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EXHIBIT 4(e)
EXECUTION COPY
LOAN AND SECURITY AGREEMENT
Dated as of December 1, 1998
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as the Agent
and
LACLEDE STEEL COMPANY,
LACLEDE CHAIN MANUFACTURING COMPANY
and
LACLEDE MID AMERICA INC.,
as Debtors and Debtors-in-Possession,
as the Borrowers
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TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions.........................................................................................2
1.2 Accounting Terms...................................................................................23
1.3 Other Terms........................................................................................23
1.4 Computation of Time Periods........................................................................23
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Revolving Loans....................................................................................24
2.2 Letters of Credit..................................................................................28
ARTICLE 3
INTEREST AND FEES
3.1 Interest Rates.....................................................................................34
3.2 Conversion or Continuation.........................................................................34
3.3 Special Provisions Governing LIBOR Loans...........................................................35
3.4 Maximum Interest Rate..............................................................................37
3.5 Funding Fee........................................................................................38
3.6 Facility Fee.......................................................................................38
3.7 Collateral Management Fee..........................................................................38
3.8 Letter of Credit Fee...............................................................................38
3.9 Audit Fees.........................................................................................39
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans....................................................................................39
4.2 Mandatory Prepayments of the Term Loans............................................................39
4.3 Place and Form of Payments; Extension of Time......................................................39
4.4 Payments as Revolving Loans........................................................................40
4.5 Apportionment, Application and Reversal of Payments................................................40
4.6 Indemnity for Returned Payments....................................................................41
4.7 Increased Capital..................................................................................41
4.8 Register; Agent's and Lenders' Books and Records; Monthly Statements...............................41
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Section Page
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ARTICLE 5
COLLATERAL
5.1 Grant of Security Interest.........................................................................42
5.2 Perfection and Protection of Security Interest.....................................................45
5.3 Location of Collateral.............................................................................46
5.4 Title to, Liens on, and Sale and Use of Collateral.................................................47
5.5 Appraisals.........................................................................................47
5.6 Access and Examination; Confidentiality............................................................47
5.7 Collateral Reporting...............................................................................48
5.8 Accounts...........................................................................................48
5.9 Collection of Accounts; Payments...................................................................49
5.10 Inventory.........................................................................................50
5.11 Equipment.........................................................................................50
5.12 Assigned Contracts................................................................................51
5.13 Documents, Instruments, and Chattel Paper.........................................................52
5.14 Right to Cure.....................................................................................52
5.15 Power of Attorney.................................................................................53
5.16 The Agent's and Lenders' Rights, Duties and Liabilities...........................................53
ARTICLE 6
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
6.1 Books and Records..................................................................................53
6.2 Financial Information..............................................................................54
6.3 Notices to the Lenders.............................................................................56
ARTICLE 7
GENERAL WARRANTIES AND REPRESENTATIONS
7.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...............58
7.2 Validity and Priority of Security Interest.........................................................58
7.3 Organization and Qualification.....................................................................59
7.4 Corporate Name; Prior Transactions.................................................................59
7.5 Subsidiaries and Affiliates........................................................................59
7.6 Financial Statements and Projections...............................................................59
7.7 Capitalization.....................................................................................60
7.8 [Intentionally left blank].........................................................................60
7.9 Debt...............................................................................................60
7.10 Distributions.....................................................................................60
7.11 Title to Property.................................................................................60
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Section Page
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7.12 Real Estate; Leases...............................................................................60
7.13 Proprietary Rights................................................................................61
7.14 Trade Names and Terms of Sale.....................................................................61
7.15 Litigation........................................................................................61
7.16 Restrictive Agreements............................................................................61
7.17 Labor Disputes....................................................................................61
7.18 Environmental Laws................................................................................61
7.19 No Violation of Law...............................................................................63
7.20 No Default........................................................................................63
7.21 ERISA.............................................................................................63
7.22 Taxes.............................................................................................63
7.23 Investment Act, Etc...............................................................................63
7.24 Public Utility Holding Company....................................................................63
7.25 Margin Securities.................................................................................64
7.26 Broker's Fees.....................................................................................64
7.28 Disclosure........................................................................................64
7.29 Bank Accounts.....................................................................................64
7.30 Year 2000 Compliance..............................................................................64
7.31 Pre-Petition Obligations; Defenses................................................................64
ARTICLE 8
AFFIRMATIVE AND NEGATIVE COVENANTS
8.1 Taxes and Other Obligations........................................................................65
8.2 Corporate Existence and Good Standing..............................................................65
8.3 Compliance with Law and Agreements.................................................................65
8.4 Maintenance of Property............................................................................65
8.5 Insurance..........................................................................................65
8.6 Condemnation.......................................................................................66
8.7 Environmental Laws.................................................................................67
8.8 ERISA..............................................................................................68
8.9 Mergers, Consolidations or Sales...................................................................68
8.10 Distributions; Capital Change; Restricted Investments.............................................69
8.11 Transactions Affecting Collateral or Obligations..................................................69
8.12 Guaranties........................................................................................69
8.13 Debt..............................................................................................69
8.14 Prepayment........................................................................................69
8.15 IRB Debt..........................................................................................69
8.16 Transactions with Affiliates......................................................................70
8.17 Investment Banking and Finder's Fees..............................................................70
8.18 Business Conducted................................................................................70
8.19 Liens.............................................................................................70
8.20 Sale and Leaseback Transactions...................................................................70
8.21 New Subsidiaries..................................................................................70
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Section Page
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8.22 Capital Expenditures..............................................................................70
8.23 [Intentionally left blank]........................................................................70
8.24 Cash Available for Fixed Charges..................................................................71
8.25 Direct Contribution...............................................................................71
8.26 Fiscal Year.......................................................................................71
8.27 Use of Proceeds of Advances.......................................................................71
8.28 Copies of Pleadings...............................................................................72
8.29 Case Matters......................................................................................72
8.30 Further Assurances................................................................................73
ARTICLE 9
CONDITIONS OF LENDING
9.1 Conditions Precedent to Each Loan..................................................................74
9.2 Conditions Precedent to Making of Initial Loans on or after the Entry Date.........................74
ARTICLE 10
DEFAULT; REMEDIES
10.1 Events of Default.................................................................................75
10.2 Remedies..........................................................................................79
ARTICLE 11
TERM AND TERMINATION
11.1 Term and Termination..............................................................................81
ARTICLE 12
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
12.1 No Implied Waivers................................................................................81
12.2 Amendments and Waivers............................................................................81
12.3 Assignments; Participations.......................................................................82
12.4 Binding Effect; Assignment........................................................................84
ARTICLE 13
THE AGENT
13.1 Appointment.......................................................................................84
13.2 Nature of Duties..................................................................................84
13.3 Rights, Exculpation, Etc..........................................................................85
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Section Page
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13.4 Reliance..........................................................................................86
13.5 Indemnification of the Agent by the Lenders.......................................................86
13.6 Agent in Individual Capacity......................................................................86
13.7 Successor Agent...................................................................................86
13.8 Collateral Matters................................................................................87
13.9 Restrictions on Actions by Lenders; Sharing of Payments...........................................88
13.10 Agency for Perfection............................................................................88
13.11 Payments by Agent to Lenders.....................................................................89
13.12 Concerning the Collateral and the Related Loan Documents.........................................89
ARTICLE 14
MISCELLANEOUS
14.1 Cumulative Remedies; No Prior Recourse to Collateral..............................................89
14.2 Severability......................................................................................90
14.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.............................90
14.4 Survival of Representations and Warranties........................................................91
14.5 Other Security and Guaranties.....................................................................91
14.6 Fees and Expenses.................................................................................91
14.7 Notices...........................................................................................92
14.8 Indemnity of the Agent and the Lenders by the Borrowers...........................................94
14.9 Waiver of Notices.................................................................................94
14.10 Final Agreement..................................................................................95
14.11 Counterparts.....................................................................................95
14.12 Captions.........................................................................................95
14.13 Right of Setoff..................................................................................95
14.14 Taxes............................................................................................95
14.15 Joint and Several Liability......................................................................96
14.16 Contribution and Indemnification among the Borrowers.............................................97
14.17 Agency of the Parent for each other Borrower.....................................................97
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EXHIBITS AND SCHEDULES
EXHIBIT A - Form of Final Order (Defs.)
EXHIBIT B - Form of Borrowing Base Certificate (Defs.)
EXHIBIT C - Financial Statements (Defs., Section 7.6(a))
EXHIBIT D - Additional Facility Related Items (Defs.)
EXHIBIT E - Form of Notice of Borrowing (Section 2.1(b))
EXHIBIT F - Form of Notice of Conversion/Continuation (Section
3.2(b))
EXHIBIT G - Form of Assignment and Acceptance (Section 12.3(a)
and (d))
SCHEDULE 2.2 - Existing Letters of Credit (Sections 2.2(a))
SCHEDULE 5.3 - Locations of Collateral (Section 5.3)
SCHEDULE 7.2 - Permitted Liens (Defs., Sections 5.4, 7.2)
SCHEDULE 7.4 - Trade Names (Sections 7.4, 7.14)
SCHEDULE 7.5 - Subsidiaries and Affiliates (Sections 7.5, 8.21)
SCHEDULE 7.9 - Debt (Section 7.9)
SCHEDULE 7.12 - Real Property and Leases; Permitted Sales (Defs.,
Sections 7.11, 7.12)
SCHEDULE 7.13 - Proprietary Rights (Defs., Section 7.13)
SCHEDULE 7.15 - Litigation (Section 7.15)
SCHEDULE 7.17 - Labor Contracts and Disputes (Section 7.17)
SCHEDULE 7.18 - Environmental Matters (Sections 7.18, 8.7)
SCHEDULE 7.21 - Employee Benefit Plans (Section 7.21)
SCHEDULE 7.29 - Bank Accounts (Section 7.29)
SCHEDULE 7.31 - Pre-Petition Obligations (Section 7.31)
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This LOAN AND SECURITY AGREEMENT (the "Agreement") is dated as
of December 1, 1998 among BANKAMERICA BUSINESS CREDIT, INC., a Delaware
corporation ("BABC"), BNY FINANCIAL CORPORATION, a New York corporation ("BNY")
formerly known as Bank of New York Commercial Corporation, NATIONSBANK, N.A., a
national banking association ("NB") (BABC, BNY and NB and their respective
successors and assigns being sometimes hereinafter referred to collectively as
the "Lenders" and each of BABC, BNY and NB and its successors and assigns being
sometimes hereinafter referred to individually as a "Lender"), BANKAMERICA
BUSINESS CREDIT, INC., a Delaware corporation, as agent for the Lenders (in such
capacity as agent, the "Agent"), LACLEDE STEEL COMPANY, a Delaware corporation,
as debtor and debtor-in-possession (the "Parent"), with an office at One
Metropolitan Square, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000, and
LACLEDE CHAIN MANUFACTURING COMPANY, a Delaware corporation, as debtor and
debtor-in-possession ("Laclede Chain"), with an office at One Metropolitan
Square, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000, and LACLEDE MID
AMERICA INC., an Indiana corporation, as debtor and debtor-in-possession
("Laclede Mid America"), with an office at One Metropolitan Square, 000 Xxxxx
Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000 (the Parent, Laclede Chain and Laclede
Mid America being sometimes hereinafter referred to collectively as the
"Borrowers" and each of the Parent, Laclede Chain and Laclede Mid America being
sometimes hereinafter referred to individually as a "Borrower"). In
consideration of the mutual conditions and agreements set forth in this
Agreement, and for good and valuable consideration, the receipt of which is
hereby acknowledged, the Lenders, the Agent and the Borrowers hereby agree as
follows:
RECITALS
A. The Borrowers, the Lenders and the Agent are parties to a
certain Loan and Security Agreement dated as of September 7, 1994, and amended
and restated as of August 20, 1997, as amended pursuant to a certain Amendment
No. 1 dated as of December 30, 1997, Amendment No. 2 dated as of March 27, 1998
and Amendment No. 3 dated as of August 11, 1998 (such Loan and Security
Agreement, as so amended, being hereinafter referred to as the "Original
Agreement"), providing for certain loans and other financial accommodations by
the Lenders and the Agent to the Borrowers.
B. On November 30, 1998, each of the Borrowers filed with the
United States Bankruptcy Court for the Eastern District of Missouri, Eastern
Division, a voluntary petition for relief under Chapter 11 of title 11 of the
United States Code, 11 U.S.C. Section 101 et seq., and each of the
Borrowers has continued in possession of its assets pursuant to Sections 1107
and 1108 thereof.
C. In connection with the Borrowers' bankruptcy filings, at
the request of the Borrowers, the Bankruptcy Court entered an enter interim
order on December 2, 1998 (as such order may be modified or supplemented from
time to time with the express written joinder or consent of the Lenders and the
Agent, collectively, the "Interim Order"), authorizing, among other things, the
Borrowers to borrow funds from the Lenders under this Agreement in a maximum
aggregate principal amount as set forth in the Interim Order subject to the
terms and conditions of the Interim Order, this Agreement, the Loan Documents
(as defined herein), and the "Final Order" (as defined below).
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ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Accounts" means all of each Borrower's now owned or hereafter
acquired or arising accounts, and any other rights to payment for the sale or
lease of goods or rendition of services, whether or not they have been earned by
performance.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"Adequate Protection Payments" means the adequate protection
payments to be made by the Borrowers with respect to the Pre-Petition
Obligations pursuant to the Final Order in an amount not less than $355,000 per
month.
"Additional Facility" means an amount equal to $5,100,000,
such amount to be reduced at the time of sale or disposition of, or other
realization upon, any Additional Facility Related Item, in an amount equal to
the Net Proceeds of such sale, disposition or realization.
"Additional Facility Related Item" means each of the items of
property or other matters identified on Exhibit D.
"Affiliate" means: (a) any Person which, directly or
indirectly, controls, is controlled by or is under common control with, any
Borrower; (b) any Person which beneficially owns or holds, directly or
indirectly, five percent (5.0%) or more of any class of Voting Stock of any
Borrower; or (c) any Person, five percent (5.0%) or more of any class of the
Voting Stock (or if such Person is not a corporation, five percent (5.0%) or
more of the equity interest) of which is beneficially owned or held, directly or
indirectly, by any Borrower. Control (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as used herein, means
the possession, directly or indirectly, of the power in any form to direct or
cause the direction of the management and policies of the Person in question.
"Agent" means BankAmerica Business Credit, Inc., in its
capacity as agent for the Lenders, and shall include any successor Agent
appointed pursuant to Section 13.7.
"Agent Advances" has the meaning specified in Section 2.1(j).
"Agent's Liens" means the Liens granted to the Agent, for the
ratable benefit of the Secured Creditors, pursuant to this Agreement, the
Original Agreement and the other Loan Documents, the Initial Order, the Final
Order or any other order entered by the Bankruptcy Court or any other court in
the Case.
"Agreed Pre-Petition Outstanding Balance" means $37,310,720.
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"Alton Mortgage" means that certain Mortgage, Security
Agreement, Financing Statement and Assignment of Rents and Leases dated as of
August 20, 1997 and executed by the Parent in favor of the Agent, pursuant to
what the Parent has granted to the Agent, for the ratable benefit of the Secured
Creditors, a mortgage Lien on its Real Estate located in Alton, Illinois and
identified therein.
"Alton Steel Operations" means the operations of the Parent's
Xxxxx Steel division located in Alton, Illinois, which consist primarily of the
melt shop and the 14-inch and 8-inch rolling xxxxx.
"Assigned Contracts" means, collectively, all of each
Borrower's rights and remedies under, and all moneys and claims for money due or
to become due to such Borrower under any material contracts and any and all
amendments, supplements, extensions, and renewals thereof including, without
limitation, all rights and claims of such Borrower now or hereafter existing:
(i) under any insurance, indemnities, warranties, and guarantees provided for or
arising out of or in connection with any of the foregoing agreements; (ii) for
any damages arising out of or for breach or default under or in connection with
any of the foregoing agreements; (iii) to all other amounts from time to time
paid or payable under or in connection with any of the foregoing agreements; or
(iv) to exercise or enforce any and all covenants, remedies, powers and
privileges thereunder.
"Assignment and Acceptance" has the meaning specified in
Section 12.3(a).
"Availability" means, at any time, (a) the Maximum Revolver
Amount minus (b) the sum of (i) the unpaid balance of Post-Petition Revolving
Loans at that time, (ii) the aggregate amount of Pending Revolving Loans at such
time, (iii) the aggregate undrawn amount of all outstanding Letters of Credit,
and (iv) the aggregate amount of any unpaid reimbursement obligations in respect
of the Letters of Credit. In determining pursuant to Section 2.1(a), 2.1(g),
2.1(h) or 2.1(j) whether Revolving Loans to be made on any date would exceed
Availability on such date, such proposed Revolving Loans shall be counted as
either Revolving Loans or Pending Revolving Loans for purposes of calculating
Availability on such date, but shall not be counted as both Revolving Loans and
Pending Revolving Loans.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association, or any successor entity
thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.).
"Bankruptcy Court" means the United States Bankruptcy Court
for the Eastern District of Missouri, Eastern Division, or such other court
having original jurisdiction over the Case.
"Bankruptcy Plan" means any plan filed pursuant to Section
1121 of the Bankruptcy Code with respect to any Borrower.
"Base LIBO Rate" means, during any Interest Period, the rate
of interest per annum notified to the Agent by Bank of America as the rate of
interest at which Dollar deposits in the approximate amount of the Loans to be
made or continued as, or converted into, LIBOR Loans by the
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Lenders and having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
commencement of such Interest Period.
"Base Rate" means, for any day, the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate
set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.)
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change in the reference rate announced by Bank of America shall take effect
at the opening of business on the day specified in the public announcement of
such change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loan" means a Post-Petition Revolving Loan during
any period in which it bears interest at the rate provided in Section 3.1(i).
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower or an ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrowing" means a borrowing consisting of Revolving Loans
made on the same day by the Lenders (or by BABC in the case of a Borrowing
funded by Settlement Loans) or by the Agent in the case of a Borrowing
consisting of an Agent Advance.
"Borrowing Base Certificate" means a certificate of the chief
financial officers of the Borrowers substantially in the form of Exhibit B (or
another form mutually acceptable to the Agent and the Borrowers) setting forth
calculations of Availability, including a calculation of each component thereof,
(a) with respect to Accounts, as of the close of business on a day no more than
two (2) Business Days prior to the date of such certificate, and (b) with
respect to Inventory, (i) prior to the twentieth (20th) day of any month, as of
the close of business on the last Business Day of the second preceding month,
and (ii) on or after the twentieth (20th) day of any month, as of the close of
business on the last Business Day of the immediately preceding month, all in
such detail as shall be satisfactory to the Agent. All calculations of
Availability in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrowers and certified to the
Agent; provided, that the Agent shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation (1) to
reflect its reasonable estimate of declines with respect to the Collateral
described therein, and (2) to the extent that such calculation is not in
accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in San Francisco, California are required or
permitted to be closed, and (b) with respect to all notices, determinations,
fundings and payments in connection with the LIBO Rate or LIBOR Loans,
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any day that is a Business Day pursuant to clause (a) above and that is also a
day on which trading is carried on by and between banks in the London interbank
market.
"Capital Expenditures" means, for any fiscal period, (a) the
cost of any fixed asset or improvement, or replacement, substitution, or
addition thereto, acquired during such period and having a useful life of more
than one year, including, without limitation, those costs arising in connection
with the direct or indirect acquisition of such assets by way of increased
product or service charges or offset items or in connection with a Capital Lease
plus (b) the amount of any cash expended during such period in consummating any
Quasi Asset Acquisition.
"Capital Lease" means any lease of property by the Parent or
any of its consolidated Subsidiaries which, in accordance with GAAP, is or
should be capitalized on the lessee's balance sheet or for which the amount of
the asset and liability thereunder, as if so capitalized should be disclosed in
a footnote to such balance sheet.
"Carveout" means the "Carveout" of up to $750,000 as defined
in the Interim Order and the Final Order.
"Case" shall mean the bankruptcy case captioned "Laclede Steel
Company, a Delaware corporation, et al.", and related cases with respect to the
Borrowers, bearing case numbers 00-00000-000, 00-00000-000, and 00-00000-000 and
arising upon the filing by each Borrower of a voluntary petition with the
Bankruptcy Court on November 30, 1998.
"Cash Available for Fixed Charges" means, with respect to any
fiscal period of the Parent and its consolidated Subsidiaries, net pre-tax
earnings (or loss) for such period, determined in accordance with GAAP (but
excluding gain or loss arising from extraordinary items), and reported on the
Financial Statements for such fiscal period, plus, to the extent deducted in
computing net earnings, (a) interest expense, including interest on the IRB
Debt, and Adequate Protection Payments, (b) depreciation expense, and (c)
amortization expense, minus, (1) to the extent included in computing net
earnings, gain arising from any other noncash non-recurring transaction and (2)
Capital Expenditures incurred during such period.
"Clean Up Costs" means costs resulting from implementation of
Parent's modified closure plan for disposition of electric arc furnace dust at
its Alton, Illinois plant.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"Collateral" means, collectively, the Parent Collateral, the
Laclede Chain Collateral and the Laclede Mid America Collateral.
"Collateral Management Fee" has the meaning specified in
Section 3.7.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 12.3, as such Commitment
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may be adjusted from time to time in accordance with the provisions of Section
12.3, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Committee" means, collectively, the official committee of
unsecured creditors (if any) appointed for any Borrower in the Case.
"Consensual Plan" shall mean a plan of reorganization or
liquidation for any Borrower that has been accepted by the class containing the
Agent and the Lenders and has not been modified pursuant to Section 1127 of the
Bankruptcy Code or otherwise without the necessary votes or consents of the
Agent and the Lenders.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Dated Account" means an Account owing to Laclede Chain and
containing terms permitting payment to be made more than thirty (30) days after
the date of the original invoice issued by Laclede Chain with respect to the
sale giving rise thereto but requiring payment within two hundred ten (210) days
after such date.
"Debt" means all liabilities, obligations and indebtedness of
the Parent and its Subsidiaries to any Person, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, fixed or
otherwise, and including, without in any way limiting the generality of the
foregoing: (i) the Parent's or any Subsidiary's liabilities and obligations to
trade creditors; (ii) all of the Obligations; (iii) all of each Borrower's
obligations for borrowed money, including, but not limited to, the IRB Debt;
(iv) all obligations and liabilities of any Person secured by any Lien on the
Parent's or any Subsidiary's property, even though the Parent or such Subsidiary
shall not have assumed or become liable for the payment thereof; provided,
however, that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the value of
such property as shown on a balance sheet of the Parent and its consolidated
Subsidiaries prepared in accordance with GAAP; (v) all obligations or
liabilities created or arising under any Capital Lease or conditional sale or
other title retention agreement with respect to property used or acquired by the
Parent or any Subsidiary, even if the rights and remedies of the lessor, seller
or lender thereunder are limited to repossession of such property; provided,
however, that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the value of
such property as shown on a balance sheet of the Parent and its consolidated
Subsidiaries prepared in accordance with GAAP; (vi) all obligations and
liabilities under Guaranties; and (vii) the Parent's or any Subsidiary's
liabilities and obligations arising as a result of the issuance of letters of
credit.
"Default" means any event or condition which, with notice, the
passage of time, the happening of any other condition or event, or any
combination thereof, would constitute an Event of Default.
"Direct Contribution" means, with respect to any fiscal period
of the Parent, the net income of the Xxxxx Steel Operations for such period.
Such net income for any fiscal period
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shall be the amount of net sales minus the sum of direct costs, manufacturing
overhead, direct selling expense, direct general and administrative expense and
interest expense on the Obligations, with such interest expense for any fiscal
period being an amount equal to the total interest on the Obligations for such
fiscal period (including interest accrued on the Pre-Petition Obligations)
multiplied by a fraction, the numerator of which is the average monthly amount
of Accounts and Inventory attributable to the Xxxxx Steel Operations for such
period, and the denominator of which is the aggregate average monthly amount of
Accounts and Inventory for all of the Borrowers for such period.
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for such stock) of such
corporation, other than distributions in capital stock (or any options or
warrants for such stock) of the same class; or (b) the redemption or other
acquisition of any capital stock (or any options or warrants for such stock) of
such corporation.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States.
"Eligible Accounts" means at any time, those Accounts which
when scheduled to the Lenders and at all times thereafter, do not violate the
negative covenants and other provisions of this Agreement and do satisfy the
affirmative covenants and other provisions of this Agreement and which the Agent
deems eligible (based on criteria which the Agent establishes), in the exercise
of its reasonable credit judgment, as the basis for Revolving Loans; provided,
however, upon the reasonable request of the applicable Borrower, the Agent will
notify such Borrower of the reason for deeming an Account not to be an Eligible
Account. Without limiting the foregoing, no Account shall be an Eligible Account
if:
(1) Such Account is (a) due or unpaid more than one hundred
twenty (120) days after the date of the original invoice issued by the
applicable Borrower with respect to the sale giving rise thereto, in
the case of an Account owing to the Parent or Laclede Mid America or an
Account owing to Laclede Chain other than a Dated Account, or (b) past
due, in the case of a Dated Account; or
(2) Such Account is owed by an Account Debtor which is
obligated to any Borrower on Accounts more than fifty percent (50.0%)
of the aggregate unpaid balance of which are (a) due or unpaid more
than one hundred twenty (120) days after the date of the original
invoice issued by the applicable Borrower with respect to the sale
giving rise thereto, in the case of an Account owing to the Parent or
Laclede Mid America or an Account owing to Laclede Chain other than a
Dated Account, or (b) past due, in the case of a Dated Account, unless
in either case the Majority Lenders have approved the continued
eligibility thereof; or
(3) Such Account arises out of a sale not made in the ordinary
course of the applicable Borrower's business or out of a sale to a
Person which is an Affiliate of the
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applicable Borrower or controlled by an Affiliate of the applicable
Borrower, unless the Majority Lenders have approved the eligibility of
Accounts attributable to such sales, provided that no Account with
respect to which Ivaco or any of its affiliates is the Account Debtor
shall be rendered ineligible solely as a result of the terms of this
clause (3), except to the extent that the sum of the unpaid balances of
all such Accounts with respect to which Ivaco or any of its affiliates
is the Account Debtor exceeds $250,000 (but any such Accounts owing
from Ivaco or any of its affiliates may be rendered ineligible as a
result of the terms of the next succeeding clause (4) or as a result of
the application of any other ineligibility criteria provided for
herein); or
(4) Such Account is subject to any right of setoff by the
Account Debtor and such Account Debtor has not entered into an
agreement with the Agent which is acceptable to the Agent with respect
to the waiver of rights of setoff; or such Account Debtor has disputed
liability or made any claim with respect to any other Account due from
such Account Debtor to the applicable Borrower; or
(5) Such Account arises out of a sale to an Account Debtor
which (i) has filed or has had filed against it a petition for
bankruptcy or any other petition for relief under the Bankruptcy Code
or any other bankruptcy or insolvency law, has made an assignment for
the benefit of creditors, has suffered a receiver or trustee to be
appointed with respect to its affairs or with respect to all or any
material portion of its assets, or, in the case of an Account Debtor
which is an individual, has been adjudicated mentally incompetent, to
the extent, in the case of any such event described in this clause (i),
that the relevant proceeding is continuing on the date of the
applicable eligibility determination, (ii) has suspended its business
operations or become insolvent, to the extent that such suspension or
insolvency is continuing on the date of the applicable eligibility
determination, or (iii) in the case of any Account Debtor which is an
individual, is deceased; or
(6) Such Account arises out of a sale to an Account Debtor
having its chief executive office or principal place of business
outside the United States or Canada, unless the sale is on letter of
credit or acceptance terms satisfactory to the Agent; or
(7) Such Account arises out of a sale to a customer on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment or any other repurchase or return basis; or
(8) The Agent believes in good faith and in the exercise of
its reasonable judgment, that the prospect of collection of such
Account is materially impaired; or
(9) The Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower assigns its right to payment of such Account to the Agent in
accordance with the terms of the Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq.); or
(10) The goods giving rise to such Account have not been
shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such
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Account have not been performed by the applicable Borrower, and, if
applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services; or
(11) Such Account is owed by an Account Debtor which is
obligated to the applicable Borrower respecting Accounts the aggregate
unpaid balance of which exceeds five percent (5.0%) of the aggregate
unpaid balance of all Accounts owed to the Borrowers at such time by
all of the Borrowers' Account Debtors, to the extent that the Majority
Lenders have not approved the eligibility of such Accounts; or
(12) Such Account is an Account with respect to which the
Account Debtor is located in any state requiring the filing of a Notice
of Business Activities Report or similar report in order to permit the
applicable Borrower to seek judicial enforcement in such state of
payment of such Account, unless such Borrower has qualified to do
business in such state or has filed a Notice of Business Activities
Report or similar report for the then current year; or
(13) Such Account is evidenced by chattel paper or
instruments; or
(14) Such Account arises out of a contract or order which, by
its terms, forbids, restricts or makes void or unenforceable the
granting of a Lien by the applicable Borrower to the Agent with respect
to such Account; or
(15) With respect to such Account, a check or other instrument
for the payment of money, tendered in full or partial satisfaction of
such Account, has been presented for payment and returned uncollected
more than two (2) times for any reason; or
(16) With respect to a Dated Account, the applicable Borrower
has extended the time for payment of such Account without the consent
of the Agent; or
(17) The perfection, enforceability or validity of the Agent's
Lien on such Account, or, except as set forth in clause (9) above, the
Agent's or the Lenders' ability to obtain direct payment of the
proceeds of such Account, is governed by any federal, state or local
statutory requirements other than those of the UCC; or
(18) The Account Debtor is any state, municipality or other
political subdivision of the United States of America or any
department, agency, public corporation or other instrumentality thereof
and as to which the Agent determines that its Lien therein is not or
cannot be perfected; or
(19) Such Account is not subject to a first priority and
perfected security interest in favor of the Agent; or
(20) Such Account is owed by an Account Debtor which is an
employee of the applicable Borrower; or
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17
(21) Any representation or warranty contained in this
Agreement with respect to such Account is at any time determined to
have been false or misleading in any material respect when made or
deemed to have been made.
If any Account at any time ceases to be an Eligible Account by
reason of any of the foregoing exclusions or any failure to meet any other
eligibility criteria established by the Agent in the exercise of its reasonable
credit judgment upon notice to the applicable Borrower, such Account shall
promptly be excluded from the calculation of Eligible Accounts.
"Eligible Inventory" means Inventory, valued at the lower of
cost or market value, with cost determined under the weighted moving average
cost method, which the Agent deems eligible (based on criteria which the Agent
establishes), in the exercise of its reasonable credit judgment, as the basis
for Revolving Loans; provided, however, upon the reasonable request of the
applicable Borrower, the Agent will notify such Borrower of the reason for
deeming Inventory not to be Eligible Inventory. Without limiting the foregoing,
no Inventory shall be Eligible Inventory if: (a) it is obsolete or
unmerchantable; (b) it is located outside the United States; (c) it is located
at premises not owned by the applicable Borrower, unless the owner of such
premises, and any mortgagee with respect thereto, shall have executed and
delivered to the Agent such agreements, instruments and documents as the Agent,
in the exercise of its reasonable discretion, shall request in connection with
the maintenance by such Borrower of Inventory on such premises; (d) it is not
subject to a first priority and perfected security interest in favor of the
Agent; (e) it is material handling, packaging or shipping materials; (f) it is
xxxx-and-hold or defective Inventory or Inventory delivered to the applicable
Borrower on consignment; or (g) it is Inventory which in any way fails to meet
or violates any applicable representation, warranty or covenant contained in
this Agreement relating directly or indirectly to such Inventory.
If any Inventory at any time ceases to be Eligible Inventory
by reason of any of the foregoing exclusions or any failure to meet any other
eligibility criteria established by the Agent in the exercise of its reasonable
credit judgment upon notice to the applicable Borrower, such Inventory shall
promptly be excluded from the calculation of Eligible Inventory.
"Entry Date" means the date on which the Interim Order is
entered by the Bankruptcy Court.
"Environmental Laws" means all federal, state and local laws,
rules, regulations, ordinances, programs, permits, guidance, orders and consent
decrees or other binding determination of any Public Authority relating to
occupational health and safety, the handling, use, storage, discharge or
disposal of Contaminants and other environmental matters applicable to any
Borrower and/or its business and facilities (whether or not owned by such
Borrower). Such laws and regulations include but are not limited to the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as amended; the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., as amended; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., as amended; the Clean Water Act, 42 U.S.C. Section 466 et
seq., as amended; the Clean Air Act, 46 U.S.C. Section 7401 et seq., as amended;
state and federal lien and environmental cleanup programs; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq.; and U.S. Department of
Transportation regulations, each as from time to time hereafter in effect.
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"Environmental Lien" means a Lien in favor of any Public
Authority for (1) any liability under any Environmental Laws, or (2) damages
arising from, or costs incurred by such Public Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable
requirement of law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any property or the
transfer, sale or lease of any property or deed or title for any property for
environmental reasons, including, but not limited to, any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible Property Transfer
Acts."
"Equipment" means all of each Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), other than motor vehicles
with respect to which a certificate of title has been issued, including, without
limitation, aircraft, dies, tools, jigs, and office equipment, as well as all of
such types of property leased by such Borrower and all of such Borrower's rights
and interests with respect thereto under such leases (including, without
limitation, options to purchase); together with all present and future additions
and accessions thereto, replacements therefor, component and auxiliary parts and
supplies used or to be used in connection therewith, and all substitutes for any
of the foregoing, and all manuals, drawings, instructions, warranties and rights
with respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means (i) any corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as any Borrower; (ii) a partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with any Borrower; or (iii) a member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
any Borrower, any corporation described in clause (i) above or any partnership,
trade or business described in clause (ii) above.
"Estates" means, collectively, the bankruptcy estates of the
Borrowers in the Case created pursuant to Section 541 of the Bankruptcy Code.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"Event of Default" has the meaning specified in Section 10.1.
"Facility Fee" has the meaning specified in Section 3.6.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by
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the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three (3) federal funds brokers
of recognized standing selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Final Order" means the final order of the Bankruptcy Court
entered on or before December 29, 1998 approving the Loans made and to be made
to the Borrowers by the Lenders on and after the Entry Date in accordance with
this Agreement (which order shall be substantially in the form of the Final
Order attached hereto as Exhibit A) as the same may be modified or supplemented
from time to time with the express written joinder or consent of the Lenders and
the Agent.
"Final Order Date" means the date of the entry of the Final
Order.
"Financial Statements" means, according to the context in
which it is used, the financial statements attached hereto as Exhibit C, or any
financial statements required to be given to the Lenders pursuant to Sections
6.2(a) or (b), or any combination thereof.
"Fiscal Year" means the fiscal years of the Parent and its
Subsidiaries for financial accounting purposes, which fiscal years are based
upon a calendar year.
"Fixed Assets" means Equipment and Real Estate of any
Borrower.
"Fremont Mortgage" means that certain Mortgage, Security
Agreement, Financing Statement and Assignment of Rents and Leases dated as
August 20, 1997 and executed by Laclede Mid America in favor of the Agent,
pursuant to which Laclede Mid America has granted to the Agent, for the ratable
benefit of the Secured Creditors a mortgage Lien on its Real Estate located in
Fremont, Indiana and identified therein.
"Funding Date" means the date any Revolving Loans (including
Settlement Loans and Agent Advances) are to be made hereunder.
"Funding Fee" has the meaning specified in Section 3.5.
"GAAP" means at any particular time with respect to the Parent
and its Subsidiaries, generally accepted accounting principles as in effect at
such time, consistently applied.
"General Intangibles" means all of each Borrower's now owned
or hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of such Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to such Borrower in connection
with the termination
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of any Plan or other employee benefit plan or any rights thereto and any other
amounts payable to such Borrower from any Plan or other employee benefit plan,
rights and claims against carriers and shippers, rights to indemnification,
business interruption insurance and proceeds thereof, property, casualty or any
similar type of insurance and any proceeds thereof, proceeds of insurance
covering the lives of key employees on which such Borrower is beneficiary, and
any letter of credit, guarantee, claim, security interest or other security held
by or granted to such Borrower to secure payment by an account debtor of any of
the Accounts.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligation of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity Securities
or other property or services.
"IDR Bonds" means those certain Industrial Development Revenue
Bonds (Laclede Steel Company Project) Series 1976 issued pursuant to a certain
Indenture of Trust dated as of October 1, 1976, between the City of Alton,
Illinois, and St. Louis Union Trust Company, as Trustee.
"Intercompany Notes" means, collectively, the Laclede Chain
Intercompany Note and the Laclede Mid America Intercompany Note.
"Interest Period" means, with respect to each LIBO Rate Loan,
the interest period applicable to such LIBO Rate Loan as determined pursuant to
Section 3.3(b).
"Interest Rate" means each or any of the interest rates set
forth in Section 3.1.
"Interim Order" has the meaning specified in the Recitals.
"Interim Period" means the period commencing on the Entry Date
and terminating upon the earlier of (a) December 29, 1998 or (b) the Final Order
Date.
"Inventory" means all of each Borrower's now owned and
hereafter acquired inventory, goods, merchandise, repair parts, and other
personal property, wherever located, to be furnished under any contract of
service or held for sale or lease, all returned goods, raw materials, other
materials and supplies of any kind, nature or description which are or might be
consumed in such Borrower's business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods, merchandise and such
other personal property, and all documents of title or other documents
representing them.
"Inventory Sublimit Amount" means the amount set forth below
for the period indicated:
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Period Amount
------ ------
December 1998 $44,000,000
January 1999 43,500,000
February 1999 43,000,000
March 1999 42,500,000
April 1999 42,000,000
May 1999 41,500,000
June 1999 41,000,000
July 1999 40,500,000
August 1999 40,000,000
September 1999 39,500,000
October 1999 39,000,000
November 1999 38,500,000
"IRB Debt" means Debt of the Parent evidenced by the Solid
Waste Disposal Bonds, the Pollution Control Bonds and the IDR Bonds, or any of
them.
"IRB Debt Payment" means any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any of
the IRB Debt, or any payment of a claim, for the rescission of the purchase or
sale of, or for material damage arising from the purchase or sale of, any of the
IRB Debt or a claim for reimbursement, indemnification or contribution arising
out of or related to any such claim for damages or rescission.
"IRS" means the Internal Revenue Service or any successor
agency.
"Ivaco" means Ivaco Inc., a corporation organized and existing
under the federal laws of Canada.
"Laclede Chain" has the meaning specified in the introductory
paragraph hereof.
"Laclede Chain Collateral" has the meaning specified in
Section 5.1(b).
"Laclede Chain Intercompany Note" means that certain
promissory note dated September 7, 1994 in the maximum principal amount of
$15,000,000, executed by Laclede Chain, payable to the Parent and pledged and
endorsed to the Agent, in a manner satisfactory to the Agent, evidencing amounts
outstanding from time to time as a result of certain loans and other advances
made by the Parent to Laclede Chain.
"Laclede Mid America" has the meaning specified in the
introductory paragraph hereof.
"Laclede Mid America Collateral" has the meaning specified in
Section 5.1(c).
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"Laclede Mid America Intercompany Note" means that certain
promissory note dated September 7, 1994 in the maximum principal amount of
$10,000,000, executed by Laclede Mid America, payable to the Parent and pledged
and endorsed to the Agent, in a manner satisfactory to the Agent, evidencing
amounts outstanding from time to time as a result of certain loans and other
advances made by the Parent to Laclede Chain.
"Latest Projections" means: (a) on the Entry Date and
thereafter until the Lenders receive new projections pursuant to Section 6.2(e),
the projections of the Parent's and its consolidated Subsidiaries' combined
financial condition, results of operations, and cash flow, for the period
commencing on October 31, 1998 and ending on December 31, 1999 and delivered to
the Lenders prior to the Entry Date; and (b) thereafter, the projections most
recently received by the Lenders pursuant to Section 6.2(e).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof.
"Letter of Credit" has the meaning specified in Section
2.2(a).
"Letter of Credit Fee" has the meaning specified in Section
3.8.
"LIBO Rate" means, for any Interest Period with respect to
LIBOR Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/16th of 1.0%) determined by the Agent as
follows:
LIBO Rate = Base LIBO Rate
-----------------------------
1.00 - LIBOR Reserve Percentage
"LIBOR Interest Rate Determination Date" means each date of
calculating the LIBO Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBOR Loan shall be the second Business Day prior to the first day of the
related Interest Period for such LIBOR Loan.
"LIBOR Loan" means a Post-Petition Revolving Loan during any
period in which it bears interest at the rate provided in Section 3.1(ii).
"LIBOR Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1.0%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
Liabilities having a term comparable to such Interest Period.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including without limitation, a security interest, charge, claim,
or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
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security purposes; and (b) to the extent not included under clause (a), any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
property.
"Loan Documents" means this Agreement, the Original Agreement,
the Term Loan Notes, the Patent and Trademark Agreements, the Mortgages and any
other agreements, instruments, and documents heretofore, now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the Obligations, the
Collateral, or any other aspect of the transactions contemplated by this
Agreement or the Original Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Majority Lenders" means Lenders whose Pro Rata Shares
aggregate at least seventy-five percent (75.0%).
"Maximum Revolver Amount" means, at any time,
(a) the lesser of
(i) the Revolver Facility minus the amount of
Pre-Petition Obligations outstanding at such time; or
(ii) (A) eighty-five percent (85.0%) of the Net
Amount of the Eligible Accounts; plus (B) the lesser
of (1) sixty-five percent (65.0%) of the value of
Eligible Inventory; and (2) the Inventory Sublimit
Amount; provided, that in computing the amount of
Eligible Inventory, the amount of Inventory
consisting of supplies included in Eligible Inventory
shall be limited to $12,769,000; plus (C) the amount
of the Additional Facility at such time; minus (D)
the amount of Pre-Petition Revolving Loans
outstanding at such time;
minus
(b) the sum of
(i) reserves for accrued interest on the
Post-Petition Obligations;
(ii) the maximum amount of the Carveout; and
(iii) all other reserves which the Agent deems
necessary in the exercise of reasonable credit judgment to
maintain with respect to any Borrower's account, and which are
reasonably related to the preservation or protection of the
value of the Collateral or the business value of such
Borrower, including, without limitation, any reserves for any
amounts which the Agent or any Lender may be obligated to pay
in the future for the account of such Borrower.
"Mortgages" means the Xxxxx Mortgage, the Vandalia Mortgage,
the Fremont Mortgage, and the Parent Fremont Mortgage.
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"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by any Borrower
or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Net Proceeds" means, with respect to any sale or disposition
of Fixed Assets or any Additional Facility Related Items, the face amount of the
sale or disposition price, whether paid in cash or otherwise, minus the
applicable Borrower's reasonable expenses of sale or disposition and any sales
or other conveyance taxes incurred by any Borrower in connection therewith.
"Notice of Borrowing" has the meaning specified in Section
2.1(b).
"Notice of Conversion/Continuation" has the meaning specified
in Section 3.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by each Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement, the
Original Agreement or any of the other Loan Documents, whether or not evidenced
by any note, or other instrument or document, whether arising from an extension
of credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment from others, and any participation by
the Agent and/or any Lender in such Borrower's debts owing to others), absolute
or contingent, due or to become due, primary or secondary, as principal or
guarantor, and including, without limitation, all principal, interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable to
such Borrower hereunder or under any of the other Loan Documents. "Obligations"
includes, without limitation, all debts, liabilities, and obligations now or
hereafter owing from each Borrower to the Agent and/or any Lender under or in
connection with the Letters of Credit.
"OCC" means the Office of the Comptroller of the Currency.
"Parent" has the meaning specified in the introductory
paragraph hereof.
"Parent Collateral" has the meaning specified in Section
5.1(a).
"Parent Fremont Mortgage" means that certain Mortgage,
Security Agreement, Financing Statement and Assignment of Rents and Leases dated
as of August 20, 1997 and executed by Parent in favor of the Agent, pursuant to
which the Parent has granted to the Agent, for the ratable benefit of the
Secured Creditors a Lien on its Real Estate located in Fremont, Indiana and
identified therein.
"Participating Lender" means any Person who shall have been
granted the right by any Lender to participate in the financing provided by such
Lender under this Agreement pursuant to Section 12.3(e), and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
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"Patent and Trademark Agreements" means the Patent Security
Agreement and the Trademark Security Agreement, each dated as of September 7,
1994, executed and delivered by the Borrowers to the Agent pursuant to Section
5.2 to evidence and perfect the Agent's security interest in each Borrower's
present and future patents, trademarks, and related licenses and rights, for the
benefit of the Secured Creditors, and with respect to (1) the Parent, the
additional Patent Security Agreement and Trademark Security Agreement, each
dated as of the August 20, 1997, executed and delivered by the Parent to the
Agent, and (2) Laclede Chain, the additional Trademark Security Agreement and
the Notice of Amendment to Patent Security Agreement, each dated as of August
20, 1997, executed and delivered by Laclede Chain to the Agent.
"Payment Account" means each blocked bank account established
pursuant to Section 5.9, to which the funds of any Borrower (including, without
limitation, proceeds of Accounts and other Collateral) are deposited or
credited, and which is maintained in the name of the Agent or such Borrower, as
the Agent may determine, on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice(s) of Borrowing
received by the Agent which have not yet been advanced.
"Permitted Liens" means:
(a) Liens for taxes not yet payable or statutory Liens for
taxes in an amount not to exceed $100,000, provided that the payment of such
taxes which are due and payable is being contested in good faith and by proper
proceedings diligently pursued, and that reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor
and that a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Pre-Petition Permitted Liens upon Equipment granted in
connection with the acquisition of such Equipment by the applicable Borrower
(including, without limitation, pursuant to Capital Leases), provided that (i)
the cost of each such acquisition constituted a Capital Expenditure permitted by
Section 8.22 of the Original Agreement, (ii) the Debt incurred to finance each
such acquisition was permitted by Section 8.13 of the Original Agreement, and
(iii) each such Lien attaches only to the Equipment acquired with the Debt
secured thereby;
(d) deposits under worker's compensation, unemployment
insurance, social security and other similar laws, or to secure the performance
of bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure indemnity, performance or other similar bonds for the performance
of bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure statutory obligations (other than liens arising under ERISA or
Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business;
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(e) Liens which arise by operation of law under Article 2 of
the Uniform Commercial Code in favor of unpaid sellers of goods or prepaying
buyers of goods, or liens in items of any accompanying documents or proceeds of
either arising by operation of law under Article 4 of the Uniform Commercial
Code in favor of a collecting bank;
(f) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
that the payment thereof is not at the time required by Section 8.1;
(g) Reservations, exceptions, encroachments, easements, rights
of way, covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the Real Estate or materially
interfere with its use in the ordinary conduct of the Parent's or any
Subsidiary's business;
(h) Liens in existence on the Petition Date and reflected on
Schedule 7.2;
(i) Judgment and other similar Liens arising in connection
with court proceedings, provided that (A) the existence of such Liens is being
contested in good faith and by proper proceedings diligently pursued, (B)
reserves or other appropriate provision, if any, as are required by GAAP have
been made therefor, (C) a stay of enforcement of any such Liens is in effect,
(D) the priority of any such Liens is subordinate to that of the Agent's Liens,
and (E) the existence of any judgment or court proceedings upon which such Liens
are based does not otherwise constitute an Event of Default under this
Agreement; and
(j) Liens granted to the trustee for the holders of the Solid
Waste Disposal Bonds in the capital stock and Fixed Assets of Laclede Chain.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, Public Authority, or any other entity.
"Petition Date" means November 30, 1998.
"Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which any Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Pollution Control Bonds" means those certain Pollution
Control Revenue Bonds (Laclede Steel Company Project) Series 1976 issued
pursuant to a certain Indenture of Trust dated as of October 1, 1976, between
the City of Alton, Illinois, and St. Louis Union Trust Company, as Trustee.
"Post-Petition Collateral" means all Collateral acquired,
created or generated by any Borrower after the Petition Date which does not
constitute Pre-Petition Collateral.
"Post-Petition Obligations" means those Obligations of the
Borrowers which have arisen or arise on or after the Petition Date.
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"Post-Petition Revolving Loans" means Revolving Loans made
pursuant to this Agreement.
"Pre-Petition Collateral" mean all Collateral which exists as
of the Petition Date, and all accessions, substitutions, replacements, products
and proceeds thereof.
"Pre-Petition Obligations" means those Obligations of the
Borrowers which arose prior to the Petition Date.
"Pre-Petition Permitted Liens" means Liens which were
Permitted Liens under the Original Agreement (other than those in favor of the
Agent) which existed pursuant to applicable law and were perfected, valid,
enforceable and non-avoidable as of the Petition Date.
"Pre-Petition Revolving Loans" means Revolving Loans made
pursuant to the Original Agreement.
"Premises" means the land identified by addresses on Schedule
7.12, together with all buildings, improvements, and fixtures thereon and all
tenements, hereditament, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the real property in which any Borrower
has any interests on the Petition Date.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments.
"Proprietary Rights" means all of each Borrower's now owned
and hereafter arising or acquired: licenses, franchises, permits, patents,
patent rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service xxxx applications, and all licenses and rights related to any of the
foregoing, including, without limitation, those patents, trademarks, service
marks and copyrights set forth on Schedule 7.13 hereto, and all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing, and all rights
to xxx for past, present and future infringement of any of the foregoing.
"Public Authority" means the government of any country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or any department, agency, public corporation or other
instrumentality of any of the foregoing.
"Quasi Asset Acquisition" means any acquisition by any
Borrower of the Securities of any Person, which Securities are being acquired in
lieu of the assets of such Person.
"Real Estate" means all of the present and future interests of
any Borrower, as owner, lessee, or otherwise, in the Premises, including,
without limitation, any interest arising from an option to purchase or lease the
Premises or any portion thereof.
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"Redeemable Preferred Stock" means the Parent's six percent
(6.0%) redeemable preferred capital stock, no par value per share, 416,667
shares of which were issued on August 1, 1996, and which was recapitalized on
October 28, 1996.
"Register" has the meaning specified in Section 12.3(c).
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means any of the events described in
Section 4043 of ERISA.
"Restricted Investment" means any acquisition of property by
the Parent or any of its Subsidiaries in exchange for cash or other property,
whether in the form of an acquisition of stock, debt Security, or other
indebtedness or obligation, or the purchase or acquisition of any other
property, or a loan, advance, capital contribution, or subscription, except
acquisitions of the following: (a) Fixed Assets to be used in the business of
the Parent or such Subsidiary, so long as the acquisition costs thereof
constitute Capital Expenditures permitted hereunder; (b) goods held for sale or
lease or to be used in the provision of services by the Parent or such
Subsidiary in the ordinary course of business; (c) current assets arising from
the sale or lease of goods or the rendition of services in the ordinary course
of business of the Parent or such Subsidiary; (d) direct obligations of the
United States of America, or any agency thereof, or obligations guaranteed by
the United States of America, provided that such obligations mature within one
year from the date of acquisition thereof; (e) certificates of deposit maturing
within one year from the date of acquisition, bankers' acceptances, Eurodollar
bank deposits, or overnight bank deposits, in each case issued by, created by,
or with a bank or trust company organized under the laws of the United States or
any state thereof having capital and surplus aggregating at least $100,000,000;
(f) commercial paper given a rating of "A2" or better by Standard & Poor's
Rating Services or "P2" or better by Xxxxx'x Investors Service, Inc. and
maturing not more than 90 days from the date of creation thereof; (g) money
market preferred capital stock given a rating of "A" or better by Standard &
Poor's Rating Services or Xxxxx'x Investors Service, Inc.; and (h) tax exempt
floating rate option tender bonds backed by a letter of credit issued by a bank
given a rating of "AA" or better by Standard & Poor's Rating Services or "Aa" or
better by Xxxxx'x Investors Service, Inc. and having a maturity of one year or
less.
"Revolver Facility" means (a) $85,000,000, or (b) the
agreement by the Lenders and the Agent to provide Post-Petition Revolving Loans
and Letters of Credit up to such amount subject to the terms of this Agreement,
as the context may require.
"Revolving Loans" means revolving loans made by Lenders, or by
the Agent or BABC on behalf of the Lenders, pursuant to this Agreement or the
Original Agreement.
"Secured Creditors" means the Agent and the Lenders.
"Security" has the meaning specified in Section 2(1) of the
Securities Act of 1933, as amended.
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"Settlement Loan" and "Settlement Loans" have the meanings
specified in Section 2.1(h).
"Solid Waste Bond Loan Agreement" means that certain Loan
Agreement dated as of September 1, 0000 xxxxxxx Xxxxxxxxxxxx Xxxxxxxx
Development Authority and the Parent, together with all amendments thereto.
"Solid Waste Disposal Bonds" means those certain Solid Waste
Disposal Revenue Bonds (Laclede Steel Company Project) Series 1990 issued
pursuant to a certain Indenture of Trust dated as of September 1, 0000, xxxxxxx
Xxxxxxxxxxxx Xxxxxxxx Development Authority and Boatmen's Trust Company, as
Trustee.
"Solvent" means when used with respect to any Person that (a)
the fair value of all its assets is in excess of the total amount of its debts
(including contingent liabilities); (b) it is able to pay its debts as they
mature; (c) it does not have unreasonably small capital for the business in
which it is engaged or for any business or transaction in which it is about to
engage; and (d) it is not "insolvent" as such term is defined in Section 101(32)
of the Bankruptcy Code.
"Stated Termination Date" means December 31, 1999.
"Subsidiary" means any corporation of which more than fifty
percent (50.0%) of the outstanding Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions), is at the time, directly or indirectly through one or more
intermediaries, owned by the applicable Borrower and/or one or more of its
Subsidiaries.
"Supporting Letter of Credit" has the meaning specified in
Section 2.2(j).
"Term Loans" means the Term Loans made pursuant to, and as
defined in, the Original Agreement.
"Term Loan Notes" the Term Loan Notes issued pursuant to, and
as defined in, the Original Agreement.
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) December 31, 1998, if the Final Order shall not
have been entered on or before such date, (iii) the effective date of a plan of
reorganization in the Case, provided that such plan has been confirmed by an
order of the Bankruptcy Court on or before such date, (iv) the date the Revolver
Facility is terminated either by the Majority Lenders pursuant to Section 10.2,
and (v) the date this Agreement is otherwise terminated for any reason
whatsoever.
"Termination Event" means: (1) a Reportable Event with respect
to any Benefit Plan ; (2) the withdrawal of any Borrower or any ERISA Affiliate
from a Benefit Plan during a plan year in which such Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (3) the imposition of an obligation on any Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (4) the institution by the PBGC
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of proceedings to terminate a Benefit Plan; (5) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan; (6) the partial or
complete withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (7) the cessation of operations which results in the termination of
employment of twenty percent (20.0%) of Benefit Plan participants who are
employees of any Borrower and its ERISA Affiliates.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of Illinois or of any other state the laws of which are
required by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
"Unused Letter of Credit Subfacility" means an amount equal to
$10,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with
respect to all Letters of Credit.
"Vandalia Mortgage" means that certain Mortgage, Security
Agreement, Financing Statement and Assignment of Rents and Leases dated as of
September 7, 1994 and executed by the Parent in favor of the Agent, pursuant to
which the Parent has granted to the Agent, for the ratable benefit of the
Secured Creditors, a mortgage Lien on its Real Estate located in Vandalia,
Illinois and identified therein, as modified by (i) that certain Mortgage
Modification Agreement dated as of February 15, 1995, and (ii) that certain
Second Mortgage Modification Agreement dated as of August 20, 1997.
"Voting Stock" means Securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
1.2 Accounting Terms. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements.
1.3 Other Terms. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein. Any
references herein to exhibits, schedules, sections or articles are references to
exhibits, schedules, sections or articles of this Agreement, unless otherwise
specified. Wherever appropriate in the context, terms used herein in the
singular also include the plural, and vice versa, and each masculine, feminine,
or neuter pronoun shall also include the other genders.
1.4 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" shall mean "from and including" and the words "to" and "until"
shall each mean "to but excluding". Periods of days referred to in this
Agreement shall be counted in calendar days unless Business Days are expressly
prescribed and references in this Agreement to months and years shall be to
calendar months and calendar years unless otherwise specified.
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ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Revolving Loans. (a) Amounts. Subject to the satisfaction
of the conditions precedent set forth in Article 9, each Lender severally
agrees, upon the Parent's request from time to time, to make Post-Petition
Revolving Loans to the Borrowers, in amounts not to exceed (except with respect
to Settlement Loans or Agent Advances) such Lender's Pro Rata Share of
Availability at such time. The Lenders, however, in their discretion, may elect
to make Revolving Loans or participate (as provided for in Section 2.2(f)) in
the credit support or enhancement provided through the Agent to the issuers of
Letters of Credit in excess of Availability on one or more occasions, but if
they do so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Maximum Revolver Amount or to be obligated to exceed
such limits on any other occasion. If the sum of outstanding Post-Petition
Revolving Loans, the aggregate amount of Pending Revolving Loans, the undrawn
amount of outstanding Letters of Credit and any unpaid reimbursement obligations
in respect of Letters of Credit exceeds the Maximum Revolver Amount, the
Lenders, or any of them, may refuse to make or otherwise restrict the making of
Revolving Loans on such terms as the Lenders, or such Lender, may determine
until such excess has been eliminated.
(b) Notice of Borrowing. Whenever the Borrowers desire to
borrow Revolving Loans under this Section 2.1, the Parent shall deliver to the
Agent a written request substantially in the form of Exhibit E hereto (a "Notice
of Borrowing") signed by an authorized officer of the Parent, no later than (i)
11:00 a.m. (San Francisco, California time) on the requested Funding Date, in
the case of requests for Base Rate Loans, or (ii) 11:00 a.m. (San Francisco,
California time) four (4) Business Days in advance of the requested Funding
Date, in the case of requests for LIBOR Loans. The Notice of Borrowing shall,
with respect to any Revolving Loans requested, specify (i) the requested Funding
Date (which shall be a Business Day), (ii) the aggregate amount of the requested
Revolving Loans, (iii) whether the Revolving Loans requested are to be Base Rate
Loans or LIBOR Loans, and (iv) if the requested Revolving Loans are to be LIBOR
Loans, the requested Interest Period. With respect to any request for Base Rate
Loans, in lieu of delivering the above-described Notice of Borrowing the Parent
may give the Agent telephonic notice of such request by the required time;
provided, however, that such telephonic notice shall be confirmed in writing by
delivery to the Agent (A) immediately of a telecopy of a Notice of Borrowing
which has been signed by an authorized officer of the Parent, and (B) promptly
of a Notice of Borrowing containing the original signature of an authorized
officer of the Parent mailed to the Agent via United States mail on the date
such notice is given. In the event that the terms of any confirmatory Notice of
Borrowing referred to in the proviso contained in the immediately preceding
sentence shall conflict with the telephonic notice with respect to which it was
delivered, the terms of such telephonic notice shall govern. Notwithstanding
anything in this Section 2.1(b) to the contrary, any Revolving Loans to be made
on the Entry Date shall initially be Base Rate Loans.
(c) Reliance upon Authority. On or prior to the Entry Date and
thereafter prior to any change with respect to any of the information contained
in the following clauses (i) and (ii), the Parent shall deliver to the Agent a
writing setting forth (i) the account of each Borrower to which the Agent is
authorized to transfer the proceeds of the Revolving Loans requested pursuant to
this Section 2.1, and (ii) the names of the officers authorized to request
Revolving Loans on behalf of the Parent, and shall provide the Agent with a
specimen signature of each such officer. The Agent shall be entitled to rely
conclusively on such officer's authority to request Revolving Loans on behalf of
the Borrowers, the
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proceeds of which are to be transferred to any of the accounts specified by the
Parent pursuant to the immediately preceding sentence, until the Agent receives
written notice to the contrary. The Agent shall have no duty to verify the
identity of any individual representing himself as one of the officers
authorized by the Parent to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to
any Borrower as a result of acting upon any notice referred to in Sections
2.1(b) and (c), which notice the Agent believes in good faith to have been given
by an officer duly authorized by the Parent to request Revolving Loans on behalf
of the Borrowers or for otherwise acting in good faith under this Section 2.1,
and the crediting of Revolving Loans to the Borrowers' deposit account, or
transmittal to such Person as the Parent shall direct, shall conclusively
establish the obligation of the applicable Borrower to repay such Revolving
Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.1(b) shall be irrevocable and
the Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.1(b), the Agent shall elect, in its discretion,
(i) to have the terms of Section 2.1(g) apply to such requested Borrowing, or
(ii) to request BABC to make a Settlement Loan pursuant to the terms of Section
2.1(h) in the amount of the requested Borrowing; provided, however, that if BABC
declines in its sole discretion to make a Settlement Loan pursuant to Section
2.1(h), the Agent shall elect to have the terms of Section 2.1(g) apply to such
requested Borrowing.
(g) Making of Revolving Loans. (i) In the event that the Agent
shall elect to have the terms of Section 2.1(g) apply to a requested Borrowing
as described in Section 2.1(f), then promptly after receipt of a Notice of
Borrowing pursuant to Section 2.1(b), the Agent shall notify the Lenders, not
later than noon (San Francisco, California time) on the Funding Date applicable
thereto, by telecopy, telephone or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such Lender's Pro Rata
Share of the requested Borrowing available to the Agent in same day funds, to
such account of the Agent as the Agent may designate, not later than 1:00 p.m.
(San Francisco, California time) on the Funding Date applicable thereto. After
the Agent's receipt of the proceeds of such Revolving Loans, upon satisfaction
of the applicable conditions precedent set forth in Article 9, the Agent shall
make the proceeds of such Revolving Loans available to the Borrowers on the
applicable Funding Date by transferring same day funds equal to the proceeds of
such Revolving Loans received by the Agent to the account of the Borrowers,
designated in writing by the Parent; provided, however, that the amount of
Revolving Loans so made on any date shall in no event exceed Availability on
such date.
(ii) On any Funding Date in respect of a Borrowing, the Agent
shall be entitled to assume that each Lender has made the amount of such
Lender's Revolving Loan available to the Agent on such Funding Date, unless such
Lender shall have notified the Agent to the contrary. The Agent, in its sole
discretion, based upon such assumption, may make available to the Borrowers a
corresponding amount on such Funding Date. If such corresponding amount had not
in fact been made available to the Agent by any Lender, such Lender and the
Borrowers jointly and severally agree to repay to the Agent forthwith, on
demand, such corresponding amount, together with interest thereon for each day
during the period commencing on the date such amount is made available to the
Borrowers and ending
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on the date such amount is repaid to the Agent, at (1) in the case of the
Borrowers, the Interest Rate applicable from time to time to such Borrowing, and
(2) in the case of a Lender, the Federal Funds Rate. If such Lender repays to
the Agent such corresponding amount, such amount so repaid shall constitute a
Revolving Loan, and if both such Lender and the Borrowers shall have repaid such
corresponding amount, the Agent shall promptly return to the Borrowers such
corresponding amount in same day funds. Nothing in this Section 2.1(g)(ii) shall
be deemed to relieve any Lender of its obligation, if any, hereunder to make a
Revolving Loan on any Funding Date.
(h) Making of Settlement Loans. In the event the Agent shall
elect, with the consent of BABC, to have the terms of this Section 2.1(h) apply
to a requested Borrowing as described in Section 2.1(f), BABC shall make a
Revolving Loan in the amount of such Borrowing (any such Revolving Loan made
solely by BABC pursuant to this Section 2.1(h) being referred to as a
"Settlement Loan" and such Revolving Loans being referred to collectively as
"Settlement Loans") available to the Borrowers on the Funding Date applicable
thereto by transferring same day funds to an account of the Borrowers,
designated in writing by the Parent; provided, that at no time shall the sum of
the principal amounts of all outstanding Settlement Loans exceed $5,000,000.
Each Settlement Loan is a Revolving Loan hereunder and shall be subject to all
the terms and conditions applicable to other Revolving Loans except that all
payments thereon shall be payable to BABC solely for its own account (and for
the account of the holder of any participation interest with respect to such
Revolving Loan created pursuant to subsection (ii) of Section 2.1(k)). The Agent
shall not request BABC to make any Settlement Loan if (i) the Agent shall have
received written notice from any Lender, or otherwise has actual knowledge, that
one or more of the applicable conditions precedent set forth in Article 9 will
not be satisfied on the requested Funding Date for the applicable Borrowing, or
(ii) the requested Borrowing would exceed Availability on such Funding Date.
BABC shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Article 9 have been satisfied or the requested
Borrowing would exceed Availability on the Funding Date applicable thereto prior
to making, in its sole discretion, any Settlement Loan.
(i) [Intentionally left blank]
(j) Agent Advances. (i) Subject to the limitations set forth
in the provisos contained in this Section 2.1(j)(i), the Agent is hereby
authorized by the Borrowers and the Lenders, from time to time in the Agent's
discretion, (1) after the occurrence of a Default or an Event of Default, or (2)
at any time that any of the other applicable conditions precedent set forth in
Article 9 have not been satisfied, to make Revolving Loans to the Borrowers on
behalf of the Lenders which the Agent, in its reasonable business judgment,
deems necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (C) to pay any other amount
chargeable to any Borrower pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 14.6 (any
of the advances described in this Section 2.1(j)(i) being hereinafter referred
to as "Agent Advances"); provided, that the Agent shall not make any Agent
Advance to any Borrower if the amount thereof would exceed Availability on the
Funding Date applicable thereto; and provided, further, that the Majority
Lenders may at any time revoke the Agent's authorization contained in this
Section 2.1(j)(i) to make Agent Advances, any such revocation to be in writing
and to become effective upon the Agent's receipt thereof.
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(ii) The Agent Advances shall be repayable on demand and
secured by the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Revolving Loans
from time to time. The Agent shall notify each Lender and the Borrowers in
writing of each such Agent Advance, which notice shall include a description of
the purpose of such Agent Advance.
(k) Settlement. The Agent and the Lenders hereby agree that,
except in the case of Settlement Loans and Agent Advances, each Lender's funded
portion of the Revolving Loans is intended to be equal at all times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. The Agent and the
Lenders agree (which agreement shall not be for the benefit of or enforceable by
any Borrower) that in order to facilitate the administration of this Agreement
and the other Loan Documents, settlement among them as to the Revolving Loans,
the Settlement Loans and the Agent Advances shall take place on a periodic basis
in accordance with the following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by the
Agent, with respect to (1) each outstanding Settlement Loan, (2) each
outstanding Agent Advance, and (3) collections received, by notifying the other
Lenders by telecopy, telephone or other similar form of transmission, of such
requested Settlement, no later than 11:00 a.m. (San Francisco, California time)
on the date of such requested Settlement (the "Settlement Date"). Each Lender
(other than BABC, in the case of Settlement Loans) shall make the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the Settlement
Loans and Agent Advances with respect to which Settlement is requested available
to the Agent, for itself or for the account of BABC, in same day funds, to such
account of the Agent as the Agent may designate, not later than 1:00 p.m. (San
Francisco, California time), on the Settlement Date applicable thereto,
regardless of whether the applicable conditions precedent set forth in Article 9
have then been satisfied. Such amounts made available to the Agent shall be
applied against the amounts of the applicable Settlement Loan or Agent Advance
and, together with the portion of such Settlement Loan or Agent Advance
representing BABC's Pro Rata Share thereof, shall constitute Revolving Loans of
such Lenders. If any such amount is not made available to the Agent by any
Lender on the Settlement Date applicable thereto, the Agent shall be entitled to
recover such amount on demand from such Lender together with interest thereon at
the Federal Funds Rate for the first three (3) days from and after the
Settlement Date and thereafter at the Interest Rate then applicable to the
Post-Petition Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Settlement Loan or Agent
Advance), each other Lender shall irrevocably and unconditionally purchase and
receive from BABC or the Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Settlement Loan or Agent Advance to
the extent of such Lender's Pro Rata Share thereof by paying to the Agent, in
same day funds, an amount equal to such Lender's Pro Rata Share of such
Settlement Loan or Agent Advance. If such amount is not in fact made available
to the Agent by any Lender, the Agent shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after such demand and thereafter at
the Interest Rate then applicable to the Post-Petition Revolving Loans.
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(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Settlement Loan or
Agent Advance pursuant to subsection (ii) above, the Agent shall promptly
distribute to such Lender at such address as such Lender may request in writing,
such Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such Settlement Loan
or Agent Advance.
(iv) If any payments are received by the Agent which, in
accordance with the terms of this Agreement would be applied to the reduction of
the Post-Petition Revolving Loans, and no Settlement Loans or Agent Advances are
then outstanding, the Agent may pay over such amounts to BABC for application to
BABC's Post-Petition Revolving Loans. If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to BABC's Post-Petition Revolving Loans other than Settlement Loans and Agent
Advances, as provided for in the immediately preceding sentence, BABC shall pay
to the Agent, for the accounts of the Lenders, to be applied to the outstanding
Post-Petition Revolving Loans of such Lenders, an amount such that each Lender
shall have outstanding, as of such Settlement Date, after giving effect to such
payments, its Pro Rata Share of such Revolving Loans; provided, that the Agent
may net payments due from BABC pursuant to this sentence against payments due to
BABC pursuant to Section 2.1(k)(i) on the applicable Settlement Date, and
require either BABC or the other Lenders, as applicable, to make only the amount
of the payment due after such netting. As of each Settlement Date, BABC with
respect to Settlement Loans, the Agent with respect to Agent Advances, and each
Lender with respect to the Revolving Loans other than Settlement Loans and Agent
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the actual average daily amount of funds employed by
BABC, the Agent and the other Lenders since the immediately preceding Settlement
Date.
(l) Notation. The Agent shall record in the Register the
principal amount of the Revolving Loans owing to each Lender, including the
Settlement Loans owing to BABC, and the Agent Advances owing to the Agent, from
time to time. In addition, each Lender is authorized, at such Lender's option,
to note the date and amount of each payment or prepayment of principal of such
Lender's Revolving Loans in its books and records, including computer records,
such books and records constituting rebuttably presumptive evidence, absent
manifest error, of the accuracy of the information contained therein.
(m) Lenders' Failure to Perform. All Post-Petition Revolving
Loans (other than Settlement Loans and Agent Advances) shall be made by the
Lenders simultaneously and in accordance with their Pro Rata Shares. It is
understood that (a) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Loans hereunder, and (b)
no failure by any Lender to perform its obligation to make any Loans hereunder
shall excuse any other Lender from its obligation to make any Loans hereunder.
2.2 Letters of Credit.
(a) Agreement to Cause Issuance. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrowers herein set forth, the Agent agrees to take
reasonable steps to cause to be issued for the account of any Borrower one or
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more stand-by or documentary letters of credit (each such letter of credit,
together with those letters of credit previously issued by NB and reflected on
Schedule 2.2 a "Letter of Credit" and such letters of credit, collectively, the
"Letters of Credit") in accordance with this Section 2.2 from time to time
during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have
any obligation to take steps to cause to be issued any Letter of Credit at any
time: (1) if the maximum undrawn amount of the requested Letter of Credit is
greater than the Unused Letter of Credit Subfacility at such time; (2) if the
maximum undrawn amount of the requested Letter of Credit and all commissions,
fees, and charges due from the applicable Borrower in connection with the
opening thereof, exceed Availability at such time; or (3) which has an
expiration date later than the Stated Termination Date or more than one (1) year
from the date of issuance.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article 9, the
obligation of the Agent to take reasonable steps to cause to be issued any
Letter of Credit is subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent:
(1) the applicable Borrower shall have delivered to the
proposed issuer of such Letter of Credit, at such times and in such
manner as such proposed issuer may prescribe, an application in form
and substance satisfactory to such proposed issuer for the issuance of
the Letter of Credit and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed
Letter of Credit shall be satisfactory to the Agent and such proposed
issuer; and
(2) as of the date of issuance, no order of any court,
arbitrator or Public Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of credit of
the type and in the amount of the proposed Letter of Credit, and no
law, rule or regulation applicable to money center banks generally and
no request or directive (whether or not having the force of law) from
any Public Authority with jurisdiction over money center banks
generally shall prohibit, or request that the proposed issuer of such
Letter of Credit refrain from, the issuance of letters of credit
generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Parent, for itself or on behalf
of either or both of the other Borrowers, shall give the Agent seven
(7) Business Days' prior written notice, containing the original
signature of an authorized officer of the Parent, of the applicable
Borrower's request for the issuance of a Letter of Credit. Such notice
shall be irrevocable and shall specify the Borrower requesting the
Letter of Credit, the original face amount of the Letter of Credit
requested, the effective date (which date shall be a Business Day) of
issuance of such requested Letter of Credit, whether such Letter of
Credit may be drawn in a single or in partial draws, the date on which
such requested Letter of Credit is to expire (which date shall be a
Business Day), the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit. The
Parent shall attach to such notice the proposed form of the Letter of
Credit that the Agent is requested to cause to be issued.
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(2) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Letter of Credit set forth in the
notice from the Parent pursuant to Section 2.2(d)(1), (i) the amount of
the applicable Unused Letter of Credit Subfacility and (ii)
Availability as of such date. If (A) (i) the undrawn amount of the
requested Letter of Credit is not greater than the applicable Unused
Letter of Credit Subfacility and (ii) the issuance of such requested
Letter of Credit and all commissions, fees, and charges due from the
applicable Borrower in connection with the opening thereof would not
exceed Availability as of such date, and (B) the Agent has received a
certificate from the Parent or such Borrower stating that the
applicable conditions set forth in Article 9 have been satisfied, the
Agent shall take reasonable steps to cause such issuer to issue the
requested Letter of Credit on such requested effective date of
issuance.
(3) Notice of Issuance. Promptly after the issuance of any
Letter of Credit, the Agent shall give each Lender written notice, or
telephonic notice confirmed promptly thereafter in writing, of the
issuance of such Letter of Credit.
(4) No Extensions or Amendment. The Agent shall not cause any
Letter of Credit to be extended or amended unless the requirements of
this Section 2.2(d) are met as though a new Letter of Credit were being
requested and issued.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations. The Borrowers
agree to reimburse the issuer for any draw under any Letter of Credit
immediately upon demand, and to pay the issuer of the Letter of Credit
the amount of all other Obligations and other amounts payable to such
issuer under or in connection with any Letter of Credit immediately
when due, irrespective of any claim, setoff, defense or other right
which any Borrower may have at any time against such issuer or any
other Person.
(2) Revolving Loans to Satisfy Reimbursement Obligations. In
the event that the issuer of any Letter of Credit honors a draw under
such Letter of Credit and the applicable Borrower shall not have repaid
such amount to the issuer of such Letter of Credit pursuant to Section
2.2(e)(1), the Agent shall, upon receiving notice of such failure,
notify each Lender of such failure, and each Lender shall
unconditionally pay to the Agent, for the account of such issuer, as
and when provided hereinbelow, an amount equal to such Lender's Pro
Rata Share of the amount of such payment in Dollars and in same day
funds. If the Agent so notifies the Lenders prior to 11:00 a.m. (San
Francisco, California time) on any Business Day, each Lender shall make
available to the Agent the amount of such payment, as provided in the
immediately preceding sentence, on such Business Day. Such amounts paid
by the Lenders to the Agent shall constitute Revolving Loans which
shall be deemed to have been requested by the applicable Borrower
pursuant to Section 2.1 as set forth in Section 4.4.
(f) Participations.
(1) Purchase of Participations. Immediately upon issuance of
any Letter of Credit in accordance with Section 2.1(d), each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and
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participation in the credit support or enhancement provided through the
Agent to such issuer in connection with the issuance of such Letter of
Credit, equal to such Lender's Pro Rata Share of the face amount of
such Letter of Credit (including, without limitation, all obligations
of the applicable Borrower with respect thereto, and any security
therefor or guaranty pertaining thereto).
(2) Sharing of Reimbursement Obligation Payments. Whenever the
Agent receives a payment from a Borrower on account of reimbursement
obligations in respect of a Letter of Credit as to which the Agent has
previously received for the account of the issuer thereof payment from
a Lender pursuant to this Section 2.2(f)(2), the Agent shall promptly
pay to such Lender such Lender's Pro Rata Share of such payment from
such Borrower in Dollars. Each such payment shall be made by the Agent
on the Business Day on which the Agent receives immediately available
funds paid to such Person pursuant to the immediately preceding
sentence, if received prior to 1:00 p.m. (San Francisco, California
time) on such Business Day and otherwise on the next succeeding
Business Day.
(3) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, any
reimbursement agreement executed in connection therewith, the
application for any Letter of Credit and any credit support or
enhancement provided through the Agent in connection with the issuance
of any Letter of Credit, and such other documentation as may reasonably
by requested by such Lender.
(4) Obligations Irrevocable. The obligations of each Lender to
make payments to the Agent with respect to any Letter of Credit or with
respect to any credit support or enhancement provided through the Agent
with respect to a Letter of Credit, and the obligations of the
Borrowers to make payments to the Agent, for the account of the
Lenders, shall be irrevocable, not subject to any qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement (assuming, in the case of the obligations
of the Lenders to make such payments, that the Agent has caused such
Letter of Credit to be issued in accordance with Section 2.2(d)),
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which any Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender, the Agent, the issuer
of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between any Borrower or
any other Person and the beneficiary named in any Letter of
Credit);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
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(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents; or
(v) the occurrence of any Default or Event of
Default.
(g) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of a Borrower received by the Agent with respect to any
Letter of Credit (or any guaranty by a Borrower or reimbursement obligation of a
Borrower relating thereto) and distributed by the Agent to the Lenders on
account of their respective participations therein is thereafter set aside,
avoided or recovered from the Agent in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by the
Agent, pay to the Agent their respective Pro Rata Shares of such amount set
aside, avoided or recovered, together with interest at the rate required to be
paid by the Agent upon the amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(1) Letter of Credit Fee. The Borrowers agree to pay to the
Agent with respect to each Letter of Credit, for the account of the
Lenders, the Letter of Credit Fee specified in, and in accordance with
the terms of, Section 3.8.
(2) Issuer Fees and Charges. The Borrowers shall pay to the
issuer of any Letter of Credit, or to the Agent, for the account of the
issuer of any such Letter of Credit, solely for such issuer's account,
such fees and other charges as are charged by such issuer for letters
of credit issued by it, including, without limitation, its standard
fees for issuing, administering, amending, renewing, paying and
cancelling letters of credit and all other fees associated with issuing
or servicing letters of credit, as and when assessed.
(i) Indemnification; Exoneration.
(1) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 2.2, each Borrower hereby agrees to
protect, indemnify, pay and save the Lenders and the Agent harmless
from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys'
fees) which any Lender or the Agent may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of
Credit or the provision of any credit support or enhancement in
connection therewith.
(2) Assumption of Risk by the Borrowers. As among the
Borrowers, the Lenders and the Agent, the Borrowers assume all risks of
the acts and omissions of, or misuse of any of the Letters of Credit
by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the
provisions of the applications for the issuance of Letters of Credit,
the Lenders and the Agent shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Person in connection with the application for
and issuance of and presentation of drafts with respect to any of the
Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be
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invalid or ineffective for any reason; (C) the failure of
the beneficiary of any Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document
required in order make a drawing under any Letter of Credit or of the
proceeds thereof; (G) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (H) any consequences arising from causes beyond the control
of the Lenders or the Agent, including, without limitation, any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto Public Authority. None of the foregoing shall affect,
impair or prevent the vesting of any rights or powers of the Agent or
any Lender under this Section 2.2(i).
(3) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action
taken or omitted by the Agent or any Lender under or in connection with
any of the Letters of Credit or any related certificates, if taken or
omitted in good faith and without gross negligence, shall not put the
Agent or any Lender under any resulting liability to any Borrower or
relieve any Borrower of any of its obligations hereunder to any such
Person.
(j) Supporting Letter of Credit; Cash Collateral.
(i) If, notwithstanding the provisions of Section 2.2(b) any
Letter of Credit is outstanding upon the termination of this Agreement, then
upon such termination the Borrowers shall deposit with the Agent, for the
ratable benefit of the Secured Creditors, with respect to each Letter of Credit
then outstanding, as the Agent shall specify, either (A) a standby letter of
credit (a "Supporting Letter of Credit") in form and substance satisfactory to
the Agent, issued by an issuer satisfactory to the Agent in an amount equal to
the greatest amount for which such Letter of Credit may be drawn, under which
Supporting Letter of Credit the Agent is entitled to draw amounts necessary to
reimburse the Agent and the Lenders for payments made by the Agent and the
Lenders under such Letter of Credit or under any credit support or enhancement
provided through the Agent with respect thereto, or (B) cash in amounts
necessary to reimburse the Agent and the Lenders for payments made by the Agent
or the Lenders under such Letter of Credit or under any credit support or
enhancement provided through the Agent with respect thereto. Such Supporting
Letter of Credit or deposit of cash shall be held by the Agent, for the ratable
benefit of the Secured Creditors, as security for, and to provide for the
payment of, the aggregate undrawn amount of such Letters of Credit remaining
outstanding.
(ii) The Borrowers shall, upon the request of the Agent, which
may be made at any time that (A) an Event of Default has occurred and is
continuing, or (B) Availability is less than zero, deliver to the Agent cash
collateral for any Letter of Credit outstanding.
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ARTICLE 3
INTEREST AND FEES
3.1 Interest Rates. All outstanding Post-Petition Obligations
shall bear interest on the unpaid principal amount thereof (including, to the
extent permitted by law, on interest thereon not paid when due) from the date
made until paid in full in cash at a rate determined by reference to the Base
Rate or the LIBO Rate and Sections 3.1(i) or (ii), as applicable, but not to
exceed the Maximum Rate described in Section 3.4. Subject to the provisions of
Section 3.2, any of the Post-Petition Revolving Loans may be converted into, or
continued as, Base Rate Loans or LIBOR Loans in the manner provided in Section
3.2. If at any time Post-Petition Revolving Loans are outstanding with respect
to which notice has not been delivered to the Agent in accordance with the terms
of this Agreement specifying the basis for determining the interest rate
applicable thereto, then those Post-Petition Revolving Loans shall be Base Rate
Loans and shall bear interest at a rate determined by reference to the Base Rate
until notice to the contrary has been given to the Agent and such notice has
become effective. Except as otherwise provided herein, the outstanding
Post-Petition Obligations shall bear interest as follows:
(i) For all Post-Petition Revolving Loans and other
Post-Petition Obligations, which are not LIBOR Loans, then at a
fluctuating per annum rate to two percent (2.00%) plus the Base Rate;
(ii) For all Post-Petition Revolving Loans which are LIBOR
Loans, then at a per annum rate equal to four percent (4.00%) plus the
LIBO Rate determined for the applicable Interest Period.
Each change in the Base Rate shall be reflected in the interest rate described
in (i) above as of the effective date of such change. All interest charges shall
be computed on the basis of a year of 360 days and actual days elapsed. Except
as otherwise provided herein, (a) interest accrued on each LIBOR Loan shall be
payable in arrears on the first day of each month hereafter, and (b) interest
accrued on the Base Rate Loans will be payable in arrears on the first day of
each month hereafter.
3.2 Conversion or Continuation. (a) Subject to the provisions
of Section 3.3, (i) the Borrowers shall have the option to convert all or any
part of the outstanding Post-Petition Revolving Loans, in a minimum amount of
$5,000,000 and integral multiples of $5,000,000 in excess of that amount, from
Base Rate Loans to LIBOR Loans at any time; (ii) the Borrowers shall have the
option to convert all or any part of the outstanding Post-Petition Revolving
Loans from LIBOR Loans to Base Rate Loans on the expiration of the Interest
Period applicable thereto; and (iii) the Borrowers shall have the option, on the
expiration of the Interest Period applicable to any outstanding LIBOR Loan, to
continue all or any portion of such LIBOR Loan equal to $5,000,000 and integral
multiples of $5,000,000 in excess of that amount, as a LIBOR Loan; provided,
however, that no outstanding Loans may be converted into or continued as LIBOR
Loans when any Default or Event of Default has occurred and is continuing. Any
conversion or continuation made with respect to less than the entire outstanding
balance of the Post-Petition Revolving Loans must be applied pro rata to the
Revolving Loans, according to the outstanding principal balance of each
Revolving Loan.
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(b) Whenever the Borrowers elect to convert or continue Loans
under this Section 3.2, the Parent, for itself or as agent for the Borrowers,
shall deliver to the Agent a written notice substantially in the form of that
attached hereto as Exhibit F (a "Notice of Conversion/ Continuation"), signed by
an authorized officer of the Parent (i) no later than 11:00 a.m. (San Francisco,
California time) two (2) Business Days in advance of the requested conversion
date, in the case of a conversion into Base Rate Loans, and (ii) no later than
11:00 a.m (San Francisco, California time) four (4) Business Days in advance of
the requested conversion or continuation date, in the case of a conversion into,
or continuation of, LIBOR Loans. The Notice of Conversion/Continuation shall
specify (1) the conversion or continuation date (which shall be a Business Day),
(2) the amount and type of the Loans to be converted or continued, (3) the
nature of the requested conversion or continuation, and (4) in the case of a
conversion into, or continuation of, LIBOR Loans, the requested Interest Period.
Promptly after receipt of a Notice of Conversion/Continuation pursuant to this
Section 3.2(b), the Agent shall notify the Lenders by telecopy, telephone or
other similar form of transmission, of the requested conversion or continuation.
In the event that the Parent should fail to provide a Notice of
Conversion/Continuation with respect to any LIBOR Loans as provided above, such
Loans shall, on the last day of the Interest Period with respect to such Loans,
convert to Base Rate Loans.
(c) The officers of the Parent authorized to request Revolving
Loans for the Parent or on behalf of either or both of the other Borrowers shall
also be authorized to request a conversion or continuation for the Borrowers.
The Agent shall be entitled to rely on such officers' authority until the Agent
is notified to the contrary in writing pursuant to Section 2.2(c). The Agent
shall have no duty to verify the identity of any individual representing himself
as one of the officers authorized to make such request on behalf of the Parent.
The Agent shall incur no liability to any Borrower in acting upon any notice
referred to in this Section 3.2, which notice the Agent believes in good faith
to have been given by an officer authorized to make such requests on behalf of
the Borrowers, or for otherwise acting in good faith under this Section 3.2 and,
upon such conversion or continuation by the Agent and the Lenders in accordance
with this Agreement, the Borrowers shall have effected the conversion or
continuation of the applicable Loans hereunder.
(d) Any Notice of Conversion/Continuation for conversion to,
or continuation of, Loans made pursuant to this Section 3.2 shall be irrevocable
and the Borrowers shall be bound to convert or continue in accordance therewith.
3.3 Special Provisions Governing LIBOR Loans. Notwithstanding
any other provisions to the contrary contained in this Agreement, the following
provisions shall govern with respect to LIBOR Loans as to the matters covered:
(a) Amount of LIBOR Loans. Each election of, continuation of
or conversion to LIBOR Loans, shall be in a minimum amount of $5,000,000 and in
integral multiples of $5,000,000 in excess of that amount.
(b) Determination of Interest Period. By giving notice as set
forth in Section 3.2(b), the Parent, shall have the option, subject to the other
provisions of this Section 3.3, to specify whether the Interest Period for such
LIBOR Loan shall be a period of one, two, three or four months (or, if
available, as determined by all of the Lenders, six or twelve months). The
determination of Interest Periods shall be subject to the following provisions:
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(i) In the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires.
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, the Interest Period shall be extended to
expire on the next succeeding Business Day; provided, however, that if
the next succeeding Business Day occurs in the following calendar
month, then such Interest Period shall expire on the immediately
preceding Business Day.
(iii) No Borrower may select an Interest Period for any LIBOR
Loan, which Interest Period expires later than the Termination Date.
(iv) There shall be no more than five (5) Interest Periods in
effect at any one time.
(c) Determination of Interest Rate. As soon as practicable
after 11:00 a.m. (San Francisco, California time) on the LIBOR Interest Rate
Determination Date, the Agent shall determine (which determination shall, absent
manifest error, be presumptively correct) the Interest Rate for the LIBOR Loans
for which an Interest Rate is then being determined and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to the Parent.
In the event that on any LIBOR Interest Rate Determination Date the Agent shall
have determined (which determination shall, absent manifest error, be
presumptively correct and binding upon all parties) that:
(i) adequate and fair means do not exist for ascertaining the
applicable interest rates by reference to which the LIBO Rate then
being determined is to be fixed; or
(ii) the LIBO Rate for any Interest Period for such Loans will
not adequately reflect the cost to any Lender of making, funding or
maintaining its LIBOR Loan for such Interest Period, the Agent shall
forthwith so notify the Borrowers and the Lenders, whereupon:
(A) each LIBOR Loan will automatically, on the last day
of the then existing Interest Period therefor,
convert into a Base Rate Loan; and
(B) the obligation of the Lenders to make, or to convert
Loans into, LIBOR Loans shall be suspended until the
Agent shall notify the Borrowers and the Lenders that
the circumstances causing such suspension no longer
exist.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other Public Authority asserts that it is unlawful, for
any Lender to perform its obligations hereunder to make LIBOR Loans or to fund
or maintain LIBOR Loans hereunder, (i) the obligation of the Lenders to make, or
to convert Loans into or to continue Loans as, LIBOR Loans shall be suspended
until the Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist and (ii) the Borrowers
shall on the termination of the Interest Period than applicable thereto, or on
such earlier date required by law,
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prepay in full all LIBOR Loans then outstanding together with accrued interest
thereon, or convert all such LIBOR Loans into Base Rate Loans in accordance
with Section 3.2.
(e) Increased Costs. If, due to either (i) the introduction of
or any change (other than any change by way of imposition or increase of reserve
requirements included in the LIBOR Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Public Authority (whether or
not having the force of law), there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining LIBOR Loans, then
the Borrowers agree that they shall, from time to time, upon demand by such
Lender, pay to such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrowers by such Lender, shall, absent manifest error,
be rebuttably presumptive evidence of the correctness of such amount.
(f) Compensation. In addition to such amounts as are required
to be paid by the Borrowers pursuant to the other Sections of this Article 3,
each Borrower agrees to compensate any Lender for all losses, expenses and
liabilities, including, without limitation, any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Lender's LIBOR Loans to the Borrowers,
which such Lender may sustain (i) if for any reason a funding of any LIBOR Loans
does not occur on a date specified therefor in a Notice of Borrowing or Notice
of Conversion/Continuation, or a successive Interest Period does not commence
after notice therefor is given pursuant to Section 3.2, (ii) if any voluntary or
mandatory prepayment of any LIBOR Loans occurs for any reason on a date which is
not the last scheduled day of an Interest Period, (iii) as a consequence of any
required conversion of LIBOR Loans to Base Rate Loans as a result of any of the
events indicated in Section 3.3(d), or (iv) as a consequence of any other
failure by any Borrower to repay LIBOR Loans when required by the terms of this
Agreement.
(g) Booking of LIBOR Loans. The Lenders may make, carry or
transfer LIBOR Loans at, to, or for the account of, any of their respective
branch offices or the office of any of their respective affiliates.
(h) LIBOR Loans After Event of Default. Unless the Majority
Lenders shall otherwise agree, after the occurrence of and during the
continuance of any Event of Default, no Borrower may borrow Revolving Loans as
LIBOR Loans or elect to have any Loans continued as, or converted to, LIBOR
Loans after the expiration of any Interest Period then in effect for such Loans.
3.4 Maximum Interest Rate. In no event shall any Interest Rate
provided for hereunder exceed the maximum rate permissible for corporate
borrowers under applicable law for loans of the type provided for hereunder (the
"Maximum Rate"). If, in any month, any interest rate, absent such limitation,
would have exceeded the Maximum Rate, then the interest rate for that month
shall be the Maximum Rate, and, if in future months, that interest rate would
otherwise be less than the Maximum Rate, then that interest rate shall remain at
the Maximum Rate until such time as the amount of interest paid hereunder equals
the amount of interest which would have been paid if the same had not been
limited by the Maximum Rate. In the event that, upon payment in full of the
Obligations under this Agreement, the total amount of interest paid or accrued
under the terms of this Agreement is less than the total amount of interest
which would, but for this Section 3.4, have been paid or accrued if the interest
rates otherwise set forth in this Agreement had at all times been in effect,
then the Borrowers
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shall, to the extent permitted by applicable law, pay the Agent, for the account
of the Lenders, an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have been charged if the Maximum Rate had, at
all times, been in effect or (ii) the amount of interest which would have
accrued had the interest rates otherwise set forth in this Agreement, at all
times, been in effect and (b) the amount of interest actually paid or accrued
under this Agreement. In the event that a court determines that the Agent and/or
any Lender has received interest and other charges hereunder in excess of the
Maximum Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest, in the
inverse order of maturity, and if there are no Obligations outstanding, the
Agent and/or such Lender shall refund to the Borrowers such excess.
3.5 Funding Fee. The Borrowers agree, on a joint and several
basis, to pay the Agent, for the ratable account of the Lenders, on the Final
Order Date a funding fee (the "Funding Fee") in the amount of $210,000, which
Funding Fee shall be fully earned by the Lenders on the Final Order Date. The
Agent, the Lenders and the Borrowers agree that the Funding Fee shall be
financed by the Lenders as Post-Petition Revolving Loans.
3.6 Facility Fee. The Borrowers agree, on a joint and several
basis, to pay to the Agent, for the ratable account of the Lenders, a facility
fee (the "Facility Fee") equal to one half of one percent (0.50%) per annum on
the average daily amount by which the Revolver Facility exceeded the sum of
outstanding Pre-Petition Obligations and Post-Petition Obligations, payable on
the first day of each month for the immediately preceding month and on the
Termination Date for the period from the last date for which the Facility Fee
was paid to and including the Termination Date. The Facility Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
As provided for in Section 5.9(c), all payments received by the Agent on account
of Accounts or as proceeds of other Collateral shall be deemed to be credited to
the applicable Borrower's loan account immediately upon receipt for purposes of
calculating the Facility Fee pursuant to this Section 3.6.
3.7 Collateral Management Fee. The Borrowers shall pay to the
Agent, for the ratable benefit of the Lenders, a collateral management fee (the
"Collateral Management Fee") in the amount of $10,000 per month, payable monthly
in advance on the first day of each month.
3.8 Letter of Credit Fee. The Borrowers agree, on a joint and
several basis, to pay to the Agent, for the ratable account of the Lenders, for
each Letter of Credit, a fee (the "Letter of Credit Fee") equal to two percent
(2.00%) per annum of the undrawn amount of each Letter of Credit issued for any
Borrower's account at such Borrower's request, plus all out-of-pocket costs,
fees and expenses incurred by the Agent in connection with the application for,
issuance of, or amendment to any Letter of Credit, which costs, fees and
expenses could include a "fronting fee" required to be paid by the Agent to such
issuer for the assumption of the settlement risk in connection with the issuance
of such Letter of Credit; provided, that the Borrowers shall not be required to
pay to the Agent the amount of any "fronting fee" charged with respect to any
trade or documentary Letter of Credit having an expiration date less than ninety
(90) days from the date of issuance. Solely by way of information, the "fronting
fee" charged by Bank of America as of the Petition Date in connection with
letters of credit issued by it at the request of BABC is one-half of one percent
(.50%) per annum of the undrawn amount of the applicable letter of credit, and
the amount of such "fronting fee" is subject to change at any time. The Letter
of Credit Fee shall be payable in advance (1) upon the issuance of each Letter
of Credit for the number of days remaining in the month during which such Letter
of Credit was issued
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and (2) thereafter, monthly, on the first day of each month during which each
such Letter of Credit remains outstanding. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
3.9 Audit Fees. The Borrowers agree, on a joint and several
basis, to pay to (a) BNY, solely for its own account, and (b) the Agent, solely
for its own account, all costs and fees reasonably incurred by BNY's and the
Agent's respective internal auditors in connection with audits of the Borrowers
performed by such auditors during the term of this Agreement; provided, that BNY
shall be entitled to reimbursement for not more than one (1) auditor per day and
only in the event that such auditor accompanied the Agent on the applicable
audit. Each auditor of BNY and of the Agent shall be billed at a rate of $600
per day plus reasonably incurred out-of-pocket expenses (including travel
expenses).
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Post-Petition Revolving Loans, plus all accrued but
unpaid interest thereon, on the Termination Date. The Borrowers may prepay
Post-Petition Revolving Loans at any time, and reborrow subject to the terms of
this Agreement; provided, however, that with respect to any LIBOR Loans prepaid
by any Borrower prior to the expiration date of the Interest Period applicable
thereto, such Borrower agrees to pay to the Lenders the amounts described in
Section 3.3(f). In addition, and without limiting the generality of the
foregoing, the Borrowers shall pay to the Agent, for the account of the Lenders,
the amount by which the sum of outstanding Revolving Loans, the aggregate amount
of Pending Revolving Loans, the aggregate undrawn amounts of all outstanding
Letters of Credit and the amount of all unpaid reimbursement obligations with
respect to the Letters of Credit exceeds the Maximum Revolver Amount (but
without duplication), any such amount to be payable upon demand.
4.2 Mandatory Prepayments of the Term Loans. Prepayments on
the Term Loans shall be required to be made as provided in Sections 5.11(c),
8.5(c), 8.6(b) and 8.9(b). In addition, after the Additional Facility has been
reduced to zero, and if any amounts are received with respect to items (a), (b),
or (f) on Exhibit D, then 50% of such amounts shall be applied to the prepayment
of the Term Loans, applying such amounts ratably to the installments of the Term
Loans in the inverse order of maturity.
4.3 Place and Form of Payments; Extension of Time. All
payments of principal, interest, reimbursement obligations in connection with
Letters of Credit, fees, premium and other sums due to the Agent or the Lenders
shall be made at the Agent's address set forth in or specified pursuant to
Section 14.7. Except for proceeds received directly by the Agent, all such
payments shall be made in immediately available funds. If any payment of
principal, interest, reimbursement obligations in connection with Letters of
Credit, fees, premium, or other sums to be made hereunder becomes due and
payable on a day other than a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day and interest thereon shall be
payable at the applicable Interest Rate during such extension.
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4.4 Payments as Revolving Loans. All payments of principal,
interest, reimbursement obligations in connection with Letters of Credit, fees,
premiums and other sums payable hereunder, including all reimbursement for
expenses pursuant to Section 14.6, may, at the option of the Agent, in its sole
discretion, subject only to the terms of this Section 4.4, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
the Parent pursuant to Section 2.1 or a deemed request as provided in this
Section 4.4. Each Borrower hereby irrevocably authorizes the Lenders to make
Revolving Loans (including Settlement Loans by BABC or Agent Advances by the
Agent), upon notice from the Agent as described in the next succeeding sentence,
for the purpose of paying principal, interest, reimbursement obligations in
connection with Letters of Credit, fees, premiums and other sums payable
hereunder, including reimbursing expenses pursuant to Section 14.6, and agrees
that all such Revolving Loans so made shall be deemed to have been requested by
the Parent pursuant to Section 2.1, as of the date of the aforementioned notice.
The Agent shall request Revolving Loans as described in the immediately
preceding sentence by notifying the Lenders (or BABC, in the case of a
Settlement Loan) and the Parent, by telecopy, telephone or other similar form of
transmission, of the amount and Funding Date of the requested Borrowing and that
such Borrowing is being requested pursuant to this Section 4.4. On the requested
Funding Date, as applicable, the Lenders will make the requested Revolving Loans
in accordance with the procedures and subject to the conditions specified in
Section 2.1.
4.5 Apportionment, Application and Reversal of Payments.
Aggregate principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Loans to which such
payments relate held by each Lender) and payments of the fees shall, as
applicable, be apportioned ratably among the Lenders. All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans as otherwise provided in this Agreement, or not
constituting payment of specific fees, and all proceeds of Accounts or other
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, expense reimbursements or
indemnities then due to the Agent or the Lenders from any Borrower; second, from
and after the entry of the Final Order, to make Adequate Protection Payments;
third to pay interest due in respect of all Post-Petition Revolving Loans,
including Settlement Loans and Agent Advances, and all unpaid reimbursement
obligations in respect of Letters of Credit; fourth, until the outstanding
Pre-Petition Obligations are equal to or less than the Agreed Pre-Petition
Outstanding Balance, to pay the principal of the Pre-Petition Revolving Loans;
fifth, to pay or prepay principal of the Settlement Loans and Agent Advances;
sixth, to pay or prepay principal of the Post-Petition Revolving Loans (other
than Settlement Loans and Agent Advances), with such payments to be applied
first in satisfaction of any Base Rate Loans, and to pay, prepay or provide cash
collateral in respect of outstanding Letters of Credit or any unpaid
reimbursement obligations in respect thereof, as applicable; and seventh, to the
payment of any other Post-Petition Obligation due to the Agent or any Lender by
any Borrower. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by a Borrower, or unless an Event of Default is
outstanding, neither the Agent nor any Lender shall apply any payments which it
receives to any LIBOR Loan except (a) on the expiration date of the Interest
Period applicable to any such LIBOR Loan, or (b) in the event, and only to the
extent, that there are no outstanding Base Rate Loans. The Agent shall promptly
distribute to each Lender, pursuant to the applicable wire transfer instructions
set forth in Section 13.11, or pursuant to such other instructions as such
Lender may deliver to the Agent in writing, such funds as it may be entitled to
receive. The Agent and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Obligations.
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4.6 Indemnity for Returned Payments. If after receipt of any
payment of, or proceeds applied to the payment of, all or any part of the
Obligations, the Agent or any Lender is for any reason compelled to surrender
such payment or proceeds to any Person, because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continue and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the Agent or
such Lender, and the Borrowers shall be liable to pay to the Agent, and hereby
do indemnify the Agent and the Lenders and hold the Agent and the Lenders
harmless for, the amount of such payment or proceeds surrendered. The provisions
of this Section 4.6 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Agent or any Lender in reliance upon
such payment or application of proceeds, and any such contrary action so taken
shall be without prejudice to the Agent's and the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The provisions of
this Section 4.6 shall survive the termination of this Agreement.
4.7 Increased Capital. If any Lender determines that
compliance by such Lender with any guideline or request from any central bank or
other Public Authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender, or any corporation controlling such Lender, and such Lender reasonably
determines that the amount of such capital is increased by or based upon its
Commitment or its making or maintaining Loans hereunder, or its commitment to
participate (as provided for in Section 2.2(f)) in any credit support or
enhancement provided through the Agent in connection with the issuance of any
Letter of Credit or to otherwise extend credit to the Borrowers hereunder, and
other commitments of this type, then, upon demand by such Lender, the Borrowers
agree to immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to such Lender's commitment to participate
(as provided for in Section 2.2(f)) in any credit support or enhancement
provided through the Agent in connection with Letters of Credit or commitment to
make Loans hereunder. A certificate as to the amount of such increased cost,
submitted to the Borrowers by the applicable Lender shall, absent manifest
error, be conclusive and binding on the Borrowers for all purposes.
4.8 Register; Agent's and Lenders' Books and Records; Monthly
Statements. Each Borrower agrees that the Register and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall, absent manifest error, constitute rebuttably
presumptive proof thereof, irrespective of whether any Obligation is also
evidenced by a promissory note or other instrument. The Agent will provide to
the Borrowers a monthly statement of Loans, payments, and other transactions
pursuant to this Agreement. Such statement shall be deemed correct, accurate,
and binding on the Borrowers and an account stated (except for reversals and
reapplications of payments made as provided in Section 4.5 and corrections of
errors discovered by the Agent), unless the Borrowers notify the Agent in
writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrowers, only the items to which exception is expressly made will be
considered to be disputed by the Borrowers.
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ARTICLE 5
COLLATERAL
5.1 Grant of Security Interest. (a) As security for (A) all
Post-Petition Obligations and (B) the Pre-Petition Indebtedness in an amount
equal to any diminution in value of the Pre-Petition Collateral (in which the
Lenders had valid, perfected, enforceable and non-avoidable liens or security
interests as of the Petition Date) occurring during the pendency of the Case
(whether such diminution is a consequence of the Borrowers' use of the
Pre-Petition Collateral, including the Borrowers' consumption of cash
collateral, economic depreciation of the Pre-Petition Collateral, or otherwise),
and as adequate protection for any use of the Lenders' cash collateral pursuant
to the Interim Order or the Final Order or otherwise, the Parent hereby
reaffirms its grant to the Agent, for the ratable benefit of the Secured
Creditors, pursuant to the Original Credit Agreement (to the extent granted
thereunder), and hereby grants to the Agent, for the ratable benefit of the
Secured Creditors, a continuing security interest in, lien on, and right of
set-off against, all of the following property of the Parent, whether now owned
or existing (subject to the qualifications and restrictions set forth below) or
hereafter acquired or arising, regardless of where located:
(i) Accounts;
(ii) Inventory;
(iii) contract rights, letters of credit, Assigned
Contracts, chattel paper, instruments, notes,
documents, investment property and documents of
title;
(iv) General Intangibles;
(v) Equipment;
(vi) money, Securities (other than the capital stock of
Laclede Chain) and other property of any kind of the
Parent in the possession or under the control of the
Agent or any Lender, any assignee of or participant
in the Obligations, or a bailee of any such party or
such party's affiliates;
(vii) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its
affiliates or any other financial institution in
which the Parent maintains deposits;
(viii) all other real and personal property of the Parent;
(ix) books, records and other property related to or
referring to any of the foregoing, including, without
limitation, books, records, account ledgers, data
processing records, computer software and other
property and General Intangibles at any time
evidencing or relating to any of the foregoing; and
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(x) accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing,
including, but not limited to, proceeds of any
insurance policies, claims against third parties, and
condemnation or requisition payments with respect to
all or any of the foregoing.
All of the foregoing, together with the Real Estate covered by any mortgage
liens granted by the Parent to the Agent for the ratable benefit of the Secured
Creditors and all other property of the Parent in which the Agent or any Lender
may at any time be granted a Lien, is herein collectively referred to as the
"Parent Collateral".
(b) As security for (A) all Post-Petition Obligations, and (B)
the Pre-Petition Indebtedness in an amount equal to any diminution in value of
the Pre-Petition Collateral (in which the Lenders had valid, perfected,
enforceable and non-avoidable liens or security interests as of the Petition
Date) occurring during the pendency of the Case (whether such diminution is a
consequence of the Borrowers' use of the Pre-Petition Collateral, including the
Borrowers' consumption of cash collateral, economic depreciation of the
Pre-Petition Collateral or otherwise), and as adequate protection for any use of
the Lenders' cash collateral pursuant to the Interim Order or the Final Order or
otherwise, Laclede Chain hereby reaffirms its grant to the Agent, for the
ratable benefit of the Secured Creditors, pursuant to the Original Credit
Agreement (to the extent granted thereunder), and hereby grants to the Agent,
for the ratable benefit of the Secured Creditors, a continuing security interest
in, lien on, and right of set-off against, all of the following property of
Laclede Chain, whether now owned or existing or hereafter acquired or arising,
regardless of where located:
(i) Accounts;
(ii) Inventory;
(iii) contract rights, letters of credit, Assigned
Contracts, chattel paper, instruments, notes,
documents, investment property and documents of
title;
(iv) General Intangibles;
(v) Equipment;
(vi) money, Securities and other property of any kind of
Laclede Chain in the possession or under the control
of the Agent or any Lender, any assignee of or
participant in the Obligations, or a bailee of any
such party or such party's affiliates;
(vii) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its
affiliates or any other financial institution in
which Laclede Chain maintains deposits;
(viii) all other real and personal property of Laclede
Chain;
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(ix) books, records and other property related to or
referring to any of the foregoing, including, without
limitation, books, records, account ledgers, data
processing records, computer software and other
property and General Intangibles at any time
evidencing or relating to any of the foregoing; and
(x) accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing,
including, but not limited to, proceeds of any
insurance policies, claims against third parties, and
condemnation or requisition payments with respect to
all or any of the foregoing.
All of the foregoing, together with all other property of Laclede Chain in which
the Agent or any Lender may at any time be granted a Lien, is herein
collectively referred to as the "Laclede Chain Collateral".
(c) As security for (A) all Post-Petition Obligations and (B)
the Pre-Petition Indebtedness in an amount equal to any diminution in value of
the Pre-Petition Collateral (in which the Lenders had valid, perfected,
enforceable and non-avoidable liens or security interests as of the Petition
Date) occurring during the pendency of the Case (whether such diminution is a
consequence of the Borrowers' use of the Pre-Petition Collateral, including the
Borrowers' consumption of cash collateral, economic depreciation of the
Pre-Petition Collateral, or otherwise), and as adequate protection for any use
of the Lenders' cash collateral pursuant to the Interim Order or the Final Order
or otherwise, Laclede Mid America hereby reaffirms its grant to the Agent, for
the ratable benefit of the Secured Creditors, pursuant to the Original Credit
Agreement, and hereby grants to the Agent for the ratable benefit of the Secured
Creditors a continuing security interest in, lien on, and right of set-off
against, all of the following property of Laclede Mid America, whether now owned
or existing (subject to the qualifications and restrictions set forth below) or
hereafter acquired or arising, regardless of where located:
(i) Accounts;
(ii) Inventory;
(iii) contract rights, letters of credit, Assigned
Contracts, chattel paper, instruments, notes,
documents, investment property and documents of
title;
(iv) General Intangibles;
(v) Equipment;
(vi) money, Securities and other property of any kind of
Laclede Mid America in the possession or under the
control of the Agent or any Lender, any assignee of
or participant in the Obligations, or a bailee of any
such party or such party's affiliates;
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(vii) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its
affiliates or any other financial institution in
which Laclede Mid America maintains deposits;
(viii) all other real and personal property of Laclede Mid
America;
(ix) books, records and other property related to or
referring to any of the foregoing, including, without
limitation, books, records, account ledgers, data
processing records, computer software and other
property and General Intangibles at any time
evidencing or relating to any of the foregoing; and
(x) accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing,
including, but not limited to, proceeds of any
insurance policies, claims against third parties, and
condemnation or requisition payments with respect to
all or any of the foregoing.
All of the foregoing, together with all other property of Laclede Mid America in
which the Agent or any Lender may at any time be granted a Lien, is herein
collectively referred to as the "Laclede Mid America Collateral".
(d) As security for all Obligations, (i) the Parent executed and
delivered to the Agent the Vandalia Mortgage, the Xxxxx Mortgage, the Memphis
Mortgage and the Parent Fremont Mortgage to grant to the Agent for the ratable
benefit of the Secured Creditors, a continuing mortgage lien on its Real Estate
located in Vandalia, Illinois, Alton, Illinois, Memphis, Tennessee and Fremont,
Indiana, respectively, and identified in such Mortgages, and (ii) Laclede Mid
America executed and delivered to the Agent the Fremont Mortgage to grant to the
Agent for the ratable benefit of the Secured Creditors, a continuing mortgage
lien on the Real Estate located in Fremont, Indiana, and identified in such
Mortgage. The Parent and Laclede Mid America hereby reaffirm that grant and
grant the liens of the Mortgages to the Agent, for the ratable benefit of the
Secured Creditors, as security for the Post-Petition Obligations and to provide
the Secured Creditors adequate protection (pursuant to Sections 361, 362, 363
and 364 of the Bankruptcy Code and as provided in the Interim Order and the
Final Order) of the security interests and liens granted under or pursuant to
the Original Credit Agreement and for any use of cash collateral pursuant to the
Interim Order, the Final Order or otherwise.
(e) The Agent may, subject to the provisions of Articles 12 and 13, in
its sole discretion, (i) exchange, waive, or release any of the Collateral, (ii)
apply Collateral and direct the order or manner of sale thereof as the Agent may
determine, and (iii) settle, compromise, collect, or otherwise liquidate any
Collateral in any manner, all without affecting the Obligations or the Agent's
or any Lender's right to take any other action with respect to any other
Collateral.
5.2 Perfection and Protection of Security Interest. Each Borrower
shall, at its expense, perform all steps requested by the Agent at any time to
perfect, maintain, protect, and enforce the Agent's Liens, including, without
limitation: (a) executing and filing financing or continuation statements, and
amendments thereof, in form and substance satisfactory to the Agent; (b)
delivering to the Agent the originals of all instruments, documents, and chattel
paper, and all other Collateral of
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which the Agent determines it should have physical possession in order to
perfect and protect the Agent's security interest therein, including the
Intercompany Notes, duly pledged, endorsed or assigned to the Agent without
restriction; (c) delivering to the Agent warehouse receipts covering any portion
of the Collateral located in warehouses and for which warehouse receipts are
issued; (d) when an Event of Default exists, transferring Inventory to
warehouses designated by the Agent; (e) placing notations on such Borrower's
books of account to disclose the Agent's security interest; (f) delivering to
the Agent all letters of credit on which such Borrower is named beneficiary; and
(g) taking such other steps as are deemed necessary or desirable by the Agent to
maintain and protect the Agent's Liens. To the extent permitted by applicable
law, the Agent may file, without the applicable Borrower's signature, one or
more financing statements disclosing the Agent's Liens. Each Borrower agrees
that a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
If any Collateral is at any time in the possession or control of any
warehouseman, bailee or any of a Borrower's agents or processors, then such
Borrower shall notify the Agent thereof and shall notify such Person of the
Agent's security interest in such Collateral and, upon the Agent's request,
instruct such Person to hold all such Collateral for the Agent's account subject
to the Agent's instructions. If at any time any Collateral is located on any
operating facility of a Borrower which is not owned by such Borrower, then such
Borrower shall obtain written waivers, in form and substance satisfactory to the
Agent, of all present and future Liens to which the owner or lessor or any
mortgagee of such premises may be entitled to assert against the Collateral.
From time to time, each Borrower shall, upon the Agent's request,
execute and deliver confirmatory written instruments pledging to the Agent, for
the ratable benefit of the Secured Creditors, the Collateral with respect to
such Borrower, but any Borrower's failure to do so shall not affect or limit the
Agent's security interest or the Agent's other rights in and to the Collateral
with respect to such Borrower. So long as this Agreement is in effect and until
all Obligations have been fully satisfied, the Agent's Liens shall continue in
full force and effect in all Collateral (whether or not deemed eligible for the
purpose of calculating the Maximum Revolver Amount or as the basis for any
advance, loan, extension of credit, or other financial accommodation).
5.3 Location of Collateral. Each Borrower represents and warrants to
the Agent and the Lenders that: (a) Schedule 5.3 is a correct and complete list
of such Borrower's chief executive office, the location of its books and
records, the locations of the Collateral with respect to such Borrower, and the
locations of all of its other places of business; and (b) Schedule 5.3 correctly
identifies any of such facilities and locations that are not owned by such
Borrower and sets forth the names of the owners and lessors or sublessors of,
and, to the best of such Borrower's knowledge, the holders of any mortgages on,
such facilities and locations. Each Borrower covenants and agrees that it will
not (i) maintain any Collateral with respect to such Borrower at any location
other than those locations listed for such Borrower on Schedule 5.3, (ii)
otherwise change or add to any of such locations, or (iii) change the location
of its chief executive office from the location identified in Schedule 5.3,
unless it gives the Agent at least thirty (30) days' prior written notice
thereof and executes any and all financing statements and other documents that
the Agent requests in connection therewith. Without limiting the foregoing, each
Borrower represents that all of its Inventory is, and covenants that all of its
Inventory will be, located either (a) on premises owned by such Borrower, (b) on
premises leased by such Borrower, provided that the Agent has received an
executed landlord waiver from the landlord of such premises in form and
substance satisfactory to the Agent, or (c) in a public warehouse, provided that
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the Agent has received an executed bailee letter from the applicable public
warehouseman in form and substance satisfactory to the Agent.
5.4 Title to, Liens on, and Sale and Use of Collateral. Each Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) all of the Collateral with respect to such Borrower is
and will continue to be owned by such Borrower free and clear of all Liens
whatsoever, except for Permitted Liens; (b) the Agent's Liens in the Collateral
with respect to such Borrower will not be subject to any prior Lien except for
those Permitted Liens, if any, specifically identified on Schedule 7.2; (c) such
Borrower will use, store, and maintain the Collateral with respect to such
Borrower with all reasonable care and will use such Collateral for lawful
purposes only; and (d) such Borrower will not, without the Agent's prior written
approval, sell, or dispose of or permit the sale or disposition of any of the
Collateral with respect to such Borrower except for sales of Inventory in the
ordinary course of business and sales of Equipment as permitted by Sections
5.11(c) or 8.9(b). The inclusion of proceeds in the Collateral shall not be
deemed to constitute the Agent's or any Lender's consent to any sale or other
disposition of the Collateral except as expressly permitted herein.
5.5 Appraisals. Each Borrower shall, at its expense and upon the
Agent's request, provide the Agent with appraisals or updates thereof of any or
all of the Collateral with respect to such Borrower from an appraiser, and
prepared on a basis, satisfactory to the Agent.
5.6 Access and Examination; Confidentiality. (a) The Agent, accompanied
by any Lender which so elects, may at all reasonable times have access to,
examine, audit, make extracts from or copies of and inspect any or all of each
Borrower's records, files, and books of account and the Collateral, and discuss
each Borrower's affairs with such Borrower's officers and management. Each
Borrower will deliver to the Agent any instrument necessary for the Agent to
obtain records from any service bureau maintaining records for such Borrower.
The Agent may, and at the direction of the Majority Lenders shall, at the
Borrowers' expense, make copies of all of each Borrower's books and records, or
require the Borrowers to deliver such copies to the Agent. The Agent may,
without expense to the Agent, use such of the Borrowers' respective personnel,
supplies, and premises as may be reasonably necessary for maintaining or
enforcing the Agent's Liens.
(b) The Agent and each Lender agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by any Borrower and
provided to the Agent or such Lender by or on behalf of such Borrower, under
this Agreement or any other Loan Document, and neither the Agent, nor such
Lender nor any of their respective affiliates shall use any such information
other than in connection with or in enforcement of this Agreement and the other
Loan Documents, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by the
Agent or such Lender, or (ii) was or becomes available on a nonconfidential
basis from a source other than such Borrower, provided that such source is not
bound by a confidentiality agreement with such Borrower known to the Agent or
such Lender; provided, however, that the Agent and any Lender may disclose such
information (A) at the request or pursuant to any requirement of any Public
Authority to which the Agent or such Lender is subject or in connection with an
examination of the Agent or such Lender by any such Public Authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable requirement of law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Agent, any Lender or their respective affiliates may be party; (E) to
the extent reasonably required in connection with the exercise
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of any remedy hereunder or under any other Loan Document; (F) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (G) to any affiliate of the Agent or such Lender, or to
any Participating Lender or assignee under any Assignment and Acceptance, actual
or potential, provided that such affiliate, Participating Lender or assignee
agrees to keep such information confidential to the same extent required of the
Agent and the Lenders hereunder; and (H) as expressly permitted under the terms
of any other document or agreement regarding confidentiality to which such
Borrower is party or is deemed party with the Agent or such Lender.
5.7 Collateral Reporting. Each Borrower will provide the Agent with the
following documents at the following times in form satisfactory to the Agent:
(a) on a daily basis, a schedule of such Borrower's Accounts created since the
last such schedule, prepared as of a date no more than two (2) Business Days
prior to the delivery date of such schedule and accompanied by a current
Borrowing Base Certificate; (b) within two (2) Business Days following the
receipt of remittances into such Borrower's lock-box or Payment Account,
sufficient information to enable the Agent to properly apply remittances to the
appropriate Borrower's account in the correct amount; (c) on a monthly basis, by
the fifteenth (15th) day of each month for the immediately preceding calendar
month, an aging of such Borrower's Accounts, together with a reconciliation to
the previous month's aging of such Borrower's Accounts and to such Borrower's
general ledger; (d) on Wednesday of each week, for the week ending the preceding
Friday, a "roll forward" inventory report covering finished and semi-finished
inventory; (e) on a monthly basis by the fifteenth (15th) day of each month for
the immediately preceding calendar month (or more frequently if requested by the
Agent), Inventory reports by category, with additional detail showing additions
to and deletions from the Inventory; (f) upon request, copies of invoices in
connection with such Borrower's Accounts, customer statements, credit memos,
remittance advices and reports, deposit slips, shipping and delivery documents
in connection with such Borrower's Accounts and for Inventory and Equipment
acquired by such Borrower, purchase orders and invoices; (g) on a monthly basis,
by the twenty-fifth (25th) day of each month, a statement of the balance of each
of the Intercompany Notes as of the last day of the immediately preceding
calendar month; (h) such other reports as to the Collateral of such Borrower as
the Agent or any Lender shall reasonably request from time to time; and (i) with
the delivery of each of the foregoing, a certificate of an officer of such
Borrower certifying as to the accuracy and completeness of the foregoing. If any
of any Borrower's records or reports of the Collateral are prepared by an
accounting service or other agent, each Borrower hereby authorizes such service
or agent to deliver such records, reports, and related documents to the Agent,
for distribution to the Lenders.
5.8 Accounts. (a) Each Borrower hereby represents and warrants to the
Agent and the Lenders, with respect to such Borrower's Accounts, that: (i) each
existing Account represents, and each future Account will represent, a bona fide
sale or lease and delivery of goods by such Borrower, or rendition of services
by such Borrower, in the ordinary course of such Borrower's business; (ii) each
existing Account is, and each future Account will be, for a liquidated amount
payable by the Account Debtor thereon on the terms set forth in the invoice
therefor or in the schedule thereof delivered to the Agent, without any offset,
deduction, defense, or counterclaim except those known to such Borrower and
disclosed to the Agent and the Lenders pursuant to this Agreement; (iii) no
payment will be received with respect to any Account, and no credit, discount,
or extension, or agreement therefor will be granted on any Account, except as
reported to the Agent and the Lenders in accordance with this Agreement; (iv)
each copy of an invoice delivered to the Agent by a Borrower will be a genuine
copy of the original invoice sent to the Account Debtor named therein; and (v)
all goods described in each
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invoice will have been delivered to the Account Debtor and all services of such
Borrower described in each invoice will have been performed.
(b) No Borrower shall re-date any invoice or sale or make sales on
extended dating beyond that customary in such Borrower's business or extend or
modify any Account. If any Borrower becomes aware of any matter which may
materially affect the collectibility of any Account, including information
regarding the Account Debtor's creditworthiness, such Borrower will promptly so
advise the Agent.
(c) No Borrower shall accept any note or other instrument (except a
check or other instrument for the immediate payment of money) with respect to
any Account without the Agent's written consent. If the Agent consents to the
acceptance of any such instrument, it shall be considered as evidence of the
Account and not payment thereof and the applicable Borrower will promptly
deliver such instrument to the Agent, endorsed by such Borrower to the Agent in
a manner satisfactory in form and substance to the Agent.
(d) Each Borrower shall notify the Agent promptly of any dispute or
claim with an Account Debtor respecting an Eligible Account as to which the
amount in dispute exceeds $250,000, and agrees to settle or adjust such dispute
or claim at no expense to the Agent or any Lender. No discount, credit or
allowance shall be granted to any such Account Debtor without the Agent's prior
written consent, except for discounts, credits and allowances made or given in
the ordinary course of such Borrower's business when no Event of Default exists
hereunder. Each Borrower shall send the Agent a copy of each credit memorandum
in excess of $50,000 as soon as issued. The Agent may, and at the direction of
the Majority Lenders shall, at all times when an Event of Default exists
hereunder, settle or adjust disputes and claims directly with Account Debtors
for amounts and upon terms which the Agent or the Majority Lenders, as
applicable, shall consider advisable and, in all cases, the Agent will credit
the applicable Borrower's loan account with only the net amounts received by the
Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to any Borrower, then
such Borrower shall promptly determine the reason for such return and shall
issue a credit memorandum to the Account Debtor in the appropriate amount. Each
Borrower shall immediately report to the Agent any return involving an amount in
excess of $50,000. Each such report shall indicate the reasons for the returns
and the locations and condition of the returned Inventory. In the event any
Account Debtor returns Inventory to any Borrower when an Event of Default
exists, such Borrower shall: (i) hold the returned Inventory in trust for the
Agent; (ii) segregate all returned Inventory from all of its other property;
(iii) dispose of the returned Inventory solely according to the Agent's written
instructions; and (iv) not issue any credits or allowances with respect thereto
without the Agent's prior written consent. All returned Inventory shall be
subject to the Agent's Liens thereon. Whenever any Inventory is returned, the
related Account shall be deemed ineligible to the extent of the return and the
Maximum Revolver Amount shall be adjusted accordingly.
5.9 Collection of Accounts; Payments. (a) Each Borrower has established
a lock-box service for collections of Accounts at a bank or banks mutually
acceptable to the Agent and such Borrower and pursuant to documentation
satisfactory to the Agent. The applicable Borrower shall instruct all Account
Debtors to make all payments directly to the address or addresses established
for such service. If, notwithstanding such instructions, the applicable Borrower
receives any proceeds of
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Accounts, it shall receive such payments as the Agent's and the Lenders'
trustee, and shall immediately deliver such payments to the Agent in their
original form duly endorsed in blank or deposit them into a Payment Account, as
the Agent may direct. All collections received in any such lock-box or Payment
Account or directly by such Borrower, the Agent or any Lender, and all funds in
any Payment Account or other account to which such collections are deposited,
shall be the sole property of the Agent and the Lenders and subject to the
Agent's and the Lenders' sole control. Laclede Mid America shall not be required
to maintain a lock-box service or Payment Account separate from that of the
Parent, until such time as the Agent may, in its discretion, so direct Laclede
Mid America. The Agent or the Agent's designee may, at any time, notify obligors
that the Accounts have been assigned to the Agent and of the Agent's security
interest therein, and may collect them directly and charge the collection costs
and expenses to the applicable Borrower's loan account as a Revolving Loan as
described in Section 4.4. At the Agent's request, each Borrower shall execute
and deliver to the Agent such documents as the Agent shall require to grant the
Agent access to any post office box in which collections of Accounts are
received.
(b) If sales of Inventory are made for cash, the applicable Borrower
shall immediately deliver to the Agent or deposit into a Payment Account of such
Borrower the identical checks, cash, or other forms of payment which such
Borrower receives.
(c) All payments received by the Agent on account of Accounts or as
proceeds of other Collateral will be the Agent's sole property and will be
credited to the Borrowers' loan account (conditional upon final collection)
after allowing one (1) Business Day for collection; provided, however, that such
payments shall be deemed to be credited to the Borrowers' loan account
immediately upon receipt for purposes of (i) determining Availability, (ii)
calculating the Facility Fee pursuant to Section 3.6, and (iii) calculating the
amount of interest accrued thereon solely for purposes of determining the amount
of interest to be distributed by the Agent to the Lenders.
5.10 Inventory. (a) Each Borrower represents and warrants to the Agent
and the Lenders and agrees with the Agent and the Lenders that all of the
Inventory owned by such Borrower is and will be held for sale or lease, or to be
furnished in connection with the rendition of services, in the ordinary course
of such Borrower's business, and is and will be fit for such purposes. Each
Borrower will keep its Inventory in good and marketable condition, at its own
expense. No Borrower will, without the prior written consent of the Agent,
acquire or accept any Inventory on consignment or approval. Each Borrower agrees
that all Inventory will be produced in accordance with the Federal Fair Labor
Standards Act of 1938, as amended, and all rules, regulations, and orders
thereunder. No Borrower will sell any Inventory on a xxxx-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other repurchase or
return basis.
(b) Each Borrower will conduct a physical count of its Inventory
constituting pipe not less frequently than once every four (4) months, and shall
upon request promptly supply the Agent, in sufficient copies for distribution by
the Agent to each Lender, with a copy of such count accompanied by a report of
the value of such inventory (valued at the lower of cost or market value). Each
Borrower will maintain such perpetual inventory reporting systems as are in
place on the Petition Date.
5.11 Equipment. (a) The Parent represents and warrants to the Agent and
the Lenders that it has delivered to the Agent and the Lenders, pursuant to the
Original Agreement, a complete and accurate list of the Parent's Equipment owned
by the Parent as of the date of such list.
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The Parent shall, upon the Agent's request from time to time, provide to the
Agent and the Lenders an update of such list, and each of the other Borrowers
shall, upon the Agent's request from time to time after the Petition Date,
provide to the Agent and the Lenders a list with respect to its Equipment, in a
similar format to that described in the immediately preceding sentence. Each
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that all of the Equipment owned by such Borrower is
and will be used or held for use in such Borrower's business, and is and will be
fit for such purposes. Each Borrower shall keep and maintain its Equipment in
good operating condition and repair (ordinary wear and tear excepted) and shall
make all necessary replacements thereof.
(b) Each Borrower shall promptly inform the Agent of any material
additions to or deletions from the Equipment. No Borrower shall permit any
Equipment (i) consisting of Collateral to become a fixture with respect to real
property or to become an accession with respect to other personal property with
respect to which real or personal property the Agent does not have a Lien, (ii)
not consisting of Collateral to become a fixture with respect to real property
or to become an accession with respect to other personal property with respect
to which real or personal property the Agent has a Lien. No Borrower will,
without the Agent's prior written consent, alter or remove any identifying
symbol or number on any of such Borrower's Equipment consisting of Collateral.
(c) No Borrower shall, without the Agent's prior written consent, sell,
lease as a lessor, or otherwise dispose of any of such Borrower's Equipment,
except as permitted in Section 8.9(b); provided, however, that the Parent and
its Subsidiaries may dispose of obsolete or unusable Equipment having an orderly
liquidation value no greater than $1,500,000 in the aggregate during the term of
this Agreement, without the Agent's consent, subject to the conditions set forth
in the next sentence. In the event any of such Equipment is sold, transferred or
otherwise disposed pursuant to the proviso contained in the immediately
preceding sentence, (1) if such sale, transfer or disposition is effected
without replacement of such Equipment, or such Equipment is replaced by
Equipment leased by the applicable Borrower or by Equipment purchased by such
Borrower subject to a Lien, then such Borrower shall deliver all of the cash
proceeds of any such sale, transfer or disposition to the Agent, which proceeds
shall be applied, ratably, to the reduction of the Term Loans (applying such
proceeds ratably to the installments of the Term Loans in the inverse order of
maturity), or (2) if such sale, transfer or disposition is made in connection
with the purchase by the applicable Borrower of replacement Equipment (other
than Equipment subject to a Lien), then such Borrower shall use the proceeds of
such sale, transfer or disposition to finance the purchase by such Borrower of
such replacement Equipment and shall deliver to the Agent written evidence of
the use of the proceeds for such purchase. All replacement Equipment purchased
by the applicable Borrower shall be free and clear of all Liens, claims and
encumbrances.
5.12 Assigned Contracts. Each Borrower shall fully perform all of its
obligations under each of such Borrower's Assigned Contracts, and shall enforce
all of its rights and remedies thereunder as it deems appropriate in its
business judgment; provided, however, that no Borrower shall take any action or
fail to take any action with respect to its Assigned Contracts which would
result in a waiver or other loss of any material right or remedy of such
Borrower thereunder. Without limiting the generality of the foregoing, each
Borrower shall take all action necessary or appropriate to permit, and shall not
take any action which would have any materially adverse effect upon, the full
enforcement of all indemnification rights under its Assigned Contracts. No
Borrower shall, without the Agent's prior written consent, modify, amend,
supplement, compromise, satisfy, release, or discharge any of its
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Assigned Contracts, any collateral securing the same, any Person liable directly
or indirectly with respect thereto, or any agreement relating to any of its
Assigned Contracts or the collateral therefor. Each Borrower shall notify the
Agent in writing, promptly after such Borrower becomes aware thereof, of any
event or fact which could give rise to a claim by it for indemnification under
any of its Assigned Contracts, and shall diligently pursue such right and report
to the Agent on all further developments with respect thereto. Each Borrower
shall remit directly to the Agent for application to the Obligations in such
order as the Majority Lenders shall determine, all amounts received by such
Borrower as indemnification or otherwise pursuant to its Assigned Contracts. If
any Borrower shall fail after the Agent's demand to pursue diligently any right
under its Assigned Contracts, or if an Event of Default then exists, the Agent
may, and at the direction of the Majority Lenders shall, directly enforce such
right in its own or such Borrower's name and may enter into such settlements or
other agreements with respect thereto as the Agent or the Majority Lenders, as
applicable, shall determine. In any suit, proceeding or action brought by the
Agent under any Assigned Contract for any sum owing thereunder or to enforce any
provision thereof, the Borrowers shall indemnify and hold the Agent harmless
from and against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaims, recoupment, or reduction of liability whatsoever of the
obligor thereunder arising out of a breach by the applicable Borrower of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing from such Borrower to or in favor of such obligor or
its successors. All such obligations of the applicable Borrower shall be and
remain enforceable only against such Borrower and shall not be enforceable
against the Agent. Notwithstanding any provision hereof to the contrary, each
Borrower shall at all times remain liable to observe and perform all of its
duties and obligations under its Assigned Contracts, and the Agent's or any
Lender's exercise of any of their respective rights with respect to the
Collateral shall not release such Borrower from any of such duties and
obligations. Neither the Agent nor any Lender shall be obligated to perform or
fulfill any of any Borrower's duties or obligations under its Assigned Contracts
or to make any payment thereunder, or to make any inquiry as to the nature or
sufficiency of any payment or property received by it thereunder or the
sufficiency of performance by any party thereunder, or to present or file any
claim, or to take any action to collect or enforce any performance, any payment
of any amounts, or any delivery of any property.
5.13 Documents, Instruments, and Chattel Paper. Each Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that (a) all documents, instruments, and chattel paper
describing, evidencing, or constituting Collateral with respect to such
Borrower, and all signatures and endorsements thereon, are and will be complete,
valid, and genuine and (b) all goods evidenced by such documents, instruments,
and chattel paper are and will be owned by such Borrower free and clear of all
Liens other than Permitted Liens.
5.14 Right to Cure. The Agent may, in its discretion and at any time,
and shall, at the direction of the Majority Lenders, for the Borrowers' account
and at the Borrowers' expense, pay any amount or do any act required of any
Borrower hereunder or requested by the Agent to preserve, protect, maintain or
enforce the Obligations, the Collateral or the Agent's Liens therein, and which
such Borrower fails to pay or do, including, without limitation, payment of any
judgment against such Borrower, any insurance premium, any warehouse charge, any
finishing or processing charge, any landlord's claim, and any other Lien upon or
with respect to the Collateral. All payments that the Agent makes under this
Section 5.14 and all out-of-pocket costs and expenses that the Agent pays or
incurs in connection with any action taken by it hereunder shall be charged to
the Borrowers' loan account as a Revolving Loan as described in Section 4.4. Any
payment made or other action taken by the Agent
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under this Section 5.14 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
5.15 Power of Attorney. Each Borrower hereby appoints the Agent and the
Agent's designees as such Borrower's attorney, with power: (a) to endorse such
Borrower's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b) to sign such Borrower's name on any invoice, xxxx of lading, warehouse
receipt or other document of title relating to any Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment, financing
statements and other public records; (c) to notify the post office authorities,
when an Event of Default exists, to change the address for delivery of such
Borrower's mail to an address designated by the Agent and to receive, open and
dispose of all mail addressed to the such Borrower; (d) to send requests for
verification of accounts to customers or account debtors; (e) to clear
Inventory, the purchase of which was financed with Letters of Credit, through
customs in such Borrower's name, the Agent's name or the name of the Agent's
designee, and to sign and deliver to customs officials powers of attorney in
such Borrower's name for such purpose; and (f) to do all things necessary to
carry out this Agreement. Each Borrower ratifies and approves all acts of such
attorney. None of the Lenders or the Agent nor the attorneys will be liable for
any acts or omissions or for any error of judgment or mistake of fact or law.
This power, being coupled with an interest, is irrevocable until this Agreement
has been terminated and the Obligations have been fully satisfied.
5.16 The Agent's and Lenders' Rights, Duties and Liabilities. Each
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. Neither the Agent, nor any
Lender, nor any of their respective officers, directors, employees or agents
shall be liable or responsible in any way for the safekeeping of any of the
Collateral, or for any loss or damage thereto, or for any diminution in the
value thereof, or for any act of default of any warehouseman, carrier,
forwarding agency or other person whomsoever, all of which shall be at the
Borrowers' sole risk. The Obligations shall not be affected by any failure of
the Agent or any Lender to take any steps to perfect the Agent's Liens or to
collect or realize upon the Collateral, nor shall loss of or damage to the
Collateral release any Borrower from any of the Obligations. The Agent may, and
at the direction of the Majority Lenders shall, without notice to or consent
from any Borrower, xxx upon or otherwise collect, extend the time for payment
of, modify or amend the terms of, compromise or settle for cash, credit, or
otherwise upon any terms, grant other indulgences, extensions, renewals,
compositions, or releases, and take or omit to take any other action with
respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of any Borrower for the Obligations or under
this Agreement or any other agreement now or hereafter existing between the
Agent and/or any Lender and any Borrower.
ARTICLE 6
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
6.1 Books and Records. Each Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements
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required to be delivered pursuant to Section 6.2(a). Each Borrower shall, by
means of appropriate entries, reflect in such accounts and in all Financial
Statements proper liabilities and reserves for all taxes and proper provision
for depreciation and amortization of property and bad debts, all in accordance
with GAAP. Each Borrower shall maintain at all times books and records
pertaining to the Collateral in such detail, form and scope as the Agent or any
Lender shall reasonably require, including, but not limited to, records of (a)
all payments received and all credits and extensions granted with respect to the
Accounts; (b) the return, rejections, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory; and (c) all other dealings affecting
the Collateral.
6.2 Financial Information. The Borrowers shall promptly furnish to the
Agent, in sufficient copies for distribution by the Agent to each Lender, all
such financial information as the Agent or any Lender shall reasonably request,
and notify its auditors and accountants that the Agent, on behalf of the
Lenders, is authorized to obtain such information directly from them. Without
limiting the foregoing, the Borrowers will furnish to the Agent, in sufficient
copies for distribution by the Agent to each Lender, in such detail as the Agent
or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety
(90) days after the close of each Fiscal Year, consolidated audited and
consolidating unaudited balance sheets, and statements of income and
expense, cash flow and of stockholders' equity for the Parent and its
consolidated Subsidiaries for such Fiscal Year, and the accompanying notes
thereto, setting forth in each case in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the
financial position and the results of operations of the Parent and its
consolidated Subsidiaries as at the date thereof and for the Fiscal Year
then ended, and prepared in accordance with GAAP. Such statements shall be
examined in accordance with generally accepted auditing standards by and, in
the case of such statements performed on a consolidated basis.
(b) As soon as available, but in any event not later than
forty-five (45) days after the end of each month, consolidated and
consolidating unaudited balance sheets of the Parent and its consolidated
Subsidiaries as at the end of such month, and consolidated and consolidating
unaudited statements of income and expense and cash flow for the Parent and
its consolidated Subsidiaries for such month and for the period from the
beginning of the Fiscal Year to the end of such month, all in reasonable
detail, fairly presenting the financial position and results of operations
of the Parent and its consolidated Subsidiaries as at the date thereof and
for such periods, and prepared in accordance with GAAP applied consistently
with the audited Financial Statements required to be delivered pursuant to
Section 6.2(a). Such statements shall be certified to be correct by the
chief financial or accounting officer of the Parent, subject to normal
year-end adjustments.
(c) With each of the audited Financial Statements delivered
pursuant to Section 6.2(a), a certificate of the independent certified
public accountants that examined such statement to the effect that they have
reviewed and are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or condition
which then constituted a Default or Event of Default, except for those, if
any, described in reasonable detail in such certificate.
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(d) With each of the annual audited Financial Statements delivered
pursuant to Section 6.2(a), and within forty-five (45) days after the end of
each fiscal quarter, a certificate of the chief financial officer of the
Parent (i) setting forth in reasonable detail the calculations required to
establish that the Borrowers were in compliance with the covenants set forth
in Sections 8.22, 8.24 and 8.25 during the period covered in such Financial
Statements and as at the end thereof, and (ii) stating that, except as
explained in reasonable detail in such certificate, (A) all of the
representations and warranties of the Borrowers contained in this Agreement
and the other Loan Documents are correct and complete in all material
respects as at the date of such certificate as if made at such time, (B) the
Borrowers are, at the date of such certificate, in compliance in all
material respects with all of their respective covenants and agreements in
this Agreement and the other Loan Documents, and (C) no Default or Event of
Default then exists or existed during the period covered by such Financial
Statements. If such certificate discloses that a representation or warranty
is not correct or complete in all material respects, or that a covenant has
not been complied with in all material respects, or that a Default or Event
of Default existed or exists, such certificate shall set forth what action
the applicable Borrower has taken or proposes to take with respect thereto.
(e) Within forty-five (45) days after the end of each fiscal
quarter, consolidated and consolidating projected balance sheets, statements
of income and expense, and statements of cash flow for the Parent and its
consolidated Subsidiaries as at the end of and for the then current fiscal
quarter and as at the end of and for each of the succeeding three (3) fiscal
quarters.
(f) Within forty-five (45) days after the end of each fiscal
quarter, a report of the Capital Expenditures of the Parent and its
consolidated Subsidiaries for such quarter and a statement of cash flow for
the Parent and its consolidated Subsidiaries for the period from the
beginning of the then current Fiscal Year to the end of such quarter,
prepared in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 6.2(a).
(g) Promptly after their preparation, copies of any all proxy
statements, financial statements, and reports which any Borrower makes
available to its stockholders.
(h) Promptly after filing with the IRS, a copy of each tax return
filed by the Parent or by any of its Subsidiaries.
(i) Promptly upon the filing or transmission thereof to any third
party, all schedules or reports (and any amendment or supplements thereto)
required or permitted to be filed or transmitted by Bankruptcy Rules 1007 or
1009, or otherwise required or permitted by the United States Department of
Justice, the Office of the United States Attorney General, or the Office of
the United States Trustee.
(j) Concurrently with the delivery to any party listed below, all
written information with respect to the Obligations, the Collateral, or the
Agent's or Lenders' Liens in the
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Collateral delivered to the Committee any representative of the Committee,
or any holder of Debt or stock of any Borrower.
(k) Such additional information as the Agent and/or any Lender may
from time to time reasonably request regarding the financial and business
affairs of the Parent or any Subsidiary, including, without limitation,
projections of future operations on both a consolidated and consolidating
basis.
6.3 Notices to the Lenders. The Borrowers shall notify the Agent,
in writing, in sufficient copies for distribution by the Agent to each Lender,
of the following matters at the following times:
(a) Immediately after becoming aware thereof, any Default or Event
of Default.
(b) Immediately after becoming aware thereof, the assertion by the
holder of any capital stock of any Borrower or of any Debt incurred after
the Petition Date in an outstanding principal amount in excess of $100,000
that a default exists with respect thereto or that such Borrower is not in
compliance with the terms thereof, or the threat or commencement by such
holder of any enforcement action because of such asserted default or
non-compliance.
(c) Immediately after becoming aware thereof, any material adverse
change in the Parent's or any Subsidiary's property, business, operations,
or condition (financial or otherwise).
(d) Immediately after becoming aware thereof, any pending or
threatened action, suit, proceeding, or counterclaim by any Person, or any
pending or threatened investigation by a Public Authority, which action,
suit, proceeding, counterclaim or investigation seeks damages in excess of
$500,000 (which amount shall not be fully covered by insurance), or which
may otherwise materially and adversely affect the Collateral, the repayment
of the Obligations, the Agent's or any Lender's rights under the Loan
Documents, or the Parent's or any Subsidiary's property, business,
operations, or condition (financial or otherwise).
(e) Immediately after becoming aware thereof, any pending or
threatened strike, work stoppage, material unfair labor practice claim, or
other material labor dispute affecting any Borrower.
(f) Immediately after receipt thereof, any written notice of any
violation by the Parent or any of its Subsidiaries of any Environmental Law,
or written notice that its compliance with any Environmental Law is being
investigated by a Public Authority, where such violation or alleged
non-compliance is reasonably likely to give rise to fines, penalties or
liability in excess of $100,000.
(g) Immediately after receipt thereof, any written notice that the
Parent or any of its Subsidiaries is or may be liable to any Person as a
result of the Release or
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threatened Release of any Contaminant or that the Parent or any Subsidiary
is subject to investigation by any Public Authority evaluating whether any
remedial action is needed to respond to the Release or threatened Release of
any Contaminant which, in either case, is reasonably likely to give rise to
liability in excess of $100,000.
(h) Immediately after receipt thereof, any written notice of the
imposition of any Environmental Lien against any property of the Parent or
any of its Subsidiaries.
(i) Any change in any Borrower's name, state of incorporation, or
form of organization, trade names or styles under which such Borrower will
sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto.
(j) Within ten (10) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know, that a Termination Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) has occurred, and, when known, any action taken or threatened by the
IRS, the DOL or the PBGC with respect thereto.
(k) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three
(3) Business Days after the filing thereof with the PBGC, the DOL or the
IRS, as applicable, copies of the following: (i) each annual report (form
5500 series), including Schedule B thereto, filed with the PBGC, the DOL or
the IRS with respect to each Benefit Plan, (ii) a copy of each funding
waiver request filed with the PBGC, the DOL or the IRS with respect to any
Benefit Plan and all communications received by any Borrower or any ERISA
Affiliate from the PBGC, the DOL or the IRS with respect to such request,
and (iii) a copy of each other filing or notice filed with the PBGC, the DOL
or the IRS, with respect to each Plan of either Borrower or any ERISA
Affiliate.
(l) Upon request, copies of each actuarial report for any Benefit
Plan or Multiemployer Plan and annual report for any Multiemployer Plan; and
within three (3) Business Days after receipt thereof by any Borrower or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer such Benefit Plan; (ii) any favorable or unfavorable
determination letter from the IRS regarding the qualification of a Plan
under Section 401(a) of the Code; or (iii) any notice from a Multiemployer
Plan regarding the imposition of withdrawal liability.
(m) Within three (3) Business Days upon the occurrence thereof:
(i) any changes in the benefits of any existing Plan which increase the
Borrowers' annual costs with respect thereto by an amount in excess of
$250,000, or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any ERISA Affiliate was
not previously contributing; or (ii) any failure by any Borrower or any
ERISA Affiliate 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.
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(n) Within three (3) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know that any of the following events has
or will occur: (i) a Multiemployer Plan has been or will be terminated; (ii)
the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan; or (iii) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
For purposes of subsections (j) through (n) above, each Borrower and any ERISA
Affiliate shall be deemed to know all facts known by the Administrator of any
Plan of which such Borrower or any ERISA Affiliate is the plan sponsor.
Each notice given under this Section shall describe the subject
matter thereof in reasonable detail, and shall set forth the action that the
Parent, its Subsidiary or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
ARTICLE 7
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower warrants and represents to the Agent and the Lenders
that:
7.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. Such Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant to the Agent Liens upon and security
interests in the Collateral with respect to such Borrower. Such Borrower has
taken all necessary corporate action to authorize its execution, delivery, and
performance of this Agreement and the other Loan Documents. No consent,
approval, or authorization of, or declaration or filing with, any Public
Authority (other than the Bankruptcy Court), and no consent of any other Person
(other than the Bankruptcy Court), is required in connection with such
Borrower's execution, delivery and performance of this Agreement and the other
Loan Documents, except for those already duly obtained. Each of this Agreement
and the other Loan Documents to which such Borrower is a party has been duly
executed and delivered by such Borrower, and constitutes the legal, valid and
binding obligation of such Borrower, enforceable against it in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally. Such Borrower's execution, delivery, and performance of this
Agreement and the other Loan Documents do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result in
the creation or imposition of any Lien upon the property of such Borrower by
reason of the terms of (a) any contract, mortgage, Lien, lease, agreement,
indenture, or instrument to which such Borrower is a party or which is binding
upon it, (b) any judgment, law, statute, rule or governmental regulation
applicable to such Borrower, or (c) the Certificate or Articles of Incorporation
or By-laws of such Borrower.
7.2 Validity and Priority of Security Interest. The provisions of this
Agreement, the other Loan Documents, the Interim Order and the Final Order
create legal and valid Liens on all the Collateral in favor of the Agent, for
the ratable benefit of the Secured Creditors, and such Liens constitute
perfected and continuing Liens on all the Collateral, having priority over all
other Liens on
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the Collateral except Permitted Liens, and enforceable against the applicable
Borrower and all third parties. Notwithstanding anything to the contrary
contained herein, (i) the Pre-Petition Obligations are secured by the
Pre-Petition Collateral, and, solely for the purpose of adequate protection
pursuant to Sections 361, 362, 363, and 364 of the Bankruptcy Code as provided
in the Interim Order and the Final Order, the Post-Petition Collateral; (ii) the
Post-Petition Obligations are secured by the Post-Petition Collateral and the
Pre-Petition Collateral; (iii) except with respect to Pre-Petition Permitted
Liens which as a matter of applicable nonbankruptcy law have priority over the
Agent's Liens as of the Petition Date, the Liens securing the Pre-Petition
Obligations have priority over all other Liens against the Collateral; and (iv)
except with respect to the Pre-Petition Permitted Liens and the Carveout, the
Post-Petition Obligations constitute allowed administrative superpriority
expenses in the Case having priority, and the Agent's Liens securing
Post-Petition Obligations have priority, in accordance with the provisions of
Section 364(c) of the Bankruptcy Code, over all administrative expenses, secured
claims and unsecured claims against the Borrowers now existing or hereafter
arising, of any kind or nature whatsoever, including, without limitation, all
administrative expenses of the kind specified in Sections 105, 326, 327, 328,
330, 331, 503, 506(c), 507, 726, or 1114 of the Bankruptcy Code.
7.3 Organization and Qualification. Such Borrower (a) is duly
incorporated and organized and validly existing in good standing under the laws
of, in the case of the Parent or Laclede Chain, the State of Delaware, and, in
the case of Laclede Mid America, the State of Indiana, (b) is qualified to do
business as a foreign corporation and is in good standing in the States of, in
the case of the Parent, Illinois, Michigan, Missouri, Pennsylvania, Tennessee
and Texas, and, in the case of Laclede Chain, Colorado, Missouri, Texas, and
Oregon, and, in the case of Laclede Mid America, Missouri, which are the only
states in which qualification is necessary in order for it to own or lease its
property and conduct its business, and (c) has all requisite power and authority
to conduct its business and to own its property.
7.4 Corporate Name; Prior Transactions. Such Borrower has not, during
the past five (5) years, been known by or used any other corporate or fictitious
name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its property
outside of the ordinary course of business, except as set forth on Schedule 7.4.
7.5 Subsidiaries and Affiliates. Schedule 7.5 is a correct and complete
list of the name and relationship to the Parent of each and all of the Parent's
Subsidiaries and other Affiliates. Each Subsidiary is (a) duly incorporated and
organized and validly existing in good standing under the laws of its state of
incorporation set forth on Schedule 7.5, and (b) qualified to do business as a
foreign corporation and in good standing in the states identified in Section
7.3, which are the only states in which such qualification is necessary in order
for it to own or lease its property and conduct its business.
7.6 Financial Statements and Projections. (a) The Borrowers have
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, changes in financial position, and
changes in stockholders equity for the Parent and its consolidated Subsidiaries
as of December 31, 1997, and for the Fiscal Year then ended, accompanied by the
report thereon of the Parent's independent certified public accountants,
Deloitte & Touche. The Borrowers have also delivered to the Agent and the
Lenders the unaudited balance sheet and related statements of
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income and changes in financial position for the Parent and its consolidated
Subsidiaries as of September 30, 1998 and for the third quarter and nine-month
period then ended. Such financial statements are attached hereto as Exhibit C.
All such financial statements have been prepared in accordance with GAAP and
present accurately and fairly the financial position of the Parent and its
consolidated Subsidiaries as at the dates thereof and their results of
operations for the periods then ended.
(b) The Latest Projections represent the Borrowers' best estimate of
the future financial performance of the Parent and its consolidated Subsidiaries
for the periods set forth therein. The Latest Projections have been prepared on
the basis of the assumptions set forth therein, which the Borrowers believe are
fair and reasonable in light of current and reasonably foreseeable business
conditions.
7.7 Capitalization. The Parent's authorized capital stock consists of
(a) 5,000,000 shares of common stock, par value $13.33 per share, of which
4,056,140 shares are validly issued and outstanding, fully paid and
non-assessable, and (b) 2,000,000 shares of the Redeemable Preferred Stock, of
which 416,667 shares are validly issued and outstanding, fully paid and
non-assessable. Laclede Chain's authorized capital stock consists of 3000 shares
of common stock, par value $1.00 per share, of which 100 shares are validly
issued and outstanding, fully paid and non-assessable, and are owned
beneficially and of record by the Parent. Laclede Mid America's authorized
capital stock consists of 1000 shares of common stock, par value $1.00 per
share, of which 100 shares are validly issued and outstanding, fully paid and
non-assessable, and are owned beneficially and of record by the Parent.
7.8 [Intentionally left blank]
7.9 Debt. The Parent and its consolidated Subsidiaries have no Debt,
except (a) the Obligations, (b) Debt described on Schedule 7.9, and (c) trade
payables and other contractual obligations arising in the ordinary course of
business.
7.10 Distributions. Since December 31, 1993, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
Securities of the Parent or any of its Subsidiaries, except as expressly
permitted by Section 8.10.
7.11 Title to Property. With respect to those locations listed as
Premises owned by such Borrower on Schedule 7.12, such Borrower has good and
marketable title in fee simple to such Premises, and such Borrower has good,
indefeasible, and merchantable title to all of its other property (including,
without limitation, the assets reflected on the June 30, 1998 Financial
Statements delivered to the Agent and the Lenders, except as disposed of in the
ordinary course of business since the date thereof or as otherwise expressly
permitted hereby), free of all Liens except Permitted Liens.
7.12 Real Estate; Leases. Schedule 7.12 sets forth a correct and
complete list of all Real Estate owned by the Parent or any of its Subsidiaries,
all leases and subleases of real or personal property by the Parent or its
Subsidiaries as lessee or sublessee, and all leases and subleases of real or
personal property by the Parent or its Subsidiaries as lessor, lessee, sublessor
or sublessee. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists.
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7.13 Proprietary Rights. Schedule 7.13 sets forth a correct and
complete list of all of the Proprietary Rights. None of the Proprietary Rights
is subject to any licensing agreement or similar arrangement except as set forth
on Schedule 7.13. To the best of such Borrower's knowledge, none of the
Proprietary Rights infringes on or conflicts with any other Person's property,
and no other Person's property infringes on or conflicts with the Proprietary
Rights. The Proprietary Rights described on Schedule 7.13 constitute all of the
property of such type necessary to the current and anticipated future conduct of
such Borrower's business.
7.14 Trade Names and Terms of Sale. All trade names or styles under
which the Parent or any of its Subsidiaries will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 7.4.
7.15 Litigation. Except as set forth on Schedule 7.15, there is no
pending or (to the best of such Borrower's knowledge) threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Public
Authority, or any basis for any of the foregoing, which may materially and
adversely affect the Collateral, the repayment of the Obligations, the Agent's
or any Lender's rights under the Loan Documents, or the property, business,
operations, or condition (financial or otherwise) of the Parent or any of its
Subsidiaries.
7.16 Restrictive Agreements. Neither the Parent nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charter
or other corporate restriction, which affects its ability to execute, deliver,
and perform the Loan Documents and repay the Obligations or which materially and
adversely affects or, insofar as any Borrower can reasonably foresee, could
materially and adversely affect, the property, business, operations, or
condition (financial or otherwise) of the Parent or such Subsidiary, or would in
any respect materially and adversely affect the Collateral, the repayment of the
Obligations, the Agent's or any Lender's rights under the Loan Documents, or the
property, business, operations, or condition (financial or otherwise) of the
Parent or such Subsidiary.
7.17 Labor Disputes. Except as set forth on Schedule 7.17, (a) there is
no collective bargaining agreement or other labor contract covering employees of
the Parent or any of its Subsidiaries, (b) no such collective bargaining
agreement or other labor contract is scheduled to expire during the term of this
Agreement and (c) no union or other labor organization is seeking to organize,
or to be recognized as, a collective bargaining unit of employees of the Parent
or any of its Subsidiaries or for any similar purpose, and (d) there is no
pending or (to the best of such Borrower's knowledge) threatened, strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting the Parent or its Subsidiaries or their employees.
7.18 Environmental Laws. Except as otherwise disclosed on Schedule
7.18:
(a) Each of the Parent and its Subsidiaries is currently in material
compliance with, and, to the best of its knowledge, has complied in all
material respects with, all Environmental Laws applicable to its Premises
and business, and neither the Parent nor any such Subsidiary nor any of its
present Premises or operations, or to the best of such Borrower's knowledge,
its past property or operations, are subject to any enforcement order from
or liability agreement with any Public Authority or private Person
respecting (i) material non-compliance with any Environmental Law or (ii)
any material liabilities and costs or remedial action arising from the
Release or threatened Release of a Contaminant.
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(b) Each of the Parent and its Subsidiaries has obtained all
permits necessary for its current operation under Environmental Laws, and
all such permits are in good standing and the Parent is and such
Subsidiaries are in compliance in all material respects with all terms and
conditions of such permits.
(c) Neither the Parent nor any of its Subsidiaries, nor, to the
best of such Borrower's knowledge, any of its predecessors in interest, has
stored, treated or disposed of any hazardous waste on any Premises, as
defined pursuant to 40 CFR Part 261 or any equivalent Environmental Law, so
as to require issuance of a permit.
(d) Neither the Parent nor any of its Subsidiaries has any
contingent liability with respect to non-compliance with any Environmental
Laws or any Release or threatened Release of a Contaminant or the
generation, handling, use, storage, or disposal of any Contaminant, which
contingent liability is reasonably likely to give rise to a violation of
either of the covenants contained in Sections 8.24 or 8.25.
(e) Neither the Parent nor any of its Subsidiaries has received
any summons, complaint, order or similar written notice that it is not
currently in compliance with, or that any Public Authority is investigating
its compliance with, any Environmental Laws or that it is or may be liable
to any other Person as a result of a Release or threatened Release of a
Contaminant.
(f) To the best of the Borrowers' knowledge, none of the present
or past operations of the Parent and its Subsidiaries is the subject of any
investigation by any Public Authority evaluating whether any material
remedial action is needed to respond to a Release or threatened Release of a
Contaminant.
(g) There is not now, nor to the best of such Borrower's knowledge
has there ever been on or in the Premises:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos containing material, or
(iii) any polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other equipment.
(h) Within the last six (6) years, neither the Parent nor any of
its Subsidiaries has filed any notice under any requirement of Environmental
Law reporting a spill or accidental and unpermitted release or discharge of
a Contaminant into the environment, which is reasonably likely to lead to
material liabilities and costs.
(i) Neither the Parent nor any of its Subsidiaries has entered
into any negotiations or settlement agreements with any Person (including,
without limitation, the prior owner of its property) imposing material
obligations or liabilities on the Parent or any of its Subsidiaries with
respect to any remedial action in response to the Release of a Contaminant
or environmentally related claim.
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(j) None of the products manufactured, distributed or sold by the
Parent or any of its Subsidiaries contain asbestos containing material.
(k) No Environmental Lien has attached to any Premises of the
Parent or any of its Subsidiaries.
(l) For purposes of this Section 7.18 "material" shall mean costs
or liabilities which could reasonably exceed $750,000.
7.19 No Violation of Law. Neither the Parent nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation would in any respect
materially and adversely affect the Collateral, the repayment of the
Obligations, the Agent's or any Lender's rights under the Loan Documents, or the
property, business, operations, or condition (financial or otherwise) of the
Parent or any of its Subsidiaries.
7.20 No Default. [Intentionally left blank].
7.21 ERISA. Neither the Parent nor any of its Subsidiaries nor any
ERISA Affiliate maintains or contributes to any Plan other than those listed on
Schedule 7.21.
7.22 Taxes. Each of the Parent and each of its Subsidiaries has
filed all tax returns and other reports which it was required by law to file on
or prior to the date hereof and has paid all taxes, assessments, fees, and other
governmental charges, and penalties and interest, if any, against it or its
property, income, or franchise, that are due and payable.
7.23 Investment Act, Etc. Neither the Parent nor any of its
Subsidiaries is an "investment company" nor an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C. ?
80(a)(l), et seq.), nor is the Parent or any Subsidiary subject to any other
state or federal regulation limiting its ability to incur Debt. The making of
the Post-Petition Revolving Loans and other financial accommodations hereunder
by the Agent and the Lenders, the application of the proceeds and repayment
thereof by the Borrowers and the consummation of the other transactions
contemplated by this Agreement and the Loan Documents do not violate any
provisions of such laws or any rule, regulation or order issued by the
Securities and Exchange Commission or other Public Authority thereunder.
7.24 Public Utility Holding Company. Neither the Parent nor any of
its Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an affiliate of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.25 Margin Securities. Neither the Parent nor any of its
Subsidiaries owns any "margin stock," as that term is defined in Regulation U of
the Federal Reserve Board, and the proceeds of the Post-Petition Revolving Loans
and the other financial accommodations made pursuant to this Agreement will be
used only for the purposes contemplated hereunder. None of the Post-Petition
Revolving Loans or the other financial accommodations hereunder will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any Debt or other Person's
indebtedness which was originally incurred to purchase or carry any margin
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security, or for any other purpose which might cause any such loan or other
financial accommodation to be considered a "purpose credit" within the meaning
of Regulation U or X of the Federal Reserve Board. Such Borrower will neither
take nor permit any agent acting on its behalf to take any action which might
cause any transaction, obligation or right created by this Agreement, or any
document or instrument delivered pursuant hereto, to violate any regulation of
the Federal Reserve Board.
7.26 Broker's Fees. No broker or finder is entitled to receive
compensation for services rendered with respect to the transactions described in
this Agreement.
7.27 [Intentionally left blank]
7.28 Disclosure. Neither this Agreement nor any document or
statement furnished to the Agent or any Lender by or on behalf of such Borrower
hereunder contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained herein or
therein not misleading.
7.29 Bank Accounts. Schedule 7.29 contains a complete and accurate
list of all bank accounts maintained by such Borrower with any bank or other
financial institution.
7.30 Year 2000 Compliance. On the basis of a comprehensive review
and assessment undertaken by the Borrowers of their respective computer
applications and inquiry made of their material suppliers, vendors and
customers, the Borrowers reasonably believe that the "Year 2000 problem" (that
is, the risk that computer applications used by any person may be unable to
recognize and perform properly certain date-sensitive functions involving dates
prior to and any date after December 31, 1999) will not result in a material
adverse change in any of the operations, business, properties or condition
(financial or otherwise) of the Borrowers. The Borrowers have developed adequate
contingency plans to ensure uninterrupted and unimpaired business operations in
the event of a failure of their own or a third party's systems or equipment due
to the Year 2000 problem, including those of suppliers, vendors and customers,
as well as a general failure of or interruption in their communications and
delivery infrastructure.
7.31 Pre-Petition Obligations; Defenses. As of the Petition Date,
the amount of the aggregate outstanding principal balance of the Pre-Petition
Obligations is as set forth on Schedule 7.31, and the Borrowers are truly and
justly indebted to the Agent and the Lenders on such Pre-Petition Obligations,
plus all accrued and unpaid interest, fees and expenses on the Pre-Petition
Obligations, without setoff, defense or counterclaim.
ARTICLE 8
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower covenants to the Agent and each Lender that, so long
as any of the Obligations remain outstanding or this Agreement is in effect:
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8.1 Taxes and Other Obligations. Such Borrower shall, and
shall cause each of its Subsidiaries to, (a) file when due all tax returns and
other reports which it is required to file, (b) pay, or provide for the payment,
when due, of all taxes, fees, assessments and other governmental charges against
it or upon its property, income and franchises, make all required withholding
and other tax deposits, and establish adequate reserves for the payment of all
such items, and provide to the Agent and the Lenders, upon request, satisfactory
evidence of its timely compliance with the foregoing and (c) pay when due all
claims of materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all other obligations undertaken by it, in each case, to the
extent such taxes, fees, assessments, charges, claims or indebtedness constitute
obligations arising after the Petition Date; provided, however, that neither the
Parent nor any of its Subsidiaries need pay any tax, fee, assessment,
governmental charge, or Debt, or discharge any other obligation, that it is
contesting in good faith by appropriate proceedings diligently pursued, and for
which adequate reserves are maintained, so long as no Lien, other than a
Permitted Lien, results from such non-payment.
8.2 Corporate Existence and Good Standing. Such Borrower shall
maintain its corporate existence and its qualification and good standing in all
states necessary to conduct its business and own its property, and shall obtain
and maintain all licenses, permits, franchises and governmental authorizations
necessary to conduct its business and own its property.
8.3 Compliance with Law and Agreements. Except as may be
required or permitted by the provisions of the Bankruptcy Code or by the
Bankruptcy Court during the existence of the Case, such Borrower shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
each judgment, law, statute, rule, and governmental regulation applicable to it
and each contract, mortgage, lien, lease, indenture, order, instrument,
agreement, or document to which it is a party or by which it is bound.
8.4 Maintenance of Property. Such Borrower shall, and shall
cause each of its Subsidiaries to, maintain all of its property necessary and
useful, in the judgment of such Borrower, in the conduct of its business, in
good operating condition and repair, ordinary wear and tear excepted.
8.5 Insurance. (a) Such Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, with financially sound and reputable
insurers, insurance against loss or damage by fire with extended coverage;
theft, burglary, pilferage and loss in transit; public liability and third party
property damage; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, as the Agent, in its discretion, or acting at the direction
of the Majority Lenders, shall specify, in amounts, and under policies
acceptable to the Agent and the Majority Lenders. Without limiting the
foregoing, such Borrower shall also maintain, and shall cause each of its
Subsidiaries to maintain, flood insurance, in the event of a designation of the
area in which any Real Estate is located as "flood prone" or a "flood risk
area," as defined by the Flood Disaster Protection Act of 1973, in an amount to
be reasonably determined by the Agent, and shall comply with the additional
requirements of the National Flood Insurance Program as set forth in said Act.
(b) Such Borrower shall cause the Agent, for the ratable
benefit of the Secured Creditors, to be named in each such policy as secured
party or mortgagee and loss payee or additional
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insured, in a manner acceptable to the Agent. Each policy of insurance shall
contain a clause or endorsement requiring the insurer to give not less than
thirty (30) days' prior written notice to the Agent in the event of cancellation
of the policy for any reason whatsoever and a clause or endorsement stating that
the interest of the Agent shall not be impaired or invalidated by any act or
neglect of the Parent or any of its Subsidiaries or the owner of any premises
for purposes more hazardous than are permitted by such policy. All premiums for
such insurance shall be paid by the Borrowers when due, and certificates of
insurance and, if requested by the Agent or any Lender, photocopies of the
policies, shall be delivered to the Agent, in each case in sufficient quantity
for distribution by the Agent to each of the Lenders. If such Borrower fails to
procure such insurance or to pay the premiums therefor when due, the Agent may,
and at the direction of the Majority Lenders shall, do so from the proceeds of
Revolving Loans as described in Section 4.4.
(c) Such Borrower shall promptly notify the Agent and the
Lenders of any loss, damage, or destruction to the Collateral with respect to
such Borrower or arising from its use, whether or not covered by insurance. The
Agent is hereby authorized to collect all insurance proceeds directly, and to
apply or remit them as follows:
(i) With respect to insurance proceeds relating to property
other than Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or
handling thereof, the Agent shall promptly remit to such Borrower such
proceeds.
(ii) With respect to insurance proceeds relating to Collateral
other than Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or
handling thereof, the Agent shall apply such proceeds, ratably, to the
reduction of the Obligations in the order provided for in Section 4.5.
(iii) With respect to insurance proceeds relating to
Collateral consisting of Fixed Assets, after deducting from such
proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds,
ratably, to the reduction of the Term Loans (applying such proceeds
ratably to the installments of the Term Loans in the inverse order of
maturity), or at the option of the Majority Lenders, may permit or
require the applicable Borrower to use such money, or any part thereof,
to replace, repair, restore or rebuild the relevant Fixed Assets in a
diligent and expeditious manner with materials and workmanship of
substantially the same quality as existed before the loss, damage or
destruction.
8.6 Condemnation. (a) Such Borrower shall, immediately upon
learning of the institution of any proceeding for the condemnation or other
taking of any of its property, notify the Agent and the Lenders of the pendency
of such proceeding, and agrees that the Agent may participate in any such
proceeding, and such Borrower from time to time will deliver to the Agent all
instruments reasonably requested by the Agent to permit such participation.
(b) The Agent is hereby authorized to collect the proceeds of
any condemnation claim or award directly, and to apply or remit them as follows:
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(i) With respect to condemnation proceeds relating to property
other than Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or
handling thereof, the Agent shall remit to such Borrower such proceeds.
(ii) With respect to condemnation proceeds relating to
Collateral other than Fixed Assets, after deducting from such proceeds
the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds,
ratably, to the reduction of the Obligations in the order provided for
in Section 4.5.
(iii) With respect to condemnation proceeds relating to
Collateral consisting of Fixed Assets, after deducting from such
proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds,
ratably, to the reduction of the Term Loans (applying such proceeds
ratably to the installments of the Term Loans in the inverse order of
maturity), or at the option of the Majority Lenders, may permit or
require the applicable Borrower to use such money, or any part thereof,
to replace, repair, restore or rebuild the relevant Fixed Assets in a
diligent and expeditious manner with materials and workmanship of
substantially the same quality as existed before the condemnation.
8.7 Environmental Laws. (a) Such Borrower shall, and shall
cause each of its Subsidiaries to, conduct its business in material compliance
with all Environmental Laws applicable to it, including, without limitation,
those relating to the generation, handling, use, storage, and disposal of any
Contaminant. Such Borrower shall, and shall cause each of its Subsidiaries to,
take prompt and appropriate action to respond to any material non-compliance
with Environmental Laws and shall regularly report to the Agent on such
response.
(b) Without limiting the generality of the foregoing, each
Borrower shall submit to the Agent and the Lenders annually, on or before
September 30 of each year, an update of the status of each environmental
compliance or liability issue: (i) identified on Schedule 7.18; and/or (ii)
identified in any notification provided pursuant to Sections 6.3(f) or (g). To
the extent that any matter reported pursuant to Sections 6.3(f) or (g) is
reasonably likely to give rise to liabilities or costs in excess of $500,000,
the Agent or any Lender may request copies of technical reports prepared by the
applicable Borrower and its communications with any Public Authority, subject to
the confidentiality provisions contained in Section 5.6, to determine whether
such Borrower or any of its Subsidiaries is proceeding reasonably to correct,
cure or contest in good faith any alleged non-compliance or environmental
liability. If, in the reasonable determination of the Agent or the Majority
Lenders, the applicable Borrower or any of its Subsidiaries is not proceeding
reasonably, such Borrower shall, at the Agent's or the Majority Lenders' request
and at such Borrower's expense, subject to the confidentiality provisions
contained in Section 5.6: (a) cause such Borrower to retain an independent
environmental engineer acceptable to the Agent or the Majority Lenders (which
acceptance shall not be unreasonably withheld) to evaluate the site, including
tests if appropriate, where the non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Agent, in
sufficient quantity for distribution by the Agent to the Lenders, a report
setting forth the results of such evaluation, a proposed plan for responding to
any environmental problems described therein, and an estimate of the costs
thereof, and (b) provide to the Agent and the Lenders a supplemental report of
such engineer whenever the scope of the environmental problems, or the response
thereto or the estimated costs thereof, shall change in any material respect.
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8.8 ERISA. (a) Such Borrower shall, and shall cause each of
its ERISA Affiliates to, establish, maintain and operate all Plans to comply in
all material respects with the provisions of ERISA, the Code, all regulations
and interpretations promulgated thereunder, and all other applicable laws and
regulations.
(b) Such Borrower shall not, and shall not permit any ERISA
Affiliate, to:
(i) Engage in any prohibited transaction described in Sections
406 of ERISA or 4975 of the Code for which a statutory or class
exemption is not available or a private exemption has not been
previously been obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code) whether or
not waived;
(iii) Fail to pay timely required contributions or annual
installments due with respect to any waived funding deficiency to any
Benefit Plan;
(iv) Terminate any Benefit Plan which would result in any
liability of such Borrower or an ERISA Affiliate under Title IV of
ERISA;
(v) Fail to make any contribution or payment to any
Multiemployer Plan which such Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
(vi) Fail to pay any required installment under section (m) of
Section 412 of the Code or any other payment required under Section 412
of the Code on or before the due date for such installment or other
payment; or
(vii) Amend a Plan resulting in an increase in current
liability for the plan year such that such Borrower or any ERISA
Affiliate is required to provide security to such Plan under Section
401(a)(29) of the Code.
8.9 Mergers, Consolidations or Sales. (a) Neither the Parent
nor any of its Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, or transfer, sell, assign, lease, or otherwise
dispose of all or any part of its property, or wind up, liquidate or dissolve,
or agree to do any of the foregoing, except (i) for sales of Inventory in the
ordinary course of its business, (ii) for transfers, sales, assignment or leases
by any Subsidiary of the Parent, other than Laclede Chain and Laclede Mid
America, to any Borrower, of all or any part of its property, consented to in
writing by the Majority Lenders, (iii) for mergers by any Subsidiary of the
Parent with and into any Borrower, consented to in writing by the Majority
Lenders, (iv) for sales by the Parent of its capital stock, (v) for sales by
Laclede Mid America of its newly-issued capital stock in an amount not to exceed
ten percent (10.0%) of all capital stock of Laclede Mid America outstanding
after giving effect to such issuance, (vi) for sales by the Parent or any of its
Subsidiaries of Fixed Assets, subject to compliance with the provisions of
Section 8.9(b), and (vii) as otherwise expressly permitted under this Agreement.
(b) Other than as provided in the proviso in Section 5.11(c),
no sale or other disposition of Fixed Assets shall be permitted except a sale or
other disposition complying with the
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terms of this Section 8.9(b). In the event that any Borrower intends to sell or
otherwise dispose of any Fixed Asset consisting of Collateral, such Borrower
shall give the Agent and the Lenders at least ten (10) Business Days' prior
written notice of such sale. Upon any such sale or other disposition, the entire
amount of Net Proceeds shall be applied on the date of such sale or disposition
to the repayment of the Term Loans, and if the Term Loans have been repaid in
full, to any other Pre-Petition Obligations then outstanding.
8.10 Distributions; Capital Change; Restricted Investments.
Neither the Parent nor any of its Subsidiaries shall (a) directly or indirectly
declare or make, or incur any liability to make, any Distribution, except
Distributions to the Parent by its Subsidiaries, (b) make any change in its
capital structure which could materially and adversely affect the repayment of
the Obligations, or (c) make any Restricted Investment.
8.11 Transactions Affecting Collateral or Obligations. Neither
the Parent nor any of its Subsidiaries shall enter into any transaction which
materially and adversely affects the Collateral or any Borrower's ability to
repay the Obligations.
8.12 Guaranties. Neither the Parent nor any of its
Subsidiaries shall make, issue, or become liable on any Guaranty, except
Guaranties in favor of the Agent.
8.13 Debt. Neither the Parent nor any of its Subsidiaries
shall incur or maintain any Debt, other than: (a) the Obligations; (b) trade
payables and contractual obligations to suppliers and customers, and
non-interest bearing current operating liabilities (as determined in accordance
with GAAP), in each case incurred in the ordinary course of business; and (c)
other Debt existing on the Petition Date and reflected in the Financial
Statements attached hereto as Exhibit C.
8.14 Prepayment. Neither the Parent nor any of its
Subsidiaries shall voluntarily prepay any Debt, except the Obligations in
accordance with the terms hereof.
8.15 IRB Debt.
(a) The Parent shall not amend or otherwise change the terms
applicable to any IRB Debt in any manner adversely affecting the interests of
the Lenders without the prior written consent of the Majority Lenders. The
Parent shall not make any payment which would not have been made in the absence
of an amendment or change of terms applicable to any IRB Debt unless such
amendment or change has been approved by the Majority Lenders as provided in the
preceding sentence.
(b) The Parent shall deliver to the Lenders (i) a copy of each
notice or other communication delivered by it or on its behalf to any trustee
under any indenture for any IRB Debt, such delivery to be made at the same time
and by the same means as such notice or other communication is delivered to such
trustee, and (ii) a copy of each notice or other communication received by the
Parent from any such trustee, such delivery to be made promptly after such
notice or other communication is received by the Parent.
8.16 Transactions with Affiliates. Except as set forth below,
neither the Parent nor any of its Subsidiaries shall, sell, transfer,
distribute, or pay any money or property, including, but not
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limited to, any fees or expenses of any nature (including, but not limited to,
any fees or expenses for management services), except actual expenses incurred
and approved in advance in writing by the Agent, to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate. Notwithstanding
the foregoing, the Parent may maintain outstanding certain loans or other
advances to Laclede Chain and to Laclede Mid America under the Intercompany
Notes.
8.17 Investment Banking and Finder's Fees. Neither the Parent
nor any of its Subsidiaries shall pay or agree to pay, or reimburse any other
party with respect to, any investment banking or similar or related fee,
underwriter's fee, finder's fee, or broker's fee to any Person in connection
with this Agreement. Each Borrower shall defend and indemnify the Agent and the
Lenders against and hold them harmless from all claims of any Person for any
such fees, and all costs and expenses (including without limitation, attorneys'
fees) incurred by the Agent and/or any Lender in connection therewith.
8.18 Business Conducted. Such Borrower shall not engage,
directly or indirectly, in any line of business other than the businesses in
which such Borrower is engaged on the Petition Date.
8.19 Liens. Neither the Parent nor any of its Subsidiaries
shall create, incur, assume, or permit to exist any Lien on any property now
owned or hereafter acquired by any of them, except Permitted Liens.
8.20 Sale and Leaseback Transactions. Neither the Parent nor
any of its Subsidiaries shall, directly or indirectly, enter into any
arrangement with any Person providing for the Parent or such Subsidiary to lease
or rent property that the Parent or such Subsidiary has sold or will sell or
otherwise transfer to such Person.
8.21 New Subsidiaries. Such Borrower shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than those listed on Schedule 7.5.
8.22 Capital Expenditures. Neither the Parent nor any of its
Subsidiaries shall make or incur any Capital Expenditure (a) other than for
maintenance or repair of Equipment, and (b) if, after giving effect thereto, the
aggregate amount of all Capital Expenditures by the Parent and its Subsidiaries
on a consolidated basis after the Petition Date would exceed $6,500,000.
8.23 [Intentionally left blank]
8.24 Cash Available for Fixed Charges. The Borrowers will
maintain Cash Available for Fixed Charges, determined as of the end of each
period listed below for the period indicated, of not less than the following:
Cash Available for
Period Fixed Charges
------ -------------
Four month period ending 3/31/99 $(1,800,000)
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Seven month period ending 6/30/99 $(1,700,000)
Ten month period ending 9/30/99 $ (100,000)
Thirteen month period ending 12/31/99 $ 1,400,000
8.25 Direct Contribution. The Direct Contribution of the Xxxxx
Steel Operations will not be less than the following amounts for the following
periods:
Period Amount
------ ------
Quarter ending 3/31/99 $(1,250,000)
Quarter ending 6/30/99 $ (250,000)
Quarter ending 9/30/99 $ -0-
Quarter ending 12/31/99 $ (200,000)
8.26 Fiscal Year. The Parent and its Subsidiaries will
maintain a Fiscal Year based upon a year ending September 30 in each year.
8.27 Use of Proceeds of Advances. The Borrowers will use the
proceeds of Post-Petition Revolving Loans solely to fund the Borrowers' working
capital requirements in the ordinary course of their business and for the
Borrowers' other general corporate purposes not prohibited by this Agreement
(including, without limitation, (i) the payment of fees and expenses to
professionals under Sections 330 and 331 of the Bankruptcy Code, (ii) the
payment of administrative expenses of the kind specified in Section 503(b) of
the Bankruptcy Code incurred in the ordinary course of business of the Borrowers
and (iii) the payment of the Obligations in accordance with the terms of this
Agreement). Under no circumstances will the Borrowers use, directly or
indirectly, the proceeds of Post-Petition Revolving Loans to compensate services
rendered or expenses incurred in connection with the assertion of or joinder in
any claim, counterclaim, action, proceeding, application, motion, objection,
defense, or other contested matter, the purpose of which is to seek or the
result of which would be to obtain any order, judgment, determination,
declaration, or similar relief (A) invalidating, setting aside, avoiding, or
subordinating, in whole or in part, the Obligations or the Lenders' liens and
security interests in the Collateral; (B) modifying, staying, vacating, or
amending the Interim Order or the Final Order without the consent of the
Majority Lenders; (C) granting or imposing, under Section 364 of the Bankruptcy
Code or otherwise, liens or security interests on any property, whether equal,
superior, or subordinate, to the Lenders' liens and security interests on that
property, (D) permitting the use of cash collateral as defined in Section 363 of
the Bankruptcy Code, (E) granting any modification, alteration, or impairment in
any manner of the liens, security interests, rights, or remedies granted to the
Agent or the Lenders pursuant to the Interim Order, the Final Order, the
Original Credit Agreement, or this Agreement (including, without limitation, the
Lenders' right to demand payment of all Obligations and to enforce their liens
and security interests in the Collateral), whether by plan of reorganization or
liquidation, order of confirmation, or any financings of, extensions of credit
to, or incurring of debt by any Borrower, whether pursuant to Section 364 of the
Bankruptcy Code or otherwise; or (F) granting a priority for any administrative
expense, secured claim or unsecured claim against any Borrower (now
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existing or hereafter arising of any kind or nature whatsoever, including,
without limitation, any administrative expenses of the kind specified in
Sections 105, 326, 327, 328, 330, 331, 503, 506(c), 507, 726, or 1114 of the
Bankruptcy Code or otherwise) which are equal or superior to the priority of the
Lenders in respect of the Post-Petition Obligations, except for expenses
included within the Carveout.
8.28 Copies of Pleadings. Borrowers shall furnish to the
Lenders concurrently with the filing thereof, copies of all written pleadings,
motions, applications, financial information, petitions, schedules, reports and
other papers and documents filed by or on behalf of any Borrower in the Case
(and all amendments or supplements thereto), including, without limitation, all
United States Trustee reports, all schedules and reports required by Section 521
of the Bankruptcy Code and Bankruptcy Rules 1007 or 1009, and all fee
applications for professionals retained by the Bankruptcy Court pursuant to
Section 327 of the Bankruptcy Code.
8.29 Case Matters. No Borrower shall, so long as any of the
Obligations have not been paid in full in cash, without the consent of the
Majority Lenders:
(a) Seek or consent to any modification, stay, vacation
or amendment of the Interim Order or the Final Order;
(b) Seek or consent to (i) any grant or imposition, or
request that the Court grant or impose, under section 364 of the
Bankruptcy Code or otherwise, liens or security interests on any
Borrower's property, whether equal, superior, or subordinate, to the
Agent's and Lenders' liens and security interests on that Property, and
(ii) any request of the Bankruptcy Court to seek authority for any
Borrower to use cash collateral as defined in section 363 of the
Bankruptcy Code.
(c) Seek or consent to the assertion of any claims or
defenses (including, without limitation, offsets and counterclaims of
any nature or kind) to the validity, perfection, enforceability, and
nonavoidability (under sections 105, 506(c), 542, 543, 544, 545, 547,
548, 549, 550, 551, 552(b), or 553 of the Bankruptcy Code or otherwise)
of the Prepetition Obligations and the Agent's and Lenders' security
interests in and liens on the Prepetition Collateral.
(d) Seek or consent to the assertion of any claim,
counterclaim, action, proceeding, application, motion, objection,
defense, or other contested matter, the purpose of which is to seek or
the result of which would be to obtain any order, judgment,
determination, declaration, or similar relief invalidating, setting
aside, avoiding, or subordinating, in whole or in part, the Obligations
or the Agent's and Lenders' liens and security interests in the
Collateral.
(e) Seek or consent to the modification, alteration, or
impairment in any manner of the liens, security interests, rights, or
remedies granted to the Agent and Lenders pursuant to the Interim
Order, Final Order, the Original Credit Agreement, or this Agreement
(including, without limitation, the Agent's and Lenders' right to
demand payment of all Obligations and to enforce their liens and
security interests in the Collateral), whether by plan of
reorganization or liquidation, order of confirmation, or any financings
of, extensions of credit
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to, or incurring of debt by any Borrower, whether pursuant to Section
364 of the Bankruptcy Code or otherwise.
(f) Seek or consent to any order (i) dismissing the Case
with respect to any Borrower, under Sections 105, 305 or 1112 of the
Code or otherwise; or (ii) converting the Case with respect to any
Borrower, under Sections 105 or 1112 of the Code or otherwise.
(g) Seek or consent to a priority for any administrative
expense, secured claim or unsecured claim against any Borrower (now
existing or hereafter arising of any kind or nature whatsoever,
including, without limitation, any administrative expenses of the kind
specified in Sections 105, 326, 327, 328, 330, 331, 503, 506(c), 507,
726, or 1114 of the Bankruptcy Code or otherwise) which are equal or
superior to the priority of the Agent and the Lenders in respect of the
Post-Petition Obligations, except for those secured by Pre-Petition
Permitted Liens which as a matter of applicable nonbankruptcy law have
priority over the Agent's Liens as of the Petition Date.
(h) Prior to the date on which the Obligations have been
paid in full in cash, pay or incur any administrative expenses except
for such expenses which are administrative expense claims have been
incurred in the ordinary course of the business of the Borrowers;
(i) Make any payments or transfer any property on account
of claims asserted by any of the Borrowers' vendors for reclamation in
accordance with Section 2-702 of any applicable Uniform Commercial Code
and Section 546(c) of the Bankruptcy Code, unless otherwise ordered by
the Bankruptcy Court upon prior notice to the Agent;
(j) Seek to return any Inventory to any vendor pursuant
to Section 546(g) of the Bankruptcy Code.
8.30 Further Assurances. Such Borrower shall execute and
deliver, or cause to be executed and delivered, to the Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as the Agent may, from time to time, request to carry out the terms and
conditions of this Agreement and the other Loan Documents.
ARTICLE 9
CONDITIONS OF LENDING
---------------------
9.1 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Post-Petition Revolving Loan, including any Post-Petition
Revolving Loans on the Entry Date, and the obligation of the Agent to cause to
be issued any Post-Petition Letter of Credit and the obligation of the Lenders
to participate in Post-Petition Letters of Credit, shall be subject to the
further conditions precedent that on the date of any such extension of credit:
(a) the following statements shall be true, and the acceptance
by a Borrower of any extension of credit shall be deemed to be a
statement to the effect set forth in clauses (i) and (ii), with the
same effect as the delivery to the Agent and the Lenders of
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a certificate signed by the president and chief financial officer of
such Borrower, dated the date of such extension of credit, stating
that:
(i) The representations and warranties contained in
this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such extension of
credit as though made on and as of such date, except to the
extent the Agent and the Lenders have been notified by any
Borrower that any representation or warranty is not correct
and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes
a Default or an Event of Default;
(b) the Agent and the Lenders shall have received such other
approvals, opinions or documents as they may reasonably request;
(c) no order, judgment or decree of any Public Authority and
no law, rule or regulation applicable to Lender shall purport by its
terms to enjoin, restrain or otherwise prohibit the making of such
Loan;
(d) With respect to any requested Revolving Loan to be made
during the Interim Period, the Interim Order shall be in full force and
effect and shall not have been reversed, stayed, modified, amended or
appealed; and
(e) With respect to any requested Revolving Loan to be made
after the Interim Period, the Final Order shall be in full force and
effect and shall not have been reversed, stayed, modified, amended or
appealed.
provided, however, that the foregoing conditions precedent are not conditions to
each Lender participating in or reimbursing BABC or the Agent for such Lenders'
Pro Rata Share of any Settlement Loan or Agent Advance as provided in Sections
2.1(h), (j) and (k).
9.2 Conditions Precedent to Making of Initial Loans on or
after the Entry Date. The obligation of the Lenders to make their initial
Post-Petition Revolving Loans on or after the Entry Date are subject to the
following conditions precedent having been satisfied in a manner satisfactory to
the Agent and the Lenders:
(a) Each Borrower shall have performed and complied with all
covenants, agreements and conditions contained herein which are
required to be performed or complied with by such Borrower before or on
the Entry Date.
(b) All representations and warranties made hereunder shall be
true and correct as of the Entry Date as if made on such date.
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(c) No Default or Event of Default shall exist on the Entry
Date, or would exist after giving effect to the Loans to be made on
such date.
(d) The Borrowers shall have paid the initial installment of
the Collateral Management Fee, and all fees and expenses of the Agent
and the Lenders payable under the terms of this Agreement (including,
but no limited to, the allocated costs of in-house counsel to the
Agent).
(e) The Interim Order shall have been entered by the
Bankruptcy Court, and the Agent shall have received a certified copy of
the same and such order shall be in full force and effect and shall not
have been reversed, stayed, modified, amended or appealed.
The acceptance by a Borrower of any Loans made on the Entry Date shall be deemed
to be a representation and warranty made by such Borrower to the effect that all
of the conditions to the making of such Loans set forth in Sections 9.2(a) - (e)
have been satisfied, with the same effect as delivery to the Agent and the
Lenders of a certificate signed by the president and chief financial officer of
such Borrower, dated the Entry Date, to such effect.
ARTICLE 10
DEFAULT; REMEDIES
-----------------
10.1 Events of Default. It shall constitute an event of
default ("Event of Default") if any one or more of the following shall occur for
any reason:
(a)
(i) any failure to pay the principal of or premium on
any of the Post-Petition Obligations or the Adequate
Protection Payments when due, whether upon demand or
otherwise, other than such obligation arising under Section
4.1 as a result of the sum of outstanding Revolving Loans, the
aggregate amount of Pending Revolving Loans, the undrawn
amount of outstanding Letters of Credit and any unpaid
reimbursement obligations in respect of Letters of Credit
exceeding the Maximum Revolver Amount;
(ii) any failure to pay the principal of or premium
on any of the Post-Petition Obligations within ten (10)
Business Days following the date such principal is due,
whether upon demand or otherwise, in the case of such
obligation arising under Section 4.1 as a result of the sum of
outstanding Revolving Loans, the aggregate amount of Pending
Revolving Loans, the undrawn amount of outstanding Letters of
Credit and any unpaid reimbursement obligations in respect of
Letters of Credit exceeding the Maximum Revolver Amount; or
(iii) any failure to pay interest on any of the
Post-Petition Obligations, fees, expenses or any of the
Obligations not otherwise specified in the foregoing clauses
(i)
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or (ii), within five (5) Business Days following the date such
interest or item is due, whether upon demand or otherwise;
(b) any representation or warranty made by any Borrower in
this Agreement or by the Parent or any of its Subsidiaries in any of
the other Loan Documents, any Financial Statement, or any certificate
furnished by the Parent or any of its Subsidiaries at any time to the
Agent or any Lender shall prove to be untrue in any material respect as
of the date on which made;
(c)
(i) any failure by the Borrowers to comply with the
covenant contained in Section 8.24 as of the end of any period
indicated therein or the covenant contained in Section 8.25 as
of the end of any period indicated therein;
(ii) any failure by any Borrower to comply with any
of the covenants contained in Sections 5.9, 8.9, 8.10, 8.11,
8.13, 8.14, 8.15, 8.17, 8.19, 8.20, 8.21, 8.22 and 8.23;
(iii) any failure by any Borrower to comply with any
of the other covenants and agreements contained in Article 8,
for more than ten (10) days after the earlier of (i) notice of
such failure by the Agent to such Borrower and (ii) the date
that such Borrower discovers, or reasonably should have
discovered, such failure; provided, however, that no such
grace period shall apply, and an Event of Default shall exist
promptly upon such failure to comply, if such failure to
comply may not, in the Majority Lenders' reasonable
determination, be cured by the applicable Borrower during such
grace period; or if any such agreement, instrument or document
shall terminate (other than in accordance with its terms or
the terms hereof or with the written consent of the Majority
Lenders) or become void or unenforceable without the written
consent of the Majority Lenders;
(d) any failure by any Borrower to comply with any of the
other covenants and agreements contained in this Agreement, the other
Loan Documents (other than the Original Agreement or the Term Loan
Notes), or any other agreement entered into at any time to which any
Borrower and the Agent and/or any Lender are party, for more than
thirty (30) days after the earlier of (i) notice of such failure by the
Agent to such Borrower and (ii) the date that such Borrower discovers,
or reasonably should have discovered, such failure; provided, however,
that no such grace period shall apply, and an Event of Default shall
exist promptly upon such failure to comply, if such failure to comply
may not, in the Majority Lenders' reasonable determination, be cured by
the applicable Borrower during such grace period; or if any such
agreement, instrument or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written
consent of the Majority Lenders) or become void or unenforceable
without the written consent of the Majority Lenders;
(e) default shall occur after the Petition Date with respect
to any Debt incurred after the Petition Date for borrowed money (other
than the Obligations) in an outstanding principal amount which exceeds,
in the aggregate for all such Debt with
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respect to which default shall have occurred, $500,000, or under any
agreement or instrument under or pursuant to which any such Debt or
indebtedness may have been issued, created, assumed, or guaranteed by
the Parent or any of its Subsidiaries, and such default shall continue
for more than the period of grace, if any, therein specified, if the
effect thereof (with or without the giving of notice or further lapse
of time or both) is to accelerate, or to permit the holders of any such
Debt or indebtedness to accelerate, the maturity of any such Debt; or
any such Debt or indebtedness shall be declared due and payable or be
required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof;
(f) An order with respect to the Case shall be entered by the
Bankruptcy Court, or any party shall file an application for an order
with respect to the Case seeking relief, (i) appointing a trustee under
Section 1104 of the Bankruptcy Code, (ii) appointing an examiner or
responsible person, or (iii) dismissing or converting the Case (or any
part thereof) whether pursuant to Section 105, 305, or 1112 of the
Bankruptcy Code, or otherwise.
(g) An order with respect to the Case shall be entered by the
Bankruptcy Court, or any party shall file an application for an order
with respect to the Case seeking relief, confirming a plan of
reorganization or liquidation in the Case other than a Consensual Plan.
(h) An order with respect to the Case shall be entered by the
Bankruptcy Court, or any Borrower shall file an application for an
order with respect to the Case seeking relief, (i) revoking, reversing
or staying, the Interim Order or the Final Order, or modifying,
supplementing or amending the Interim Order or the Final Order in a
manner adverse to the Agent and the Lenders in their sole opinion, (ii)
permitting any administrative expense or any claim (now existing or
hereafter arising, or any kind or nature whatsoever) to have
administrative priority as to any Borrower equal or superior to the
priority of the Agent and the Lenders in respect of the Post-Petition
Obligations, (iii) granting or permitting the grant of a Lien on any of
the Collateral, (iv) invalidating or otherwise challenging any of the
Agent's or Lenders' Liens securing the Pre-Petition Obligations, or
otherwise objecting to, or raising defenses to, the extent, amount,
validity, perfection, priority, or enforceability of any of the
Pre-Petition Obligations or Liens securing any Pre-Petition
Obligations, (v) surcharging under Section 506(c) of the Bankruptcy
Code to any property which secures any of the Pre-Petition Obligations,
or (vi) permitting the use of the Lenders' cash collateral except as
permitted by the Carveout.
(i) An order with respect to the Case shall be entered by the
Bankruptcy Court, or any party shall file an application for an order
with respect to the Case seeking relief, granting relief from the
automatic stay to any creditor of any Borrower with respect to any
claim in an amount equal to or exceeding $100,000 in the aggregate;
provided, however, that it shall not be an Event of Default if relief
from the automatic stay is granted (i) solely for the purpose of
allowing such creditor to determine the liquidated amount of its claim
against a Borrower, or (ii) to permit the commencement of or
prosecution of a proceeding to collect against an insurance company.
(j) The entry of the Final Order shall not have occurred by
the earlier of (1) the date of expiration of the Interim Order, and (2)
December 29, 1998.
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(k) An event shall occur, or fail to occur, the effect of
which is that any party shall be in violation of the Interim Order or
the Final Order, or the Lenders shall be entitled to enforce their
remedies pursuant thereto, including, without limitation, terminating
their commitment hereunder and/or enforcing their security interest and
liens in the Collateral.
(l) any guaranty of the Obligations shall be terminated,
revoked or declared void or invalid;
(m) one or more judgments or orders for the payment of money
aggregating in excess of $500,000, which amount shall not be fully
covered by insurance, shall be rendered against the Parent or any of
its Subsidiaries, and either (i) enforcement proceedings shall have
been commenced by any creditor upon any such judgment or order, or (ii)
there shall be any period of 45 consecutive days during which such
judgment remains unpaid or a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect;
(n) any loss, theft, damage or destruction of any item or
items of Collateral occurs which (i) materially and adversely affects
the operation of the business of the Parent or any of its Subsidiaries,
taken as a whole; or (ii) is material in amount and is not adequately
covered by insurance;
(o) there occurs any material adverse change in the property,
business, operation, or condition (financial or otherwise) of the
Parent or any of its Subsidiaries, taken as a whole;
(p) Any Termination Event occurs which the Agent believes
could subject any Borrower or any ERISA Affiliate to a liability in
excess of $500,000;
(q) The plan administrator of any Plan applies under Section
412(d) of the Code for a waiver of the minimum funding standards of
Section 412(a) of the Code and the Agent believes that the substantial
business hardship upon which the application for such waiver is based
could subject any Borrower or any ERISA Affiliate to a liability in
excess of $500,000;
(r) there is filed against the Parent or any of its
Subsidiaries any civil or criminal action, suit or proceeding under any
federal or state racketeering statute (including, without limitation,
the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (1) is not dismissed within one hundred
twenty (120) days, and (2) could result in the confiscation or
forfeiture of any material portion of the Collateral;
(s) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of
the Collateral intended to be secured thereby ceases to be, or is not,
valid, perfected and prior to all other Liens (other than Permitted
Liens) or is terminated, revoked or declared void; or
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(t) the Parent shall cease to own (i) at least 90% of the
capital stock of Laclede Mid America, or (ii) 100% of the capital stock
of Laclede Chain.
10.2 Remedies. (a) If a Default or an Event of Default exists,
the Agent may, in its discretion, or, at the direction of the Majority Lenders,
shall, do one or more of the following at any time or times and in any order,
without notice to or demand on any Borrower: (i) reduce the Maximum Revolver
Amount, or the amount of the Revolver Facility, or the advance rates against
Eligible Accounts and/or Eligible Inventory used in computing the Maximum
Revolver Amount, or reduce or increase one or more of the other elements used in
computing the Maximum Revolver Amount; (ii) restrict the amount of or refuse to
make Revolving Loans; and (iii) restrict or refuse to arrange for Letters of
Credit. If an Event of Default exists, the Agent may, in its discretion, or
shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on any Borrower:
(i) terminate the Commitments and this Agreement; and (ii) declare any or all
Obligations to be immediately due and payable; provided, however, that upon the
occurrence of any Event of Default described in Sections 10.1(f), 10.1(g),
10.1(h), 10.1(i), or 10.11(j) the Commitments shall automatically and
immediately expire and all Obligations shall automatically become immediately
due and payable without notice or demand of any kind.
(b) If an Event of Default exists: (i) the Agent shall have,
in addition to all other rights, the rights and remedies of a secured party
under the UCC; (ii) the Agent may, at any time, take possession of the
Collateral and keep it on the applicable Borrower's premises, at no cost to the
Agent or any Lender, or remove any part of it to such other place or places as
the Agent may desire, or each Borrower shall, upon the Agent's demand, at such
Borrower's cost, assemble the Collateral and make it available to the Agent at a
place reasonably convenient to the Agent; and (iii) the Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit or
otherwise, at such prices and upon such terms as the Agent deems advisable, in
its sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new notice of sale.
Without in any way requiring notice to be given in the following manner, each
Borrower agrees that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to such Borrower if such notice
is mailed by registered or certified mail, return receipt requested, postage
prepaid, or is delivered personally against receipt, at least five (5) Business
Days prior to such action to such Borrower's address specified in or pursuant to
Section 14.7. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to any Borrower. In the
event the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, each Borrower irrevocably waives: (a) the posting of any
bond, surety or security with respect thereto which might otherwise be required;
(b) any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (c) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrowers agree that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license or other right to use, without charge, each Borrower's
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and each Borrower's rights under all
licenses and all franchise
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agreements shall inure to the Agent's benefit. The proceeds of sale shall be
applied first to all expenses of sale, including attorneys' fees, and then, in
the case of a sale of Collateral consisting of Fixed Assets, ratably, to the
reduction of the Term Loans (applying such proceeds ratably to the installments
of the Term Loans in the inverse order of maturity), or, in the case of a sale
of Collateral other than Fixed Assets, ratably, to the reduction of the
Obligations in the order provided for in Section 4.5. The Agent will return any
excess to the applicable Borrower or such other Person as shall be legally
entitled thereto and such Borrower shall remain liable for any deficiency.
(c) If an Event of Default occurs, each Borrower hereby waives
all rights to notice and hearing prior to the exercise by the Agent of the
Agent's rights to repossess the Collateral without judicial process or to
replevy, attach or levy upon the Collateral without notice or hearing.
(d) The Agent and the Lenders may exercise any of the
foregoing remedies without demand and without further application to or order of
the Bankruptcy Court; provided, however, that prior to the Agent's or the
Lenders' exercise of any the remedies set forth in Section 10.2(b) or any of the
other Loan Documents, the Agent shall provide three (3) Business Days prior
written notice to the Parent and its counsel, and counsel of record for the
Committee (if any, and otherwise to the United States Trustee for the Eastern
District of Missouri, Eastern Division).
(e) Notwithstanding the foregoing, upon an Event of Default
resulting from the Borrowers' failure to comply with the covenant set forth in
Section 8.25 (Direct Contribution), the Borrowers agree to immediately cease the
Xxxxx Steel Operations by the end of the month succeeding the end of the fiscal
quarter for which such covenant was breached. The Borrowers shall promptly after
the occurrence of such an Event of Default, deliver a business plan and budget,
reasonably acceptable to the Agent, for the cessation of the Xxxxx Steel
Operations. The Agent's and the Lenders' sole remedies with respect to such an
Event of Default shall be limited to an enforcement of the Borrowers' Agreements
set forth in this Section 10.2(e), but the Agent and the Lenders shall not be
restricted in exercising any applicable remedies with respect to the Xxxxx Steel
Operations as a result of any other Event of Default, including an Event of
Default arising from the Borrowers' failure to comply with this Section 10.2(e).
ARTICLE 11
TERM AND TERMINATION
--------------------
11.1 Term and Termination. The term of this Agreement shall
end on the Termination Date. Upon the effective date of termination of this
Agreement for any reason whatsoever, all Obligations shall become immediately
due and payable. Notwithstanding the termination of this Agreement, until all
Obligations are paid and performed in full in cash, each Borrower shall remain
bound by the terms of this Agreement and shall not be relieved of any of its
obligations hereunder, and the Agent and the Lenders shall retain all their
rights and remedies hereunder (including, without limitation, the security
interest of the Agent, for the ratable benefit of the Secured Creditors, in and
all rights and remedies with respect to all then existing and after-arising
Collateral).
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ARTICLE 12
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
-----------------------------------------------------------
12.1 No Implied Waivers. No act, failure or delay by the Agent
or the Lenders shall constitute a waiver of any of their rights and remedies. No
single or partial waiver by the Agent or the Lenders of any provision of this
Agreement or any other Loan Document, or of breach or default hereunder or
thereunder, or of any right or remedy which the Agent or the Lenders may have,
shall operate as a waiver of any other provision, breach, default, right or
remedy or of the same provisions, breach, default, right or remedy on a future
occasion. No waiver by the Agent or the Lenders shall affect their rights to
require strict performance of this Agreement.
12.2 Amendments and Waivers. No amendment or modification of
any provision of this Agreement shall be effective without the written agreement
of the Majority Lenders and the Borrowers, and no termination or waiver of any
provision of this Agreement, or consent to any departure by any Borrower
therefrom, shall in any event be effective without the written concurrence of
the Majority Lenders, which concurrence the Majority Lenders shall have the
right to grant or withhold at their sole discretion. Notwithstanding the
immediately preceding sentence, any amendment, modification or waiver (i) of any
provision of Articles 2, 3 or 4, which amendment, modification or waiver relates
solely to any increase of the Commitments, the reduction of the interest rates
applicable to any Loans and/or the amount of fees payable hereunder (other than
fees payable solely to the Agent or an issuing bank), (ii) effectuating the
discharge of any Guaranty of any of the Obligations, or (iii) of the definitions
of "Majority Lenders," "Pro Rata Share," or "Maximum Revolver Amount" (or any
term affecting the calculation of the Maximum Revolver Amount in any material
respect) and the provisions contained in this Section 12.2, shall be effective
if, and only if, evidenced by a writing agreed to and signed by all Lenders. No
amendment, modification, termination, or waiver of any provision of Article 13
or any other provision referring to the Agent shall be effective without the
written concurrence of the Agent. The Agent may, but shall have no obligation
to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents as attorney-in-fact for such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on a Borrower in
any case shall entitle such Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, waiver or consent
effected in accordance with this Section 12.2 shall be binding on each Secured
Creditor, each future Secured Creditor, and, if signed by each Borrower, on the
Borrowers.
12.3 Assignments; Participations.
(a) Each Lender shall have the right, with the Agent's
consent, at any time to assign to one or more commercial banks or other
financial institutions all, or portions in minimum amounts of $25,000,000, of
its Commitment, the Loans owing to it and its rights and obligations with
respect to Letters of Credit; provided, that BABC is hereby granted a right of
first refusal in connection with any such assignment; and provided, further,
that the parties to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance
entered into with respect to such assignment by the assigning Lender and the
assignee, and accepted by the Agent, in substantially the form of Exhibit G
("Assignment and Acceptance"), and with a processing and recordation fee of
$3,500. Upon such execution, delivery, acceptance and recording,
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from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least two (2) Business Days after the execution
thereof, the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, (A) have the rights and obligations (including, but
not limited to, the obligation to participate in Letters of Credit pursuant to
Section 2.2(f)) of a Lender hereunder and (B) the assigning Lender thereunder
shall cease to be a party hereto.
(b) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address set forth in
Section 14.7 a copy of each Assignment and Acceptance delivered to and accepted
by it and books and records, including computer records, in which it shall
record the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall constitute rebuttably presumptive
evidence, absent manifest error, of the accuracy of the information contained
therein, and the Borrowers, the Agent and the Lenders may treat each Person the
name of which is recorded in the Register as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by any
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit G, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt written notice thereof to the
Borrowers.
(e) Each Lender may sell participations in all or any part of
its rights and obligations under this Agreement (including, without limitation,
all or any part of its Commitment, the Loans or its rights in connection with
Letters of Credit, as applicable) to one or more other Persons; provided,
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however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Agent, the Borrowers
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. BABC agrees not to sell participations in its rights and obligations
under this Agreement to the extent that such sales reduce that portion of its
Commitment which is not subject to participation interests below $25,000,000
unless, at the option of BNY, such sales are made in conjunction with sales by
BNY, on a pari passu basis, of participations in BNY's rights and obligations
under this Agreement. Notwithstanding anything to the contrary contained in the
first sentence of this Section 12.3(e), any Participating Lender may be given
the right to require the Lender granting such Participating Lender's
participation to vote against (1) the release of all or substantially all of the
Collateral, (2) any amendment, modification or waiver of any provision of
Articles 2, 3 or 4 relating to the principal amount of the Loans or Letters of
Credit, the maturity dates of the Loans, the interest rates borne by the Loans
and the amounts of any fees payable to such Lender under Sections 3.5, 3.6, 3.7
and 3.8. No Participating Lender shall be a "Lender" for any purpose under this
Agreement; provided, however, that each Participating Lender shall have the
rights and obligations of a Lender (including any right to receive payment)
under Sections 3.3(f), 3.5, 3.6, 3.7, 3.8, 4.2, 4.6, 4.7, 13.5, 14.8, 13.9 and
12.3(f); provided, further, that all requests for any such payments shall be
made by any Participating Lender through the Lender granting such participation.
The right of each Participating Lender to receive payment pursuant to the
immediately preceding sentence shall be limited to the lesser of (i) the amounts
actually incurred by such Participating Lender for which payment is provided
under such Sections and (ii) the amounts that would have been payable under such
Sections to the Lender granting the participation had such participation not
been granted. It is expressly agreed that, in connection with any participation
pursuant to this Section 12.3(e), any Lender may provide, on a confidential
basis, to any prospective Participating Lender, such information pertaining to
any Borrower or any guarantor of any of the Obligations as such Lender may deem
appropriate.
(f) If a Participating Lender shall at any time with the
Borrowers' knowledge participate with any Lender in the Loans, each Borrower
hereby grants to such Participating Lender, and such Lender and such
Participating Lender shall have and are hereby given, a continuing Lien on and
security interest in any money, Securities and other property of such Borrower
in the custody or possession of the Participating Lender, including the right of
setoff, to the extent of the Participating Lender's participation in the
Obligations, and such Participating Lender shall be deemed to have the same
right of setoff to the extent of Participating Lender's participation in the
Obligations under this Agreement as it would have if it were a direct lender.
(g) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement held by such Lender,
in favor of any Federal Reserve Bank, in accordance with Regulation A of the
Federal Reserve Board or U.S. Treasury Xxxxxxxxxx 00 XXX ? 203.14, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
12.4 Binding Effect; Assignment. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
representatives, successors and assigns of the parties hereto; provided,
however, that no interest herein may be assigned by any Borrower without the
prior written consent of the Agent and the Lenders. With respect to a Borrower,
successors and assigns
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shall include, without limitation, any receiver, trustee, examiner, responsible
person or like representative of its Estate. The rights and benefits of any
Lender hereunder shall, if such Lender so agrees, inure to any party acquiring
any interest in the Obligations or any part thereof, subject to the provisions
of Section 12.3.
ARTICLE 13
THE AGENT
---------
13.1 Appointment. Each Lender hereby designates and appoints
BankAmerica Business Credit, Inc. as its Agent under this Agreement and the
other Loan Documents, and each Lender hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto.
The Agent agrees to act as such on the express conditions contained in this
Article 13. The provisions of this Article 13 are solely for the benefit of the
Agent and the Lenders, and no Borrower shall have any rights as a third party
beneficiary of any of the provisions hereof (other than as expressly set forth
in Section 13.7). In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for any Borrower. The Agent may perform any of its duties under
this Agreement, or under the other Loan Documents, by or through its agents or
employees.
13.2 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including, without
limitation, (a) the determination of the applicability of ineligibility criteria
with respect to the calculation of the Maximum Revolver Amount, (b) the making
of Agent Advances pursuant to Section 2.2(j), and (c) the exercise of remedies
pursuant to Section 10.2, and any action so taken or not taken shall be deemed
consented to by the Lenders. The Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the other Loan Documents, express or implied, is intended to
or shall be construed to impose upon the Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. Each Lender shall make its own independent investigation of
the financial condition and affairs of each Borrower in connection with the
making and the continuance of the Loans hereunder, and shall make its own
appraisal of the creditworthiness of each Borrower, and the 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 the date of this Agreement or at any time or
times thereafter; provided, that at the request of any Lender, the Agent shall
request information of any Borrower on behalf of such Lender, to the extent that
such Lender does not independently have the right to make such request of the
Borrower. If the Agent seeks the consent or approval of the Majority Lenders to
the taking or refraining from taking any action hereunder, the Agent shall send
notice thereof to each Lender. The Agent shall promptly notify each Lender (i)
any time that the Agent becomes aware that an Event of Default has occurred and
is continuing and (ii) any time that the Majority Lenders have instructed the
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Agent to act or refrain from acting pursuant hereto. The Agent may employ
agents, co-agents and attorneys-in-fact and shall not be responsible to the
Lenders or any Borrower, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
13.3 Rights, Exculpation, Etc. Neither the Agent nor any of
its officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted by it or any of them under this Agreement or under
any of the other Loan Documents, or in connection herewith or therewith, except
that (i) the Agent shall be obligated on the terms set forth herein for
performance of its express obligations under this Agreement; (ii) the Agent
shall not be entitled to exercise any of the powers granted to it under this
Agreement or the other Loan Documents in any way inconsistent with its express
obligations to the Lenders under this Agreement; and (iii) no Person shall be
relieved of any liability imposed by law for willful misconduct, intentional
tort or gross (but not mere) negligence. The Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 4.5, and if any such apportionment or distribution is subsequently
determined to have been made in error, the sole recourse of any Secured Creditor
to whom payment was due but not made shall be to recover from other Secured
Creditors any payment in excess of the amount to which it is determined to have
been entitled. The Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties contained in this Agreement
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Loan
Documents or any of the transactions contemplated thereby, or for the financial
condition of any Borrower. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the other Loan Documents or the
financial condition of any Borrower, or the existence or possible existence of
any Default or Event of Default; provided, that at the request of any Lender,
the Agent shall make such inquiry of a Borrower on behalf of such Lender, to the
extent that such Lender does not independently have the right to make such
inquiry of such Borrower. The Agent may at any time request instructions from
the Lenders or Majority Lenders with respect to any actions or approvals which
by the terms of this Agreement or of any of the other Loan Documents the Agent
is permitted or required to take or to grant, and if such instructions are
promptly requested, the Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from the Lenders or Majority Lenders, as applicable. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Lenders or Majority Lenders, as applicable.
13.4 Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
13.5 Indemnification of the Agent by the Lenders. To the
extent that the Agent is not reimbursed and indemnified by any Borrower, the
Lenders will reimburse and indemnify the Agent for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
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costs, expenses, advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by the Agent under this Agreement or any of the
other Loan Documents, in proportion to each Lender's Pro Rata Share, including,
without limitation, Agent Advances; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
resulting from the Agent's recklessness or willful misconduct. The obligations
of the Lenders under this Section 13.5 shall survive the resignation of an Agent
pursuant to Section 13.7, the payment in full of the Loans and reimbursement
obligations with respect to Letters of Credit, the termination of all
outstanding Letters of Credit and the termination of this Agreement.
13.6 Agent in Individual Capacity. BABC and its affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Parent and any of
its Subsidiaries and Affiliates as though BABC were not the Agent hereunder, and
without notice to or the consent of the other Lenders. The Lenders acknowledge
that, pursuant to such activities, BABC or its affiliates may receive
information regarding the Parent or its Subsidiaries or Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or any such Subsidiary or Affiliate) and acknowledge that the Agent
shall be under no obligation to provide such information to them; provided, that
in the event that BABC receives any such information which is not subject to
such confidentiality obligations, and while BABC is the Agent hereunder, and the
Lenders are not otherwise provided with such information, then the Agent shall
provide such information to the Lenders. With respect to its Commitment and the
Loans made by it and the Letters of Credit in connection with which it has
purchased a participation interest, BABC shall have the same rights and powers
under this Agreement as any other Lender and may exercise the same as though it
were not the Agent.
13.7 Successor Agent.
(a) The Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving thirty (30)
Business Days' prior written notice to each Borrower and each Lender. Such
resignation shall take effect upon the earlier of (i) the acceptance by a
successor Agent of its appointment pursuant to clause (b) below, and (ii) thirty
(30) Business Days following the date of written notice by the Agent to each
Borrower and each Lender pursuant to the immediately preceding sentence.
(b) Upon any notice of resignation, the Majority Lenders shall
appoint from among the Lenders a successor Agent. If a successor Agent shall not
have been so appointed within such thirty (30) Business Day period, the retiring
Agent, with the consent of the Borrowers, shall then appoint a successor Agent
who shall serve as Agent until such time, if any, as the Majority Lenders shall
appoint a successor Agent as provided above. If the Borrowers shall not have
consented to the appointment by the retiring Agent of a successor Agent pursuant
to the immediately preceding sentence, the retiring Agent's resignation shall
nevertheless become effective and the Lenders shall perform all of the duties of
the Agent hereunder until such time, if any, as the Majority Banks shall appoint
a successor Agent.
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(c) Notwithstanding the foregoing, in the event that BABC
assigns all of its Loans to an Affiliate, such Affiliate shall automatically
become the successor Agent hereunder upon the effective date of such assignment.
13.8 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its reasonable business judgment, to release any Agent's Lien upon
any Collateral (i) upon the termination of the Commitments, payment and
satisfaction of all Loans and reimbursement obligations in respect of Letters of
Credit, and the termination of all outstanding Letters of Credit (whether or not
any of such obligations are due) and all other Obligations which have matured
and which the Agent has been notified in writing are then due and payable; (ii)
constituting property being sold or disposed of if the applicable Borrower
certifies to the Agent that the sale or disposition is made in compliance with
Section 5.11 or 8.9 (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
applicable Borrower owned no interest at the time the Lien was granted or at any
time thereafter; (iv) constituting property leased to the applicable Borrower
under a lease which has expired or been terminated in a transaction permitted
under this Agreement or which will expire imminently and which has not been, and
is not intended by such Borrower to be, renewed or extended; or (v) in
accordance with the terms of Section 5.1(e). Except as provided above, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Majority Lenders; provided that the Agent may not release
the Agent's Liens on Collateral valued in the aggregate in excess of $500,000
without the prior written authorization of all of the Lenders. Upon request by
the Agent or a Borrower at any time, the Lenders will confirm in writing the
Agent's authority to release any Agent's Liens upon particular types or items of
Collateral pursuant to this Section 13.8(a).
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 13.8(a) from the Majority Lenders or Lenders, as applicable,
of the Agent's authority to release any Agent's Liens upon particular types or
items of Collateral, and upon at least five (5) Business Days' prior written
request by a Borrower, and provided that no Event of Default has occurred and is
then continuing, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent's Liens upon such Collateral; provided, however, that (i) the Agent
shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of any Borrower in respect of) all interests retained by
such Borrower, including (without limitation) the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the applicable
Borrower or is cared for, protected or insured or has been encumbered, or, other
than a duty to act without recklessness, willful misconduct or gross (but not
mere) negligence, that the Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the pursuant to this
Section 13.8 or pursuant to
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any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate, in its reasonable business judgment, given
the Agent's own interest in the Collateral in its capacity as one of the Lenders
and that the Agent shall have no other duty or liability whatsoever to any
Secured Creditor as to any of the foregoing.
13.9 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express consent of
the Agent, and that it shall, to the extent it is lawfully entitled to do so,
upon the request of the Agent, set off against the Obligations, any amounts
owing by such Lender to any Borrower or any accounts of any Borrower now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by the Agent, take or cause
to be taken any action, including, without limitation, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral, the purpose of which is, or
could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) Subject to Section 4.5, if, at any time or times any
Lender shall receive (i) by payment, foreclosure, setoff or otherwise, any
proceeds of Collateral or any payments with respect to the Obligations of any
Borrower to such Lender arising under, or relating to, this Agreement or the
other Loan Documents, except for any such proceeds or payments received by such
Lender from the Agent pursuant to the terms of this Agreement, or (ii) payments
from the Agent in excess of such Lender's ratable portion of all such
distributions by the Agent, such Lender shall promptly (1) turn the same over to
the Agent, in kind, and with such endorsements as may be required to negotiate
the same to the Agent, or in same day funds, as applicable, for the account of
all of the Secured Creditors and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
13.10 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC can be
perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent.
13.11 Payments by Agent to Lenders. All payments to be made by
the Agent to the Lenders under this Agreement, under this Interim Order or under
the Final Order shall be made by bank wire transfer or internal transfer of
immediately available funds to:
if to BABC: BankAmerica Business Credit, Inc.
ABA #000000000
To: Bank of America, San Francisco
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BankAmerica Business Credit, Inc.
Account No. 1257503561, reference
Laclede
if to BNY: BNY Financial Corporation
ABA #000000000, Account No. 8090653114,
reference Laclede Steel
if to NB: NationsBank of Texas Business Credit
ABA #111 0000 12
Account No. 018 00 19471, reference: Laclede Steel
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal or interest on the Revolving Loans or the Term Loans,
Adequate Protection Payments or otherwise.
13.12 Concerning the Collateral and the Related Loan
Documents. Each Lender authorizes and directs the Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit of the Secured Creditors. Each Lender agrees that any action
taken by the Agent or Majority Lenders in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral, and the
exercise by the Agent or the Majority Lenders of their respective powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
ARTICLE 14
MISCELLANEOUS
14.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against any Borrower to collect the Obligations without any prior
recourse to the Collateral.
14.2 Severability. If any provision of this Agreement shall be
prohibited or invalid, under applicable law, it shall be ineffective only to
such extent, without invalidating the remainder of this Agreement.
14.3 Governing Law; Choice of Forum; Service of Process; Jury
Trial Waiver. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS
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(AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS
AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.
(b) SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE, THE
BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE TO THE NON-EXCLUSIVE
JURISDICTION OF THE BANKRUPTCY COURT AND WAIVE ANY OBJECTION BASED ON VENUE OR
FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN.
NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL, REAL ESTATE, OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) 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 SUCH BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 14.7 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS, OR, AT THE AGENT'S AND/OR THE LENDERS' OPTION, BY SERVICE UPON THE
CORPORATION TRUST COMPANY, 000 XXXXX XXXXXXX XXXXXX, XXXXXXX, XXXXXXXX 00000,
WHICH SUCH BORROWER IRREVOCABLY APPOINTS AS SUCH BORROWER'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS. IN
ADDITION, THE AGENT AND THE LENDERS AGREE TO PROMPTLY FORWARD BY REGISTERED MAIL
ANY PROCESS SO SERVED UPON SAID AGENT TO THE APPLICABLE BORROWER AT ITS ADDRESS
SET FORTH IN SECTION 14.7. EACH BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS
AS AFORESAID.
(d) THE BORROWERS, THE AGENT AND THE LENDERS HEREBY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR (ii) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM
IN RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED, IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE BORROWERS, THE AGENT AND THE
LENDERS HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN
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EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(e) NOTHING IN THIS SECTION 14.3 SHALL AFFECT THE RIGHT OF THE
AGENT OR THE LENDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
(f) EACH BORROWER AGREES THAT IT WILL NOT ASSERT AGAINST AGENT
OR ANY LENDER ANY CLAIM FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE
DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.4 Survival of Representations and Warranties. All of each
Borrower's representations, and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
14.5 Other Security and Guaranties. The Agent, in its sole
discretion, subject to the other terms and provisions contained in this
Agreement, may, without notice or demand and without affecting any Borrower's
obligations hereunder, from time to time: (a) take from any Person and hold
collateral (other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
14.6 Fees and Expenses. The Borrowers agree, on a joint and
several basis, to pay to each Lender the amount of attorneys' and paralegals'
fees (including allocated in-house counsel fees) and disbursements of counsel to
such Lender in connection with the negotiation, preparation and consummation of
this Agreement and the other Loan Documents. Each Borrower shall pay to the
Agent, on demand, all costs and expenses that the Agent pays or incurs in
connection with the Case or the negotiation, preparation, consummation,
administration, enforcement, and termination of this Agreement and the other
Loan Documents, including, without limitation: (a) attorneys', paralegals'
(including allocated in-house counsel fees), and financial advisors? fees and
disbursements of counsel and such advisors to the Agent; (b) costs and expenses
(including attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes, fees and other charges
for recording mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's Liens; (e) sums paid
or incurred to pay any amount or take any action required of any Borrower under
the Loan Documents that such Borrower fails to pay or take; (f) costs of
appraisals, inspections, and verifications of the Collateral, including, without
limitation, travel, lodging, and meals for inspections of the Collateral and
each Borrower's operations by the Agent's agents up to four (4) times per year
and
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whenever an Event of Default exists; (g) costs and expenses of forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining Payment Accounts; (h) costs and expenses of preserving and
protecting the Collateral; and (i) costs and expenses (including attorneys' and
paralegals' fees and disbursements) paid or incurred to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including without limitation,
preparations for and consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of the Loan Documents
regarding costs and expenses to be paid by any Borrower. All of the foregoing
costs and expenses shall be charged to the applicable Borrower's loan account as
Revolving Loans as described in Section 4.4. Notwithstanding anything to the
contrary in the foregoing, the right of the Agent to reimbursement for financial
advisors shall exist only if the Borrowers are not entitled to retain in the
Case financial advisors acceptable to the Agent such as PriceWaterhouseCoopers.
14.7 Notices. Except as otherwise provided herein, all
notices, demands and requests that any party is required or elects to give to
any other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including, but not limited to, delivery by overnight
mail and courier service, (b) four (4) days after it shall have been mailed by
United States mail, first class, certified or registered, with postage prepaid,
or (c) in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to BABC:
BankAmerica Business Credit, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy No. (000) 000-0000
with copies to:
BankAmerica Business Credit, Inc.
00000 Xxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No. (000) 000-0000
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and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No. (000) 000-0000
If to BNY:
BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Love
Telecopy No. (000) 000-0000
If to NB:
NationsBank, N.A.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Look
Telecopy No. (000) 000-0000
If to any Borrower:
Laclede Steel Company
or
Laclede Chain Manufacturing Company
c/o Laclede Steel Company
or
Laclede Mid America Inc.
c/o Laclede Steel Company
One Metropolitan Square
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Telecopy No. (000) 000-0000
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with a copy to:
Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Xx.
Telecopy No. (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
14.8 Indemnity of the Agent and the Lenders by the Borrowers.
Each Borrower agrees to (i) reimburse the Agent and the Lenders for any costs
and expenses (including, without limitation, attorneys' and paralegals' fees and
expenses, including allocated in-house counsel fees) incurred by the Agent or
any Lender in defending any suit brought against it by any Borrower or any other
Person in connection with the transactions contemplated by this Agreement, and
(ii) indemnify and hold the Agent and the Lenders and their respective officers,
directors, employees, attorneys and agents (collectively, the "Indemnitees")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever incurred by the Indemnitees, whether direct, indirect
or consequential, as a result of or arising from or relating to any proceeding
by any Person, whether threatened or initiated, asserting any claim for legal or
equitable remedy against any Person under any statute or regulation (including,
without limitation, any federal or state securities or commercial laws or under
any common law or equitable cause or otherwise, including any liability and
costs under Environmental Laws or common law principles arising from or in
connection with the past, present or future operations of any Borrower or its
predecessors in interest, or the past, present or future environmental condition
of any Borrower's property, the presence of asbestos-containing materials at or
on such property, or the Release or threatened Release of any Contaminant from
such property), in any way arising from or in connection with the negotiation,
preparation, execution, delivery, enforcement, performance and administration of
this Agreement or any other document executed in connection herewith, provided
that no Borrower shall have any obligation hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of any
Indemnitee seeking such indemnification. To the extent that the indemnity set
forth in this Section may be unenforceable because it is violative of any law or
public policy, each Borrower shall pay the maximum portion which it is permitted
to pay under applicable law. Any Indemnitee will promptly notify each Borrower
of the commencement of any legal proceeding which may give rise to any
indemnified liability under the foregoing indemnity and shall permit such
Borrower to participate in the defense of such Indemnitee in any such
proceeding. The foregoing indemnity shall survive the resignation of an Agent
pursuant to Section 13.7, the payment of the Obligations and the termination of
this Agreement. All of the foregoing fees, costs and expenses shall be part of
the Obligations, payable upon demand, and secured by the Collateral.
14.9 Waiver of Notices. Unless otherwise expressly provided
herein, each Borrower waives presentment, protest and notice of demand or
dishonor and protest as to any instrument, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on any
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Borrower which the Agent or any Lender may elect to give shall entitle such
Borrower to any or further notice or demand in the same, similar or other
circumstances.
14.10 Final Agreement. This Agreement, together with the
Interim Order and the Final Order, are intended by the Borrowers, the Agent and
the Lenders to be the final, complete, and exclusive expression of the agreement
between them. This Agreement supersedes any and all prior oral or written
agreements relating to the subject matter hereof.
14.11 Counterparts. This Agreement may be executed in any
number of counterparts, and by the Agent, each Lender and each Borrower in
separate counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.
14.12 Captions. The captions contained in this Agreement are
for convenience of reference only, are without substantive meaning and should
not be construed to modify, enlarge, or restrict any provision.
14.13 Right of Setoff. Whenever an Event of Default exists,
the Agent and each Lender are hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Agent or such Lender or any
affiliate of the Agent or such Lender to or for the credit or the account of any
Borrower against any and all of the Obligations, whether or not then due and
payable. The Agent and each Lender agree promptly to notify the applicable
Borrower after any such setoff and application made by the Agent or such Lender,
as applicable, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
14.14 Taxes.
(a) Any and all payments by the Borrowers hereunder shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 14.14) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
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(c) The Borrowers will indemnify each Lender and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 14.14) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Agent (as the case may be) makes written demand
therefor. Each Lender shall, at the time of any written demand for
indemnification under this subsection (c), provide to the Borrowers a receipt
for, or other evidence of the payment of, the Taxes or Other Taxes for which
indemnification is sought.
(d) Within 30 days after the date of any payment of Taxes, the
Borrowers will furnish to the Agent, at its address referred to in Section 14.7,
the original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment hereunder with respect to which a
claim for indemnity has been made hereunder, the Borrowers will furnish to the
Agent, at such address, a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Agent, in either case stating that such
payment is exempt from or not subject to Taxes.
(e) Without prejudice to the survival of any other agreement
of any Borrower hereunder, the agreements and obligations of the Borrowers
contained in this Section 14.14 shall survive the payment in full of principal
and interest hereunder.
14.15 Joint and Several Liability. Each Borrower shall be
liable, on a joint and several basis, for all amounts due to the Agent and/or
any Lender under this Agreement, regardless of which Borrower actually receives
Loans or other extensions of credit hereunder or the amount of such Loans
received or the manner in which the Agent and/or such Lender accounts for such
Loans or other extensions of credit on its books and records. Each Borrower's
Obligations with respect to Loans made to it, and each Borrower's Obligations
arising as a result of the joint and several liability of the Borrowers
hereunder, with respect to Loans made to the other Borrowers hereunder, shall be
separate and distinct obligations, but all such Obligations shall be primary
obligations of each Borrower.
Each Borrower's Obligations arising as a result of the joint
and several liability of the Borrowers hereunder with respect to Loans or other
extensions of credit made to the other Borrowers hereunder shall, to the fullest
extent permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrowers or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrowers, (ii) the absence of any attempt to
collect the Obligations from the other Borrowers, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any indulgence
by the Agent and/or any Lender with respect to any provision of any instrument
evidencing the Obligations of the other Borrowers, or any part thereof, or any
other agreement now or hereafter executed by the other Borrowers and delivered
to the Agent and/or any Lender, (iv) the failure by the Agent and/or any Lender
to take any steps to perfect and maintain its security interest in, or to
preserve its rights to, any security or collateral for the Obligations of the
other Borrowers, (v) the Agent's and/or any Lender's election in the Case of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) the disallowance
of all or any portion of the Agent's and/or any Lender's claim(s) for the
repayment of the Obligations of the other Borrowers under Section 502 of the
Bankruptcy Code, or (vii) any other circumstances which might constitute a legal
or equitable discharge or defense of a guarantor or of the other Borrowers. With
respect to each
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Borrower's Obligations arising as a result of the joint and several liability of
the Borrowers hereunder with respect to Loans or other extensions of credit made
to either of the other Borrowers hereunder, such Borrower waives, until the
Obligations shall have been paid in full and the Loan Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
the Agent and/or any Lender now has or may hereafter have against any Borrower,
any endorser or any guarantor of all or any part of the Obligations, and any
benefit of, and any right to participate in, any security or collateral given to
the Agent and/or any Lender to secure payment of the Obligations or any other
liability of the Borrowers to the Agent and/or any Lender.
Upon the occurrence and during the continuance of any Event of
Default, the Agent and the Lenders may proceed directly and at once, without
notice, against any Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against the other Borrowers
or any other Person, or against any security or collateral for the Obligations.
Each Borrower consents and agrees that the Agent and the Lenders shall be under
no obligation to marshal any assets in favor of such Borrower or against or in
payment of any or all of the Obligations.
14.16 Contribution and Indemnification among the Borrowers.
Each Borrower is obligated to repay the Obligations as joint and several
obligors under this Agreement. To the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an "Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be entitled
to contribution and indemnification from, and be reimbursed by, each of the
other Borrowers in an amount, for each of such other Borrowers, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Borrower's "Allocable Amount" (as defined below) and the denominator of
which is the sum of the Allocable Amounts of all of the Borrowers. As of any
date of determination, the "Allocable Amount" of each Borrower shall be equal to
the maximum amount of liability for Accommodation Payments which could be
asserted against such Borrower hereunder without (a) rendering such Borrower
"insolvent" within the meaning of Section 101(31) of the Bankruptcy Code ,
Section 2 of the Uniform Fraudulent Transfer Act (the "UFTA") or Section 2 of
the Uniform Fraudulent Conveyance Act (the "UFCA"), (ii) leaving such Borrower
with unreasonably small capital or assets, within the meaning of Section 548 of
the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (iii)
leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or
Section 5 of the UFCA. All rights and claims of contribution, indemnification
and reimbursement under this section shall be subordinate in right of payment to
the prior payment in full of the Obligations. The provisions of this section
shall, to the extent expressly inconsistent with any provision in any Loan
Document, supersede such inconsistent provision.
14.17 Agency of the Parent for each other Borrower. Each of
the other Borrowers appoints the Parent as its agent for all purposes relevant
to this Agreement, including (without limitation) the giving and receipt of
notices and the execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by all of the Borrowers
or by Laclede Chain or Laclede Mid America, acting singly, shall be valid and
effective if given or taken only by the Parent, whether or not either of the
other Borrowers joins therein.
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IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
LACLEDE STEEL COMPANY, as
Debtor and Debtor-in-Possession
By: /s/ X X Xxxx
--------------------------------
Title: Vice President
LACLEDE CHAIN MANUFACTURING
COMPANY, as
Debtor and Debtor-in-Possession
By: /s/ X X Xxxx
--------------------------------
Title: Vice President
LACLEDE MID AMERICA INC., as
Debtor and Debtor-in-Possession
By: /s/ X X Xxxx
--------------------------------
Title: Vice President
X-0
000
XXXXXXXXXXX BUSINESS CREDIT, INC.,
as the Agent
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Vice President
Commitment: $59,500,000 BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Vice President
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Commitment: $21,250,000 BNY FINANCIAL CORPORATION, as a Lender
and as successor to THE BANK OF NEW YORK
COMMERCIAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Vice President
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Commitment: $4,250,000 NATIONSBANK, N.A. as a Lender
By: /s/ Xxxxx Xxxxxx
---------------------------------
Vice President
S-4
