EXHIBIT 10.3
REVOLVING CREDIT
AND
SECURITY AGREEMENT
PNC BANK, NATIONAL ASSOCIATION
(AS LENDER, AS ADMINISTRATIVE AGENT,
AS SYNDICATION AGENT AND AS COLLATERAL AGENT)
AND
JPMORGAN CHASE BANK (AS LENDER AND AS DOCUMENTATION AGENT) AND
SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
AND
PNC CAPITAL MARKETS, INC. (AS CO-LEAD ARRANGER AND SOLE BOOK
RUNNER) AND X. X. XXXXXX SECURITIES, INC. (AS CO-LEAD ARRANGER)
AND
THE BORROWERS PARTY HERETO
(AS BORROWERS)
OCTOBER 6, 2003
REVOLVING CREDIT AND SECURITY AGREEMENT
Revolving Credit and Security Agreement ("Agreement"), dated October 6,
2003, by and among the Borrowers (as hereinafter defined), the financial
institutions which are now or which hereafter become a party hereto
(collectively, the "Lenders" and individually a "Lender"), PNC Bank, National
Association ("PNC"), as administrative agent, syndication agent and collateral
agent for the Lenders (PNC, in such capacity, the "Agent"), and JPMorgan Chase
Bank, as documentation agent for the Lenders ("Documentation Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
Borrowers, the Lenders, the Agent and the Documentation Agent hereby agree as
follows:
I. DEFINITIONS.
1.1 Accounting Terms.
As used in this Agreement, the Notes, or any certificate,
report or other document made or delivered pursuant to this Agreement,
accounting terms not defined in Section 1.2 or elsewhere in this Agreement and
accounting terms partly defined in Section 1.2 to the extent not defined, shall
have the respective meanings given to them under GAAP; provided, however,
whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP. All financial computations to be made
under this Agreement shall, unless otherwise specifically provided herein, be
made in accordance with GAAP applied on a basis consistent in all material
respects with the financial statements delivered to the Agent and the Lenders on
or prior to the Closing Date.
1.2 General Terms.
For purposes of this Agreement the following terms shall have
the following meanings:
"Accountants" shall have the meaning set forth in Section 9.6
hereof.
"Advances" shall mean and include the Revolving Advances and
Letters of Credit.
"Advance Rates" shall have the meaning set forth in Section
2.1(a) hereof.
"Affiliate" of any Person shall mean (a) any Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person, or (b) any Person who is a director or officer (i) of
such Person, (ii) of any Subsidiary of such Person or (iii) of any Person
described in clause (a) above. For purposes of this definition, control of a
Person shall mean the power, direct or indirect, (x) to vote ten percent (10%)
or more of the securities having ordinary voting power for the election of
directors of such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble to
this Agreement and shall include its successors and assigns.
"Agent's Letter" shall mean the Agent's fee letter dated
October 6, 2003, by and among the Borrowers and the Agent.
"Aggregate Consideration" shall mean with respect to any
Permitted Acquisition the sum of (a) the cash paid by any Borrower, directly or
indirectly, to the seller in connection therewith, plus (b) common stock of IMCO
issued (valued at market price at the close of trading on the date of the
definitive acquisition agreement pursuant to which the Permitted Acquisition is
to be made) in connection with such Permitted Acquisition, plus (c) Indebtedness
incurred or assumed by any Borrower, whether in favor of the seller or otherwise
and whether fixed or contingent, in connection with such Permitted Acquisition,
plus (d) any Guaranty given or incurred by any Borrower in connection therewith,
and plus (e) any other consideration given or obligation incurred by any
Borrower in connection therewith.
"Alchem" shall mean Alchem Aluminum, Inc., a Delaware
corporation and its successors and assigns.
"Alchem Shelbyville" shall mean Alchem Aluminum Shelbyville
Inc., a Delaware corporation and its successors and assigns.
"Alternate Base Rate" shall mean, for any day, a rate per
annum equal to the higher of (i) the Base Rate in effect on such day and (ii)
the Federal Funds Open Rate in effect on such day plus one-half of one percent
(.50%) per annum.
"Anti-Terrorism Laws" shall mean any laws relating to
terrorism or money laundering, including Executive Order No. 13224, the USA
Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the
laws administered by the United States Treasury Department's Office of Foreign
Asset Control (as any of the foregoing laws may from time to time be amended,
renewed, extended, or replaced).
"Applicable Base Rate Margin" shall have the meaning set forth
in Section 3.1(b) hereof.
"Applicable Eurodollar Rate Margin" shall have the meaning set
forth in Section 3.1(b) hereof.
"Applicable Facility Fee Percentage" shall have the meaning
set forth in Section 3.3 hereof.
"Applicable Letter of Credit Fee Percentage" shall have the
meaning set forth in Section 3.2(a) hereof.
"Authority" shall have the meaning set forth in Section
4.18(d) hereof.
"Base Rate" shall mean the base commercial lending rate of PNC
as publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without
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notice, on the effective date of any change in such rate. This rate of interest
is determined from time to time by PNC as a means of pricing some loans to its
customers and is neither tied to any external rate of interest or index nor does
it necessarily reflect the lowest rate of interest actually charged by PNC to
any particular class or category of customers of PNC.
"Blocked Account Agreements" shall mean, collectively, each of
the Blocked Account Agreements in substantially the form of Exhibit B attached
hereto and made a part hereof entered into by the Borrowers, as applicable, the
Agent and the bank at which the applicable Blocked Account is located, together
with all amendments, supplements, modifications, substitutions and replacements
thereto and thereof.
"Blocked Accounts" shall have the meaning set forth in Section
4.15(h) hereof.
"Blocked Person" shall have the meaning assigned to such term
in Section 5.24(b) hereof.
"Borrower" shall mean IMCO, Alchem, Alchem Shelbyville, Gulf
Reduction, IMCO Energy, IMCO Indiana LP, IMCO International, IMCO Investment,
IMCO Management, IMCO Operations Services, IMCO Recycling of California, IMCO
Recycling of Idaho, IMCO Recycling of Illinois, IMCO Recycling of Indiana, IMCO
Recycling of Michigan, IMCO Recycling of Ohio, IMCO Recycling of Utah, IMCO
Recycling Services, IMSAMET, Indiana Aluminum, Interamerican, MetalChem, Midwest
Zinc, Pittsburg Aluminum, Rock Creek, U.S. Zinc, U.S. Zinc Export, Western Zinc,
and any other person who may hereafter become a party hereto and "Borrowers"
shall collectively mean all such Persons.
"Borrowers' Account" shall have the meaning set forth in
Section 2.7 hereof.
"Borrowing Agent" shall mean IMCO.
"Borrowing Base Certificate" shall mean a certificate duly
executed by an officer of Borrowing Agent appropriately completed and in
substantially the form of Exhibit A hereto.
"Business Day" shall mean any day other than Saturday or
Sunday or a legal holiday on which commercial banks are authorized or required
by law to be closed for business in Pittsburgh, Pennsylvania and, if the
applicable Business Day relates to any Eurodollar Rate Loans, such day must also
be a day on which dealings are carried on in the London interbank market.
"Capital Expenditures" shall mean any expenditure made or
liability incurred which is, in accordance with GAAP, treated as a capital
expenditure and not as an expense item for the year in which it was made or
incurred, as the case may be.
"Capital Stock" shall mean, with respect to any Person, (a)
any share of capital stock of or other unit of ownership interest in such Person
and (b) any security convertible into, or any option, warrant or other right to
acquire, any share of capital stock of or other unit of ownership interest in
such Person.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et
seq.
"Change of Control" shall mean (i) any "person" or "group" of
related persons (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that such person or group shall be deemed
to have "beneficial ownership" of all shares that any such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than twenty percent
(20%) of the total voting power of the voting stock of IMCO (for the purposes of
this clause, such person or group shall be deemed to beneficially own any voting
stock of IMCO held by a parent entity, if such persons or group "beneficially
owns" (as defined above), directly or indirectly, more than twenty percent (20%)
of the voting power of the voting stock of such parent entity); or (ii) the
first (1st) day on which a majority of the members of the Board of Directors of
IMCO are not Continuing Directors; (iii) the sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of
IMCO and its Subsidiaries taken as a whole to any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act); or (iv) the adoption by the
stockholders of IMCO of a plan or proposal for the liquidation or dissolution of
IMCO.
"Charges" shall mean all taxes, charges, fees, imposts, levies
or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, Capital Stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation
and property taxes, custom duties, fees, assessments, liens, claims and charges,
together with any interest and any penalties, additions to tax or additional
amounts, imposed by any taxing or other similar governmental authority, domestic
or foreign (including, without limitation, the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the Collateral, any
Borrower or any of its Affiliates.
"CIP Regulations" shall have the meaning assigned to such term
in Section 14.11 hereof.
"Closing Date" shall mean October 6, 2003 or such other date
as may be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and the regulations promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
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(d) all Investment Property, but excluding all
Capital Stock issued by any Subsidiary of IMCO;
(e) all of each Borrower's right, title and
interest in and to (i) its respective goods and other personal property
including, but not limited to, all merchandise returned or rejected by
Customers, relating to or securing any of the Receivables; (ii) all of each
Borrower's rights as a consignor, a consignee, an unpaid vendor, mechanic,
artisan, or other lienor, including stoppage in transit, setoff, detinue,
replevin, reclamation and repurchase; (iii) all additional amounts due to any
Borrower from any Customer relating to the Receivables; (iv) other property,
including warranty claims, relating to any goods securing this Agreement; (v)
all of each Borrower's contract rights, rights of payment which have been earned
under a contract right, instruments (including promissory notes), documents,
chattel paper (including electronic chattel paper), warehouse receipts, deposit
accounts including, but not limited to, the Blocked Accounts, letters of credit,
and money; (vi) all commercial tort claims (whether now existing or hereafter
arising); (vii) if and when obtained by any Borrower, all real and personal
property of third parties in which such Borrower has been granted a lien or
security interest as security for the payment or enforcement of Receivables; and
(vii) any other goods or personal property, if any, in which any Borrower may
hereafter in writing grant a security interest to Agent hereunder, or in any
amendment or supplement hereto or thereto, or under any other agreement between
Agent and any Borrower;
(f) all of each Borrower's ledger sheets, ledger
cards, files, correspondence, records, books of account, business papers,
computer software (owned by any Borrower or in which it has an interest),
computer programs, tapes, disks and documents relating to (a), (b), (c), (d) or
(e) of this Paragraph; and
(g) all proceeds and products of (a), (b), (c),
(d), (e) and (f) in whatever form, including, but not limited to: cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds; provided, however, to the extent the terms of the
Senior Secured Notes Documentation expressly prohibit IMCO from granting a Lien
to someone other than JPMorgan Chase Bank, as trustee pursuant to the Senior
Secured Notes Indenture in the VAW-IMCO Note, the VAW-IMCO Note shall not be
deemed Collateral so long as such express prohibition is in effect.
"Commitment Percentage" of any Lender shall mean the
percentage set forth below such Lender's name on the signature page hereof as
same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(b)
hereof.
"Commitment Transfer Supplement" shall mean a document in the
form of Exhibit 16.3 hereto, properly completed and otherwise in form and
substance satisfactory to Agent by which the Purchasing Lender purchases and
assumes a portion of the obligation of Lenders to make Advances under this
Agreement.
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"Consents" shall mean all filings and all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties, domestic or foreign, necessary to carry on
any Borrower's business, including, without limitation, any Consents required
under all applicable federal, state or other applicable law.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of IMCO who: (i) was a member of such Board
of Directors on the date hereof; or (ii) was nominated for election or elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Contract Rate" shall mean, as of the date of determination,
the then applicable interest rate on any Domestic Rate Loan or Eurodollar Rate
Loan in accordance with Section 3.1(a) or 3.1(b), as the case may be.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"Customer" shall mean and include the account debtor with
respect to any Receivable and/or the prospective purchaser of goods, services or
both with respect to any contract or contract right, and/or any party who enters
into or proposes to enter into any contract or other arrangement with any
Borrower, pursuant to which such Borrower is to deliver any personal property or
perform any services.
"Default" shall mean an event which, with the giving of notice
or passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section
3.1(d) hereof.
"Defaulting Lender" shall have the meaning set forth in
Section 2.15(a) hereof.
"Depository Accounts" shall have the meaning set forth in
Section 4.15(h) hereof.
"Disqualified Stock" means any Capital Stock of Subsidiaries
that, by its terms (or by the terms of any security into which it is convertible
or for which it is exercisable, redeemable or exchangeable), or upon the
happening of any event or with the passage of time, matures, or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, in each case on, or
prior to, the expiration of the Term, or is convertible into or is exchangeable
for debt securities of IMCO or any of its Subsidiaries.
"Documentation Agent" shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and assigns.
"Dollar" and the sign "$" shall mean lawful money of the
United States of America.
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"Domestic Rate Loan" shall mean any Advance that bears
interest based upon the Alternate Base Rate.
"Domestic Subsidiary" shall mean a Subsidiary organized under
the laws of any state of the United States of America or the District of
Columbia.
"Earnings Before Interest and Taxes" shall mean for any fiscal
period the sum of (i) net income (or loss) of IMCO and its Subsidiaries
(excluding all Non-Borrower Subsidiaries) on a consolidated basis for such
period (excluding extraordinary gains or losses including, without limitation,
those items created by mandated changes in accounting treatment), (ii) plus all
interest expense of IMCO and its Subsidiaries (excluding all Non-Borrower
Subsidiaries) on a consolidated basis for such period, and (iii) plus all
charges against or minus credits to income of IMCO and its Subsidiaries
(excluding all Non-Borrower Subsidiaries) on a consolidated basis for such
period for federal, state and local taxes.
"EBITDA" shall mean for any fiscal period the sum of (i)
Earnings Before Interest and Taxes for such period, (ii) plus depreciation
expenses of IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries)
on a consolidated basis for such period, (iii) plus amortization expenses of
IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries) on a
consolidated basis for such period, (iv) plus all non-cash charges against and
minus all non-cash credits to income of IMCO and its Subsidiaries (excluding all
Non-Borrower Subsidiaries) on a consolidated basis for such period, and (v) plus
or minus, as applicable, any other non-cash non-recurring items of gain or loss
of IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries) with
respect to such fiscal period not already excluded hereunder, and (vi) plus one
hundred percent (100%) of cash distributions (including interest payments
pursuant to the VAW-IMCO Note) to IMCO or any other Borrower made by any of the
Non-Borrower Subsidiaries.
"Eligible Inventory" shall mean and include with respect to
each Borrower, Inventory, including work in process (unless otherwise deemed
ineligible by Agent), of each Borrower valued at the lower of cost or market
value, determined on a first-in-first-out basis, which is not, in Agent's
opinion, obsolete, slow moving or unmerchantable and which Agent, in its sole
and reasonable discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time reasonably deem appropriate
including, without limitation, whether the Inventory is subject to a perfected,
first priority security interest in favor of Agent and whether the Inventory
conforms to all standards imposed by any governmental agency, division or
department thereof which has regulatory authority over such goods or the use or
sale thereof.
In addition, no Inventory of any Borrower shall be Eligible Inventory if it:
(a) 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 other
Permitted Encumbrances (subject to reserves established by Agent in accordance
with the terms of this Agreement);
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(b) (i) is not located on premises owned, leased
or rented by such Borrower and set forth in Schedule 4.5 (as such Schedule may
be updated from time to time), or (ii) is stored at a leased location, unless a
reasonably satisfactory landlord waiver has been delivered to Agent, or reserves
reasonably satisfactory to Agent have been established by Agent with respect
thereto or (iii) is stored with a bailee or warehouseman unless a reasonably
satisfactory warehouseman waiver or a reasonably satisfactory, acknowledged
bailee letter has been received by Agent or reserves reasonably satisfactory to
Agent have been established by Agent with respect thereto, or (iv) is located at
a location owned by a Borrower that is subject to a mortgage in favor of a
lender other than Agent unless a reasonably satisfactory mortgagee waiver has
been delivered to Agent, or reserves reasonably satisfactory to Agent have been
established by Agent with respect thereto;
(c) is in transit unless such otherwise Eligible
Inventory is in transit from a domestic location owned by a Borrower or a
domestic location identified on Schedule 8.1(t) (as such Schedule may be updated
from time to time) to a domestic location owned by a Borrower or a location
identified on Schedule 8.1(t) (as such Schedule may be updated from time to
time);
(d) 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;
(e) is placed on consignment (or is being held
pursuant to a consignment agreement);
(f) is excess, obsolete, unsalable, shopworn,
seconds, damaged or unfit for sale;
(g) consists of goods which have been returned
by the Customer, excluding goods returned for reprocessing in the ordinary
course of business;
(h) consists of display items or packing or
shipping materials, manufacturing supplies or replacement parts;
(i) is not of a type held for sale in the
ordinary course of such Borrower's business;
(j) breaches any of the representations or
warranties pertaining to Inventory of such Borrower set forth in this Agreement
or in any of the Other Documents;
(k) consists of any costs associated with
"freight-in" charges;
(l) consists of any gross profit xxxx-up in
connection with the sale and distribution thereof to any division of any
Borrower or to any Affiliate of such Borrower;
(m) consists of Hazardous Substances or goods
that can be transported or sold only with licenses that are not readily
available (unless otherwise deemed to be Eligible Inventory by Agent);
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(n) is not covered by casualty insurance as
required by terms of this Agreement reasonably acceptable to Agent;
(o) was produced in violation of the Fair Labor
Standards Act and subject to the "hot goods" provision contained in Title 29
U.S.C. Section 215(a)(1); or
(p) is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
"Eligible Receivables" shall mean and include with respect to
each Borrower, each Receivable of such Borrower arising in the ordinary course
of such Borrower's business and which Agent, in its sole and reasonable credit
judgment, shall deem to be an Eligible Receivable, based on such considerations
as Agent may from time to time deem appropriate. A Receivable shall not be
deemed eligible unless such Receivable is subject to Agent's first priority
perfected security interest and no other Lien (other than Permitted
Encumbrances), and is evidenced by an invoice or other documentary evidence
satisfactory to Agent. In addition, no Receivable of a Borrower shall be an
Eligible Receivable if:
(a) it arises out of a sale made by any Borrower
to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any
Borrower;
(b) it is due or unpaid more than sixty (60)
days after the original due date or more than one hundred twenty (120) days
after the original invoice date;
(c) fifty percent (50%) or more of the
Receivables from such Customer are not deemed Eligible Receivables hereunder;
(d) any covenant, representation or warranty
contained in this Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property or call a meeting of its creditors, (ii) admit in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment for the
benefit of creditors, (iv) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, any petition which is filed against it in any involuntary case under
such bankruptcy laws, or (viii) take any action for the purpose of effecting any
of the foregoing;
(f) the sale is to a Customer outside the
continental United States of America or Canada, unless the sale is on letter of
credit, guaranty or acceptance terms, in each case acceptable to Agent in its
sole reasonable discretion;
(g) the sale to the Customer is on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase or return basis or is evidenced by chattel paper;
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(h) Agent believes, in its sole reasonable
judgment, that collection of such Receivable is insecure or that such Receivable
may not be paid by reason of the Customer's financial inability to pay;
(i) the Customer is the United States of
America, any state or any department, agency or instrumentality of any of them,
unless the applicable Borrower assigns its right to payment of such Receivable
to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise
complied with other applicable laws and has complied with Section 6.4 hereof;
(j) the goods giving rise to such Receivable
have not been shipped to the Customer or the services giving rise to such
Receivable have not been performed by the applicable Borrower or the Receivable
otherwise does not represent a final sale;
(k) the Receivables of the Customer exceed a
credit limit determined by Agent, in its sole reasonable discretion, to the
extent such Receivables exceed such limit;
(l) the Receivable is subject to any offset,
deduction, defense, dispute, or counterclaim, or is owed by a Customer that is
also a creditor or supplier of a Borrower (but only to the extent of such
Borrower's obligations to such customer from time to time) or the Receivable is
contingent in any respect or for any reason;
(m) the applicable Borrower has made any
agreement with any Customer for any deduction therefrom, except for discounts or
allowances made in the ordinary course of business for prompt payment, all of
which discounts or allowances are reflected in the calculation of the face value
of each respective invoice related thereto;
(n) any return, rejection or repossession of the
merchandise has occurred or the rendition of services has been disputed;
(o) such Receivable is not payable to a
Borrower; or
(p) such Receivable is not otherwise
satisfactory to Agent as determined in good faith by Agent in the exercise of
its discretion in a reasonable manner.
"Environmental Complaint" shall have the meaning set forth in
Section 4.18(d) hereof.
"Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each Borrower all of
such Borrower's goods (other than Inventory) whether now owned or hereafter
acquired and wherever located including, without limitation, all equipment,
machinery, apparatus, vehicles, fittings, furniture,
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furnishings, fixtures, parts, accessories and all replacements and substitutions
therefor or accessions thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the rules and regulations promulgated
thereunder.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for
the then current Interest Period relating thereto the interest rate per annum
determined by PNC by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by PNC in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the London
interbank offered rates for U.S. Dollars quoted by the British Bankers'
Association as set forth on the Moneyline Telerate (or appropriate successor or,
if British Banker's Association or its successor ceases to provide such quotes,
a comparable replacement determined by PNC) display page 3750 (or such other
display page on the Moneyline Telerate Service as may replace display page 3750)
two (2) Business Days prior to the first day of such Interest Period for an
amount comparable to such Eurodollar Rate Loan and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Reserve Percentage. The Eurodollar Rate may also be expressed by the
following formula:
Average of London interbank offered rates
quoted by BBA as shown on
Eurodollar Rate = Moneyline Telerate Service display page 3750
or appropriate successor
--------------------------------------------
1.00 - Reserve Percentage
"Eurodollar Rate Loan" shall mean an Advance at any time that
bears interest based on the Eurodollar Rate.
"Event of Default" shall mean the occurrence of any of the
events set forth in Article X hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Executive Order No. 13224" shall mean the Executive Order No.
13224 on Terrorist Financing, effective September 24, 2001, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.
"Existing Lender Indebtedness" shall mean the Indebtedness of
IMCO to the Existing Lenders pursuant to that certain Second Amended and
Restated Credit Agreement, dated as of October 25, 1999, as amended, modified or
supplemented from time to time.
"Existing Lenders" shall mean JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank, successor by merger to Chase Bank of Texas,
National Association), Bank of America, N.A., Xxxxxxx Xxxxx Capital Corporation,
Bank of Tokyo-Mitsubishi, Ltd., Bank One, NA, PNC, DG Bank Deutsche
Genossenschaftsbank, AG, Bank Hapoalim, Amsouth Bank, Comerica Bank, Xxxxx Fargo
Bank (Texas), National Association.
"Existing Letters of Credit" shall have the meaning set forth
in Section 2.9(a).
11
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Federal Funds Open Rate" shall mean the rate per annum
determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the "open" rate
for federal funds transactions as of the opening of business for federal funds
transactions among members of the Federal Reserve System arranged by federal
funds brokers on such day, as quoted by Xxxxxx Guybutler, any successor entity
thereto, or any other broker selected by the Agent, as set forth on the
applicable Telerate display page; provided, however, that if such day is not a
Business Day, the Federal Funds Open Rate for such day shall be the "open" rate
on the immediately preceding Business Day, or if no such rate shall be quoted by
a Federal funds broker at such time, such other rate as determined by the Agent
in accordance with its usual procedures.
"Fixed Charge Coverage Ratio" shall mean and include, with
respect to any fiscal period, the ratio of (a) EBITDA minus Capital Expenditures
that were not specifically funded by Indebtedness (other than a Revolving
Advance) of IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries)
on a consolidated basis with respect to such period, minus cash taxes paid of
IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries) on a
consolidated basis with respect to such period to (b) Fixed Charges.
"Fixed Charges" shall mean, with respect to any fiscal period,
the sum of (a) interest expense of IMCO and its Subsidiaries (excluding all
Non-Borrower Subsidiaries) on a consolidated basis with respect to such period,
plus (b) scheduled principal payments on Indebtedness of IMCO and its
Subsidiaries (excluding all Non-Borrower Subsidiaries) on a consolidated basis
with respect to such period, plus (c) dividends and distributions of IMCO and
its Subsidiaries (excluding all Non-Borrower Subsidiaries) on a consolidated
basis with respect to such period as permitted by Section 7.7 hereof.
"Foreign Subsidiary" shall mean any Subsidiary that is not
organized under the laws of any state of the United States of America or the
District of Columbia.
"Formula Amount" shall have the meaning set forth in Section
2.1(a).
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"General Intangibles" shall mean and include as to each
Borrower all of such Borrower's general intangibles, whether now owned or
hereafter acquired including, without
12
limitation, all payment intangibles, choses in action, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, equipment formulations, manufacturing procedures, quality control
procedures, trademarks, service marks, trade secrets, goodwill, copyrights,
design rights, software, computer information, source codes, codes, records and
dates, registration, licenses, franchises, customer lists, tax refunds, tax
refund claims, computer programs, all claims under guaranties, security
interests or other security, other than real property, held by or granted to
such Borrower to secure payment of any of the Receivables by a Customer (other
than to the extent covered by Receivables), all rights of indemnification and
all other intangible property of every kind and nature (other than Receivables).
"Governmental Body" shall mean any nation or government, any
state or other political subdivision thereof or any entity exercising the
legislative, judicial, regulatory or administrative functions of or pertaining
to a government.
"Guarantor" shall mean any Person who may hereafter guarantee
payment or performance of the whole or any part of the Obligations and
"Guarantors" means collectively all such Persons.
"Guarantor Security Agreement" shall mean any Security
Agreement executed by any Guarantor in favor of the Agent securing the Guaranty
of such Guarantor, together with all amendments, supplements, modifications,
substitutions and replacements thereto and thereof.
"Guaranty" shall mean any guaranty of the obligations of
Borrowers executed by a Guarantor in favor of Agent for its benefit and for the
ratable benefit of Lenders, together with all amendments, supplements,
modifications, substitutions and replacements thereto and thereof.
"Gulf Reduction" shall mean Gulf Reduction Corporation, a
Delaware corporation and its successors and assigns.
"Hazardous Discharge" shall have the meaning set forth in
Section 4.18(d) hereof.
"Hazardous Substance" shall mean, without limitation, any
flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to
regulation under CERCLA, RCRA or applicable state law, and any other applicable
Federal and state laws now in force or hereafter enacted relating to hazardous
waste disposal.
"Hedging Contracts" shall mean foreign exchange contracts,
currency swap agreements, futures contracts, interest rate protection
agreements, interest rate future agreements, interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, option agreements
or any other similar hedging agreements or arrangements entered into by a
Borrower in the ordinary course of business and not for speculative purposes.
13
"Hedging Obligations" shall mean all liabilities of a Borrower
under Hedging Contracts.
"IMCO" shall mean IMCO Recycling Inc., a Delaware corporation
and its successors and assigns.
"IMCO Energy" shall mean IMCO Energy Corp., a Delaware
corporation and its successors and assigns.
"IMCO Indiana LP" shall mean IMCO Indiana Partnership L.P., an
Indiana limited partnership and its successors and assigns.
"IMCO International" shall mean IMCO International, Inc., a
Delaware corporation and its successors and assigns.
"IMCO Investment" shall mean IMCO Investment Company, a
Delaware corporation and its successors and assigns.
"IMCO Management" shall mean IMCO Management Partnership L.P.,
a Texas limited partnership and its successors and
assigns.
"IMCO Operations Services" shall mean IMCO Operations Services
Company, a Delaware corporation and its successors and assigns.
"IMCO Recycling of California" shall mean IMCO Recycling of
California, Inc., a Delaware corporation and its successors and assigns.
"IMCO Recycling of Idaho" shall mean IMCO Recycling of Idaho
Inc., a Delaware corporation and its successors and
assigns.
"IMCO Recycling of Illinois" shall mean IMCO Recycling of
Illinois Inc., an Illinois corporation and its successors and assigns.
"IMCO Recycling of Indiana" shall mean IMCO Recycling of
Indiana Inc., a Delaware corporation and its successors and assigns.
"IMCO Recycling of Michigan" shall mean IMCO Recycling of
Michigan L.L.C., a Delaware limited liability company and its successors and
assigns.
"IMCO Recycling of Ohio" shall mean IMCO Recycling of Ohio
Inc., a Delaware corporation and its successors and
assigns.
"IMCO Recycling of Utah" shall mean IMCO Recycling of Utah
Inc., a Delaware corporation and its successors and assigns.
"IMCO Recycling Services" shall mean IMCO Recycling Services
Company, a Delaware corporation and its successors and assigns.
14
"IMSAMET" shall mean IMSAMET, Inc., a Delaware corporation and
its successors and assigns.
"Incentive Pricing Effective Date" shall have the meaning set
forth in Section 3.1(b) hereof.
"Indebtedness" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all Hedging Obligations, indebtedness, debt and other similar monetary
obligations of such Person whether direct or guaranteed, and all premiums, if
any, due at the required prepayment dates of such indebtedness, and all
indebtedness secured by a Lien on assets owned by such Person, whether or not
such indebtedness actually shall have been created, assumed or incurred by such
Person. Any indebtedness of such Person resulting from the acquisition by such
Person of any assets subject to any Lien shall be deemed, for the purposes
hereof, to be the equivalent of the creation, assumption and incurring of the
indebtedness secured thereby, whether or not actually so created, assumed or
incurred.
"Indebtedness for Borrowed Money" shall mean, as to any Person
at any time, any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, or joint or several) of such Person for or in respect of: (i)
borrowed money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any Letter of Credit or Hedging Contract, or
(iv) obligations with respect to capitalized leases.
"Indiana Aluminum" shall mean Indiana Aluminum Inc., an
Indiana corporation and its successors and assigns.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
"Interamerican" shall mean Interamerican Zinc, Inc., a
Delaware corporation and its successors and assigns.
"Interest Period" shall mean the period provided for any
Eurodollar Rate Loan pursuant to Section 2.2(b) hereof.
"Inventory" shall mean and include as to each Borrower all of
such Borrower's now owned or hereafter acquired goods, merchandise and other
personal property, wherever located, to be furnished under any consignment
arrangement, contract of service or held for sale or lease, all raw materials,
work in process, finished goods and materials and supplies of any kind, nature
or description which are or might be used or consumed in such Borrower's
business or used in selling or furnishing such goods, merchandise and other
personal property, and all documents of title or other documents representing
them.
15
"Inventory Advance Rate" shall have the meaning set forth in
Section 2.1(a)(y)(ii) hereof.
"Inventory Availability Sublimit" shall mean, at any time, an
amount equal to fifty percent (50%) of the sum of (i) the product of Eligible
Receivables multiplied by the Receivables Advance Rate, plus (ii) the product of
Eligible Inventory multiplied by the Inventory Advance Rate, subject to the
provisions of Section 2.1(b) hereof.
"Investment Property" shall mean and include as to each
Borrower, all of such Borrower's now owned or hereafter acquired securities
(whether certificated or uncertificated), securities entitlements, securities
accounts, commodities contracts and commodities accounts.
"Issuer" shall mean any Person who issues a Letter of Credit
pursuant to the terms hereof.
"Lender" and "Lenders" shall have the meaning ascribed to such
term in the preamble to this Agreement and shall include each Person which
becomes a transferee, successor or assign of any Lender.
"Letter of Credit Application" shall have the meaning set
forth in Section 2.9(a) hereof.
"Letter of Credit Fees" shall have the meaning set forth in
Section 3.2 hereof.
"Letters of Credit" shall have the meaning set forth in
Section 2.8 hereof.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, lien (whether statutory or
otherwise), Charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the financial condition, results of operations, business or prospects of
the applicable Person or Persons, (b) any Borrower's ability to pay the
Obligations in accordance with the terms thereof, (c) the value of the
Collateral, or Agent's Liens on the Collateral or, subject to Permitted
Encumbrances, the priority of any such Lien or (d) the practical realization of
the benefits of Agent's and each Lender's rights and remedies under this
Agreement and the Other Documents.
"Maximum Revolving Advance Amount" shall mean One Hundred
Twenty Million and 00/100 Dollars ($120,000,000.00).
"MetalChem" shall mean MetalChem, Inc., a Pennsylvania
corporation and its successors and assigns.
16
"Midwest Zinc" shall mean Midwest Zinc Corporation, a Delaware
corporation and its successors and assigns.
"Minimum Net Worth Requirement" shall have the meaning set
forth in Section 6.5 hereof.
"Monthly Advances" shall have the meaning set forth in Section
3.1(a) hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Sections 3(37) and 4001(a)(3) of ERISA.
"Net Orderly Liquidation Value" means with regard to any
Inventory, the net proceeds that could be expected from an orderly liquidation
sale of such Inventory, after all expenses, professionally managed, with the
seller obligated to sell over a defined period not to exceed twenty (20) weeks
from the commencement of such sale, assuming that (a) the Borrowers' facilities
are in limited operation, utilizing select current employees of the Borrowers,
for the purpose of liquidating the Inventory, (b) the Inventory would be
disposed of on a piecemeal basis or through appropriate groupings, under a
scenario whereby the purchasers are buying "as is, where is" for cash or cash
equivalent, (c) the terms are sold on a Free On Board ("FOB") warehouse basis,
and (d) taking into consideration current economic trends, condition, location
and marketability.
"Non-Borrower Subsidiaries" shall collectively mean all
Subsidiaries of any Borrower that are not Borrowers hereunder.
"Note" shall mean each Revolving Credit Note and "Notes" shall
collectively mean all of the Revolving Credit Notes.
"Obligations" shall mean and include any and all loans,
advances, debts, liabilities, obligations, covenants and duties (absolute,
contingent, matured or unmatured) owing by the Borrowers to Lenders or Agent or
to any other direct or indirect subsidiary or affiliate of Agent or any Lender
of any kind or nature, present or future (including, without limitation, any
interest accruing thereon after maturity, or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to any Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether or not evidenced
by any note, guaranty or other instrument, whether arising under any agreement,
instrument or document, (including, without limitation, this Agreement and the
Other Documents) whether or not for the payment of money, whether arising by
reason of an extension of credit, opening of a letter of credit, loan, equipment
lease or guarantee, under any Hedging Contract or in connection with any cash
management or treasury administration services or in any other manner, whether
arising out of overdrafts or deposit or other accounts or electronic funds
transfers (whether through automated clearing houses or otherwise) or out of the
Agent's or any Lenders non-receipt of or inability to collect funds or otherwise
not being made whole in connection with depository transfer check or other
similar arrangements, whether direct or indirect (including those acquired by
assignment or participation), absolute or contingent, joint or several, due or
to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities
arise or by what
17
agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument, including, but not limited to, any and all of any
Borrower's Indebtedness and/or liabilities under this Agreement, the Other
Documents or under any other agreement between Agent or Lenders and any Borrower
and any amendments, extensions, renewals or increases and all costs and expenses
of Agent and any Lender incurred in the documentation, negotiation,
modification, enforcement, collection or otherwise in connection with any of the
foregoing, including but not limited to reasonable attorneys' fees and expenses
and all obligations of any Borrower to Agent or Lenders to perform acts or
refrain from taking any action.
"Other Documents" shall mean the Revolving Credit Notes, the
Questionnaire, the Blocked Account Agreements, the Waivers, any Guaranty, any
Guarantor Security Agreement, and any and all other agreements, instruments and
documents, including, without limitation, guaranties, pledges, powers of
attorney, consents, and all other writings heretofore, now or hereafter executed
by any Borrower and/or delivered to Agent or any Lender in respect of the
transactions contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or other
entity owning, directly or indirectly at least 50% of the shares of stock or
other ownership interests having ordinary voting power to elect a majority of
the directors of the Person, or other Persons performing similar functions for
any such Person.
"Participant" shall mean each Person who shall be granted the
right by any Lender to participate in any of the Advances and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
"Payment Office" shall mean initially Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000; thereafter, such other office of
Agent, if any, which it may designate by notice to Borrowing Agent and to each
Lender to be the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" shall mean as set forth in Section 7.1
hereof.
"Permitted Encumbrances" shall mean (a) Liens in favor of
Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or
other governmental charges not delinquent or being contested in good faith and
by appropriate proceedings and with respect to which proper reserves have been
taken by the Borrowers in accordance with GAAP; provided, that, such Liens shall
have no effect on the priority of the Liens in favor of Agent or the value of
the assets in which Agent has such a Lien and a stay of enforcement of any such
Lien shall be in effect; (c) deposits or pledges to secure obligations under
worker's compensation, social security or similar laws, or under unemployment
insurance or general liability or product liability insurance; (d) deposits or
pledges to secure bids, tenders, contracts (other than contracts for the payment
of money), leases, statutory obligations, performance bonds, surety and appeal
bonds and other obligations of like nature arising in the ordinary course of any
Borrower's business; (e) mechanics', workers', materialmen's, warehousemen's,
common carriers, landlord's or other like Liens arising in the ordinary course
of any Borrower's business with respect to obligations which are not due or
which are being contested in good faith by the applicable Borrower; (f) Liens
18
placed upon equipment and real estate assets acquired to secure a portion of the
purchase price thereof, provided that (x) any such lien shall not encumber any
other property of IMCO or its Subsidiaries other than insurance and other
proceeds of such equipment and real estate and (y) the aggregate amount of
Indebtedness secured by such Liens incurred as a result of such purchases during
any fiscal year shall not exceed the amount provided for in Section 7.6; (g)
zoning restrictions, easements, encroachments, rights of way, restrictions,
leases, licenses, restrictive covenants and other similar title exceptions or
Liens affecting Real Property, none of which materially impairs the use of such
Real Property or the value thereof, and none of which is violated in any
material respect by existing or supporting structures or land use; (h) Senior
Secured Noteholder Liens; (i) Liens on assets (other than Collateral) acquired
in connection with a Permitted Acquisition, provided that such Liens extend only
to the assets acquired in such Permitted Acquisition; (j) attachment and
judgment liens which do not constitute an Event of Default under Section 10.7;
(k) Liens disclosed on Schedule 1.2 provided that the principal amount secured
thereby is not hereafter increased, and no additional assets become subject to
such Lien; (l) extensions and renewals of any of the Liens described in this
definition of Permitted Encumbrances, subject to the limitations set forth
above; provided that the aggregate amount of such extended or renewed Liens is
not increased and such extended or renewed Liens are on terms and conditions no
more restrictive than the terms and conditions of the Liens being extended or
renewed; (m) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback in favor of collecting or payor banks
with respect to money or instruments of any Borrower on deposit with or in the
possession of such bank that do not constitute proceeds of Collateral; (m)
contractual options or rights to purchase Real Property and Equipment from any
Borrower, (o) other Liens not described by any of the foregoing on assets (other
than Collateral) provided that such Liens secure Indebtedness in an aggregate
principal amount at any time outstanding not to exceed Five Hundred Thousand and
00/00 Dollars ($500,000.00).
"Person" shall mean any individual, sole proprietorship,
partnership, corporation, business trust, joint stock company, trust,
unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or government
(whether federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Pittsburg Aluminum" shall mean Pittsburg Aluminum, Inc., a
Kansas corporation and its successors and assigns.
"Plan" shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA, maintained for employees of Borrowers or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"PNC" shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.
"Projections" shall have the meaning set forth in Section
5.5(a) hereof.
"Purchasing Lender" shall have the meaning set forth in
Section 16.3 hereof.
19
"Qualified Stock" means, with respect to any Person, any
Capital Stock of such Person that is not Disqualified Stock.
"Questionnaire" shall mean the Documentation Information
Questionnaire and the responses thereto provided by the Borrowers and delivered
to Agent.
"Real Property" shall mean all real property, both owned and
leased, of the Borrowers.
"Receivables" shall mean and include, as to each Borrower, all
of such Borrower's accounts, contract rights, instruments (including those
evidencing indebtedness owed to Borrowers by their Affiliates), documents,
chattel paper (including electronic chattel paper), general intangibles relating
to accounts, drafts and acceptances, credit card receivables, and all other
forms of obligations owing to such Borrower arising out of or in connection with
the sale or lease of Inventory or the rendition of services (including, but not
limited to, tolling arrangements), all supporting obligations, guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to Agent hereunder.
"Receivables Advance Rate" shall have the meaning set forth in
Section 2.1(a)(y)(i) hereof.
"Receivables Purchase Facility" shall mean the Receivables
financing arrangement entered into by and among IMCO, certain of its Domestic
Subsidiaries and Market Street Funding Corporation, a Delaware corporation on or
about November 1, 2000.
"Regulations" shall have the meaning set forth in Section
16.16 hereof.
"Releases" shall have the meaning set forth in Section
5.7(c)(i) hereof.
"Reportable Event" shall mean a reportable event described in
Section 4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least
fifty-one percent (51%) of the Advances and, if no Advances are outstanding,
shall mean Lenders holding fifty-one percent (51%) of the Commitment
Percentages.
"Reserve Percentage" shall mean the maximum effective
percentage in effect on any day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding.
"Revolving Advances" shall mean Advances made other than
Letters of Credit.
"Revolving Credit Note" or "Revolving Credit Notes" shall
mean, singularly or collectively, as the context may require, the promissory
notes referred to in Section 2.1(a) hereof.
20
"Rock Creek" shall mean Rock Creek Aluminum, Inc., an Ohio
corporation and its successors and assigns.
"Section 20 Subsidiary" shall mean the Subsidiary of the bank
holding company controlling PNC, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Senior Secured Notes" shall mean the Senior Secured Notes in
the aggregate principal amount of Two Hundred Ten Million and 00/100 Dollars
($210,000,000.00), due 2010 and issued on the Closing Date pursuant to the
Senior Secured Notes Indenture.
"Senior Secured Notes Documentation" shall mean collectively,
the Senior Secured Notes Indenture, the Senior Secured Notes and all related
agreements, documents and instruments.
"Senior Secured Notes Indenture" shall mean the Indenture
dated October 6, 2003 by and among IMCO, the other Borrowers, as guarantors, and
JPMorgan Chase Bank, as trustee, with respect to the issuance by IMCO of the
Senior Secured Notes in the aggregate principal amount of Two Hundred Ten
Million and 00/100 Dollars ($210,000,000.00).
"Senior Secured Noteholder Liens" shall mean Liens on the Real
Property, fixtures and Equipment of the Borrowers in favor of the holders of the
Senior Secured Notes.
"Settlement Date" shall mean the Closing Date and thereafter
Wednesday of each week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.
"Subsidiary" shall mean a corporation or other entity of whose
shares of stock or other ownership interests having ordinary voting power (other
than stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"Tangible Net Worth" shall mean, as of any date of the
determination, the difference between (a) the aggregate amount of all assets of
IMCO and its Subsidiaries on a consolidated basis as may be properly classified
as such in accordance with GAAP consistently applied excluding such other assets
as are properly classified as intangible assets under GAAP, minus (b) the
aggregate amount of all liabilities of IMCO and its Subsidiaries on a
consolidated basis properly classified as such in accordance with GAAP.
"Term" shall have the meaning set forth in Section 13.1
hereof.
"Termination Event" shall mean (i) a Reportable Event with
respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower
or any member of the Controlled Group from a Plan during a plan year in which
such entity was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or
condition (a) which
21
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan or Multiemployer Plan, or
(b) that may result in termination of a Multiemployer Plan pursuant to Section
4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of
Sections 4203 and 4205 of ERISA, of any Borrower or any member of the Controlled
Group from a Multiemployer Plan.
"Toxic Substance" shall mean and include any material present
on the Real Property which has been shown to have significant adverse effect on
human health or which is subject to regulation under the Toxic Substances
Control Act (TSCA), 15 U.S.C. Sections 2601 et seq., applicable state law, or
any other applicable Federal or state laws now in force or hereafter enacted
relating to toxic substances. "Toxic Substance" includes but is not limited to
asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.
"Transferee" shall have the meaning set forth in Section
16.3(b) hereof.
"UCP" shall have the meaning set forth in Section 2.9(b)
hereof.
"Undrawn Availability" shall mean, at a particular date, an
amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum
Revolving Advance Amount, minus the aggregate amount of outstanding Letters of
Credit, minus (b) the sum of (x) the outstanding amount of Revolving Advances
plus (y) all amounts due and owing to Borrowers' trade creditors which are
outstanding sixty (60) days or more beyond the due date (without duplication
with respect to any such amount deducted from the Formula Amount), plus (z) fees
and expenses for which Borrowers are liable but which have not been paid or
charged to Borrowers' Account.
"USA Patriot Act" shall mean the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
"U.S. Zinc" shall mean U.S. Zinc Corporation, a Delaware
corporation and its successors and assigns.
"U.S. Zinc Export" shall mean U.S. Zinc Export Corporation, a
Texas corporation and its successors and assigns.
"VAW-IMCO" shall mean VAW-IMCO Xxxx und Recycling GmbH and its
successors and assigns.
"VAW-IMCO Note" shall mean the Intercompany Note, dated
October 6, 2003, in the principal amount of Twenty-Four Million Two Thousand and
00/100 Dollars ($24,002,000.00) made by VAW-IMCO to the order of IMCO.
"Waivers" shall mean, collectively, any and all Landlord's
Waivers, Warehouseman's Waivers, Creditor's Waivers, Landlord's Waiver and
Agreements, Mortgagee Waivers and Processing Facility Waivers, executed and
delivered in connection with this Agreement, in form and substance satisfactory
to the Agent, together with all amendments, supplements, modifications,
substitutions and replacements thereto and thereof.
22
"Website Posting" shall have the meaning set forth in Section
16.6 hereof.
"Week" shall mean the time period commencing with the opening
of business on a Wednesday and ending on the end of business the following
Tuesday.
"Western Zinc" shall mean Western Zinc Corporation, a
California corporation and its successors and assigns.
"Wholly Owned Subsidiary" shall mean, with respect to any
Person, any Subsidiary of such Person all of the Capital Stock of which (except
directors' qualifying shares) are, directly or indirectly, owned or controlled
by such Person or one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more of such Subsidiaries.
1.3 Uniform Commercial Code Terms.
All terms used herein and defined in the Uniform Commercial
Code as adopted in the Commonwealth of Pennsylvania from time to time shall have
the meaning given therein unless otherwise defined herein. To the extent the
definition of any category or type of Collateral is expanded by any amendment,
modification or revision to the Uniform Commercial Code, such expanded
definition will apply automatically as of the date of such amendment,
modification or revision.
1.4 Certain Matters of Construction.
The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. Wherever appropriate in the context, terms used herein in the singular
also include the plural and vice versa. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. Unless otherwise provided, all references to any instruments or
agreements to which Agent is a party, including, without limitation, references
to any of the Other Documents, shall include any and all modifications or
amendments thereto and any and all extensions or renewals thereof.
II. ADVANCES, PAYMENTS.
2.1 (a) Revolving Advances. Subject to the terms and
conditions set forth in this Agreement including, without limitation, Section
2.1(b), each Lender, severally and not jointly, will make Revolving Advances to
Borrowers in aggregate amounts outstanding at any time equal to such Lender's
Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount
less the aggregate amount of outstanding Letters of Credit or (y) an amount
equal to the sum of:
(i) up to eighty-five percent (85%),
subject to the provisions of Section 2.1(b) hereof ("Receivables Advance Rate"),
of Eligible Receivables, plus
(ii) up to the lesser of (A) eighty-five
percent (85%) of the Net Orderly Liquidation Value (expressed as a percentage of
cost based on the most recent inventory
23
appraisal) of Eligible Inventory subject to the provisions of Section 2.1(b)
hereof, (B) sixty-five percent (65%) of the value of Eligible Inventory subject
to the provisions of Section 2.1(b) hereof (the lesser of (A) and (B) above is
the "Inventory Advance Rate") (the Receivables Advance Rate and the Inventory
Advance Rate shall be referred to collectively, as the "Advance Rates") or (C)
the Inventory Availability Sublimit, minus
(iii) the aggregate amount of outstanding
Letters of Credit, minus
(iv) such reserves as Agent may
reasonably deem proper and necessary from time to time.
The amount derived from the sum of Sections 2.1(a)(y)(i) and (ii) minus
the sum of Section 2.1 (a)(y)(iii) and (iv) at any time and from time to time
shall be referred to as the "Formula Amount". The Revolving Advances shall be
evidenced by one or more secured promissory notes (collectively, the "Revolving
Credit Note") substantially in the form attached hereto as Exhibit 2.1(a).
(b) Discretionary Rights. Subject to Section
16.2(b)(vii), the Advance Rates may be increased or decreased by Agent at any
time and from time to time in the exercise of its reasonable discretion. Each
Borrower consents to any such increases or decreases and acknowledges that
decreasing the Advance Rates or increasing the reserves may limit or restrict
Advances requested by Borrowing Agent. Agent shall give Borrowing Agent five (5)
days prior written notice of its intention to decrease the Advance Rates.
2.2 Procedure for Borrowing Advances.
(a) Borrowing Agent on behalf of any Borrower
may notify Agent prior to 1:00 p.m. (Pittsburgh, Pennsylvania time) on a
Business Day of a Borrower's request to incur, on that day, a Revolving Advance
hereunder. Should any amount required to be paid as interest hereunder, or as
fees or other charges under this Agreement or any other agreement with Agent or
Lenders, or with respect to any other Obligation, become due, same shall be
deemed a request for a Revolving Advance as of the date such payment is due, in
the amount required to pay in full such interest, fee, charge or Obligation
under this Agreement or any other agreement with Agent or Lenders, and such
request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above,
in the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing
Agent shall notify Agent in writing no later than 1:00 p.m. (Pittsburgh,
Pennsylvania time) at least three (3) Business Days' prior to the date of such
proposed borrowing, specifying (i) the date of the proposed borrowing (which
shall be a Business Day), (ii) the type of borrowing and the amount of such
Revolving Advance to be borrowed, which amount shall be in a minimum amount of
Five Million and 00/100 Dollars ($5,000,000.00) and in integral multiples of One
Million and 00/100 Dollars ($1,000,000.00) thereafter, and (iii) the duration of
the first Interest Period therefor. Interest Periods for Eurodollar Rate Loans
shall be for one (1), two (2) or three (3) months; provided, if an Interest
Period would end on a day that is not a Business Day, it shall end on the next
succeeding Business Day unless such day falls in the next succeeding calendar
month in which
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case the Interest Period shall end on the next preceding Business Day. No
Eurodollar Rate Loan shall be made available to a Borrower during the
continuance of a Default or an Event of Default.
(c) Each Interest Period of a Eurodollar Rate
Loan shall commence on the date such Eurodollar Rate Loan is made and shall end
on such date as Borrowing Agent may elect as set forth in subsection (b)(iii)
above provided that the exact length of each Interest Period shall be determined
in accordance with the practice of the interbank market for offshore Dollar
deposits and no Interest Period shall end after the last day of the Term.
The Borrowing Agent shall elect the initial Interest
Period applicable to a Eurodollar Rate Loan by its
notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice
of conversion given to Agent pursuant to Section 2.2(d), as the case may be.
Borrowing Agent shall elect the duration of each succeeding Interest Period by
giving irrevocable written notice to Agent of such duration not less than three
(3) Business Days prior to the last day of the then current Interest Period
applicable to such Eurodollar Rate Loan. If Agent does not receive timely notice
of the Interest Period elected by Borrowing Agent, Borrowers shall be deemed to
have elected to convert to a Domestic Rate Loan subject to Section 2.2(d)
hereinbelow.
(d) Any Borrower may, on the last Business Day
of the then current Interest Period applicable to any outstanding Eurodollar
Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert
any such loan into a loan of another type in the same aggregate principal amount
provided that any conversion of a Eurodollar Rate Loan shall be made only on the
last Business Day of the then current Interest Period applicable to such
Eurodollar Rate Loan. If a Borrower desires to convert a loan, Borrowing Agent
shall give Agent not less than three (3) Business Days' prior written notice to
convert from a Domestic Rate Loan to a Eurodollar Rate Loan or one (1) Business
Day's prior written notice to convert from a Eurodollar Rate Loan to a Domestic
Rate Loan, specifying the date of such conversion, the loans to be converted and
if the conversion is from a Domestic Rate Loan to any other type of loan, the
duration of the first Interest Period therefor; provided, however, a Borrower
shall not be permitted to convert a Domestic Rate Loan to a Eurodollar Rate Loan
or continue to select a Eurodollar Rate Loan during the continuance of a Default
or an Event of Default. After giving effect to each such conversion, there shall
not be outstanding more than ten (10) Eurodollar Rate Loans, in the aggregate.
(e) At its option and upon three (3) Business
Days' prior written notice, any Borrower may prepay the Eurodollar Rate Loans in
whole at any time or in part from time to time, without premium or penalty, but
with accrued interest on the principal being prepaid to the date of such
repayment. Such Borrower shall specify the date of prepayment of Advances which
are Eurodollar Rate Loans and the amount of such prepayment. In the event that
any prepayment of a Eurodollar Rate Loan is required or permitted on a date
other than the last Business Day of the then current Interest Period with
respect thereto, such Borrower shall indemnify Agent and Lenders therefor in
accordance with Section 2.2(f) hereof.
(f) Each Borrower shall indemnify Agent and
Lenders and hold Agent and Lenders harmless from and against any and all losses
or expenses that Agent and Lenders
25
may sustain or incur as a consequence of any prepayment, conversion of or any
default by any Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrowing Agent shall be presumed correct absent manifest error.
(g) Notwithstanding any other provision hereof,
if any applicable law, treaty, regulation or directive, or any change therein or
in the interpretation or application thereof, shall make it unlawful for any
Lender (for purposes of this subsection (g), the term "Lender" shall include any
Lender and the office or branch where any Lender or any corporation or bank
controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or
maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar
Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any
affected Eurodollar Rate Loans are then outstanding, promptly upon request from
Agent, either pay all such affected Eurodollar Rate Loans or convert such
affected Eurodollar Rate Loans into loans of another type. If any such payment
or conversion of any Eurodollar Rate Loan is made on a day that is not the last
day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers
shall pay Agent, upon Agent's request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Rate Loan as a result of such payment or
conversion, including (but not limited to) any interest or other amounts payable
by Lenders to lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Rate Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall
be presumed correct absent manifest error.
2.3 Disbursement of Advance Proceeds.
All Advances shall be disbursed from whichever office or other
place Agent may designate from time to time and, together with any and all other
Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers'
Account on Agent's books. During the Term, Borrowers may use the Revolving
Advances by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof. The proceeds of each Revolving Advance requested by
Borrowers or deemed to have been requested by Borrowers under Section 2.2(a)
hereof shall, with respect to requested Revolving Advances to the extent Lenders
make such Revolving Advances, be made available to the applicable Borrower on
the day so requested by way of credit to such Borrower's operating account at
PNC, or such other bank as Borrowing Agent may designate following notification
to Agent, in immediately available federal funds or other immediately available
funds or, with respect to Revolving Advances deemed to have been requested by
any Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.
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2.4 Maximum Advances.
Subject to Section 16.2(b), the aggregate balance of
outstanding Advances outstanding at any time shall not exceed the lesser of (a)
the Maximum Revolving Advance Amount or (b) the Formula Amount.
2.5 Repayment of Advances.
(a) The Revolving Advances shall be due and
payable in full on the last day of the Term subject to earlier prepayment as
herein provided.
(b) To the extent that Collateral of the
Borrowers is required to be deposited into Blocked Accounts or Depository
Accounts pursuant to Section 4.15(h) hereof, each Borrower recognizes that the
amounts evidenced by checks, notes, drafts or any other items of payment
relating to and/or proceeds of Collateral may not be collectible by Agent on the
date received. In consideration of Agent's agreement to conditionally credit
Borrowers' Account as of the Business Day on which Agent receives those items of
payment, each Borrower agrees that, in computing the charges under this
Agreement, all items of payment shall be deemed applied by Agent on account of
the Obligations one (1) Business Day after the Business Day Agent receives such
payments via wire transfer or electronic depository check. Agent is not,
however, required to credit Borrowers' Account for the amount of any item of
payment which is unsatisfactory to Agent and Agent may charge Borrowers' Account
for the amount of any item of payment which is returned to Agent unpaid.
(c) All payments of principal, interest and
other amounts payable hereunder, or under any of the Other Documents shall be
made to Agent at the Payment Office not later than 1:00 P.M. (Pittsburgh,
Pennsylvania time) on the due date therefor in lawful money of the United States
of America in federal funds or other funds immediately available to Agent. Agent
shall have the right to effectuate payment on any and all Obligations due and
owing hereunder by charging Borrowers' Account or by making Advances as provided
in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and
all other amounts payable hereunder, or under any related agreement, without any
deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
2.6 Repayment of Excess Advances.
The aggregate balance of outstanding Advances at any time in
excess of the maximum amount of such Advances permitted hereunder shall be
immediately due and payable without the necessity of any demand, at the Payment
Office, whether or not a Default or Event of Default has occurred.
2.7 Statement of Account.
Agent shall maintain, in accordance with its customary
procedures, a loan account ("Borrowers' Account") in the name of Borrowers in
which shall be recorded the date and amount of each Advance made by Agent and
the date and amount of each payment in respect
27
thereof; provided, however, the failure by Agent to record the date and amount
of any Advance shall not adversely affect Agent or any Lender. Each month, Agent
shall send to Borrowing Agent a statement showing the accounting for the
Advances made, payments made or credited in respect thereof, and other
transactions between Agent and Borrowers, during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the absence of
manifest error and shall constitute an account stated between Lenders and
Borrowers unless Agent receives a written statement of Borrowers' specific
exceptions thereto within thirty (30) days after such statement is received by
Borrowing Agent. The records of Agent with respect to the loan account shall be
presumed correct evidence absent manifest error of the amounts of Advances and
other charges thereto and of payments applicable thereto.
2.8 Letters of Credit.
Subject to the terms and conditions hereof, Agent shall (a)
issue or cause the issuance of Letters of Credit (such Letters of Credit and the
Existing Letters of Credit are collectively, the "Letters of Credit") on behalf
of any Borrower; provided, however, that Agent will not be required to issue or
cause to be issued any Letters of Credit to the extent that the face amount of
such Letters of Credit would then cause the sum of (i) the outstanding Revolving
Advances plus (ii) the outstanding amount of Letters of Credit to exceed the
lesser of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount.
The maximum amount of the amount of Letters of Credit outstanding shall not
exceed Twenty Million and 00/100 Dollars ($20,000,000.00) in the aggregate at
any time. All disbursements or payments related to Letters of Credit shall be
deemed to be Domestic Rate Loans (in Dollars) consisting of Revolving Advances
and shall bear interest at the applicable Contract Rate for Domestic Rate Loans;
Letters of Credit that have not been drawn upon shall not bear interest.
2.9 Issuance of Letters of Credit.
(a) Borrowing Agent, on behalf of any Borrower,
may request Agent to issue or cause the issuance of a Letter of Credit by
delivering to Agent at the Payment Office, Agent's form of Letter of Credit
Application (the "Letter of Credit Application") completed to the satisfaction
of Agent; and, such other certificates, documents and other papers and
information as Agent may reasonably request no later than 12:00 noon
(Pittsburgh, Pennsylvania time) at least five (5) Business Days' prior to the
date of such proposed issuance. Borrowing Agent, on behalf of Borrowers, also
has the right to give instructions and make agreements with respect to any
application, any applicable letter of credit and security agreement, any
applicable letter of credit reimbursement agreement and/or any other applicable
agreement, any letter of credit and the disposition of documents, disposition of
any unutilized funds, and to agree with Agent upon any amendment, extension or
renewal of any Letter of Credit. As of the date hereof, those letters of credit
set forth on Schedule 2.9 attached hereto and made a part hereof, which were
issued pursuant to the Existing Lender Indebtedness by the Documentation Agent
and are outstanding on the date hereof (the "Existing Letters of Credit"), are
hereby deemed to be Letters of Credit issued and outstanding hereunder. The
Borrowers shall cause the Existing Letters of Credit to be replaced with Letters
of Credit issued by the Agent within thirty (30) days after the Closing Date.
28
(b) Each Letter of Credit shall, among other
things, (i) provide for the payment of sight drafts or other forms of written
demand for payment or, acceptances of usance drafts when presented for honor
thereunder in accordance with the terms thereof and when accompanied by the
documents described therein and (ii) have an expiry date not later than the last
day of the Term. Each trade Letter of Credit shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, and any amendments or revisions thereof
adhered to by the Issuer (the "UCP"). Each standby Letter of Credit shall be
subject to the International Standby Practices 1998, International Chamber of
Commerce Publication 590 and any amendments or revisions thereof adhered to by
the Issuer (the "ISP") or the UCP, as determined by the Issuer. Each Letter of
Credit shall be governed, to the extent not inconsistent with the UCP or the
ISP, as applicable, by the laws of the Commonwealth of Pennsylvania (provided,
however, upon the request of the Borrowing Agent and the consent of the Issuer,
a Letter of Credit may be governed by the laws of a state other than
Pennsylvania).
(c) Agent shall notify Lenders of the request by
Borrowing Agent for a Letter of Credit hereunder within a reasonable time after
receiving such request.
(d) The Issuer shall have absolute discretion
whether to accept any draft. Without in any way limiting the Issuer's absolute
discretion whether to accept any draft, Borrowing Agent will not present for
acceptance any draft, and the Issuer will generally not accept any drafts (i)
that arise out of transactions involving the sale of goods by any Borrower not
in the ordinary course of its business, (ii) that involve a sale to an Affiliate
of any Borrower, (iii) that involve any purchase for which the Issuer has not
received all related documents, instruments and forms requested by the Issuer,
or (iv) that is not eligible for discounting with Federal Reserve Banks pursuant
to paragraph 7 of Section 13 of the Federal Reserve Act, as amended.
2.10 Requirements For Issuance of Letters of Credit.
(a) In connection with the issuance of any
Letter of Credit, Borrowers shall indemnify, save and hold Agent, each Lender
and each Issuer harmless from any loss, cost, expense or liability, including,
without limitation, payments made by Agent, any Lender or any Issuer and
expenses and reasonable attorneys' fees incurred by Agent, any Lender or Issuer
arising out of, or in connection with, any Letter of Credit to be issued or
created for any Borrower. Borrowers shall be bound by Agent's or any Issuer's
regulations and good faith interpretations of any Letter of Credit issued or
created for Borrowers' Account, although this interpretation may be different
from its own; and, neither Agent, nor any Lender, nor any Issuer nor any of
their correspondents shall be liable for any error, negligence, or mistakes,
whether of omission or commission, in following Borrowing Agent's or any
Borrower's instructions or those contained in any Letter of Credit or of any
modifications, amendments or supplements thereto or in issuing or paying any
Letter of Credit, except for Agent's, any Lender's, any Issuer's or such
correspondents' gross negligence or willful misconduct.
(b) Borrowing Agent shall authorize and direct
any Issuer to name the applicable Borrower as the "Applicant" or "Account Party"
of each Letter of Credit. If Agent is not the Issuer of any Letter of Credit,
Borrowing Agent shall authorize and direct the Issuer to
29
deliver to Agent all instruments, documents, and other writings and property
received by the Issuer pursuant to the Letter of Credit and to accept and rely
upon Agent's instructions and agreements with respect to all matters arising in
connection with the Letter of Credit, the application therefor or any acceptance
therefor.
(c) In connection with all Letters of Credit
issued or caused to be issued by Agent under this Agreement, each Borrower
hereby appoints the Issuer, or its designee, as its attorney, with full power
and authority upon the occurrence and during the continuance of an Event of
Default or Default, (i) to sign and/or endorse such Borrower's name upon any
warehouse or other receipts, letter of credit applications and acceptances; (ii)
to sign such Borrower's name on bills of lading; (iii) to clear Inventory
through the United States of America Customs Department ("Customs") in the name
of such Borrower or Issuer or Issuer's designee, and to sign and deliver to
Customs officials powers of attorney in the name of such Borrower for such
purpose; and (iv) to complete in such Borrower's name or Issuer's, or in the
name of Issuer's designee, any order, sale or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof. Neither
Issuer nor its attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Issuer's or its
attorney's willful misconduct or gross negligence. This power, being coupled
with an interest, is irrevocable as long as any Letters of Credit remain
outstanding.
(d) Each Lender shall to the extent of the
percentage amount equal to the product of such Lender's Commitment Percentage
times the aggregate amount of all unreimbursed reimbursement obligations arising
from disbursements made or obligations incurred with respect to the Letters of
Credit be deemed to have irrevocably purchased an undivided participation in
each such unreimbursed reimbursement obligation. In the event that at the time a
disbursement is made the unpaid balance of Advances exceeds or would exceed,
with the making of such disbursement, the lesser of the Maximum Revolving
Advance Amount or the Formula Amount, and such disbursement is not reimbursed by
Borrowers within two (2) Business Days, Agent shall promptly notify each Lender
and upon Agent's demand each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement together with such
Lender's proportionate share of Agent's reasonable unreimbursed costs and
expenses relating to such unreimbursed disbursement. In the event an Issuer
other than Agent makes a disbursement in respect of a Letter of Credit, each
Lender shall pay to such Issuer, upon such Issuer's demand, such Lender's
proportionate share of such disbursement together with such Lender's
proportionate share of such Issuer's reasonable unreimbursed costs and expenses
relating to such disbursement. Upon receipt by Agent of a repayment from any
Borrower of any amount disbursed by Agent for which Agent had already been
reimbursed by Lenders, Agent shall deliver to each Lender that Lender's pro rata
share of such repayment. Each Lender's participation commitment shall continue
until the last to occur of any of the following events: (A) Agent ceases to be
obligated to issue or cause to be issued Letters of Credit hereunder; (B) no
Letter of Credit issued hereunder remains outstanding and uncancelled or (C) all
Persons (other than the applicable Borrower) have been fully reimbursed for all
payments made under or relating to Letters of Credit.
30
2.11 Additional Payments.
Any sums reasonably expended by Agent or any Lender due to any
Borrower's failure to perform or comply with its obligations under this
Agreement or any Other Document including, without limitation, any Borrower's
obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be
charged to Borrowers' Account as a Revolving Advance and added to the
Obligations.
2.12 Manner of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall
be advanced according to the applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by
Borrowers on account of the principal of and interest on the Revolving Advances,
shall be applied to the Revolving Advances pro rata according to the applicable
Commitment Percentages of Lenders. Except as expressly provided herein, all
payments (including prepayments) to be made by any Borrower on account of
principal, interest and fees shall be made without set off or counterclaim and
shall be made to Agent on behalf of the Lenders to the Payment Office, in each
case on or prior to 1:00 P.M., Pittsburgh, Pennsylvania time, in Dollars and in
immediately available funds.
(c) (i) Notwithstanding anything to the
contrary contained in Sections 2.12(a) and (b) hereof, commencing with the first
Business Day following the Closing Date, each borrowing of Revolving Advances
shall be advanced by Agent and each payment by any Borrower on account of
Revolving Advances shall be applied first to those Revolving Advances advanced
by Agent. On or before 1:00 P.M., Pittsburgh, Pennsylvania time, on each
Settlement Date commencing with the first Settlement Date following the Closing
Date, Agent and Lenders shall make certain payments as follows: (I) if the
aggregate amount of new Revolving Advances made by Agent during the preceding
Week (if any) exceeds the aggregate amount of repayments applied to outstanding
Revolving Advances during such preceding Week, then each Lender shall provide
Agent with funds in an amount equal to its applicable Commitment Percentage of
the difference between (w) such Revolving Advances and (x) such repayments and
(II) if the aggregate amount of repayments applied to outstanding Revolving
Advances during such Week exceeds the aggregate amount of new Revolving Advances
made during such Week, then Agent shall provide each Lender with funds in an
amount equal to its applicable Commitment Percentage of the difference between
(y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to
earn interest at the applicable Contract Rate on outstanding Advances which it
has funded.
(iii) Promptly following each Settlement
Date, Agent shall submit to each Lender a certificate with respect to payments
received and Advances made during the Week immediately preceding such Settlement
Date. Such certificate of Agent shall be presumed correct in the absence of
manifest error.
(d) If any Lender or Participant (a "benefitted
Lender") shall at any time receive any payment of all or part of its Advances,
or interest thereon, or receive any
31
Collateral in respect thereof (whether voluntarily or involuntarily or by
set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefitted Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender's Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Lender so purchasing a portion of another
Lender's Advances may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(e) Unless Agent shall have been notified by
telephone, confirmed in writing, by any Lender that such Lender will not make
the amount which would constitute its applicable Commitment Percentage of the
Advances available to Agent, Agent may (but shall not be obligated to) assume
that such Lender shall make such amount available to Agent on the next
Settlement Date and, in reliance upon such assumption, make available to
Borrowers a corresponding amount. Agent will promptly notify Borrowers of its
receipt of any such notice from a Lender. If such amount is made available to
Agent on a date after such next Settlement Date, such Lender shall pay to Agent
on demand an amount equal to the product of (i) the daily average Federal Funds
Effective Rate (computed on the basis of a year of 360 days) during such period
as quoted by Agent, times (ii) such amount, times (iii) the number of days from
and including such Settlement Date to the date on which such amount becomes
immediately available to Agent. A certificate of Agent submitted to any Lender
with respect to any amounts owing under this paragraph (e) shall be presumed
correct, in the absence of manifest error. If such amount is not in fact made
available to Agent by such Lender within three (3) Business Days after such
Settlement Date, Agent shall be entitled to recover such an amount, with
interest thereon at the rate per annum then applicable to such Revolving
Advances hereunder, on demand from Borrowers; provided, however, that Agent's
right to such recovery shall not prejudice or otherwise adversely affect
Borrowers' rights (if any) against such Lender.
2.13 Reserved.
2.14 Use of Proceeds.
Borrowers shall apply the proceeds of Advances (i) to repay
the Existing Lender Indebtedness, (ii) to pay fees and expenses relating to the
transaction contemplated by this Agreement, (iii) for general corporate purposes
and (iv) to provide for working capital needs.
2.15 Defaulting Lender.
(a) Notwithstanding anything to the contrary
contained herein, in the event any Lender (x) has refused (which refusal
constitutes a breach by such Lender of its obligations under this Agreement) to
make available its portion of any Advance or (y) notifies
32
either Agent or Borrowing Agent that it does not intend to make available its
portion of any Advance (if the actual refusal would constitute a breach by such
Lender of its obligations under this Agreement) (each, a "Lender Default"), all
rights and obligations hereunder of such Lender (a "Defaulting Lender") as to
which a Lender Default is in effect and of the other parties hereto shall be
modified to the extent of the express provisions of this Section 2.15 while such
Lender Default remains in effect.
(b) Advances shall be incurred pro rata from
Lenders (the "Non-Defaulting Lenders") which are not Defaulting Lenders based on
their respective Commitment Percentages, and no Commitment Percentage of any
Lender or any pro rata share of any Advances required to be advanced by any
Lender shall be increased as a result of such Lender Default. Amounts received
in respect of principal of any type of Advances shall be applied to reduce the
applicable Advances of each Lender pro rata based on the aggregate of the
outstanding Advances of that type of all Lenders at the time of such
application; provided, that, such amount shall not be applied to any Advances of
a Defaulting Lender at any time when, and to the extent that, the aggregate
amount of Advances of any Non-Defaulting Lender exceeds such Non-Defaulting
Lender's Commitment Percentage of all Advances then outstanding.
(c) A Defaulting Lender shall not be entitled to
give instructions to Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the Other Documents. All amendments,
waivers and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, for purposes of the definition
of "Required Lenders", a Defaulting Lender shall be deemed not to be a Lender
and not to have Advances outstanding.
(d) Other than as expressly set forth in this
Section 2.15, the rights and obligations of a Defaulting Lender (including the
obligation to indemnify Agent) and the other parties hereto shall remain
unchanged. Nothing in this Section 2.15 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Other
Documents, shall alter such obligations, shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice any rights which
any Borrower, Agent or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.
(e) In the event a Defaulting Lender
retroactively cures to the satisfaction of Agent the breach which caused a
Lender to become a Defaulting Lender, such Defaulting Lender shall no longer be
a Defaulting Lender and shall be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1 Interest.
(a) Interest on Advances shall be payable in
arrears on the first (1st) day of each month with respect to Domestic Rate Loans
and, with respect to Eurodollar Rate Loans, at the end of each Interest Period.
Interest charges shall be computed on the actual principal amount of Advances
outstanding during the month (the "Monthly Advances"). On the Closing Date
through the day immediately preceding the first (1st) Incentive Pricing
Effective
33
Date, (x) Domestic Rate Loans shall bear interest for each day at a rate per
annum equal to the Alternate Base Rate plus one and one quarter of one percent
(1.25%) and (y) Eurodollar Rate Loans shall bear interest for each applicable
Interest Period at a rate per annum equal to the Eurodollar Rate plus two and
three quarters of one percent (2.75%).
(b) Subject to the terms and conditions of this
Agreement, during each calendar month of the Borrowers, in accordance with
Section 9.2 hereof, the Borrowing Agent shall submit to the Agent a Borrowing
Base Certificate as of the last day of the prior calendar month. Upon receipt of
the Borrowing Base Certificate by the Agent as of March 31, 2004 and as of the
last day of each calendar month thereafter, the Borrowers' daily average Undrawn
Availability shall be calculated for the calendar month then ending. From the
first (1st) day of the first (1st) full calendar month following the Agent's
receipt of such Borrowing Base Certificate (the "Incentive Pricing Effective
Date") until the next Incentive Pricing Effective Date, (x) Domestic Rate Loans
shall bear interest for each day at a rate per annum equal to the Alternate Base
Rate plus the applicable margin determined by reference to the Borrowers'
Undrawn Availability (the "Applicable Base Rate Margin") set forth below and (y)
Eurodollar Rate Loans shall bear interest during each applicable Interest Period
at a rate per annum equal to the Eurodollar Rate plus the applicable margin
determined by reference to the Borrowers' Undrawn Availability (the "Applicable
Eurodollar Rate Margin") set forth below:
Applicable Applicable Applicable Letter Applicable
Undrawn Availability Eurodollar Rate Base Rate of Credit Fee Facility Fee
Tier (in Millions) Margin Margin Percentage Percentage
-------------------------------------------------------------------------------------------------------------
I > $75 2.25% 0.75% 2.25% 0.375%
II > $50 *** $75 2.50% 1.00% 2.50% 0.375%
III > $25 *** $50 2.75% 1.25% 2.75% 0.50%
IV < $25 3.00% 1.50% 3.00% 0.50%
(c) Subject to the terms and conditions of this
Agreement, in the event that the Borrowers fail to timely deliver the Borrowing
Base Certificate in accordance with Section 9.2 hereof, the Applicable
Eurodollar Rate Margin, the Applicable Base Rate Margin, the Applicable Letter
of Credit Fee Percentage and the Applicable Facility Fee Percentage shall be the
amount corresponding to Tier IV until the delivery of such Borrowing Base
Certificate.
(d) Whenever, subsequent to the date of this
Agreement, the Alternate Base Rate is increased or decreased, the applicable
Contract Rate for Domestic Rate Loans shall be similarly changed without notice
or demand of any kind by an amount equal to the amount of such change in the
Alternate Base Rate during the time such change or changes remain in effect. The
Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without
notice or demand of any kind on the effective date of any change in the Reserve
Percentage as of such effective date. Upon and after the occurrence of an Event
of Default, and during the continuation thereof, the Obligations shall bear
interest at the applicable Contract Rate plus two percent (2%) per annum (the
"Default Rate").
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3.2 Letter of Credit Fees.
(a) Borrowers shall pay (x) to Agent, for the
ratable benefit of Lenders, fees for each Letter of Credit for the period from
and excluding the date of issuance of same to and including the date of
expiration or termination, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by (i) until the first (1st) Incentive
Pricing Effective Date, two and three quarters of one percent (2.75%) per annum
and (ii) on and after the first (1st) Incentive Pricing Effective Date, the
applicable percentage per annum determined by reference to the Borrowers'
Undrawn Availability as set forth in Section 3.1(b) hereof (the "Applicable
Letter of Credit Fee Percentage"), such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable quarterly
in arrears on the first day of each calendar quarter and on the last day of the
Term and (y) to the Issuer, for its own account, fees for each Letter of Credit
for the period from and excluding the date of issuance of same to and including
the date of expiration or termination, equal to the average daily face amount of
each outstanding Letter of Credit multiplied by one quarter of one percent
(.25%) per annum, such fees to be calculated on the basis of a three hundred
sixty (360) day year for the actual number of days elapsed and to be payable
quarterly in arrears on the first (1st) day of each calendar quarter and on the
last day of the Term and (z) to the Issuer, for its own account, any and all
fees and expenses as agreed upon by the Issuer and the Borrowing Agent in
connection with any Letter of Credit, including, without limitation, in
connection with the opening, amendment or renewal of any such Letter of Credit
and any acceptances created thereunder and shall reimburse Agent for any and all
fees and expenses, if any, paid by Agent to the Issuer (all of the foregoing
fees, the "Letter of Credit Fees"). All such charges shall be deemed earned in
full on the date when the same are due and payable hereunder and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in the
Issuer's prevailing charges for that type of transaction. All Letter of Credit
Fees payable hereunder shall be deemed earned in full on the date when the same
are due and payable hereunder and shall not be subject to rebate or proration
upon the termination of this Agreement for any reason.
(b) Immediately upon the request of the Agent
after the occurrence and during the continuance of a Default or an Event of
Default, Borrowers will cause cash to be deposited and maintained in an account
with Agent, as cash collateral, in an amount equal to one hundred and five
percent (105%) of the outstanding amount of Letters of Credit, and each Borrower
hereby irrevocably authorizes Agent, in its discretion, on such Borrower's
behalf and in such Borrower's name, to open such an account and to make and
maintain deposits therein, or in an account opened by such Borrower, in the
amounts required to be made by such Borrower, out of the proceeds of Receivables
or other Collateral or out of any other funds of such Borrower coming into any
Lender's possession at any time. Agent will invest such cash collateral (less
applicable reserves) in such short-term money-market items as to which Agent and
such Borrower mutually agree and the net return on such investments shall be
credited to such account and constitute additional cash collateral. So long as
such Default or Event of Default is continuing, no Borrower may withdraw amounts
credited to any such account except upon payment and performance in full of all
Obligations and termination of this Agreement.
35
3.3 Facility Fee.
If, for any fiscal quarter during the Term, the average daily
unpaid balance of the Advances for each day of such fiscal quarter does not
equal the Maximum Revolving Advance Amount, then Borrowers shall pay to Agent
for the ratable benefit of Lenders a fee at a rate per annum equal to (i) until
the first (1st) Incentive Pricing Effective Date, one half of one percent (.50%)
per annum and (ii) on and after the first (1st) Incentive Pricing Effective
Date, the applicable percentage determined by reference to the Borrowers'
Undrawn Availability as set forth in Section 3.1(b) hereof (the "Applicable
Facility Fee Percentage") multiplied by the amount by which the Maximum
Revolving Advance Amount exceeds such average daily unpaid balance, such fees
shall be payable to the Agent in arrears on the first (1st) day of each fiscal
quarter after the date hereof until the termination hereof and on the earlier of
(i) such termination date or (ii) the last day of the Term.
3.4 Reserved.
3.5 Computation of Interest and Fees.
Interest and fees hereunder shall be computed on the basis of
a year of 360 days and for the actual number of days elapsed. If any payment to
be made hereunder becomes due and payable on a day other than a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and
interest thereon shall be payable at the applicable Contract Rate during such
extension.
3.6 Maximum Charges.
In no event whatsoever shall interest and other charges
charged hereunder exceed the highest rate permissible under law. In the event
interest and other charges as computed hereunder would otherwise exceed the
highest rate permitted under law, such excess amount shall be first applied to
any unpaid principal balance owed by Borrowers, and if the then remaining excess
amount is greater than the previously unpaid principal balance, Lenders shall
promptly refund such excess amount to Borrowers and the provisions hereof shall
be deemed amended to provide for such permissible rate.
3.7 Increased Costs.
In the event that any applicable law, treaty or governmental
regulation, or any change therein or in the interpretation or application
thereof, or compliance by any Lender (for purposes of this Section 3.7, the term
"Lender" shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) and the office or branch where Agent or any
Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether or not having the force of law) from any central
bank or other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of
any kind whatsoever with respect to this Agreement or any Other Document or
change the basis of taxation of payments to Agent or any Lender of principal,
fees, interest or any other amount payable
36
hereunder or under any Other Documents (except for changes in the rate of tax on
the overall net income of Agent or any Lender by the jurisdiction in which it
maintains its principal office);
(b) impose, modify or hold applicable any
reserve, special deposit, assessment or similar requirement against assets held
by, or deposits in or for the account of, advances or loans by, or other credit
extended by, any office of Agent or any Lender, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(c) impose on Agent or any Lender or the London
interbank Eurodollar market any other condition with respect to this Agreement
or any Other Document;
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Eurodollar Rate. Agent or such Lender shall certify the amount of such
additional cost or reduced amount to Borrowers, and such certification shall be
presumed correct absent manifest error.
3.8 Basis For Determining Interest Rate Inadequate or Unfair.
In the event that Agent or any Lender shall have determined
that:
(a) reasonable means do not exist for
ascertaining the Eurodollar Rate applicable pursuant to Section 2.2 hereof for
any Interest Period; or
(b) Dollar deposits in the relevant amount and
for the relevant maturity are not available in the London interbank Eurodollar
market, with respect to an outstanding Eurodollar Rate Loan, a proposed
Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a
Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 1:00 p.m. (Pittsburgh, Pennsylvania time)
two (2) Business Days prior to the date of such proposed borrowing, that its
request for such borrowing shall be cancelled or made as an unaffected type of
Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which
was to have been converted to an affected type of Eurodollar Rate Loan shall be
continued as or converted into a Domestic Rate Loan, or, if Borrowing Agent
shall notify Agent, no later than 1:00 p.m. (Pittsburgh, Pennsylvania time) two
(2) Business Days prior to the proposed conversion, shall be maintained as an
unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected
Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if
Borrowing Agent shall notify Agent, no later than 1:00 p.m. (Pittsburgh,
Pennsylvania time) two (2) Business Days prior to the last Business Day of the
then current Interest Period applicable to
37
such affected Eurodollar Rate Loan, shall be converted into an unaffected type
of Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans. Until such notice has been
withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and
no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
3.9 Capital Adequacy.
(a) In the event that Agent or any Lender shall
have determined that any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any Lender (for purposes of this Section 3.9, the term "Lender"
shall include Agent or any Lender and any corporation or bank controlling Agent
or any Lender) and the office or branch where Agent or any Lender (as so
defined) makes or maintains any Eurodollar Rate Loans with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on Agent or any Lender's capital as a
consequence of its obligations hereunder to a level below that which Agent or
such Lender could have achieved but for such adoption, change or compliance
(taking into consideration Agent's and each Lender's policies with respect to
capital adequacy) by an amount deemed by Agent or any Lender to be material,
then, from time to time, Borrowers shall pay upon demand to Agent or such Lender
such additional amount or amounts as will compensate Agent or such Lender for
such reduction. In determining such amount or amounts, Agent or such Lender may
use any reasonable averaging or attribution methods. The protection of this
Section 3.9 shall be available to Agent and each Lender regardless of any
possible contention of invalidity or inapplicability with respect to the
applicable law, regulation or condition.
(b) A certificate of Agent or such Lender
setting forth such amount or amounts as shall be necessary to compensate Agent
or such Lender with respect to Section 3.9(a) hereof when delivered to Borrowers
shall be presumed correct absent manifest error.
3.10 Other Considerations.
The obligations of Borrowers in Sections 3.7 and 3.9 hereof,
are subject to the following: (a) no Lender shall enforce these provisions
solely against Borrowers or against a few of such Lender's customers without in
each case generally enforcing these or similar provisions in other contracts
(provided that, anything herein to the contrary notwithstanding, no Lender shall
be required to disclose to Borrowers the identity of, or the nature of the
Lender's relationship with, any other of such Lender's customers) and (b) each
Lender shall designate a different lending office if such designation will avoid
the need for, or materially reduce the amount of, such compensation, costs or
charges and will not be otherwise materially disadvantageous to such Lender; and
(c) any charges, costs or compensation charged to any Lender pursuant to such
sections must be directly attributable to the Revolving Advances.
38
IV. COLLATERAL: GENERAL TERMS.
4.1 Security Interest in the Collateral.
To secure the prompt payment and performance to Agent and each
Lender of the Obligations, each Borrower hereby assigns, pledges and grants to
Agent for its benefit and for the ratable benefit of each Lender a continuing
security interest in and to all of its Collateral, whether now owned or existing
or hereafter acquired or arising and wheresoever located. Each Borrower shall
xxxx its books and records as may be necessary or appropriate to evidence,
protect and perfect Agent's security interest and shall cause its financial
statements to reflect such security interest. Each Borrower shall promptly
provide Agent with written notice of all commercial tort claims for which the
amount of damages sought exceeds Five Hundred Thousand and 00/100 Dollars
($500,000.00), such notice to contain the case title together with the
applicable court and a brief description of the claim(s). Upon delivery of each
such notice, such Borrower shall be deemed to hereby grant to Agent a security
interest and lien in and to such commercial tort claims and all proceeds
thereof.
4.2 Perfection of Security Interest.
Each Borrower shall take all action that may be necessary or
desirable, or that Agent may request, so as at all times to maintain the
validity, perfection, enforceability and priority of Agent's security interest
in the Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii) using commercially
reasonable efforts to obtain applicable Waivers, as Agent may reasonably
request, (iii) delivering to Agent, endorsed or accompanied by such instruments
of assignment as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all chattel paper, instruments, letters of credits
and advices thereof and documents evidencing or forming a part of the
Collateral, (iv) entering into warehousing, lockbox and other custodial
arrangements satisfactory to Agent as and to the extent required hereunder, and
(v) executing and delivering control agreements, instruments of pledge, notices
and assignments, in each case in form and substance satisfactory to Agent,
relating to the creation, validity, perfection, maintenance or continuation of
Agent's security interest in Collateral under the Uniform Commercial Code or
other applicable law. Agent is hereby authorized to file financing statements in
accordance with the Uniform Commercial Code as adopted in the Commonwealth of
Pennsylvania from time to time. By its signature hereto, each Borrower hereby
authorizes Agent to file against such Borrower, one or more financing,
continuation, or amendment statements pursuant to the Uniform Commercial Code to
perfect Liens securing Obligations arising hereunder in form and substance
satisfactory to Agent. All reasonable charges, expenses and fees Agent may incur
in doing any of the foregoing, and any local taxes relating thereto, shall be
charged to Borrowers' Account as a Revolving Advance of a Domestic Rate Loan and
added to the Obligations, or, at Agent's option, shall be paid to Agent for the
ratable benefit of Lenders immediately upon demand.
39
4.3 Disposition of Collateral.
Each Borrower will safeguard and protect all Collateral for
Agent's general account and make no disposition thereof whether by sale, lease
or otherwise except as otherwise permitted under this Agreement.
4.4 Preservation of Collateral.
Following the occurrence and during the continuation of a
Default or Event of Default in addition to the rights and remedies set forth in
Section 11.1 hereof, Agent: (a) may at any time take such steps as Agent deems
necessary to protect Agent's interest in and to preserve the Collateral,
including the hiring of such security guards or the placing of other security
protection measures as Agent may deem appropriate; (b) may employ and maintain
at any of any Borrower's premises a custodian who shall have full authority to
do all acts necessary to protect Agent's interests in the Collateral; (c) may
lease warehouse facilities to which Agent may move all or part of the
Collateral; (d) may use any Borrower's owned or leased lifts, hoists, trucks and
other facilities or equipment for handling or removing the Collateral; and (e)
shall have, and is hereby granted, a right of ingress and egress to the places
where the Collateral is located, and may proceed over and through any of any
Borrower's owned or leased property. Each Borrower shall cooperate fully with
all of Agent's efforts to preserve the Collateral as permitted in the foregoing
sentence and will take such actions to preserve the Collateral as Agent may
direct. All of Agent's expenses of preserving the Collateral in accordance with
the foregoing, including any expenses relating to the bonding of a custodian,
shall be charged to Borrowers' Account as a Revolving Advance of a Domestic Rate
Loan and added to the Obligations.
4.5 Ownership of Collateral.
With respect to the Collateral, at the time the Collateral
becomes subject to Agent's security interest: (a) each Borrower shall be the
sole owner of and fully authorized and able to sell, transfer, pledge and/or
grant a first priority security interest in each and every item of its
respective Collateral to Agent; and, except for Permitted Encumbrances, the
Collateral shall be free and clear of all Liens and encumbrances whatsoever; (b)
each document and agreement executed by each Borrower or delivered to Agent or
any Lender in connection with this Agreement shall be true and correct in all
material respects; (c) all signatures and endorsements of each Borrower that
appear on such documents and agreements shall be genuine and each Borrower shall
have full capacity to execute same; and (d) each Borrower's Inventory shall be
located as set forth on Schedule 4.5 (as such Schedule may be updated from time
to time) and shall not be removed from such location(s) without the prior
written consent of Agent except with respect to the sale of Inventory in the
ordinary course of business and with respect to Inventory in transit from one
location identified on Schedule 4.5 (as such Schedule may be updated from time
to time) to another location identified on Schedule 4.5.
4.6 Defense of Agent's and Lenders' Interests.
Until (a) payment and performance in full of all of the
Obligations and (b) termination of this Agreement, Agent's interests in the
Collateral shall continue in full force and effect. During such period no
Borrower shall, without Agent's prior written consent, pledge, sell
40
(except Inventory in the ordinary course of business), assign, transfer, create
or suffer to exist a Lien upon or encumber or allow or suffer to be encumbered
in any way except for Permitted Encumbrances, and except for sales, assignments,
and transfers expressly permitted elsewhere herein, any part of the Collateral.
Each Borrower shall defend Agent's interests in the Collateral against any and
all Persons whatsoever. At any time after an Event of Default or Default has
occurred and is continuing and after demand by Agent for payment of all
Obligations, Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained, including
without limitation: labels, stationery, documents, instruments and advertising
materials. If Agent exercises such right to take possession of the Collateral,
the Borrowers shall, upon demand, assemble it in the best manner possible and
make it available to Agent at a place reasonably convenient to Agent. In
addition, with respect to all Collateral, Agent and Lenders shall be entitled to
all of the rights and remedies set forth herein and further provided by the
Uniform Commercial Code or other applicable law. After the occurrence and during
the continuance of a Default or an Event of Default, each Borrower shall, and
Agent may, at its option, instruct all suppliers, carriers, forwarders,
warehousers or others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent holds a security interest to deliver same to Agent
and/or subject to Agent's order and if they shall come into any Borrower's
possession, they, and each of them, shall be held by such Borrower in trust as
Agent's trustee, and such Borrower will immediately deliver them to Agent in
their original form together with any necessary endorsement.
4.7 Books and Records.
Each Borrower shall (a) keep proper books of record and
account in which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and
claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in all material
respects in accordance with, or as required by, GAAP consistently applied in the
opinion of such independent public accountant as shall then be regularly engaged
by the Borrowers.
4.8 Financial Disclosure.
Upon the Borrowers prior consent if no Default or Event of
Default has occurred and is continuing, which consent shall not be unreasonably
withheld, delayed or conditioned, and at any time after the occurrence and
during the continuance of a Default or Event of Default, each Borrower hereby
irrevocably authorizes and directs all accountants and auditors employed by such
Borrower at any time during the Term and promptly after the request of the Agent
to exhibit and deliver to Agent and each Lender copies of any Borrower's
financial statements (if any exist at or prior to the date of such request),
trial balances or other accounting records of any sort in the accountant's or
auditor's possession, and to disclose to Agent and each Lender any information
such accountants may have concerning such Borrower's financial status and
business operations. In accordance with and subject to the foregoing, each
Borrower hereby authorizes all
41
federal, state and municipal authorities to furnish to Agent and each Lender
copies of reports or examinations relating to such Borrower, whether made by
such Borrower or otherwise; however, Agent and each Lender will attempt to
obtain such information or materials directly from such Borrower prior to
obtaining such information or materials from such accountants or such
authorities.
4.9 Compliance with Laws.
Each Borrower shall comply with all laws, acts, rules,
regulations and orders of any Governmental Body with jurisdiction over it or its
respective Collateral or any part thereof or to the operation of such Borrower's
business the non-compliance with which could reasonably be expected to have a
Material Adverse Effect. Each Borrower may, however, contest or dispute any
acts, rules, regulations, orders and directions of those bodies or officials in
any reasonable manner, provided that any related Lien is inchoate or stayed and
sufficient reserves are established to the reasonable satisfaction of Agent to
protect Agent's Lien on or security interest in the Collateral. The Collateral
at all times shall be maintained in accordance with the material requirements of
all insurance carriers which provide insurance with respect to the Collateral so
that such insurance shall remain in full force and effect.
4.10 Inspection of Premises.
At all reasonable times (at least once per year and such
additional times as the Agent deems necessary), Agent shall have full access to
and the right to audit, check, inspect and make abstracts and copies from each
Borrower's books, records, audits, correspondence and all other papers relating
to the Collateral and the operation of each Borrower's business. Agent and its
agents may, after one day's prior notice, enter upon any of each Borrower's
premises at any time during business hours and at any other reasonable time, and
from time to time (at least once per year and such additional times as the Agent
deems necessary), for the purpose of inspecting and appraising the Collateral
and any and all records pertaining thereto and the operation of such Borrower's
business. The Agent shall conduct an Inventory appraisal at least once per year
and at such additional times as the Agent deems necessary. In addition to the
foregoing, the Lenders shall have the right to accompany the Agent with respect
to the audits, inspections and appraisals conducted by the Agent under this
Section 4.10 provided that all such audits, inspections and appraisals conducted
by the Lenders shall be at their sole cost and expense. Notwithstanding anything
contained herein to the contrary, upon the occurrence and during the continuance
of a Default or an Event of Default, such audits, inspections and appraisals may
be conducted at any time and from time to time and neither the Agent nor the
Lenders shall be required to provide advance notice to the Borrowers with
respect to conducting such audits, inspections and appraisals.
4.11 Insurance.
Each Borrower shall bear the full risk of any loss of any
nature whatsoever with respect to the Collateral. At each Borrower's own cost
and expense in amounts and with carriers acceptable to Agent, each Borrower
shall (a) keep all its insurable properties and properties in which each
Borrower has an interest insured against the hazards of fire, flood, sprinkler
leakage, those hazards covered by extended coverage insurance and such other
hazards, and for such
42
amounts, as is customary in the case of companies engaged in businesses similar
to such Borrower's including, without limitation, business interruption
insurance; (b) maintain a bond in such amounts as is customary in the case of
companies engaged in businesses similar to such Borrower insuring against
larceny, embezzlement or other criminal misappropriation of insured's officers
and employees who may either singly or jointly with others at any time have
access to the assets or funds of such Borrower either directly or through
authority to draw upon such funds or to direct generally the disposition of such
assets; (c) maintain public and product liability insurance against claims for
personal injury, death or property damage suffered by others; (d) maintain all
such worker's compensation or similar insurance as may be required under the
laws of any state or jurisdiction in which such Borrower is engaged in business;
(e) furnish Agent with (i) a status report with respect to the renewal of all
such insurance no later than ten (10) days before the expiration date thereof,
(ii) evidence of the maintenance of all such insurance by the renewal thereof no
later than the expiration date thereof, and (iii) appropriate loss payable
endorsements in form and substance satisfactory to Agent, naming Agent as a
co-insured and loss payee as its interests may appear but only with respect to
all insurance coverage covering damage, loss or destruction of Collateral, and
providing (A) that all proceeds thereunder covering a loss of or damage to
Collateral shall be payable to Agent, (B) no such insurance shall be affected by
any act or neglect of the insured or owner of the property described in such
policy, and (C) that such policy and loss payable clauses may not be cancelled,
amended or terminated unless at least thirty (30) days' prior written notice is
given to Agent. The Borrowers shall provide copies of all such insurance
policies (including the appropriate lender loss payee and additional insured
endorsements) within thirty (30) days after Agent's request, however, only
certificates of such insurance shall be required at Closing. In the event of any
loss under any insurance covering Collateral, the carriers named in such
insurance policies covering Collateral hereby are directed by Agent and the
applicable Borrower to make payment for such loss to Agent and not to such
Borrower and Agent jointly. If any insurance losses with respect to Collateral
are paid by check, draft or other instrument payable to any Borrower and Agent
jointly, Agent may endorse such Borrower's name thereon and do such other things
as Agent may deem advisable to reduce the same to cash. Agent is hereby
authorized to adjust and compromise claims under insurance coverage with respect
to Collateral. All loss recoveries with respect to Collateral received by Agent
upon any such insurance may be applied to the Obligations, in such order as
Agent in its sole discretion shall determine. Any surplus with respect to
Collateral shall be paid by Agent to the Borrowers or applied as may be
otherwise required by law. Any deficiency thereon shall be paid by Borrowers to
Agent, on demand. Any loss recoveries not relating to items of Collateral shall
be payable directly to Borrowers and, if received by Agent, Agent shall promptly
deliver same to Borrowers. Anything hereinabove to the contrary notwithstanding,
and subject to the fulfillment of the conditions set forth below, (i) Agent
shall remit to Borrowers insurance proceeds with respect to Collateral received
by Agent during any calendar year under insurance policies procured and
maintained by Borrowers which insure Borrowers' insurable Collateral to the
extent such insurance proceeds do not exceed Five Million and 00/100 Dollars
($5,000,000.00) in the aggregate during such calendar year or Two Million and
00/100 Dollars ($2,000,000.00) per occurrence and (ii) all proceeds of business
interruption insurance, and all proceeds of insurance with respect to larceny,
embezzlement or other criminal misappropriation, regardless of amount, shall be
payable directly and promptly to the applicable Borrower. In the event the
amount of insurance proceeds with respect to Collateral received by Agent for
any occurrence exceeds Two Million and 00/100 Dollars
43
($2,000,000.00), then Agent shall not be obligated to remit the insurance
proceeds to Borrowers unless Borrowers shall provide Agent with evidence
reasonably satisfactory to Agent that the insurance proceeds will be used by
Borrowers to repair, replace or restore the insured Collateral which was the
subject of the insurable loss. In the event the Borrowers have previously
received (or, after giving effect to any proposed remittance by Agent to the
Borrowers would receive) insurance proceeds with respect to Collateral which
equal or exceed Five Million and 00/100 Dollars ($5,000,000.00) in the aggregate
during any calendar year, then Agent may, in its sole discretion, either remit
the insurance proceeds to the Borrowers upon the Borrowers providing Agent with
evidence reasonably satisfactory to Agent that the insurance proceeds will be
used by the Borrowers to repair, replace, restore or reuse the insured
Collateral which was the subject of the insurable loss, or apply the proceeds to
the Obligations, as aforesaid. The agreement of Agent to remit insurance
proceeds in the manner above provided shall be subject in each instance to
satisfaction of each of the following conditions: (x) No Event of Default or
Default shall then have occurred and be continuing, and (y) the Borrowers shall
use the insurance proceeds with respect to Collateral to repair, replace,
restore or reuse the insured Collateral which was the subject of the insurable
loss and for no other purpose.
4.12 Failure to Pay Insurance.
If any Borrower fails to obtain insurance as hereinabove
provided, or to keep the same in force, Agent, if Agent so elects, may obtain
such insurance and pay the premium therefor on behalf of such Borrower, and
charge Borrowers' Account therefor as a Revolving Advance of a Domestic Rate
Loan and such expenses so paid shall be part of the Obligations.
4.13 Payment of Taxes.
Each Borrower will pay, when due, all taxes, assessments and
other Charges lawfully levied or assessed upon such Borrower or any of the
Collateral including, without limitation, real and personal property taxes,
assessments and charges and all franchise, income, employment, social security
benefits, withholding, and sales taxes, except those taxes, assessments or
Charges to the extent that any Borrower has contested or disputed those taxes,
assessments or Charges in good faith, by expeditious protest, administrative or
judicial appeal or similar proceeding provided that any related tax Lien is
stayed and sufficient reserves are established to the reasonable satisfaction of
Agent to protect Agent's security interest in or Lien on the Collateral. If any
tax by any governmental authority is or may be imposed on or as a result of any
transaction between any Borrower and Agent or any Lender which Agent or any
Lender may be required to withhold or pay or if any taxes, assessments, or other
Charges remain unpaid after the date fixed for their payment, or if any claim
shall be made which, in Agent's opinion, may possibly create a valid Lien on the
Collateral, Agent may without notice to the Borrowers pay the taxes, assessments
or other Charges and each Borrower hereby indemnifies and holds Agent and each
Lender harmless in respect thereof. Agent will not pay any taxes, assessments or
Charges to the extent that any Borrower has contested or disputed those taxes,
assessments or Charges in good faith, by expeditious protest, administrative or
judicial appeal or similar proceeding provided that any related tax lien is
stayed and sufficient reserves are established to the reasonable satisfaction of
Agent to protect Agent's security interest in or Lien on the Collateral. The
amount of any payment by Agent under this Section 4.13 shall be charged to
Borrowers' Account as a Revolving Advance of a Domestic Rate Loan and added to
the
44
Obligations and, until the Borrowers shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Borrowers' credit and Agent shall retain its security
interest in any and all Collateral held by Agent.
4.14 Payment of Leasehold Obligations.
Each Borrower shall at all times pay, when and as due, its
rental obligations under all leases under which it is a tenant, and shall
otherwise comply, in all material respects, with all other terms of such leases
and keep them in full force and effect and, at Agent's reasonable request will
provide evidence of having done so, except to the extent that the aggregate
rental payments due or to become due under such lease are not in excess of One
Million and 00/100 Dollars ($1,000,000.00).
4.15 Receivables.
(a) Nature of Receivables. Each of the
Receivables shall be a bona fide and valid account representing a bona fide
indebtedness incurred by the Customer therein named, for a fixed sum as set
forth in the invoice relating thereto (provided immaterial or unintentional
invoice errors shall not be deemed to be a breach hereof) with respect to an
absolute sale or lease and delivery of goods upon stated terms of a Borrower, or
work, labor or services theretofore rendered by a Borrower as of the date each
Receivable is created. Same shall be due and owing without dispute, setoff or
counterclaim except as may be stated on the accounts receivable schedules
delivered by Borrowers to Agent.
(b) Solvency of Customers. Each Customer, to the
Borrowers' knowledge, as of the date each Receivable is created, is and will be
solvent and able to pay all Receivables on which the Customer is obligated in
full when due or with respect to such Customers of any Borrower who are not
solvent such Borrower has set up on its books and in its financial records bad
debt reserves adequate to cover the uncollectible portion.
(c) Locations of Borrowers. Each Borrower's
chief executive office is located at the addresses set forth on Schedule 4.15(c)
hereto. Until written notice is given to Agent by Borrowing Agent of any other
office at which any Borrower keeps its records pertaining to Receivables, all
such records shall be kept at such executive office or at IMCO's chief executive
office.
(d) Collection of Receivables. Until any
Borrower's authority to do so is terminated by Agent in accordance with the
terms of this Agreement (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default), each Borrower will, at such
Borrower's cost and expense, but on Agent's behalf and for Agent's account,
collect as Agent's property and in trust for Agent all amounts due on
Receivables, and shall not commingle such collections with any Borrower's funds
or use the same except to pay Obligations. Each Borrower shall deliver to Agent,
or deposit in the Blocked Account, in original form and on the date of receipt
thereof, all checks, drafts, notes, money orders, acceptances, cash and other
evidences of Indebtedness.
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(e) Notification of Assignment of Receivables.
At any time following the occurrence and during the continuance of an Event of
Default or a Default, Agent shall have the right to send notice of the
assignment of, and Agent's security interest in, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral. Thereafter, Agent shall have the sole right to collect the
Receivables, take possession of the Collateral, or both. Agent's actual
collection expenses, including, but not limited to, stationery and postage,
telephone and telegraph, secretarial and clerical expenses and the salaries of
any collection personnel used for collection, may be charged to Borrowers'
Account and added to the Obligations.
(f) Power of Agent to Act on Borrowers' Behalf.
Agent shall have the right, at any time after the occurrence and during the
continuance of a Default or an Event of Default, to receive, endorse, assign
and/or deliver in the name of Agent or any Borrower any and all checks, drafts
and other instruments for the payment of money relating to the Receivables, and
each Borrower hereby waives notice of presentment, protest and non-payment of
any instrument so endorsed. Each Borrower hereby constitutes Agent or Agent's
designee as such Borrower's attorney with power at any time after the occurrence
and during the continuance of an Event of Default or Default (i) to endorse such
Borrower's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment or Collateral; (ii) to sign such Borrower's name on
any invoice or xxxx of lading relating to any of the Receivables, drafts against
Customers, assignments and verifications of Receivables; (iii) to send
verifications of Receivables to any Customer; (iv) to demand payment of the
Receivables; (v) to enforce payment of the Receivables by legal proceedings or
otherwise; (vi) to exercise all of Borrowers' rights and remedies with respect
to the collection of the Receivables and any other Collateral; (vii) to settle,
adjust, compromise, extend or renew the Receivables; (viii) to settle, adjust or
compromise any legal proceedings brought to collect Receivables; (ix) to
prepare, file and sign such Borrower's name on a proof of claim in bankruptcy or
similar document against any Customer; (x) to prepare, file and sign such
Borrower's name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables; and (xi) to do all other
acts and things necessary to carry out this Agreement. All acts of said attorney
or designee are hereby ratified and approved, and said attorney or designee
shall not be liable for any acts of omission or commission nor for any error of
judgment or mistake of fact or of law, unless done with gross (not mere)
negligence or willful misconduct; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. Agent shall have the
right at any time following the occurrence of an Event of Default or Default
which is continuing, to change the address for delivery of mail addressed to any
Borrower to such address as Agent may designate and to receive, open and dispose
of all mail addressed to any Borrower.
(g) No Liability. Neither Agent nor any Lender
shall, under any circumstances or in any event whatsoever, have any liability
for any error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Receivables or any instrument received in
payment thereof, or for any damage resulting therefrom unless such liability
arises from Agent's or any Lender's willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction. Following the
occurrence of an Event of Default or Default which is continuing, Agent may,
without notice or consent from any Borrower, xxx upon or otherwise collect,
extend the time of payment of, compromise or settle for cash, credit or upon any
terms any of the Receivables or any other securities, instruments or
46
insurance applicable thereto and/or release any obligor thereof. Agent is
authorized and empowered to accept following the occurrence and during the
continuance of an Event of Default or Default the return of the goods
represented by any of the Receivables, without notice to or consent by any
Borrower, all without discharging or in any way affecting any Borrower's
liability hereunder.
(h) Establishment of a Lockbox Account, Dominion
Account. All proceeds of Collateral of the Borrowers shall be deposited by
Borrowers into a lockbox account, dominion account or such other "blocked
account" ("Blocked Accounts") as Agent may require pursuant to a Blocked Account
Agreement. Borrowers shall issue to any such bank, an irrevocable letter of
instruction directing said bank to transfer such funds so deposited to Agent,
either to any account maintained by Agent at said bank or by wire transfer to
appropriate account(s) of Agent. All funds deposited in such Blocked Account
shall immediately become the property of Agent and Borrowers shall obtain the
agreement by such bank to waive any offset rights against the funds so
deposited. Neither Agent nor any Lender assumes any responsibility for such
blocked account arrangement, including without limitation, any claim of accord
and satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may establish depository accounts ("Depository
Accounts") in the name of Agent at a bank or banks for the deposit of such funds
and Borrowers shall deposit all proceeds of Collateral or cause same to be
deposited, in kind, in such Depository Accounts of Agent in lieu of depositing
same to the Blocked Accounts.
(i) Adjustments. No Borrower will, without
Agent's consent, compromise or adjust any Receivables (or extend the time for
payment thereof) or accept any returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances as have been heretofore
(A) customary in the business or industry of such Borrower, and (B) done in the
ordinary course of such Borrower's business.
4.16 Maintenance of Equipment.
The Equipment shall be maintained in good operating condition
and repair in substantial accordance with industry standards (reasonable wear
and tear excepted) and all necessary replacements of and repairs thereto shall
be made so that the value and operating efficiency of the Equipment shall be
maintained and reserved. No Borrower shall use or operate the Equipment in
violation of any law, statute, ordinance, code, rule or regulation except to the
extent that such violation would not have a Material Adverse Effect.
4.17 Exculpation of Liability.
Nothing herein contained shall be construed to constitute
Agent or any Lender as any Borrower's agent for any purpose whatsoever, nor
shall Agent or any Lender be responsible or liable for any shortage,
discrepancy, damage, loss or destruction of any part of the Collateral wherever
the same may be located and regardless of the cause thereof. Neither Agent nor
any Lender, whether by anything herein or in any assignment or otherwise, assume
any of any Borrower's obligations under any contract or agreement assigned to
Agent or such Lender, and
47
neither Agent nor any Lender shall be responsible in any way for the performance
by any Borrower of any of the terms and conditions thereof.
4.18 Environmental Matters.
(a) The Borrowers shall ensure that the Real
Property remains in compliance with all Environmental Laws except to the extent
that such failure to comply would not reasonably be expected to have a Material
Adverse Effect, and they shall not place or permit to be placed any Hazardous
Substances on any Real Property except as permitted by applicable law or
appropriate governmental authorities.
(b) The Borrowers shall monitor continued
compliance with all applicable Environmental Laws with respect to their
operations except to the extent that such failure to comply would not reasonably
be expected to have a Material Adverse Effect.
(c) The Borrowers shall (i) employ in connection
with the use of the Real Property appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any and
all Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws. The Borrowers shall use their best efforts to obtain
certificates of disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators employed by
the Borrowers in connection with the transport or disposal of any Hazardous
Waste generated at the Real Property.
(d) In the event any Borrower obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity of
any Hazardous Substances at the Real Property (any such event being hereinafter
referred to as a "Hazardous Discharge") or receives any notice of violation,
request for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property,
demand letter or complaint, order, citation, or other written notice with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or any Borrower's interest therein (any of the foregoing is referred to
herein as an "Environmental Complaint") from any Person, including any state
agency responsible in whole or in part for environmental matters in the state in
which the Real Property is located or the United States Environmental Protection
Agency (any such person or entity hereinafter the "Authority"), in each case
dealing with matters which would reasonably be expected to have a Material
Adverse Effect, then Borrowing Agent shall, within five (5) Business Days, give
written notice of same to Agent detailing facts and circumstances of which any
Borrower is aware giving rise to the Hazardous Discharge or Environmental
Complaint. Such information is to be provided to allow Agent to protect its
security interest in the Real Property and the Collateral and is not intended to
create nor shall it create any obligation upon Agent or any Lender with respect
thereto.
(e) The Borrowers shall promptly forward to
Agent copies of any request for information, notification of potential
liability, demand letter relating to potential responsibility with respect to
the investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by any Borrower to dispose of Hazardous Substances and shall
continue to forward copies of correspondence between any Borrower and the
Authority
48
regarding such claims to Agent until the claim is settled, in each case dealing
with matters which would reasonably be expected to have a Material Adverse
Effect. The Borrowers shall promptly forward to Agent copies of all documents
and reports concerning a Hazardous Discharge at the Real Property that any
Borrower is required to file under any Environmental Laws. Such information is
to be provided solely to allow Agent to protect Agent's security interest in the
Real Property and the Collateral.
(f) The Borrowers shall respond promptly to any
Hazardous Discharge or Environmental Complaint and take all necessary action in
order to safeguard the health of any Person and to avoid subjecting the
Collateral or Real Property to any Lien. If any Borrower shall fail to respond
promptly to any Hazardous Discharge or Environmental Complaint or any Borrower
shall fail to comply with any of the requirements of any Environmental Laws,
Agent shall notify such Borrower of such failure to respond or comply and if
such Borrower does not respond or comply in a manner reasonably acceptable to
the Agent, the Agent, on behalf of Lenders, may, but without the obligation to
do so, for the sole purpose of protecting Agent's interest in Collateral: (A)
give such notices or (B) enter onto the Real Property (or authorize third
parties to enter onto the Real Property) and take such actions as Agent (or such
third parties as directed by Agent) deem reasonably necessary or advisable, to
clean up, remove, mitigate or otherwise deal with any such Hazardous Discharge
or Environmental Complaint. All reasonable costs and expenses incurred by Agent
and Lenders (or such third parties) in the exercise of any such rights,
including any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with interest
thereon from the date expended at the Default Rate for Domestic Rate Loans
constituting Revolving Advances shall be paid upon demand by Borrowers, and
until paid shall be added to and become a part of the Obligations secured by the
Liens created by the terms of this Agreement or any other agreement between
Agent, any Lender and any Borrower.
(g) Promptly upon the written request of Agent
from time to time, the Borrowers shall provide Agent, at Borrowers' expense,
with an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable in the reasonable opinion of Agent,
to assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances found on, under, at or within the Real
Property; provided, however, so long as no Default or Event of Default has
occurred and is continuing, the Agent may not request such environmental site
assessment or environmental audit report more than one (1) time per calendar
year. Any report or investigation of such Hazardous Discharge proposed and
acceptable to an appropriate Authority that is charged to oversee the clean-up
of such Hazardous Discharge shall be acceptable to Agent. If such estimates to
remove or remediate such Hazardous Discharge, individually or in the aggregate,
exceed Five Million and 00/100 Dollars ($5,000,000.00), Agent shall have the
right to require the Borrowers to post a bond, letter of credit or other
security reasonably satisfactory to Agent to secure payment of these costs and
expenses.
(h) The Borrowers shall defend and indemnify
Agent and Lenders and hold Agent, Lenders and their respective employees,
agents, directors and officers harmless from and against all loss, liability,
damage and expense, claims, costs, fines and penalties, including attorney's
fees, suffered or incurred by Agent or Lenders under or on account of any
49
Environmental Laws, including, without limitation, the assertion of any Lien
thereunder, with respect to any Hazardous Discharge, the presence of any
Hazardous Substances affecting the Real Property, whether or not the same
originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable to
any Hazardous Discharge resulting from actions on the part of Agent or any
Lender. The Borrowers' obligations under this Section 4.18 shall arise upon the
discovery of the presence of any Hazardous Substances at the Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substances. The Borrowers' obligation and the indemnifications hereunder shall
survive the termination of this Agreement.
4.19 Financing Statements.
Except as respects (i) the financing statements filed by
Agent, (ii) the financing statements described on Schedule 1.2, and (iii) those
financing statements permitted to be filed hereunder, no financing statement
covering any of the Collateral or any proceeds thereof is on file in any public
office.
V. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants as follows:
5.1 Authority.
Each Borrower has full power, authority and legal right to
enter into this Agreement and the Other Documents to which it is a party and to
perform all its respective Obligations hereunder and thereunder, as the case may
be. This Agreement and the Other Documents to which it is a party constitute the
legal, valid and binding obligation of each Borrower, enforceable in accordance
with their terms, except as such enforceability may be limited by (a) any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (b) general principles of equity. The
execution, delivery and performance of this Agreement and of the Other Documents
by each Borrower a party hereto or thereto (a) are within such Borrower's
corporate, partnership or limited liability company powers, as the case may be,
have been duly authorized, are not in contravention of law or the terms of such
Borrower's by-laws, certificate of incorporation, limited partnership agreement,
certificate of limited partnership, operating agreement or certificate of
formation or other applicable documents relating to such Borrower's formation or
to the conduct of such Borrower's business or of any material agreement or
undertaking to which such Borrower is a party or by which such Borrower is
bound, and (b) will not conflict with nor result in any breach in any of the
provisions of or constitute a default under or result in the creation of any
Lien except Permitted Encumbrances upon any Collateral of such Borrower under
the provisions of any agreement, charter document, instrument, by-law, or other
instrument to which such Borrower is a party or by which it or its property may
be bound.
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5.2 Formation and Qualification.
(a) Each Borrower is duly incorporated or
organized, as the case may be, and in good standing under the laws of the state
listed on Schedule 5.2(a) and is qualified to do business and is in good
standing in the states listed on Schedule 5.2(a) which constitute all states in
which qualification and good standing are necessary for such Borrower to conduct
its business and own its property and where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect. Each Borrower has
delivered to Agent true and complete copies of its certificate of incorporation
and by-laws, certificate of formation and operating agreement, limited
partnership agreement and certificate of limited partnership or other
organizational documents, as the case may be, and will promptly notify Agent of
any amendment or changes thereto.
(b) The only Subsidiaries of each Borrower are
listed on Schedule 5.2(b).
5.3 Survival of Representations and Warranties.
All representations and warranties of such Borrower contained
in this Agreement and the Other Documents, as the case may be, shall be true at
the time of such Borrower's execution of this Agreement and the Other Documents,
as the case may be, except to the extent such representations and warranties
relate to an earlier date in which case they shall be true as of such earlier
date, and shall survive the execution, delivery and acceptance thereof by the
parties thereto and the closing of the transactions described therein or related
thereto.
5.4 Tax Returns.
Each Borrower's federal tax identification number is set forth
on Schedule 5.4. Except as set forth on Schedule 5.4, each Borrower has filed
all United States federal, state and local tax returns and other reports each is
required by law to file and has paid all taxes, assessments, fees and other
governmental charges that are due and payable, except those taxes, assessments,
fees and other governmental charges to the extent any Borrower has contested or
disputed those taxes, assessments, fees or governmental charges in good faith,
by expeditious protest, administrative or judicial appeal or similar proceeding
provided that any related tax Lien is stayed and sufficient reserves have been
established to the reasonable satisfaction of Agent to protect Agent's security
interest in or Lien on the Collateral. Except as set forth on Schedule 5.4, all
applicable income tax returns of each Borrower have been examined and reported
upon by the appropriate taxing authority or closed by applicable statute and
satisfied for all fiscal years prior to and including the fiscal year ending
December 31, 1999. The provision for taxes on the books of each Borrower is
adequate for all years not closed by applicable statutes, and for its current
fiscal year, and no Borrower has any knowledge of any deficiency or additional
assessment in connection therewith not provided for on its books.
5.5 Financial Statements.
(a) The twelve-month cash flow projections of
IMCO and its Subsidiaries on a consolidated basis, copies of which are annexed
hereto as Exhibit 5.5(a) (the "Projections") were prepared by an Officer of
IMCO, are based on underlying assumptions and
51
estimates which provide a reasonable basis for the projections contained therein
and reflect IMCO's judgment based on present circumstances of the most likely
set of conditions and course of action for the projected period.
(b) The consolidated balance sheets of IMCO and
its Subsidiaries and such other Persons described therein as of December 31,
2002, and the related statements of income, changes in stockholder's equity, and
changes in cash flow for the period ended on such date, all accompanied by
reports thereon containing opinions without qualification by independent
certified public accountants, copies of which have been delivered to Agent, have
been prepared in accordance with GAAP, consistently applied (except for changes
in application in which such accountants concur) and present fairly in all
material respects the financial condition of IMCO and its Subsidiaries at such
date and the results of their operations for such period. Since June 30, 2003,
there has been no change in the financial condition of IMCO and its Subsidiaries
taken as a whole as shown on the consolidated balance sheet as of such date and
no change in the aggregate value of machinery, Equipment and Real Property owned
by Borrowers and their respective Subsidiaries, except changes in the ordinary
course of business or changes that would result from audit and normal year-end
adjustments, none of which individually or in the aggregate has had, or
reasonably could be believed to cause in the future, a Material Adverse Effect.
5.6 Corporate Name.
Except as set forth on Schedule 5.6, no Borrower has been
known by any other corporate name in the past five years and does not sell
Inventory under any other name, nor has any Borrower been the surviving
corporation of a merger or consolidation or acquired all or substantially all of
the assets of any Person, other than another Borrower, during the preceding five
(5) years.
5.7 O.S.H.A. and Environmental Compliance.
(a) Except as set forth on Schedule 5.7, each
Borrower has duly complied with, and its facilities, business, assets, property,
leaseholds and Equipment are in compliance in all material respects with, the
provisions of the Federal Occupational Safety and Health Act, the Environmental
Protection Act, RCRA and all other Environmental Laws except to the extent such
failure to comply would not reasonably be expected to have a Material Adverse
Effect; there have been no outstanding citations, notices or orders of
non-compliance issued to any Borrower or relating to its business, assets,
property, leaseholds or Equipment under any such laws, rules or regulations
except to the extent that such non-compliance would not reasonably be expected
to have a Material Adverse Effect.
(b) Each Borrower has been issued all required
federal, state and local licenses, certificates or permits relating to all
applicable Environmental Laws except to the extent the failure to obtain such
licenses, certificates or permits would not reasonably be expected to have a
Material Adverse Effect.
(c) (i) There are no visible signs of releases,
spills, discharges, leaks or disposal (collectively referred to as "Releases")
of Hazardous Substances at, upon, under or
52
within any Real Property or any premises leased by any Borrower; (ii) there are
no underground storage tanks or polychlorinated biphenyls on the Real Property
or any premises leased by any Borrower; (iii) neither the Real Property nor any
premises leased by any Borrower has ever been used as a treatment, storage or
disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are
present on the Real Property or any premises leased by any Borrower except as
permitted by applicable law or the appropriate Governmental Body.
5.8 Solvency; No Litigation, Violation, Indebtedness or Default.
(a) After giving effect to the transactions
contemplated by this Agreement, the Borrowers will be solvent, able to pay their
debts as they mature, have capital sufficient to carry on their business and all
businesses in which they are about to engage, and (i) as of the Closing Date,
the fair present saleable value of their assets, calculated on a going concern
basis, is in excess of the amount of their liabilities and (ii) subsequent to
the Closing Date, the fair saleable value of their assets (calculated on a going
concern basis) will be in excess of the amount of their liabilities.
(b) Except as disclosed in Schedule 5.8(b), no
Borrower has (i) any pending or threatened litigation, arbitration, actions or
proceedings which could reasonably be expected to have a Material Adverse
Effect, and (ii) any liabilities or Indebtedness for Borrowed Money other than
the Obligations.
(c) No Borrower is in violation of any
applicable statute, regulation, ordinance, or order of any court, governmental
authority or arbitration board or tribunal in any respect which could reasonably
be expected to have a Material Adverse Effect.
(d) No Borrower nor any member of the Controlled
Group maintains or contributes to any Plan other than those listed on Schedule
5.8(d) hereto. Except as set forth in Schedule 5.8(d), (i) no Plan has incurred
any "accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA
and Section 412(a) of the Code, whether or not waived, and each Borrower and
each member of the Controlled Group has met all applicable minimum funding
requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan
which is intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, (iii) no
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Borrower nor any member of the Controlled Group
knows of any facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities and could reasonably be
expected to have a Material Adverse Effect, (vi) no Borrower nor any member of
the Controlled Group has breached any of the responsibilities, obligations or
duties imposed on it by ERISA with respect to any Plan, which could reasonably
be expected to have a Material Adverse Effect, (vii) no Borrower nor any member
of a Controlled Group has incurred
53
any liability for any excise tax arising under Section 4972 or 4980B of the
Code, and no fact exists which could give rise to any such liability, (viii) no
Borrower nor any member of the Controlled Group nor any fiduciary of, nor any
trustee to, any Plan, has engaged in a "prohibited transaction" described in
Section 406 of ERISA or Section 4975 of the Code nor taken any action which
would constitute or result in a Termination Event with respect to any such Plan
which is subject to ERISA, (ix) each Borrower and each member of the Controlled
Group has made all contributions due and payable with respect to each Plan, (x)
there exists no event described in Section 4043(b) of ERISA, for which the
thirty (30) day notice period contained in 29 CFR Section 2615.3 has not been
waived, (xi) no Borrower nor any member of the Controlled Group has any
fiduciary responsibility for investments with respect to any plan existing for
the benefit of persons other than employees or former employees of any Borrower
and any member of the Controlled Group, and (xii) no Borrower nor any member of
the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980.
5.9 Patents, Trademarks, Copyrights and Licenses.
All patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, copyrights, copyright
applications, design rights, tradenames, assumed names and licenses owned or
utilized by any Borrower are set forth on Schedule 5.9, are valid and have been
duly registered or filed with all appropriate governmental authorities and
constitute all of the patents, trademarks, service marks, copyrights, design
rights, tradenames, assumed names and licenses which are necessary for the
operation of its business; there is no objection to or pending challenge to the
validity of any such patent, trademark, copyright, design right, tradename or
license and no Borrower is aware of any grounds for any challenge, except as set
forth in Schedule 5.9 hereto. Each patent, patent application, patent license,
trademark, trademark application, trademark license, service xxxx, service xxxx
application, service xxxx license, design right, copyright, copyright
application and copyright license owned or held by any Borrower consist of
original material or property developed by such Borrower or was lawfully
acquired by such Borrower from the proper and lawful owner thereof. Each of such
items has been maintained so as to preserve the value thereof from the date of
creation or acquisition thereof. With respect to all customized software
licensed by any Borrower, such Borrower is in possession of all source and
object codes related to each piece of software or is the beneficiary of a source
code escrow agreement, each such source code escrow agreement being listed on
Schedule 5.9 hereto.
5.10 Licenses and Permits.
Except as set forth in Schedule 5.10, each Borrower (a) is in
compliance with and (b) has procured and is now in possession of, all material
licenses or permits required by any applicable federal, state or local law or
regulation for the operation of its business in each jurisdiction wherein it is
now conducting or proposes to conduct business and where the failure to comply
with or procure such licenses or permits would reasonably be expected to have a
Material Adverse Effect.
54
5.11 Reserved.
5.12 No Default.
No Borrower is in default in the payment or performance of any
of its contractual obligations and no Default has occurred that could reasonably
be expected to have a Material Adverse Effect.
5.13 No Burdensome Restrictions.
No Borrower is party to any contract or agreement, the
performance of which could reasonably be expected to have a Material Adverse
Effect. No Borrower has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien which is not a
Permitted Encumbrance.
5.14 No Labor Disputes.
No Borrower is involved in any labor dispute which could
reasonably be expected to have a Material Adverse Effect; there are no strikes
or walkouts or union organization of any of Borrower's employees threatened or
in existence and no labor contract is scheduled to expire during the Term other
than as set forth on Schedule 5.14 hereto.
5.15 Margin Regulations.
No Borrower 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" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. No part of the proceeds of any Advance will be used for "purchasing"
or "carrying" "margin stock" as defined in Regulation U of such Board of
Governors.
5.16 Investment Company Act.
No Borrower is an "investment company" registered or required
to be registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
5.17 Disclosure.
No representation or warranty made by any Borrower in this
Agreement or in any financial statement, report, certificate or any other
document furnished in connection herewith contains any untrue statement of fact
or omits to state any fact necessary to make the statements herein or therein
not misleading in any material respect. There is no fact known to any Borrower
or which reasonably should be known to such Borrower which such Borrower has not
disclosed to Agent in writing with respect to the transactions contemplated by
this Agreement which could reasonably be expected to have a Material Adverse
Effect.
55
5.18 Delivery of Senior Secured Notes Documentation.
Agent has received complete copies of the Senior Secured Notes
Documentation and all amendments thereto, waivers relating thereto and other
side letters or agreements effecting the terms thereof. None of such documents
and agreements have been amended or supplemented, nor have any of the provisions
thereof been waived, except pursuant to a written agreement or instrument which
has heretofore been delivered to the Agent.
5.19 Hedging Contracts.
No Borrower is a party to, nor will it be a party to, any
Hedging Contract unless same provides that damages upon termination following an
event of default thereunder are payable (in cash or in kind) on a "two-way
basis" without regard to fault on the part of either party, although liability
for damages in connection with such fault is not precluded by the foregoing.
5.20 Conflicting Agreements.
No provision of any mortgage, indenture, contract, agreement,
judgment, decree or order binding on any Borrower or affecting the Collateral
conflicts with, or requires any Consent which has not already been obtained and
where a failure to obtain such Consent would in any way prevent the execution,
delivery or performance of, the terms of this Agreement or the Other Documents.
5.21 Application of Certain Laws and Regulations.
No Borrower nor any Affiliate of any Borrower is subject to
any statute, rule or regulation which regulates the incurrence of any
Indebtedness and would affect such Borrower's ability to perform its Obligations
hereunder, including without limitation, statutes or regulations relative to
common or interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.
5.22 Business and Property of Borrowers.
Upon and after the Closing Date, the Borrowers do not propose
to engage in any business other than as set forth on Schedule 5.22 hereto and
activities necessary to conduct the foregoing. On the Closing Date, each
Borrower will own all the property and possess all of the rights and Consents
necessary for the conduct of the business of such Borrower, except to the extent
that such failure to own property or to possess all rights and Consents could
not reasonably be expected to have a Material Adverse Effect.
5.23 Section 20 Subsidiaries.
Borrowers do not intend to use and shall not use any portion
of the proceeds of the Advances, directly or indirectly, to purchase during the
underwriting period, or for 30 days thereafter, Ineligible Securities being
underwritten by a Section 20 Subsidiary.
56
5.24 Anti-Terrorism Laws.
(a) None of the Borrowers nor any Affiliate of
any Borrower, is in violation in any material respect of any Anti-Terrorism Law
or engages in or conspires to engage in any material respect in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(b) None of the Borrowers, nor any Affiliate of
any Borrower, is any of the following (each a "Blocked Person"):
(i) a Person that is listed in the
annex to, or is otherwise subject to the provisions of, the Executive Order No.
13224;
(ii) a Person owned or controlled by, or
acting for or on behalf of, any Person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order No. 13224;
(iii) a Person with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;
(iv) a Person that commits, threatens or
conspires to commit or supports "terrorism" as defined in the Executive Order
No. 13224;
(v) a Person that is named as a
"specially designated national" on the most current list published by the U.S.
Treasury Department Office of Foreign Asset Control at its official website or
any replacement website or other replacement official publication of such list,
or
(vi) a Person who is affiliated or
associated with a Person listed above.
No Borrower (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order
No. 13224.
VI. AFFIRMATIVE COVENANTS.
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1 Payment of Fees.
Pay to Agent on demand all usual and customary fees and
expenses which Agent incurs in connection with (a) the forwarding of Advance
proceeds and (b) the establishment and maintenance of any Blocked Accounts or
Depository Accounts as provided for in Section 4.15(h). Agent may, without
making demand, charge Borrowers' Account for all such fees and expenses.
57
6.2 Conduct of Business and Maintenance of Existence and Assets.
(a) Conduct continuously and operate actively
its business according to good business practices and maintain all of its
properties useful or necessary in its business in good working order and
condition (reasonable wear and tear excepted and except as may be disposed of in
accordance with the terms of this Agreement or as may be consistent with
industry practices), including, without limitation, all licenses, patents,
copyrights, design rights, tradenames, trade secrets and trademarks and take all
actions necessary to enforce and protect the validity of any intellectual
property right or other right included in the Collateral; (b) keep in full force
and effect its existence and comply in all material respects with the laws and
regulations governing the conduct of its business where the failure to do so
could reasonably be expected to have a Material Adverse Effect; and (c) make all
such reports and pay all such franchise and other taxes and license fees and do
all such other acts and things as may be lawfully required to maintain its
rights, licenses, leases, powers and franchises under the laws of the United
States or any political subdivision thereof where the failure to do so would
reasonably be expected to have a Material Adverse Effect.
6.3 Violations.
Promptly notify Agent in writing of any violation of any law,
statute, regulation or ordinance of any Governmental Body, or of any agency
thereof, applicable to any Borrower or the Collateral which could reasonably be
expected to have a Material Adverse Effect.
6.4 Government Receivables.
To the extent any Borrower desires such Receivables to
constitute Eligible Receivables, take all steps necessary to protect Agent's
interest in the Collateral under the Federal Assignment of Claims Act or other
applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them.
6.5 Tangible Net Worth.
Maintain at all times a Tangible Net Worth in an amount not
less than the sum of Forty-Four Million Five Hundred Thousand and 00/100 Dollars
($44,500,000.00) plus fifty percent (50%) of the net income of IMCO and its
Subsidiaries on a consolidated basis (excluding, however, extraordinary gains
and the effects of non-cash charges created by mandated changes in accounting
treatment including, but not limited to, the after tax effect of non-cash asset
impairment charges in connection with the application of Financial Accounting
Standard No. 144), for each fiscal quarter hereafter in which net income (as
opposed to a net loss) was earned (the "Minimum Net Worth Requirement").
6.6 Fixed Charge Coverage Ratio.
Maintain a Fixed Charge Coverage Ratio (for IMCO and its
Subsidiaries (excluding all Non-Borrower Subsidiaries) on a consolidated basis)
of not less than 1.0 to 1.0 calculated as of the last day of the fiscal quarter
ending December 31, 2003 for the period equal
58
to the four (4) consecutive fiscal quarters then ending and as of the last day
of each fiscal quarter thereafter for the period equal to the four (4)
consecutive fiscal quarters then ending.
6.7 Undrawn Availability.
Notwithstanding anything contained in Sections 6.5 and 6.6
herein to the contrary, so long as (a) Borrowers' Undrawn Availability is not
less than or equal to Fifty Million and 00/100 Dollars ($50,000,000.00) for any
period of five (5) consecutive days during the then current fiscal quarter and
(b) the Borrowers' daily average Undrawn Availability for any calendar month
during the then current fiscal quarter is not less than or equal to Fifty
Million and 00/100 Dollars ($50,000,000.00), neither the Minimum Tangible Net
Worth Requirement nor the Fixed Charge Coverage Ratio shall be applicable. If
the (a) Borrowers' Undrawn Availability is less than or equal to Fifty Million
and 00/100 Dollars ($50,000,000.00) for any period of five (5) consecutive days
during the then current fiscal quarter or (b) the Borrowers' daily Undrawn
Availability for any calendar month during the then current fiscal quarter is
less than or equal to Fifty Million and 00/100 ($50,000,000.00), the Minimum
Tangible Net Worth Requirement and the Fixed Charged Coverage Ratio shall be
applicable and shall be calculated as set forth in Sections 6.5 and 6.6 above as
of the last day of the fiscal quarter most recently ended.
6.8 Execution of Supplemental Instruments.
Execute and deliver to Agent from time to time, upon
reasonable demand, such supplemental agreements, statements, assignments and
transfers, or instructions or documents relating to the Collateral, and such
other instruments as Agent may reasonably request, in order that the Agent shall
have a first priority perfected Lien in the Collateral.
6.9 Payment of Indebtedness.
Pay, discharge or otherwise satisfy at or before maturity
(subject, where applicable, to specified cure periods and, in the case of the
trade payables, to normal payment practices) all its obligations and liabilities
of whatever nature, except when the failure to do so could not reasonably be
expected to have a Material Adverse Effect or when the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and each Borrower shall have provided for such reserves with respect thereto, as
Agent may reasonably deem proper and necessary, subject at all times to any
applicable subordination arrangement in favor of Lenders.
6.10 Standards of Financial Statements.
Cause all financial statements referred to in Sections 9.6,
9.7, 9.8 and 9.10 as to which GAAP is applicable to be complete and correct in
all material respects (subject, in the case of interim financial statements, to
notes and normal year-end audit adjustments) and to be prepared in accordance
with GAAP applied consistently throughout the periods reflected therein (except
as concurred in by such reporting accountants or officer, as the case may be,
and disclosed therein).
59
6.11 Anti-Terrorism Laws.
The Borrowers and their respective Affiliates shall not
knowingly (i) conduct any business or engage in any transaction or dealing with
any Blocked Person, including the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No. 13224; or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or
any other Anti-Terrorism Law. The Borrowers shall deliver to Lenders any
certification or other evidence requested from time to time by any Lender in its
sole reasonable discretion, confirming Borrowers' compliance with this Section
6.11.
VII. NEGATIVE COVENANTS.
No Borrower shall (and solely with respect to Sections 7.6 and 7.8, no
Borrower shall permit any of its Subsidiaries to), until satisfaction in full of
the Obligations and termination of this Agreement:
7.1 Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or
other reorganization with or into any other Person or acquire all or a
substantial portion of the assets or stock of any Person or permit any other
Person to consolidate with or merge with it; provided however, that any Borrower
may merge or consolidate into another Borrower; and provided further that (i)
any Borrower may purchase or acquire all or a substantial portion of the assets
or stock of any Person or a business or division of another Person (a "Permitted
Acquisition"), and (ii) any Borrower may merge or consolidate with or into any
Person if all of the following requirements are met in connection with such
Permitted Acquisition, merger or consolidation:
1) in the case of a Borrower acquiring
the ownership interests in such Person and such Person is organized under the
laws of any state of the United States of America or the District of Columbia,
such Person shall become a Borrower or a Guarantor for the Obligations as
reasonably determined by the Agent;
2) in the case of a merger or
consolidation, a Borrower shall be the continuing and surviving entity;
3) in the case of a stock or other
ownership purchase, the Person acquired by such Borrower shall, to the extent
such Person becomes a Borrower or Guarantor, grant Liens in its assets to the
Agent for the benefit of the Lenders covering the same type of assets as the
Collateral, and in the case of a Permitted Acquisition or a merger or
consolidation in which a Borrower is the continuing or surviving entity, such
Borrower shall cause the Lien of the Agent to be a first priority, perfected
security interest, provided, however, none of such assets which become
Collateral as a result of a Permitted Acquisition or a merger or consolidation
in which a Borrower is the continuing or surviving entity shall be included in
the Formula Amount in accordance with the terms of this Agreement until such
time as Agent makes such determination in its sole reasonable discretion;
60
4) the board of directors or other
equivalent governing body of such Person shall have approved such Permitted
Acquisition, merger or consolidation;
5) the business acquired, or the
business conducted by the Person whose ownership interests are being acquired or
the business subject to the merger or consolidation, as applicable, shall be
substantially the same as, or reasonably related to, one or more line or lines
of business conducted by the Borrowers as described in Section 5.22;
6) no Default or Event of Default
shall exist immediately prior to and after giving effect to such Permitted
Acquisition, merger or consolidation;
7) immediately prior to and after
giving effect to such Permitted Acquisition (including the payment of any
prospective portion of the purchase price or earn-outs), merger or
consolidation, the Borrowers shall have in excess of Fifty Million and 00/100
Dollars ($50,000,000.00) of Undrawn Availability;
8) the proforma Fixed Charge Coverage
Ratio (for IMCO and its Subsidiaries (excluding all Non-Borrower Subsidiaries)
on a consolidated basis) after giving effect to such Permitted Acquisition
(including the payment of any prospective portion of the purchase price or
earn-outs due within one year of the date of closing of such Permitted
Acquisition), merger or consolidation for the period equal to the four (4)
consecutive fiscal quarters most recently ended shall not be less than 1.0 to
1.0;
9) the EBITDA for the period equal to
the twelve (12) months most recently ended of the Person whose stock or assets
are being acquired by a Borrower shall not be less than One Dollar ($1.00) (as
calculated in a manner reasonably acceptable to the Agent); and
10) the Aggregate Consideration paid by
any such Borrower for all such Permitted Acquisitions, mergers or consolidations
shall not exceed Ten Million and 00/100 Dollars ($10,000,000.00) in the
aggregate in any fiscal year of the Borrowers and Twenty-Five Million and 00/100
Dollars ($25,000,000.00) in the aggregate during the Term, provided, however,
the Aggregate Consideration paid by any such Borrower for all Permitted
Acquisitions of Persons that are not organized under the laws of any state of
the United States of America or the District of Columbia shall not exceed Five
Million and 00/100 Dollars ($5,000,000.00) in the aggregate in any fiscal year
of the Borrowers and Fifteen Million and 00/100 Dollars ($15,000,000.00) in the
aggregate during the Term.
(b) Sell, lease, transfer or otherwise dispose
of any of its properties or assets, except:
1) transactions involving the sale,
lease or transfer of Inventory, Equipment or Real Property in the ordinary
course of business;
2) any sale, transfer or lease of
assets (not consisting of Collateral) (i) in the ordinary course of business
which are no longer necessary or required in the conduct of such Borrowers'
business or (ii) which are obsolete, of immaterial value or no longer utilized
in the business of such Borrower;
61
3) the licensing of intellectual
property in the ordinary course of business;
4) the short-term rental of Equipment
in the ordinary course of business;
5) like-kind exchanges of assets of
reasonably equivalent value (other than Collateral) in the ordinary course of
business;
6) any sale, transfer, disposition of,
or lease of assets by any Borrower to another Borrower;
7) the sale (a) by Indiana Aluminum of
Real Property and Equipment located at 0000 Xxxxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxxxx 00000, (b) by Alchem of Real Property and Equipment located at 000 Xxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 and (c) by IMCO Recycling of Illinois of Real
Property and Equipment located at 0000 Xxxxx Xxxxxxx X, Xxxxxxxx, Xxxxxxxx 00000
so long as all of the following requirements are met in connection with such
sale: (i) no Default or Event of Default shall have occurred and be continuing,
and (ii) each such sale shall be for fair market value and on arm's length
terms; and
8) any other sale, transfer or
disposition of assets other than Collateral (not otherwise permitted by this
Section 7.1(b)) having a fair market value not exceeding Two Million and 00/100
Dollars ($2,000,000.00) provided that (i) no Event of Default or Default shall
have occurred and be continuing, and (ii) the consideration received for such
assets is at least equal to the fair market value thereof.
7.2 Creation of Liens.
Create or suffer to exist any Lien or transfer upon or against
any of its property or assets (including, without limitation, any Capital Stock
of any Subsidiary of any Borrower) now owned or hereafter acquired, except
Permitted Encumbrances.
7.3 Guarantees.
Become liable upon the obligations of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders)
except (a) as disclosed on Schedule 7.3, (b) guarantees made in the ordinary
course of business up to an aggregate amount of Five Million and 00/100 Dollars
($5,000,000.00), (c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, (d)
guarantees in respect of any Indebtedness of another Borrower permitted in
Section 7.8, (e) indemnities given in connection with this Agreement or the
documents executed in connection herewith in favor of the Agent, and (f) the
giving of indemnities in connection with the sale of Inventory, other asset or
business dispositions, or provision of services permitted hereunder.
7.4 Investments.
Except as permitted under Section 7.1(a), purchase or acquire
obligations or stock of, or any other interest in or make on or after the date
of this Agreement any capital contribution
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to or make any other investment in, any Person, except (a) investments existing
on the Closing Date and set forth on Schedule 7.4 and loans and advances
permitted pursuant to Section 7.5 hereof, (b) obligations issued or guaranteed
by the United States of America or any agency thereof, (c) commercial paper with
maturities of not more than 180 days and a published rating of not less than A-1
or P-1 (or the equivalent rating), (d) certificates of time deposit and bankers'
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least Five Hundred
Million and 00/100 Dollars ($500,000,000.00), or (ii) its debt obligations, or
those of a holding company of which it is a Subsidiary, are rated not less than
A (or the equivalent rating) by a nationally recognized investment rating
agency, (e) U.S. money market funds (i) rated AAA by Standard & Poors, Inc. or
with an equivalent rating from Xxxxx'x Investors Service, Inc., or (ii) that
invest solely in obligations issued or guaranteed by the United States of
America or an agency thereof, (f) investments by a Borrower in a Borrower, (g)
bank accounts (whether or not interest bearing) created in the ordinary course
of business that are prudent under the circumstances (including certificates of
deposit) which are insured by the Federal Deposit Insurance Corporation ("FDIC")
or a similar federal insurance program, provided that such Borrower may, in the
ordinary course of its business, maintain in its disbursement accounts from time
to time accounts in excess of then applicable FDIC or other program insurance
limits, (h) investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business, (i) guaranties permitted hereunder,
(j) Hedging Contracts permitted hereunder, (k) the investment by IMCO in
VAW-IMCO that is not intended to be repaid under the VAW-IMCO Note but rather
will be classified as additional paid in capital of VAW-IMCO to be used to make
redemption payments with respect to the redemption by VAW-IMCO of the Capital
Stock of VAW-IMCO held by Hydro Aluminum Deutschland GmbH provided that such
investment amount shall have been (i) placed in escrow on the Closing Date for
the purpose of making such payments and (ii) paid within forty-five (45) days
after the Closing Date, (l) any investment in any Person to the extent the
consideration paid consists of Qualified Stock of IMCO, and (m) investments
(whether in cash or in kind) in (i) corporations, general or limited
partnerships, limited liability companies, joint ventures and similar Persons
(excluding natural Persons) that are not Subsidiaries, and (ii) Subsidiaries
that are not Borrowers or Guarantors, provided, however, that (A) immediately
prior to and after giving effect to such investment, the Borrowers' Undrawn
Availability shall exceed Fifty Million and 00/100 Dollars ($50,000,000.00); and
(B) the aggregate amount of such investments when combined with the aggregate
amount of all such loans and advances set forth in Section 7.5(f) below shall
not exceed Five Million and 00/100 Dollars ($5,000,000.00) in the aggregate in
any fiscal year of the Borrowers and Fifteen Million and 00/100 Dollars
($15,000,000.00) in the aggregate during the Term.
7.5 Loans.
Make advances, loans or extensions of credit to any Person
(other than another Borrower), including, without limitation, any Parent,
Subsidiary or Affiliate except with respect to (a) the existing advances, loans
and extensions of credit set forth on Schedule 7.5 attached hereto and made a
part hereof, (b) the extension of commercial trade credit in connection with the
sale of Inventory or Equipment or other services in the ordinary course of its
business, (c) loans to its employees in the ordinary course of business not to
exceed the aggregate amount of
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One Million and 00/100 Dollars ($1,000,000.00) at any time outstanding, (d) the
loan to be made to VAW-IMCO from the proceeds of the Senior Secured Notes
transaction with respect to the prepayment of the Indebtedness of VAW-IMCO
pursuant to the terms of and as evidenced by the VAW-IMCO Note, (e) investments
permitted pursuant to Section 7.4 hereof, and (f) loans and advances in or to
(i) corporations, general or limited partnerships, limited liability companies,
joint ventures and similar Persons (excluding natural Persons) that are not
Subsidiaries, and (ii) Subsidiaries that are not Borrowers or Guarantors,
provided, however, that (A) immediately prior to and after giving effect to such
loans and advances, the Borrowers' Undrawn Availability shall exceed Fifty
Million and 00/100 Dollars ($50,000,000.00); and (B) the aggregate amount of all
such loans and advances when combined with the aggregate amount of all
investments permitted pursuant to Section 7.4(m) above shall not exceed Five
Million 00/100 Dollars ($5,000,000.00) in the aggregate in any fiscal year of
the Borrowers and Fifteen Million and 00/100 Dollars ($15,000,000.00) in the
aggregate during the Term.
7.6 Capital Expenditures.
Make or incur any Capital Expenditure or commitments for
Capital Expenditures (including capitalized leases) in any fiscal year in an
aggregate amount for IMCO and its Subsidiaries on a consolidated basis in excess
of Twenty-Five Million and 00/100 Dollars ($25,000,000.00), excluding Capital
Expenditures made following an insured casualty event to replace goods damaged
or destroyed using the proceeds of such insurance so long as such proceeds are
used for such purpose within one (1) year of the receipt of such insurance
proceeds; provided, however, that to the extent that the amount made or incurred
in any fiscal year is less than such annual limitation, the lesser of (i) Five
Million and 00/100 Dollars ($5,000,000.00) or (ii) the amount by which the
amount of such annual limitation exceeds the amount of Capital Expenditures made
or incurred in any such fiscal year may be expended in the immediately following
fiscal year.
7.7 Dividends.
Declare, pay or make any dividend or distribution on any
shares of the common stock or preferred stock or other equity interest, as the
case may be, of any Borrower (other than dividends or distributions payable in
Qualified Stock, or split-ups, stock dividends or reclassifications of its
stock, or cash or other dividends paid by one Borrower to another Borrower) or
apply any of its funds, property or assets to the purchase, redemption or other
retirement of any common or preferred stock or other equity interest, as the
case may be, or of any options to purchase or acquire any such shares of common
or preferred stock or other equity interest, as the case may be, of any Borrower
except that dividends or distributions described above in an aggregate amount
which shall not exceed Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) per year may be declared, paid or made so long as (a) a notice
of termination with regard to this Agreement shall not be outstanding, (b) no
Event of Default or Default shall exist immediately prior to or after giving
effect to such dividend or distribution, and (c) the Borrowers' Undrawn
Availability exceeds Fifty Million 00/100 Dollars ($50,000,000.00) immediately
prior to and after giving effect to such dividend or distribution.
In addition, the Borrowers shall not permit their Subsidiaries
to enter into or otherwise be bound by any agreement prohibiting or restricting
the payment of dividends to a
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Borrower, except as otherwise permitted under the Senior Secured Notes Indenture
as of the date hereof.
7.8 Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness
(exclusive of trade debt and accrued liabilities and reserves arising in the
ordinary course of business as determined in accordance with GAAP) except in
respect of
(a) Indebtedness existing on the Closing Date
and set forth on Schedule 7.8 (including any extensions, renewals or
refinancings thereof), provided that the principal amount of such Indebtedness
shall not be increased without the prior written consent of the Required
Lenders;
(b) Indebtedness to Lenders under or pursuant to
this Agreement or the Other Documents;
(c) Indebtedness incurred for Capital
Expenditures permitted under Section 7.6 hereof;
(d) as permitted under Section 7.3 hereof;
(e) Indebtedness arising from Hedging Contracts
entered into in the ordinary course of business consisting of bona fide hedging
contracts;
(f) assumed Indebtedness incurred in connection
with a Permitted Acquisition (but only to the extent permitted within the
limitations on Aggregate Consideration thereunder);
(g) Indebtedness incurred under the Senior
Secured Notes Documentation in the aggregate principal amount not to exceed Two
Hundred Ten Million and 00/100 Dollars ($210,000,000.00);
(h) Indebtedness incurred by VAW-IMCO pursuant
to the terms of and as evidenced by the VAW-IMCO Note;
(i) Indebtedness of any Borrower to any other
Borrower to the extent the loan pursuant to which such Indebtedness is created
is permitted under Section 7.5 hereof;
(j) Indebtedness of Foreign Subsidiaries of the
Borrowers incurred for working capital financing in an aggregate principal
amount at any time not exceeding Forty Million and 00/100 Dollars
($40,000,000.00);
(k) judgments not constituting an Event of
Default; and
(l) Indebtedness in an amount not to exceed Ten
Million and 00/100 Dollars ($10,000,000.00) incurred pursuant to certain solid
waste disposal bonds or industrial revenue bonds issued after the date hereof by
the City of Morgantown, Kentucky or any other
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governmental entity in a location in which any Borrower owns any Equipment, Real
Property or other assets.
7.9 Nature of Business.
Enter into or engage in any business materially different from
that currently being conducted by the Borrowers and their Subsidiaries taken as
a whole nor, except as specifically permitted hereby purchase or invest,
directly or indirectly, in any assets or property other than in the ordinary
course of business for assets or property which are useful in, necessary for and
are to be used in the business of the Borrowers and their Subsidiaries, taken as
a whole, as presently conducted.
7.10 Transactions with Affiliates.
Except for transactions among the Borrowers and transactions
described in Schedule 7.10 hereof, directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise deal with, any Affiliate, except transactions in the ordinary course
of business, on an arm's length basis on terms no less favorable than terms
which would have been obtainable from a Person other than an Affiliate.
7.11 Leases.
Enter as lessee into any lease arrangement for real or
personal property (unless capitalized and permitted under Section 7.6 hereof) if
after giving effect thereto, aggregate annual rental payments for all leased
property would exceed Ten Million and 00/100 Dollars ($10,000,000.00) in any one
fiscal year in the aggregate for all Borrowers.
7.12 Subsidiaries.
Subject to Sections 7.1 and 7.4 hereof, acquire or create,
directly or indirectly, any Wholly Owned Subsidiary that is a Domestic
Subsidiary unless, as determined by the Agent (i) (y) such Subsidiary expressly
becomes a Borrower and becomes jointly and severally liable for the obligations
of Borrowers hereunder, under the Notes and under any other agreement between
any Borrower and Lenders, or (z) such Subsidiary becomes a Guarantor for the
Obligations and among other things, executes a Guaranty in form and substance
reasonably satisfactory to the Agent, (ii) Agent shall have received all
documents, including organizational documents and legal opinions, it may
reasonably require in connection therewith and (iii) and in the case of the
creation of a Wholly Owned Subsidiary that is a Domestic Subsidiary, the
Subsidiary created by such Borrower shall, to the extent such Subsidiary becomes
a Borrower or Guarantor, grant first priority, perfected Liens in its assets to
the Agent for the benefit of the Lenders covering the same type of assets as the
Collateral, provided, however, to the extent such Subsidiary becomes a Borrower,
none of such assets which become Collateral shall be included in the Formula
Amount in accordance with the terms of this Agreement until such time as Agent
makes such determination in its sole reasonable discretion.
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7.13 Fiscal Year and Accounting Changes.
Change its fiscal year from a calendar year or make any
material change (i) in accounting treatment and reporting practices except as
required or permitted by GAAP or (ii) in tax reporting treatment except as
required or permitted by law.
7.14 Pledge of Credit.
Now or hereafter use any portion of any Advance in or for any
business other than such Borrower's business as conducted on the date of this
Agreement.
7.15 Amendment of Articles of Incorporation, By-Laws, Certificate
of Organization, Operating Agreement, Etc.
Amend, modify or waive any term or material provision of its
Articles of Incorporation, By-Laws, Certificate of Limited Partnership,
Partnership Agreement, Certificate of Formation, Operating Agreement or other
organizational documents which amendment, modification or waiver would
reasonably be considered material and adverse to Agent, unless required by law.
7.16 Compliance with ERISA.
(i) (x) Maintain, or permit any member of the Controlled Group
to maintain, or (y) become obligated to contribute, or permit any member of the
Controlled Group to become obligated to contribute, to any Plan, other than
those Plans disclosed on Schedule 5.8(d), (ii) engage, or permit any member of
the Controlled Group to engage, in any non-exempt "prohibited transaction", as
that term is defined in section 406 of ERISA and Section 4975 of the Code, (iii)
incur, or permit any member of the Controlled Group to incur, any "accumulated
funding deficiency", as that term is defined in Section 302 of ERISA or Section
412 of the Code, (iv) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in any liability of any
Borrower or any member of the Controlled Group or the imposition of a lien on
the property of any Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA, (v) assume, or permit any member of the Controlled Group
to assume, any obligation to contribute to any Multiemployer Plan not disclosed
on Schedule 5.8(d), (vi) incur, or permit any member of the Controlled Group to
incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly
to notify Agent of the occurrence of any Termination Event, (viii) fail to
comply, or permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other applicable laws in respect of any
Plan, (ix) fail to meet, or permit any member of the Controlled Group to fail to
meet, all minimum funding requirements under ERISA or the Code or postpone or
delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Plan.
7.17 Prepayment of Indebtedness.
At any time, directly or indirectly, prepay any Indebtedness
for Borrowed Money or repurchase, redeem, retire or otherwise acquire any
Indebtedness of any Borrower, except for the prepayment, repurchase, redemption,
retirement or acquisition of (a) any Indebtedness for
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Borrowed Money of any Borrower owed to the Lenders pursuant to this Agreement or
the Other Documents; (b) any Indebtedness of any Borrower owed to another
Borrower; or (c) the Indebtedness of IMCO the prepayment of which is mandatory
pursuant to Section 3.5 of the Senior Secured Notes Indenture from Excess
Collateral Proceeds (as defined in the Senior Secured Notes Indenture).
7.18 Other Agreements.
Enter into any amendment, waiver or modification of (i) the
Senior Secured Notes Documentation that could reasonably be expected to
materially and adversely affect the Agent and the Lenders or (ii) the VAW-IMCO
Note.
VIII. CONDITIONS PRECEDENT.
8.1 Conditions to Initial Advances.
The agreement of Lenders to make the initial Advances
requested to be made on the Closing Date is subject to the satisfaction, or
waiver by Lenders, immediately prior to or concurrently with the making of such
Advances, of the following conditions precedent:
(a) Notes. Agent shall have received the Notes
duly executed and delivered by an authorized officer of each Borrower;
(b) Filings, Registrations and Recordings. Each
document (including, without limitation, any Uniform Commercial Code financing
statement) required by this Agreement, any related agreement or under law or
reasonably requested by the Agent to be filed, registered or recorded in order
to create, in favor of Agent, a perfected security interest in or Lien upon the
Collateral shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(c) Corporate Proceedings of Borrowers. Agent
shall have received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, of the board of directors, partners, managers or members,
as the case may be, of each Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes, and any related agreements, and (ii)
the granting by each Borrower of the security interests in and Liens upon the
Collateral in each case certified by the Secretary of each Borrower (or the
General Partner of each Borrower that is a limited partnership) as of the
Closing Date; and, such certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded as of the date
of such certificate;
(d) Incumbency Certificates of Borrowers. Agent
shall have received a certificate of the Secretary or an Assistant Secretary of
each Borrower or the General Partner of each Borrower that is a limited
partnership, dated the Closing Date, as to the incumbency and signature of the
officers of each Borrower or such General Partner of such Borrower executing
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this Agreement, any certificate or other documents to be delivered by it
pursuant hereto, together with evidence of the incumbency of such Secretary;
(e) Certificates. Agent shall have received a
copy of the Articles or Certificate of Incorporation, Certificate of Limited
Partnership or Certificate of Formation of each Borrower, as the case may be,
together with all amendments thereto, certified by the Secretary of State or
other appropriate official of such entity's jurisdiction of incorporation or
formation, as the case may be, together with copies of the By-Laws, Partnership
Agreement or Operating Agreement, of each Borrower, as the case may be, and all
material agreements of each Borrower's shareholders, partners or members, as the
case may be, certified as accurate and complete by the Secretary of each
Borrower or the General Partner of each Borrower that is a limited partnership,
as the case may be;
(f) Good Standing and Tax Lien Certificates.
Agent shall have received copies of good standing and tax lien certificates, or
similar certifications, as applicable, for each Borrower dated not more than
sixty (60) days prior to the Closing Date, issued by the Secretary of State,
Department of Revenue or other appropriate official of each such entity's
jurisdiction of incorporation or formation, as the case may be, and each
jurisdiction where the conduct of each entity's business activities or the
ownership of each such entity's properties necessitates qualification;
(g) Legal Opinion. Agent shall have received the
executed legal opinions of Fulbright & Xxxxxxxx, LLP, in house counsel of IMCO,
and local counsel opinions in form and substance satisfactory to Agent which
shall cover such matters incident to the transactions contemplated by this
Agreement, the Notes, and related agreements as Agent may reasonably require and
each Borrower hereby authorizes and directs such counsel to deliver such
opinions to Agent and Lenders;
(h) No Litigation. (i) No litigation,
investigation or proceeding before or by any arbitrator or Governmental Body
shall be continuing or threatened against any Borrower or against the officers
or directors of any Borrower, (A) in connection with the Other Documents or any
of the transactions contemplated thereby and which, in the reasonable opinion of
Agent, is deemed material or (B) which could, in the reasonable opinion of
Agent, have a Material Adverse Effect; and (ii) no injunction, writ, restraining
order or other order of any nature materially adverse to any Borrower or the
conduct of its business or inconsistent with the due consummation of the
transactions contemplated by this Agreement shall have been issued by any
Governmental Body;
(i) Financial Condition Certificates. Agent
shall have received an executed Financial Condition Certificate in the form of
Exhibit 8.1(k);
(j) Collateral Examination. Agent shall have
completed a Collateral examination and received an inventory appraisal, the
results of which shall be satisfactory in form and substance to Lenders;
(k) Fees. Agent shall have received all fees
payable to Agent and Lenders on or prior to the Closing Date pursuant to Article
III hereof or the Agent's Letter;
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(l) Projections. Agent shall have received a
copy of the Projections which shall be satisfactory in all respects to Lenders;
(m) Senior Secured Notes Documentation. Agent
shall have received final executed copies of the Senior Secured Notes
Documentation as in effect on the Closing Date and the transactions contemplated
by such documentation shall be consummated prior to the making of the initial
Advance and IMCO shall have received [Two Hundred Ten Million and 00/100 Dollars
($210,000,000.00)] in gross proceeds from the Senior Secured Notes transaction.
(n) VAW-IMCO Note. Agent shall have received a
copy of the fully executed VAW-IMCO Note in form and substance reasonably
acceptable to the Agent.
(o) Insurance. Agent shall have received in form
and substance satisfactory to Agent, certificates of insurance for Borrowers'
casualty insurance policies, together with loss payable endorsements on Agent's
standard form of loss payee endorsement naming Agent as lender loss payee with
respect to the Collateral, and certificates of insurance for Borrowers'
liability insurance policies, together with endorsements naming Agent as an
additional insured;
(p) Payment Instructions. Agent shall have
received written instructions from Borrowers directing the application of
proceeds of the initial Advances made pursuant to this Agreement;
(q) Blocked Accounts. Agent shall have received
the duly executed Blocked Account Agreements or other agreements establishing
the Blocked Accounts or Depository Accounts with financial institutions
acceptable to Agent for the collection or servicing of the Receivables and
proceeds of the Collateral;
(r) Consents. Agent shall have received any and
all Consents necessary to permit the effectuation of the transactions
contemplated by this Agreement and the Other Documents; and, such Consents and
waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
(s) No Adverse Material Change. (i) since
June 30, 2003, there shall not have occurred any event, condition or state of
facts which could reasonably be expected to have a Material Adverse Effect and
(ii) no representations made or information supplied to Agent shall have been
proven to be inaccurate or misleading in any material respect;
(t) Leasehold and Similar Agreements. Agent
shall have received the landlord, mortgagee, warehouseman, consignment,
processing or similar agreements (if any) satisfactory to Agent with respect to
all premises leased by Borrowers or at which Inventory is located as set forth
on Schedule 8.1(t);
(u) Other Documents. Agent shall have received
the executed Other Documents all in form and substance satisfactory to Agent;
(v) Existing Indebtedness. Agent shall have
received (i) a payoff letter, in form and substance satisfactory to Agent,
pursuant to which the Existing Lender
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Indebtedness that is to be paid by initial Advances hereunder will be paid in
full, (ii) a payoff letter, in form and substance satisfactory to Agent,
pursuant to which the Receivables Purchase Facility that is to be paid by
initial Advances hereunder will be paid in full, and (iii) evidence satisfactory
to Agent that all necessary termination statements, satisfaction documents and
any other applicable releases in connection with the Existing Lender
Indebtedness, the Receivables Purchase Facility and all other Liens with respect
to the Borrowers that are not Permitted Encumbrances have been filed or
arrangements satisfactory to Agent have been made for such filing;
(w) Closing Certificate. Agent shall have
received a closing certificate signed by the Vice President-Treasurer of each
Borrower or the General Partner of each Borrower that is a limited partnership,
dated as of the date hereof, stating that (i) all representations and warranties
set forth in this Agreement and the Other Documents to which such Borrower is a
party are true and correct in all material respects on and as of such date, (ii)
the Borrowers are on such date in compliance with all the terms and provisions
set forth in this Agreement and the Other Documents, as the case may be, and
(iii) on such date no Default or Event of Default has occurred or is continuing;
(x) Borrowing Base. Agent and each Lender shall
have received evidence from Borrowers that the aggregate amount of Eligible
Receivables and Eligible Inventory is sufficient in value and amount to support
Advances in the amount requested by Borrowers on the Closing Date;
(y) Undrawn Availability. After giving effect to
the initial Advances hereunder and all closing costs, fees and expenses,
Borrowers shall have Undrawn Availability of at least Twenty Five Million and
00/100 Dollars ($25,000,000.00); and
(z) Other. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to Agent and its counsel.
8.2 Conditions to Each Advance.
The agreement of Lenders to make any Advance requested to be
made on any date (including, without limitation, the initial Advance), is
subject to the satisfaction of the following conditions precedent as of the date
such Advance is made.
(a) Representations and Warranties. Each of the
representations and warranties made by any Borrower in or pursuant to this
Agreement and any related agreements to which it is a party, as the case may be,
and each of the representations and warranties contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any related agreement shall be true and
correct in all material respects on and as of such date as if made on and as of
such date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date).
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(b) No Default. No Event of Default or Default
shall have occurred and be continuing on such date, or would exist after giving
effect to the Advances requested to be made, on such date; provided, however
that, subject to the terms of Section 16.2(b), Agent, in its sole discretion,
may continue to make Advances notwithstanding the existence of an Event of
Default or Default and that any Advances so made shall not be deemed a waiver of
any such Event of Default or Default.
(c) Maximum Advances. Subject to the terms of
Section 16.2(b), in the case of any Advances requested to be made, after giving
effect thereto, the aggregate Advances shall not exceed the maximum amount of
Advances permitted under Section 2.1 hereof.
Each request for an Advance by Borrowing Agent hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the Obligations and
the termination of this Agreement:
9.1 Disclosure of Material Matters.
Immediately upon learning thereof, report to Agent all matters
materially affecting the value, enforceability or collectibility of any portion
of the Collateral including, without limitation, any Borrower's reclamation or
repossession of, or the return to any Borrower of, a material amount of goods or
material claims or material disputes asserted by any Customer or other obligor.
9.2 Schedules.
Deliver to Agent on or before the fifteenth (15th) day of each
month as and for the prior month (a) accounts receivable agings of the Borrowers
(reconciled to the general ledger), (b) accounts payable schedules of the
Borrowers (reconciled to the general ledger), (c) Inventory reports of the
Borrowers and (d) a Borrowing Base Certificate (which shall be calculated as of
the last day of the prior month and which shall not be binding upon Agent or
restrictive of Agent's rights under this Agreement). In addition, each Borrower
will deliver to Agent at such intervals as Agent may reasonably require: (i)
confirmatory assignment schedules, (ii) copies of Customer's invoices, (iii)
evidence of shipment or delivery, and (iv) such further schedules, documents
and/or information regarding the Collateral as Agent may require including,
without limitation, trial balances and test verifications. Agent shall have the
right to confirm and verify all Receivables by any manner and through any medium
it considers advisable and do whatever it may deem reasonably necessary to
protect its interests hereunder. The items to be provided under this Section are
to be in form satisfactory to Agent and executed by each applicable Borrower and
delivered to Agent from time to time solely for Agent's convenience in
maintaining records of the Collateral, and any Borrower's failure to deliver any
of such items to Agent shall not affect, terminate, modify or otherwise limit
Agent's Lien with respect to the Collateral.
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9.3 Environmental Reports.
Furnish Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.6 and 9.7, with a certificate signed by the
President, Chief Financial Officer or Treasurer of each Borrower stating, to the
best of his knowledge, that each Borrower is in compliance in all material
respects with all federal, state and local laws relating to environmental
protection and control and occupational safety and health. To the extent any
Borrower is not in compliance with the foregoing laws, the certificate shall set
forth with specificity all areas of non-compliance and the proposed action such
Borrower will implement in order to achieve full compliance.
9.4 Litigation.
Promptly notify Agent in writing of any litigation, suit or
administrative proceeding affecting any Borrower or any Subsidiary of a
Borrower, whether or not the claim is covered by insurance, and of any suit or
administrative proceeding, which in any such case could reasonably be expected
to have a Material Adverse Effect.
9.5 Material Occurrences.
Promptly notify Agent in writing upon the occurrence of (a)
any Event of Default or Default; (b) any event of default under the Senior
Secured Notes Documentation; (c) any event which with the giving of notice or
lapse of time, or both, would constitute an event of default under the Senior
Secured Notes Documentation, (d) any event, development or circumstance whereby
any financial statements or other reports furnished to Agent fail in any
material respect to present fairly, in accordance with GAAP consistently
applied, the financial condition or operating results of IMCO and its
Subsidiaries on a consolidated basis as of the date of such statements; (e) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Code, could subject any Borrower to a tax imposed by Section 4971 of the
Code; (f) each and every default by any Borrower or any Subsidiary of any
Borrower which would reasonably be expected to result in the acceleration of the
maturity of any Indebtedness for Borrowed Money, including the names and
addresses of the holders of such Indebtedness with respect to which there is a
default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (e) any other development
in the business or affairs of any Borrower which could reasonably be expected to
have a Material Adverse Effect; in each case, to the extent permitted by
applicable law, describing the nature thereof and the action Borrowers propose
to take with respect thereto.
9.6 Annual Financial Statements.
Furnish Agent within ninety (90) days after the end of each
fiscal year of the Borrowers, financial statements of IMCO and its Subsidiaries
on a consolidated basis including, but not limited to, statements of income and
stockholders' equity and cash flow from the beginning of the current fiscal year
to the end of such fiscal year and the balance sheet as at the end of such
fiscal year, all prepared in accordance with GAAP applied on a basis consistent
with prior practices, and in reasonable detail and reported upon without
qualification by an
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independent certified public accounting firm selected by Borrowers and
satisfactory to Agent (the "Accountants"). Such statements shall also include
information solely with respect to IMCO and its Subsidiaries (excluding all
Non-Borrower Subsidiaries) on a consolidated basis, each in such detail as
reasonably deemed necessary by the Agent in its discretion. In addition, the
reports shall be accompanied by a certificate of IMCO's senior financial officer
which shall state that, based on an examination sufficient to permit him to make
an informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by such Borrower
with respect to such event, and such certificate shall have appended thereto
calculations which set forth compliance with the requirements or restrictions
imposed by Sections 6.5, 6.6, 6.7, 7.1, 7.3, 7.4, 7.5, 7.6, 7.11 and 7.12
hereof. In addition, upon the reasonable request of the Agent, the Borrowers
shall provide to the Agent the financial statements set forth above of IMCO and
its Subsidiaries on a consolidating basis.
9.7 Quarterly Financial Statements.
Furnish Agent within forty-five (45) days after the end of
each fiscal quarter, an unaudited balance sheet of IMCO and its Subsidiaries on
a consolidated basis and unaudited statements of income and stockholders' equity
and cash flow of IMCO and its Subsidiaries on a consolidated basis reflecting
results of operations from the beginning of the fiscal year to the end of such
quarter and for such quarter, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to normal
and recurring year end adjustments that individually and in the aggregate are
not material to the business of the Borrowers. Such statements shall also
include information solely with respect to IMCO and its Subsidiaries (excluding
all Non-Borrower Subsidiaries) consisting of a consolidating (x) statement of
income, (y) balance sheet and (z) cash flow statement including necessary
elimination entries, each in such detail as reasonably deemed necessary by the
Agent in its discretion. The reports shall be accompanied by a certificate
signed by the senior financial officer of IMCO, which shall state that, based on
an examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrowers with respect to such
default and, such certificate shall have appended thereto calculations which set
forth compliance with the requirements or restrictions imposed by Sections 6.5,
6.6, 7.1, 7.3, 7.4, 7.5, 7.6, 7.11 and 7.12 hereof. In addition, upon the
reasonable request of the Agent, the Borrowers shall provide to the Agent the
financial statements set forth above of IMCO and its Subsidiaries on a
consolidating basis.
9.8 Other Reports.
Furnish Agent as soon as available, but in any event within
ten (10) days after the filing thereof, with copies of such financial
statements, proxy statements, registration statements, reports and returns as
IMCO is or may be required to file with the United States Securities Exchange
Commission or any State Securities Commission.
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9.9 Additional Information.
Furnish Agent with such additional information as Agent shall
reasonably request in order to enable Agent to determine whether the terms,
covenants, provisions and conditions of this Agreement and the Notes have been
complied with by the Borrowers including, without limitation and without the
necessity of any request by Agent, (a) copies of all environmental audits and
reviews, (b) at least thirty (30) days prior thereto, notice of any Borrower's
opening of any new place of business (excluding sales offices) or any Borrower's
closing of any existing place of business (except sales offices), and (c)
promptly upon any Borrower's learning thereof, notice of any material labor
dispute to which any Borrower may become a party, any strikes or walkouts
relating to any of its plants or other facilities, and the expiration of any
labor contract to which any Borrower is a party or by which any Borrower is
bound.
9.10 Projected Operating Budget.
Furnish Agent, no later than fifteen (15) days prior to the
beginning of each fiscal year of IMCO, commencing with fiscal year 2004 and each
fiscal year thereafter during the Term, a quarter by quarter projected operating
budget and cash flow of IMCO and its Subsidiaries on a consolidated basis for
such fiscal year (including an income statement for each quarter and a balance
sheet as at the end of each fiscal quarter), such projections to be accompanied
by a certificate signed by the President or Chief Financial Officer of IMCO to
the effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial
statements and that such officer has no reasonable basis to question the
reasonableness of any material assumptions on which such projections were
prepared.
9.11 Notice of Suits, Adverse Events.
Furnish Agent with prompt notice of (i) any lapse or other
termination of any Consent issued to any Borrower by any Governmental Body or
any other Person that is material to the operation of any Borrower's business,
(ii) any refusal by any Governmental Body or any other Person to renew or extend
any such Consent; (iii) copies of any periodic or special reports filed by any
Borrower with any Governmental Body or Person, if such reports indicate any
material change in the business, operations, affairs or condition of any
Borrower, or if copies thereof are requested by Lender, and (iv) copies of any
material notices and other communications from any Governmental Body which
specifically relate to any Borrower.
9.12 ERISA Notices and Requests.
Furnish Agent with immediate written notice in the event that
(i) any Borrower or any member of the Controlled Group knows or has reason to
know that a Termination Event has occurred, together with a written statement
describing such Termination Event and the action, if any, which such Borrower or
any member of the Controlled Group has taken, is taking, or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii)
any Borrower or any member of the Controlled Group knows or has reason to know
that a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of
the Code) has occurred together
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with a written statement describing such transaction and the action which such
Borrower or any member of the Controlled Group has taken, is taking or proposes
to take with respect thereto, (iii) a funding waiver request has been filed with
respect to any Plan together with all communications received by any Borrower or
any member of the Controlled Group with respect to such request, (iv) any
increase in the benefits of any existing Plan or the establishment of any new
Plan or the commencement of contributions to any Plan to which any Borrower or
any member of the Controlled Group was not previously contributing shall occur,
(v) any Borrower or any member of the Controlled Group shall receive from the
PBGC a notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) any Borrower
or any member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, together with copies
of each such letter; (vii) any Borrower or any member of the Controlled Group
shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (viii) any Borrower or any member of
the Controlled Group shall fail to make a required installment or any other
required payment under Section 412 of the Code on or before the due date for
such installment or payment; (ix) any Borrower or any member of the Controlled
Group knows that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
9.13 Additional Documents.
Execute and deliver to Agent, upon request, such documents and
agreements as Agent may, from time to time, reasonably request to carry out the
purposes, terms or conditions of this Agreement.
9.14 Tax Shelter Regulations.
None of the Borrowers, the Lenders or the Agent intend to
treat the Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event any
of the Borrowers determines to take any action inconsistent with such intention,
the Borrowers will promptly (1) notify the Agent thereof, and (2) deliver to the
Agent a duly completed copy of IRS Form 8886 or any successor form. If the
Borrowers so notify the Agent, the Borrowers acknowledge that one or more of the
Lenders may treat its Advances as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, may maintain the lists and other records required by such Treasury
Regulation.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1 failure by any Borrower to pay any principal or interest on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this Agreement, or
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by required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due or in any Other Document;
10.2 any representation or warranty made or deemed made by any
Borrower in this Agreement or any related agreement or in any certificate,
document or financial or other statement furnished at any time in connection
herewith or therewith, as the case may be, shall prove to have been misleading
in any material respect on the date when made or deemed to have been made;
10.3 failure by any Borrower to (i) furnish financial information
required to be provided hereunder when due or when requested, or (ii) permit the
inspection of its books or records;
10.4 issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Borrower's property which is not
stayed or lifted within thirty (30) days and does not otherwise constitute a
Permitted Encumbrance;
10.5 except as otherwise provided for in Sections 10.1 and 10.3,
failure or neglect of any Borrower to perform, keep or observe any term,
provision, condition, covenant herein contained and applicable to such Borrower
(other than those in Sections 4.6, 4.7, 4.9 or 6.3 hereof), or contained in any
other agreement or arrangement, now or hereafter entered into between any
Borrower and Agent or any Lender;
10.6 failure or neglect of any Borrower to perform, keep or observe
any term, provision, condition or covenant contained in Sections 4.6, 4.7, 4.9
or 6.3 hereof and such failure shall continue for ten (10) days from the
occurrence of such failure or neglect;
10.7 any judgment or judgments are rendered or judgment liens filed
against any Borrower for an aggregate uninsured amount in excess of Five Million
and 00/100 Dollars ($5,000,000.00) (i) which within thirty (30) days of such
rendering or filing is not either appealed, satisfied, stayed or discharged of
record and (ii) for which such Borrower has not established sufficient reserves
in accordance with GAAP;
10.8 any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of creditors, (iii)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vi) acquiesce to, or fail to have dismissed, within thirty (30) days,
any petition filed against it in any involuntary case under such bankruptcy
laws, or (vii) take any action for the purpose of effecting any of the
foregoing;
10.9 any Borrower or any Subsidiary of any Borrower shall admit in
writing its inability, or be generally unable, to pay its debts as they become
due or any Borrower or any Subsidiary of any Borrower with total assets
consisting of five percent (5%) or more of the total consolidated assets of IMCO
and its Subsidiaries shall cease operations of its present business;
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10.10 any Affiliate or any Subsidiary of any Borrower, shall (i)
apply for, consent to or suffer the appointment of, or the taking of possession
by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or
of all or a substantial part of its property, (ii) admit in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment for the
benefit of creditors, (iv) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
10.11 any change in any Borrower's condition or affairs (financial
or otherwise) which in Agent's reasonable opinion has a Material Adverse Effect;
10.12 any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected
Lien having a first priority interest, except to the extent such Lien is a
Permitted Encumbrance;
10.13 an event of default has occurred under the Senior Secured
Notes Documentation which default shall not have been cured or waived within any
applicable cure period;
10.14 a default of the obligations of any Borrower under any other
material agreement to which it is a party shall occur which default is not cured
within any applicable cure period and which could reasonably be expected to have
a Material Adverse Effect;
10.15 any Borrower or any Subsidiary of any Borrower shall (a)
default in any payment of principal of or interest on any Indebtedness for
Borrowed Money that individually, or in the aggregate, is in excess of One
Million and 00/100 Dollars ($1,000,000.00) beyond any period of grace with
respect to such payment or (b) default in the observance of any other covenant,
term or condition contained in any agreement or instrument pursuant to which
such Indebtedness for Borrowed Money that individually, or in the aggregate, is
in excess of One Million and 00/100 Dollars ($1,000,000.00) is created, secured
or evidenced, if the effect of such default is to cause the acceleration of any
such Indebtedness (whether or not such right shall have been waived);
10.16 termination or breach of any Guaranty or similar agreement
executed and delivered to Agent in connection with the Obligations of any
Borrower, or if any Guarantor attempts to terminate, challenges the validity of,
or its liability under, any such Guaranty or similar agreement;
10.17 any Change of Control shall occur;
10.18 any material provision of this Agreement shall, for any
reason, cease to be valid and binding on any Borrower, or any Borrower shall so
claim in writing to Agent unless such provision ceases to be valid and binding
on any Borrower at the request of, or because of any action taken by, the Agent
or the other Lenders;
10.19 (i) any Governmental Body shall (A) revoke, terminate, suspend
or adversely modify any license, permit, patent, trademark or tradename of any
Borrower which would
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reasonably be expected to have a Material Adverse Effect, or (B) commence
proceedings to suspend, revoke, terminate or adversely modify any such license,
permit, trademark, tradename or patent which would reasonably be expected to
have a Material Adverse Effect and such proceedings shall not be dismissed or
discharged within sixty (60) days, or (C) schedule or conduct a hearing on the
renewal of any license, permit, trademark, tradename or patent necessary for the
continuation of any Borrower's business and the staff of such Governmental Body
issues a report recommending the termination, revocation, suspension or
material, adverse modification of such license, permit, trademark, tradename or
patent; (ii)any agreement which is necessary or material to the operation of any
Borrower's business shall be revoked or terminated and not replaced by a
substitute acceptable to Agent within thirty (30) days after the date of such
revocation or termination, and such revocation or termination and
non-replacement would reasonably be expected to have a Material Adverse Effect;
10.20 any portion of the Collateral in excess of One Million and
00/100 Dollars ($1,000,000.00) shall be seized or taken by a Governmental Body,
or any Borrower or the title and rights of any Borrower shall have become the
subject matter of litigation which might, in the reasonable opinion of Agent,
upon final determination, result in material impairment or loss of the security
provided by this Agreement or the Other Documents;
10.21 the operations of any Borrower's manufacturing facility are
interrupted at any time for more than ten (10) consecutive days, which
interruption would reasonably be expected to have a Material Adverse Effect
excluding, however, the cessation of operations of any Borrower's present
business which would not otherwise constitute an Event of Default under Section
10.9 hereof; or
10.22 an event or condition specified in Sections 7.16 or 9.12
hereof shall occur or exist with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, any
Borrower or any member of the Controlled Group shall incur, or in the opinion of
Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Agent, would have a Material Adverse
Effect.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1 Rights and Remedies.
Upon the occurrence of (i) an Event of Default pursuant to
Section 10.8, all Obligations shall be immediately due and payable and this
Agreement and the obligation of Lenders to make Advances shall be deemed
terminated; and, (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured), at the option of
Required Lenders, all Obligations shall be immediately due and payable and
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances and (iii) a filing of a petition against
any Borrower in any involuntary case under any state or federal bankruptcy laws,
the obligation of Lenders to make Advances hereunder shall be terminated other
than as may be required by an appropriate order of the bankruptcy court having
jurisdiction over any Borrower. Upon the occurrence of any Event of Default,
Agent shall have the right to exercise any and all other rights and remedies
provided for herein, under the Uniform Commercial Code and at law or equity
generally, including, without limitation, the right to
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foreclose the security interests granted herein and to realize upon any
Collateral by any available judicial procedure and/or to take, to the extent
permitted by applicable law, possession of and sell any or all of the Collateral
with or without judicial process. Agent may enter any of any Borrower's premises
or other premises without legal process and without incurring liability to any
Borrower therefor, and Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require the Borrowers to
make the Collateral available to Agent at a convenient place. With or without
having the Collateral at the time or place of sale, Agent may sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms,
either for cash, credit or future delivery, as Agent may elect. Except as to
that part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent shall
give the Borrowers reasonable notification of such sale or sales, it being
agreed that in all events written notice mailed to the Borrowers at least five
(5) days prior to such sale or sales is reasonable notification. At any public
sale Agent or any Lender may bid for and become the purchaser, and Agent, any
Lender or any other purchaser at any such sale thereafter shall hold the
Collateral sold absolutely free from any claim or right of whatsoever kind,
including any equity of redemption and such right and equity are hereby
expressly waived and released by each Borrower. In connection with the exercise
of the foregoing remedies, Agent is granted permission to use all of each
Borrower's trademarks, trade styles, trade names, patents, patent applications,
licenses, franchises and other proprietary rights which are used in connection
with (a) Inventory for the purpose of disposing of such Inventory and (b)
Equipment for the purpose of completing the manufacture of unfinished goods. The
proceeds realized from the sale of any Collateral shall be applied as follows:
first, to the reasonable costs, expenses and attorneys' fees and expenses
incurred by Agent for collection and for acquisition, completion, protection,
removal, storage, sale and delivery of the Collateral; second, to interest due
upon any of the Obligations and any fees payable under this Agreement; and,
third, to the principal of the Obligations. If any deficiency shall arise,
Borrowers shall remain liable to Agent and Lenders therefor.
11.2 Agent's Discretion.
Subject to Section 14.6, Agent shall have the right in its
sole discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of Agent's or Lenders' rights hereunder.
11.3 Setoff.
In addition to any other rights which Agent or any Lender may
have under applicable law, upon the occurrence of an Event of Default hereunder,
Agent and such Lender, including any branch, Subsidiary or Affiliate of Agent or
such Lender, shall have a right to apply any Borrower's property held by Agent,
such Lender, such branch, Subsidiary or Affiliate to reduce the Obligations.
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11.4 Rights and Remedies not Exclusive.
The enumeration of the foregoing rights and remedies is not
intended to be exhaustive and the exercise of any right or remedy shall not
preclude the exercise of any other right or remedies provided for herein or
otherwise provided by law, all of which shall be cumulative and not alternative.
11.5 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Agreement to the
contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Agent on account of the
Obligations or any other amounts outstanding under any of the Other Documents or
in respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of the Agent
in connection with enforcing the rights of the Lenders under this Agreement and
the Other Documents and any protective advances made by the Agent with respect
to the Collateral under or pursuant to the terms of this Agreement;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each of
the Lenders in connection with enforcing its rights under this Agreement and the
Other Documents or otherwise with respect to the Obligations owing to such
Lender;
FOURTH, to the payment of all of the Obligations consisting of accrued
fees and interest arising under or pursuant to this Agreement or the Other
Documents;
FIFTH, to the payment of the outstanding principal amount of the
Obligations constituting Advances (including the payment or cash
collateralization of the outstanding amount of Letters of Credit);
SIXTH, to all other Obligations and other obligations which shall have
become due and payable under the Other Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above;
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent
that any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but
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undrawn amount of outstanding Letters of Credit, such amounts shall be held by
the Agent in a cash collateral account and applied (A) first, to reimburse the
Issuer from time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 11.5.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1 Waiver of Notice.
Each Borrower hereby waives notice of non-payment of any of
the Receivables, demand, presentment, protest and notice thereof with respect to
any and all instruments, notice of acceptance hereof, notice of loans or
advances made, credit extended, Collateral received or delivered, or any other
action taken in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein.
12.2 Delay.
No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.
12.3 Jury Waiver.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING
UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1 Term.
This Agreement, which shall inure to the benefit of and shall
be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until October 6, 2007
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(the "Term") unless sooner terminated as herein provided. The Borrowers may
terminate this Agreement at any time upon ninety (90) days' prior written notice
upon payment in full of the Obligations.
13.2 Termination.
The termination of this Agreement shall not affect any
Borrower's, Agent's or any Lender's rights, or any of the Obligations having
their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrowers' Account may from time
to time be temporarily in a zero or credit position, until all of the
Obligations of each Borrower have been paid or performed in full after the
termination of this Agreement or each Borrower has furnished Agent and Lenders
with an indemnification satisfactory to Agent and Lenders with respect thereto.
Accordingly, each Borrower waives any rights which it may have under the Uniform
Commercial Code to demand the filing of termination statements with respect to
the Collateral, and Agent shall not be required to send such termination
statements to each Borrower, or to file them with any filing office, unless and
until this Agreement shall have been terminated in accordance with its terms and
all Obligations paid in full in immediately available funds. All
representations, warranties, covenants, waivers and agreements contained herein
shall survive termination hereof until all Obligations are paid or performed in
full. Without limitation, all indemnification obligations contained herein shall
survive the termination hereof and payment in full of the Obligations.
XIV. REGARDING AGENT.
14.1 Appointment.
Each Lender hereby designates PNC to act as Agent for such
Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees described in the
Agent's Letter), charges and collections (without giving effect to any
collection days) received pursuant to this Agreement, for the ratable benefit of
Lenders. Agent may perform any of its duties hereunder by or through its agents
or employees. As to any matters not expressly provided for by this Agreement
(including without limitation, collection of the Notes) Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; provided, however, that Agent shall not be
required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
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14.2 Nature of Duties.
(a) Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents. Neither Agent nor any of its officers, directors, employees or
agents shall be (i) liable for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their gross (not mere)
negligence or willful misconduct, or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents, as the case may be, or for the value, validity,
effectiveness, genuineness, due execution, enforceability or sufficiency of this
Agreement, or any of the Other Documents or for any failure of any Borrower to
perform its obligations hereunder. Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any of the
Other Documents, or to inspect the properties, books or records of any Borrower.
The duties of Agent as respects the Advances to Borrowers shall be mechanical
and administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligations in respect of this Agreement except as expressly set forth
herein.
(b) The parties hereto acknowledge and agree
that no Person shall have, solely by reason of its designation as a
documentation agent, co-lead arranger or sole book runner any power, duty,
responsibility or liability whatsoever under this Agreement or any of the Other
Documents.
14.3 Lack of Reliance on Agent and Resignation.
Independently and without reliance upon Agent or any other
Lender, each Lender has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Borrower in
connection with the making and the continuance of the Advances hereunder and the
taking or not taking of any action in connection herewith, and (ii) its own
appraisal of the creditworthiness of each Borrower. Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before making of the Advances or at any time or times thereafter
except as shall be provided by any Borrower pursuant to the terms hereof. Agent
shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Other Document, or of the financial
condition of any Borrower, or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement, the Note, the Other Documents or the financial condition of any
Borrower, or the existence of any Event of Default or any Default.
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Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowing Agent and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to the Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
14.4 Certain Rights of Agent.
If Agent shall request instructions from Lenders with respect
to any act or action (including failure to act) in connection with this
Agreement or any Other Document, Agent shall be entitled to refrain from such
act or taking such action unless and until Agent shall have received
instructions from the Required Lenders; and Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing, Lenders
shall not have any right of action whatsoever against Agent as a result of its
acting or refraining from acting hereunder in accordance with the instructions
of the Required Lenders.
14.5 Reliance.
Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, order or other document or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or entity, and, with respect to all
legal matters pertaining to this Agreement and the Other Documents and its
duties hereunder, upon advice of counsel selected by it. Agent may employ agents
and attorneys-in-fact and shall not be liable for the default or misconduct of
any such agents or attorneys-in-fact selected by Agent with reasonable care.
14.6 Notice of Default.
Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder or under the Other
Documents, unless Agent has received notice from a Lender or a Borrower
referring to this Agreement or the Other Documents, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that Agent receives such a notice, Agent shall give notice thereof to
Lenders. Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided, that,
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of Lenders.
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14.7 Indemnification.
To the extent Agent is not reimbursed and indemnified by the
Borrowers, each Lender will reimburse and indemnify Agent in proportion to its
respective portion of the Advances (or, if no Advances are outstanding,
according to its Commitment Percentage), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, or in any way relating to or arising out of this Agreement or any
Other Document; provided that, Lenders shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross (not mere)
negligence or willful misconduct.
14.8 Agent in its Individual Capacity.
With respect to the obligation of Agent to lend under this
Agreement, the Advances made by it shall have the same rights and powers
hereunder as any other Lender and as if it were not performing the duties as
Agent specified herein; and the term "Lender" or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity as a Lender. Agent may engage in business with any Borrower as if it
were not performing the duties specified herein, and may accept fees and other
consideration from any Borrower for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.
14.9 Delivery of Documents.
To the extent Agent receives financial statements required
under Sections 9.6, 9.7, 9.8 and 9.10 and a Borrowing Base Certificate from the
Borrowing Agent pursuant to the terms of this Agreement, Agent will promptly
furnish such documents and information to Lenders.
14.10 Borrowers' Undertaking to Agent.
Without prejudice to their respective obligations to Lenders
under the other provisions of this Agreement, each Borrower hereby undertakes
with Agent to pay to Agent from time to time on demand all amounts from time to
time due and payable by it for the account of Agent or Lenders or any of them
pursuant to this Agreement to the extent not already paid. Any payment made
pursuant to any such demand shall pro tanto satisfy the relevant Borrower's
obligations to make payments for the account of Lenders or the relevant one or
more of them pursuant to this Agreement.
14.11 No Reliance on Agent's Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender,
nor any of its Affiliates, participants or assignees, may rely on the Agent to
carry out such Lender's, Affiliate's, participant's or assignee's customer
identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
"CIP Regulations"), or any other Anti-Terrorism Law, including any programs
involving any of the
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following items relating to or in connection with any of the Borrowers, their
Affiliates or their agents, this Agreement, the Other Documents or the
transactions hereunder or contemplated hereby: (1) any identity verification
procedures, (2) any record keeping, (3) comparisons with government lists, (4)
customer notices or (5) other procedures required under the CIP Regulations or
such other laws.
XV. BORROWING AGENCY.
15.1 Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf
of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit
all loan proceeds hereunder in accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a
co-borrowing facility with a borrowing agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request.
Neither Agent nor any Lender shall incur liability to Borrowers as a result
thereof. To induce Agent and Lenders to do so and in consideration thereof, each
Borrower hereby indemnifies Agent and each Lender and holds Agent and each
Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Agent or any Lender by
any Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Agent or any Lender on
any request or instruction from Borrowing Agent or any other action taken by
Agent or any Lender with respect to this Section 15.1 except due to willful
misconduct or gross (not mere) negligence by the indemnified party.
(c) All Obligations shall be joint and several,
and each Borrower shall make payment upon the maturity of the Obligations by
acceleration or otherwise, and such obligation and liability on the part of each
Borrower shall in no way be affected by any extensions, renewals and forbearance
granted to Agent or any Lender to any Borrower, failure of Agent or any Lender
to give any Borrower notice of borrowing or any other notice, any failure of
Agent or any Lender to pursue or preserve its rights against any Borrower, the
release by Agent or any Lender of any Collateral now or thereafter acquired from
any Borrower, and such agreement by each Borrower to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by Agent or
any Lender to the other Borrowers or any Collateral for such Borrower's
Obligations or the lack thereof. Each Borrower waives all suretyship defenses.
15.2 Waiver of Subrogation.
Each Borrower expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim which such Borrower may now or hereafter have against the other Borrowers
or other Person directly or contingently liable for the Obligations hereunder,
or against or with respect to the other Borrowers' property (including, without
limitation, any property which is Collateral for the Obligations), arising from
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the existence or performance of this Agreement, until termination of this
Agreement and repayment in full of the Obligations.
XVI. MISCELLANEOUS.
16.1 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. Any judicial
proceeding brought by or against any Borrower with respect to any of the
Obligations, this Agreement or any related agreement may be brought in any court
of competent jurisdiction in the Commonwealth of Pennsylvania, United States of
America, and, by execution and delivery of this Agreement, each Borrower accepts
for itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this Agreement.
Each Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by registered mail (return
receipt requested) directed to Borrowing Agent at its address set forth in
Section 16.6 and service so made shall be deemed completed five (5) days after
the same shall have been so deposited in the mails of the United States of
America, or, at the Agent's and/or any Lender's option, by service upon
Borrowing Agent which each Borrower irrevocably appoints as such Borrower's
Agent for the purpose of accepting service within the Commonwealth of
Pennsylvania. Nothing herein shall affect the right to serve process in any
manner permitted by law or shall limit the right of Agent or any Lender to bring
proceedings against any Borrower in the courts of any other jurisdiction. Each
Borrower waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Any judicial proceeding by any
Borrower against Agent or any Lender involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or state
court located in the County of Allegheny, Commonwealth of Pennsylvania.
16.2 Entire Understanding.
(a) This Agreement and the documents executed
concurrently herewith contain the entire understanding between each Borrower,
Agent and each Lender and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no
force and effect unless in writing, signed by each Borrower's, Agent's and each
Lender's respective officers. Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged. Each Borrower acknowledges that it has been advised by counsel in
connection with the execution of this Agreement and Other Documents and is not
relying upon oral representations or statements inconsistent with the terms and
provisions of this Agreement.
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(b) The Required Lenders, Agent with the consent
in writing of the Required Lenders, and the Borrowers may, subject to the
provisions of this Section 16.2(b), from time to time enter into written
supplemental agreements to this Agreement or the Other Documents executed by the
Borrowers, for the purpose of adding or deleting any provisions or otherwise
changing, varying or waiving in any manner the rights of Lenders, Agent or
Borrowers thereunder or the conditions, provisions or terms thereof or waiving
any Event of Default thereunder, but only to the extent specified in such
written agreements; provided, however, that no such supplemental agreement
shall, without the consent of all Lenders:
(i) increase the Commitment Percentage
or maximum dollar commitment of any Lender or increase the Maximum Revolving
Advance Amount.
(ii) extend the maturity of any Note or
the due date for any amount payable hereunder, or decrease the rate of interest
or reduce any fee payable by Borrowers to Lenders pursuant to this Agreement.
(iii) alter the definition of the term
Required Lenders or alter, amend or modify this Section 16.2(b).
(iv) release any Collateral during any
calendar year (other than in accordance with the provisions of this Agreement)
having an aggregate value in excess of Two Million and 00/100 Dollars
($2,000,000.00).
(v) change the rights and duties of
Agent.
(vi) permit any Revolving Advance to be
made if after giving effect thereto the sum of the Revolving Advances
outstanding and the amount of Letters of Credit outstanding hereunder would
exceed (x) the Maximum Revolving Advance Amount or (y) the Formula Amount for
more than thirty (30) consecutive Business Days or exceed one hundred and five
percent (105%) of the Formula Amount.
(vii) increase the Advance Rates above
the Advance Rates in effect on the Closing Date.
(viii) release any Borrower from the
Obligations under this Agreement, the applicable Guaranty, if any, or any Other
Document.
(ix) alter, amend or modify Section 11.5
hereof.
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon the Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, the Borrowers, Agent and Lenders shall
be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
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In the event that Agent requests the consent of a Lender pursuant to
this Section 16.2 and such consent is denied, then PNC may, at its option,
require such Lender to assign its interest in the Advances to PNC or to another
Lender or to any other Person designated by the Agent (the "Designated Lender"),
for a price equal to the then outstanding principal amount thereof plus accrued
and unpaid interest and fees due such Lender, which interest and fees shall be
paid when collected from Borrowers. In the event PNC elects to require any
Lender to assign its interest to PNC or to the Designated Lender, PNC will so
notify such Lender in writing within forty five (45) days following such
Lender's denial, and such Lender will assign its interest to PNC or the
Designated Lender no later than five (5) days following receipt of such notice
pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the
Designated Lender, as appropriate, and Agent.
Notwithstanding (a) the existence of a Default or an Event of Default,
(b) that any of the other applicable conditions precedent set forth in Section
8.2 hereof have not been satisfied or (c) any other provision of this Loan
Agreement, Agent may at its discretion and without the consent of the Required
Lenders, voluntarily permit the outstanding Revolving Advances and the amount of
Letters of Credit outstanding at any time to exceed one hundred and five percent
(105%) of the Formula Amount for up to thirty (30) consecutive Business Days
provided that such outstanding Advances do not exceed the Maximum Revolving
Advance Amount. For purposes of the preceding sentence, the discretion granted
to Agent hereunder shall not preclude involuntary overadvances that may result
from time to time due to the fact that the Formula Amount was unintentionally
exceeded for any reason, including, but not limited to, Collateral previously
deemed to be either "Eligible Receivables" or "Eligible Inventory", as
applicable, becomes ineligible or collections of Receivables applied to reduce
outstanding Revolving Advances are thereafter returned for insufficient funds.
In the event that Revolving Advances are made after Agent has determined the
existence of involuntary overadvances, such Revolving Advances shall be deemed
to be involuntary overadvances and Agent may, for the immediately following
thirty (30) Business Days, in its sole discretion, without the consent of the
Required Lenders, permit the sum of the outstanding Revolving Advances and the
outstanding Letters of Credit to exceed the Formula Amount by up to five percent
(5%) of the Formula Amount; provided, however, Agent shall require Borrowers to
pay in full or otherwise eliminate any overadvance that remains outstanding at
the end of such thirty (30) day period. The provisions of this paragraph
constitute agreements among the Agent and the Lenders inter se and do not in any
manner limit, impair or otherwise effect Borrowers' obligations with respect to
overadvances (whether or not involuntary) under Section 2.6 above.
In addition to (and not in substitution of) the discretionary Revolving
Advances permitted above in this Section 16.2, the Agent is hereby authorized by
the Borrowers and the Lenders, from time to time in the Agent's sole discretion,
(a) after the occurrence and during the continuation of a Default or an Event of
Default, or (b) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 hereof have not been satisfied, to make
Revolving Advances to the Borrowers on behalf of the Lenders which the Agent, in
its reasonable business judgment, deems necessary or desirable (i) to preserve
or protect the Collateral, or any portion thereof, (ii) to enhance the
likelihood of, or maximize the amount of, repayment of the Advances and other
Obligations, or (iii) to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement; provided, that at any time after giving
effect to any such Revolving Advances, the outstanding Revolving Advances and
the amount of
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Letters of Credit outstanding do not exceed one hundred five percent (105%) of
the Formula Amount or the Maximum Revolving Advance Amount.
16.3 Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and
inure to the benefit of the Borrowers, Agent, each Lender, all future holders of
the Obligations and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the
regular course of commercial banking business one or more Lenders may at any
time and from time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a participating
interest, a "Transferee"). Each Transferee may exercise all rights of payment
(including without limitation rights of set-off) with respect to the portion of
such Advances held by it or other Obligations payable hereunder as fully as if
such Transferee were the direct holder thereof provided that Borrowers shall not
be required to pay to any Transferee more than the amount which it would have
been required to pay to Lender which granted an interest in its Advances or
other Obligations payable hereunder to such Transferee had such Lender retained
such interest in the Advances hereunder or other Obligations payable hereunder
and in no event shall Borrowers be required to pay any such amount arising from
the same circumstances and with respect to the same Advances or other
Obligations payable hereunder to both such Lender and such Transferee. Each
Borrower hereby grants to any Transferee a continuing security interest in any
deposits, moneys or other property actually or constructively held by such
Transferee as security for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent
which shall not be unreasonably withheld or delayed, sell, assign or transfer
all or any part of its rights under this Agreement and the Other Documents to
one or more additional banks or financial institutions and one or more
additional banks or financial institutions may commit to make Advances hereunder
(each a "Purchasing Lender"), in minimum amounts of not less than Five Million
and 00/100 Dollars ($5,000,000.00), pursuant to a Commitment Transfer
Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent
and delivered to Agent for recording; provided that no such consent of the Agent
shall be required in the case of a sale, assignment or transfer by a Lender to
an Affiliate of such Lender. Upon such execution, delivery, acceptance and
recording, from and after the transfer effective date determined pursuant to
such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer Supplement,
have the rights and obligations of a Lender thereunder with a Commitment
Percentage as set forth therein, and (ii) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement, the Commitment Transfer
Supplement creating a novation for that purpose. Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. The Borrowers
hereby consent to the addition of such Purchasing Lender and the resulting
adjustment of the
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Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents. The Borrowers shall execute and deliver
such further documents and do such further acts and things in order to
effectuate the foregoing.
(d) Notwithstanding any other provision in this
Agreement, any Lender may at any time pledge all or a portion of its rights
under this Agreement, its Note and the Other Documents to any of the twelve (12)
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341 without notice to or consent of the Borrowers or the Agent.
No such pledge or enforcement thereof shall release the transferor Lender of its
obligations hereunder or under any Other Document.
(e) Agent shall maintain at its address a copy
of each Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Advances owing
to each Lender from time to time. The entries in the Register shall be presumed
correct, in the absence of demonstrable error, and Borrowers, Agent and Lenders
may treat each Person whose name is recorded in the Register as the owner of the
Advance recorded therein for the purposes of this Agreement. The Register shall
be available for inspection by Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice. Agent shall receive a fee in
the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) payable
by the applicable Purchasing Lender upon the effective date of each transfer or
assignment to such Purchasing Lender; provided that no such fee shall be payable
if the Purchasing Lender is an Affiliate of the transferor Lender.
(f) Each Borrower authorizes each Lender to
disclose to any Transferee or Purchasing Lender and any prospective Transferee
or Purchasing Lender any and all financial information in such Lender's
possession concerning such Borrower which has been delivered to such Lender by
or on behalf of such Borrower pursuant to this Agreement or in connection with
such Lender's credit evaluation of such Borrower provided that such Lender first
obtain a confidentiality agreement from such prospective Transferee or
Purchasing Lender.
16.4 Application of Payments.
Agent shall have the continuing and exclusive right to apply
or reverse and re-apply any payment and any and all proceeds of Collateral to
any portion of the Obligations. To the extent that any Borrower makes a payment
or Agent or any Lender receives any payment or proceeds of the Collateral for
any Borrower's benefit, which are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.
16.5 Indemnity.
Each Borrower shall indemnify Agent, each Lender and each of
their respective officers, directors, Affiliates, employees and agents from and
against any and all liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Agent or any Lender in any litigation, proceeding or
investigation instituted or conducted by any governmental agency or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Agent or any Lender is a party
thereto, except to the extent that any of the foregoing arises out of the gross
negligence or willful misconduct of the party being indemnified.
16.6 Notice.
Any notice or request hereunder may be given to Borrowing
Agent or any Borrower or to Agent or any Lender at their respective addresses
set forth below or at such other address as may hereafter be specified in a
notice designated as a notice of change of address under this Section. Any
notice, request, demand, direction or other communication (for purposes of this
Section 16.6 only, a "Notice") to be given to or made upon any party hereto
under any provision of this Loan Agreement shall be given or made by telephone
or in writing (which includes by means of electronic transmission (i.e.,
"e-mail") or facsimile transmission or by setting forth such Notice on a site on
the World Wide Web (a "Website Posting") if Notice of such Website Posting
(including the information necessary to access such site) has previously been
delivered to the applicable parties hereto by another means set forth in this
Section 16.6) in accordance with this Section 16.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on Section 16.6 hereof or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 16.6. Any Notice shall be effective:
(a) In the case of hand-delivery, when
delivered;
(b) If given by mail, four days after such
Notice is deposited with the United States Postal Service, with first-class
postage prepaid, return receipt requested;
(c) In the case of a telephonic Notice, when a
party is contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a facsimile or
electronic transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission,
when sent to the applicable party's facsimile machine's telephone number, if the
party sending such Notice receives confirmation of the delivery thereof from its
own facsimile machine;
(e) In the case of electronic transmission, when
actually received;
(f) In the case of a Website Posting, upon
delivery of a Notice of such posting (including the information necessary to
access such site) by another means set forth in this Section 16.6; and
(g) If given by any other means (including by
overnight courier), when actually received.
(h) Any Lender giving a Notice to Borrowing
Agent or any Borrower shall concurrently send a copy thereof to the Agent, and
the Agent shall promptly notify the other Lenders of its receipt of such Notice.
93
(A) If to Agent or PNC at: PNC Bank, National Association
0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: PNC Bank, National Association
PNC Agency Services
PNC Firstside Center
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and a copy to: Xxxxx Xxxx & Xxxxxxxxx LLP
One Oxford Centre
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx, Esquire
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(B) If to a Lender other than Agent, as specified on the signature
pages hereof.
(C) If to Borrowing Agent
or any Borrower, at: IMCO Recycling Inc.
Central Tower at Xxxxxxxx Square
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
94
with a copy to: IMCO Recycling Inc.
Central Tower at Xxxxxxxx Square
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esquire
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and a copy to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
16.7 Survival.
The obligations of the Borrowers under Sections 2.2(f), 3.7,
3.8, 3.9, 4.18(h), 14.7 and 16.5 shall survive termination of this Agreement and
the Other Documents and payment in full of the Obligations.
16.8 Severability.
If any part of this Agreement is contrary to, prohibited by,
or deemed invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
16.9 Expenses.
All costs and expenses including, without limitation,
reasonable attorneys' fees (including the allocated costs of in house counsel)
and disbursements incurred by Agent on its behalf or on behalf of Lenders (a) in
all efforts made to enforce payment of any Obligation or effect collection of
any Collateral, or (b) in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any consents or
waivers hereunder and all related agreements, documents and instruments, or (c)
in instituting, maintaining, preserving, enforcing and foreclosing on Agent's
security interest in or Lien on any of the Collateral, whether through judicial
proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent's or any Lender's transactions
with any Borrower, or (e) in connection with any advice given to Agent or any
Lender with respect to its rights and obligations under this Agreement and all
related agreements, may be charged to Borrowers' Account and shall be part of
the Obligations.
95
16.10 Injunctive Relief.
Each Borrower recognizes that, in the event any Borrower fails
to perform, observe or discharge any of its obligations or liabilities under
this Agreement, any remedy at law may prove to be inadequate relief to Lenders;
therefore, Agent, if Agent so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
that actual damages are not an adequate remedy.
16.11 Consequential Damages.
Neither Agent nor any Lender, nor any agent or attorney for
any of them, shall be liable to any Borrower for any special, incidental,
consequential or punitive damages arising from any breach of contract, tort or
other wrong relating to the establishment, administration or collection of the
Obligations.
16.12 Captions.
The captions at various places in this Agreement are intended
for convenience only and do not constitute and shall not be interpreted as part
of this Agreement.
16.13 Counterparts; Telecopied Signatures.
This Agreement may be executed in any number of and by
different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto.
16.14 Construction.
The parties acknowledge that each party and its counsel have
reviewed this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendments, schedules or
exhibits thereto.
16.15 Confidentiality; Sharing Information.
(a) Agent, each Lender and each Transferee shall
hold all non-public information obtained by Agent, such Lender or such
Transferee pursuant to the requirements of this Agreement in accordance with
Agent's, such Lender's and such Transferee's customary procedures for handling
confidential information of this nature; provided, however, Agent, each Lender
and each Transferee may disclose such confidential information (a) to its
examiners, affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees and
Purchasing Lenders, and (c) as required or requested by any Governmental Body or
representative thereof or pursuant to legal process; provided, further that (i)
unless specifically prohibited by applicable law or court order, Agent, each
Lender and each Transferee shall use its best efforts prior to disclosure
thereof, to notify the applicable Borrower of the applicable request for
disclosure of such non-public information (A) by a Governmental Body or
representative thereof (other than any such request in connection with an
examination of
96
the financial condition of a Lender or a Transferee by such Governmental Body)
or (B) pursuant to legal process and (ii) in no event shall Agent, any Lender or
any Transferee be obligated to return any materials furnished by any Borrower
other than those documents and instruments in possession of Agent or any Lender
in order to perfect its Lien on the Collateral once the Obligations have been
paid in full and this Agreement has been terminated.
(b) Each Borrower acknowledges that from time to
time financial advisory, investment banking and other services may be offered or
provided to such Borrower or one or more of its Affiliates (in connection with
this Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each Borrower hereby authorizes each Lender to
share any information delivered to such Lender by such Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of
such Lender, it being understood that any such Subsidiary or Affiliate of any
Lender receiving such information shall be bound by the provisions of Section
16.15 as if it were a Lender hereunder. Such authorization shall survive the
repayment of the other Obligations and the termination of the Loan Agreement.
Notwithstanding anything contained herein to the contrary, the information
subject to this Section 16.15 shall not include, and the Agent and each Lender
(and their employees or representatives) may disclose to any and all persons
without limitation of any kind, any information with respect to the "tax
treatment" and "tax structure" (in each case, within the meaning of Section
1.6011-4 of the Regulations) of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Agent or such Lender relating to such tax treatment and tax
structure; provided, however, that with respect to any document or similar item
that in either case contains information concerning the tax treatment or tax
structure of the transactions contemplated hereby as well as other information,
this sentence shall only apply to such portion of such document or similar item
that relates to the tax treatment or tax structure of the Revolving Advances,
Letters of Credit and transactions contemplated hereby.
16.16 Tax Withholding Clause.
Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and, upon the written request of the Agent, each other Lender or assignee or
participant of a Lender) agrees that it will deliver to each of the Borrowing
Agent and the Agent two (2) duly completed appropriate valid Withholding
Certificates certifying its status (as a U.S. or foreign person) and, if
appropriate, making a claim of reduced, or exemption from, U.S. withholding tax
on the basis of an income tax treaty or an exemption provided by the Internal
Revenue Code. The term "Withholding Certificate" means a Form W-9; a Form
W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under Section 1.1441-1(e)(2) and/or (3) of the Income
Tax Regulations (the "Regulations"); a statement described in Section
1.871-14(c)(2)(v) of the Regulations; or any other certificates under the
Internal Revenue Code or Regulations that certify or establish the status of a
payee or beneficial owner as a U.S. or foreign person. Each Lender, assignee or
participant required to deliver to the Borrowing Agent and the Agent a
Withholding Certificate pursuant to the preceding sentence shall deliver such
valid Withholding Certificate as follows: (A) each Lender which is a party
hereto on the Closing Date shall deliver such valid Withholding
97
Certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrowers hereunder for the account of such
Lender; (B) each assignee or participant shall deliver such valid Withholding
Certificate at least five (5) Business Days before the effective date of such
assignment or participation (unless the Agent in its sole discretion shall
permit such assignee or participant to deliver such valid Withholding
Certificate less than five (5) Business Days before such date in which case it
shall be due on the date specified by the Agent). Each Lender, assignee or
participant which so delivers a valid Withholding Certificate further undertakes
to deliver to each of the Borrowing Agent and the Agent two (2) additional
copies of such Withholding Certificate (or a successor form) on or before the
date that such Withholding Certificate expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent Withholding
Certificate so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrowing Agent or the
Agent. Notwithstanding the submission of a Withholding Certificate claiming a
reduced rate of or exemption from U.S. withholding tax, the Agent shall be
entitled to withhold United States federal income taxes at the full 30%
withholding rate if in its reasonable judgment it is required to do so. Further,
the Agent is indemnified under Section 1.1461-1(e) of the Regulations against
any claims and demands of any Lender or assignee or participant of a Lender for
the amount of any tax it deducts and withholds in accordance with regulations
under Section 1441 of the Code.
16.17 USA Patriot Act.
Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA Patriot Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United states or foreign country, and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to the Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a "shell" and
certifying to other matters as required by Section 313 of the USA Patriot Act
and the applicable regulations: (1) within ten (10) days after the Closing Date,
and (2) as such other times as are required under the USA Patriot Act.
16.18 Publicity.
Each Borrower and each Lender hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Agent shall in its sole and absolute discretion deem appropriate.
[INTENTIONALLY LEFT BLANK]
98
Each of the parties has signed this Agreement as of the day and year first
above written.
BORROWERS:
ATTEST/WITNESS IMCO RECYCLING INC.
By: By:
-------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Senior Vice President
IMCO INVESTMENT COMPANY
IMCO RECYCLING OF INDIANA INC.
IMCO ENERGY CORP.
IMCO RECYCLING OF ILLINOIS INC.
ALCHEM ALUMINUM, INC.
PITTSBURG ALUMINUM, INC.
INTERAMERICAN ZINC, INC.
IMCO RECYCLING OF CALIFORNIA, INC.
IMCO INTERNATIONAL, INC.
IMCO RECYCLING OF OHIO INC.
IMSAMET, INC.
IMCO RECYCLING OF IDAHO INC.
IMCO RECYCLING OF UTAH INC.
ROCK CREEK ALUMINUM, INC.
U.S. ZINC CORPORATION
GULF REDUCTION CORPORATION
MIDWEST ZINC CORPORATION
METALCHEM, INC.
U.S. ZINC EXPORT CORPORATION
ALCHEM ALUMINUM SHELBYVILLE INC.
INDIANA ALUMINUM INC.
IMCO OPERATIONS SERVICES COMPANY
ATTEST/WITNESS WESTERN ZINC CORPORATION
By: By:
-------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Vice President of each of the
above-named entities
IMCO INDIANA PARTNERSHIP L.P.
ATTEST/WITNESS By: IMCO Energy Corp., its General
Partner
By: By:
-------------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Vice President
IMCO MANAGEMENT PARTNERSHIP, L.P.
ATTEST/WITNESS By: IMCO Recycling Inc., its
General Partner
By: By:
-------------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Senior Vice President
IMCO RECYCLING OF MICHIGAN L.L.C.
ATTEST/WITNESS By: IMCO Recycling, Inc., its
Manager
By: By:
-------------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Senior Vice President
IMCO RECYCLING SERVICES COMPANY
ATTEST/WITNESS By: Indiana Aluminum Inc., its
Manager
By: By:
-------------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Associate General Counsel Title: Vice President
Agent and Lenders:
PNC Bank, National Association, as
Lender and as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address: 000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Commitment Percentage: 60.0%
JPMorgan Chase Bank, as Lender and
as Documentation Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address: 000 Xxxx Xxxxxx, Xxxxx 0
Xxx Xxxx, XX 00000
Commitment Percentage: 40.0%
