE CASE OF ANY CONVERSION OR CONTINUATION,
SUCH ELECTION MUST BE MADE PURSUANT TO A WRITTEN NOTICE (A "NOTICE OF
CONVERSION/CONTINUATION") IN THE FORM OF EXHIBIT 1.5(E).
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION 1.5, IF A
COURT OF COMPETENT JURISDICTION DETERMINES IN A FINAL ORDER THAT THE RATE OF
INTEREST PAYABLE HEREUNDER EXCEEDS THE HIGHEST RATE OF INTEREST PERMISSIBLE
UNDER LAW (THE "MAXIMUM LAWFUL RATE"), THEN SO LONG AS THE MAXIMUM LAWFUL RATE
WOULD BE SO EXCEEDED, THE RATE OF INTEREST PAYABLE HEREUNDER SHALL BE EQUAL TO
THE MAXIMUM LAWFUL RATE; PROVIDED, HOWEVER, THAT IF AT ANY TIME THEREAFTER THE
RATE OF INTEREST PAYABLE HEREUNDER IS LESS THAN THE MAXIMUM LAWFUL RATE,
BORROWERS SHALL CONTINUE TO PAY INTEREST HEREUNDER AT THE MAXIMUM LAWFUL RATE
UNTIL SUCH TIME AS THE TOTAL INTEREST RECEIVED BY AGENT, ON BEHALF OF LENDERS,
IS EQUAL TO THE TOTAL INTEREST THAT WOULD HAVE BEEN RECEIVED HAD THE INTEREST
RATE PAYABLE HEREUNDER BEEN (BUT FOR THE OPERATION OF THIS PARAGRAPH) THE
INTEREST RATE PAYABLE SINCE THE CLOSING DATE AS OTHERWISE PROVIDED IN THIS
AGREEMENT. THEREAFTER, INTEREST HEREUNDER SHALL BE PAID AT THE RATE(S) OF
INTEREST AND IN THE MANNER PROVIDED IN SECTIONS 1.5(A) THROUGH (E), UNLESS AND
UNTIL THE RATE OF INTEREST AGAIN EXCEEDS THE MAXIMUM LAWFUL RATE, AND AT THAT
TIME THIS PARAGRAPH SHALL AGAIN APPLY. IN NO EVENT SHALL THE TOTAL INTEREST
RECEIVED BY ANY LENDER PURSUANT TO THE TERMS HEREOF EXCEED THE AMOUNT THAT SUCH
LENDER COULD LAWFULLY HAVE RECEIVED HAD THE INTEREST DUE HEREUNDER BEEN
CALCULATED FOR THE FULL TERM HEREOF AT THE MAXIMUM LAWFUL RATE. IF THE MAXIMUM
LAWFUL RATE IS CALCULATED PURSUANT TO THIS PARAGRAPH, SUCH INTEREST SHALL BE
CALCULATED AT A DAILY RATE EQUAL TO THE MAXIMUM LAWFUL RATE DIVIDED BY THE
NUMBER OF DAYS IN THE YEAR IN WHICH SUCH CALCULATION IS MADE. IF,
NOTWITHSTANDING THE PROVISIONS OF THIS SECTION 1.5(F), A COURT OF COMPETENT
JURISDICTION SHALL FINALLY DETERMINE THAT A LENDER HAS RECEIVED INTEREST
HEREUNDER IN EXCESS OF THE MAXIMUM LAWFUL RATE, AGENT SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, PROMPTLY APPLY SUCH EXCESS IN THE ORDER SPECIFIED
IN SECTION 1.11 AND THEREAFTER SHALL REFUND ANY EXCESS TO BORROWERS OR AS A
COURT OF COMPETENT JURISDICTION MAY OTHERWISE ORDER.
Eligible Accounts. All of the Accounts owned by each Borrower and reflected in
the most recent Borrowing Base Certificate delivered by each Borrower to Agent
shall be "Eligible Accounts" for purposes of this Agreement, except any Account
to which any of the exclusionary criteria set forth below applies. Agent shall
have the right to establish or modify or eliminate Reserves against Eligible
Accounts from time to time in its reasonable credit judgment. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria, in its
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in
12
17
the case of adjustments or new criteria which have the effect of making more
credit available. Eligible Accounts shall not include any Account of any
Borrower:
THAT DOES NOT ARISE FROM THE SALE OF GOODS OR THE PERFORMANCE OF SERVICES BY
SUCH BORROWER IN THE ORDINARY COURSE OF ITS BUSINESS;
(I) UPON WHICH SUCH BORROWER'S RIGHT TO RECEIVE PAYMENT IS NOT ABSOLUTE OR IS
CONTINGENT UPON THE FULFILLMENT OF ANY CONDITION WHATSOEVER OR (II) AS TO WHICH
SUCH BORROWER IS NOT ABLE TO BRING SUIT OR OTHERWISE ENFORCE ITS REMEDIES
AGAINST THE ACCOUNT DEBTOR THROUGH JUDICIAL PROCESS OR (III) IF THE ACCOUNT
REPRESENTS A PROGRESS BILLING CONSISTING OF AN INVOICE FOR GOODS SOLD OR USED OR
SERVICES RENDERED PURSUANT TO A CONTRACT UNDER WHICH THE ACCOUNT DEBTOR'S
OBLIGATION TO PAY THAT INVOICE IS SUBJECT TO SUCH BORROWER'S COMPLETION OF
FURTHER PERFORMANCE UNDER SUCH CONTRACT OR IS SUBJECT TO THE EQUITABLE LIEN OF A
SURETY BOND ISSUER;
TO THE EXTENT THAT ANY DEFENSE, COUNTERCLAIM, SETOFF OR DISPUTE IS ASSERTED AS
TO SUCH ACCOUNT;
THAT IS NOT A TRUE AND CORRECT STATEMENT OF BONA FIDE INDEBTEDNESS INCURRED IN
THE AMOUNT OF THE ACCOUNT FOR MERCHANDISE SOLD TO OR SERVICES RENDERED AND
ACCEPTED BY THE APPLICABLE ACCOUNT DEBTOR;
WITH RESPECT TO WHICH AN INVOICE, REASONABLY ACCEPTABLE TO AGENT IN FORM AND
SUBSTANCE, HAS NOT BEEN SENT TO THE APPLICABLE ACCOUNT DEBTOR;
THAT (I) IS NOT OWNED BY SUCH BORROWER OR (II) IS SUBJECT TO ANY RIGHT, CLAIM,
SECURITY INTEREST OR OTHER INTEREST OF ANY OTHER PERSON, OTHER THAN LIENS IN
FAVOR OF AGENT, ON BEHALF OF ITSELF AND LENDERS;
THAT ARISES FROM A SALE TO ANY DIRECTOR, OFFICER, OTHER EMPLOYEE OR AFFILIATE OF
ANY CREDIT PARTY, OR TO ANY ENTITY THAT HAS ANY COMMON OFFICER OR DIRECTOR WITH
ANY CREDIT PARTY;
THAT IS THE OBLIGATION OF AN ACCOUNT DEBTOR THAT IS THE UNITED STATES GOVERNMENT
OR A POLITICAL SUBDIVISION THEREOF, OR ANY STATE, COUNTY OR MUNICIPALITY OR
DEPARTMENT, AGENCY OR INSTRUMENTALITY THEREOF UNLESS AGENT, IN ITS SOLE
DISCRETION, HAS AGREED TO THE CONTRARY IN WRITING AND SUCH BORROWER, IF
NECESSARY OR DESIRABLE, HAS COMPLIED WITH RESPECT TO SUCH OBLIGATION WITH THE
FEDERAL ASSIGNMENT OF CLAIMS ACT OF 1940, OR ANY APPLICABLE STATE, COUNTY OR
MUNICIPAL LAW RESTRICTING ASSIGNMENT THEREOF;
13
18
THAT IS THE OBLIGATION OF AN ACCOUNT DEBTOR LOCATED IN A FOREIGN COUNTRY OTHER
THAN CANADA (EXCLUDING THE PROVINCE OF NEWFOUNDLAND, THE NORTHWEST TERRITORIES
AND THE TERRITORY OF NUNAVUT) UNLESS PAYMENT THEREOF IS ASSURED BY A LETTER OF
CREDIT ASSIGNED AND DELIVERED TO AGENT, REASONABLY SATISFACTORY TO AGENT AS TO
FORM, AMOUNT AND ISSUER;
TO THE EXTENT SUCH BORROWER OR ANY SUBSIDIARY THEREOF IS LIABLE FOR GOODS SOLD
OR SERVICES RENDERED BY THE APPLICABLE ACCOUNT DEBTOR TO SUCH BORROWER OR ANY
SUBSIDIARY THEREOF BUT ONLY TO THE EXTENT OF THE POTENTIAL OFFSET;
THAT ARISES WITH RESPECT TO GOODS THAT ARE DELIVERED ON A XXXX-AND-HOLD,
CASH-ON-DELIVERY BASIS OR PLACED ON CONSIGNMENT, GUARANTEED SALE OR OTHER TERMS
BY REASON OF WHICH THE PAYMENT BY THE ACCOUNT DEBTOR IS OR MAY BE CONDITIONAL;
THAT IS IN DEFAULT; PROVIDED, THAT, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, AN ACCOUNT SHALL BE DEEMED IN DEFAULT UPON THE OCCURRENCE OF ANY OF
THE FOLLOWING:
if the Account is related to Laclede Steel, such Account is not paid within the
earlier of: 60 days following its due date or 90 days following its original
invoice date; if the Account is related to Laclede Chain, such Account is not an
Extended Term Account and such Account is not paid within the earlier of (A) 60
days following its due date or; (B) 90 days following its original invoice date;
if the Account is related to Laclede Chain, such Account is an Extended Term
Account and such Account is not paid within 10 days following the due date; if
the Account is related to Laclede Chain, such Account is not an Extended Term
Account and such Account has a due date which is more than 180 days past its
original invoice date; the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or a petition is filed by or against
any Account Debtor obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
THAT IS THE OBLIGATION OF AN ACCOUNT DEBTOR IF 50% OR MORE OF THE DOLLAR AMOUNT
OF ALL ACCOUNTS OWING BY THAT ACCOUNT DEBTOR ARE INELIGIBLE UNDER THE OTHER
CRITERIA SET FORTH IN THIS SECTION 1.6;
AS TO WHICH AGENT'S LIEN THEREON, ON BEHALF OF ITSELF AND LENDERS, IS NOT A
FIRST PRIORITY PERFECTED LIEN;
AS TO WHICH ANY OF THE REPRESENTATIONS OR WARRANTIES IN THE LOAN DOCUMENTS ARE
UNTRUE;
14
19
TO THE EXTENT SUCH ACCOUNT IS EVIDENCED BY A JUDGMENT, INSTRUMENT OR CHATTEL
PAPER;
TO THE EXTENT SUCH ACCOUNT EXCEEDS ANY CREDIT LIMIT ESTABLISHED BY AGENT, IN ITS
REASONABLE CREDIT JUDGMENT, NOTICE OF WHICH HAS BEEN PROVIDED TO BORROWERS;
TO THE EXTENT THAT SUCH ACCOUNT, TOGETHER WITH ALL OTHER ACCOUNTS OWING BY SUCH
ACCOUNT DEBTOR AND ITS AFFILIATES AS OF ANY DATE OF DETERMINATION EXCEED 10% OF
ALL ELIGIBLE ACCOUNTS; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACCOUNTS OWING BY
CSK AUTO TO LACLEDE CHAIN, TO THE EXTENT THAT ANY SUCH ACCOUNT, TOGETHER WITH
ALL OTHER ACCOUNTS OWING BY SUCH ACCOUNT DEBTOR AS OF ANY DATE OF DETERMINATION
EXCEEDS 25% OF ALL ELIGIBLE ACCOUNTS;
THAT IS PAYABLE IN ANY CURRENCY OTHER THAN DOLLARS;
THAT IS OTHERWISE UNACCEPTABLE TO AGENT IN ITS REASONABLE CREDIT JUDGMENT; OR
THAT IS AN ACCOUNT AS TO WHICH THE ORIGINAL DUE DATE HAS BEEN EXTENDED, IF SUCH
ACCOUNT WOULD HAVE BEEN NEGLIGIBLE UNDER CLAUSE (L) ABOVE IN THE ABSENCE OF THAT
EXTENSION.
Eligible Inventory. All of the Inventory owned by the Borrowers and reflected in
the most recent Borrowing Base Certificate delivered by each Borrower to Agent
shall be "Eligible Inventory" for purposes of this Agreement, except any
Inventory to which any of the exclusionary criteria set forth below applies.
Agent shall have the right to establish or modify or eliminate Reserves against
Eligible Inventory from time to time in its reasonable credit judgment. In
addition, Agent reserves the right, at any time and from time to time after the
Closing Date, to adjust the criteria set forth below, to establish new criteria,
in its reasonable credit judgment, subject to the approval of Supermajority
Revolving Lenders in the case of adjustments or new criteria which have the
effect of making more credit available. Eligible Inventory shall not include any
Inventory of any Borrower that:
IS NOT OWNED BY SUCH BORROWER FREE AND CLEAR OF ALL LIENS AND RIGHTS OF ANY
OTHER PERSON (INCLUDING THE RIGHTS OF A PURCHASER THAT HAS MADE PROGRESS
PAYMENTS AND THE RIGHTS OF A SURETY THAT HAS ISSUED A BOND TO ASSURE SUCH
BORROWER'S PERFORMANCE WITH RESPECT TO THAT INVENTORY), EXCEPT THE LIENS IN
FAVOR OF AGENT, ON BEHALF OF ITSELF AND LENDERS, AND PERMITTED ENCUMBRANCES IN
FAVOR OF LANDLORDS AND BAILEES TO THE EXTENT PERMITTED IN SECTION 5.9 HEREOF
(SUBJECT TO RESERVES ESTABLISHED BY AGENT IN ACCORDANCE WITH SECTION 5.9
HEREOF);
(I) IS NOT LOCATED ON PREMISES OWNED, LEASED OR RENTED BY SUCH BORROWER AND SET
FORTH IN DISCLOSURE SCHEDULE (3.2), OR (II) IS STORED AT A LEASED LOCATION,
UNLESS AGENT HAS GIVEN ITS PRIOR CONSENT THERETO AND UNLESS EITHER (X) A
REASONABLY SATISFACTORY LANDLORD WAIVER HAS BEEN DELIVERED TO AGENT, OR (Y)
RESERVES REASONABLY SATISFACTORY TO AGENT HAVE BEEN ESTABLISHED WITH RESPECT
THERETO OR
15
20
(III) IS STORED WITH A BAILEE OR WAREHOUSEMAN UNLESS A REASONABLY SATISFACTORY,
ACKNOWLEDGED BAILEE LETTER HAS BEEN RECEIVED BY AGENT AND RESERVES REASONABLY
SATISFACTORY TO AGENT HAVE BEEN ESTABLISHED WITH RESPECT THERETO, OR (IV) IS
LOCATED AT AN OWNED LOCATION SUBJECT TO A MORTGAGE IN FAVOR OF A LENDER OTHER
THAN AGENT UNLESS A REASONABLY SATISFACTORY MORTGAGEE WAIVER HAS BEEN DELIVERED
TO AGENT, OR (V) IS LOCATED AT ANY SITE IF THE AGGREGATE BOOK VALUE OF INVENTORY
AT ANY SUCH LOCATION IS LESS THAN $100,000;
IS PLACED ON CONSIGNMENT OR IS IN TRANSIT (OTHER THAN INTERCOMPANY SHIPMENTS TO
LOCATIONS OWNED, LEASED OR OPERATED BY A BORROWER WITHIN THE UNITED STATES,
PROVIDED THE AGGREGATE AMOUNT OF ALL SUCH INTERCOMPANY SHIPMENTS THAT WILL BE
INCLUDED AS ELIGIBLE INVENTORY SHALL NOT EXCEED $1,500,000 AT ANY ONE TIME);
IS COVERED BY A NEGOTIABLE DOCUMENT OF TITLE, UNLESS SUCH DOCUMENT HAS BEEN
DELIVERED TO AGENT WITH ALL NECESSARY ENDORSEMENTS, FREE AND CLEAR OF ALL LIENS
EXCEPT THOSE IN FAVOR OF AGENT AND LENDERS;
IS EXCESS, OBSOLETE, UNSALABLE, SHOPWORN, SECONDS, DAMAGED OR UNFIT FOR SALE;
CONSISTS OF DISPLAY ITEMS OR PACKING OR SHIPPING MATERIALS, MANUFACTURING
SUPPLIES OR REPLACEMENT PARTS;
CONSISTS OF GOODS WHICH HAVE BEEN RETURNED BY THE BUYER;
IS NOT OF A TYPE HELD FOR SALE IN THE ORDINARY COURSE OF SUCH BORROWER'S
BUSINESS;
IS NOT SUBJECT TO A FIRST PRIORITY LIEN IN FAVOR OF AGENT ON BEHALF OF ITSELF
AND LENDERS, SUBJECT TO PERMITTED ENCUMBRANCES;
BREACHES ANY OF THE REPRESENTATIONS OR WARRANTIES PERTAINING TO INVENTORY SET
FORTH IN THE LOAN DOCUMENTS;
CONSISTS OF HAZARDOUS MATERIALS OR GOODS THAT CAN BE TRANSPORTED OR SOLD ONLY
WITH LICENSES THAT ARE NOT READILY AVAILABLE;
IS NOT COVERED BY CASUALTY INSURANCE REASONABLY ACCEPTABLE TO AGENT; OR
IS OTHERWISE UNACCEPTABLE TO AGENT IN ITS REASONABLE CREDIT JUDGMENT.
Cash Management Systems. On or prior to the Closing Date, Borrowers will
establish and will maintain until the Termination Date, the cash management
systems described in Annex C (the "Cash Management Systems").
16
21
Fees.
BORROWERS SHALL PAY TO GE CAPITAL, INDIVIDUALLY, THE FEES SPECIFIED IN THAT
CERTAIN COMMITMENT LETTER DATED AS OF DECEMBER 14, 2000 AMONG BORROWERS AND GE
CAPITAL (THE "GE CAPITAL COMMITMENT LETTER"), AT THE TIMES SPECIFIED FOR PAYMENT
THEREIN.
AS ADDITIONAL COMPENSATION FOR THE REVOLVING LENDERS, BORROWERS SHALL PAY TO
AGENT, FOR THE RATABLE BENEFIT OF SUCH LENDERS, IN ARREARS, ON THE FIRST
BUSINESS DAY OF EACH MONTH PRIOR TO THE COMMITMENT TERMINATION DATE AND ON THE
COMMITMENT TERMINATION DATE, A FEE FOR BORROWERS' NON-USE OF AVAILABLE FUNDS IN
AN AMOUNT EQUAL TO THE APPLICABLE UNUSED LINE FEE MARGIN PER ANNUM (CALCULATED
ON THE BASIS OF A 360 DAY YEAR FOR ACTUAL DAYS ELAPSED) MULTIPLIED BY THE
DIFFERENCE BETWEEN (X) THE MAXIMUM AMOUNT (AS IT MAY BE REDUCED FROM TIME TO
TIME) AND (Y) THE AVERAGE FOR THE PERIOD OF THE DAILY CLOSING BALANCES OF THE
AGGREGATE REVOLVING LOAN, AND THE SWING LINE LOAN OUTSTANDING DURING THE PERIOD
FOR WHICH SUCH FEE IS DUE.
IF BORROWERS PAY AFTER ACCELERATION OR PREPAY ALL OR ANY PORTION OF THE TERM
LOAN OR PREPAY THE REVOLVING LOAN AND REDUCE OR TERMINATE THE REVOLVING LOAN
COMMITMENT, WHETHER VOLUNTARILY OR INVOLUNTARILY AND WHETHER BEFORE OR AFTER
ACCELERATION OF THE OBLIGATIONS, OR IF ANY OF THE COMMITMENTS ARE OTHERWISE
TERMINATED, BORROWERS SHALL PAY TO AGENT, FOR THE BENEFIT OF LENDERS AS
LIQUIDATED DAMAGES AND COMPENSATION FOR THE COSTS OF BEING PREPARED TO MAKE
FUNDS AVAILABLE HEREUNDER AN AMOUNT EQUAL TO THE APPLICABLE PERCENTAGE (AS
DEFINED BELOW) MULTIPLIED BY THE SUM OF (I) THE PRINCIPAL AMOUNT OF THE TERM
LOAN PAID AFTER ACCELERATION OR PREPAID AND (II) THE AMOUNT OF THE REDUCTION OF
THE REVOLVING LOAN COMMITMENT. AS USED HEREIN, THE TERM "APPLICABLE PERCENTAGE"
SHALL MEAN (X) THREE PERCENT (3%), IN THE CASE OF A PREPAYMENT ON OR PRIOR TO
THE FIRST ANNIVERSARY OF THE CLOSING DATE, (Y) TWO PERCENT (2%), IN THE CASE OF
A PREPAYMENT AFTER THE FIRST ANNIVERSARY OF THE CLOSING DATE BUT ON OR PRIOR TO
THE SECOND ANNIVERSARY THEREOF, AND (Z) ONE PERCENT (1%), IN THE CASE OF A
PREPAYMENT AFTER THE SECOND ANNIVERSARY OF THE CLOSING DATE BUT ON OR PRIOR TO
THE THIRD ANNIVERSARY THEREOF. THE CREDIT PARTIES AGREE THAT THE APPLICABLE
PERCENTAGES ARE A REASONABLE CALCULATION OF LENDERS' LOST PROFITS IN VIEW OF THE
DIFFICULTIES AND IMPRACTICALITY OF DETERMINING ACTUAL DAMAGES RESULTING FROM AN
EARLY TERMINATION OF THE COMMITMENTS. NOTWITHSTANDING THE FOREGOING, NO
PREPAYMENT FEE SHALL BE PAYABLE BY BORROWERS UPON A MANDATORY PREPAYMENT MADE
PURSUANT TO SECTIONS 1.3(B) OR 1.16(C); PROVIDED THAT BORROWERS DO NOT
PERMANENTLY REDUCE OR TERMINATE THE REVOLVING LOAN COMMITMENT UPON ANY SUCH
PREPAYMENT AND, IN THE CASE OF PREPAYMENTS MADE PURSUANT TO SECTIONS 1.3(B)(II)
OR (B)(III), THE TRANSACTION GIVING RISE TO THE APPLICABLE PREPAYMENT IS
EXPRESSLY PERMITTED UNDER SECTION 6.
17
22
BORROWERS SHALL PAY TO AGENT, FOR THE RATABLE BENEFIT OF REVOLVING LENDERS, THE
LETTER OF CREDIT FEE AS PROVIDED IN ANNEX B.
Receipt of Payments. Borrowers shall make each payment under this Agreement not
later than 1:00 p.m. (Chicago time) on the day when due in immediately available
funds in Dollars to the Collection Account. For purposes of computing interest
and Fees and determining Borrowing Availability as of any date, all payments
shall be deemed received on the Business Day on which immediately available
funds therefor are received in the Collection Account prior to 1:00 p.m. Chicago
time. Payments received after 1:00 p.m. Chicago time on any Business Day or on a
day that is not a Business Day shall be deemed to have been received on the
following Business Day.
Application and Allocation of Payments.
(A) SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING, (I) PAYMENTS CONSISTING OF PROCEEDS OF ACCOUNTS RECEIVED IN THE
ORDINARY COURSE OF BUSINESS SHALL BE APPLIED, FIRST, TO THE SWING LINE LOAN AND,
SECOND, THE REVOLVING LOAN; (II) PAYMENTS MATCHING SPECIFIC SCHEDULED PAYMENTS
THEN DUE SHALL BE APPLIED TO THOSE SCHEDULED PAYMENTS; (III) VOLUNTARY
PREPAYMENTS SHALL BE APPLIED AS DETERMINED BY BORROWER REPRESENTATIVE, SUBJECT
TO THE PROVISIONS OF SECTION 1.3(A); AND (IV) MANDATORY PREPAYMENTS SHALL BE
APPLIED AS SET FORTH IN SECTIONS 1.3(C) AND 1.3(D). ALL PAYMENTS AND PREPAYMENTS
APPLIED TO A PARTICULAR LOAN SHALL BE APPLIED RATABLY TO THE PORTION THEREOF
HELD BY EACH LENDER AS DETERMINED BY ITS PRO RATA SHARE. AS TO ANY OTHER
PAYMENT, AND AS TO ALL PAYMENTS MADE WHEN A DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR FOLLOWING THE COMMITMENT TERMINATION DATE, EACH
BORROWER HEREBY IRREVOCABLY WAIVES THE RIGHT TO DIRECT THE APPLICATION OF ANY
AND ALL PAYMENTS RECEIVED FROM OR ON BEHALF OF SUCH BORROWER, AND EACH BORROWER
HEREBY IRREVOCABLY AGREES THAT AGENT SHALL HAVE THE CONTINUING EXCLUSIVE RIGHT
TO APPLY ANY AND ALL SUCH PAYMENTS AGAINST THE OBLIGATIONS OF BORROWERS AS AGENT
MAY DEEM ADVISABLE NOTWITHSTANDING ANY PREVIOUS ENTRY BY AGENT IN THE LOAN
ACCOUNT OR ANY OTHER BOOKS AND RECORDS. IN THE ABSENCE OF A SPECIFIC
DETERMINATION BY AGENT WITH RESPECT THERETO, PAYMENTS SHALL BE APPLIED TO
AMOUNTS THEN DUE AND PAYABLE IN THE FOLLOWING ORDER: (1) TO FEES AND AGENT'S
EXPENSES REIMBURSABLE HEREUNDER; (2) TO INTEREST ON THE SWING LINE LOAN; (3) TO
PRINCIPAL PAYMENTS ON THE SWING LINE LOAN; (4) TO INTEREST ON THE OTHER LOANS,
RATABLY IN PROPORTION TO THE INTEREST ACCRUED AS TO EACH LOAN; (5) TO PRINCIPAL
PAYMENTS ON THE OTHER LOANS AND TO PROVIDE CASH COLLATERAL FOR LETTER OF CREDIT
OBLIGATIONS IN THE MANNER DESCRIBED IN ANNEX B, RATABLY TO THE AGGREGATE,
COMBINED PRINCIPAL BALANCE OF THE OTHER LOANS AND OUTSTANDING LETTER OF CREDIT
OBLIGATIONS; AND (6) TO ALL OTHER OBLIGATIONS, INCLUDING EXPENSES OF LENDERS TO
THE EXTENT REIMBURSABLE UNDER SECTION 11.3.
(B) AGENT IS AUTHORIZED TO, AND AT ITS SOLE ELECTION MAY,
CHARGE TO THE REVOLVING LOAN BALANCE ON BEHALF OF EACH BORROWER AND CAUSE TO BE
PAID ALL FEES, EXPENSES, CHARGES, COSTS (INCLUDING INSURANCE PREMIUMS IN
ACCORDANCE WITH SECTION 5.4(A)) AND INTEREST AND PRINCIPAL, OTHER THAN PRINCIPAL
OF THE
18
23
REVOLVING LOAN, OWING BY BORROWERS UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS IF AND TO THE EXTENT BORROWERS FAIL TO PAY PROMPTLY ANY SUCH AMOUNTS
AS AND WHEN DUE, EVEN IF THE AMOUNT OF SUCH CHARGES WOULD EXCEED BORROWING
AVAILABILITY AT SUCH TIME OR WOULD CAUSE THE BALANCE OF THE REVOLVING LOAN AND
THE SWING LINE LOAN TO ANY BORROWER TO EXCEED SUCH BORROWER'S SEPARATE BORROWING
BASE AFTER GIVING EFFECT TO SUCH CHARGES. AT AGENT'S OPTION AND TO THE EXTENT
PERMITTED BY LAW, ANY CHARGES SO MADE SHALL CONSTITUTE PART OF THE REVOLVING
LOAN HEREUNDER.
Loan Account and Accounting. Agent shall maintain a loan account (the "Loan
Account") on its books to record: all Advances and the Term Loan, all payments
made by Borrowers, and all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by each Borrower; provided that any failure to so record or
any error in so recording shall not limit or otherwise affect any Borrower's
duty to pay the Obligations. Agent shall render to Borrower Representative a
monthly accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account as to each Borrower for the immediately preceding
month. Unless Borrower Representative notifies Agent in writing of any objection
to any such accounting (specifically describing the basis for such objection),
within 30 days after the date thereof, each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive on Borrowers in
all respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrowers.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
Indemnity.
(A) EACH CREDIT PARTY THAT IS A SIGNATORY HERETO SHALL JOINTLY
AND SEVERALLY INDEMNIFY AND HOLD HARMLESS EACH OF AGENT, LENDERS AND THEIR
RESPECTIVE AFFILIATES, AND EACH SUCH PERSON'S RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AGENTS AND REPRESENTATIVES (EACH, AN "INDEMNIFIED
PERSON"), FROM AND AGAINST ANY AND ALL SUITS, ACTIONS, PROCEEDINGS, CLAIMS,
DAMAGES, LOSSES, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES
AND DISBURSEMENTS AND OTHER COSTS OF INVESTIGATION OR DEFENSE, INCLUDING THOSE
INCURRED UPON ANY APPEAL) THAT MAY BE INSTITUTED OR ASSERTED AGAINST OR INCURRED
BY ANY SUCH INDEMNIFIED PERSON AS THE RESULT OF CREDIT HAVING BEEN EXTENDED,
SUSPENDED OR TERMINATED UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
THE ADMINISTRATION OF SUCH CREDIT, AND IN CONNECTION WITH OR ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THEREUNDER AND ANY ACTIONS OR FAILURES
TO ACT IN CONNECTION THEREWITH, INCLUDING ANY AND ALL ENVIRONMENTAL LIABILITIES
AND LEGAL COSTS AND EXPENSES ARISING OUT OF OR INCURRED IN CONNECTION WITH
DISPUTES BETWEEN OR AMONG ANY PARTIES TO ANY OF THE LOAN DOCUMENTS
(COLLECTIVELY, "INDEMNIFIED LIABILITIES"); PROVIDED, THAT NO SUCH CREDIT PARTY
SHALL BE LIABLE FOR ANY INDEMNIFICATION TO AN INDEMNIFIED PERSON TO THE EXTENT
THAT ANY SUCH SUIT,
19
24
ACTION, PROCEEDING, CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE RESULTS FROM THAT
INDEMNIFIED PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NO INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(B) TO INDUCE LENDERS TO PROVIDE THE LIBOR RATE OPTION ON THE
TERMS PROVIDED HEREIN, IF (I) ANY LIBOR LOANS ARE REPAID IN WHOLE OR IN PART
PRIOR TO THE LAST DAY OF ANY APPLICABLE LIBOR PERIOD (WHETHER THAT REPAYMENT IS
MADE PURSUANT TO ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
OCCURS AS A RESULT OF ACCELERATION, BY OPERATION OF LAW OR OTHERWISE); (II) ANY
BORROWER SHALL DEFAULT IN PAYMENT WHEN DUE OF THE PRINCIPAL AMOUNT OF OR
INTEREST ON ANY LIBOR LOAN; (III) ANY BORROWER SHALL REFUSE TO ACCEPT ANY
BORROWING OF, OR SHALL REQUEST A TERMINATION OF, ANY BORROWING OF, CONVERSION
INTO OR CONTINUATION OF, LIBOR LOANS AFTER BORROWER REPRESENTATIVE HAS GIVEN
NOTICE REQUESTING THE SAME IN ACCORDANCE HEREWITH; OR (IV) ANY BORROWER SHALL
FAIL TO MAKE ANY PREPAYMENT OF A LIBOR LOAN AFTER BORROWER REPRESENTATIVE HAS
GIVEN A NOTICE THEREOF IN ACCORDANCE HEREWITH, THEN BORROWERS SHALL JOINTLY AND
SEVERALLY INDEMNIFY AND HOLD HARMLESS EACH LENDER FROM AND AGAINST ALL LOSSES,
COSTS AND EXPENSES RESULTING FROM OR ARISING FROM ANY OF THE FOREGOING. SUCH
INDEMNIFICATION SHALL INCLUDE ANY LOSS (INCLUDING LOSS OF MARGIN) OR EXPENSE
ARISING FROM THE REEMPLOYMENT OF FUNDS OBTAINED BY IT OR FROM FEES PAYABLE TO
TERMINATE DEPOSITS FROM WHICH SUCH FUNDS WERE OBTAINED. FOR THE PURPOSE OF
CALCULATING AMOUNTS PAYABLE TO A LENDER UNDER THIS SUBSECTION, EACH LENDER SHALL
BE DEEMED TO HAVE ACTUALLY FUNDED ITS RELEVANT LIBOR LOAN THROUGH THE PURCHASE
OF A DEPOSIT BEARING INTEREST AT THE LIBOR RATE IN AN AMOUNT EQUAL TO THE AMOUNT
OF THAT LIBOR LOAN AND HAVING A MATURITY COMPARABLE TO THE RELEVANT LIBOR
PERIOD; PROVIDED, THAT EACH LENDER MAY FUND EACH OF ITS LIBOR LOANS IN ANY
MANNER IT SEES FIT, AND THE FOREGOING ASSUMPTION SHALL BE UTILIZED ONLY FOR THE
CALCULATION OF AMOUNTS PAYABLE UNDER THIS SUBSECTION. THIS COVENANT SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE NOTES AND ALL
OTHER AMOUNTS PAYABLE HEREUNDER. AS PROMPTLY AS PRACTICABLE UNDER THE
CIRCUMSTANCES, EACH LENDER SHALL PROVIDE BORROWER REPRESENTATIVE WITH ITS
WRITTEN CALCULATION OF ALL AMOUNTS PAYABLE PURSUANT TO THIS SECTION 1.13(B), AND
SUCH CALCULATION SHALL BE BINDING ON THE PARTIES HERETO UNLESS BORROWER
REPRESENTATIVE SHALL OBJECT IN WRITING WITHIN 10 BUSINESS DAYS OF RECEIPT
THEREOF, SPECIFYING THE BASIS FOR SUCH OBJECTION IN DETAIL.
Access. Each Credit Party that is a party hereto shall, during normal business
hours, from time to time upon three Business Days' prior notice as frequently as
Agent determines to be appropriate: (a) provide
20
25
Agent and any of its officers, employees and agents access to its properties,
facilities, advisors and employees (including officers) of each Credit Party and
to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If a Default or
Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Borrowers shall provide Agent and each Lender with
access to their suppliers and customers. Each Credit Party shall make available
to Agent and its counsel, as quickly as is possible under the circumstances,
originals or copies of all books and records that Agent may reasonably request.
Each Credit Party shall deliver any document or instrument necessary for Agent,
as it may from time to time reasonably request, to obtain records from any
service bureau or other Person that maintains records for such Credit Party, and
shall maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least 5 days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrowers.
Taxes.
(A) ANY AND ALL PAYMENTS BY EACH BORROWER HEREUNDER (INCLUDING
ANY PAYMENTS MADE PURSUANT TO SECTION 12) OR UNDER THE NOTES SHALL BE MADE, IN
ACCORDANCE WITH THIS SECTION 1.15, FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR
ANY AND ALL PRESENT OR FUTURE TAXES. IF ANY BORROWER SHALL BE REQUIRED BY LAW TO
DEDUCT ANY TAXES FROM OR IN RESPECT OF ANY SUM PAYABLE HEREUNDER (INCLUDING ANY
SUM PAYABLE PURSUANT TO SECTION 12) OR UNDER THE NOTES, (I) THE SUM PAYABLE
SHALL BE INCREASED AS MUCH AS SHALL BE NECESSARY SO THAT AFTER MAKING ALL
REQUIRED DEDUCTIONS (INCLUDING DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE
UNDER THIS SECTION 1.15) AGENT OR LENDERS, AS APPLICABLE, RECEIVE AN AMOUNT
EQUAL TO THE SUM THEY WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE, (II)
SUCH BORROWER SHALL MAKE SUCH DEDUCTIONS, AND (III) SUCH BORROWER SHALL PAY THE
FULL AMOUNT DEDUCTED TO THE RELEVANT TAXING OR OTHER AUTHORITY IN ACCORDANCE
WITH APPLICABLE LAW. WITHIN 30 DAYS AFTER THE DATE OF ANY PAYMENT OF TAXES,
BORROWER REPRESENTATIVE SHALL FURNISH TO AGENT THE ORIGINAL OR A CERTIFIED COPY
OF A RECEIPT EVIDENCING PAYMENT THEREOF. AGENT AND LENDERS SHALL NOT BE
OBLIGATED TO RETURN OR REFUND ANY AMOUNTS RECEIVED PURSUANT TO THIS SECTION.
(B) EACH CREDIT PARTY THAT IS A SIGNATORY HERETO SHALL JOINTLY
AND SEVERALLY INDEMNIFY AND, WITHIN 10 DAYS OF DEMAND THEREFOR, PAY AGENT AND
EACH LENDER FOR THE FULL AMOUNT OF TAXES (INCLUDING ANY TAXES IMPOSED BY ANY
JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 1.15) PAID BY AGENT OR SUCH
LENDER, AS APPROPRIATE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES
WERE CORRECTLY OR LEGALLY ASSERTED.
21
26
(C) EACH LENDER ORGANIZED UNDER THE LAWS OF A JURISDICTION
OUTSIDE THE UNITED STATES (A "FOREIGN LENDER") AS TO WHICH PAYMENTS TO BE MADE
UNDER THIS AGREEMENT OR UNDER THE NOTES ARE EXEMPT FROM UNITED STATES
WITHHOLDING TAX UNDER AN APPLICABLE STATUTE OR TAX TREATY SHALL PROVIDE TO
BORROWER REPRESENTATIVE AND AGENT A PROPERLY COMPLETED AND EXECUTED IRS FORM
W-8ECI OR FORM W-8BEN OR OTHER APPLICABLE FORM, CERTIFICATE OR DOCUMENT
PRESCRIBED BY THE IRS OR THE UNITED STATES CERTIFYING AS TO SUCH FOREIGN
LENDER'S ENTITLEMENT TO SUCH EXEMPTION (A "CERTIFICATE OF EXEMPTION"). ANY
FOREIGN PERSON THAT SEEKS TO BECOME A LENDER UNDER THIS AGREEMENT SHALL PROVIDE
A CERTIFICATE OF EXEMPTION TO BORROWER REPRESENTATIVE AND AGENT PRIOR TO
BECOMING A LENDER HEREUNDER. NO FOREIGN PERSON MAY BECOME A LENDER HEREUNDER IF
SUCH PERSON FAILS TO DELIVER A CERTIFICATE OF EXEMPTION IN ADVANCE OF BECOMING A
LENDER.
Capital Adequacy; Increased Costs; Illegality.
(A) IF ANY LENDER SHALL HAVE DETERMINED THAT ANY LAW, TREATY,
GOVERNMENTAL (OR QUASI-GOVERNMENTAL) RULE, REGULATION, GUIDELINE OR ORDER
REGARDING CAPITAL ADEQUACY, RESERVE REQUIREMENTS OR SIMILAR REQUIREMENTS OR
COMPLIANCE BY ANY LENDER WITH ANY REQUEST OR DIRECTIVE REGARDING CAPITAL
ADEQUACY, RESERVE REQUIREMENTS OR SIMILAR REQUIREMENTS (WHETHER OR NOT HAVING
THE FORCE OF LAW), IN EACH CASE, ADOPTED AFTER THE CLOSING DATE, FROM ANY
CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY INCREASES OR WOULD HAVE THE EFFECT
OF INCREASING THE AMOUNT OF CAPITAL, RESERVES OR OTHER FUNDS REQUIRED TO BE
MAINTAINED BY SUCH LENDER AND THEREBY REDUCING THE RATE OF RETURN ON SUCH
LENDER'S CAPITAL AS A CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER, THEN BORROWERS
SHALL FROM TIME TO TIME UPON DEMAND BY SUCH LENDER (WITH A COPY OF SUCH DEMAND
TO AGENT) PAY TO AGENT, FOR THE ACCOUNT OF SUCH LENDER, ADDITIONAL AMOUNTS
SUFFICIENT TO COMPENSATE SUCH LENDER FOR SUCH REDUCTION. A CERTIFICATE AS TO THE
AMOUNT OF THAT REDUCTION AND SHOWING THE BASIS OF THE COMPUTATION THEREOF
SUBMITTED BY SUCH LENDER TO BORROWER REPRESENTATIVE AND TO AGENT SHALL, ABSENT
MANIFEST ERROR, BE FINAL, CONCLUSIVE AND BINDING FOR ALL PURPOSES.
(B) IF, DUE TO EITHER (I) THE INTRODUCTION OF OR ANY CHANGE IN
ANY LAW OR REGULATION (OR ANY CHANGE IN THE INTERPRETATION THEREOF) OR (II) THE
COMPLIANCE WITH ANY GUIDELINE OR REQUEST FROM ANY CENTRAL BANK OR OTHER
GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW), IN EACH CASE
ADOPTED AFTER THE CLOSING DATE, THERE SHALL BE ANY INCREASE IN THE COST TO ANY
LENDER OF AGREEING TO MAKE OR MAKING, FUNDING OR MAINTAINING ANY LOAN, THEN
BORROWERS SHALL FROM TIME TO TIME, UPON DEMAND BY SUCH LENDER (WITH A COPY OF
SUCH DEMAND TO AGENT), PAY TO AGENT FOR THE ACCOUNT OF SUCH LENDER ADDITIONAL
AMOUNTS SUFFICIENT TO COMPENSATE SUCH LENDER FOR SUCH INCREASED COST. A
CERTIFICATE AS TO THE AMOUNT OF SUCH INCREASED COST, SUBMITTED TO BORROWER
REPRESENTATIVE AND TO AGENT BY SUCH LENDER, SHALL BE CONCLUSIVE AND BINDING ON
BORROWERS FOR ALL PURPOSES, ABSENT MANIFEST ERROR. EACH LENDER AGREES THAT, AS
PROMPTLY AS PRACTICABLE AFTER IT BECOMES AWARE OF ANY CIRCUMSTANCES REFERRED TO
ABOVE WHICH WOULD RESULT IN
22
27
ANY SUCH INCREASED COST, THE AFFECTED LENDER SHALL, TO THE EXTENT NOT
INCONSISTENT WITH SUCH LENDER'S INTERNAL POLICIES OF GENERAL APPLICATION, USE
REASONABLE COMMERCIAL EFFORTS TO MINIMIZE COSTS AND EXPENSES INCURRED BY IT AND
PAYABLE TO IT BY BORROWERS PURSUANT TO THIS SECTION 1.16(B).
(C) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
IF THE INTRODUCTION OF OR ANY CHANGE IN ANY LAW OR REGULATION (OR ANY CHANGE IN
THE INTERPRETATION THEREOF) SHALL MAKE IT UNLAWFUL, OR ANY CENTRAL BANK OR OTHER
GOVERNMENTAL AUTHORITY SHALL ASSERT THAT IT IS UNLAWFUL, FOR ANY LENDER TO AGREE
TO MAKE OR TO MAKE OR TO CONTINUE TO FUND OR MAINTAIN ANY LIBOR LOAN, THEN,
UNLESS THAT LENDER IS ABLE TO MAKE OR TO CONTINUE TO FUND OR TO MAINTAIN SUCH
LIBOR LOAN AT ANOTHER BRANCH OR OFFICE OF THAT LENDER WITHOUT, IN THAT LENDER'S
OPINION, ADVERSELY AFFECTING IT OR ITS LOANS OR THE INCOME OBTAINED THEREFROM,
ON NOTICE THEREOF AND DEMAND THEREFOR BY SUCH LENDER TO BORROWER REPRESENTATIVE
THROUGH AGENT, (I) THE OBLIGATION OF SUCH LENDER TO AGREE TO MAKE OR TO MAKE OR
TO CONTINUE TO FUND OR MAINTAIN LIBOR LOANS SHALL TERMINATE AND (II) EACH
BORROWER SHALL FORTHWITH PREPAY IN FULL ALL OUTSTANDING LIBOR LOANS OWING BY
SUCH BORROWER TO SUCH LENDER, TOGETHER WITH INTEREST ACCRUED THEREON, UNLESS
BORROWER REPRESENTATIVE ON BEHALF OF SUCH BORROWER, WITHIN 5 BUSINESS DAYS AFTER
THE DELIVERY OF SUCH NOTICE AND DEMAND, CONVERTS ALL LIBOR LOANS INTO INDEX RATE
LOANS.
(D) WITHIN 15 DAYS AFTER RECEIPT BY BORROWER REPRESENTATIVE OF
WRITTEN NOTICE AND DEMAND FROM ANY LENDER (AN "AFFECTED LENDER") FOR PAYMENT OF
ADDITIONAL AMOUNTS OR INCREASED COSTS AS PROVIDED IN SECTIONS 1.15(A), 1.16(A)
OR 1.16(B), BORROWER REPRESENTATIVE MAY, AT ITS OPTION, NOTIFY AGENT AND SUCH
AFFECTED LENDER OF ITS INTENTION TO REPLACE THE AFFECTED LENDER. SO LONG AS NO
DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWER
REPRESENTATIVE, WITH THE CONSENT OF AGENT, MAY OBTAIN, AT BORROWERS' EXPENSE, A
REPLACEMENT LENDER ("REPLACEMENT LENDER") FOR THE AFFECTED LENDER, WHICH
REPLACEMENT LENDER MUST BE REASONABLY SATISFACTORY TO AGENT. IF BORROWERS OBTAIN
A REPLACEMENT LENDER WITHIN 90 DAYS FOLLOWING NOTICE OF THEIR INTENTION TO DO
SO, THE AFFECTED LENDER MUST SELL AND ASSIGN ITS LOANS AND COMMITMENTS TO SUCH
REPLACEMENT LENDER FOR AN AMOUNT EQUAL TO THE PRINCIPAL BALANCE OF ALL LOANS
HELD BY THE AFFECTED LENDER AND ALL ACCRUED INTEREST AND FEES WITH RESPECT
THERETO THROUGH THE DATE OF SUCH SALE; PROVIDED, THAT BORROWERS SHALL HAVE
REIMBURSED SUCH AFFECTED LENDER FOR THE ADDITIONAL AMOUNTS OR INCREASED COSTS
THAT IT IS ENTITLED TO RECEIVE UNDER THIS AGREEMENT THROUGH THE DATE OF SUCH
SALE AND ASSIGNMENT. NOTWITHSTANDING THE FOREGOING, BORROWERS SHALL NOT HAVE THE
RIGHT TO OBTAIN A REPLACEMENT LENDER IF THE AFFECTED LENDER RESCINDS ITS DEMAND
FOR INCREASED COSTS OR ADDITIONAL AMOUNTS WITHIN 15 DAYS FOLLOWING ITS RECEIPT
OF BORROWERS' NOTICE OF INTENTION TO REPLACE SUCH AFFECTED LENDER. FURTHERMORE,
IF BORROWERS GIVE A NOTICE OF INTENTION TO REPLACE AND DO NOT SO REPLACE SUCH
AFFECTED LENDER WITHIN 90 DAYS THEREAFTER, BORROWERS' RIGHTS UNDER THIS SECTION
23
28
1.16(D) SHALL TERMINATE AND BORROWERS SHALL PROMPTLY PAY ALL INCREASED COSTS OR
ADDITIONAL AMOUNTS DEMANDED BY SUCH AFFECTED LENDER PURSUANT TO SECTIONS
1.15(A), 1.16(A) AND 1.16(B).
Single Loan. All Loans to each Borrower and all of the other Obligations of each
Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of that Borrower secured, until the
Termination Date, by all of the Collateral.
CONDITIONS PRECEDENT
Conditions to the Initial Loans. No Lender shall be obligated to make any Loan
or incur any Letter of Credit Obligations on the Closing Date, or to take,
fulfill, or perform any other action hereunder, until the following conditions
have been satisfied or provided for in a manner satisfactory to Agent, or waived
in writing by Agent and Lenders:
CREDIT AGREEMENT; LOAN DOCUMENTS. THIS AGREEMENT OR COUNTERPARTS HEREOF SHALL
HAVE BEEN DULY EXECUTED BY, AND DELIVERED TO, BORROWERS, AGENT AND LENDERS; AND
AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS, INSTRUMENTS, AGREEMENTS AND LEGAL
OPINIONS AS AGENT SHALL REASONABLY REQUEST IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, INCLUDING ALL THOSE
LISTED IN THE CLOSING CHECKLIST ATTACHED HERETO AS ANNEX D, EACH IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT.
REPAYMENT OF PRIOR LENDER OBLIGATIONS; SATISFACTION OF OUTSTANDING L/CS. (I)
AGENT SHALL HAVE RECEIVED A FULLY EXECUTED ORIGINAL OF A PAY-OFF LETTER
REASONABLY SATISFACTORY TO AGENT CONFIRMING THAT ALL OF THE PRIOR LENDER
OBLIGATIONS WILL BE REPAID IN FULL FROM THE PROCEEDS OF THE TERM LOAN AND THE
INITIAL REVOLVING CREDIT ADVANCE AND ALL LIENS UPON ANY OF THE PROPERTY OF
BORROWERS OR ANY OF THEIR SUBSIDIARIES IN FAVOR OF PRIOR LENDER SHALL BE
TERMINATED BY PRIOR LENDER IMMEDIATELY UPON SUCH PAYMENT; AND (II) ALL LETTERS
OF CREDIT ISSUED OR GUARANTEED BY PRIOR LENDER SHALL HAVE BEEN CASH
COLLATERALIZED, SUPPORTED BY A GUARANTY OF AGENT OR SUPPORTED BY A LETTER OF
CREDIT ISSUED PURSUANT TO ANNEX B, AS MUTUALLY AGREED UPON BY AGENT, BORROWERS
AND PRIOR LENDER.
APPROVALS. AGENT SHALL HAVE RECEIVED (I) SATISFACTORY EVIDENCE THAT THE CREDIT
PARTIES HAVE OBTAINED ALL REQUIRED CONSENTS AND APPROVALS OF ALL PERSONS
INCLUDING ALL REQUISITE GOVERNMENTAL AUTHORITIES, TO THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE CONSUMMATION
OF THE RELATED TRANSACTIONS OR (II) AN OFFICER'S CERTIFICATE IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT AFFIRMING THAT NO SUCH CONSENTS OR
APPROVALS ARE REQUIRED.
24
29
OPENING AVAILABILITY. THE ELIGIBLE ACCOUNTS AND ELIGIBLE INVENTORY SUPPORTING
THE INITIAL REVOLVING CREDIT ADVANCE AND THE INITIAL LETTER OF CREDIT
OBLIGATIONS INCURRED AND THE AMOUNT OF THE RESERVES TO BE ESTABLISHED ON THE
CLOSING DATE SHALL BE SUFFICIENT IN VALUE, AS DETERMINED BY AGENT, TO PROVIDE
BORROWERS, COLLECTIVELY, WITH BORROWING AVAILABILITY, AFTER GIVING EFFECT TO THE
INITIAL REVOLVING CREDIT ADVANCE MADE TO EACH BORROWER, THE INCURRENCE OF ANY
INITIAL LETTER OF CREDIT OBLIGATIONS AND THE CONSUMMATION OF THE RELATED
TRANSACTIONS (ON A PRO FORMA BASIS, WITH TRADE PAYABLES BEING PAID CURRENTLY,
AND EXPENSES AND LIABILITIES BEING PAID IN THE ORDINARY COURSE OF BUSINESS AND
WITHOUT ACCELERATION OF SALES) OF AT LEAST $14,000,000.
PAYMENT OF FEES. BORROWERS SHALL HAVE PAID THE FEES REQUIRED TO BE PAID ON THE
CLOSING DATE IN THE RESPECTIVE AMOUNTS SPECIFIED IN SECTION 1.9 (INCLUDING THE
FEES SPECIFIED IN THE GE CAPITAL COMMITMENT LETTER), AND SHALL HAVE REIMBURSED
AGENT FOR ALL FEES, COSTS AND EXPENSES OF CLOSING PRESENTED AS OF THE CLOSING
DATE.
CAPITAL STRUCTURE: OTHER INDEBTEDNESS. THE CAPITAL STRUCTURE OF EACH CREDIT
PARTY AND THE TERMS AND CONDITIONS OF ALL INDEBTEDNESS OF EACH CREDIT PARTY
SHALL BE ACCEPTABLE TO AGENT IN ITS SOLE DISCRETION.
DUE DILIGENCE. AGENT SHALL HAVE COMPLETED ITS BUSINESS, ENVIRONMENTAL AND LEGAL
DUE DILIGENCE, INCLUDING A ROLL FORWARD OF ITS PREVIOUS COLLATERAL AUDIT, WITH
RESULTS REASONABLY SATISFACTORY TO AGENT.
CONSUMMATION OF RELATED TRANSACTIONS. AGENT SHALL HAVE RECEIVED FULLY EXECUTED
COPIES OF EACH OF THE RELATED TRANSACTIONS DOCUMENTS, EACH OF WHICH SHALL BE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT AND ITS COUNSEL. THE RELATED
TRANSACTIONS SHALL HAVE BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE
RELATED TRANSACTIONS DOCUMENTS. WITHOUT LIMITING THE GENERAL APPLICABILITY OF
THE FOREGOING, AGENT SHALL HAVE RECEIVED EVIDENCE SATISFACTORY TO IT THAT THE
BORROWERS HAVE OBTAINED CONFIRMATION OF THE PLAN OF REORGANIZATION (THE
"CONFIRMATION ORDER") PROVIDING FOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN AND CONTAINING TERMS AND PROVISIONS ACCEPTABLE TO THE AGENT
IN ITS SOLE DISCRETION. THE CONFIRMATION ORDER SHALL NOT HAVE BEEN STAYED BY THE
BANKRUPTCY COURT OR ANY OTHER COURT HAVING JURISDICTION TO ISSUE ANY SUCH STAY
AND SHALL INCLUDE, WITHOUT LIMITATION, THE FOLLOWING REQUIREMENTS, ALL AS MORE
SPECIFICALLY DETAILED IN THE GE CAPITAL COMMITMENT LETTER (AND INCORPORATED
HEREIN BY REFERENCE): (I) THE TERMS OF THE TRANSACTION CONTEMPLATED HEREIN ARE
APPROVED AND RATIFIED AS BEING ENTERED INTO IN GOOD FAITH, PROVIDING THE MOST
FAVORABLE FINANCING TERMS AND BEING CRITICAL TO THE SUCCESS AND FEASIBILITY OF
THE PLAN OF REORGANIZATION, AND (II) THE DEFINITIVE LOAN DOCUMENTS, INCLUDING,
UCC FINANCING STATEMENTS AND MORTGAGES SIGNED BY BORROWERS' PREDECESSOR DEBTORS
AS DEBTORS-IN-POSSESSION, SHALL BE BINDING UPON AND ENFORCEABLE AGAINST THE
25
30
BORROWERS UPON AND AFTER THE EFFECTIVE DATE OF CONFIRMATION OF THE PLAN OF
REORGANIZATION AS IF EXECUTED AND DELIVERED BY BORROWERS AS REORGANIZED DEBTORS,
NOTWITHSTANDING ANY PROVISION IN THE PLAN OF REORGANIZATION OR THE CONFIRMATION
ORDER TO THE CONTRARY. IN ADDITION, THE TIME TO APPEAL THE CONFIRMATION ORDER OR
TO SEEK REVIEW, REHEARING, OR CERTIORARI WITH RESPECT TO THE CONFIRMATION ORDER
MUST HAVE EXPIRED, NO APPEAL OR PETITION FOR REVIEW, REHEARING, OR CERTIORARI
WITH RESPECT TO THE CONFIRMATION ORDER MAY BE PENDING, AND THE CONFIRMATION
ORDER MUST OTHERWISE BE IN FULL FORCE AND EFFECT.
SALE OF LACLEDE MID AMERICA, INC. AGENT SHALL HAVE RECEIVED EVIDENCE
SATISFACTORY TO IT THAT LACLEDE STEEL SHALL HAVE RECEIVED NO LESS THAN
$22,500,000 IN CASH FROM THE SALE OF LACLEDE MID AMERICA, INC.
CLOSING DATE INDEBTEDNESS. TOTAL INDEBTEDNESS OF THE BORROWERS (INCLUDING THE
LOANS) AS OF THE CLOSING DATE SHALL NOT EXCEED $60,000,000.
PLAN OF REORGANIZATION. AGENT SHALL HAVE RECEIVED A CERTIFIED COPY OF THE PLAN
OF REORGANIZATION, IN FORM AND SUBSTANCE SATISFACTORY TO AGENT.
CONFIRMATION ORDER. AGENT SHALL HAVE RECEIVED A CERTIFIED COPY OF THE
CONFIRMATION ORDER, IN FORM AND SUBSTANCE SATISFACTORY TO AGENT, AND SUCH
CONFIRMATION ORDER SHALL BE A FINAL ORDER
Further Conditions to Each Loan. Except as otherwise expressly provided herein,
no Lender shall be obligated to fund any Advance, convert or continue any Loan
as a LIBOR Loan or incur any Letter of Credit Obligation, if, as of the date
thereof:
ANY REPRESENTATION OR WARRANTY BY ANY CREDIT PARTY CONTAINED HEREIN OR IN ANY
OTHER LOAN DOCUMENT IS UNTRUE OR INCORRECT AS OF SUCH DATE, EXCEPT TO THE EXTENT
THAT SUCH REPRESENTATION OR WARRANTY EXPRESSLY RELATES TO AN EARLIER DATE AND
EXCEPT FOR CHANGES THEREIN EXPRESSLY PERMITTED OR EXPRESSLY CONTEMPLATED BY THIS
AGREEMENT AND AGENT OR REQUISITE REVOLVING LENDERS HAVE DETERMINED NOT TO MAKE
SUCH ADVANCE, CONVERT OR CONTINUE ANY LOAN AS LIBOR LOAN OR INCUR SUCH LETTER OF
CREDIT OBLIGATION AS A RESULT OF THE FACT THAT SUCH WARRANTY OR REPRESENTATION
IS UNTRUE OR INCORRECT;
ANY EVENT OR CIRCUMSTANCE HAVING A MATERIAL ADVERSE EFFECT HAS OCCURRED SINCE
THE DATE HEREOF AS DETERMINED BY THE REQUISITE REVOLVING LENDERS AND AGENT OR
REQUISITE REVOLVING LENDERS HAVE DETERMINED NOT TO MAKE SUCH ADVANCE, CONVERT OR
CONTINUE ANY LOAN AS A LIBOR LOAN OR INCUR SUCH LETTER OF CREDIT OBLIGATION AS A
RESULT OF THE FACT THAT SUCH EVENT OR CIRCUMSTANCE HAS OCCURRED;
26
31
ANY DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT
AFTER GIVING EFFECT TO ANY ADVANCE (OR THE INCURRENCE OF ANY LETTER OF CREDIT
OBLIGATION), AND AGENT OR REQUISITE REVOLVING LENDERS SHALL HAVE DETERMINED NOT
TO MAKE ANY ADVANCE, CONVERT OR CONTINUE ANY LOAN AS A LIBOR LOAN OR INCUR ANY
LETTER OF CREDIT OBLIGATION AS A RESULT OF THAT DEFAULT OR EVENT OF DEFAULT; OR
AFTER GIVING EFFECT TO ANY ADVANCE (OR THE INCURRENCE OF ANY LETTER OF CREDIT
OBLIGATIONS), (I) THE OUTSTANDING PRINCIPAL AMOUNT OF THE AGGREGATE REVOLVING
LOAN WOULD EXCEED THE LESSER OF THE AGGREGATE BORROWING BASE AND THE MAXIMUM
AMOUNT, IN EACH CASE, LESS THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THE SWING
LINE LOAN, OR (II) THE OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING LOAN OF THE
APPLICABLE BORROWER WOULD EXCEED SUCH BORROWER'S SEPARATE BORROWING BASE LESS
THE OUTSTANDING PRINCIPAL AMOUNT OF THE SWING LINE LOAN TO THAT BORROWER.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit Obligations,
the Credit Parties executing this Agreement, jointly and severally, make the
following representations and warranties to Agent and each Lender with respect
to all Credit Parties, each and all of which shall survive the execution and
delivery of this Agreement.
27
32
Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization set forth in Disclosure Schedule
(3.1); (b) is duly qualified to conduct business and is in good standing in each
other jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses, damages or liabilities in
excess of $50,000; (c) has the requisite power and authority and the legal right
to own, pledge, mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease and to conduct its business as now,
heretofore and proposed to be conducted; (d) subject to specific representations
regarding Environmental Laws, has all material licenses, permits, consents or
approvals from or by, and has made all material filings with, and has given all
material notices to, all Governmental Authorities having jurisdiction, to the
extent required for such ownership, operation and conduct; (e) is in compliance
with its charter and bylaws or partnership or operating agreement, as
applicable; and (f) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
Executive Offices, Collateral Locations, FEIN. As of the Closing Date, the
current location of each Credit Party's chief executive office and the
warehouses and premises at which any Collateral is located are set forth in
Disclosure Schedule (3.2), and none of such locations has changed within the 12
months preceding the Closing Date. In addition, Disclosure Schedule (3.2) lists
the federal employer identification number of each Credit Party.
Corporate Power, Authorization, Enforceable Obligations. The execution, delivery
and performance by each Credit Party of the Loan Documents to which it is a
party and the creation of all Liens provided for therein: (a) are within such
Person's power; (b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action; (c) do not contravene
any provision of such Person's charter, bylaws or partnership or operating
agreement as applicable; (d) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Person is a party or by which such Person or any of its property is bound; (f)
do not result in the creation or imposition of any Lien upon any of the property
of such Person other than those in favor of Agent, on behalf of itself and
Lenders, pursuant to the Loan Documents; and (g) do not require the consent or
approval of any Governmental Authority or any other Person, except those
referred to in Section 2.1(c), all of which will have been duly obtained, made
or complied with prior to the Closing Date. Each of the Loan Documents shall be
duly executed and delivered by each Credit Party that is a party thereto and
each such Loan Document shall constitute a legal, valid and binding obligation
of such Credit Party enforceable against it in accordance with its terms.
Financial Statements and Projections. Except for the Projections, all Financial
Statements concerning Borrowers and their respective Subsidiaries that are
referred to below have been prepared in accordance with GAAP consistently
applied throughout the periods covered (except as disclosed therein and except,
with respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.
28
33
FINANCIAL STATEMENTS. THE FOLLOWING FINANCIAL STATEMENTS ATTACHED HERETO AS
DISCLOSURE SCHEDULE (3.4(a)) HAVE BEEN DELIVERED ON THE DATE HEREOF:
The audited consolidated and consolidating balance sheets at September 30, 2000
and the related statements of income and cash flows of Borrowers and their
Subsidiaries for the Fiscal Year then ended, certified by Deloitte & Touche LLP.
The unaudited balance sheet(s) at November 30, 2000 and the related statement(s)
of income and cash flows of Borrowers and their Subsidiaries for the two Fiscal
Months then ended.
PRO FORMA. THE PRO FORMA DELIVERED ON THE DATE HEREOF AND ATTACHED HERETO AS
DISCLOSURE SCHEDULE (3.4(b)) WAS PREPARED BY BORROWERS GIVING PRO FORMA EFFECT
TO THE RELATED TRANSACTIONS, WAS BASED ON THE PROJECTED CONSOLIDATED AND
CONSOLIDATING BALANCE SHEETS OF BORROWERS AND THEIR SUBSIDIARIES DATED DECEMBER
29, 2000, AND WAS PREPARED IN ACCORDANCE WITH GAAP, WITH ONLY SUCH ADJUSTMENTS
THERETO AS WOULD BE REQUIRED IN ACCORDANCE WITH GAAP.
PROJECTIONS. THE PROJECTIONS DELIVERED ON THE DATE HEREOF AND ATTACHED HERETO AS
DISCLOSURE SCHEDULE (3.4(c)) HAVE BEEN PREPARED BY BORROWERS IN LIGHT OF THE
PAST OPERATIONS OF THEIR BUSINESSES, AND REFLECT PROJECTIONS FOR THE THREE YEAR
PERIOD BEGINNING ON OCTOBER 1, 2000 ON A MONTH-BY-MONTH BASIS FOR THE FIRST YEAR
AND ON A YEAR-BY-YEAR BASIS THEREAFTER. THE PROJECTIONS ARE BASED UPON ESTIMATES
AND ASSUMPTIONS STATED THEREIN, ALL OF WHICH BORROWERS BELIEVE TO BE REASONABLE
AND FAIR IN LIGHT OF CURRENT CONDITIONS AND CURRENT FACTS KNOWN TO BORROWERS
AND, AS OF THE CLOSING DATE, REFLECT BORROWERS' GOOD FAITH AND REASONABLE
ESTIMATES OF THE FUTURE FINANCIAL PERFORMANCE OF BORROWERS AND OF THE OTHER
INFORMATION PROJECTED THEREIN FOR THE PERIOD SET FORTH THEREIN.
Material Adverse Effect. Except as set forth on Disclosure Schedule (3.5),
between September 30, 2000 and the Closing Date: (a) no Credit Party has
incurred any obligations, contingent or noncontingent liabilities, liabilities
for Charges, long-term leases or unusual forward or long-term commitments that
are not reflected in the Pro Forma and that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract, lease
or other agreement or instrument has been entered into by any Credit Party or
has become binding upon any Credit Party's assets and no law or regulation
applicable to any Credit Party has been adopted that has had or could reasonably
be expected to have a Material Adverse Effect, and (c) no Credit Party is in
default and to the best of Borrowers' knowledge no third party is in default
under any material contract, lease or other agreement or instrument, that alone
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Between September 30, 2000 and the Closing Date no event has occurred,
that alone or together with other events, could reasonably be expected to have a
Material Adverse Effect.
Ownership of Property; Liens. As of the Closing Date, the real estate ("Real
Estate") listed in Disclosure Schedule (3.6) constitutes all of the real
property owned, leased, subleased, or used by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real Estate,
and valid and marketable leasehold interests in all of its leased Real Estate,
all as described on Disclosure Schedule (3.6), and copies of all such leases or
a summary of terms thereof reasonably satisfactory to Agent have been delivered
to Agent. Disclosure Schedule (3.6) further describes any Real Estate with
respect to which any Credit Party is a lessor, sublessor or assignor as of the
Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and
29
34
assets. As of the Closing Date, none of the properties and assets of any Credit
Party are subject to any Liens other than Permitted Encumbrances, and there are
no facts, circumstances or conditions known to any Credit Party that may result
in any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets. Disclosure Schedule (3.6) also describes any purchase options,
rights of first refusal or other similar contractual rights pertaining to any
Real Estate. As of the Closing Date, no portion of any Credit Party's Real
Estate has suffered any material damage by fire or other casualty loss that has
not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. As of the Closing Date, all material
permits required to have been issued or appropriate to enable the Real Estate to
be lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.
Labor Matters. As of the Closing Date (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule (3.7), no Credit Party is a party to or bound by
any collective bargaining agreement, management agreement, consulting agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described on Disclosure Schedule
(3.7) have been delivered to Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7), there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.
Except as set forth in Disclosure Schedule (3.8), as of the Closing Date, no
Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. All
of the issued and outstanding Stock of each Credit Party is owned by each of the
Stockholders and in the amounts set forth in Disclosure Schedule (3.8). Except
as set forth in Disclosure Schedule (3.8), there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each
Credit Party as of the Closing Date (except for the Obligations) is described in
Section 6.3 (including Disclosure Schedule (6.3)). None of the Credit Parties
other than the Borrowers has any assets (except Stock of their Subsidiary) or
any Indebtedness or Guaranteed Indebtedness (except the Obligations).
Government Regulation. No Credit Party is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940. No Credit Party is subject to regulation under the Public Utility
30
35
Holding Company Act of 1935, the Federal Power Act, or any other federal or
state statute that restricts or limits its ability to incur Indebtedness or to
perform its obligations hereunder. The making of the Loans by Lenders to
Borrowers, the incurrence of the Letter of Credit Obligations on behalf of
Borrowers, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
Margin Regulations. No Credit Party is engaged, nor will it engage, principally
or as one of its important activities, in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" as such terms are
defined in Regulation U of the Federal Reserve Board as now and from time to
time hereafter in effect (such securities being referred to herein as "Margin
Stock"). No Credit Party owns any Margin Stock, and none of the proceeds of the
Loans or other extensions of credit under this Agreement will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Indebtedness that was originally
incurred to purchase or carry any Margin Stock or for any other purpose that
might cause any of the Loans or other extensions of credit under this Agreement
to be considered a "purpose credit" within the meaning of Regulations T, U or X
of the Federal Reserve Board. No Credit Party will take or permit to be taken
any action that might cause any Loan Document to violate any regulation of the
Federal Reserve Board.
Taxes. All tax returns, reports and statements, including information returns,
required by any Governmental Authority to be filed by any Credit Party have been
filed with the appropriate Governmental Authority and all Charges have been paid
prior to the date on which any fine, penalty, interest or late charge may be
added thereto for nonpayment thereof (or any such fine, penalty, interest, late
charge or loss has been paid), excluding Charges or other amounts being
contested in accordance with Section 5.2(b). Proper and accurate amounts have
been withheld by each Credit Party from its respective employees for all periods
in full and complete compliance with all applicable federal, state, local and
foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities. Disclosure Schedule (3.11) sets forth as of the
Closing Date those taxable years for which any Credit Party's tax returns are
currently being audited by the IRS or any other applicable Governmental
Authority, and any assessments or threatened assessments in connection with such
audit, or otherwise currently outstanding. Except as described in Disclosure
Schedule (3.11), no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Credit Party's knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect.
ERISA.
(A) DISCLOSURE SCHEDULE (3.12) LISTS (I) ALL ERISA AFFILIATES
AND (II) ALL PLANS AND SEPARATELY IDENTIFIES ALL PENSION PLANS, INCLUDING TITLE
IV PLANS, MULTIEMPLOYER PLANS, ESOPS AND WELFARE PLANS, INCLUDING ALL RETIREE
WELFARE PLANS. COPIES OF ALL SUCH LISTED PLANS, TOGETHER WITH A COPY OF THE
LATEST IRS/DOL 5500-SERIES FORM FOR EACH SUCH PLAN, HAVE BEEN DELIVERED TO
AGENT. EXCEPT WITH RESPECT TO MULTIEMPLOYER PLANS, EACH QUALIFIED PLAN HAS BEEN
DETERMINED BY THE IRS TO QUALIFY UNDER SECTION 401 OF THE IRC, THE TRUSTS
CREATED THEREUNDER HAVE
31
36
BEEN DETERMINED TO BE EXEMPT FROM TAX UNDER THE PROVISIONS OF SECTION 501 OF THE
IRC, AND NOTHING HAS OCCURRED THAT WOULD CAUSE THE LOSS OF SUCH QUALIFICATION OR
TAX-EXEMPT STATUS. EACH PLAN IS IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF
ERISA AND THE IRC, INCLUDING THE TIMELY FILING OF ALL REPORTS REQUIRED UNDER THE
IRC OR ERISA, INCLUDING THE STATEMENT REQUIRED BY 29 CFR SECTION 2520.104-23.
NEITHER ANY CREDIT PARTY NOR ERISA AFFILIATE HAS FAILED TO MAKE ANY CONTRIBUTION
OR PAY ANY AMOUNT DUE AS REQUIRED BY EITHER SECTION 412 OF THE IRC OR SECTION
302 OF ERISA OR THE TERMS OF ANY SUCH PLAN. NEITHER ANY CREDIT PARTY NOR ERISA
AFFILIATE HAS ENGAGED IN A "PROHIBITED TRANSACTION," AS DEFINED IN SECTION 406
OF ERISA AND SECTION 4975 OF THE IRC, IN CONNECTION WITH ANY PLAN, THAT WOULD
SUBJECT ANY CREDIT PARTY TO A MATERIAL TAX ON PROHIBITED TRANSACTIONS IMPOSED BY
SECTION 502(i) OF ERISA OR SECTION 4975 OF THE IRC.
(B) EXCEPT AS SET FORTH IN DISCLOSURE SCHEDULE (3.12): (I) NO
TITLE IV PLAN HAS ANY UNFUNDED PENSION LIABILITY; (II) NO ERISA EVENT OR EVENT
DESCRIBED IN SECTION 4062(e) OF ERISA WITH RESPECT TO ANY TITLE IV PLAN HAS
OCCURRED OR IS REASONABLY EXPECTED TO OCCUR; (III) THERE ARE NO PENDING, OR TO
THE KNOWLEDGE OF ANY CREDIT PARTY, THREATENED CLAIMS (OTHER THAN CLAIMS FOR
BENEFITS IN THE NORMAL COURSE), SANCTIONS, ACTIONS OR LAWSUITS, ASSERTED OR
INSTITUTED AGAINST ANY PLAN OR ANY PERSON AS FIDUCIARY OR SPONSOR OF ANY PLAN;
(IV) NO CREDIT PARTY OR ERISA AFFILIATE HAS INCURRED OR REASONABLY EXPECTS TO
INCUR ANY LIABILITY AS A RESULT OF A COMPLETE OR PARTIAL WITHDRAWAL FROM A
MULTIEMPLOYER PLAN; (V) WITHIN THE LAST FIVE YEARS NO TITLE IV PLAN OF ANY
CREDIT PARTY OR ERISA AFFILIATE HAS BEEN TERMINATED, WHETHER OR NOT IN A
"STANDARD TERMINATION" AS THAT TERM IS USED IN SECTION 4041(b)(1) OF ERISA, NOR
HAS ANY TITLE IV PLAN OF ANY CREDIT PARTY OR ANY ERISA AFFILIATE (DETERMINED AT
ANY TIME WITHIN THE LAST FIVE YEARS) WITH UNFUNDED PENSION LIABILITIES BEEN
TRANSFERRED OUTSIDE OF THE "CONTROLLED GROUP" (WITHIN THE MEANING OF SECTION
4001(a)(14) OF ERISA) OF ANY CREDIT PARTY OR ERISA AFFILIATE (DETERMINED AT SUCH
TIME); (VI) EXCEPT IN THE CASE OF ANY ESOP, STOCK OF ALL CREDIT PARTIES AND
THEIR ERISA AFFILIATES MAKES UP, IN THE AGGREGATE, NO MORE THAN 10% OF FAIR
MARKET VALUE OF THE ASSETS OF ANY PLAN MEASURED ON THE BASIS OF FAIR MARKET
VALUE AS OF THE LATEST VALUATION DATE OF ANY PLAN; AND (VII) NO LIABILITY UNDER
ANY TITLE IV PLAN HAS BEEN SATISFIED WITH THE PURCHASE OF A CONTRACT FROM AN
INSURANCE COMPANY THAT IS NOT RATED AAA BY THE STANDARD & POOR'S CORPORATION OR
AN EQUIVALENT RATING BY ANOTHER NATIONALLY RECOGNIZED RATING AGENCY.
No Litigation. No action, claim, lawsuit, demand, investigation or proceeding is
now pending or, to the knowledge of any Credit Party, threatened against any
Credit Party, before any Governmental Authority or before any arbitrator or
panel of arbitrators (collectively, "Litigation"), (a) that challenges any
Credit Party's right or power to enter into or perform any of its obligations
under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could be reasonably be expected to have a Material
Adverse Effect. Except as set forth on Disclosure Schedule (3.13), as of the
Closing Date there is no Litigation pending or, to any Credit Party's knowledge,
threatened, that seeks damages in excess of $100,000 or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.
32
37
Brokers. No broker or finder brought about the obtaining, making or closing of
the Loans or the Related Transactions, and no Credit Party or Affiliate thereof
has any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
Intellectual Property. As of the Closing Date, each Credit Party owns or has
rights to use all Intellectual Property necessary to continue to conduct its
business as now or heretofore conducted by it or proposed to be conducted by it,
and each Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule
(3.15). Each Credit Party conducts its business and affairs without infringement
of or interference with any Intellectual Property of any other Person in any
material respect. Except as set forth in Disclosure Schedule (3.15), no Credit
Party is aware of any infringement claim by any other Person with respect to any
Intellectual Property.
Full Disclosure. No information contained in this Agreement, any of the other
Loan Documents, any Projections, Financial Statements or Collateral Reports or
other written reports from time to time delivered hereunder or any written
statement furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made. Except for the SWIDA
Collateral and ECP Collateral, the Liens granted to Agent, on behalf of itself
and Lenders, pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein,
subject, as to priority, only to Permitted Encumbrances.
Environmental Matters.
(A) EXCEPT AS SET FORTH IN DISCLOSURE SCHEDULE (3.17), AS OF
THE CLOSING DATE: (I) THE REAL ESTATE IS FREE OF CONTAMINATION FROM ANY
HAZARDOUS MATERIAL EXCEPT FOR SUCH CONTAMINATION THAT WOULD NOT ADVERSELY IMPACT
THE VALUE OR MARKETABILITY OF SUCH REAL ESTATE AND THAT WOULD NOT RESULT IN
ENVIRONMENTAL LIABILITIES THAT COULD REASONABLY BE EXPECTED TO EXCEED $100,000;
(II) NO CREDIT PARTY HAS CAUSED OR SUFFERED TO OCCUR ANY RELEASE OF HAZARDOUS
MATERIALS ON, AT, IN, UNDER, ABOVE, TO, FROM OR ABOUT ANY OF ITS REAL ESTATE
THAT COULD REASONABLY BE EXPECTED TO RESULT IN THE CREDIT PARTIES INCURRING
REMEDIATION COSTS EXCEEDING $100,000; (III) THE CREDIT PARTIES ARE AND HAVE BEEN
IN COMPLIANCE WITH ALL ENVIRONMENTAL LAWS, EXCEPT FOR SUCH NONCOMPLIANCE THAT
WOULD NOT RESULT IN ENVIRONMENTAL LIABILITIES WHICH COULD REASONABLY BE EXPECTED
TO EXCEED $100,000; (IV) THE CREDIT PARTIES HAVE OBTAINED, AND ARE IN COMPLIANCE
WITH, ALL ENVIRONMENTAL PERMITS REQUIRED BY ENVIRONMENTAL LAWS FOR THE
OPERATIONS OF THEIR RESPECTIVE BUSINESSES AS PRESENTLY CONDUCTED OR AS PROPOSED
TO BE CONDUCTED, EXCEPT WHERE THE FAILURE TO SO OBTAIN OR COMPLY WITH SUCH
ENVIRONMENTAL PERMITS WOULD NOT RESULT IN ENVIRONMENTAL LIABILITIES THAT COULD
REASONABLY BE EXPECTED TO EXCEED $100,000, AND ALL SUCH ENVIRONMENTAL PERMITS
ARE VALID, UNCONTESTED AND IN GOOD STANDING; (V) NO CREDIT PARTY IS INVOLVED IN
OPERATIONS OR KNOWS OF ANY FACTS, CIRCUMSTANCES OR CONDITIONS, INCLUDING ANY
RELEASES OF HAZARDOUS MATERIALS, THAT ARE LIKELY TO RESULT IN ANY ENVIRONMENTAL
LIABILITIES OF SUCH CREDIT PARTY WHICH COULD REASONABLY BE EXPECTED TO EXCEED
$100,000, AND NO CREDIT PARTY HAS PERMITTED ANY CURRENT OR FORMER TENANT OR
OCCUPANT OF THE REAL ESTATE TO ENGAGE IN ANY SUCH OPERATIONS; (VI) THERE IS NO
33
38
LITIGATION ARISING UNDER OR RELATED TO ANY ENVIRONMENTAL LAWS, ENVIRONMENTAL
PERMITS OR HAZARDOUS MATERIAL THAT SEEKS DAMAGES, PENALTIES, FINES, COSTS OR
EXPENSES IN EXCESS OF $25,000 OR INJUNCTIVE RELIEF AGAINST, OR THAT ALLEGES
CRIMINAL MISCONDUCT BY, ANY CREDIT PARTY; (VII) NO NOTICE HAS BEEN RECEIVED BY
ANY CREDIT PARTY IDENTIFYING IT AS A "POTENTIALLY RESPONSIBLE PARTY" OR
REQUESTING INFORMATION UNDER CERCLA OR ANALOGOUS STATE STATUTES, AND TO THE
KNOWLEDGE OF THE CREDIT PARTIES, THERE ARE NO FACTS, CIRCUMSTANCES OR CONDITIONS
THAT MAY RESULT IN ANY CREDIT PARTY BEING IDENTIFIED AS A "POTENTIALLY
RESPONSIBLE PARTY" UNDER CERCLA OR ANALOGOUS STATE STATUTES THAT COULD
REASONABLY BE EXPECTED TO RESULT IN THE CREDIT PARTIES INCURRING REMEDIATION
COSTS EXCEEDING $100,000; AND (VIII) THE CREDIT PARTIES HAVE PROVIDED TO AGENT
COPIES OF ALL EXISTING ENVIRONMENTAL REPORTS, REVIEWS AND AUDITS PERTAINING TO
ACTUAL OR POTENTIAL ENVIRONMENTAL LIABILITIES, IN EACH CASE RELATING TO ANY
CREDIT PARTY.
(B) EACH CREDIT PARTY HEREBY ACKNOWLEDGES AND AGREES THAT
AGENT (I) IS NOT NOW, AND HAS NOT EVER BEEN, IN CONTROL OF ANY OF THE REAL
ESTATE OR ANY CREDIT PARTY'S AFFAIRS, AND (II) DOES NOT HAVE THE CAPACITY
THROUGH THE PROVISIONS OF THE LOAN DOCUMENTS OR OTHERWISE TO INFLUENCE ANY
CREDIT PARTY'S CONDUCT WITH RESPECT TO THE OWNERSHIP, OPERATION OR MANAGEMENT OF
ANY OF ITS REAL ESTATE OR COMPLIANCE WITH ENVIRONMENTAL LAWS OR ENVIRONMENTAL
PERMITS.
Insurance. Disclosure Schedule (3.18) lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the terms of each such policy.
Deposit and Disbursement Accounts. Disclosure Schedule (3.19) lists all banks
and other financial institutions at which any Credit Party maintains deposit or
other accounts as of the Closing Date, including any Disbursement Accounts, and
such Schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
Government Contracts. Except as set forth in Disclosure Schedule (3.20), as of
the Closing Date, no Credit Party is a party to any contract or agreement with
any Governmental Authority and no Credit Party's Accounts are subject to the
Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state
or local law.
Customer and Trade Relations. As of the Closing Date, there exists no actual or,
to the knowledge of any Credit Party, threatened termination or cancellation of,
or any material adverse modification or change in: the business relationship of
any Credit Party with any customer or group of customers whose purchases during
the preceding 12 months caused them to be ranked among the ten largest customers
of such Credit Party; or the business relationship of any Credit Party with any
supplier material to its operations.
Agreements and Other Documents. As of the Closing Date, each Credit Party has
provided to Agent or its counsel, on behalf of Lenders, accurate and complete
copies (or summaries) of all of the following agreements or documents to which
it is subject and each of which is listed in Disclosure Schedule (3.22): supply
agreements and purchase agreements not terminable by such Credit Party within 60
days following written notice issued by such Credit Party and involving
transactions in excess of $1,000,000 per annum;
34
39
leases of Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $250,000 per annum; licenses
and permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; instruments and documents evidencing
any Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.
Solvency. Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or incurred on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
incurred, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrower Representative; (c) the Refinancing and the
consummation of the other Related Transactions; and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Credit Party is
and will be Solvent.
Subordinated Debt. As of the Closing Date, Borrowers have delivered to Agent a
complete and correct copy of the Subordinated Notes (including all schedules,
exhibits, amendments, supplements, modifications, assignments and all other
documents delivered pursuant thereto or in connection therewith). Borrower
Representative has the corporate power and authority to incur the Indebtedness
evidenced by the Subordinated Notes. The subordination provisions of the
Subordinated Notes are enforceable against the holders of the Subordinated Notes
by Agent and Lenders. All Obligations, including the Letter of Credit
Obligations, constitute senior Indebtedness entitled to the benefits of the
subordination provisions contained in the Subordinated Notes. Borrowers
acknowledge that Agent and each Lender are entering into this Agreement and are
extending the Commitments in reliance upon the subordination provisions of the
Subordinated Notes and this Section 3.24.
FINANCIAL STATEMENTS AND INFORMATION
Reports and Notices.EACH CREDIT PARTY EXECUTING THIS AGREEMENT HEREBY AGREES
THAT FROM AND AFTER THE CLOSING DATE AND UNTIL THE TERMINATION DATE, IT SHALL
DELIVER TO AGENT OR TO AGENT AND LENDERS, AS REQUIRED, THE FINANCIAL STATEMENTS,
NOTICES, PROJECTIONS AND OTHER INFORMATION AT THE TIMES, TO THE PERSONS AND IN
THE MANNER SET FORTH IN ANNEX E.
EACH CREDIT PARTY EXECUTING THIS AGREEMENT HEREBY AGREES THAT, FROM AND AFTER
THE CLOSING DATE AND UNTIL THE TERMINATION DATE, IT SHALL DELIVER TO AGENT OR TO
AGENT AND LENDERS, AS REQUIRED, THE VARIOUS COLLATERAL REPORTS (INCLUDING
BORROWING BASE CERTIFICATES IN THE FORM OF EXHIBIT 4.1(b)) AT THE TIMES, TO THE
PERSONS AND IN THE MANNER SET FORTH IN ANNEX F.
Communication with Accountants. Each Credit Party executing this Agreement
authorizes (a) Agent and (b) so long as an Event of Default has occurred and is
continuing, each Lender, to communicate directly with its independent certified
public accountants, including Deloitte & Touche LLP, and authorizes and, at
Agent's request, shall instruct those accountants and advisors to disclose and
make available to Agent and each Lender any and all Financial Statements and
other supporting financial
35
40
documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party.
AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof and until the
Termination Date:
Maintenance of Existence and Conduct of Business. Each Credit Party shall: do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights and franchises; continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder; at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and transact business only in such
corporate and trade names as are set forth in Disclosure Schedule (5.1).
Payment of Charges.
(A) SUBJECT TO SECTION 5.2(b), EACH CREDIT PARTY SHALL PAY AND
DISCHARGE OR CAUSE TO BE PAID AND DISCHARGED PROMPTLY ALL CHARGES PAYABLE BY IT,
INCLUDING (I) CHARGES IMPOSED UPON IT, ITS INCOME AND PROFITS, OR ANY OF ITS
PROPERTY (REAL, PERSONAL OR MIXED) AND ALL CHARGES WITH RESPECT TO TAX, SOCIAL
SECURITY AND UNEMPLOYMENT WITHHOLDING WITH RESPECT TO ITS EMPLOYEES, (II) LAWFUL
CLAIMS FOR LABOR, MATERIALS, SUPPLIES AND SERVICES OR OTHERWISE, AND (III) ALL
STORAGE OR RENTAL CHARGES PAYABLE TO WAREHOUSEMEN OR BAILEES, IN EACH CASE,
BEFORE ANY THEREOF SHALL BECOME PAST DUE.
(B) EACH CREDIT PARTY MAY IN GOOD FAITH CONTEST, BY
APPROPRIATE PROCEEDINGS, THE VALIDITY OR AMOUNT OF ANY CHARGES, TAXES OR CLAIMS
DESCRIBED IN SECTION 5.2(a); PROVIDED, THAT (I) ADEQUATE RESERVES WITH RESPECT
TO SUCH CONTEST ARE MAINTAINED ON THE BOOKS OF SUCH CREDIT PARTY, IN ACCORDANCE
WITH GAAP; (II) NO LIEN SHALL BE IMPOSED TO SECURE PAYMENT OF SUCH CHARGES
(OTHER THAN PAYMENTS TO WAREHOUSEMEN AND/OR BAILEES) THAT IS SUPERIOR TO ANY OF
THE LIENS SECURING THE OBLIGATIONS AND SUCH CONTEST IS MAINTAINED AND PROSECUTED
CONTINUOUSLY AND WITH DILIGENCE AND OPERATES TO SUSPEND COLLECTION OR
ENFORCEMENT OF SUCH CHARGES; (III) NONE OF THE COLLATERAL BECOMES SUBJECT TO
FORFEITURE OR LOSS AS A RESULT OF SUCH CONTEST; (IV) SUCH CREDIT PARTY SHALL
PROMPTLY PAY OR DISCHARGE SUCH CONTESTED CHARGES, TAXES OR CLAIMS AND ALL
ADDITIONAL CHARGES, INTEREST, PENALTIES AND EXPENSES, IF ANY, AND SHALL DELIVER
TO AGENT EVIDENCE REASONABLY ACCEPTABLE TO AGENT OF SUCH COMPLIANCE, PAYMENT OR
DISCHARGE, IF SUCH CONTEST IS TERMINATED OR DISCONTINUED ADVERSELY TO SUCH
CREDIT PARTY OR THE CONDITIONS SET FORTH IN THIS SECTION 5.2(b) ARE NO LONGER
MET; AND (V)
36
41
AGENT HAS NOT ADVISED BORROWERS IN WRITING THAT AGENT REASONABLY BELIEVES THAT
NONPAYMENT OR NONDISCHARGE THEREOF COULD HAVE OR RESULT IN A MATERIAL ADVERSE
EFFECT.
Books and Records. Each Credit Party shall keep adequate books and records with
respect to its business activities in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).
Insurance; Damage to or Destruction of Collateral.
(A) THE CREDIT PARTIES SHALL, AT THEIR SOLE COST AND EXPENSE,
MAINTAIN THE POLICIES OF INSURANCE DESCRIBED ON DISCLOSURE SCHEDULE (3.18) AS IN
EFFECT ON THE DATE HEREOF OR OTHERWISE IN FORM AND AMOUNTS AND WITH INSURERS
REASONABLY ACCEPTABLE TO AGENT. SUCH POLICIES OF INSURANCE (OR THE LOSS PAYABLE
AND ADDITIONAL INSURED ENDORSEMENTS DELIVERED TO AGENT) SHALL CONTAIN PROVISIONS
PURSUANT TO WHICH THE INSURER AGREES TO PROVIDE 30 DAYS PRIOR WRITTEN NOTICE TO
AGENT IN THE EVENT OF ANY NON-RENEWAL, CANCELLATION OR AMENDMENT OF ANY SUCH
INSURANCE POLICY. IF ANY CREDIT PARTY AT ANY TIME OR TIMES HEREAFTER SHALL FAIL
TO OBTAIN OR MAINTAIN ANY OF THE POLICIES OF INSURANCE REQUIRED ABOVE, OR TO PAY
ALL PREMIUMS RELATING THERETO, AGENT MAY AT ANY TIME OR TIMES THEREAFTER OBTAIN
AND MAINTAIN SUCH POLICIES OF INSURANCE AND PAY SUCH PREMIUMS AND TAKE ANY OTHER
ACTION WITH RESPECT THERETO THAT AGENT DEEMS ADVISABLE. AGENT SHALL HAVE NO
OBLIGATION TO OBTAIN INSURANCE FOR ANY CREDIT PARTY OR PAY ANY PREMIUMS
THEREFOR. BY DOING SO, AGENT SHALL NOT BE DEEMED TO HAVE WAIVED ANY DEFAULT OR
EVENT OF DEFAULT ARISING FROM ANY CREDIT PARTY'S FAILURE TO MAINTAIN SUCH
INSURANCE OR PAY ANY PREMIUMS THEREFOR. ALL SUMS SO DISBURSED, INCLUDING
REASONABLE ATTORNEYS' FEES, COURT COSTS AND OTHER CHARGES RELATED THERETO, SHALL
BE PAYABLE ON DEMAND BY BORROWERS TO AGENT AND SHALL BE ADDITIONAL OBLIGATIONS
HEREUNDER SECURED BY THE COLLATERAL.
(B) AGENT RESERVES THE RIGHT AT ANY TIME UPON ANY CHANGE IN
ANY CREDIT PARTY'S RISK PROFILE (INCLUDING ANY CHANGE IN THE PRODUCT MIX
MAINTAINED BY ANY CREDIT PARTY OR ANY LAWS AFFECTING THE POTENTIAL LIABILITY OF
SUCH CREDIT PARTY) TO REQUIRE ADDITIONAL FORMS AND LIMITS OF INSURANCE TO, IN
AGENT'S OPINION, ADEQUATELY PROTECT BOTH AGENT'S AND LENDERS' INTERESTS IN ALL
OR ANY PORTION OF THE COLLATERAL AND TO ENSURE THAT EACH CREDIT PARTY IS
PROTECTED BY INSURANCE IN AMOUNTS AND WITH COVERAGE CUSTOMARY FOR ITS INDUSTRY.
IF REASONABLY REQUESTED BY AGENT, EACH CREDIT PARTY SHALL DELIVER TO AGENT FROM
TIME TO TIME A REPORT OF A REPUTABLE INSURANCE BROKER, REASONABLY SATISFACTORY
TO AGENT, WITH RESPECT TO ITS INSURANCE POLICIES.
(C) EACH CREDIT PARTY SHALL DELIVER TO AGENT, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT, ENDORSEMENTS TO (I) ALL "ALL RISK"
AND BUSINESS INTERRUPTION INSURANCE NAMING AGENT, ON BEHALF OF ITSELF AND
LENDERS, AS LOSS
37
42
PAYEE, AND (II) ALL GENERAL LIABILITY AND OTHER LIABILITY POLICIES NAMING AGENT,
ON BEHALF OF ITSELF AND LENDERS, AS ADDITIONAL INSURED. EACH CREDIT PARTY
IRREVOCABLY MAKES, CONSTITUTES AND APPOINTS AGENT (AND ALL OFFICERS, EMPLOYEES
OR AGENTS DESIGNATED BY AGENT), SO LONG AS ANY DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR THE ANTICIPATED INSURANCE PROCEEDS EXCEED
$250,000, AS SUCH CREDIT PARTY'S TRUE AND LAWFUL AGENT AND ATTORNEY-IN-FACT FOR
THE PURPOSE OF MAKING, SETTLING AND ADJUSTING CLAIMS UNDER SUCH "ALL RISK"
POLICIES OF INSURANCE, ENDORSING THE NAME OF SUCH CREDIT PARTY ON ANY CHECK OR
OTHER ITEM OF PAYMENT FOR THE PROCEEDS OF SUCH "ALL RISK" POLICIES OF INSURANCE
AND FOR MAKING ALL DETERMINATIONS AND DECISIONS WITH RESPECT TO SUCH "ALL RISK"
POLICIES OF INSURANCE. AGENT SHALL HAVE NO DUTY TO EXERCISE ANY RIGHTS OR POWERS
GRANTED TO IT PURSUANT TO THE FOREGOING POWER-OF-ATTORNEY. BORROWER
REPRESENTATIVE SHALL PROMPTLY NOTIFY AGENT OF ANY LOSS, DAMAGE, OR DESTRUCTION
TO THE COLLATERAL IN THE AMOUNT OF $250,000 OR MORE, WHETHER OR NOT COVERED BY
INSURANCE. AFTER DEDUCTING FROM SUCH PROCEEDS THE EXPENSES, IF ANY, INCURRED BY
AGENT IN THE COLLECTION OR HANDLING THEREOF, AGENT MAY, AT ITS OPTION, APPLY
SUCH PROCEEDS TO THE REDUCTION OF THE OBLIGATIONS IN ACCORDANCE WITH SECTION
1.3(d); PROVIDED THAT IN THE CASE OF INSURANCE PROCEEDS PERTAINING TO ANY CREDIT
PARTY THAT IS NOT A BORROWER, SUCH INSURANCE PROCEEDS SHALL BE APPLIED RATABLY
TO ALL LOANS OWING BY EACH BORROWER OR AGENT SHALL PERMIT OR REQUIRE THE
APPLICABLE CREDIT PARTY TO USE SUCH MONEY, OR ANY PART THEREOF, TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL IN A DILIGENT AND EXPEDITIOUS MANNER
WITH MATERIALS AND WORKMANSHIP OF SUBSTANTIALLY THE SAME QUALITY AS EXISTED
BEFORE THE LOSS, DAMAGE OR DESTRUCTION. NOTWITHSTANDING THE FOREGOING, IF THE
CASUALTY GIVING RISE TO SUCH INSURANCE PROCEEDS COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT AND SUCH INSURANCE PROCEEDS DO NOT EXCEED
$250,000 IN THE AGGREGATE, AGENT SHALL PERMIT THE APPLICABLE CREDIT PARTY TO
REPLACE, RESTORE, REPAIR OR REBUILD THE PROPERTY; PROVIDED THAT IF SUCH CREDIT
PARTY SHALL NOT HAVE COMPLETED OR ENTERED INTO BINDING AGREEMENTS TO COMPLETE
SUCH REPLACEMENT, RESTORATION, REPAIR OR REBUILDING WITHIN 180 DAYS OF SUCH
CASUALTY, AGENT MAY APPLY SUCH INSURANCE PROCEEDS TO THE OBLIGATIONS IN
ACCORDANCE WITH SECTION 1.3(d); PROVIDED THAT IN THE CASE OF INSURANCE PROCEEDS
PERTAINING TO ANY CREDIT PARTY THAT IS NOT A BORROWER, SUCH INSURANCE PROCEEDS
SHALL BE APPLIED RATABLY TO ALL OF THE LOANS OWING BY EACH BORROWER. ALL
INSURANCE PROCEEDS THAT ARE TO BE MADE AVAILABLE TO ANY BORROWER TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL SHALL BE APPLIED BY AGENT TO REDUCE
THE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOAN OF SUCH BORROWER (WHICH
APPLICATION SHALL NOT RESULT IN A PERMANENT REDUCTION OF THE REVOLVING LOAN
COMMITMENT) AND UPON SUCH APPLICATION, AGENT SHALL ESTABLISH A RESERVE AGAINST
THE SEPARATE BORROWING BASE OF THE AFFECTED BORROWER IN AN AMOUNT EQUAL TO THE
AMOUNT OF SUCH PROCEEDS SO APPLIED. ALL INSURANCE PROCEEDS MADE AVAILABLE TO ANY
CREDIT PARTY THAT IS NOT A BORROWER TO REPLACE, REPAIR, RESTORE OR REBUILD
COLLATERAL SHALL BE DEPOSITED IN A CASH COLLATERAL ACCOUNT. THEREAFTER, SUCH
FUNDS SHALL BE MADE AVAILABLE TO THAT BORROWER TO PROVIDE FUNDS TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL AS FOLLOWS: (I) BORROWER
REPRESENTATIVE SHALL REQUEST A REVOLVING CREDIT ADVANCE OR A RELEASE
38
43
FROM THE CASH COLLATERAL ACCOUNT BE MADE TO SUCH BORROWER IN THE AMOUNT
REQUESTED TO BE RELEASED; (II) SO LONG AS THE CONDITIONS SET FORTH IN SECTION
2.2 HAVE BEEN MET, REVOLVING LENDERS SHALL MAKE SUCH REVOLVING CREDIT ADVANCE OR
AGENT SHALL RELEASE FUNDS FROM THE CASH COLLATERAL ACCOUNT; AND (III) IN THE
CASE OF INSURANCE PROCEEDS APPLIED AGAINST THE REVOLVING LOAN, THE RESERVE
ESTABLISHED WITH RESPECT TO SUCH INSURANCE PROCEEDS SHALL BE REDUCED BY THE
AMOUNT OF SUCH REVOLVING CREDIT ADVANCE. TO THE EXTENT NOT USED TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL, SUCH INSURANCE PROCEEDS SHALL BE
APPLIED IN ACCORDANCE WITH SECTION 1.3(D); PROVIDED THAT IN THE CASE OF
INSURANCE PROCEEDS PERTAINING TO ANY CREDIT PARTY THAT IS NOT A BORROWER, SUCH
INSURANCE PROCEEDS SHALL BE APPLIED RATABLY TO ALL LOANS OWING BY EACH BORROWER.
Compliance with Laws. Each Credit Party shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including those
relating to ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Supplemental Disclosure. From time to time as may be reasonably requested
by Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of a Default or an Event of Default), the
Credit Parties shall supplement each Disclosure Schedule hereto, or any
representation herein or in any other Loan Document, with respect to any matter
hereafter arising that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in such Disclosure
Schedule or as an exception to such representation or that is necessary to
correct any information in such Disclosure Schedule or representation which has
been rendered inaccurate thereby (and, in the case of any supplements to any
Disclosure Schedule, such Disclosure Schedule shall be appropriately marked to
show the changes made therein); provided that (a) no such supplement to any such
Disclosure Schedule or representation shall amend, supplement or otherwise
modify any Disclosure Schedule or representation, or be or be deemed a waiver of
any Default or Event of Default resulting from the matters disclosed therein,
except as consented to by Agent and Requisite Lenders in writing, and (b) no
supplement shall be required or permitted as to representations and warranties
that relate solely to the Closing Date.
Intellectual Property. Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect.
Environmental Matters. Each Credit Party shall and shall cause each Person
within its control to: (a) conduct its operations and keep and maintain its Real
Estate in compliance with all Environmental Laws and Environmental Permits other
than noncompliance that could not reasonably be expected to have a Material
Adverse Effect; (b) implement any and all investigation, remediation, removal
and response actions that are necessary to comply with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent
promptly after such Credit Party becomes aware of any violation of Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from
or about any Real Estate that is reasonably likely to result in Environmental
Liabilities in excess of $100,000; and (d) promptly forward to Agent a copy of
any order, notice, request for information or any communication or report
received by such Credit Party in connection with any such violation or Release
or any other matter relating to any Environmental Laws or Environmental Permits
that could reasonably be expected to result in Environmental Liabilities in
excess of $100,000, in each case whether or not the Environmental Protection
Agency or any Governmental
39
44
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases. Each Credit Party shall obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. With respect to such locations or warehouse
space leased or owned as of the Closing Date and thereafter, if Agent has not
received a landlord or mortgagee agreement or bailee letter as of the Closing
Date (or, if later, as of the date such location is acquired or leased), any
Borrower's Eligible Inventory at that location shall, in Agent's discretion, be
excluded from the Borrowing Base or be subject to such Reserves as may be
established by Agent in its reasonable credit judgment. After the Closing Date,
no real property or warehouse space shall be leased by any Credit Party and no
Inventory shall be shipped to a processor or converter under arrangements
established after the Closing Date without the prior written consent of Agent
(which consent, in Agent's discretion, may be conditioned upon the exclusion
from the Borrowing Base of Eligible Inventory at that location or the
establishment of Reserves acceptable to Agent) or, unless and until a reasonably
satisfactory landlord agreement or bailee letter, as appropriate, shall first
have been obtained with respect to such location. Each Credit Party shall timely
and fully pay and perform its obligations under all leases and other agreements
with respect to each leased location or public warehouse where any Collateral is
or may be located. To the extent otherwise permitted hereunder, if any Credit
Party proposes to acquire a fee ownership interest in Real Estate after the
Closing Date, it shall first provide to Agent a mortgage or deed of trust
granting Agent a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, real property survey,
local counsel opinion(s), and, if required by Agent, supplemental casualty
insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.
Further Assurances. Each Credit Party executing this Agreement agrees that
it shall and shall cause each other Credit Party to, at such Credit Party's
expense and upon request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement or any other Loan Document.
40
45
NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees as
to all Credit Parties that from and after the date hereof until the Termination
Date:
Mergers, Subsidiaries, Etc. No Credit Party shall directly or indirectly,
by operation of law or otherwise, (a) form or acquire any Subsidiary, or (b)
merge with, consolidate with, acquire all or substantially all of the assets or
Stock of, or otherwise combine with or acquire, any Person.
Investments; Loans and Advances. Except as otherwise expressly permitted by
this Section 6, no Credit Party shall make or permit to exist any investment in,
or make, accrue or permit to exist loans or advances of money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, except that: (a) Borrowers may hold investments comprised of notes
payable, or stock or other securities issued by Account Debtors to any Borrower
pursuant to negotiated agreements with respect to settlement of such Account
Debtor's Accounts in the ordinary course of business, so long as the aggregate
amount of any such Account so settled by Borrowers does not exceed $250,000 and
the aggregate amount of all such Accounts so settled by the Borrowers does not
exceed $500,000; (b) each Credit Party may maintain its existing investments in
its Subsidiaries as of the Closing Date; and (c) Borrowers may make intercompany
dividends or intercompany loans permitted under Section 6.3 (a)(vi).
Indebtedness.
(A) NO CREDIT PARTY SHALL CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY
INDEBTEDNESS, EXCEPT (WITHOUT DUPLICATION) (I) INDEBTEDNESS SECURED BY PURCHASE
MONEY SECURITY INTERESTS AND CAPITAL LEASES PERMITTED IN SECTION 6.7(C), (II)
THE LOANS AND THE OTHER OBLIGATIONS, (III) UNFUNDED PENSION FUND AND OTHER
EMPLOYEE BENEFIT PLAN OBLIGATIONS AND LIABILITIES TO THE EXTENT THEY ARE
PERMITTED TO REMAIN UNFUNDED UNDER APPLICABLE LAW, (IV) EXISTING INDEBTEDNESS
DESCRIBED IN DISCLOSURE SCHEDULE (6.3) AND REFINANCINGS THEREOF OR AMENDMENTS OR
MODIFICATIONS THERETO THAT DO NOT HAVE THE EFFECT OF INCREASING THE PRINCIPAL
AMOUNT THEREOF OR CHANGING THE AMORTIZATION THEREOF (OTHER THAN TO EXTEND THE
SAME) AND THAT ARE OTHERWISE ON TERMS AND CONDITIONS NO LESS FAVORABLE TO ANY
CREDIT PARTY, AGENT OR ANY LENDER, AS DETERMINED BY AGENT, THAN THE TERMS OF THE
INDEBTEDNESS BEING REFINANCED, AMENDED OR MODIFIED, (V) INDEBTEDNESS
SPECIFICALLY PERMITTED UNDER SECTION 6.17; (VI) INDEBTEDNESS EVIDENCED BY A
PROMISSORY NOTE IN FORM AND SUBSTANCE SATISFACTORY TO THE REQUISITE LENDERS
PAYABLE TO METALS USA, INC. IN A PRINCIPAL AMOUNT NOT TO EXCEED $2,000,000; AND
(VII) INDEBTEDNESS CONSISTING OF INTERCOMPANY LOANS AND ADVANCES MADE BY ANY
BORROWER TO ANY OTHER BORROWER; PROVIDED, THAT: (A) EACH BORROWER SHALL HAVE
EXECUTED AND DELIVERED TO EACH OTHER BORROWER, ON THE CLOSING DATE, A DEMAND
NOTE (COLLECTIVELY, THE "INTERCOMPANY NOTES") TO EVIDENCE ANY SUCH INTERCOMPANY
INDEBTEDNESS OWING AT ANY TIME BY SUCH BORROWER TO SUCH OTHER BORROWERS WHICH
INTERCOMPANY NOTES SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
AGENT AND SHALL BE PLEDGED AND DELIVERED TO AGENT PURSUANT TO THE APPLICABLE
PLEDGE AGREEMENT OR SECURITY AGREEMENT AS ADDITIONAL COLLATERAL SECURITY FOR THE
OBLIGATIONS; (B) EACH BORROWER SHALL RECORD ALL INTERCOMPANY TRANSACTIONS ON ITS
BOOKS AND RECORDS IN A MANNER REASONABLY SATISFACTORY TO AGENT; (C) THE
OBLIGATIONS OF EACH BORROWER UNDER ANY SUCH INTERCOMPANY NOTES SHALL BE
41
46
SUBORDINATED TO THE OBLIGATIONS OF SUCH BORROWER HEREUNDER IN A MANNER
REASONABLY SATISFACTORY TO AGENT; (D) AT THE TIME ANY SUCH INTERCOMPANY LOAN OR
ADVANCE IS MADE BY ANY BORROWER TO ANY OTHER BORROWER AND AFTER GIVING EFFECT
THERETO, EACH SUCH BORROWER SHALL BE SOLVENT; (E) NO DEFAULT OR EVENT OF DEFAULT
WOULD OCCUR AND BE CONTINUING AFTER GIVING EFFECT TO ANY SUCH PROPOSED
INTERCOMPANY LOAN; AND (F) IN THE CASE OF ANY INTERCOMPANY INDEBTEDNESS, THE
BORROWER ADVANCING SUCH FUNDS SHALL HAVE BORROWING AVAILABILITY UNDER ITS
SEPARATE BORROWING BASE OF NOT LESS THAN $5,000,000 AFTER GIVING EFFECT TO SUCH
INTERCOMPANY LOAN; (G) THE AGGREGATE AMOUNT OF SUCH INTERCOMPANY INDEBTEDNESS
OWING BY ANY BORROWER SHALL NOT EXCEED $7,000,000 AT ANY ONE TIME OUTSTANDING.
(B) NO CREDIT PARTY SHALL, DIRECTLY OR INDIRECTLY, VOLUNTARILY PURCHASE,
REDEEM, DEFEASE OR PREPAY ANY PRINCIPAL OF, PREMIUM, IF ANY, INTEREST OR OTHER
AMOUNT PAYABLE IN RESPECT OF ANY INDEBTEDNESS, OTHER THAN (I) THE OBLIGATIONS;
(II) INDEBTEDNESS SECURED BY A PERMITTED ENCUMBRANCE IF THE ASSET SECURING SUCH
INDEBTEDNESS HAS BEEN SOLD OR OTHERWISE DISPOSED OF IN ACCORDANCE WITH SECTIONS
6.8(B) OR (C); (III) INDEBTEDNESS PERMITTED BY SECTION 6.3(A)(IV) UPON ANY
REFINANCING THEREOF IN ACCORDANCE WITH SECTION 6.3(A)(IV); AND (IV) OTHER
INDEBTEDNESS (EXCLUDING SUBORDINATED DEBT) NOT IN EXCESS OF $100,000 AND (V) AS
OTHERWISE PERMITTED IN SECTION 6.14.
Employee Loans and Affiliate Transactions.
(A) EXCEPT AS OTHERWISE EXPRESSLY PERMITTED IN THIS SECTION 6 WITH RESPECT
TO AFFILIATES, NO CREDIT PARTY SHALL ENTER INTO OR BE A PARTY TO ANY TRANSACTION
WITH ANY OTHER CREDIT PARTY OR ANY AFFILIATE THEREOF EXCEPT AS PERMITTED UNDER
SECTION 6.2, SECTION 6.3 OR OTHERWISE IN THE ORDINARY COURSE OF AND PURSUANT TO
THE REASONABLE REQUIREMENTS OF SUCH CREDIT PARTY'S BUSINESS AND UPON FAIR AND
REASONABLE TERMS THAT ARE NO LESS FAVORABLE TO SUCH CREDIT PARTY THAN WOULD BE
OBTAINED IN A COMPARABLE ARM'S LENGTH TRANSACTION WITH A PERSON NOT AN AFFILIATE
OF SUCH CREDIT PARTY. IN ADDITION, IF ANY SUCH TRANSACTION OR SERIES OF RELATED
TRANSACTIONS INVOLVES PAYMENTS IN EXCESS OF $100,000 IN THE AGGREGATE, THE TERMS
OF THESE TRANSACTIONS MUST BE DISCLOSED IN ADVANCE TO AGENT AND LENDERS. ALL
SUCH TRANSACTIONS EXISTING AS OF THE DATE HEREOF ARE DESCRIBED IN DISCLOSURE
SCHEDULE (6.4(A)).
(B) NO CREDIT PARTY SHALL ENTER INTO ANY LENDING OR BORROWING TRANSACTION
WITH ANY EMPLOYEES OF ANY CREDIT PARTY, EXCEPT LOANS TO ITS RESPECTIVE EMPLOYEES
IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICES FOR TRAVEL AND
ENTERTAINMENT EXPENSES, RELOCATION COSTS AND SIMILAR PURPOSES AND STOCK OPTION
FINANCING UP TO A MAXIMUM OF $25,000 TO ANY EMPLOYEE AND UP TO A MAXIMUM OF
$150,000 IN THE AGGREGATE AT ANY ONE TIME OUTSTANDING.
42
47
Capital Structure and Business. No Credit Party shall (a) make any changes
in any of its business objectives, purposes or operations that could in any way
adversely affect the repayment of the Loans or any of the other Obligations or
could reasonably be expected to have or result in a Material Adverse Effect, (b)
make any change in its capital structure as described in Disclosure Schedule
(3.8), including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock (other than Stock issued to employees or
directors) or any revision of the terms of its outstanding Stock; provided that
Laclede Steel may issue or sell shares of its Stock for cash so long as (i) the
proceeds thereof are applied in prepayment of the Obligations as required by
Section 1.3(b)(iii), and (ii) no Change of Control occurs after giving effect
thereto, or (c) amend its charter or bylaws in a manner that would adversely
affect Agent or Lenders or such Credit Party's duty or ability to repay the
Obligations. No Credit Party shall engage in any business other than the
businesses currently engaged in by it or businesses reasonably related thereto.
Guaranteed Indebtedness. No Credit Party shall create, incur, assume or
permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any Credit
Party, and (b) for Guaranteed Indebtedness incurred for the benefit of any other
Credit Party if the primary obligation is expressly permitted by this Agreement.
Liens. No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on Disclosure Schedule
(6.7) securing the Indebtedness described on Disclosure Schedule (6.3) and
permitted refinancings, extensions and renewals thereof, including extensions or
renewals of any such Liens; provided that the principal amount of the
Indebtedness so secured is not increased and the Lien does not attach to any
other property; (c) Liens created after the date hereof by conditional sale or
other title retention agreements (including Capital Leases) or in connection
with purchase money Indebtedness with respect to Equipment and Fixtures acquired
by any Credit Party in the ordinary course of business, involving the incurrence
of an aggregate amount of purchase money Indebtedness and Capital Lease
Obligations of not more than $250,000 outstanding at any one time for all such
Liens (provided that such Liens attach only to the assets subject to such
purchase money debt and such Indebtedness is incurred within 20 days following
such purchase and does not exceed 100% of the purchase price of the subject
assets); and (d) other Liens securing Indebtedness not exceeding $100,000 in the
aggregate at any time outstanding, so long as such Liens do not attach to any
Accounts or Inventory. In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument, other than the SWIDA Security
Agreement and ECP Security Agreement, or take any other action, that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
Sale of Stock and Assets. No Credit Party shall sell, transfer, convey, assign
or otherwise dispose of any of its properties or other assets, including the
Stock of any of its Subsidiaries (whether in a public or a private offering or
otherwise) or any of its Accounts, other than (a) the sale of Inventory in the
ordinary course of business, and (b) the sale, transfer, conveyance or other
disposition by a Credit Party of Equipment, Fixtures or Real Estate that are
obsolete or no longer used or useful in such Credit Party's business and having
a net book value not exceeding $100,000 in any single transaction or $250,000 in
the aggregate in any Fiscal Year; and (c) other Equipment and Fixtures having a
net book value not exceeding $50,000 in any single transaction or $100,000 in
the aggregate in any Fiscal Year. With respect to any disposition of assets or
other properties permitted pursuant to clauses (b) and (c) above, subject to
Section 1.3(b), Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit the applicable Credit
Party to effect such disposition and shall
43
48
execute and deliver to Borrowers, at Borrowers' expense, appropriate UCC-3
termination statements and other releases as reasonably requested by Borrowers.
ERISA. No Credit Party shall, or shall cause or permit any ERISA Affiliate
to, cause or permit to occur an event that could result in the imposition of a
Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or
permit to occur an ERISA Event to the extent such ERISA Event could reasonably
be expected to have a Material Adverse Effect.
Financial Covenants. Borrowers shall not breach or fail to comply with any
of the Financial Covenants.
Hazardous Materials. No Credit Party shall cause or permit a Release of any
Hazardous Material on, at, in, under, above, to, from or about any of the Real
Estate where such Release would form the basis for any Environmental Liabilities
under any Environmental Laws or Environmental Permits or other than such
violations or Environmental Liabilities that could not reasonably be expected to
have a Material Adverse Effect.
Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
Cancellation of Indebtedness. No Credit Party shall cancel any claim or
debt owing to it, except for reasonable consideration negotiated on an arm's
length basis and in the ordinary course of its business consistent with past
practices.
Restricted Payments. No Credit Party shall make any Restricted Payment,
except (a) intercompany loans and advances between Borrowers to the extent
permitted by Section 6.3, (b) dividends and distributions by Subsidiaries of any
Borrower paid to such Borrower, (c) employee loans permitted under Section
6.4(b), (d) payments of principal and interest of Intercompany Notes issued in
accordance with Section 6.3; and (e) scheduled payments of interest with respect
to Subordinated Debt; provided, that (i) no Default or Event of Default has
occurred and is continuing or would result after giving effect to any Restricted
Payment pursuant to clause (e) above, (ii) Borrowers collectively shall have
Borrowing Availability of at least $5,000,000 after giving effect to any
Restricted Payment pursuant to clause (e) and (iii) the timing of the Restricted
Payments referred to in clause (e) above shall be set at dates that permit the
delivery of Financial Statements necessary to determine current compliance with
the Financial Covenants prior to each such payment.
Change of Corporate Name or Location; Change of Fiscal Year. No Credit
Party shall (a) change its corporate name or trade name or (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, in each case without at least 30 days prior
written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate
structure in any manner that might make any financing or continuation statement
filed in connection herewith seriously misleading within the meaning of Section
9-402(7) of the Code or any other then applicable provision of the Code except
upon prior written notice to Agent and Lenders and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken. No Credit
Party shall change its Fiscal Year.
44
49
No Impairment of Intercompany Transfers. No Credit Party shall directly or
indirectly enter into or become bound by any agreement, instrument, indenture or
other obligation (other than this Agreement and the other Loan Documents) that
could directly or indirectly restrict, prohibit or require the consent of any
Person with respect to the payment of dividends or distributions or the making
or repayment of intercompany loans by a Subsidiary of any Borrower to any
Borrower or between Borrowers.
No Speculative Transactions. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
Leases; Real Estate Purchases. No Credit Party shall enter into any
operating lease for Equipment or Real Estate, if the aggregate of all such
operating lease payments payable in any year for all Credit Parties on a
consolidated basis would exceed $3,000,000. No Credit Party shall purchase a fee
simple ownership interest in Real Estate with an aggregate purchase price in
excess of $500,000.
Changes Relating to Subordinated Debt; Material Contracts. No Credit Party
shall change or amend the terms of any Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (a)
increase the interest rate on such Subordinated Debt; (b) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (c) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Agent or any Lender.
Credit Parties Other Than Borrower. None of the Credit Party other than the
Borrowers shall engage in any trade or business, or own any assets (other than
Stock of their Subsidiaries) or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations).
TERM
Termination. The financing arrangements contemplated hereby shall be in
effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
Survival of Obligations Upon Termination of Financing Arrangements. Except as
otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each
45
50
Lender, all as contained in the Loan Documents, shall not terminate or expire,
but rather shall survive any such termination or cancellation and shall continue
in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
ANY BORROWER (I) FAILS TO MAKE ANY PAYMENT OF PRINCIPAL OF, OR INTEREST ON,
OR FEES OWING IN RESPECT OF, THE LOANS OR ANY OF THE OTHER OBLIGATIONS WHEN DUE
AND PAYABLE, OR (II) FAILS TO PAY OR REIMBURSE AGENT OR LENDERS FOR ANY EXPENSE
REIMBURSABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT WITHIN 10 DAYS FOLLOWING
AGENT'S DEMAND FOR SUCH REIMBURSEMENT OR PAYMENT OF EXPENSES.
ANY CREDIT PARTY FAILS OR NEGLECTS TO PERFORM, KEEP OR OBSERVE ANY OF THE
PROVISIONS OF SECTIONS 1.4, 1.8, 5.4(A) OR 6, OR ANY OF THE PROVISIONS SET FORTH
IN ANNEXES C OR G, RESPECTIVELY.
ANY BORROWER FAILS OR NEGLECTS TO PERFORM, KEEP OR OBSERVE ANY OF THE
PROVISIONS OF SECTION 4 OR ANY PROVISIONS SET FORTH IN ANNEXES E OR F,
RESPECTIVELY, AND THE SAME SHALL REMAIN UNREMEDIED FOR 3 DAYS OR MORE.
ANY CREDIT PARTY FAILS OR NEGLECTS TO PERFORM, KEEP OR OBSERVE ANY OTHER
PROVISION OF THIS AGREEMENT OR OF ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN
ANY PROVISION EMBODIED IN OR COVERED BY ANY OTHER CLAUSE OF THIS SECTION 8.1)
AND THE SAME SHALL REMAIN UNREMEDIED FOR 20 DAYS OR MORE.
A DEFAULT OR BREACH OCCURS UNDER ANY OTHER AGREEMENT, DOCUMENT OR
INSTRUMENT TO WHICH ANY CREDIT PARTY IS A PARTY THAT IS NOT CURED OR WAIVED
WITHIN ANY APPLICABLE GRACE PERIOD THEREFOR, AND SUCH DEFAULT OR BREACH (I)
INVOLVES THE FAILURE TO MAKE ANY PAYMENT WHEN DUE IN RESPECT OF ANY INDEBTEDNESS
OR GUARANTEED INDEBTEDNESS (OTHER THAN THE OBLIGATIONS) OF ANY CREDIT PARTY IN
EXCESS OF $250,000 IN THE AGGREGATE (INCLUDING (X) UNDRAWN COMMITTED OR
AVAILABLE AMOUNTS AND (Y) AMOUNTS OWING TO ALL CREDITORS UNDER ANY COMBINED OR
SYNDICATED CREDIT ARRANGEMENTS), OR (II) CAUSES, OR PERMITS ANY HOLDER OF SUCH
INDEBTEDNESS OR GUARANTEED INDEBTEDNESS OR A TRUSTEE TO CAUSE, INDEBTEDNESS OR
GUARANTEED INDEBTEDNESS OR A PORTION THEREOF IN EXCESS OF $250,000 IN THE
AGGREGATE TO BECOME DUE PRIOR TO ITS STATED MATURITY OR PRIOR TO ITS REGULARLY
SCHEDULED DATES OF PAYMENT, OR CASH COLLATERAL IN RESPECT THEREOF TO BE
46
51
DEMANDED, IN EACH CASE, REGARDLESS OF WHETHER SUCH DEFAULT IS WAIVED, OR SUCH
RIGHT IS EXERCISED, BY SUCH HOLDER OR TRUSTEE.
ANY INFORMATION CONTAINED IN ANY BORROWING BASE CERTIFICATE IS UNTRUE OR
INCORRECT IN ANY RESPECT (OTHER THAN INADVERTENT, IMMATERIAL ERRORS NOT
EXCEEDING $50,000 IN THE AGGREGATE IN ANY BORROWING BASE CERTIFICATE), OR ANY
REPRESENTATION OR WARRANTY HEREIN OR IN ANY LOAN DOCUMENT OR IN ANY WRITTEN
STATEMENT, REPORT, FINANCIAL STATEMENT OR CERTIFICATE (OTHER THAN A BORROWING
BASE CERTIFICATE) MADE OR DELIVERED TO AGENT OR ANY LENDER BY ANY CREDIT PARTY
IS UNTRUE OR INCORRECT IN ANY MATERIAL RESPECT AS OF THE DATE WHEN MADE OR
DEEMED MADE.
ASSETS OF ANY CREDIT PARTY WITH A FAIR MARKET VALUE OF $50,000 OR MORE ARE
ATTACHED, SEIZED, LEVIED UPON OR SUBJECTED TO A WRIT OR DISTRESS WARRANT, OR
COME WITHIN THE POSSESSION OF ANY RECEIVER, TRUSTEE, CUSTODIAN OR ASSIGNEE FOR
THE BENEFIT OF CREDITORS OF ANY CREDIT PARTY AND SUCH CONDITION CONTINUES FOR 30
DAYS OR MORE.
A CASE OR PROCEEDING IS COMMENCED AGAINST ANY CREDIT PARTY SEEKING A DECREE
OR ORDER IN RESPECT OF SUCH CREDIT PARTY (I) UNDER THE BANKRUPTCY CODE, OR ANY
OTHER APPLICABLE FEDERAL, STATE OR FOREIGN BANKRUPTCY OR OTHER SIMILAR LAW, (II)
APPOINTING A CUSTODIAN, RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE OR SEQUESTRATOR
(OR SIMILAR OFFICIAL) FOR SUCH CREDIT PARTY OR FOR ANY SUBSTANTIAL PART OF ANY
SUCH CREDIT PARTY'S ASSETS, OR (III) ORDERING THE WINDING-UP OR LIQUIDATION OF
THE AFFAIRS OF SUCH CREDIT PARTY, AND SUCH CASE OR PROCEEDING SHALL REMAIN
UNDISMISSED OR UNSTAYED FOR 60 DAYS OR MORE OR A DECREE OR ORDER GRANTING THE
RELIEF SOUGHT IN SUCH CASE OR PROCEEDING SHALL BE ENTERED BY A COURT OF
COMPETENT JURISDICTION.
ANY CREDIT PARTY (I) FILES A PETITION SEEKING RELIEF UNDER THE BANKRUPTCY
CODE, OR ANY OTHER APPLICABLE FEDERAL, STATE OR FOREIGN BANKRUPTCY OR OTHER
SIMILAR LAW, (II) CONSENTS TO OR FAILS TO CONTEST IN A TIMELY AND APPROPRIATE
MANNER THE INSTITUTION OF PROCEEDINGS THEREUNDER OR THE FILING OF ANY SUCH
PETITION OR THE APPOINTMENT OF OR TAKING POSSESSION BY A CUSTODIAN, RECEIVER,
LIQUIDATOR, ASSIGNEE, TRUSTEE OR SEQUESTRATOR (OR SIMILAR OFFICIAL) FOR SUCH
CREDIT PARTY OR FOR ANY SUBSTANTIAL PART OF ANY SUCH CREDIT PARTY'S ASSETS,
(III) MAKES AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, (IV) TAKES ANY ACTION IN
FURTHERANCE OF ANY OF THE FOREGOING; OR (V) ADMITS IN WRITING ITS INABILITY TO,
OR IS GENERALLY UNABLE TO, PAY ITS DEBTS AS SUCH DEBTS BECOME DUE.
A FINAL JUDGMENT OR JUDGMENTS FOR THE PAYMENT OF MONEY IN EXCESS OF
$250,000 IN THE AGGREGATE AT ANY TIME ARE OUTSTANDING AGAINST ONE OR MORE OF THE
CREDIT PARTIES AND THE SAME ARE NOT, WITHIN 30 DAYS AFTER THE ENTRY THEREOF,
DISCHARGED OR
47
52
EXECUTION THEREOF STAYED OR BONDED PENDING APPEAL, OR SUCH JUDGMENTS ARE NOT
DISCHARGED PRIOR TO THE EXPIRATION OF ANY SUCH STAY.
ANY MATERIAL PROVISION OF ANY LOAN DOCUMENT FOR ANY REASON CEASES TO BE
VALID, BINDING AND ENFORCEABLE IN ACCORDANCE WITH ITS TERMS (OR ANY CREDIT PARTY
SHALL CHALLENGE THE ENFORCEABILITY OF ANY LOAN DOCUMENT OR SHALL ASSERT IN
WRITING, OR ENGAGE IN ANY ACTION OR INACTION BASED ON ANY SUCH ASSERTION, THAT
ANY PROVISION OF ANY OF THE LOAN DOCUMENTS HAS CEASED TO BE OR OTHERWISE IS NOT
VALID, BINDING AND ENFORCEABLE IN ACCORDANCE WITH ITS TERMS), OR ANY LIEN
CREATED UNDER ANY LOAN DOCUMENT CEASES TO BE A VALID AND PERFECTED FIRST
PRIORITY LIEN (EXCEPT AS OTHERWISE PERMITTED HEREIN OR THEREIN) IN ANY OF THE
COLLATERAL PURPORTED TO BE COVERED THEREBY.
ANY CHANGE OF CONTROL OCCURS.
ANY EVENT OCCURS, WHETHER OR NOT INSURED OR INSURABLE, AS A RESULT OF WHICH
REVENUE-PRODUCING ACTIVITIES CEASE OR ARE SUBSTANTIALLY CURTAILED AT ANY
FACILITY OF BORROWERS GENERATING MORE THAN 20% OF BORROWERS' CONSOLIDATED
REVENUES FOR THE FISCAL YEAR PRECEDING SUCH EVENT AND SUCH CESSATION OR
CURTAILMENT CONTINUES FOR MORE THAN 20 DAYS.
Remedies.
(A) IF ANY DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
AGENT MAY (AND AT THE WRITTEN REQUEST OF THE REQUISITE REVOLVING LENDERS SHALL),
WITHOUT NOTICE, SUSPEND THE REVOLVING LOAN FACILITY WITH RESPECT TO ADDITIONAL
ADVANCES AND/OR THE INCURRENCE OF ADDITIONAL LETTER OF CREDIT OBLIGATIONS,
WHEREUPON ANY ADDITIONAL ADVANCES AND ADDITIONAL LETTER OF CREDIT OBLIGATIONS
SHALL BE MADE OR INCURRED IN AGENT'S SOLE DISCRETION (OR IN THE SOLE DISCRETION
OF THE REQUISITE REVOLVING LENDERS, IF SUCH SUSPENSION OCCURRED AT THEIR
DIRECTION) SO LONG AS SUCH DEFAULT OR EVENT OF DEFAULT IS CONTINUING. IF ANY
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AGENT MAY (AND AT THE WRITTEN
REQUEST OF REQUISITE LENDERS SHALL), WITHOUT NOTICE EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, INCREASE THE RATE OF INTEREST APPLICABLE TO THE LOANS
AND THE LETTER OF CREDIT FEES TO THE DEFAULT RATE.
(B) IF ANY EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AGENT MAY (AND
AT THE WRITTEN REQUEST OF THE REQUISITE LENDERS SHALL), WITHOUT NOTICE: (I)
TERMINATE THE REVOLVING LOAN FACILITY WITH RESPECT TO FURTHER ADVANCES OR THE
INCURRENCE OF FURTHER LETTER OF CREDIT OBLIGATIONS; (II) DECLARE ALL OR ANY
PORTION OF THE OBLIGATIONS, INCLUDING ALL OR ANY PORTION OF ANY LOAN TO BE
FORTHWITH DUE AND PAYABLE, AND REQUIRE THAT THE LETTER OF CREDIT OBLIGATIONS BE
CASH COLLATERALIZED AS PROVIDED IN ANNEX B, ALL WITHOUT PRESENTMENT, DEMAND,
PROTEST OR FURTHER NOTICE OF ANY KIND, ALL OF
48
53
WHICH ARE EXPRESSLY WAIVED BY BORROWERS AND EACH OTHER CREDIT PARTY; OR (III)
EXERCISE ANY RIGHTS AND REMEDIES PROVIDED TO AGENT UNDER THE LOAN DOCUMENTS OR
AT LAW OR EQUITY, INCLUDING ALL REMEDIES PROVIDED UNDER THE CODE; PROVIDED, THAT
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT SPECIFIED IN SECTIONS 8.1(H) OR (I),
THE REVOLVING LOAN FACILITY SHALL BE IMMEDIATELY TERMINATED AND ALL OF THE
OBLIGATIONS, INCLUDING THE AGGREGATE REVOLVING LOAN, SHALL BECOME IMMEDIATELY
DUE AND PAYABLE WITHOUT DECLARATION, NOTICE OR DEMAND BY ANY PERSON.
Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives (including for purposes
of Section 12): (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by Agent on which any
Credit Party may in any way be liable, and hereby ratifies and confirms whatever
Agent may do in this regard, (b) all rights to notice and a hearing prior to
Agent's taking possession or control of, or to Agent's replevy, attachment or
levy upon, the Collateral or any bond or security that might be required by any
court prior to allowing Agent to exercise any of its remedies, and (c) the
benefit of all valuation, appraisal, marshaling and exemption laws.
ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
Assignment and Participations.
(A) SUBJECT TO THE TERMS OF THIS SECTION 9.1, ANY LENDER MAY MAKE AN
ASSIGNMENT TO A QUALIFIED ASSIGNEE OF, OR SELL PARTICIPATIONS IN, AT ANY TIME OR
TIMES, THE LOAN DOCUMENTS, LOANS, LETTER OF CREDIT OBLIGATIONS AND ANY
COMMITMENT OR ANY PORTION THEREOF OR INTEREST THEREIN, INCLUDING ANY LENDER'S
RIGHTS, TITLE, INTERESTS, REMEDIES, POWERS OR DUTIES THEREUNDER. ANY ASSIGNMENT
BY A LENDER SHALL: (I) REQUIRE THE CONSENT OF AGENT (WHICH CONSENT SHALL NOT BE
REQUIRED WITH RESPECT TO AN ASSIGNMENT TO A QUALIFIED ASSIGNEE OF THE AGENT OR
ANY CO-AGENT THEREUNDER DESCRIBED IN CLAUSE (A) OF THE DEFINITION THEREOF AND
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED WITH RESPECT TO ANY
OTHER QUALIFIED ASSIGNEE) AND THE EXECUTION OF AN ASSIGNMENT AGREEMENT (AN
"ASSIGNMENT AGREEMENT") SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT
9.1(A) AND OTHERWISE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO, AND
ACKNOWLEDGED BY, AGENT; (II) BE CONDITIONED ON SUCH ASSIGNEE LENDER REPRESENTING
TO THE ASSIGNING LENDER AND AGENT THAT IT IS PURCHASING THE APPLICABLE LOANS TO
BE ASSIGNED TO IT FOR ITS OWN ACCOUNT, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO THE DISTRIBUTION THEREOF; (III) AFTER GIVING EFFECT TO ANY SUCH PARTIAL
ASSIGNMENT, THE ASSIGNEE LENDER SHALL HAVE COMMITMENTS IN AN AMOUNT AT LEAST
EQUAL TO $5,000,000 AND THE ASSIGNING LENDER SHALL HAVE RETAINED
49
54
COMMITMENTS IN AN AMOUNT AT LEAST EQUAL TO $5,000,000; (IV) EXCEPT IN RESPECT TO
AN ASSIGNMENT TO A QUALIFIED ASSIGNEE OF THE AGENT OR ANY CO-AGENT THEREUNDER
DESCRIBED IN CLAUSE (A) OF THE DEFINITION THEREOF, INCLUDE A PAYMENT TO AGENT OF
AN ASSIGNMENT FEE OF $3,500; AND (V) SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING, REQUIRE THE CONSENT OF BORROWER REPRESENTATIVE WHICH CONSENT
SHALL NOT BE REQUIRED WITH RESPECT TO AN ASSIGNMENT TO A QUALIFIED ASSIGNEE OF
THE AGENT OR ANY CO-AGENT THEREUNDER DESCRIBED IN CLAUSE (A) OF THE DEFINITION
THEREOF AND WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. IN THE CASE OF
AN ASSIGNMENT BY A LENDER UNDER THIS SECTION 9.1, THE ASSIGNEE SHALL HAVE, TO
THE EXTENT OF SUCH ASSIGNMENT, THE SAME RIGHTS, BENEFITS AND OBLIGATIONS AS ALL
OTHER LENDERS HEREUNDER. THE ASSIGNING LENDER SHALL BE RELIEVED OF ITS
OBLIGATIONS HEREUNDER WITH RESPECT TO ITS COMMITMENTS OR ASSIGNED PORTION
THEREOF FROM AND AFTER THE DATE OF SUCH ASSIGNMENT. EACH BORROWER HEREBY
ACKNOWLEDGES AND AGREES THAT ANY ASSIGNMENT SHALL GIVE RISE TO A DIRECT
OBLIGATION OF BORROWERS TO THE ASSIGNEE AND THAT THE ASSIGNEE SHALL BE
CONSIDERED TO BE A "LENDER". IN ALL INSTANCES, EACH LENDER'S LIABILITY TO MAKE
LOANS HEREUNDER SHALL BE SEVERAL AND NOT JOINT AND SHALL BE LIMITED TO SUCH
LENDER'S PRO RATA SHARE OF THE APPLICABLE COMMITMENT. IN THE EVENT AGENT OR ANY
LENDER ASSIGNS OR OTHERWISE TRANSFERS ALL OR ANY PART OF THE OBLIGATIONS, AGENT
OR ANY SUCH LENDER SHALL SO NOTIFY BORROWERS AND BORROWERS SHALL, UPON THE
REQUEST OF AGENT OR SUCH LENDER, EXECUTE NEW NOTES IN EXCHANGE FOR THE NOTES, IF
ANY, BEING ASSIGNED. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION
9.1(A), ANY LENDER MAY AT ANY TIME PLEDGE THE OBLIGATIONS HELD BY IT AND SUCH
LENDER'S RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO A FEDERAL
RESERVE BANK, AND ANY LENDER THAT IS AN INVESTMENT FUND MAY ASSIGN THE
OBLIGATIONS HELD BY IT AND SUCH LENDER'S RIGHTS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO ANOTHER INVESTMENT FUND MANAGED BY THE SAME INVESTMENT
ADVISOR; PROVIDED, THAT NO SUCH PLEDGE TO A FEDERAL RESERVE BANK SHALL RELEASE
SUCH LENDER FROM SUCH LENDER'S OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT.
(B) ANY PARTICIPATION BY A LENDER OF ALL OR ANY PART OF ITS COMMITMENTS
SHALL BE MADE WITH THE UNDERSTANDING THAT ALL AMOUNTS PAYABLE BY BORROWERS
HEREUNDER SHALL BE DETERMINED AS IF THAT LENDER HAD NOT SOLD SUCH PARTICIPATION,
AND THAT THE HOLDER OF ANY SUCH PARTICIPATION SHALL NOT BE ENTITLED TO REQUIRE
SUCH LENDER TO TAKE OR OMIT TO TAKE ANY ACTION HEREUNDER EXCEPT ACTIONS DIRECTLY
AFFECTING (I) ANY REDUCTION IN THE PRINCIPAL AMOUNT OF, OR INTEREST RATE OR FEES
PAYABLE WITH RESPECT TO, ANY LOAN IN WHICH SUCH HOLDER PARTICIPATES, (II) ANY
EXTENSION OF THE SCHEDULED AMORTIZATION OF THE PRINCIPAL AMOUNT OF ANY LOAN IN
WHICH SUCH HOLDER PARTICIPATES OR THE FINAL MATURITY DATE THEREOF, AND (III) ANY
RELEASE OF ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL (OTHER THAN IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT, THE COLLATERAL DOCUMENTS OR THE OTHER LOAN
DOCUMENTS). SOLELY FOR PURPOSES OF SECTIONS 1.13, 1.15, 1.16 AND 9.8, EACH
BORROWER ACKNOWLEDGES AND AGREES THAT A PARTICIPATION SHALL GIVE RISE TO A
DIRECT OBLIGATION OF BORROWERS TO THE PARTICIPANT AND THE PARTICIPANT SHALL BE
CONSIDERED TO BE A "LENDER". EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE NO
BORROWER OR
50
55
CREDIT PARTY SHALL HAVE ANY OBLIGATION OR DUTY TO ANY PARTICIPANT. NEITHER AGENT
NOR ANY LENDER (OTHER THAN THE LENDER SELLING A PARTICIPATION) SHALL HAVE ANY
DUTY TO ANY PARTICIPANT AND MAY CONTINUE TO DEAL SOLELY WITH THE LENDER SELLING
A PARTICIPATION AS IF NO SUCH SALE HAD OCCURRED.
(C) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 9.1, NO LENDER SHALL, AS
BETWEEN BORROWERS AND THAT LENDER, OR AGENT AND THAT LENDER, BE RELIEVED OF ANY
OF ITS OBLIGATIONS HEREUNDER AS A RESULT OF ANY SALE, ASSIGNMENT, TRANSFER OR
NEGOTIATION OF, OR GRANTING OF PARTICIPATION IN, ALL OR ANY PART OF THE LOANS,
THE NOTES OR OTHER OBLIGATIONS OWED TO SUCH LENDER.
(D) EACH CREDIT PARTY EXECUTING THIS AGREEMENT SHALL ASSIST ANY LENDER
PERMITTED TO SELL ASSIGNMENTS OR PARTICIPATIONS UNDER THIS SECTION 9.1 AS
REASONABLY REQUIRED TO ENABLE THE ASSIGNING OR SELLING LENDER TO EFFECT ANY SUCH
ASSIGNMENT OR PARTICIPATION, INCLUDING THE EXECUTION AND DELIVERY OF ANY AND ALL
AGREEMENTS, NOTES AND OTHER DOCUMENTS AND INSTRUMENTS AS SHALL BE REQUESTED AND,
IF REQUESTED BY AGENT, THE PREPARATION OF INFORMATIONAL MATERIALS FOR, AND THE
PARTICIPATION OF MANAGEMENT IN MEETINGS WITH, POTENTIAL ASSIGNEES OR
PARTICIPANTS. EACH CREDIT PARTY EXECUTING THIS AGREEMENT SHALL CERTIFY THE
CORRECTNESS, COMPLETENESS AND ACCURACY OF ALL DESCRIPTIONS OF THE CREDIT PARTIES
AND THEIR RESPECTIVE AFFAIRS CONTAINED IN ANY SELLING MATERIALS PROVIDED BY THEM
AND ALL OTHER INFORMATION PROVIDED BY THEM AND INCLUDED IN SUCH MATERIALS,
EXCEPT THAT ANY PROJECTIONS DELIVERED BY BORROWERS SHALL ONLY BE CERTIFIED BY
BORROWERS AS HAVING BEEN PREPARED BY BORROWERS IN COMPLIANCE WITH THE
REPRESENTATIONS CONTAINED IN SECTION 3.4(C).
(E) ANY LENDER MAY FURNISH ANY INFORMATION CONCERNING CREDIT PARTIES IN THE
POSSESSION OF SUCH LENDER FROM TIME TO TIME TO ASSIGNEES AND PARTICIPANTS
(INCLUDING PROSPECTIVE ASSIGNEES AND PARTICIPANTS); PROVIDED THAT SUCH LENDER
SHALL OBTAIN FROM ASSIGNEES OR PARTICIPANTS CONFIDENTIALITY COVENANTS
SUBSTANTIALLY EQUIVALENT TO THOSE CONTAINED IN SECTION 11.8.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a).
(g) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a
51
56
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if such Loan were made by such Granting Lender. No SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender). Any
SPC may (i) with notice to, but without the prior written consent of, Borrowers
and Agent and assign all or a portion of its interests in any Loans to the
Granting Lender or to any financial institutions (consented to by Borrowers and
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section 9.1(g) may not be
amended without the prior written consent of each Granting Lender, all or any of
whose Loans are being funded by an SPC at the time of such amendment. For the
avoidance of doubt, the Granting Lender shall for all purposes, including
without limitation, the approval of any amendment or waiver of any provision of
any Loan Document or the obligation to pay any amount otherwise payable by the
Granting Lender under the Loan Documents, continue to be the Lender of record
hereunder.
(h) Notwithstanding anything to the contrary contained herein, GE Capital
agrees that it shall not assign its Commitment to the extent such assignment
would result in GE Capital's Commitment being less than any other Lender's
Commitment without the consent of the affected Lender (which consent shall not
be unreasonably withheld).
Appointment of Agent. GE Capital is hereby appointed to act on behalf of
all Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agent and Lenders
and no Credit Party nor any other Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, Agent shall act solely
as an agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
Credit Party or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Agent shall be mechanical and administrative in nature
and Agent shall not have, or be deemed to have, by reason of this Agreement, any
other Loan Document or otherwise a fiduciary relationship in respect of any
Lender. Except as expressly set forth in this Agreement and the other Loan
Documents, Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to any Credit Party or any of
their respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders or all affected Lenders with respect to
any act or action (including failure to act) in connection with this Agreement
or any other Loan Document, then Agent shall be entitled to refrain from such
act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, Requisite Revolving Lenders, Supermajority
Revolving Lenders or all affected Lenders, as the case may be, and Agent shall
not incur liability to any Person by reason of so refraining. Agent shall be
fully justified in failing or refusing to take any action hereunder or under any
other Loan Document (a) if such action would, in the opinion of Agent, be
contrary to law or the terms of this Agreement or any other Loan Document, (b)
if such action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without
52
57
limiting the foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of Requisite
Lenders, Requisite Revolving Lenders, Supermajority Revolving Lenders or all
affected Lenders, as applicable.
53
58
Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, except for damages caused by
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, Agent: (a) may treat the payee of any Note as the
holder thereof until Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to Agent; (b)
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts so long as all material findings and written reports,
other than those considered to be privileged, are provided to Lenders on a
timely basis; (c) makes no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Loan Documents on the part of any Credit Party or to inspect the
Collateral (including the books and records) of any Credit Party except as
expressly set forth in the Loan Documents; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall incur
no liability under or in respect of this Agreement or the other Loan Documents
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
GE Capital and Affiliates. With respect to its Commitments hereunder, GE
Capital shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise the same as though it were
not Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include GE Capital in its individual capacity. GE Capital and its
Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Credit Party, any of their Affiliates and any Person who may
do business with or own securities of any Credit Party or any such Affiliate,
all as if GE Capital were not Agent and without any duty to account therefor to
Lenders. GE Capital and its Affiliates may accept fees and other consideration
from any Credit Party for services in connection with this Agreement or
otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between GE Capital as a Lender
holding disproportionate interests in the Loans.
Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
Indemnification. Lenders agree to indemnify Agent (to the extent not reimbursed
by Credit Parties and without limiting the obligations of Borrowers hereunder),
ratably according to their respective Pro Rata Shares, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against Agent in any way relating to
or arising out of this Agreement or any other Loan Document or any action taken
or omitted to be taken by Agent in connection therewith;
54
59
provided, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Credit Parties.
Successor Agent. Agent may resign at any time by giving not less than 30
days' prior written notice thereof to Lenders and Borrower Representative. Upon
any such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, within 30 days after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower Representative, such approval not to be unreasonably withheld or
delayed; provided that such approval shall not be required if a Default or an
Event of Default has occurred and is continuing. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the earlier of the acceptance of any appointment as
Agent hereunder by a successor Agent or the effective date of the resigning
Agent's resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was acting as Agent under this Agreement and the other
Loan Documents.
Setoff and Sharing of Payments. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default and
subject to Section 9.9(f), each Lender is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person, any
such notice being hereby expressly waived, to offset and to appropriate and to
apply any and all balances held by it at any of its offices for the account of
any Borrower or Guarantor (regardless of whether such balances are then due to
such Borrower or Guarantor) and any other properties or assets at any time held
or owing by that Lender or that holder to or for the credit or for the account
of any Borrower or Guarantor against and on account of any of the Obligations
that are not paid when due. Any Lender exercising a right of setoff or otherwise
receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata Share
of the Obligations as would be necessary to cause such Lender to share the
amount so offset or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares (other than offset rights
exercised by any Lender with respect to Sections 1.13, 1.15 or 1.16). [Each
Lender's obligation under this Section 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal to
its Pro Rata Share of the
55
60
Swing Line Loans under Section 1.1.] Each Credit Party that is a Borrower or
Guarantor agrees, to the fullest extent permitted by law, that (a) any Lender
may exercise its right to offset with respect to amounts in excess of its Pro
Rata Share of the Obligations and may sell participations in such amounts so
offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations by
that Lender shall be rescinded and the purchase price restored without interest.
Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.ADVANCES; PAYMENTS.
Revolving Lenders shall refund or participate in the Swing Line Loan in
accordance with clauses (iii) and (iv) of Section 1.1(c). If the Swing Line
Lender declines to make a Swing Line Loan or if Swing Line Availability is zero,
Agent shall notify Revolving Lenders, promptly after receipt of a Notice of
Revolving Credit Advance and in any event prior to 1:00 p.m. (Chicago) on the
date such Notice of Revolving Advance is received, by telecopy, telephone or
other similar form of transmission. Each Revolving Lender shall make the amount
of such Lender's Pro Rata Share of such Revolving Credit Advance available to
Agent in same day funds by wire transfer to Agent's account as set forth in
Annex H not later than 2:00 p.m. (Chicago) on the requested funding date, in the
case of an Index Rate Loan, and not later than 11:00 a.m. (Chicago) on the
requested funding date, in the case of a LIBOR Loan. After receipt of such wire
transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to the Borrower designated by Borrower Representative
in the Notice of Revolving Credit Advance. All payments by each Revolving Lender
shall be made without setoff, counterclaim or deduction of any kind. On the 2nd
Business Day of each calendar week or more frequently at Agent's election (each,
a "Settlement Date"), Agent shall advise each Lender by telephone, or telecopy
of the amount of such Lender's Pro Rata Share of principal, interest and Fees
paid for the benefit of Lenders with respect to each applicable Loan. Provided
that each Lender has funded all payments or Advances required to be made by it
and has purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, Agent shall
pay to each Lender such Lender's Pro Rata Share of principal, interest and Fees
paid by Borrowers since the previous Settlement Date for the benefit of such
Lender on the Loans held by it. To the extent that any Lender (a "Non-Funding
Lender") has failed to fund all such payments and Advances or failed to fund the
purchase of all such participations, Agent shall be entitled to set off the
funding short-fall against that Non-Funding Lender's Pro Rata Share of all
payments received from Borrowers. Such payments shall be made by wire transfer
to such Lender's account (as specified by such Lender in Annex H or the
applicable Assignment Agreement) not later than 1:00 p.m. (Chicago) on the next
Business Day following each Settlement Date.
AVAILABILITY OF LENDER'S PRO RATA SHARE. AGENT MAY ASSUME THAT EACH
REVOLVING LENDER WILL MAKE ITS PRO RATA SHARE OF EACH REVOLVING CREDIT ADVANCE
AVAILABLE TO AGENT ON EACH FUNDING DATE. IF SUCH PRO RATA SHARE IS NOT, IN FACT,
PAID TO
56
61
AGENT BY SUCH REVOLVING LENDER WHEN DUE, AGENT WILL BE ENTITLED TO RECOVER SUCH
AMOUNT ON DEMAND FROM SUCH REVOLVING LENDER WITHOUT SETOFF, COUNTERCLAIM OR
DEDUCTION OF ANY KIND. IF ANY REVOLVING LENDER FAILS TO PAY THE AMOUNT OF ITS
PRO RATA SHARE FORTHWITH UPON AGENT'S DEMAND, AGENT SHALL PROMPTLY NOTIFY
BORROWER REPRESENTATIVE AND BORROWERS SHALL IMMEDIATELY REPAY SUCH AMOUNT TO
AGENT. NOTHING IN THIS SECTION 9.9(B) OR ELSEWHERE IN THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE DEEMED TO REQUIRE AGENT TO ADVANCE FUNDS ON BEHALF
OF ANY REVOLVING LENDER OR TO RELIEVE ANY REVOLVING LENDER FROM ITS OBLIGATION
TO FULFILL ITS COMMITMENTS HEREUNDER OR TO PREJUDICE ANY RIGHTS THAT BORROWERS
MAY HAVE AGAINST ANY REVOLVING LENDER AS A RESULT OF ANY DEFAULT BY SUCH
REVOLVING LENDER HEREUNDER. TO THE EXTENT THAT AGENT ADVANCES FUNDS TO ANY
BORROWER ON BEHALF OF ANY REVOLVING LENDER AND IS NOT REIMBURSED THEREFOR ON THE
SAME BUSINESS DAY AS SUCH ADVANCE IS MADE, AGENT SHALL BE ENTITLED TO RETAIN FOR
ITS ACCOUNT ALL INTEREST ACCRUED ON SUCH ADVANCE UNTIL REIMBURSED BY THE
APPLICABLE REVOLVING LENDER.
RETURN OF PAYMENTS.
If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
Borrowers and such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.
If Agent determines at any time that any amount received by Agent under this
Agreement must be returned to any Borrower or paid to any other Person pursuant
to any insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Loan Document, Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
NON-FUNDING LENDERS. THE FAILURE OF ANY NON-FUNDING LENDER TO MAKE ANY REVOLVING
CREDIT ADVANCE OR ANY PAYMENT REQUIRED BY IT HEREUNDER OR TO PURCHASE ANY
PARTICIPATION IN ANY SWING LINE LOAN TO BE MADE OR PURCHASED BY IT ON THE DATE
SPECIFIED THEREFOR SHALL NOT RELIEVE ANY OTHER LENDER (EACH SUCH OTHER REVOLVING
LENDER, AN "OTHER LENDER") OF ITS OBLIGATIONS TO MAKE SUCH ADVANCE OR PURCHASE
SUCH PARTICIPATION ON SUCH DATE, BUT NEITHER ANY OTHER LENDER NOR AGENT SHALL BE
RESPONSIBLE FOR THE FAILURE OF ANY NON-FUNDING LENDER TO MAKE AN ADVANCE,
PURCHASE A PARTICIPATION OR MAKE ANY OTHER PAYMENT REQUIRED HEREUNDER.
NOTWITHSTANDING ANYTHING SET FORTH HEREIN TO THE CONTRARY, A NON-FUNDING LENDER
SHALL NOT HAVE ANY VOTING OR CONSENT RIGHTS UNDER OR WITH RESPECT TO ANY LOAN
DOCUMENT OR CONSTITUTE A "LENDER" OR A "REVOLVING LENDER" (OR BE INCLUDED IN THE
CALCULATION OF "REQUISITE LENDERS", "REQUISITE REVOLVING LENDERS" OR
"SUPERMAJORITY REVOLVING LENDERS" HEREUNDER) FOR ANY VOTING OR CONSENT RIGHTS
UNDER OR WITH RESPECT TO ANY LOAN DOCUMENT. AT BORROWER REPRESENTATIVE'S
REQUEST, AGENT OR A PERSON REASONABLY ACCEPTABLE TO AGENT SHALL
57
62
HAVE THE RIGHT WITH AGENT'S CONSENT AND IN AGENT'S SOLE DISCRETION (BUT SHALL
HAVE NO OBLIGATION) TO PURCHASE FROM ANY NON-FUNDING LENDER, AND EACH
NON-FUNDING LENDER AGREES THAT IT SHALL, AT AGENT'S REQUEST, SELL AND ASSIGN TO
AGENT OR SUCH PERSON, ALL OF THE COMMITMENTS OF THAT NON-FUNDING LENDER FOR AN
AMOUNT EQUAL TO THE PRINCIPAL BALANCE OF ALL LOANS HELD BY SUCH NON-FUNDING
LENDER AND ALL ACCRUED INTEREST AND FEES WITH RESPECT THERETO THROUGH THE DATE
OF SALE, SUCH PURCHASE AND SALE TO BE CONSUMMATED PURSUANT TO AN EXECUTED
ASSIGNMENT AGREEMENT.
DISSEMINATION OF INFORMATION. AGENT SHALL USE REASONABLE EFFORTS TO PROVIDE
LENDERS WITH ANY NOTICE OF DEFAULT OR EVENT OF DEFAULT RECEIVED BY AGENT FROM,
OR DELIVERED BY AGENT TO, ANY CREDIT PARTY, WITH NOTICE OF ANY EVENT OF DEFAULT
OF WHICH AGENT HAS ACTUALLY BECOME AWARE AND WITH NOTICE OF ANY ACTION TAKEN BY
AGENT FOLLOWING ANY EVENT OF DEFAULT WITHIN THREE (3) BUSINESS DAYS OF
RESPECTIVE RECEIPT OR DELIVERY; PROVIDED, THAT AGENT SHALL NOT BE LIABLE TO ANY
LENDER FOR ANY FAILURE TO DO SO, EXCEPT TO THE EXTENT THAT SUCH FAILURE IS
ATTRIBUTABLE TO AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. LENDERS
ACKNOWLEDGE THAT BORROWERS ARE REQUIRED TO PROVIDE FINANCIAL STATEMENTS AND
COLLATERAL REPORTS TO LENDERS IN ACCORDANCE WITH ANNEXES E AND F HERETO AND
AGREE THAT AGENT SHALL HAVE NO DUTY TO PROVIDE THE SAME TO LENDERS; PROVIDED,
THAT AGENT SHALL NOT DENY REASONABLE REQUESTS FROM LENDERS TO DIRECTLY PROVIDE
SUCH FINANCIAL STATEMENTS, COLLATERAL INFORMATION AND OTHER BORROWER INFORMATION
PREPARED BY, RECEIVED BY OR MAINTAINED BY AGENT.
ACTIONS IN CONCERT. ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING,
EACH LENDER HEREBY AGREES WITH EACH OTHER LENDER THAT NO LENDER SHALL TAKE ANY
ACTION TO PROTECT OR ENFORCE ITS RIGHTS ARISING OUT OF THIS AGREEMENT OR THE
NOTES (INCLUDING EXERCISING ANY RIGHTS OF SETOFF) WITHOUT FIRST OBTAINING THE
PRIOR WRITTEN CONSENT OF AGENT AND REQUISITE LENDERS, IT BEING THE INTENT OF
LENDERS THAT ANY SUCH ACTION TO PROTECT OR ENFORCE RIGHTS UNDER THIS AGREEMENT
AND THE NOTES SHALL BE TAKEN IN CONCERT AND AT THE DIRECTION OR WITH THE CONSENT
OF AGENT OR REQUISITE LENDERS.
Co-Agents. Lenders designated as Co-Agents shall have no duties,
responsibilities or liabilities hereunder other than in their capacities as
Lenders.
SUCCESSORS AND ASSIGNS
Successors and Assigns. This Agreement and the other Loan Documents shall be
binding on and shall inure to the benefit of each Credit Party, Agent, Lenders
and their respective successors and assigns (including, in the case of any
Credit Party, a debtor-in-possession on behalf of such Credit Party), except as
otherwise provided herein or therein. No Credit Party may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents
58
63
without the prior express written consent of Agent and Lenders. Any such
purported assignment, transfer, hypothecation or other conveyance by any Credit
Party without the prior express written consent of Agent and Lenders shall be
void. The terms and provisions of this Agreement are for the purpose of defining
the relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
MISCELLANEOUS
Complete Agreement; Modification of Agreement. The Loan Documents constitute the
complete agreement between the parties with respect to the subject matter
thereof and may not be modified, altered or amended except as set forth in
Section 11.2. Any letter of interest (other than the section entitled "FEES" and
the market flex provisions of the section entitled "SYNDICATION," each as more
fully detailed in the GE Capital Commitment Letter) or confidentiality agreement
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
Amendments and Waivers.
EXCEPT FOR ACTIONS EXPRESSLY PERMITTED TO BE TAKEN BY AGENT, NO AMENDMENT,
MODIFICATION, TERMINATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY CONSENT TO ANY DEPARTURE BY ANY CREDIT PARTY
THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING
AND SIGNED BY AGENT AND BORROWERS, AND BY REQUISITE LENDERS, REQUISITE REVOLVING
LENDERS, SUPERMAJORITY REVOLVING LENDERS OR ALL AFFECTED LENDERS, AS APPLICABLE.
EXCEPT AS SET FORTH IN CLAUSES (B) AND (C) BELOW, ALL SUCH AMENDMENTS,
MODIFICATIONS, TERMINATIONS OR WAIVERS REQUIRING THE CONSENT OF ANY LENDERS
SHALL REQUIRE THE WRITTEN CONSENT OF REQUISITE LENDERS.
NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER OF OR CONSENT WITH RESPECT TO
ANY PROVISION OF THIS AGREEMENT THAT INCREASES THE PERCENTAGE ADVANCE RATES SET
FORTH IN THE DEFINITION OF THE LACLEDE STEEL BORROWING BASE OR THE LACLEDE CHAIN
BORROWING BASE, OR THAT MAKES LESS RESTRICTIVE THE NONDISCRETIONARY CRITERIA FOR
EXCLUSION FROM ELIGIBLE ACCOUNTS AND ELIGIBLE INVENTORY SET FORTH IN SECTIONS
1.6 AND 1.7, SHALL BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING AND SIGNED
BY AGENT, SUPERMAJORITY REVOLVING LENDERS AND BORROWERS. NO AMENDMENT,
MODIFICATION, TERMINATION OR WAIVER OF OR CONSENT WITH RESPECT TO ANY PROVISION
OF THIS AGREEMENT THAT WAIVES COMPLIANCE WITH THE CONDITIONS PRECEDENT SET FORTH
IN SECTION 2.2 TO THE MAKING OF ANY LOAN OR THE INCURRENCE OF ANY LETTER OF
CREDIT OBLIGATIONS SHALL BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING AND
SIGNED BY AGENT, REQUISITE REVOLVING LENDERS AND BORROWERS. NOTWITHSTANDING
ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO WAIVER OR CONSENT WITH
RESPECT TO ANY DEFAULT OR ANY EVENT OF DEFAULT SHALL BE EFFECTIVE FOR PURPOSES
OF THE CONDITIONS PRECEDENT TO THE MAKING OF LOANS OR THE INCURRENCE OF LETTER
OF CREDIT
59
64
OBLIGATIONS SET FORTH IN SECTION 2.2 UNLESS THE SAME SHALL BE IN WRITING AND
SIGNED BY AGENT, REQUISITE REVOLVING LENDERS AND BORROWERS.
NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER SHALL, UNLESS IN WRITING AND
SIGNED BY AGENT AND EACH LENDER DIRECTLY AFFECTED THEREBY: (I) INCREASE THE
PRINCIPAL AMOUNT OF ANY LENDER'S COMMITMENT (WHICH ACTION SHALL BE DEEMED TO
AFFECT ALL LENDERS); (II) REDUCE OR WAIVE THE PAYMENT OF THE PRINCIPAL OF, RATE
OF INTEREST ON OR FEES PAYABLE WITH RESPECT TO ANY LOAN OR LETTER OF CREDIT
OBLIGATIONS OF ANY AFFECTED LENDER; (III) EXTEND ANY SCHEDULED PAYMENT DATE
(OTHER THAN PAYMENT DATES OF MANDATORY PREPAYMENTS UNDER SECTION 1.3(B)(II)
AND-(III)) OR FINAL MATURITY DATE OF THE PRINCIPAL AMOUNT OF ANY LOAN OF ANY
AFFECTED LENDER; (IV) WAIVE, FORGIVE, DEFER, EXTEND OR POSTPONE ANY PAYMENT OF
INTEREST OR FEES AS TO ANY AFFECTED LENDER; (V) RELEASE ANY GUARANTY OR, EXCEPT
AS OTHERWISE PERMITTED HEREIN OR IN THE OTHER LOAN DOCUMENTS, RELEASE, OR PERMIT
ANY CREDIT PARTY TO SELL OR OTHERWISE DISPOSE OF, ANY COLLATERAL WITH A VALUE
EXCEEDING $2,000,000 IN THE AGGREGATE (WHICH ACTION SHALL BE DEEMED TO DIRECTLY
AFFECT ALL LENDERS); (VI) CHANGE THE PERCENTAGE OF THE COMMITMENTS OR OF THE
AGGREGATE UNPAID PRINCIPAL AMOUNT OF THE LOANS THAT SHALL BE REQUIRED FOR
LENDERS OR ANY OF THEM TO TAKE ANY ACTION HEREUNDER; AND (VII) AMEND OR WAIVE
THIS SECTION 11.2 OR THE DEFINITIONS OF THE TERMS "REQUISITE LENDERS",
"REQUISITE REVOLVING LENDERS" OR "SUPERMAJORITY REVOLVING LENDERS" INSOFAR AS
SUCH DEFINITIONS AFFECT THE SUBSTANCE OF THIS SECTION 11.2. FURTHERMORE, NO
AMENDMENT, MODIFICATION, TERMINATION OR WAIVER AFFECTING THE RIGHTS OR DUTIES OF
AGENT OR L/C ISSUER UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE
EFFECTIVE UNLESS IN WRITING AND SIGNED BY AGENT OR L/C ISSUER, AS THE CASE MAY
BE, IN ADDITION TO LENDERS REQUIRED HEREINABOVE TO TAKE SUCH ACTION. EACH
AMENDMENT, MODIFICATION, TERMINATION OR WAIVER SHALL BE EFFECTIVE ONLY IN THE
SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH IT WAS GIVEN. NO
AMENDMENT, MODIFICATION, TERMINATION OR WAIVER SHALL BE REQUIRED FOR AGENT TO
TAKE ADDITIONAL COLLATERAL PURSUANT TO ANY LOAN DOCUMENT. NO AMENDMENT,
MODIFICATION, TERMINATION OR WAIVER OF ANY PROVISION OF ANY NOTE SHALL BE
EFFECTIVE WITHOUT THE WRITTEN CONCURRENCE OF THE HOLDER OF THAT NOTE. NO NOTICE
TO OR DEMAND ON ANY CREDIT PARTY IN ANY CASE SHALL ENTITLE SUCH CREDIT PARTY OR
ANY OTHER CREDIT PARTY TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN SIMILAR OR
OTHER CIRCUMSTANCES. ANY AMENDMENT, MODIFICATION, TERMINATION, WAIVER OR CONSENT
EFFECTED IN ACCORDANCE WITH THIS SECTION 11.2 SHALL BE BINDING UPON EACH HOLDER
OF THE NOTES AT THE TIME OUTSTANDING AND EACH FUTURE HOLDER OF THE NOTES.
IF, IN CONNECTION WITH ANY PROPOSED AMENDMENT, MODIFICATION, WAIVER OR
TERMINATION (A "PROPOSED CHANGE"):
requiring the consent of all affected Lenders, the consent of Requisite Lenders
is obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
clause (i) and in clauses (ii), (iii) and (iv) below being referred to as a
"Non-Consenting Lender"),
60
65
requiring the consent of Supermajority Revolving Lenders, the consent of
Requisite Revolving Lenders is obtained, but the consent of Supermajority
Revolving Lenders is not obtained, requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite Revolving
Lenders is not obtained, or requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained, then, so long as Agent is
not a Non-Consenting Lender, at Borrower Representative's request, Agent or a
Person reasonably acceptable to Agent shall have the right with Agent's consent
and in Agent's sole discretion (but shall have no obligation) to purchase from
such Non-Consenting Lenders, and such Non-Consenting Lenders agree that they
shall, upon Agent's request, sell and assign to Agent or such Person, all of the
Commitments of such Non-Consenting Lenders for an amount equal to the principal
balance of all Loans held by the Non-Consenting Lenders and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.
UPON PAYMENT IN FULL IN CASH AND PERFORMANCE OF ALL OF THE OBLIGATIONS (OTHER
THAN INDEMNIFICATION OBLIGATIONS), TERMINATION OF THE COMMITMENTS AND A RELEASE
OF ALL CLAIMS AGAINST AGENT AND LENDERS, AND SO LONG AS NO SUITS, ACTIONS,
PROCEEDINGS OR CLAIMS ARE PENDING OR THREATENED AGAINST ANY INDEMNIFIED PERSON
ASSERTING ANY DAMAGES, LOSSES OR LIABILITIES THAT ARE INDEMNIFIED LIABILITIES,
AGENT SHALL DELIVER TO BORROWERS TERMINATION STATEMENTS, MORTGAGE RELEASES AND
OTHER DOCUMENTS NECESSARY OR APPROPRIATE TO EVIDENCE THE TERMINATION OF THE
LIENS SECURING PAYMENT OF THE OBLIGATIONS.
Fees and Expenses. Borrowers shall reimburse (i) Agent for all fees, costs and
expenses (including the reasonable fees and expenses of all of its counsel,
advisors, consultants and auditors) and (ii) Agent (and, with respect to clauses
(c) and (d) below, all Lenders) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors (including
environmental and management consultants and appraisers), incurred in connection
with the negotiation and preparation of the Loan Documents and incurred in
connection with:
THE FORWARDING TO BORROWERS OR ANY OTHER PERSON ON BEHALF OF BORROWERS BY AGENT
OF THE PROCEEDS OF ANY LOAN (INCLUDING A WIRE TRANSFER FEE OF $25 PER WIRE
TRANSFER);
ANY AMENDMENT, MODIFICATION OR WAIVER OF, CONSENT WITH RESPECT TO, OR
TERMINATION OF, ANY OF THE LOAN DOCUMENTS OR RELATED TRANSACTIONS DOCUMENTS OR
ADVICE IN CONNECTION WITH THE SYNDICATION AND ADMINISTRATION OF THE LOANS MADE
PURSUANT HERETO OR ITS RIGHTS HEREUNDER OR THEREUNDER;
ANY LITIGATION, CONTEST, DISPUTE, SUIT, PROCEEDING OR ACTION (WHETHER INSTITUTED
BY AGENT, ANY LENDER, ANY BORROWER OR ANY OTHER PERSON AND WHETHER AS A PARTY,
WITNESS OR OTHERWISE) IN ANY WAY RELATING TO THE COLLATERAL, ANY OF THE LOAN
61
66
DOCUMENTS OR ANY OTHER AGREEMENT TO BE EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THEREWITH, INCLUDING ANY LITIGATION, CONTEST, DISPUTE, SUIT, CASE,
PROCEEDING OR ACTION, AND ANY APPEAL OR REVIEW THEREOF, IN CONNECTION WITH A
CASE COMMENCED BY OR AGAINST ANY OR ALL OF THE BORROWERS OR ANY OTHER PERSON
THAT MAY BE OBLIGATED TO AGENT BY VIRTUE OF THE LOAN DOCUMENTS; INCLUDING ANY
SUCH LITIGATION, CONTEST, DISPUTE, SUIT, PROCEEDING OR ACTION ARISING IN
CONNECTION WITH ANY WORK-OUT OR RESTRUCTURING OF THE LOANS DURING THE PENDENCY
OF ONE OR MORE EVENTS OF DEFAULT; PROVIDED THAT IN THE CASE OF REIMBURSEMENT OF
COUNSEL FOR LENDERS OTHER THAN AGENT, SUCH REIMBURSEMENT SHALL BE LIMITED TO ONE
COUNSEL FOR ALL SUCH LENDERS; PROVIDED, FURTHER, THAT NO PERSON SHALL BE
ENTITLED TO REIMBURSEMENT UNDER THIS CLAUSE (C) IN RESPECT OF ANY LITIGATION,
CONTEST, DISPUTE, SUIT, PROCEEDING OR ACTION TO THE EXTENT ANY OF THE FOREGOING
RESULTS FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
ANY ATTEMPT TO ENFORCE ANY REMEDIES OF AGENT AGAINST ANY OR ALL OF THE CREDIT
PARTIES OR ANY OTHER PERSON THAT MAY BE OBLIGATED TO AGENT OR ANY LENDER BY
VIRTUE OF ANY OF THE LOAN DOCUMENTS, INCLUDING ANY SUCH ATTEMPT TO ENFORCE ANY
SUCH REMEDIES IN THE COURSE OF ANY WORK-OUT OR RESTRUCTURING OF THE LOANS DURING
THE PENDENCY OF ONE OR MORE EVENTS OF DEFAULT; PROVIDED, THAT IN THE CASE OF
REIMBURSEMENT OF COUNSEL FOR LENDERS OTHER THAN AGENT, SUCH REIMBURSEMENT SHALL
BE LIMITED TO ONE COUNSEL FOR ALL SUCH LENDERS;
ANY WORKOUT OR RESTRUCTURING OF THE LOANS DURING THE PENDENCY OF ONE OR MORE
EVENTS OF DEFAULT; AND
EFFORTS TO (I) MONITOR THE LOANS OR ANY OF THE OTHER OBLIGATIONS, (II) EVALUATE,
OBSERVE OR ASSESS ANY OF THE CREDIT PARTIES OR THEIR RESPECTIVE AFFAIRS, AND
(III) VERIFY, PROTECT, EVALUATE, ASSESS, APPRAISE, COLLECT, SELL, LIQUIDATE OR
OTHERWISE DISPOSE OF ANY OF THE COLLATERAL;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
No Waiver. Agent's or any Lender's failure, at any time or times, to require
strict performance by the Credit Parties of any provision of this Agreement or
any other Loan Document shall not waive, affect or
62
67
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver of an
Event of Default shall not suspend, waive or affect any other Event of Default
whether the same is prior or subsequent thereto and whether the same or of a
different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized employee
of Agent and the applicable required Lenders, and directed to Borrowers
specifying such suspension or waiver.
Remedies. Agent's and Lenders' rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that Agent or any
Lender may have under any other agreement, including the other Loan Documents,
by operation of law or otherwise. Recourse to the Collateral shall not be
required.
Severability. Wherever possible, each provision of this Agreement and the other
Loan Documents shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement or any other
Loan Document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such other Loan Document.
Conflict of Terms. Except as otherwise provided in this Agreement or any of the
other Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
Confidentiality. Agent and each Lender agree to use commercially reasonable
efforts (equivalent to the efforts Agent or such Lender applies to maintaining
the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit Parties
and designated as confidential for a period of 2 years following receipt
thereof, except that Agent and any Lender may disclose such information (a) to
Persons employed or engaged by Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any bona fide
assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 11.8 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a)
above); (c) as required or requested by any Governmental Authority or reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena
or legal or administrative order or process; (d) as, on the advice of Agent's or
such Lender's counsel, is required by law; (e) in connection with the exercise
of any right or remedy under the Loan Documents or in connection with any
Litigation to which Agent or such Lender is a party; (f) that ceases to be
confidential through no fault of Agent or any Lender; or (g) information
required by rating agencies.
GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXXX
63
00
XXXXXX, XXXX XX XXXXXXX, XXXXXXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
XXXX COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
Notices. Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile
number indicated in Annex I or to such other address (or facsimile number) as
may be substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower Representative or Agent) designated in Annex I to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
Section Titles. The Section titles and Table of Contents contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
64
69
Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
Press Releases and Related Matters. Each Credit Party executing this Agreement
agrees that neither it nor its Affiliates will in the future issue any press
releases or other public disclosure using the name of GE Capital or its
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least 2 Business Days' prior notice to
GE Capital and without the prior written consent of GE Capital unless (and only
to the extent that) such Credit Party or Affiliate is required to do so under
law and then, in any event, such Credit Party or Affiliate will consult with GE
Capital before issuing such press release or other public disclosure. Each
Credit Party consents to the publication by Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement. Agent or such Lender shall provide a draft of
any such tombstone or similar advertising material to each Credit Party for
review and comment prior to the publication thereof. Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.
Reinstatement. This Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against any Borrower for
liquidation or reorganization, should any Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of any Borrower's assets,
and shall continue to be effective or to be reinstated, as the case may be, if
at any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
Advice of Counsel. Each of the parties represents to each other party hereto
that it has discussed this Agreement and, specifically, the provisions of
Sections 11.9 and 11.13, with its counsel.
No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement
65
70
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
CROSS-GUARANTY
Cross-Guaranty. Each Borrower hereby agrees that such Borrower is jointly and
severally liable for, and hereby absolutely and unconditionally guarantees to
Agent and Lenders and their respective successors and assigns, the full and
prompt payment (whether at stated maturity, by acceleration or otherwise) and
performance of, all Obligations owed or hereafter owing to Agent and Lenders by
each other Borrower. Each Borrower agrees that its guaranty obligation hereunder
is a continuing guaranty of payment and performance and not of collection, that
its obligations under this Section 12 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Section 12 shall be absolute and unconditional, irrespective of, and
unaffected by,
THE GENUINENESS, VALIDITY, REGULARITY, ENFORCEABILITY OR ANY FUTURE AMENDMENT
OF, OR CHANGE IN, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER
AGREEMENT, DOCUMENT OR INSTRUMENT TO WHICH ANY BORROWER IS OR MAY BECOME A
PARTY;
THE ABSENCE OF ANY ACTION TO ENFORCE THIS AGREEMENT (INCLUDING THIS SECTION 12)
OR ANY OTHER LOAN DOCUMENT OR THE WAIVER OR CONSENT BY AGENT AND LENDERS WITH
RESPECT TO ANY OF THE PROVISIONS THEREOF;
THE EXISTENCE, VALUE OR CONDITION OF, OR FAILURE TO PERFECT ITS LIEN AGAINST,
ANY SECURITY FOR THE OBLIGATIONS OR ANY ACTION, OR THE ABSENCE OF ANY ACTION, BY
AGENT AND LENDERS IN RESPECT THEREOF (INCLUDING THE RELEASE OF ANY SUCH
SECURITY);
THE INSOLVENCY OF ANY CREDIT PARTY; OR
ANY OTHER ACTION OR CIRCUMSTANCES THAT MIGHT OTHERWISE CONSTITUTE A LEGAL OR
EQUITABLE DISCHARGE OR DEFENSE OF A SURETY OR GUARANTOR.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
66
71
Waivers by Borrowers. Each Borrower expressly waives all rights it may have now
or in the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or Lenders to xxxxxxxx assets or to proceed in
respect of the Obligations guaranteed hereunder against any other Credit Party,
any other party or against any security for the payment and performance of the
Obligations before proceeding against, or as a condition to proceeding against,
such Borrower. It is agreed among each Borrower, Agent and Lenders that the
foregoing waivers are of the essence of the transaction contemplated by this
Agreement and the other Loan Documents and that, but for the provisions of this
Section 12 and such waivers, Agent and Lenders would decline to enter into this
Agreement.
Benefit of Guaranty. Each Borrower agrees that the provisions of this Section 12
are for the benefit of Agent and Lenders and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any other Borrower and Agent or Lenders, the obligations of such
other Borrower under the Loan Documents.
Subordination of Subrogation, Etc. Notwithstanding anything to the contrary in
this Agreement or in any other Loan Document, and except as set forth in Section
12.7, each Borrower hereby expressly and irrevocably subordinates to payment of
the Obligations any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and
all defenses available to a surety, guarantor or accommodation co-obligor until
the Obligations are indefeasibly paid in full in cash. Each Borrower
acknowledges and agrees that this subordination is intended to benefit Agent and
Lenders and shall not limit or otherwise affect such Borrower's liability
hereunder or the enforceability of this Section 12, and that Agent, Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 12.4.
Election of Remedies. If Agent or any Lender may, under applicable law, proceed
to realize its benefits under any of the Loan Documents giving Agent or such
Lender a Lien upon any Collateral, whether owned by any Borrower or by any other
Person, either by judicial foreclosure or by non-judicial sale or enforcement,
Agent or any Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of its rights and remedies under this
Section 12. If, in the exercise of any of its rights and remedies, Agent or any
Lender shall forfeit any of its rights or remedies, including its right to enter
a deficiency judgment against any Borrower or any other Person, whether because
of any applicable laws pertaining to "election of remedies" or the like, each
Borrower hereby consents to such action by Agent or such Lender and waives any
claim based upon such action, even if such action by Agent or such Lender shall
result in a full or partial loss of any rights of subrogation that each Borrower
might otherwise have had but for such action by Agent or such Lender. Any
election of remedies that results in the denial or impairment of the right of
Agent or any Lender to seek a deficiency judgment against any Borrower shall not
impair any other Borrower's obligation to pay the full amount of the
Obligations. In the event Agent or any Lender shall bid at any foreclosure or
trustee's sale or at any private sale permitted by law or the Loan Documents,
Agent or such Lender may bid all or less than the amount of the Obligations and
the amount of such bid need not be paid by Agent or such Lender but shall be
credited against the Obligations. The amount of the successful bid at any such
sale, whether Agent, Lender or any other party is the successful bidder, shall
be conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 12, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Agent or any Lender might otherwise be entitled but for such
bidding at any such sale.
67
72
Limitation. Notwithstanding any provision herein contained to the contrary, each
Borrower's liability under this Section 12 (which liability is in any event in
addition to amounts for which such Borrower is primarily liable under Section 1)
shall be limited to an amount not to exceed as of any date of determination the
greater of:
THE NET AMOUNT OF ALL LOANS ADVANCED TO ANY OTHER BORROWER UNDER THIS AGREEMENT
AND THEN RE-LOANED OR OTHERWISE TRANSFERRED TO, OR FOR THE BENEFIT OF, SUCH
BORROWER; AND
THE AMOUNT THAT COULD BE CLAIMED BY AGENT AND LENDERS FROM SUCH BORROWER UNDER
THIS SECTION 12 WITHOUT RENDERING SUCH CLAIM VOIDABLE OR AVOIDABLE UNDER SECTION
548 OF CHAPTER 11 OF THE BANKRUPTCY CODE OR UNDER ANY APPLICABLE STATE UNIFORM
FRAUDULENT TRANSFER ACT, UNIFORM FRAUDULENT CONVEYANCE ACT OR SIMILAR STATUTE OR
COMMON LAW AFTER TAKING INTO ACCOUNT, AMONG OTHER THINGS, SUCH BORROWER'S RIGHT
OF CONTRIBUTION AND INDEMNIFICATION FROM EACH OTHER BORROWER UNDER SECTION 12.7.
Contribution with Respect to Guaranty Xxxxxxxxxxx.XX THE EXTENT THAT ANY
BORROWER SHALL MAKE A PAYMENT UNDER THIS SECTION 12 OF ALL OR ANY OF THE
OBLIGATIONS (OTHER THAN LOANS MADE TO THAT BORROWER FOR WHICH IT IS PRIMARILY
LIABLE) (A "GUARANTOR PAYMENT") THAT, TAKING INTO ACCOUNT ALL OTHER GUARANTOR
PAYMENTS THEN PREVIOUSLY OR CONCURRENTLY MADE BY ANY OTHER BORROWER, EXCEEDS THE
AMOUNT THAT SUCH BORROWER WOULD OTHERWISE HAVE PAID IF EACH BORROWER HAD PAID
THE AGGREGATE OBLIGATIONS SATISFIED BY SUCH GUARANTOR PAYMENT IN THE SAME
PROPORTION THAT SUCH BORROWER'S "ALLOCABLE AMOUNT" (AS DEFINED BELOW) (AS
DETERMINED IMMEDIATELY PRIOR TO SUCH GUARANTOR PAYMENT) BORE TO THE AGGREGATE
ALLOCABLE AMOUNTS OF EACH OF THE BORROWERS AS DETERMINED IMMEDIATELY PRIOR TO
THE MAKING OF SUCH GUARANTOR PAYMENT, THEN, FOLLOWING INDEFEASIBLE PAYMENT IN
FULL IN CASH OF THE OBLIGATIONS AND TERMINATION OF THE COMMITMENTS, SUCH
BORROWER SHALL BE ENTITLED TO RECEIVE CONTRIBUTION AND INDEMNIFICATION PAYMENTS
FROM, AND BE REIMBURSED BY, EACH OTHER BORROWER FOR THE AMOUNT OF SUCH EXCESS,
PRO RATA BASED UPON THEIR RESPECTIVE ALLOCABLE AMOUNTS IN EFFECT IMMEDIATELY
PRIOR TO SUCH GUARANTOR PAYMENT.
AS OF ANY DATE OF DETERMINATION, THE "ALLOCABLE AMOUNT" OF ANY BORROWER SHALL BE
EQUAL TO THE MAXIMUM AMOUNT OF THE CLAIM THAT COULD THEN BE RECOVERED FROM SUCH
BORROWER UNDER THIS SECTION 12 WITHOUT RENDERING SUCH CLAIM VOIDABLE OR
AVOIDABLE UNDER SECTION 548 OF CHAPTER 11 OF THE BANKRUPTCY CODE OR UNDER ANY
APPLICABLE STATE UNIFORM FRAUDULENT TRANSFER ACT, UNIFORM FRAUDULENT CONVEYANCE
ACT OR SIMILAR STATUTE OR COMMON LAW.
THIS SECTION 12.7 IS INTENDED ONLY TO DEFINE THE RELATIVE RIGHTS OF BORROWERS
AND NOTHING SET FORTH IN THIS SECTION 12.7 IS INTENDED TO OR SHALL IMPAIR THE
OBLIGATIONS OF BORROWERS, JOINTLY AND SEVERALLY, TO PAY ANY AMOUNTS AS AND WHEN
THE SAME
68
73
SHALL BECOME DUE AND PAYABLE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT,
INCLUDING SECTION 12.1. NOTHING CONTAINED IN THIS SECTION 12.7 SHALL LIMIT THE
LIABILITY OF ANY BORROWER TO PAY THE LOANS MADE directly or indirectly TO THAT
BORROWER AND ACCRUED INTEREST, FEES AND EXPENSES WITH RESPECT THERETO FOR WHICH
SUCH BORROWER SHALL BE PRIMARILY LIABLE.
THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHTS OF CONTRIBUTION AND
INDEMNIFICATION HEREUNDER SHALL CONSTITUTE ASSETS OF THE BORROWER TO WHICH SUCH
CONTRIBUTION AND INDEMNIFICATION IS OWING.
THE RIGHTS OF THE INDEMNIFYING BORROWERS AGAINST OTHER CREDIT PARTIES UNDER THIS
SECTION 12.7 SHALL BE EXERCISABLE UPON THE FULL AND INDEFEASIBLE PAYMENT OF THE
OBLIGATIONS AND THE TERMINATION OF THE COMMITMENTS.
Liability Cumulative. The liability of Borrowers under this Section 12 is in
addition to and shall be cumulative with all liabilities of each Borrower to
Agent and Lenders under this Agreement and the other Loan Documents to which
such Borrower is a party or in respect of any Obligations or obligation of the
other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
69
74
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
LACLEDE STEEL COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
LACLEDE CHAIN MANUFACTURING COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By:
------------------------------------------------
Duly Authorized Signatory
75
XXXXXX FINANCIAL, INC.,
as Co-Agent and Lender
By:
------------------------------------------------
Name:
-----------------------------------------------
Title:
---------------------------------------------
CONGRESS FINANCIAL CORPORATION (CENTRAL),
as Co-Agent and Lender
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
76
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings, and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
"Account Debtor" means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account.
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments),
whether arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all monies due or to become due to any Credit Party, under all purchase orders
and contracts for the sale of goods or the performance of services or both by
such Credit Party or in connection with any other transaction (whether or not
yet earned by performance on the part of such Credit Party), including the right
to receive the proceeds of said purchase orders and contracts, (e) all health
care insurance receivables and (f) all collateral security and guaranties of any
kind, given by any Account Debtor or any other Person with respect to any of the
foregoing.
"Advance" means any Revolving Credit Advance or Swing Line Advance, as the
context may require.
"Affiliate" means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, 5% or more of the Stock having ordinary voting power in the
election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, (c) each of such
Person's officers, directors, joint venturers and partners and (d) in the case
of Borrowers, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of any Borrower. For the purposes of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its successor
appointed pursuant to Section 9.7.
"Aggregate Borrowing Base" means as of any date of determination, an amount
equal to (i) the sum of the Laclede Steel Borrowing Base and the Laclede Chain
Borrowing Base; less (ii) any Reserves except to the extent already deducted
therefrom.
A-1
77
"Agreement" means the Credit Agreement by and among Borrowers, the other Credit
Parties party thereto, GE Capital, as Agent and Lender and the other Lenders
from time to time party thereto, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time in effect,
payable with respect to outstanding Letter of Credit Obligations as determined
by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin, the
Applicable Unused Line Fee Margin, the Applicable Revolver Index Margin, the
Applicable Term Loan Index Margin, the Applicable Revolver LIBOR Margin and the
Applicable Term Loan LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate margin from
time to time in effect and payable in addition to the Index Rate applicable to
the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate from time
to time in effect and payable in addition to the LIBOR Rate applicable to the
Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan Index Margin" means the per annum interest rate from time
to time in effect and payable in addition to the Index Rate applicable to the
Term Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan LIBOR Margin" means the per annum interest rate from time
to time in effect and payable in addition to the LIBOR Rate applicable to the
Term Loan, as determined by reference to Section 1.5(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from time to time
in effect, payable in respect of Borrowers' non-use of committed funds pursuant
to Section 1.9(b), which fee is determined by reference to Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United States Code, 11
U.S.C.ss.ss.101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the Eastern
District of Missouri, Eastern Division or any other court with jurisdiction over
the Chapter 11 Cases.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower Representative" means Laclede Steel in its capacity as Borrower
Representative pursuant to the provisions of Section 1.1(d).
"Borrowers" and "Borrower" have the respective meanings ascribed thereto in the
preamble to the Agreement.
"Borrowing Availability" means as of any date of determination (a) as to all
Borrowers, the lesser of (i) the Maximum Amount and (ii) the Aggregate Borrowing
Base, in each case, less the sum of the aggregate
A-2
78
Revolving Loan and Swing Line Loan then outstanding, or (b) as to an individual
Borrower, the lesser of (i) the Maximum Amount less the sum of the Revolving
Loan and Swing Line Loan outstanding to all other Borrowers and (ii) that
Borrower's separate Borrowing Base, less the sum of the Revolving Loan and Swing
Line Loan outstanding to that Borrower; provided that an Overadvance in
accordance with Section 1.1(a)(iii) may cause the Revolving Loan and the Swing
Line Loan to exceed the Aggregate Borrowing Base or a Borrower's separate
Borrowing Base by the amount of such permitted Overadvance.
"Borrowing Base" means, as the context may require, the Laclede Steel Borrowing
Base, the Laclede Chain Borrowing Base or any such Borrowing Base.
"Borrowing Base Certificate" means a certificate to be executed and delivered
from time to time by each Borrower in the form attached to the Agreement as
Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the States of Illinois and New
York and in reference to LIBOR Loans shall mean any such day that is also a
LIBOR Business Day.
"Capital Expenditures" means, with respect to any Person, all expenditures (by
the expenditure of cash or the incurrence of Indebtedness) by such Person during
any measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto that have a useful life of more than one year
and that are required to be capitalized under GAAP; provided, however, that
Capital Expenditures shall not include the non-cash portion of those
expenditures incurred in connection with the ECP Security Agreement.
"Capital Lease" means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section 1.8.
"Change of Control" means any of the following: (a) any person or group of
persons (within the meaning of the Securities Exchange Act of 1934,) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934,) of 25% or more of the issued and outstanding shares of capital Stock of
Laclede Steel having the right to vote for the election of directors of Laclede
Steel under ordinary circumstances; (b) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period constituted the
board of directors of Laclede Steel (together with any new directors whose
election by the board of directors of Laclede Steel or whose nomination for
election by the Stockholders of Laclede Steel was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; (c) Laclede Steel ceases
to own and control all of the economic and voting rights associated with all of
the
A-3
79
outstanding capital Stock of Laclede Chain, (d) Laclede Chain ceases to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of any of its Subsidiaries, or (e) the PBGC shall at
any time acquire beneficial ownership of 50% or more of the issued and
outstanding shares of capital stock of Laclede Steel having the right to vote
for the election of directors of Laclede Steel under ordinary circumstances.
"Chapter 11 Cases" means Case Nos. 00-00000-000, 00-00000-000 and 00-00000-000
filed under Chapter 11 of the Bankruptcy Code and pending before the Bankruptcy
Court.
"Charges" means all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
income or gross receipts of any Credit Party, (d) any Credit Party's ownership
or use of any properties or other assets, or (e) any other aspect of any Credit
Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Credit Party, wherever located.
"Closing Date" means December 29, 2000.
"Closing Checklist" means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Illinois; provided, that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, Agent's or any Lender's
Lien on any Collateral is governed by the Uniform Commercial Code as enacted and
in effect in a jurisdiction other than the State of Illinois, the term "Code"
shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions.
"Collateral" means the property covered by the Security Agreement, the Mortgages
and the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Pledge Agreements, the
Mortgages, the Patent Security Agreement, the Trademark Security Agreement, the
Copyright Security Agreement and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral referred
to in Annex F.
"Collection Account" means that certain account of Agent, account number
000-000-00 in the name of Agent at Bankers Trust Company in New York, New York
ABA No. 021 001 033, or such other account as may be specified in writing by
Agent as the "Collection Account.".
A-4
80
"Commitment Termination Date" means the earliest of (a) December 29, 2003 (b)
the date of termination of Lenders' obligations to make Advances and to incur
Letter of Credit Obligations or permit existing Loans to remain outstanding
pursuant to Section 8.2(b), and (c) the date of indefeasible prepayment in full
by Borrowers of the Loans and the cancellation and return (or stand-by
guarantee) of all Letters of Credit or the cash collateralization of all Letter
of Credit Obligations pursuant to Annex B, and the permanent reduction of all
Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of such Lender's
Revolving Loan Commitment (including without duplication the Swing Line Lender's
Swing Line Commitment as a subset of its Revolving Loan Commitment) and Term
Loan Commitment as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments (including without
duplication the Swing Line Lender's Swing Line Commitment as a subset of its
Revolving Loan Commitment) and Term Loan Commitments, which aggregate commitment
shall be Sixty-One Million Five Hundred Thousand Dollars ($61,500,000) on the
Closing Date, as to each of clauses (a) and (b), as such Commitments may be
reduced, amortized or adjusted from time to time in accordance with the
Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Concentration Accounts" has the meaning ascribed to it in Annex C.
"Confirmation Order" means the Findings of Fact, Conclusions of Law and Order
Confirming the Plan of Reorganization entered by the Bankruptcy Court.
"Contracts" means all "contracts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
"Copyright License" means any and all rights now owned or hereafter acquired by
any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security Agreements made in
favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" means each Borrower and each of their respective Subsidiaries.
"Default" means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
A-5
81
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and denominated
as Disclosure Schedules (1.4) through (6.7) in the Index to the Agreement.
"Documents" means all "documents," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of America.
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) the amount of non-cash charges (including
depreciation and amortization) for such period, (v) amortized debt discount for
such period, and (vi) the amount of any deduction to consolidated net income as
the result of any grant to any members of the management of such Person of any
Stock, in each case to the extent included in the calculation of consolidated
net income of such Person for such period in accordance with GAAP, but without
duplication. For purposes of this definition, the following items shall be
excluded in determining consolidated net income of a Person: (1) the income (or
deficit) of any other Person accrued prior to the date it became a Subsidiary
of, or was merged or consolidated into, such Person or any of such Person's
Subsidiaries; (2) the income (or deficit) of any other Person (other than a
Subsidiary) in which such Person has an ownership interest, except to the extent
any such income has actually been received by such Person in the form of cash
dividends or distributions; (3) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary; (4) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued during
such period; (5) any write-up of any asset; (6) any net gain from the collection
of the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
"ECP" means ECP Distribution Limited Partnership, a Delaware limited
partnership.
"ECP Collateral" means the equipment of Laclede Steel at its facilities in
Alton, Illinois subject to the security interest of ECP pursuant to the ECP
Security Agreement.
"ECP Security Agreement" means that certain Security Agreement dated October 19,
2000 by and between Laclede Steel and ECP.
A-6
82
"Eligible Accounts" has the meaning ascribed to it in Section 1.6.
"Eligible Inventory" has the meaning ascribed to it in Section 1.7.
"Environmental Laws" means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include applicable
provisions of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C.ss.ss.9601 et seq.) ("CERCLA"); the Hazardous
Materials Transportation Authorization Act of 1994 (49 U.S.C.ss.ss.5101 et
seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7
U.S.C.ss.ss.136 et seq.); the Solid Waste Disposal Act (42 X.X.X.xx.xx. 6901 et
seq.); the Toxic Substance Control Act (15 U.S.C.ss.ss.2601 et seq.); the Clean
Air Act (42 U.S.C.ss.ss.7401 et seq.); the Federal Water Pollution Control Act
(33 U.S.C.ss.ss.1251 et seq.); the Occupational Safety and Health Act (29
U.S.C.ss.ss.651 et seq.); and the Safe Drinking Water Act (42 X.X.X.xx.xx.
300(f) et seq.), and any and all applicable regulations promulgated thereunder,
and all applicable analogous state, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all liabilities,
response, remedial and removal costs, investigation and feasibility study costs,
punitive damages, property damages, natural resource damages, consequential
damages, treble damages, (including all reasonable fees, disbursements and
expenses of counsel, experts and consultants, but not including those incurred
in order to assist a Credit Party in complying with Environmental Laws), fines,
penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any Person, arising
under or related to any Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property. "Environmental Liabilities" shall not include fees,
disbursements and expense of counsel, experts and consultants incurred in
connection with a proceeding in which the relevant Credit Party is found not to
be liable.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located and, in any
event, including all such Credit Party's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any regulations promulgated thereunder.
A-7
83
"ERISA Affiliate" means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of
the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA Affiliate,
(a) any event described in Section 4043(c) of ERISA with respect to a Title IV
Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV
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; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition that 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 Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; or (i)
the loss of a Qualified Plan's qualification or tax exempt status; or (j) the
termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of Section
4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Extended Term Account" means any Account with a due date which is more than 90
days but less than 180 days past its original invoice date with the exception of
CSK Auto which Accounts are deemed Extended Term Accounts if the due date of
such Accounts is more than 90 days but less than 240 days past their original
invoice date.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29 U.S.C.ss.201
et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to the weighted
average of the rates on overnight Federal funds transactions among members of
the Federal Reserve System, as determined by Agent in its sole discretion, which
determination shall be final, binding and conclusive (absent manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Fees" means any and all fees payable to Agent or any Lender pursuant to the
Agreement or any of the other Loan Documents.
"Final Order" shall mean an order, judgment, ruling or other decree of
Bankruptcy Court or any other court of competent jurisdiction, which judgment,
order or other degree (a) has not been reversed, stayed, modified or amended and
as to which (i) the time to appeal, petition for certiorari or seek reargument
or rehearing has expired and (ii) no appeal, reargument, petition for certiorari
or rehearing is pending or any right to appeal, reargue, petition for certiorari
or seek rehearing has been waived in writing in a manner satisfactory to the
Agent or (b) if an appeal, reargument, petition for certiorari or rehearing
thereof has been denied, the time to take any further appeal or petition for
certiorari or further reargument or rehearing has expired.
A-8
84
"Financial Covenants" means the financial covenants set forth in Annex G.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrowers delivered
in accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of Borrowers.
"Fiscal Quarter" means any of the quarterly accounting periods of Borrowers,
ending on December 31, March 31, June 30 and September 30 of each year.
"Fiscal Year" means any of the annual accounting periods of Borrowers ending on
September 30 of each year.
"Fixed Charges" means, with respect to any Person for any fiscal period, (a) the
aggregate of all Interest Expense paid or accrued during such period excluding
any interest paid-in-kind, plus (b) scheduled payments of principal with respect
to Indebtedness during such period.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any fiscal
period, the ratio of (i) EBITDA, less Capital Expenditures paid in cash, less
income taxes actually paid to (ii) Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations.
"GAAP" means generally accepted accounting principles in the United States of
America consistently applied, as such term is further defined in Annex G to the
Agreement.
"GE Capital" means General Electric Capital Corporation, a New York corporation.
"GE Capital Commitment Letter" means that certain letter dated as of December
14, 2000 between GE Capital and Borrowers with respect to certain Fees to be
paid from time to time by Borrowers to GE Capital.
"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, including all
right, title and interest that such Credit Party may now or hereafter have in or
under any Contract, all payment intangibles, customer lists, Licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire,
A-9
85
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or hereafter
acquired by any Credit Party, including embedded software.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation ("primary obligation") of any other Person (the
"primary obligor") in any manner, including any obligation or arrangement of
such Person to (a) purchase or repurchase any such primary obligation, (b)
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
incurred and (y) the maximum amount for which such Person may be liable pursuant
to the terms of the instrument embodying such Guaranteed Indebtedness, or, if
not stated or determinable, the maximum reasonably anticipated liability
(assuming full performance) in respect thereof.
"Hazardous Material" means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a "solid
waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any regulated radioactive substance.
"Indebtedness" means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred 6 months or more, but excluding
obligations to trade creditors incurred in the ordinary course of business (i)
that are unsecured and not overdue by more than 6 months unless being contested
in good faith or (ii) that are overdue by more than 6 months to the extent and
only to the extent such trade creditors have consented in writing to such
extended period, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under
A-10
86
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.13.
"Indemnified Person" has the meaning ascribed to in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher of (i) the
rate publicly quoted from time to time by The Wall Street Journal as the "base
rate on corporate loans posted by at least 75% of the nation's 30 largest banks"
(or, if The Wall Street Journal ceases quoting a base rate of the type
described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by reference
to the Index Rate.
"Instruments" means all "instruments," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and, in any
event, including all certificated securities (exclusive of Laclede Mid-America)
not otherwise pledged as permitted pursuant to the Loan Documents, all
certificates of deposit, and all notes and other, without limitation, evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
"Interest Expense" means, with respect to any Person for any fiscal period,
interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan, the last Business
Day of each month to occur while such Loan is outstanding, and (b) as to any
LIBOR Loan, the last day of the applicable LIBOR Period provided that, in
addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment
X-00
00
Xxxxxxxxxxx Date shall be deemed to be an "Interest Payment Date" with respect
to any interest that has then accrued under the Agreement.
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other supplies
and embedded software.
"Investment Property" means all "investment property" as such term is defined in
the Code now owned or hereafter acquired by any Credit Party, wherever located,
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of any Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations promulgated
thereunder.
"IRS" means the Internal Revenue Service.
"Laclede Chain" means Laclede Chain Manufacturing Company, a Delaware
corporation.
"Laclede Chain Borrowing Base" means, as of any date of
determination by Agent, from time to time, an amount equal to the sum
at such time of:
THE SUM OF (I) 80% OF THE BOOK VALUE OF LACLEDE CHAIN'S ELIGIBLE ACCOUNTS LESS
THAN OR EQUAL TO 90 DAYS PRIOR TO THE DUE DATE OF SUCH ACCOUNTS, (II) 65% OF THE
BOOK VALUE OF LACLEDE CHAIN'S ELIGIBLE ACCOUNTS LESS THAN OR EQUAL TO 120 DAYS
BUT GREATER THAN 90 DAYS PRIOR TO THE DUE DATE OF SUCH ACCOUNTS, AND (III) 45%
OF THE BOOK VALUE OF LACLEDE CHAINS' ELIGIBLE ACCOUNTS LESS THAN OR EQUAL TO 180
DAYS PRIOR TO THE DUE DATE OF SUCH ACCOUNTS BUT GREATER THAN 120 DAYS PRIOR TO
THE DUE DATE OF SUCH ACCOUNTS; AND
65% OF THE BOOK VALUE OF LACLEDE CHAIN'S ELIGIBLE INVENTORY
VALUED AT THE LOWER OF AVERAGE COST OR MARKET.
in each case, less any Reserves established by Agent at such time.
"Laclede Chain Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Laclede Chain in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Subsidiaries, if any, and all Intercompany
Notes owing to or held by it.
"Laclede Mid-America" means Laclede Mid-America, Inc., an Indiana corporation.
A-12
88
"Laclede Steel" means Laclede Steel Company, a Delaware corporation.
"Laclede Steel Borrowing Base" means, as of any date of determination by Agent,
from time to time, an amount equal to the sum at such time of:
(a) 85% of the book value of Laclede Steel's Eligible Accounts;
(b) 65% of the book value of Laclede Steel's Eligible Inventory
valued at the lower of average cost or market; and
(C) SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED OR IS CONTINUING,
THE SUPPLIES INVENTORY CREDIT;
in each case, less any Reserves established by Agent at such time.
"Laclede Steel Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Laclede Steel in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Subsidiaries not otherwise pledged as
permitted pursuant to the Loan Documents (except Laclede Mid-America) and all
Intercompany Notes owing to or held by it.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature pages of
the Agreement, and, if any such Lender shall decide to assign all or any portion
of the Obligations, such term shall include any assignee of such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations incurred by
Agent and Lenders at the request of Borrower Representative, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by Agent or another L/C Issuer or the purchase of
a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit issued for
the account of any Borrower by any L/C Issuer, and bankers' acceptances issued
by any Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"Leverage Ratio" means, with respect to Borrowers, on a consolidated basis, the
ratio of (a) Funded Debt as at any date of determination, to (b) EBITDA.
"LIBOR Business Day" means a Business Day on which banks in the City of London
are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.
A-13
89
"LIBOR Period" means, with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day selected by Borrower Representative pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrower Representative's irrevocable notice to Agent as set forth in Section
1.5(e); provided, that the foregoing provision relating to LIBOR Periods is
subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end 2 LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period) shall end on the
last LIBOR Business Day of a calendar month;
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period for
such Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than 5 separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined by Agent
equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the
first day of such LIBOR Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal
and emergency reserves under any regulations of the Federal Reserve Board
or other Governmental Authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Federal
Reserve Board that are required to be maintained by a member bank of the
Federal Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrower
Representative.
"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security
A-14
90
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral Documents, the
Master Standby Agreement, the Master Documentary Agreement, and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loans" means the Revolving Loan, the Swing Line Loan and the Term Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for Documentary
Letters of Credit dated as of the Closing Date among Borrowers, as Applicant(s),
and GE Capital.
"Master Standby Agreement" means the Master Agreement for Standby Letters of
Credit dated as of the Closing Date among Borrowers, as Applicant(s), and GE
Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on (a) the business,
assets, operations, prospects or financial or other condition of any Credit
Party (b) any Borrower's ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement, (c) the Collateral or
Agent's Liens, on behalf of itself and Lenders, on the Collateral or the
priority of such Liens, or (d) Agent's or any Lender's rights and remedies under
the Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, any event or occurrence adverse to one or more Credit Parties
which results or could reasonably be expected to result in costs and/or
liabilities in excess of the lesser of $5,000,000 and 10% of Aggregate Borrowing
Base as of any date of determination shall constitute a Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Lenders as of that date.
"Mortgaged Properties" has the meaning assigned to it in Annex D.
"Mortgages" means each of the mortgages, deeds of trust, leasehold mortgages,
leasehold deeds of trust, collateral assignments of leases or other real estate
security documents delivered by any Credit Party to
A-15
91
Agent on behalf of itself and Lenders with respect to the Mortgaged Properties,
all in form and substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making,
is obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"Non-Funding Lender" has the meaning ascribed to it in Section 9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes, the Swing Line Notes and the
Term Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it in Section
1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a).
"Obligations" means all loans, advances, debts, liabilities and obligations for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by any Credit Party to Agent or any
Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
"Overadvance" has the meaning ascribed to it in Section 1.1(a)(iii).
"Patent License" means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on
which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements made in favor
of Agent, on behalf of itself and Lenders, by each applicable Credit Party.
"Patents" means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens for taxes
or assessments or other governmental Charges not yet due and payable or which
are being contested in accordance with Section 5.2(b); (b) pledges or deposits
of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other
A-16
92
than contracts for the payment of money) or leases to which any Credit Party is
a party as lessee made in the ordinary course of business; (d) inchoate and
unperfected workers', mechanics' or similar liens arising in the ordinary course
of business, so long as such Liens attach only to Equipment, Fixtures and/or
Real Estate; (e) carriers', warehousemen's, suppliers' or other similar
possessory liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of $25,000 at any
time, so long as such Liens attach only to Inventory; (f) deposits securing, or
in lieu of, surety, appeal or customs bonds in proceedings to which any Credit
Party is a party; (g) any attachment or judgment lien not constituting an Event
of Default under Section 8.1(j); (h) zoning restrictions, easements, licenses,
or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(i) presently existing or hereafter created Liens in favor of Agent, on behalf
of Lenders; and (j) Liens expressly permitted under clauses (b) and (c) of
Section 6.7 of the Agreement.
"Person" means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in Section
3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains, contributes
to or has an obligation to contribute to or has maintained, contributed to or
had an obligation to contribute to at any time within the past 7 years on behalf
of participants who are or were employed by any Credit Party or ERISA Affiliate.
"Plan of Reorganization " means the Debtors' Second Amended Joint Plan of
Reorganization filed with the Bankruptcy Court by Borrowers and LaClede Mid
America, Inc. on October 18, 2000, as modified pursuant to the Confirmation
Order and in accordance with this Agreement.
"Pledge Agreements" means, collectively, the Laclede Steel Pledge Agreement, the
Laclede Chain Pledge Agreement, and any pledge agreements entered into after the
Closing Date by any Credit Party (as required by the Agreement or any other Loan
Document).
"Prior Lender" means Bank America Business Credit, Inc.
"Prior Lender Obligations" means the principal, interest, fees and expenses
owing to the Prior Lender pursuant to the Loan and Security Agreement dated as
of December 1, 1998.
"Proceeds" means "proceeds," as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral, (e) dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock, and (f) any and all other amounts from time to time paid or payable under
or in connection with any of the Collateral, upon disposition or otherwise.
A-17
93
"Pro Forma" means the projected consolidated and consolidating balance sheet of
Borrowers and their Subsidiaries as of December 29, 2000 after giving pro forma
effect to the Related Transactions.
"Projections" means Borrowers' forecasted consolidated and consolidating: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of the Borrowers, together with appropriate
supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any Lender, (a)
with respect to the Revolving Loan, the percentage obtained by dividing (i) the
Revolving Loan Commitment of that Lender by (ii) the aggregate Revolving Loan
Commitments of all Lenders, (b) with respect to the Term Loan, the percentage
obtained by dividing (i) the Term Loan Commitment of that Lender by (ii) the
aggregate Term Loan Commitments of all Lenders, as any such percentages may be
adjusted by assignments permitted pursuant to Section 9.1, (c) with respect to
all Loans, the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of all Lenders, and (d) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders.
"Qualified Plan" means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender and any
investment fund that invests in commercial loans and that is managed or advised
by a Lender, an Affiliate of a Lender, the same investment advisor as the
assigning Lender or by an Affiliate of such investment advisor, (b) any
commercial bank, savings and loan association or savings bank or any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from Xxxxx'x at the date
that it becomes a Lender and which, through its applicable lending office, is
capable of lending to Borrowers without the imposition of any withholding or
similar taxes; and (c) any other entity consented to in writing by the Agent;
provided that no Person determined by Agent to be acting in the capacity of a
vulture fund or distressed debt purchaser shall be a Qualified Assignee, and no
Person or Affiliate of such Person (other than a Person that is already a
Lender) holding Subordinated Debt or Stock issued by any Credit Party shall be a
Qualified Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing" means the repayment in full by Borrowers of the Prior Lender
Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(c)(iii).
"Related Transactions" means the initial borrowing under the Revolving Loan and
the Term Loan on the Closing Date, the Refinancing, the issuance of the
Subordinated Notes, the payment of all fees, costs and expenses associated with
all of the foregoing and the execution and delivery of all of the Related
Transactions Documents, Order.
A-18
94
"Related Transactions Documents" means the Loan Documents, the Subordinated
Notes, the Plan of Reorganization and the Confirmation Order, and all other
agreements or instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the environment.
"Requisite Lenders" means Lenders having (a) more than 51% of the Commitments of
all Lenders, or (b) if the Commitments have been terminated, more than 51% of
the aggregate outstanding amount of all Loans.
"Requisite Revolving Lenders" means Lenders having (a) more than 51% of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 51% of the aggregate outstanding
amount of the Revolving Loan.
"Reserves" means (a) reserves established by Agent from time to time against
Eligible Inventory pursuant to Section 5.9, (b) reserves established pursuant to
Section 5.4(c), and (c) such other reserves against Eligible Accounts, Eligible
Inventory or Borrowing Availability of any Borrower that Agent may, in its
reasonable credit judgment, establish from time to time. Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued Interest Expenses, Indebtedness, claims, warranties or unreconciled
variances shall be deemed to be a reasonable exercise of Agent's credit
judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the declaration
or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Stock;
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of such Credit Party's Stock or any other payment or
distribution made in respect thereof, either directly or indirectly; (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) by such Credit Party to any Stockholder of such Credit
Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section 1.1(a)(i).
A-19
95
"Revolving Lenders" means, as of any date of determination, Lenders having a
Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the aggregate amount of
Revolving Credit Advances outstanding to Borrower plus (ii) the aggregate Letter
of Credit Obligations incurred on behalf of Borrower. Unless the context
otherwise requires, references to the outstanding principal balance of the
Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the aggregate commitment
of such Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Credit Advances or incur
Letter of Credit Obligations, which aggregate commitment shall be Fifty-Five
Million Dollars ($55,000,000) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section 1.1(a)(ii).
"Security Agreement" means the Security Agreement of even date herewith entered
into by and among Agent, on behalf of itself and Lenders, and each Credit Party
that is a signatory thereto.
"Solvent" means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation and guaranties ) at any time shall be computed as the amount that, in
light of all the facts and circumstances existing at the time, represents the
amount that can be reasonably be expected to become an actual or matured
liability. Contingent pension plan liabilities shall be computed in the same
manner as is appropriate for balance sheet presentation
"Stock" means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock of such
Person.
"Subordinated Debt" means the Indebtedness of Laclede Steel evidenced by the
Subordinated Notes and any Indebtedness of any Credit Party subordinated to the
Obligations in a manner and form satisfactory to Agent and Lenders in their sole
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.
"Subordinated Notes" means those certain 8.5% Subordinated Notes due December
15, 2015 issued by Laclede Steel to the PBGC in an aggregate original principal
amount of $5,000,000.
A-20
96
"Subsidiary" means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner
or may exercise the powers of a general partner. Unless the context otherwise
requires, each reference to a Subsidiary shall be a reference to a Subsidiary of
a Borrower.
"Supermajority Revolving Lenders" means Lenders having (a) 80% or more of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan) and Letter of Credit Obligations.
"Supplies Inventory Credit" means, at any time, for either Borrower, the
difference between (i) as of the Closing Date through the end of January 2001,
$1,200,000, decreasing by $100,000 each calendar month thereafter and (ii) the
Supplies Inventory Credit utilized by the Borrower's Borrowing Base at the date
of determination.
"Supporting Obligations" has the meaning ascribed thereto in the Code.
"SWIDA" means Southwestern Illinois Development Authority.
"SWIDA Collateral" means the machinery and equipment of Laclede Chain located at
its facilities in Maryville, Missouri and the equity interests of Laclede Steel
in Laclede Chain pledged to SWIDA pursuant to the SWIDA Pledge Agreement.
"SWIDA Pledge Agreement" means that certain Pledge Agreement dated as of August
20, 1997 by and between Laclede Steel and SunTrust Bank (as successor in
interest to Xxxxxxx'x Trust Company).
"SWIDA Security Agreement" means that certain Security Agreement dated as of
August 20, 1997 by and between Laclede Chain and SunTrust Bank (as successor in
interest to Xxxxxxx'x Trust Company).
"Swing Line Advance" has the meaning ascribed to it in Section 1.1(c)(i).
"Swing Line Availability" has the meaning ascribed to it in Section 1.1(c)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the commitment of
the Swing Line Lender to make Swing Line Advances as set forth on Annex J to the
Agreement, which commitment constitutes a subfacility of the Revolving Loan
Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means, as the context may require, at any time, the aggregate
amount of Swing Line Advances outstanding to any Borrower or to all Borrowers.
A-21
97
"Swing Line Note" has the meaning ascribed to it in Section 1.1(c)(ii).
"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on or measured by
the net income of Agent or a Lender by the jurisdictions under the laws of which
Agent and Lenders are organized or conduct business or any political subdivision
thereof.
"Termination Date" means the date on which (a) the Loans have been indefeasibly
repaid in full, (b) all other Obligations under the Agreement and the other Loan
Documents have been completely discharged (c) all Letter of Credit Obligations
have been cash collateralized, canceled or backed by standby letters of credit
in accordance with Annex B, and (d) none of Borrowers shall have any further
right to borrow any monies under the Agreement.
"Term Lenders" means those Lenders having Term Loan Commitments.
"Term Loan" has the meaning assigned to it in Section 1.1(b)(i).
"Term Loan Commitment" means (a) as to any Lender with a Term Loan Commitment,
the commitment of such Lender to make its Pro Rata Share of the Term Loan as set
forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders with a Term Loan Commitment,
the aggregate commitment of all Lenders to make the Term Loan, which aggregate
commitment shall be Six Million Five Hundred Thousand Dollars ($6,500,000) on
the Closing Date. After advancing the Term Loan, each reference to a Lender's
Term Loan Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan.
"Term Note" has the meaning assigned to it in Section 1.1(b)(i).
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan), that is
covered by Title IV of ERISA, and that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security Agreements made in
favor of Agent, on behalf of Lenders, by each applicable Credit Party.
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate amount, if any,
of the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of
A-22
98
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
Rules of construction with respect to accounting terms used in the Agreement or
the other Loan Documents shall be as set forth in Annex G. All other undefined
terms contained in any of the Loan Documents shall, unless the context indicates
otherwise, have the meanings provided for by the Code as in effect in the State
of Illinois to the extent the same are used or defined therein. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words "including", "includes" and "include"
shall be deemed to be followed by the words "without limitation"; the word "or"
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
X-00
00
XXXXX X (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement, Agent and
Revolving Lenders agree to incur, from time to time prior to the Commitment
Termination Date, upon the request of Borrower Representative on behalf of the
applicable Borrower and for such Borrower's account, Letter of Credit
Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer") for such
Borrower's account and guaranteed by Agent; provided, that if the L/C Issuer is
a Revolving Lender, then such Letters of Credit shall not be guaranteed by Agent
but rather each Revolving Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in paragraph (b)(ii) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the least
of (i) Ten Million Dollars ($10,000,000) (the "L/C Sublimit") and (ii) the
Maximum Amount less the aggregate outstanding principal balance of the Revolving
Credit Advances and the Swing Line Loan, and (iii) the Aggregate Borrowing Base
less the aggregate outstanding principal balance of the Revolving Credit
Advances and the Swing Line Loan. Furthermore, the aggregate amount of any
Letter of Credit Obligations incurred on behalf of any Borrower shall not at any
time exceed such Borrower's separate Borrowing Base less the aggregate principal
balance of the Revolving Credit Advances and the Swing Line Loan to such
Borrower. No such Letter of Credit shall have an expiry date that is more than
one year following the date of issuance thereof, unless otherwise determined by
the Agent, in its sole discretion, and neither Agent nor Revolving Lenders shall
be under any obligation to incur Letter of Credit Obligations in respect of, or
purchase risk participations in, any Letter of Credit having an expiry date that
is later than the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that Agent or any
Revolving Lender shall make any payment on or pursuant to any Letter of Credit
Obligation, such payment shall then be deemed automatically to constitute a
Revolving Credit Advance to the applicable Borrower under Section 1.1(a) of the
Agreement regardless of whether a Default or Event of Default has occurred and
is continuing and notwithstanding any Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each Revolving Lender shall be
obligated to pay its Pro Rata Share thereof in accordance with the Agreement.
The failure of any Revolving Lender to make available to Agent for Agent's own
account its Pro Rata Share of any such Revolving Credit Advance or payment by
Agent under or in respect of a Letter of Credit shall not relieve any other
Revolving Lender of its obligation hereunder to make available to Agent its Pro
Rata Share thereof, but no Revolving Lender shall be responsible for the failure
of any other Revolving Lender to make available such other Revolving Lender's
Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for any Borrower to incur Revolving
Credit Advances as contemplated by paragraph (b)(i) above because of an Event of
Default described in Sections 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any Revolving Lender to be deemed to have assumed a
ratable share of the reimbursement obligations owed to an L/C Issuer, or if the
L/C Issuer is a Revolving Lender, then (A) immediately and without further
action whatsoever, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation equal to such Revolving Lender's Pro Rata
Share (based on the Revolving Loan Commitments) of the Letter of Credit
Obligations
B-1
100
in respect of all Letters of Credit then outstanding and (B) thereafter,
immediately upon issuance of any Letter of Credit, each Revolving Lender shall
be deemed to have irrevocably and unconditionally purchased from Agent (or such
L/C Issuer, as the case may be) an undivided interest and participation in such
Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments) of
the Letter of Credit Obligations with respect to such Letter of Credit on the
date of such issuance. Each Revolving Lender shall fund its participation in all
payments or disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash collateral for any Letter of
Credit Obligations pursuant to the Agreement prior to the Commitment Termination
Date, each Borrower will pay to Agent for the ratable benefit of itself and
Revolving Lenders cash or cash equivalents acceptable to Agent ("Cash
Equivalents") in an amount equal to 105% of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
such Borrower. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution acceptable to Agent. The Cash Collateral Account shall be
in the name of the applicable Borrower and shall be pledged to, and subject to
the control of, Agent, for the benefit of Agent and Lenders, in a manner
satisfactory to Agent. Each Borrower hereby pledges and grants to Agent, on
behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination Date,
Borrowers shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit and guaranties thereof,
if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guaranty of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
30 additional days) as, and in an amount equal to 105% of, the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall be subject to such terms and conditions, as are satisfactory to Agent
in its sole discretion.
(iii) From time to time after funds are deposited in the Cash Collateral
Account by any Borrower, whether before or after the Commitment Termination
Date, Agent may apply such funds or Cash Equivalents then held in the Cash
Collateral Account to the payment of any amounts, and in such order as Agent may
elect, as shall be or shall become due and payable by such Borrower to Agent and
Lenders with respect to such Letter of Credit Obligations of such Borrower and,
upon the satisfaction in full of all Letter of Credit Obligations of such
Borrower, to any other Obligations of any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on behalf of or through any
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrowers
to Agent and Lenders in respect thereof, any funds remaining in the Cash
Collateral Account shall be applied to other Obligations then due and owing and
upon payment in full of such Obligations, any remaining amount shall be paid to
Borrowers or as otherwise required by law. Interest earned on deposits in the
Cash Collateral Account shall be for the account of Agent.
X-0
000
(x) Fees and Expenses. Borrowers agree to pay to Agent for the benefit of
Revolving Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "Letter of Credit Fee") in an amount equal to the Applicable L/C Margin
from time to time in effect multiplied by the maximum amount available from time
to time to be drawn under the applicable Letter of Credit. Such fee shall be
paid to Agent for the benefit of the Revolving Lenders in arrears, on the first
day of each month and on the Commitment Termination Date. In addition, Borrowers
shall pay to any L/C Issuer, on demand, such fees (including all per annum
fees), charges and expenses of such L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of such Letter of
Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
Representative shall give Agent at least 2 Business Days' prior written notice
requesting the incurrence of any Letter of Credit Obligation. The notice shall
be accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and a completed Application for Standby Letter of Credit or
Application and Agreement for Documentary Letter of Credit or Application for
Documentary Letter of Credit (as applicable) in the form of Exhibit X-0, X-0 X-0
attached hereto. Notwithstanding anything contained herein to the contrary,
Letter of Credit applications by Borrower Representative and approvals by Agent
and the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrower
Representative, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to reimburse Agent and
Revolving Lenders for payments made with respect to any Letter of Credit
Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities, and the obligations of
each Revolving Lender to make payments to Agent with respect to Letters of
Credit shall be unconditional and irrevocable. Such obligations of Borrowers and
Revolving Lenders shall be paid strictly in accordance with the terms hereof
under all circumstances including the following:
(i) any lack of validity or enforceability of any Letter of Credit or
the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other right that
any Borrower or any of their respective Affiliates or any Lender may at any
time have against a beneficiary or any transferee of any Letter of Credit
(or any Persons or entities for whom any such transferee may be acting),
Agent, any Lender, or any other Person, whether in connection with the
Agreement, the Letter of Credit, the transactions contemplated herein or
therein or any unrelated transaction (including any underlying transaction
between any Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or
other document that does not comply with the terms of such Letter of Credit
or such guaranty;
B-3
102
(v) any other circumstance or event whatsoever, that is similar to any
of the foregoing; or
(vi) the fact that a Default or an Event of Default has occurred and
is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the Agreement,
Borrowers hereby agree to pay and to protect, indemnify, and save harmless Agent
and each Lender from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and allocated costs of internal counsel) that Agent or any Lender may incur
or be subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or guaranty thereof, or (B) the failure of Agent or any
Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or guaranty thereof as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than to the
extent solely as a result of the gross negligence or willful misconduct of Agent
or such Lender (as finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrowers, Borrowers assume all
risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries, of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law, neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions required
in order to demand payment under such Letter of Credit; provided, that in the
case of any payment by Agent under any Letter of Credit or guaranty thereof,
Agent shall be liable to the extent such payment was made solely as a result of
its gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or guaranty
thereof; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they may be in cipher; (E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any document required
in order to make a payment under any Letter of Credit or guaranty thereof or of
the proceeds thereof; (G) the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) any consequences arising from
causes beyond the control of Agent or any Lender. None of the above shall
affect, impair, or prevent the vesting of any of Agent's or any Lender's rights
or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand any
waivers, covenants or indemnities made by Borrowers in favor of any L/C Issuer
in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among Borrowers and such L/C
Issuer, including an Application and Agreement For Documentary Letter of Credit,
a Master Documentary Agreement and a Master Standby Agreement entered into with
Agent.
B-4
103
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Borrower shall, and shall cause its Subsidiaries to, establish and maintain
the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date, each Borrower
shall (i) establish lock boxes ("Lock Boxes") or at Agent's discretion, blocked
accounts ("Blocked Accounts") at one or more of the banks set forth in
Disclosure Schedule (3.19), and shall request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
such Lock Boxes, and (ii) deposit and cause its Subsidiaries to deposit or cause
to be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and
all Collateral (whether or not otherwise delivered to a Lock Box) into one or
more Blocked Accounts in such Borrower's name or any such Subsidiary's name and
at a bank identified in Disclosure Schedule (3.19) (each, a "Relationship
Bank"). On or before the Closing Date, each Borrower shall have established a
concentration account in its name (each a "Concentration Account" and
collectively, the "Concentration Accounts") at the bank or banks that shall be
designated as the Concentration Account bank for each such Borrower in
Disclosure Schedule (3.19) (each a "Concentration Account Bank" and
collectively, the "Concentration Account Banks"), which banks shall be
reasonably satisfactory to Agent.
(b) Each Borrower may maintain, in its name, an account (each a "Disbursement
Account" and collectively, the "Disbursement Accounts") at a bank reasonably
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances and Swing Line Advances made to such Borrower
pursuant to Section 1.1 for use by such Borrower solely in accordance with the
provisions of Section 1.4.
(c) On or before the Closing Date, each Concentration Account Bank, each bank
where a Disbursement Account is maintained and all other Relationship Banks,
shall have entered into tri-party blocked account agreements with Agent, for the
benefit of itself and Lenders, and the applicable Borrower and Subsidiaries
thereof, as applicable, in form and substance reasonably acceptable to Agent,
which shall become operative on or prior to the Closing Date. Each such blocked
account agreement shall provide, among other things, that (i) all items of
payment deposited in such account and proceeds thereof deposited in the
applicable Concentration Account are held by such bank as agent or
bailee-in-possession for Agent, on behalf of itself and Lenders, (ii) the bank
executing such agreement has no rights of setoff or recoupment or any other
claim against such account, as the case may be, other than for payment of its
service fees and other charges directly related to the administration of such
account and for returned checks or other items of payment, and (iii) from and
after the Closing Date (A) with respect to banks at which a Blocked Account is
maintained, such bank agrees to forward immediately all amounts in each Blocked
Account to such Borrower's Concentration Account Bank and to commence the
process of daily sweeps from such Blocked Account into the applicable
Concentration Account and (B) with respect to each Concentration Account Bank,
such bank agrees to immediately forward all amounts received in the applicable
Concentration Account to the Collection Account through daily sweeps from such
Concentration Account into the Collection Account. No Borrower shall, or shall
cause or permit any Subsidiary thereof to, accumulate or maintain cash in
Disbursement Accounts or payroll accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements.
C-1
104
(d) So long as no Default or Event of Default has occurred and is continuing,
Borrowers may amend Disclosure Schedule (3.19) to add or replace a Relationship
Bank, Lock Box or Blocked Account or to replace any Concentration Account or any
Disbursement Account; provided, that (i) Agent shall have consented in writing
in advance to the opening of such account or Lock Box with the relevant bank and
(ii) prior to the time of the opening of such account or Lock Box, the
applicable Borrower or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance reasonably satisfactory to Agent. Borrowers shall close any of
their accounts (and establish replacement accounts in accordance with the
foregoing sentence) promptly and in any event within 30 days following notice
from Agent that the creditworthiness of any bank holding an account is no longer
acceptable in Agent's reasonable judgment, or as promptly as practicable and in
any event within 60 days following notice from Agent that the operating
performance, funds transfer or availability procedures or performance with
respect to accounts or Lock Boxes of the bank holding such accounts or Agent's
liability under any tri-party blocked account agreement with such bank is no
longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Accounts shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which each Borrower and each Subsidiary
thereof shall have granted a Lien to Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed received by
Agent in accordance with Section 1.10 and shall be applied (and allocated) by
Agent in accordance with Section 1.11. In no event shall any amount be so
applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account.
(g) Each Borrower shall and shall cause its Affiliates, officers, employees,
agents, directors or other Persons acting for or in concert with such Borrower
(each a "Related Person") to (i) hold in trust for Agent, for the benefit of
itself and Lenders, all checks, cash and other items of payment received by such
Borrower or any such Related Person, and (ii) within 1 Business Day after
receipt by such Borrower or any such Related Person of any checks, cash or other
items of payment, deposit the same into a Blocked Account of such Borrower. Each
Borrower and each Related Person thereof acknowledges and agrees that all cash,
checks or other items of payment constituting proceeds of Collateral are part of
the Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into the applicable Blocked Accounts.
C-2
105
ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
B. Revolving Notes, Swing Line Notes and Term Notes. Duly executed originals
of the Revolving Notes, Swing Line Notes and Term Notes for each applicable
Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the Security Agreement,
dated the Closing Date, and all instruments, documents and agreements executed
pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies required by
Section 5.4 are in full force and effect, together with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements, as
requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of itself
and Lenders) has a valid and perfected first priority security interest in the
Collateral (other than the SWIDA Collateral and the ECP Collateral and subject
to the Permitted Encumbrances), including (i) such documents duly executed by
each Credit Party (including financing statements under the Code and other
applicable documents under the laws of any jurisdiction with respect to the
perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for those relating to the Prior Lender Obligations (all of
which shall be terminated on the Closing Date).
(b) Evidence satisfactory to Agent, including copies, of all UCC-1 and
other financing statements filed in favor of any Credit Party with respect to
each location, if any, at which Inventory may be consigned.
F. Payoff Letter; Termination Statements. Copies of a duly executed payoff
letter, in form and substance reasonably satisfactory to Agent, by and between
all parties to the Prior Lender loan documents evidencing repayment in full of
all Prior Lender Obligations, together with (a) UCC-3 or other appropriate
termination statements, in form and substance satisfactory to Agent, manually
signed by the Prior Lender releasing all liens of Prior Lender upon any of the
personal property of each Credit Party, and (b) termination of all blocked
account agreements, bank agency agreements or other similar agreements or
arrangements or arrangements in favor of Prior Lender or relating to the Prior
Lender Obligations.
G. Intellectual Property Security Agreements. Duly executed originals of
Trademark Security Agreements, Copyright Security Agreements and Patent Security
Agreements, each dated the Closing Date and signed by each Credit Party which
owns Trademarks, Copyrights and/or Patents, as applicable,
D-1
106
all in form and substance reasonably satisfactory to Agent, together with all
instruments, documents and agreements executed pursuant thereto.
H. Initial Borrowing Base Certificate. Duly executed originals of an initial
Borrowing Base Certificate from each Borrower, dated the Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
such Borrower as of a date not more than 7 days prior to the Closing Date.
I. Initial Notice of Revolving Credit Advance. Duly executed originals of a
Notice of Revolving Credit Advance, dated the Closing Date, with respect to the
initial Revolving Credit Advance to be requested by Borrower Representative on
the Closing Date.
J. Letter of Direction. Duly executed originals of a letter of direction from
Borrower Representative addressed to Agent, on behalf of itself and Lenders,
with respect to the disbursement on the Closing Date of the proceeds of the Term
Loan and the initial Revolving Credit Advance.
K. Cash Management System; Blocked Account Agreements. Evidence satisfactory
to Agent that, as of the Closing Date, Cash Management Systems complying with
Annex C to the Agreement have been established and are currently being
maintained in the manner set forth in such Annex C, together with copies of duly
executed tri-party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by Annex C.
L. Charter and Good Standing. For each Credit Party, such Person's (a) charter
and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
M. Bylaws and Resolutions. For each Credit Party, (a) such Person's bylaws,
together with all amendments thereto and (b) resolutions of such Person's Board
of Directors, approving and authorizing the execution, delivery and performance
of the Loan Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
N. Incumbency Certificates. For each Credit Party, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person's corporate secretary
or an assistant secretary as being true, accurate, correct and complete.
O. Opinions of Counsel. Duly executed originals of opinions of [Xxxxx Xxxx
LLP], counsel for the Credit Parties, together with any local counsel opinions
reasonably requested by Agent, each in form and substance reasonably
satisfactory to Agent and its counsel, dated the Closing Date, and each
accompanied by a letter addressed to such counsel from the Credit Parties,
authorizing and directing such counsel to address its opinion to Agent, on
behalf of Lenders, and to include in such opinion an express statement to the
effect that Agent and Lenders are authorized to rely on such opinion.
P. Pledge Agreements. Duly executed originals of each of the Pledge Agreements
accompanied by (as applicable) (a) share certificates representing all of the
outstanding Stock being pledged pursuant to such Pledge Agreement and stock
powers for such share certificates executed in blank and (b) the original
D-2
107
Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.
Q. Accountants' Letters. A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit
Parties to communicate with Agent and Lenders in accordance with Section 4.2.
R. Appointment of Agent for Service. An appointment of CT Corporation as each
Credit Party's agent for service of process.
S. Commitment Letter. Duly executed originals of the GE Capital Commitment
Letter.
T. Officer's Certificate. Agent shall have received duly executed originals of
a certificate of the Chief Executive Officer and Chief Financial Officer of each
Borrower, dated the Closing Date, stating that, since September 30, 2000 (a) no
event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect except those identified on Schedule
3.5; (b) there has been no material adverse change in the industry in which any
Borrower operates; (c) no Litigation has been commenced which, if successful,
would have a Material Adverse Effect or could challenge any of the transactions
contemplated by the Agreement and the other Loan Documents; (d) there have been
no Restricted Payments made by any Credit Party; and (e) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of any Borrower or any of its Subsidiaries.
U. Waivers. Agent, on behalf of Lenders, shall have received landlord waivers
and consents, bailee letters and mortgagee agreements in form and substance
reasonably satisfactory to Agent, in each case as required pursuant to
Section 5.9.
V. Mortgages. Mortgages covering all of the Real Estate (the "Mortgaged
Properties") together with: (a) title insurance policies, current as-built
surveys, zoning letters and certificates of occupancy, in each case reasonably
satisfactory in form and substance to Agent, in its sole discretion; and (b)
evidence that counterparts of the Mortgages have been recorded in all places to
the extent necessary or desirable, in the judgment of Agent, to create a valid
and enforceable first priority lien (subject to Permitted Encumbrances) on each
Mortgaged Property in favor of Agent for the benefit of itself and Lenders (or
in favor of such other trustee as may be required or desired under local law).
W. Subordination and Intercreditor Agreements. Agent and Lenders shall have
received any and all subordination and/or intercreditor agreements, all in form
and substance reasonably satisfactory to Agent, in its sole discretion, as Agent
shall have deemed necessary or appropriate with respect to any Indebtedness of
any Credit Party.
X. Environmental Reports. Agent shall have received Phase I Environmental Site
Assessment Reports, consistent with American Society for Testing and Materials
(ASTM) Standard E 1527-94 and applicable state requirements, on all of the Real
Estate, dated no more than 6 months prior to the Closing Date, prepared by
environmental engineers reasonably satisfactory to Agent, all in form and
substance reasonably satisfactory to Agent, in its sole discretion; and Agent
shall have further received such environmental review and audit reports,
including Phase II reports, with respect to the Real Estate of any Credit Party
as Agent shall have requested, and Agent shall be satisfied, in its sole
discretion, with the contents of all such environmental reports. Agent shall
have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
D-3
108
Y. Appraisals. Agent shall have received appraisals as to all Equipment and as
to each of the Mortgaged Properties, each of which shall be in form and
substance reasonably satisfactory to Agent.
Z. Audited Financials; Financial Condition. Agent shall have received the
Financial Statements, Projections and other materials set forth in Section 3.4,
certified by Borrower Representative's Chief Financial Officer, in each case in
form and substance reasonably satisfactory to Agent, and Agent shall be
satisfied, in its sole discretion, with all of the foregoing. Agent shall have
further received a certificate of the Chief Executive Officer and/or the Chief
Financial Officer of each Borrower, based on such Pro Forma and Projections, to
the effect that (a) such Borrower will be Solvent upon the consummation of the
transactions contemplated herein; (b) the Pro Forma fairly presents the
financial condition of such Borrower as of the date thereof after giving effect
to the transactions contemplated by the Loan Documents; (c) the Projections are
based upon estimates and assumptions stated therein, all of which such Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to such Borrower and, as of the Closing Date, reflect such
Borrower's good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein; and (d) containing such other statements with respect to the
solvency of such Borrower and matters related thereto as Agent shall request.
AA. Master Standby Agreement. A Master Agreement for Standby Letters of Credit
among Borrowers and GE Capital.
BB. Master Documentary Agreement. A Master Agreement for Documentary Letters of
Credit among Borrowers and GE Capital.
CC. Asset Purchase Agreement. The Asset Purchase Agreement evidencing the
sale of Laclede Mid America, Inc. for more than $22,500,000 of cash proceeds.
DD. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
D-4
109
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrowers shall deliver or cause to be delivered to Agent or to Agent and
Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within 30 days after the end of
each Fiscal Month, financial information regarding Borrowers and their
Subsidiaries, certified by the Chief Financial Officer of Borrower
Representative, consisting of consolidated and consolidating (i) unaudited
balance sheets as of the close of such Fiscal Month and the related statements
of income and cash flows for that portion of the Fiscal Year ending as of the
close of such Fiscal Month; (ii) unaudited statements of income and cash flows
for such Fiscal Month, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments); and (iii) a summary of the outstanding balance
of all Intercompany Notes as of the last day of that Fiscal Month. Such
financial information shall be accompanied by the certification of the Chief
Financial Officer of Borrower Representative that (i) such financial information
presents fairly in accordance with GAAP (subject to normal year-end adjustments)
the financial position and results of operations of Borrowers and their
Subsidiaries, on a consolidated and consolidating basis, in each case as at the
end of such Fiscal Month and for that portion of the Fiscal Year then ended and
(ii) any other information presented is true, correct and complete in all
material respects and that there was no Default or Event of Default in existence
as of such time or, if a Default or Event of Default has occurred and is
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
(b) Quarterly Financials. To Agent and Lenders, within 45 days after the end of
each Fiscal Quarter, consolidated and consolidating financial information
regarding Borrowers and their Subsidiaries, certified by the Chief Financial
Officer of Borrower Representative, including (i) unaudited balance sheets as of
the close of such Fiscal Quarter and the related statements of income and cash
flow for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments). Such financial information shall be accompanied
by (A) a statement in reasonable detail (each, a "Compliance Certificate"
showing the calculations used in determining compliance with each of the
Financial Covenants that is tested on a quarterly basis and (B) the
certification of the Chief Financial Officer of Borrower Representative that (i)
such financial information presents fairly in accordance with GAAP (subject to
normal year-end adjustments) the financial position, results of operations and
statements of cash flows of Borrowers and their Subsidiaries, on both a
consolidated and consolidating basis, as at the end of such Fiscal Quarter and
for that portion of the Fiscal Year then ended, (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrowers shall deliver to Agent and Lenders, within 45 days after the
end of each Fiscal Quarter, a management discussion and analysis that includes a
comparison to budget for that Fiscal Quarter and a comparison of performance for
that Fiscal Quarter to the corresponding period in the prior year.
E-1
110
(c) Operating Plan. To Agent and Lenders (i) as soon as available, but not later
than 15 days before the end of each Fiscal Year, a draft of the annual operating
plan for Borrowers for the following Fiscal Year with the same detail as
described in subclause (ii) of this clause (c), and, as soon as available, but
not later than 30 days after the end of each Fiscal Year, an annual operating
plan for Borrowers, on a consolidated and consolidating basis, approved by the
Board of Directors of Borrowers, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes monthly balance sheets, income statements and statements of
cash flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within 90 days after the
end of each Fiscal Year, audited Financial Statements for Borrowers and their
Subsidiaries on a consolidated and (unaudited) consolidating basis, consisting
of balance sheets and statements of income and retained earnings and cash flows,
setting forth in comparative form in each case the figures for the previous
Fiscal Year, which Financial Statements shall be prepared in accordance with
GAAP and certified without qualification, by an independent certified public
accounting firm of national standing or otherwise acceptable to Agent. Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the Financial Covenants, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred (or specifying those Defaults and Events of Default that they became
aware of), it being understood that such audit examination extended only to
accounting matters and that no special investigation was made with respect to
the existence of Defaults or Events of Default, (iii) a letter addressed to
Agent, on behalf of itself and Lenders, in form and substance reasonably
satisfactory to Agent and subject to standard qualifications required by
nationally recognized accounting firms, signed by such accounting firm
acknowledging that Agent and Lenders are entitled to rely upon such accounting
firm's certification of such audited Financial Statements, (iv) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (v) the
certification of the Chief Executive Officer or Chief Financial Officer of
Borrowers that all such Financial Statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Borrowers and their Subsidiaries on a consolidated and consolidating basis,
as at the end of such Fiscal Year and for the period then ended, and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default.
(e) Management Letters. To Agent and Lenders, within 5 Business Days after
receipt thereof by any Credit Party, copies of all management letters, exception
reports or similar letters or reports received by such Credit Party from its
independent certified public accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and in any
event within 5 Business Days after an executive officer of any Borrower has
actual knowledge of the existence of any Default, Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
E-2
111
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices
and proxy statements made publicly available by any Credit Party to its security
holders; (ii) all regular and periodic reports and all registration statements
and prospectuses, if any, filed by any Credit Party with any securities exchange
or with the Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Person.
(h) Indebtedness and Equity Notices. To Agent, as soon as practicable, copies of
all material written notices given or received by any Credit Party with respect
to any Indebtedness or Stock of such Person, and, within 2 Business Days after
any Credit Party obtains knowledge of any matured or unmatured event of default
with respect to any Indebtedness, notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if any, required
by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof, notice of
any Litigation commenced or threatened against any Credit Party that (i) seeks
damages in excess of $100,000, (ii) seeks injunctive relief, (iii) is asserted
or instituted against any Plan, its fiduciaries or its assets or against any
Credit Party or ERISA Affiliate in connection with any Plan, exclusive of
private claims seeking damages less than $100,000, (iv) alleges criminal
misconduct by any Credit Party, (v) alleges the violation of any law regarding,
or seeks remedies in connection with, any Environmental Liabilities or (vi)
involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or casualties required by
Section 5.4.
(l) Lease Default Notices. To Agent, within 2 Business Days after receipt
thereof, copies of (i) any and all default notices received under or with
respect to any leased location or public warehouse where Collateral is located,
and (ii) such other notices or documents as Agent may reasonably request.
(m) Accounts Summaries. To Agent and Lenders, at the time of delivery of each of
the monthly Financial Statements delivered pursuant to this Annex E, a
maintenance reserve account summary, a utility reserve account summary, a
production supplies reserve account summary and any other reserves account
summaries that the Borrowers produce, each in reasonable detail satisfactory to
Agent.
(n) Expense Detail. To Agent and Lenders, at the time of delivery of each of the
monthly Financial Statements delivered pursuant to this Annex E, a plant general
expense detail for each of the Borrowers' facilities and a selling and
administrative expense detail, each in reasonable detail satisfactory to Agent.
(o) Sales and Earnings Report. To Agent and Lenders, at the time of delivery of
each of the monthly Financial Statements delivered pursuant to this Annex E, a
sales and earnings report showing such sales and earnings by product line of the
Borrowers in reasonable detail satisfactory to Agent.
(p) Sales Detail. To Agent and Lenders, at the time of delivery of each of the
monthly Financial Statements delivered pursuant to this Annex E, a provisional
sales detail for all locations of the Borrowers detailing the production costs
of all locations per net ton.
(q) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall from time to time reasonably request.
X-0
000
XXXXX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrowers shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less frequently than 3:00
p.m. (Chicago time) on Tuesday of each week (together with a copy of all or any
part of the following reports requested by any Lender in writing after the
Closing Date), each of the following reports, each of which shall be prepared by
the applicable Borrower as of the last day of the immediately preceding week:
(i) a Borrowing Base Certificate with respect to each Borrower, in each
case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
(ii) with respect to each Borrower, a summary of Inventory by location
and type with a supporting perpetual or periodic Inventory report, as
applicable, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion;
(iii) with respect to each Borrower, a trial balance showing Accounts
outstanding aged from invoice date as follows: 1 to 30 days, 31 to 60
days, 61 to 90 days and 91 days or more, accompanied by such supporting
detail and documentation as shall be requested by Agent in its
reasonable discretion; and
(iv) with respect to Laclede Chain, a trial balance showing Accounts
outstanding aged until due date as follows: 1 to 90 days; 91 to 120
days; 121 to 180 days; 180 to 240 days and 241 days or more.
(b) To Agent, on a weekly basis or at such more frequent intervals as Agent may
request from time to time (together with a copy of all or any part of such
delivery requested by any Lender in writing after the Closing Date), collateral
reports with respect to each Borrower, including all additions and reductions
(cash and non-cash) with respect to Accounts of such Borrower, in each case
accompanied by such supporting detail and documentation as shall be requested by
Agent in its reasonable discretion each of which shall be prepared by the
applicable Borrower as of the last day of the immediately preceding week;
(c) To Agent, within 10 Business Days following the end of each month:
(i) a reconciliation of the Accounts trial balance of each Borrower to
such Borrower's most recent Borrowing Base Certificate, general ledger
and monthly Financial Statements delivered pursuant to Annex E, in each
case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
(ii) a reconciliation of the perpetual or periodic, as applicable,
inventory by location of each Borrower to such Borrower's most recent
Borrowing Base Certificate, general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent
in its reasonable discretion;
F-1
113
(iii) an aging of accounts payable and a reconciliation of that
accounts payable aging to each Borrower's general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(iv) a reconciliation of the outstanding Loans as set forth in the
monthly Loan Account statement provided by Agent to each Borrower's
general ledger and monthly Financial Statements delivered pursuant to
Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion;
(v) at each Borrower's own expense the results of each physical
verification, if any, that such Borrower or any of its Subsidiaries may
in their discretion have made, or caused any other Person to have made
on their behalf, of all or any portion of their Inventory (and, if a
Default or an Event of Default has occurred and is continuing, each
Borrower shall, upon the request of Agent, conduct, and deliver the
results of, such physical verifications as Agent may require);
(d) To Agent, at the time of delivery of each of the quarterly or annual
Financial Statements delivered pursuant to Annex E, (i) a listing of government
contracts of each Borrower subject to the Federal Assignment of Claims Act of
1940; and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright filed by any Credit Party with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in the prior Fiscal Quarter;
(e) Each Borrower, at its own expense, shall deliver to Agent such appraisals of
its assets as Agent may request at any time after the occurrence and during the
continuance of a Default or an Event of Default, such appraisals to be conducted
by an appraiser, and in form and substance reasonably satisfactory to Agent; and
(f) Such other reports, statements and reconciliations with respect to the
Borrowing Base, Collateral or Obligations of any or all Credit Parties as Agent
shall from time to time request in its reasonable discretion.
F-2
114
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the following financial
covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Maximum Capital Expenditures. Borrowers and their Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
Fiscal Year 2001 8,900,000
Fiscal Year 2002 7,500,000
Fiscal Year 2003 11,000,000
(b) Minimum Fixed Charge Coverage Ratio. Borrowers and their Subsidiaries shall
have on a consolidated basis at the end of each Fiscal Quarter set forth below,
a Fixed Charge Coverage Ratio for the 12-month period then ended of not less
than the following:
0.95 to 1.0 for the period ending December 31, 2001;
1.00 to 1.0 for the period ending March 31, 2002;
1.05 to 1.0 for the period ending June 30, 2002;
1.15 to 1.0 for the periods ending September 30, 2002,
December 31, 2002, March 31, 2003 and June 30, 2003 and
1.20 to 1.0 for the period ending on the last day of each
Fiscal Quarter ending thereafter.
(c) Maximum Leverage Ratio. Borrowers and their Subsidiaries shall have on a
consolidated basis at the end of each Fiscal Quarter set forth below, a Leverage
Ratio as of the last day of such Fiscal Quarter and for the 12 month period then
ended (or with respect to the Fiscal Quarters ending on or before September 30,
2001, the period commencing on January 1, 2001 and ending on the last day of
such Fiscal Quarter; provided that (i) EBITDA for the period ending June 30,
2001 shall be multiplied by 2; and (ii) EBITDA for the period ending September
30, 2001 shall be multiplied by 1.3333) of not more than the following:
4.00 to 1.0 for Fiscal Quarter ending June 30, 2001;
3.50 to 1.0 for Fiscal Quarters ending September 30,
2001 December 31, 2001, March 31, 2002 and June 30, 2002;
2.75 to 1.0 for Fiscal Quarters ending September 30,
2002, December 31, 2002, March 31, 2003 and June 30, 2003;
and
2.50 to 1.0 for each Fiscal Quarter ending thereafter.
(d) EBITDA to Fixed Charges Ratio. For the period commencing on January 1, 2001
and ending on the last day of each Fiscal Quarter set forth below, Borrowers and
their Subsidiaries on a consolidated basis shall maintain a ratio of (i) EBITDA
to (ii) the sum or Fixed Charges and income taxes paid in cash of not less than
the following:
G-1
115
1.25 to 1.0 for the Fiscal Quarter ending March 31, 2001
1.60 to 1.0 for the Fiscal Quarter ending June 30, 2001
1.70 to 1.0 for the Fiscal Quarter ending September 30, 2001
(e) Minimum EBITDA. Borrowers and their Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Quarter set forth below, EBITDA for the
12-month period then ended (or with respect to the Fiscal Quarters ending on or
before September 30, 2001, the period commencing on January 1, 2001 and ending
on the last day of such Fiscal Quarter) of not less than the following:
Period Ending On EBITDA
---------------- ------
June 30, 2001 $ 6,400,000
September 30, 2001 $ 10,300,000
December 31, 2001, March 31, 2002 and $ 14,000,000
June 30, 2002
September 30, 2002, December 31, 2002, March 31, 2003 and $ 16,500,000
June 30, 2002
September 30, 2003 and thereafter $ 18,200,000
(f) Minimum Borrowing Availability. Borrowers shall maintain Borrowing
Availability, in the aggregate, of at least $11,000,000; provided, that (i)
minimum Borrowing Availability required during the January 1, 2001 to June 30,
2001 period pursuant hereto shall be reduced to $9,000,000 to the extent the
EBITDA to Fixed Charges Ratio is greater than 1.65 to 1.0 for the period ending
March 31, 2001 as shown by the Compliance Certificate delivered in connection
with the March 31, 2001 Financial Statements and (ii) minimum Borrowing
Availability required from July 1, 2001 and thereafter shall be reduced to
$5,000,000 (A) upon receipt of the Compliance Certificate delivered with the
June 30, 2001 Financial Statements, demonstrating that the Borrowers are in
compliance with the financial covenants in this Annex G and (B) provided that
there is no Event of Default pursuant to Section 8.1 (a), (h) or (i).
Unless otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. If any "Accounting Changes" (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Borrowers, Agent and Lenders agree to enter into negotiations in order to
amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the
G-2
116
calculation of EBITDA in such period. If Agent, Borrowers and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within 30 days following the date of implementation of
any Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in accordance
with the Agreement and the other Loan Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change. For purposes of Section
8.1, a breach of a Financial Covenant contained in this Annex G shall be deemed
to have occurred as of any date of determination by Agent or as of the last day
of any specified measurement period, regardless of when the Financial Statements
reflecting such breach are delivered to Agent.
G-3
117
ANNEX H (SECTION 9.9(a))
to
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Laclede Steel Company
Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFC 4265
Laclede Chain Manufacturing Company
Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFC 4265A
H-1
118
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Laclede Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to any Borrower, to Borrower Representative, at
Laclede Steel Company
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-1
119
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
to
CREDIT AGREEMENT
-----------------------------------------------------------------------------------------------------
Commitments Lenders
-----------------------------------------------------------------------------------------------------
Revolving Loan Commitment
(including a Swing Line Commitment of
$7,500,000):
$22,804,878 General Electric Capital Corporation
Term Loan Commitment:
$2,695,122
-----------------------------------------------------------------------------------------------------
Revolving Loan Commitment: Xxxxxx Financial, Inc.
$16,097,561
Term Loan Commitment:
$1,902,439
-----------------------------------------------------------------------------------------------------
Revolving Loan Commitment: Congress Financial Corporation (Central)
$16,097,561
Term Loan Commitment
$1,902,439
-----------------------------------------------------------------------------------------------------
J-1
