AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "Agreement")
is made and entered into this 24th day of March, 1998, by and among HUNTCO
INC., a Missouri corporation ("Borrower"), HUNTCO NEVADA, INC., a Nevada
corporation which is a wholly-owned subsidiary of Borrower ("Huntco Nevada"),
HUNTCO STEEL, INC., a Delaware corporation which is a wholly-owned subsidiary
of Huntco Nevada ("Huntco Steel"), MIDWEST PRODUCTS, INC., a Missouri
corporation which is a wholly-owned subsidiary of Huntco Nevada ("Midwest
Products"), HSI AVIATION, INC., a Missouri corporation which is a wholly-owned
subsidiary of Huntco Steel ("HSI Aviation") (Huntco Nevada, Huntco Steel,
Midwest Products and HSI Aviation are sometimes hereinafter individually
referred to as a "Guarantor" and collectively referred to as the
"Guarantors"), and the Banks party hereto (collectively, the "Banks"),
including Mercantile Bank National Association in its capacity as a Bank and
as agent for the Banks under this Agreement and Xxxxxx Trust and Savings Bank
and The First National Bank of Chicago in their capacities as Banks and as co-
agents under this Agreement.
WITNESSETH:
WHEREAS, Borrower, the Guarantors, Mercantile Bank National Association,
Xxxxxx Trust and Savings Bank, NBD Bank, Bank of America Illinois, SunTrust
Bank, Atlanta and Mercantile Bank National Association, as agent for the Banks
(in such capacity, the "Agent"), have heretofore entered into that certain
Revolving Credit Agreement dated December 17, 1996, as amended by that certain
First Amendment to Revolving Credit Agreement dated effective as of April 30,
1997 (as so amended, the "Original Revolving Credit Agreement"); and
WHEREAS, Bank of America NT&SA is the successor to Bank of America
Illinois; and
WHEREAS, pursuant to an Assignment and Assumption Agreement dated as of
March 13, 1998, by and between NBD Bank and The First National Bank of
Chicago, NBD Bank assigned to The First National Bank of Chicago all of the
rights and obligations of NBD Bank under the Original Revolving Credit
Agreement, including, without limitation, all of the rights and obligations of
NBD Bank under the Original Revolving Credit Agreement in respect of its
Commitment, its Revolving Credit Loans, its Pro Rata Share of the undrawn face
amount of each of the Letter(s) of Credit and its Pro Rata Share of each of
the Letter of Credit Loans, and The First National Bank of Chicago accepted
the assignment of such rights and assumed the corresponding obligations from
NBD Bank; and
WHEREAS, Borrower and the Guarantors desire to amend and restate the
Original Revolving Credit Agreement in the manner hereinafter set forth and
the Banks and the Agent are willing to agree thereto on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, the Guarantors, the Banks and the Agent hereby amend
and restate the Original Revolving Credit Agreement so that as so amended and
restated it reads in its entirety as follows:
"WHEREAS, Borrower has applied for a revolving credit facility from the
Banks consisting of revolving credit loans and letters of credit in an
aggregate amount of up to $80,000,000.00; and
WHEREAS, in order to induce the Banks to extend said revolving credit
facility to Borrower, each of the Guarantors has agreed to guaranty the
payment and performance to the Banks of the "Borrower's Obligations" (as
hereinafter defined); and
WHEREAS, the Banks are willing to extend said revolving credit facility
to Borrower upon, and subject to, the terms, provisions and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, the Guarantors, the Banks and the Agent hereby
mutually promise and agree as follows:
SECTION 1. DEFINITIONS.
1.01 Definitions. In addition to the terms defined elsewhere in this
Agreement or in any Exhibit or Schedule hereto, when used in this Agreement,
the following terms shall have the following meanings (such meanings shall be
equally applicable to the singular and plural forms of the terms used, as the
context requires):
Acceptable Acquisition shall mean any Acquisition which has been (a) in
the event a corporation is the subject of such Acquisition, either (i)
approved by the Board of Directors of the corporation which is the subject of
such Acquisition or (ii) recommended by such Board of Directors to the
shareholders of such corporation, (b) in the event a partnership is the
subject of such Acquisition, approved by a majority (by percentage of voting
power) of the partners of the partnership which is the subject of such
Acquisition, (c) in the event an organization or entity other than a
corporation or partnership is the subject of such Acquisition, approved by a
majority (by percentage of voting power) of the governing body, if any, or by
a majority (by percentage of ownership interest) of the owners of the
organization or entity which is the subject of such Acquisition or (d) in the
event the corporation, partnership or other organization or entity which is
the subject of such Acquisition is in bankruptcy, approved by the bankruptcy
court or another court of competent jurisdiction.
Account Debtor shall mean any Person who is and/or may become obligated
to Borrower or a Guarantor under or on account of any of the Accounts.
Accounts shall mean all trade accounts receivable of Borrower and each of
the Guarantors which have been invoiced by Borrower or the applicable
Guarantor, as the case may be.
Acquisition shall mean any transaction or series of related transactions,
consummated on or after the date of this Agreement, by which Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially
all of the assets of any corporation, partnership or other organization or
entity, whether through purchase of assets, merger or otherwise or (b)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least (i) a majority (in number of
votes) of the stock and/or other securities of a corporation having
ordinary voting power for the election of directors (other than stock
and/or other securities having such power only by reason of the
happening of a contingency), (ii) a majority (by percentage of voting power)
of the outstanding partnership interests of a partnership or (iii) a majority
of the ownership interests in any organization or entity other than a
corporation or partnership.
Adjusted Prime Rate shall mean the Prime Rate plus the Applicable Margin.
The Adjusted Prime Rate shall be adjusted automatically on and as of the
effective date of any change in the Prime Rate or the Applicable Margin.
Affiliate shall mean any Person (a) which directly or indirectly through
one or more intermediaries controls, is controlled by or is under common
control with Borrower or any Subsidiary, (b) which directly or indirectly
through one or more intermediaries beneficially owns or holds or has the power
to direct the voting power of Five Percent (5%) or more of any class of
capital stock of Borrower or any Subsidiary, (c) which has Five Percent (5%)
or more of any class of its capital stock (or, in the case of a Person which
is not a corporation, Five Percent (5%) or more of its equity interest)
beneficially owned or held, directly or indirectly, by Borrower or any
Subsidiary or (d) who is a director, officer or employee of Borrower or any
Subsidiary. For purposes of this definition, "control" shall mean the power
to direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
Agent shall mean Mercantile Bank National Association in its capacity as
agent for the Banks hereunder and its successors in such capacity.
Applicable Commitment Fee Rate shall mean: (a) during the period
commencing December 17, 1996, and ending March 31, 1997, One-Eighth of One
Percent (.125%) per annum; (b) during the period commencing April 1, 1997, and
ending April 30, 1997, Three-Sixteenths of One Percent (.1875%) per annum; (c)
during the period commencing May 1, 1997, and ending March 23, 1998, (i) One-
Sixteenth of One Percent (.0625%) per annum if the Consolidated Debt to
Consolidated EBITDA Ratio was less than 3.0 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a), (ii) One-Eighth of One Percent
(.125%) per annum if the Consolidated Debt to Consolidated EBITDA Ratio was
equal to or greater than 3.0 to 1.0 but less than 3.5 to 1.0 as of the end of
the most recently ended fiscal quarter of Borrower for which consolidated
financial statements of Borrower and its Subsidiaries have been delivered to
the Agent and the Banks pursuant to Section 6.01(a), (iii) Three-Sixteenths of
One Percent (.1875%) per annum if the Consolidated Debt to Consolidated EBITDA
Ratio was equal to or greater than 3.5 to 1.0 but less than 4.0 to 1.0 as of
the end of the most recently ended fiscal quarter of Borrower for which
consolidated financial statements of Borrower and its Subsidiaries have been
delivered to the Agent and the Banks pursuant to Section 6.01(a) and (iv)
Five-Sixteenths of One Percent (.3125%) per annum if the Consolidated Debt to
Consolidated EBITDA Ratio was equal to or greater than 4.0 to 1.0 as of the
end of the most recently ended fiscal quarter of Borrower for which
consolidated financial statements of Borrower and its Subsidiaries have been
delivered to the Agent and the Banks pursuant to Section 6.01(a) and (d) from
and after March 24, 1998, (i) Three-Sixteenths of One Percent (.1875%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was less than 3.5
to 1.0 as of the end of the most recently ended fiscal quarter of Borrower for
which consolidated financial statements of Borrower and its Subsidiaries have
been delivered to the Agent and the Banks pursuant to Section 6.01(a), (ii)
One-Quarter of One Percent (.25%) per annum if the Consolidated Debt to
Consolidated EBITDA Ratio was equal to or greater than 3.5 to 1.0 but less
than 4.0 to 1.0 as of the end of the most recently ended fiscal quarter of
Borrower for which consolidated financial statements of Borrower and its
Subsidiaries have been delivered to the Agent and the Banks pursuant to
Section 6.01(a) and (iii) Three-Eighths of One Percent (.375%) per annum if
the Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater
than 4.0 to 1.0 as of the end of the most recently ended fiscal quarter of
Borrower for which consolidated financial statements of Borrower and its
Subsidiaries have been delivered to the Agent and the Banks pursuant to
Section 6.01(a). The determination of the Applicable Commitment Fee Rate as of
any date shall be based on the Consolidated Debt to Consolidated EBITDA Ratio
as of the end of the most recently ended fiscal quarter of Borrower for which
consolidated financial statements of Borrower and its Subsidiaries have been
delivered to the Agent and the Banks pursuant to Section 6.01(a), and shall be
effective for purposes of determining the Applicable Commitment Fee Rate from
and after the first day of the first month immediately following the date on
which such delivery of financial statements is required until the first day of
the first month immediately following the next such date on which delivery of
consolidated financial statements of Borrower and its Subsidiaries is so
required. For example, the Consolidated Debt to Consolidated EBITDA Ratio as
of the end of the fiscal quarter of Borrower ended December 31, 1997, will be
determined from the consolidated financial statements of Borrower and its
Subsidiaries as of and for fiscal quarter ended December 31, 1997 (which are
required to be delivered to the Agent and the Banks on or before April 10,
1998), and will be used in determining the Applicable Commitment Fee Rate from
and after May 1, 1998. Notwithstanding the foregoing, in no event shall any
provision contained in this definition be construed as permitting Borrower to
any time have a Consolidated Debt to Consolidated EBITDA Ratio greater than
the maximum Consolidated Debt to Consolidated EBITDA Ratio permitted by
Section 6.01(q)(ii) of this Agreement at such time.
Applicable Margin shall mean:
(a) with respect to Prime Loans: (i) during the period commencing
December 17, 1996, and ending March 31, 1997, Zero Percent (0.00%) per annum;
(ii) during the period commencing April 1, 1997, and ending April 30, 1997,
One-Eighth of One Percent (.125%) per annum; (iii) during the period
commencing May 1, 1997, and ending March 23, 1998, (A) a negative One-Eighth
of One Percent (-.125%) per annum if the Consolidated Debt to Consolidated
EBITDA Ratio was less than 3.0 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), (B) Zero Percent (0.00%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
3.0 to 1.0 but less than 3.5 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), (C) One-Quarter of One Percent (.25%) per annum
if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater
than 3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most recently
ended fiscal quarter of Borrower for which consolidated financial statements
of Borrower and its Subsidiaries have been delivered to the Agent and the
Banks pursuant to Section 6.01(a), (D) Three-Quarters of One Percent (.75%)
per annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to
or greater than 4.0 to 1.0 but less than 4.5 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a) and (E) One Percent (1.00%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or
greater than 4.5 to 1.0 as of the end of the most recently ended fiscal
quarter of Borrower for which consolidated financial statements of Borrower
and its Subsidiaries have been delivered to the Agent and the Banks pursuant
to Section 6.01(a); and (iv) from and after March 24, 1998, (A) Zero Percent
(0.00%) per annum if the Consolidated Debt to Consolidated EBITDA Ratio was
less than 3.5 to 1.0 as of the end of the most recently ended fiscal quarter
of Borrower for which consolidated financial statements of Borrower and its
Subsidiaries have been delivered to the Agent and the Banks pursuant to
Section 6.01(a), (B) One-Half of One Percent (.50%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), (C) One Percent (1.00%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
4.0 to 1.0 but less than 4.5 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a) and (D) One and One-Quarter Percent (1.25%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or
greater than 4.5 to 1.0 as of the end of the most recently ended fiscal
quarter of Borrower for which consolidated financial statements of Borrower
and its Subsidiaries have been delivered to the Agent and the Banks pursuant
to Section 6.01(a); and
(b) with respect to LIBOR Loans: (i) during the period commencing
December 17, 1996, and ending March 31, 1997, Three-Quarters of One Percent
(.75%) per annum; (ii) during the period commencing April 1, 1997, and ending
April 30, 1997, Seven-Eighths of One Percent (.875%) per annum; (iii) during
the period commencing May 1, 1997, and ending March 23, 1998, (A) Five-Eighths
of One Percent (.625%) per annum if the Consolidated Debt to Consolidated
EBITDA Ratio was less than 3.0 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), (B) Three-Quarters of One Percent (.75%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or
greater than 3.0 to 1.0 but less than 3.5 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a), (C) One Percent (1.00%) per annum
if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater
than 3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most recently
ended fiscal quarter of Borrower for which consolidated financial statements
of Borrower and its Subsidiaries have been delivered to the Agent and the
Banks pursuant to Section 6.01(a), (D) One and One-Half Percent (1.50%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or
greater than 4.0 to 1.0 but less than 4.5 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a) and (E) One and Three-Quarters
Percent (1.75%) per annum if the Consolidated Debt to Consolidated EBITDA
Ratio was equal to or greater than 4.5 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a); and (iv) from and after March 24,
1998, (A) Three-Quarters of One Percent (.75%) per annum if the Consolidated
Debt to Consolidated EBITDA Ratio was less than 3.5 to 1.0 as of the end of
the most recently ended fiscal quarter of Borrower for which consolidated
financial statements of Borrower and its Subsidiaries have been delivered to
the Agent and the Banks pursuant to Section 6.01(a), (B) One and One-Quarter
Percent (1.25%) per annum if the Consolidated Debt to Consolidated EBITDA
Ratio was equal to or greater than 3.5 to 1.0 but less than 4.0 to 1.0 as of
the end of the most recently ended fiscal quarter of Borrower for which
consolidated financial statements of Borrower and its Subsidiaries have been
delivered to the Agent and the Banks pursuant to Section 6.01(a), (C) One and
Three-Quarters Percent (1.75%) per annum if the Consolidated Debt to
Consolidated EBITDA Ratio was equal to or greater than 4.0 to 1.0 but less
than 4.5 to 1.0 as of the end of the most recently ended fiscal quarter of
Borrower for which consolidated financial statements of Borrower and its
Subsidiaries have been delivered to the Agent and the Banks pursuant to
Section 6.01(a) and (D) Two and One-Quarter Percent (2.25%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
4.5 to 1.0 as of the end of the most recently ended fiscal quarter of Borrower
for which consolidated financial statements of Borrower and its Subsidiaries
have been delivered to the Agent and the Banks pursuant to Section 6.01(a).
The determination of the Applicable Margin as of any date shall be based
on the Consolidated Debt to Consolidated EBITDA Ratio as of the end of the
most recently ended fiscal quarter of Borrower for which consolidated
financial statements of Borrower and its Subsidiaries have been delivered to
the Agent and the Banks pursuant to Section 6.01(a), and shall be effective
for purposes of determining the Applicable Margin from and after the first day
of the first month immediately following the date on which such delivery of
financial statements is required until the first day of the first month
immediately following the next such date on which delivery of consolidated
financial statements of Borrower and its Subsidiaries is so required. For
example, the Consolidated Debt to Consolidated EBITDA Ratio as of the end of
the fiscal quarter of Borrower ended December 31, 1997, will be determined
from the consolidated financial statements of Borrower and its Subsidiaries as
of and for the fiscal quarter ended December 31, 1997 (which are required to
be delivered to the Agent and the Banks on or before April 10, 1998), and will
be used in determining the Applicable Margin from and after May 1, 1998.
Notwithstanding the foregoing, in no event shall any provision contained in
this definition be construed as permitting Borrower to any time have a
Consolidated Debt to Consolidated EBITDA Ratio greater than the maximum
Consolidated Debt to Consolidated EBITDA Ratio permitted by Section
6.01(q)(ii) of this Agreement at such time.
Applicable Standby Letter of Credit Commitment Fee Rate shall mean: (a)
during the period commencing December 17, 1996, and ending March 31, 1997, One
Percent (1.00%) per annum; (b) during the period commencing April 1, 1997, and
ending April 30, 1997, One and One-Eighth Percent (1.125%) per annum; (c)
during the period commencing May 1, 1997, and ending March 23, 1998, (i)
Seven-Eighths of One Percent (.875%) per annum if the Consolidated Debt to
Consolidated EBITDA Ratio was less than 3.0 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a), (ii) One Percent (1.00%) per annum
if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater
than 3.0 to 1.0 but less than 3.5 to 1.0 as of the end of the most recently
ended fiscal quarter of Borrower for which consolidated financial statements
of Borrower and its Subsidiaries have been delivered to the Agent and the
Banks pursuant to Section 6.01(a), (iii) One and One-Quarter Percent (1.25%)
per annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to
or greater than 3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most
recently ended fiscal quarter of Borrower for which consolidated financial
statements of Borrower and its Subsidiaries have been delivered to the Agent
and the Banks pursuant to Section 6.01(a), (iv) One and Three-Quarters Percent
(1.75%) per annum if the Consolidated Debt to Consolidated EBITDA Ratio was
equal to or greater than 4.0 to 1.0 but less than 4.5 to 1.0 as of the end of
the most recently ended fiscal quarter of Borrower for which consolidated
financial statements of Borrower and its Subsidiaries have been delivered to
the Agent and the Banks pursuant to Section 6.01(a) and (v) Two Percent
(2.00%) per annum if the Consolidated Debt to Consolidated EBITDA Ratio was
equal to or greater than 4.5 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a); and (d) from and after March 24, 1998, (i) One
Percent (1.00%) per annum if the Consolidated Debt to Consolidated EBITDA
Ratio was less than 3.5 to 1.0 as of the end of the most recently ended fiscal
quarter of Borrower for which consolidated financial statements of Borrower
and its Subsidiaries have been delivered to the Agent and the Banks pursuant
to Section 6.01(a), (ii) One and One-Quarter Percent (1.25%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), (iii) Two Percent (2.00%) per annum if the
Consolidated Debt to Consolidated EBITDA Ratio was equal to or greater than
4.0 to 1.0 but less than 4.5 to 1.0 as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a) and (iv) Two and One-Quarter Percent (2.25%) per
annum if the Consolidated Debt to Consolidated EBITDA Ratio was equal to or
greater than 4.5 to 1.0 as of the end of the most recently ended fiscal
quarter of Borrower for which consolidated financial statements of Borrower
and its Subsidiaries have been delivered to the Agent and the Banks pursuant
to Section 6.01(a). The determination of the Applicable Standby Letter of
Credit Commitment Fee Rate as of any date shall be based on the Consolidated
Debt to Consolidated EBITDA Ratio as of the end of the most recently ended
fiscal quarter of Borrower for which consolidated financial statements of
Borrower and its Subsidiaries have been delivered to the Agent and the Banks
pursuant to Section 6.01(a), and shall be effective for purposes of
determining the Applicable Standby Letter of Credit Commitment Fee Rate from
and after the first day of the first month immediately following the date on
which such delivery of financial statements is required until the first day of
the first month immediately following the next such date on which delivery of
consolidated financial statements of Borrower and its Subsidiaries is so
required. For example, the Consolidated Debt to Consolidated EBITDA Ratio as
of the end of the fiscal quarter of Borrower ended December 31, 1997, will be
determined from the consolidated financial statements of Borrower and its
Subsidiaries as of and for fiscal quarter ended December 31, 1997 (which are
required to be delivered to the Agent and the Banks on or before April 10,
1998), and will be used in determining the Applicable Standby Letter of Credit
Commitment Fee Rate from and after May 1, 1998. Notwithstanding the
foregoing, in no event shall any provision contained in this definition be
construed as permitting Borrower to any time have a Consolidated Debt to
Consolidated EBITDA Ratio greater than the maximum Consolidated Debt to
Consolidated EBITDA Ratio permitted by Section 6.01(q)(ii) of this Agreement
at such time.
Attorneys' Fees shall mean the reasonable value of the services (and
costs, charges and expenses related thereto) of the attorneys (and all
paralegals, accountants and other staff employed by such attorneys) employed
by the Agent or any of the Banks (including, without limitation, attorneys and
paralegals who are employees of the Agent or any of the Banks or are employees
of any affiliate of the Agent or any of the Banks) from time to time (a) in
connection with the negotiation, preparation, execution, delivery, amendment,
modification, extension, renewal, administration and/or enforcement of this
Agreement and/or any of the other Transaction Documents, (b) in connection
with the preparation, negotiation or execution of any waiver or consent with
respect to this Agreement or any of the other Transaction Documents, (c) in
connection with any Default or Event of Default under this Agreement or any
default or event of default under any of the other Transaction Documents, (d)
to represent the Agent or any of the Banks in any litigation, contest,
dispute, suit or proceeding, or to commence, defend or intervene in any
litigation, contest, dispute, suit or proceeding, or to file any petition,
complaint, answer, motion or other pleading or to take any other action in or
with respect to any litigation, contest, dispute, suit or proceeding (whether
instituted by the Agent, any of the Banks, Borrower, any other Obligor or any
other Person and whether in bankruptcy or otherwise) in any way or respect
relating to this Agreement or any of the other Transaction Documents,
Borrower, any other Obligor, any Subsidiary or any Collateral, (e) to protect,
collect, lease, sell, take possession of or liquidate any Collateral, (f) to,
if an Event of Default under this Agreement has occurred and is continuing,
attempt to enforce any security interest in or other Lien upon any Collateral
or to give any advice with respect to such enforcement and/or (g) to, if an
Event of Default under this Agreement has occurred and is continuing, enforce
any of the rights or remedies of the Agent or any of the Banks to collect any
of the Borrower's Obligations and/or any obligations of any of the Guarantors
under Section 9 of this Agreement.
Bank(s) shall mean each bank listed on the signature pages hereof, and
its successors and assigns.
Borrower Security Agreement shall mean that certain Security Agreement
dated March 24, 1998, and executed by Borrower in favor of the Collateral
Agent for the equal and ratable benefit of the Creditors, as the same may from
time to time be amended, modified, extended or renewed.
Borrower's Obligations shall mean any and all present and future
indebtedness (principal, interest, fees, collection costs and expenses,
Attorneys' Fees and other amounts), liabilities, obligations (including,
without limitation, reimbursement obligations with respect to Letters of
Credit issued by Mercantile for the account of Borrower) and indemnities of
Borrower to the Agent and/or any one or more of the Banks evidenced by or
arising under this Agreement, the Notes, the Letter of Credit Applications
and/or any of the other Transaction Documents.
Borrowing Base shall mean, as of the date of any determination thereof,
the sum of:
(a) Eighty Percent (80%) of the face amount of all then existing
Eligible Accounts of Borrower; plus
(b) Sixty-Five Percent (65%) of the Eligible Inventory of
Borrower, valued at the lower of cost or market in accordance with GAAP; plus
(c) Forty Percent (40%) of the net book value of all Eligible
Machinery and Equipment of Borrower, determined in accordance with GAAP; plus
(d) Eighty Percent (80%) of the face amount of all then existing
Eligible Accounts of Huntco Nevada; plus
(e) Sixty-Five Percent (65%) of the Eligible Inventory of Huntco
Nevada, valued at the lower of cost or market in accordance with GAAP; plus
(f) Forty Percent (40%) of the net book value of all Eligible
Machinery and Equipment of Huntco Nevada, determined in accordance with GAAP;
plus
(g) Eighty Percent (80%) of the face amount of all then existing
Eligible Accounts of Huntco Steel; plus
(h) Sixty-Five Percent (65%) of the Eligible Inventory of Huntco
Steel, valued at the lower of cost or market in accordance with GAAP; plus
(i) Forty Percent (40%) of the net book value of all Eligible
Machinery and Equipment of Huntco Steel, determined in accordance with GAAP;
plus
(j) Eighty Percent (80%) of the face amount of all then existing
Eligible Accounts of Midwest Products; plus
(k) Sixty-Five Percent (65%) of the Eligible Inventory of
Midwest Products, valued at the lower of cost or market in accordance with
GAAP; plus
(l) Forty Percent (40%) of the net book value of all Eligible
Machinery and Equipment of Midwest Products, determined in accordance with
GAAP; plus
(m) Eighty Percent (80%) of the face amount of all then existing
Eligible Accounts of HSI Aviation; plus
(n) Sixty-Five Percent (65%) of the Eligible Inventory of HSI
Aviation, valued at the lower of cost or market in accordance with GAAP; plus
(o) Forty Percent (40%) of the net book value of all Eligible
Machinery and Equipment of HSI Aviation, determined in accordance with GAAP;
plus
(p) $9,000,000.00; minus
(q) the then aggregate outstanding principal balances of all of the
Private Placement Notes.
Borrowing Base Certificate shall have the meaning ascribed thereto in
Section 2.01(b).
Capital Expenditure shall mean any expenditure which, in accordance with
GAAP, is required to be capitalized on the balance sheet of the Person making
the same.
Capitalized Lease shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which in accordance with GAAP is required to
be capitalized on the balance sheet of such Person.
Capitalized Lease Obligations of any Person shall mean, as of the date of
any determination thereof, the amount at which the aggregate rental
obligations due and to become due under all Capitalized Leases under which
such Person is a lessee would be reflected as a liability on a balance sheet
of such Person in accordance with GAAP.
CERCLA shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq., and as the same
may from time to time be further amended.
Co-Agents shall mean Xxxxxx Trust and Savings Bank and The First National
Bank of Chicago.
Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of the
Code shall be construed to also refer to any successor sections.
Collateral shall have the meaning ascribed thereto in each of the
Security Agreements.
Collateral Agent shall mean Mercantile Bank National Association, in its
capacity as collateral agent under the Intercreditor Agreement and the
Security Agreements, and its successors in such capacity.
Collateral Release Date shall have the meaning ascribed thereto in the
Intercreditor Agreement.
Commitment shall mean, subject to termination or reduction as set forth
in Section 2.07 and subject to any assignments of the Commitments by the
Banks: with respect to Mercantile, $20,000,000.00; with respect to Xxxxxx
Trust and Savings Bank, $20,000,000.00; with respect to The First National
Bank of Chicago, $20,000,000.00; with respect to Bank of America NT&SA,
$10,000,000.00; and with respect to SunTrust Bank, Atlanta, $10,000,000.00.
Consolidated Debt shall mean, as of the date of any determination
thereof, all Debt of Borrower and its Subsidiaries as of such date, determined
on a consolidated basis and in accordance with GAAP.
Consolidated Debt Service Coverage Ratio shall mean, for the period in
question, the ratio of (a) Consolidated EBITDAR during such period to (b) the
sum of (i) the aggregate amount of all principal payments required to be made
by Borrower and its Subsidiaries on all Debt during the one (1) year period
immediately following the end of such period (including the principal portion
of payments in respect of Capitalized Leases but excluding principal payments
on the Loans) plus (ii) Consolidated Interest Expense during such period plus
(iii) Consolidated Operating Lease Expense during such period, all determined
on a consolidated basis and in accordance with GAAP.
Consolidated Debt to Consolidated EBITDA Ratio shall mean, as of the last
day of any fiscal quarter of Borrower, the ratio of (a) Consolidated Debt as
of such day to (b) Consolidated EBITDA for the four (4) consecutive fiscal
quarter period of Borrower ending on such day.
Consolidated EBITDA shall mean, for the period in question, the sum of
(a) Consolidated Net Income during such period plus (b) to the extent deducted
in determining Consolidated Net Income, the sum of (i) Consolidated Interest
Expense during such period, plus (ii) all provisions for any Federal, state,
local and/or foreign income taxes made by Borrower and its Subsidiaries during
such period (whether paid or deferred) plus (iii) all depreciation and
amortization expenses of Borrower and its Subsidiaries during such period, all
determined on a consolidated basis and in accordance with GAAP.
Consolidated EBITDAR shall mean, for the period in question, the sum of
(a) Consolidated Net Income during such period plus (b) to the extent deducted
in determining Consolidated Net Income, the sum of (i) the Consolidated
Interest Expense during such period, plus (ii) all provisions for any Federal,
state, local and/or foreign income taxes made by Borrower and its Subsidiaries
during such period (whether paid or deferred), plus (iii) all depreciation and
amortization expenses of Borrower and its Subsidiaries during such period plus
(iv) Consolidated Operating Lease Expense during such period, all determined
on a consolidated basis and in accordance with GAAP.
Consolidated Funded Debt shall mean, as of the date of any determination
thereof, all Debt of Borrower and its Subsidiaries as of such date which is
properly classified as long-term debt in accordance with GAAP, including,
without limitation, (a) all Debt of Borrower and its Subsidiaries which by its
terms matures more than one year from the date of creation or which may be
renewed or extended at the option of the obligor for more than one year from
such date, (b) all Capitalized Lease Obligations of Borrower and its
Subsidiaries and (c) all Guarantees by Borrower and its Subsidiaries of Funded
Debt of others (which Debt is properly classified as long-term debt in
accordance with GAAP), all determined on a consolidated basis and in
accordance with GAAP.
Consolidated Interest Expense shall mean, for the period in question,
without duplication, all gross interest expense of Borrower and its
Subsidiaries (including, without limitation, all commissions, discounts and/or
related amortization and other fees and charges owed by Borrower and its
Subsidiaries with respect to letters of credit and bankers' acceptance
financing, the net costs associated with interest swap obligations of Borrower
and its Subsidiaries, capitalized interest expense, the interest portion of
Capitalized Lease Obligations and the interest portion of any deferred payment
obligation) during such period, all determined on a consolidated basis and in
accordance with GAAP.
Consolidated Net Income and Consolidated Net Loss shall mean, for the
period in question, the after-tax net income or loss of Borrower and its
Subsidiaries during such period, determined on a consolidated basis and in
accordance with GAAP, but excluding in any event the following:
(a) any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, transfer or other
disposition of fixed or capital assets (i.e., assets other than current
assets);
(b) any gains resulting from any reappraisal, revaluation
or write-up of assets;
(c) any equity of Borrower or any Subsidiary in the
undistributed earnings of any corporation which is not a Subsidiary (unless
Borrower or any Subsidiary owns a sufficient number of shares of voting stock
of such corporation to elect a majority of the Board of Directors of such
corporation);
(d) undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or other distributions by such
Subsidiary is not at the time permitted by the terms of its charter documents
or any agreement, document, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Subsidiary;
(e) any earnings of any Person acquired by Borrower or any
Subsidiary through purchase, merger or consolidation or otherwise for any
fiscal period prior to the fiscal period in which the acquisition occurs;
(f) any deferred credit representing the excess of equity
in any Subsidiary at the date of acquisition over the cost of the investment
in such Subsidiary;
(g) gains from the acquisition or disposition of
Investments (other than Investments of the types described in clauses (c),
(d), (e) and (f) of the definition of Restricted Investments) or from the
retirement or extinguishment of Debt;
(h) gains on collections from insurance (other than
business interruption insurance) policies or settlements (net of premiums paid
or other expenses incurred with respect to such gains during the fiscal period
in which the gain occurs, to the extent such premiums or other expenses are
not already reflected in Consolidated Net Income for such fiscal period);
(i) any restoration to income of any contingency reserve
(but only if such restoration to income is in an amount in excess of
$500,000.00), except to the extent that provision for such reserve was made
out of income accrued during such period;
(j) any net income or gain (but not any net loss) during
such period from any change in accounting principles, from any discontinued
operations or the disposition thereof or from any prior period adjustments;
and
(k) any extraordinary gains and/or losses;
all determined in accordance with GAAP. If the preceding calculation results
in a number less than zero, such amount shall be considered a Consolidated Net
Loss.
Consolidated Net Worth shall mean, as of the date of any determination
thereof, the amount of the capital stock accounts (net of treasury stock, at
cost) of Borrower and its Subsidiaries as of such date plus (or minus in the
case of a deficit) the surplus and retained earnings of Borrower and its
Subsidiaries as of such date, all determined on a consolidated basis and in
accordance with GAAP.
Consolidated Operating Lease Expense shall mean, for the period in
question, the aggregate amount of all Operating Lease Expenses of Borrower and
its Subsidiaries during such period, all determined on a consolidated basis
and in accordance with GAAP.
Consolidated Tangible Net Worth shall mean, as of the date of any
determination thereof, the sum of (a) Consolidated Net Worth as of such date
minus (b) the book value of all Intangible Assets of Borrower and its
Subsidiaries as of such date minus (c) to the extent not reflected as a
liability on the consolidated balance sheet of Borrower and its Subsidiaries
as of such date, all Indebtedness of Borrower and its Subsidiaries of the
types described in clauses (b) and (c) of the definition of Indebtedness as of
such date, all determined on a consolidated basis and in accordance with GAAP.
Consolidated Total Capitalization shall mean, as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt as of such date
plus (b) Consolidated Net Worth as of such date, all determined on a
consolidated basis and in accordance with GAAP.
Creditors shall have the meaning ascribed thereto in the Intercreditor
Agreement.
Default shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default as defined in Section 7 hereof.
Debt of any Person shall mean, as of the date of determination thereof,
the sum of (a) all Indebtedness of such Person for borrowed money and/or which
has been incurred in connection with the purchase or other acquisition of
Property or assets (other than unsecured trade accounts payable incurred in
the ordinary course of business) and/or which bears interest plus (b) all
Capitalized Lease Obligations of such Person plus (c) all Guarantees by such
Person of Debt of others.
Distribution in respect of any corporation shall mean:
(a) dividends or other distributions (other than stock dividends
and stock splits) on or in respect of any of the capital stock of such
corporation; and
(b) the redemption, repurchase or other acquisition of any
capital stock of such corporation or of any warrants, rights or other options
to purchase any such capital stock (except when solely in exchange for such
stock).
Domestic Business Day shall mean any day except a Saturday, Sunday or
legal holiday observed by the Agent or by commercial banks in St. Louis,
Missouri.
Eligible Accounts shall mean all Accounts other than: (a) Accounts which
remain unpaid for more than ninety (90) days after their invoice dates and
Accounts which are not due and payable within ninety (90) days after their
invoice dates; (b) Accounts which are evidenced by a promissory note or other
"instrument" (as defined in the applicable Uniform Commercial Code); (c)
Accounts with respect to which the Account Debtor is an Affiliate of Borrower
or any of the Guarantors; (d) Accounts with respect to which payment by the
Account Debtor is or may be conditional and Accounts commonly known as xxxx
and hold Accounts or Accounts of a similar or like arrangement; (e) Accounts
with respect to which the Account Debtor is the United States of America, any
state of the United States or any other governmental body or any department,
agency or instrumentality of any of the foregoing, unless such Accounts are
duly assigned to the Collateral Agent for the equal and ratable benefit of the
Creditors in accordance with all applicable governmental and regulatory rules
and regulations (including, without limitation, the Federal Assignment of
Claims Act of 1940, as amended, if applicable) so that the Collateral Agent is
recognized by the Account Debtor to have all of the rights of an assignee of
such Accounts; (f) Accounts with respect to which the goods giving rise
thereto have not been shipped and delivered to and accepted as satisfactory by
the Account Debtor thereof or with respect to which the services performed
giving rise thereto have not been completed and accepted as satisfactory by
the Account Debtor thereof; (g) Accounts which are not invoiced (and dated as
of such date) and sent to the Account Debtor thereof concurrently with or not
later than fifteen (15) days after the shipment and delivery to said Account
Debtor of the goods giving rise thereto or the performance of the services
giving rise thereto; (h) Accounts with respect to which possession and/or
control of the goods sold giving rise thereto is held, maintained or retained
by Borrower or any of the Guarantors (or by any agent or custodian of Borrower
or any of the Guarantors) for the account of or subject to further and/or
future direction from the Account Debtor thereof; (i) Accounts arising from a
consignment sale, a "sale on approval" or a "sale or return"; (j) Accounts
with respect to which the Account Debtor is located in the State of New
Jersey, the State of Minnesota or the State of West Virginia; provided,
however, that such restriction shall not apply if Borrower and/or the
applicable Guarantor(s), as the case may be, (i) have filed and have effective
(A) in respect of Account Debtors located in the State of New Jersey, a Notice
of Business Activities Report with the State of New Jersey Division of
Taxation for the then current year, (B) in respect of Account Debtors located
in the State of Minnesota, a Minnesota Business Activity Report with the
Minnesota Department of Revenue for the then current year or (C) in respect of
Account Debtors located in the State of West Virginia, a West Virginia
Business Activity Report with the West Virginia Department of Tax and Revenue
for the then current year, as applicable, or (ii) are otherwise exempt from
such reporting requirements under the laws of such State(s); and (k) Accounts
which are not subject to a first priority perfected security interest in favor
of the Collateral Agent for the equal and ratable benefit of the Creditors.
Eligible Inventory shall mean all Inventory of Borrower and each of the
Guarantors which consists of raw materials or finished goods (specifically
excluding any Inventory of Borrower and each of the Guarantors which consists
of work-in-process) other than: (a) any Inventory which is obsolete; (b) any
raw materials which have been in Inventory for more than one hundred twenty
(120) days; (c) any finished goods which have been in finished goods Inventory
for more than one hundred twenty (120) days; (d) any Inventory which is not
located in the continental United States of America; (e) any Inventory (other
than Inventory in transit to Borrower or the applicable Guarantor in the
ordinary course of its business) which is not located at the chief executive
office of Borrower or the applicable Guarantor, as the case may be, one of the
locations listed on Exhibit A to the Security Agreement executed by Borrower
or the applicable Guarantor, as the case may be, or another location with
respect to which Borrower or the applicable Guarantor, as the case may be, has
complied with all of the requirements of Section 3(b) of the Security
Agreement executed by Borrower or such Guarantor; (f) any Inventory which
Borrower or the applicable Guarantor, as the case may be, has sold to any
customer on consignment or on approval or on any other basis which entitles
the customer to return, or which may obligate Borrower or the applicable
Guarantor, as the case may be, to repurchase, such Inventory; and (g) any
Inventory which is not subject to a first priority perfected security interest
in favor of the Collateral Agent for the equal and ratable benefit of the
Creditors.
Eligible Machinery and Equipment shall mean all machinery and equipment
of Borrower and each of the Guarantors other than: (a) any machinery or
equipment which is not used or usable in the ordinary course of business of
Borrower or the applicable Guarantor; (b) any machinery and equipment which is
not located in the continental United States of America; (c) any machinery and
equipment which is not located at the chief executive office of Borrower or
the applicable Guarantor, as the case may be, one of the locations listed on
Exhibit A to the Security Agreement executed by Borrower or the applicable
Guarantor, as the case may be, or another location with respect to which
Borrower or the applicable Guarantor, as the case may be, has complied with
all of the requirements of Section 3(b) of the Security Agreement executed by
Borrower or such Guarantor; and (d) any machinery and equipment which is not
subject to a first priority perfected security interest in favor of the
Collateral Agent for the equal and ratable benefit of the Creditors.
Environmental Claim shall mean any administrative, regulatory or judicial
action, judgment, order, consent decree, suit, demand, demand letter, claim,
Lien, notice of noncompliance or violation, investigation or other proceeding
arising (a) pursuant to any Environmental Law or governmental or regulatory
approval issued under any such Environmental Law, (b) from the presence, use,
generation, storage, treatment, Release, threatened Release, disposal,
remediation or other existence of any Hazardous Substance, (c) from any
removal, remedial, corrective or other response action pursuant to an
Environmental Law or the order of any governmental or regulatory authority or
agency, (d) from any third party seeking damages, contribution,
indemnification, cost recovery, compensation, injunctive or other relief in
connection with a Hazardous Substance or arising from alleged injury or threat
of injury to health, safety, natural resources or the environment or (e) from
any Lien against any Property owned, leased or operated by Borrower or any
Subsidiary in favor of any governmental or regulatory authority or agency in
connection with a Release, threatened Release or disposal of a Hazardous
Substance.
Environmental Law shall mean any international, Federal, state or
local statute, law, rule, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty, convention,
ordinance or other requirement relating to public health, safety or the
environment, including, without limitation, those relating to Releases to air,
water, land or groundwater, to the withdrawal or use of groundwater, to the
use and handling of polychlorinated biphenyls or asbestos, to the disposal,
treatment, storage or management of hazardous or solid waste, Hazardous
Substances or crude oil, or any fraction thereof, to exposure to toxic or
hazardous materials, to the handling, transportation, discharge or release of
gaseous or liquid Hazardous Substances and any rule, regulation, order, notice
or demand issued pursuant to such law, statute or ordinance, in each case
applicable to any of the Property owned, leased or operated by Borrower or any
Subsidiary or the operation, construction or modification of any such
Property, including, without limitation, the following: CERCLA, the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act
of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous
Materials Transportation Act, as amended, the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water
Control Act, the Clean Air Act of 1966, as amended, the Toxic Substances
Control Act of 1976, the Occupational Safety and Health Act of 1970, as
amended, the Emergency Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and
any similar or implementing state or local law, and any state or local statute
and any further amendments to these laws providing for financial
responsibility for cleanup or other actions with respect to the Release or
threatened Release of Hazardous Substances or crude oil, or any fraction
thereof and all rules, regulations, guidance documents and publication
promulgated thereunder.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
ERISA Affiliate shall mean any corporation, trade or business that is,
along with Borrower or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b) and 414(c), respectively, of the Code or Section 4001 of
ERISA.
Eurodollar Business Day shall mean any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
Event of Default shall have the meaning ascribed thereto in Section 7.
Existing Letters of Credit shall have the meaning ascribed thereto in
Section 3.02.
Fed Funds Rate shall mean a rate per annum equal to Mercantile's quoted
rate as of the opening of business by Mercantile on each Domestic Business Day
for purchasing overnight federal funds in the national market, which rate
shall fluctuate as and when said quoted rate shall change.
Financial Covenant shall mean, with respect to any agreement, document or
instrument representing or governing Debt, any covenant (whether expressed as
a covenant, an event of default or a condition to a borrowing) contained
therein expressed in terms of (a) a minimum or maximum amount in or derived
from Borrower's financial statements or (b) a minimum or maximum ratio between
any such amounts described in clause (a) above or (c) any other financial or
finance-related test as the same may relate to the assets, liabilities,
revenues or expenses of Borrower and/or its Subsidiaries; provided that the
above shall not include a negative pledge covenant.
GAAP shall mean generally accepted accounting principles at the time in
the United States.
Guarantee by any Person shall mean any obligation (other than
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business), contingent or otherwise, of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness, liability, dividend
or other obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such Person: (a) to
purchase such Indebtedness or obligation or any Property or assets
constituting security therefor, (b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness or obligation, (ii) to maintain
working capital or other balance sheet condition or otherwise to advance or
make available funds for the purchase or payment of such Indebtedness or
obligation, (iii) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor against loss in
respect thereof. For the purposes of all computations made under this
Agreement, a Guarantee in respect of any Indebtedness for borrowed money shall
be deemed to be Indebtedness equal to the then outstanding principal amount of
such Indebtedness for borrowed money which has been guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited, and a Guarantee in respect of any other obligation or
liability or any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation, liability or dividend or such
lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited. Guarantee when used as a verb shall have a correlative
meaning.
Hazardous Substance shall mean any hazardous or toxic material, substance
or waste, pollutant or contaminant which is regulated under any Environmental
Law or any other statute, law, ordinance, rule or regulation of any local,
state, regional, Federal or international authority having jurisdiction over
any of the Property owned, leased or operated by Borrower or any Subsidiary or
its use, including, without limitation, any material, substance or waste which
is: (a) defined as a hazardous substance under Section 311 of the Federal
Water Pollution Control Act (33 U.S.C. Section 1317), as amended; (b)
regulated as a hazardous waste under Section 1004 or Section 3001 of the
Federal Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as
amended; or (d) defined or regulated as a hazardous substance or hazardous waste
under any rules orregulations promulgated under any of the foregoing statutes.
HSI Aviation Security Agreement shall mean that certain Security
Agreement dated March 24, 1998, and executed by HSI Aviation in favor of the
Collateral Agent for the equal and ratable benefit of the Creditors, as the
same may from time to time be amended, modified, extended or renewed.
Huntco Nevada Security Agreement shall mean that certain Security
Agreement dated March 24, 1998, and executed by Huntco Nevada in favor of the
Collateral Agent for the equal and ratable benefit of the Creditors, as the
same may from time to time be amended, modified, extended or renewed.
Huntco Steel Security Agreement shall mean that certain Security
Agreement dated March 24, 1998, and executed by Huntco Steel in favor of the
Collateral Agent for the equal and ratable benefit of the Creditors, as the
same may from time to time be amended, modified, extended or renewed.
Indebtedness shall mean, with respect to any Person, without duplication,
all indebtedness, liabilities and obligations of such Person which in
accordance with GAAP are required to be classified upon a balance sheet of
such Person as liabilities of such Person, and in any event shall include (a)
all obligations of such Person for borrowed money or which have been incurred
in connection with the purchase or other acquisition of Property or assets,
(b) all obligations secured by any Lien on, or payable out of the proceeds of
or production from, any Property or assets owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligations, (c) all indebtedness, liabilities and obligations of third
parties, including joint ventures and partnerships of which such Person is a
venturer or general partner, recourse to which may be had against such Person,
(d) all obligations created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to
repossession or sale of such Property, (e) all Capitalized Lease Obligations
of such Person, (f) all indebtedness, liabilities and obligations of such
Person under Guarantees and (g) all unpaid reimbursement obligations of such
Person with respect to letters of credit issued for the account of such Person
which have been drawn on.
Intangible Assets shall mean all patents, trademarks, service marks,
copyrights, trade names, goodwill (including any amounts, however designated,
representing the cost of acquisition of business and investments in excess of
the book value thereof), unamortized debt discount and expense, unamortized
deferred charges, deferred research and development costs, any write-up of
asset value after the date of this Agreement, non-competition covenants,
signing bonuses and any other assets treated as intangible assets under GAAP.
Intercreditor Agreement shall mean that certain Collateral Agency and
Intercreditor Agreement dated March 24, 1998, by and among Borrower, the
Guarantors, the Creditors and the Collateral Agent, as the same may from time
to time be amended, modified, extended or renewed.
Interest Period shall mean with respect to each LIBOR Loan:
(a) initially, the period commencing on the date of such
Loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed
upon in writing by Borrower and all of the Banks), as the Borrower may elect
in the applicable Notice of Borrowing; and
(b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan and ending 1, 2, 3
or 6 months thereafter (or such other period agreed upon in writing by
Borrower and all of the Banks), as Borrower may elect pursuant to Section
2.04;
provided that:
(c) subject to clauses (d) and (e) below, any Interest
Period which would otherwise end on a day which is not a Eurodollar Business
Day shall be extended to the next succeeding Eurodollar Business Day unless
such Eurodollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Eurodollar Business Day;
(d) subject to clause (e) below, any Interest Period which
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Eurodollar Business Day
of a calendar month; and
(e) no Interest Period shall extend beyond the last day of
the Revolving Credit Period.
Inventory shall mean all inventory of each of the Guarantors, valued at
the lower of cost or market in accordance with GAAP.
Investment shall mean any investment by Borrower or any Subsidiary in
any Person, whether payment therefor is made in cash or capital stock of
Borrower or any Subsidiary, and whether such investment is by acquisition of
stock or Indebtedness, or by loan, advance, transfer of property out of the
ordinary course of business, capital contribution, equity or profit sharing
interest, extension of credit on terms other than those normal in the ordinary
course of business or otherwise.
Letter of Credit and Letters of Credit shall have the meanings ascribed
thereto in Section 3.01(a).
Letter of Credit Application shall mean an application and agreement for
irrevocable standby letter of credit in the form of Exhibit E attached hereto
and incorporated herein by reference (or such other form as may then be
Mercantile's standard form of application and agreement for irrevocable
standby letter of credit) or an application and agreement for irrevocable
commercial letter of credit in the form of Exhibit F attached hereto and
incorporated herein by reference (or such other form as may then be
Mercantile's standard form of application and agreement for irrevocable
commercial letter of credit), as the case may be, in either case executed by
Borrower, as account party, and delivered to Mercantile pursuant to Section
3.01(a), as the same may from time to time be amended, modified, extended or
renewed.
Letter of Credit Commitment Fee shall have the meaning ascribed thereto
in Section 3.01(d).
Letter of Credit Issuance Fee shall have the meaning ascribed thereto in
Section 3.01(d).
Letter of Credit Loan shall have the meaning ascribed thereto in Section
3.01(c).
Letter of Credit Negotiation Fee shall have the meaning ascribed thereto
in Section 3.01(d).
Letter of Credit Request shall have the meaning ascribed thereto in
Section 3.01(a).
LIBOR Base Rate shall mean, with respect to the applicable Interest
Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available or (b) if the LIBOR Index Rate cannot be determined, the average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of the
respective rates per annum of interest at which deposits in dollars are
offered to Mercantile in the London interbank market by two (2) Eurodollar
dealers of recognized standing, selected by Mercantile in its sole discretion,
at such time on the date two (2) Eurodollar Business Days before the first day
of such Interest Period as Mercantile in its sole discretion elects, for
delivery on the first day of the applicable Interest Period for a number of
days comparable to the number of days in such Interest Period and in an amount
approximately equal to the principal amount of the LIBOR Loan to which such
Interest Period is to apply.
LIBOR Index Rate shall mean, with respect to the applicable Interest
Period, the rate per annum (rounded upwards, if necessary, to the next higher
1/100 of 1%) for deposits in U.S. Dollars for a period equal to such Interest
Period, which appears on the Telerate Page 3750 as of 9:00 a.m. (St. Louis
time) on the day two (2) Eurodollar Business Days before the first day of such
Interest Period.
LIBOR Loan shall mean any Revolving Credit Loan bearing interest at the
LIBOR Rate.
LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate divided
by (ii) one minus the applicable LIBOR Reserve Percentage plus (b) the
Applicable Margin. The LIBOR Rate shall be adjusted automatically on and as
of the effective date of any change in the LIBOR Reserve Percentage and/or the
Applicable Margin.
LIBOR Reserve Percentage shall mean for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System with respect to "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on LIBOR Loans is determined or any category of
extensions of credit or other assets which include loans by a non-United
States office of any Bank to United States residents). The LIBOR Rate shall
be adjusted automatically on and as of the effective date of any change in the
LIBOR Reserve Percentage.
Lien shall mean 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 common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust, pledge,
hypothecation, judgment lien or other lien or encumbrance of any kind or
nature whatsoever, any conditional sale or trust receipt, any lease,
consignment or bailment for security purposes and any Capitalized Lease. The
term "Lien" shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property.
Loan shall mean each Revolving Credit Loan (whether a Prime Loan or a
LIBOR Loan) and each Letter of Credit Loan and Loans shall mean any or all of
the foregoing.
Material Adverse Effect shall mean (a) a material adverse effect on the
Properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole, (b) material impairment of Borrower's or any Guarantor's ability to
perform any of its obligations under this Agreement, any of the Notes, any of
the Letter of Credit Applications or any of the other Transaction Documents or
(c) material impairment of the enforceability of the rights of, or benefits
available to, the Agent or any of the Banks under this Agreement, any of the
Notes, any of the Letter of Credit Applications or any of the other
Transaction Documents.
Mercantile shall mean Mercantile Bank National Association, a national
banking association, in its individual corporate capacity as a Bank hereunder
and not as Agent hereunder.
Midwest Products Security Agreement shall mean that certain Security
Agreement dated March 24, 1998, and executed by Midwest Products in favor of
the Collateral Agent for the equal and ratable benefit of the Creditors, as
the same may from time to time be amended, modified, extended or renewed.
Moody's shall mean Xxxxx'x Investors Service, Inc.
Multi-Employer Plan shall mean a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of Borrower, any
Subsidiary or any ERISA Affiliate or to which Borrower, any Subsidiary or any
ERISA Affiliate has contributed in the past or currently contributes.
Note Purchase Agreements shall mean those certain Note Purchase
Agreements dated July 14, 1995, by and among Borrower and each of Principal
Mutual Life Insurance Company, Nippon Life Insurance Company of America,
Transamerica Life Insurance and Annuity Company, Transamerica Assurance
Company, Transamerica Occidental Life Insurance Company, ProvidentMutual Life
and Annuity Company of America, Berkshire Life Insurance Company and The
Security Mutual Life Insurance Company of Lincoln, Nebraska, as amended by
that certain First Amendment to Note Purchase Agreements dated March 24, 1998,
and as the same may from time to time be further amended, modified, extended
or renewed.
Notes shall have the meaning ascribed thereto in Section 2.03(a).
Notice of Borrowing shall have the meaning ascribed thereto in Section
2.02.
Obligor shall mean Borrower, each Guarantor and each other Person who is
or shall at any time hereafter become primarily or secondarily liable on any
of the Borrower's Obligations or who grants the Agent or any of the Banks a
Lien upon any of the Property or assets of such Person as security for any of
the Borrower's Obligations.
Occupational Safety and Health Laws shall mean the Occupational Safety
and Health Act of 1970, as amended, and any other Federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning employee
health and/or safety, as now or at any time hereafter in effect.
Operating Lease shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which is not a Capitalized Lease.
Operating Lease Expenses shall mean with respect to any Person, for the
period in question, the aggregate amount of rental and other expenses incurred
by such Person in respect of Operating Leases during such period, all
determined in accordance with GAAP.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan," as such term is defined in
Section 3(2) of ERISA, which is established or maintained by Borrower, any
Subsidiary or any ERISA Affiliate, other than a Multi-Employer Plan.
Permitted Liens shall mean any of the following:
(a) Liens in favor of the Collateral Agent for the equal
and ratable benefit of the Creditors under the Security Agreements;
(b) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided payment thereof is not at the time
required by Section 6.01(d) and/or 6.01(e);
(c) Liens (other than any Liens imposed by ERISA)
incidental to the conduct of business or the ownership of Properties and
assets (including Liens in connection with worker's compensation, unemployment
insurance and other like laws, warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money or the
purchase or other acquisition of Property; provided in each case the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings being diligently conducted and for
which adequate reserves in accordance with GAAP have been set aside;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as to the use of
real properties, which are necessary or desirable for the conduct of the
activities of Borrower and its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair the use of such real
properties in the operation of the business of the Borrower and its
Subsidiaries;
(e) Liens existing as of the date of this Agreement and
listed on Schedule 5.12 attached hereto; and
(f) other Liens created or incurred by Borrower or any
Subsidiary after the date of this Agreement on any Property or assets of
Borrower or any Subsidiary, provided that (i) all Indebtedness secured by
Liens permitted by this clause (f) shall have been incurred within the
limitations provided in this Agreement and (ii) the sum of (A) the aggregate
outstanding principal amount of all Indebtedness secured by Liens permitted by
this clause (f) plus (B) the aggregate outstanding principal amount of all
Indebtedness (other than Indebtedness permitted by Sections 6.02(a)(i),
6.02(a)(ii), 6.02(a)(iii), 6.02(a)(iv) and 6.02(a)(v) of this Agreement) of
the Subsidiaries of Borrower, determined on a combined basis for all
Subsidiaries of Borrower and without duplication, does not at any time exceed
Ten Percent (10%) of Consolidated Tangible Net Worth as of the end of the
fiscal quarter of Borrower immediately preceding the date of determination.
Person shall mean any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity or government (whether national,
Federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department
thereof).
Prime Loan shall mean any Revolving Credit Loan bearing interest at the
Adjusted Prime Rate.
Prime Rate shall mean the interest rate announced from time to time by
Mercantile as its "prime rate" on commercial loans (which rate shall fluctuate
as and when said prime rate shall change). Borrower acknowledges that such
"prime rate" is a reference rate and does not necessarily represent the lowest
or best rate offered by Mercantile or any of the Banks to their respective
customers.
Private Placement Notes shall mean all of the notes from time to time
issued under the Note Purchase Agreements, as the same may from time to time
be amended, modified, extended or renewed.
Property shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible. Properties shall
mean the plural of Property. For purposes of this Agreement, Borrower and
each Subsidiary shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, financing lease or
other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person for security purposes.
Pro Rata Share shall mean, with respect to each Bank, a percentage, the
numerator of which is the Commitment of such Bank and the denominator of which
is the total Commitments of all of the Banks. The Pro Rata Shares of each of
the Banks as of the date of this Agreement are as follows: Mercantile - 25%;
Xxxxxx Trust and Savings Bank - 25%; The First National Bank of Chicago - 25%;
Bank of America NT&SA - 12.5%; and SunTrust Bank, Atlanta - 12.5%.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as amended.
Regulatory Change shall have the meaning ascribed thereto in Section
2.13.
Release shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
(other than disposals in compliance with all applicable Environmental Laws)
into the environment, including, without limitation, the abandonment or
discarding of barrels, drums, containers, tanks and/or other receptacles
containing (or containing traces of) any Hazardous Substance.
Reportable Event shall have the meaning given to such term in ERISA.
Required Banks shall mean at any time Banks having Sixty-Six and 67/100
Percent (66.67%) of the aggregate amount of Loans and Letters of Credit then
outstanding or, if no Loans or Letters of Credit are then outstanding, Sixty-
Six and 67/100 Percent (66.67%) of the total Commitments of all of the Banks.
Restricted Agreement shall have the meaning ascribed thereto in Section
6.02(o).
Restricted Investment shall mean any Investment, or any expenditure or
any incurrence of any liability to make any expenditure for an Investment,
other than:
(a) loans and/or advances by Borrower or a Subsidiary to a
Subsidiary;
(b) loans and/or advances by any Subsidiary to Borrower
which are subordinated in writing to the payment of the Borrower's Obligations
in form and substance satisfactory to the Required Banks;
(c) direct obligations of the United States of America or
any instrumentality or agency thereof, the payment of which is unconditionally
guaranteed by the United States of America or any instrumentality or agency
thereof (all of which Investments must mature within twelve (12) months from
the time of acquisition thereof);
(d) Investments in readily marketable commercial paper
which, at the time of acquisition thereof by Borrower or any Subsidiary, is
rated A-1 or better by S&P and P-1 or better by Moody's and which matures
within 270 days from the date of acquisition thereof, provided that the issuer
of such commercial paper shall, at the time of acquisition of such commercial
paper, have a senior long-term debt rating of at least A by S&P and Moody's;
(e) negotiable certificates of deposit or negotiable
bankers acceptances issued by any of the Banks or any other bank or trust
company organized under the laws of the United States of America or any state
thereof, which bank or trust company (other than the Banks to which such
restrictions shall not apply) is a member of both the Federal Deposit
Insurance Corporation and the Federal Reserve System and is rated B or better
by Thompsons Bank Watch Service (all of which Investments must mature within
twelve (12) months from the time of acquisition thereof);
(f) repurchase agreements, which shall be collateralized
for at least 102% of face value, issued by any of the Banks or any other bank
or trust company organized under the laws of the United States or any state
thereof, which bank or trust company (other than the Banks to which such
restrictions shall not apply) is a member of both the Federal Deposit
Insurance Corporation and the Federal Reserve System and is rated B or better
by Thompsons Bank Watch Service (all of which Investments must mature within
twelve (12) months from the time of acquisition thereof);
(g) Investments existing as of the date hereof as described
in Schedule 5.18 attached hereto, and any future retained earnings in respect
thereof;
(h) Investments in a Subsidiary (including Investments in a
corporation which immediately becomes a Subsidiary as a result of such
Investments);
(i) additional Investments which in the aggregate do not
exceed the greater of (A) $15,000,000.00 or (B) Ten Percent (10%) of
Consolidated Tangible Net Worth as of the end of the fiscal quarter of
Borrower immediately preceding the date of determination; and
(j) loans or advances in the usual and ordinary course of
business to officers, directors and employees for business expenses.
Revolving Credit Loan and Revolving Credit Loans shall have the meanings
ascribed thereto in Section 2.01(a).
Revolving Credit Period shall mean the period commencing on the date of
this Agreement and ending October 31, 1999.
S&P shall mean Standard and Poor's Ratings Group.
Security Agreements shall mean the Borrower Security Agreement, the HSI
Aviation Security Agreement, the Huntco Nevada Security Agreement, the Huntco
Steel Security Agreement and the Midwest Products Security Agreement.
Specified Collateral shall mean, with respect to a Person, all of such
Person's now owned and existing and hereafter created, acquired or arising
right, title and interest in, to and under the following described property,
wherever located: (a) all accounts, contract rights, chattel paper, documents,
instruments and other forms of obligation and other rights to the payment of
money, and all goods whose sale, lease, rental or other disposition by such
Person have given rise to Accounts and have been returned to or repossessed or
stopped in transit by such Person; (b) all inventory of such Person, whether
in transit, held by others for such Person's account, covered by warehouse
receipts, purchase orders and/or contracts, or in the possession of any
carriers, forwarding agents, truckers, warehousemen, vendors or other Persons,
including, without limitation, all raw materials, work in process, finished
goods, supplies, goods, incidentals, office supplies and packaging and
shipping materials; (c) all goods, machinery, equipment, appliances,
furniture, furnishings, fixtures, parts, tools and supplies, together with all
accessories and parts affixed or appertaining thereto or used in connection
therewith; (d) all books, records, computer records, computer disks, ledger
cards, programs and other computer materials, customer and supplier lists,
invoices, orders and other property at any time evidencing or relating to any
of the Collateral; (e) all accessions to any of the property described above
and all substitutions, renewals, improvements and replacements of and
additions thereto; and (f) all proceeds, including, without limitation,
proceeds which constitute property of the types described in (a), (b), (c),
(d) and (e) above and any rents and profits of any of the foregoing items,
whether cash or noncash, immediate or remote, including, without limitation,
all income, accounts, contract rights, general intangibles, chattel paper,
notes, drafts, acceptances, instruments and other rights to the payment of
money arising out of the sale, rental, lease, exchange or other disposition of
any of the foregoing items, and insurance proceeds, and all products of (a),
(b), (c), (d) and (e) above, and any indemnities, warranties and guaranties
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing items.
Subordinated Indebtedness shall mean, as of the date of any determination
thereof, the aggregate principal amount of all Indebtedness of Borrower
outstanding as of such date which is subordinated in writing (either by its
terms or pursuant to a subordination agreement) to the payment and priority of
all of the Borrower's Obligations in form and substance satisfactory to the
Required Banks.
Subsidiary shall mean any corporation of which more than Fifty Percent
(50%) of the issued and outstanding capital stock entitled to vote for the
election of directors (other than by reason of default in the payment of
dividends) is at the time owned directly or indirectly by Borrower or any
Subsidiary.
Total Outstandings shall mean, as of any date, the sum of (i) the
aggregate principal amount of all Revolving Credit Loans outstanding as of
such date, plus (ii) the aggregate principal amount of all Letter of Credit
Loans outstanding as of such date plus (iii) the aggregate undrawn face amount
of all standby Letters of Credit outstanding as of such date.
Telerate Page 3750 shall mean the display designated as "Page 3750" on
the Dow Xxxxx Markets Service (or such other page as may replace Page 3750 on
that service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar Deposits).
Transaction Documents shall mean this Agreement, the Notes, the Letter of
Credit Applications, the Security Agreements, the Intercreditor Agreement and
any and all other agreements, documents and instruments heretofore, now or
hereafter delivered to the Agent or any of the Banks with respect to or in
connection with or pursuant to this Agreement, any Loans made hereunder, any
Letters of Credit issued hereunder or any of the other Borrower's Obligations,
and executed by or on behalf of Borrower or any of the Guarantors, all as the
same may from time to time be amended, modified, extended or renewed.
Welfare Plan shall mean a "welfare plan" as such term is defined in
Section 3(1) of ERISA, which is established or maintained by Borrower, any
Subsidiary or any ERISA Affiliate, other than a Multi-Employer Plan.
Wholly-Owned when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Borrower
and/or one or more of its Wholly-Owned Subsidiaries.
1.02 Accounting Terms and Determinations. Except as otherwise
specified in this Agreement, all accounting terms used in this Agreement shall
be interpreted, all accounting determinations under this Agreement shall be
made and all financial statements required to be delivered under this
Agreement shall be prepared in accordance with GAAP as in effect from time to
time, applied on a basis consistent (except for changes approved by the
Required Banks and by Borrower's independent certified public accountants)
with the most recent audited financial statements of Borrower delivered to the
Banks. Notwithstanding the foregoing, Borrower may from time to time change
its accounting methods, either at its option or in order to comply with GAAP,
provided that (a) any such change(s) are in accordance with GAAP and are
approved by the independent certified public accountants of Borrower and (b)
if the Required Banks, in good faith, determine that any such accounting
change(s), individually or in the aggregate, have any significant effect on
any of the financial covenants contained in this Agreement (i) with respect to
those financial covenant(s) upon which the effect of such accounting change(s)
can be determined with mathematical certainty, such financial covenant(s)
shall be amended to reflect the effect of such accounting change(s) (and
Borrower, each of the Guarantors, the Agent and each of the Banks shall be
obligated to promptly execute an amendment to such effect) and (ii) with
respect to those financial covenant(s) upon which the effect of such
accounting change(s) cannot be determined with mathematical certainty,
Borrower and the Banks shall, in good faith, negotiate and use their best
efforts to agree upon new financial covenant(s) reasonably acceptable to
Borrower and the Banks to replace the affected financial covenant(s) (which
new financial covenant(s) shall, to the extent reasonably possible,
approximate the effect of such accounting change(s) on the existing financial
covenant(s)), and if Borrower and the Banks cannot, in good faith, agree on
said new financial covenant(s), the existing financial covenant(s) shall
remain in full force and effect and shall be computed using the accounting
methods in effect prior to the applicable change in accounting methods. Each
such amendment shall be evidenced by an instrument in writing signed by
Borrower, each of the Guarantors, the Agent and each of the Banks and until
such amendment has been fully executed the existing financial covenant(s)
shall remain in full force and effect and shall be computed using the
accounting methods in effect prior to the applicable change in accounting
methods.
SECTION 2. THE REVOLVING CREDIT LOANS.
2.01 Commitments To Lend. (a) Subject to the terms and conditions
set forth in this Agreement and so long as no Default or Event of Default
under this Agreement has occurred and is continuing, during the Revolving
Credit Period, each Bank severally agrees to make such loans to Borrower
(individually, a "Revolving Credit Loan" and collectively, the "Revolving
Credit Loans") as Borrower may from time to time request pursuant to Section
2.02. Each Revolving Credit Loan under this Section 2.01 which is a Prime
Loan shall be for an aggregate principal amount of at least $200,000.00 or any
larger multiple of $50,000.00. Each Revolving Credit Loan under this Section
2.01 which is a LIBOR Loan shall be for an aggregate principal amount of at
least $2,000,000.00 or any larger multiple of $500,000.00. The aggregate
principal amount of Revolving Credit Loans which each Bank shall be required
to have outstanding under this Agreement at any one time shall not exceed the
lesser of (a) such Bank's Commitment at such time or (b) such Bank's Pro Rata
Share of the lesser of (i) the sum of (A) the total Commitments of all of the
Banks at such time minus (B) the aggregate principal amount of all Letter of
Credit Loans outstanding at such time minus (C) the aggregate undrawn face
amount of all Letters of Credit outstanding at such time or (ii) the sum of
(A) the Borrowing Base at such time minus (B) the aggregate principal amount
of all Letter of Credit Loans outstanding at such time minus (C) the aggregate
undrawn face amount of all standby Letters of Credit outstanding at such time.
Each Revolving Credit Loan under this Section 2.01 shall be made from the
several Banks ratably in proportion to their respective Pro Rata Shares.
Within the foregoing limits, Borrower may borrow under this Section 2.01,
prepay under Section 2.08 and reborrow at any time during the Revolving Credit
Period under this Section 2.01. The failure of any Bank to make any Revolving
Credit Loan required under this Agreement shall not release any other Bank
from its obligation to make Revolving Credit Loans as provided herein.
(b) Borrower shall deliver to the Agent and each of the Banks on
March 24, 1998 (with respect to the month ended February 28, 1998) and on the
last day of each month commencing in the month of April, 1998, a borrowing
base certificate in the form of Exhibit A attached hereto and incorporated
herein by reference (a "Borrowing Base Certificate") setting forth:
(i) the Borrowing Base and its components as of the end of the
immediately preceding month;
(ii) the aggregate principal amount of all Revolving Credit
Loans outstanding as of the end of the immediately preceding month;
(iii) the aggregate principal amount of all Letter of Credit
Loans outstanding as of the end of the immediately preceding month;
(iv) the aggregate undrawn face amount of all standby Letters
of Credit outstanding as of the end of the immediately preceding month; and
(v) the difference, if any, between the Borrowing Base and the
Total Outstandings as of the end of the immediately preceding month.
The Borrowing Base shown in such Borrowing Base Certificate shall be and
remain the Borrowing Base hereunder until the next Borrowing Base Certificate
is delivered to the Agent and each of the Banks, at which time the Borrowing
Base shall be the amount shown in such subsequent Borrowing Base Certificate.
Each Borrowing Base Certificate shall be certified (subject to normal year-end
adjustments) as to truth and accuracy by the chief financial officer or
treasurer of Borrower.
(c) If the Borrowing Base as of any date is less than the Total
Outstandings as of such date, Borrower shall be automatically required
(without demand or notice of any kind by the Agent or any of the Banks, all of
which are hereby expressly waived by Borrower) to immediately repay the
Revolving Credit Loans and/or the Letter of Credit Loans and/or surrender for
cancellation the outstanding standby Letters of Credit, in either case in an
amount sufficient to reduce the amount of the Total Outstandings to the amount
of the Borrowing Base.
(d) If the total Commitments of all of the Banks as of any date should
be less than the sum of the Total Outstandings as of such date plus the
aggregate undrawn face amount of all commercial Letters of Credit outstanding
as of such date, whether as a result of Borrower's election to decrease the
amount of the Commitments of the Banks pursuant to Section 2.07 or otherwise,
Borrower shall be automatically required (without demand or notice of any kind
by the Agent or any of the Banks, all of which are hereby expressly waived by
Borrower) to immediately repay the Revolving Credit Loans and/or the Letter of
Credit Loans and/or surrender for cancellation the outstanding Letters of
Credit, in either case in an amount sufficient to reduce the sum of the Total
Outstandings plus the aggregate undrawn face amount of all commercial Letters
of Credit to an amount equal to or less than the total Commitments of all of
the Banks.
2.02 Method of Borrowing. (a) Borrower shall give notice (a "Notice
of Borrowing") to the Agent by 10:00 a.m. (St. Louis time) on the Domestic
Business Day of each Prime Loan, and by 10:00 a.m. (St. Louis Time) at least
three (3) Eurodollar Business Days before each LIBOR Loan, specifying:
(i) the date of such Revolving Credit Loan, which shall be a
Domestic Business Day in the case of a Prime Loan and a Eurodollar Business
Day in the case of a LIBOR Loan,
(ii) the aggregate principal amount of such Revolving Credit
Loan,
(iii) whether such Revolving Credit Loan is to be a Prime Loan
or a LIBOR Loan, and
(iv) in the case of a LIBOR Loan, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing given to it, the Agent
shall notify each Bank by 11:30 a.m. (St. Louis time) on the date of receipt
of such Notice of Borrowing by the Agent (which must be a Domestic Business
Day) of the contents thereof and of such Bank's Pro Rata Share of such
Revolving Credit Loan. A Notice of Borrowing shall not be revocable by
Borrower.
(c) Not later than 2:00 p.m. (St. Louis time) on the date of each
Revolving Credit Loan, each Bank shall (except as provided in subsection (d)
of this Section) make available its Pro Rata Share of such Revolving Credit
Loan, in Federal or other funds immediately available in St. Louis, Missouri,
to the Agent at its address specified in or pursuant to Section 10.07. Unless
the Agent determines that any applicable condition specified in Section 4 has
not been satisfied, the Agent will make the funds so received from the Banks
available to Borrower immediately thereafter at the Agent's aforesaid address
by crediting such funds to a demand deposit account (or such other account
mutually agreed upon in writing between Agent and Borrower) of Borrower with
the Agent. The Agent shall not be required to make any amount available to
Borrower hereunder except to the extent the Agent shall have received such
amounts from the Banks as set forth herein, provided, however, that unless the
Agent shall have been notified by a Bank prior to the date a Revolving Credit
Loan is to be made hereunder that such Bank does not intend to make its Pro
Rata Share of such Revolving Credit Loan available to the Agent, the Agent may
assume that such Bank has made such Pro Rata Share available to the Agent on
such date, and the Agent may in reliance upon such assumption make available
to Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank and the Agent has made such
amount available to Borrower, the Agent shall be entitled to receive such
amount from such Bank forthwith upon its demand, together with interest
thereon in respect of each day during the period commencing on the date such
amount was made available to Borrower and ending on but excluding the date the
Agent recovers such amount from such Bank at a rate per annum equal to the Fed
Funds Rate.
(d) If any Bank makes a new Revolving Credit Loan hereunder on a day
on which Borrower is required to or has elected to repay all or any part of an
outstanding Revolving Credit Loan from such Bank, such Bank shall apply the
proceeds of its new Revolving Credit Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (c) of this Section, or remitted by Borrower to the
Agent as provided in Section 2.09, as the case may be.
(e) Borrower hereby authorizes the Agent to rely on telephonic,
telegraphic, telecopy, telex or written instructions believed by the Agent in
good faith to have been sent or delivered by any person identifying himself as
X.X. Xxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxx or Xxxxxxx X. Xxxxxxxxx (or
any other individual from time to time authorized to act on behalf of Borrower
pursuant to a resolution adopted by the Board of Directors of Borrower and
certified by the Secretary of Borrower and delivered to the Agent) with
respect to any request to make a Revolving Credit Loan or a repayment
hereunder, and on any signature which the Agent in good faith believes to be
genuine, and Borrower shall be bound thereby in the same manner as if such
individual was actually authorized or such signature was genuine. Borrower
also hereby agrees to indemnify the Agent and each of the Banks and to hold
the Agent and each of the Banks harmless from and against any and all claims,
demands, damages, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) relating to or arising
out of or in connection with the acceptance of instructions for making
Revolving Credit Loans or repayments hereunder.
2.03 Notes. (a) The Revolving Credit Loans of each Bank to Borrower
shall be evidenced by an Amended and Restated Revolving Credit Note of
Borrower dated March 24, 1998, and payable to the order of such Bank in a
principal amount equal to its Commitment in substantially the form of Exhibit
B attached hereto (with appropriate insertions) (collectively, as the same may
from time to time be amended, modified extended or renewed, the "Notes").
Upon the delivery of the original Note payable to a Bank to such Bank, the
original Revolving Credit Note of Borrower dated December 17, 1996 (or March
13, 1998 in the case of the original Revolving Credit Note payable to the
order of The First National Bank of Chicago) and payable to the order of such
Bank shall be deemed cancelled by amendment and restatement and of no further
force or effect and shall be promptly returned to Borrower marked "Cancelled
by Amended and Restated Revolving Credit Note dated March 24, 1998."
(b) Each Bank shall record in its books and records the date, amount,
type and maturity of each Revolving Credit Loan made by it and the date and
amount of each payment of principal and/or interest made by Borrower with
respect thereto; provided, however, that the obligation of Borrower to repay
each Revolving Credit Loan hereunder shall be absolute and unconditional,
notwithstanding any failure of any Bank to make any such recordation or any
mistake by any Bank in connection with any such recordation. The books and
records of each Bank showing the account between such Bank and Borrower shall
be admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth in the absence of manifest
error.
2.04 Duration of Interest Periods and Selection of Interest Rates.
(a) The duration of the initial Interest Period for each LIBOR Loan shall be
as specified in the applicable Notice of Borrowing. Borrower shall elect the
duration of each subsequent Interest Period applicable to such LIBOR Loan and
the interest rate to be applicable during such subsequent Interest Period (and
Borrower shall have the option (i) in the case of any Prime Loan, to elect
that such Loan become a LIBOR Loan and the Interest Period to be applicable
thereto, and (ii) in the case of any LIBOR Loan, to elect that such Loan
become a Prime Loan), by giving notice of such election to the Agent by 10:00
a.m. (St. Louis time) on the Domestic Business Day of, in the case of the
election of the Adjusted Prime Rate, and by 10:00 a.m. (St. Louis time) at
least three (3) Eurodollar Business Days before, in the case of the election
of the LIBOR Rate, the end of the immediately preceding Interest Period
applicable thereto, if any; provided, however, that notwithstanding the
foregoing, in addition to and without limiting the rights and remedies of the
Agent and the Banks under Section 7 hereof, so long as any Default or Event of
Default under this Agreement has occurred and is continuing, Borrower shall
not be permitted to renew any LIBOR Loan as a LIBOR Loan or to convert any
Prime Loan into a LIBOR Loan.
(b) If the Agent does not receive a notice of election for a
Revolving Credit Loan pursuant to subsection (a) above within the applicable
time limits specified therein, Borrower shall be deemed to have elected to pay
such Revolving Credit Loan in whole pursuant to Section 2.08 on the last day
of the current Interest Period with respect thereto and to reborrow the
principal amount of such Revolving Credit Loan on such date as a Prime Loan.
2.05 Interest Rates. (a) Each Prime Loan shall bear interest on
the outstanding principal amount thereof, for each day from the date such Loan
is made until it becomes due, at a rate per annum equal to the Adjusted Prime
Rate. Such interest shall be payable monthly in arrears on the last day of
each month, commencing on the first such date after such Prime Loan is made,
and at the maturity of the Notes, whether by reason of acceleration or
otherwise. From and after the maturity of the Notes, whether by reason of
acceleration or otherwise, each Prime Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to Two Percent (2%)
over and above the Adjusted Prime Rate.
(b) Each LIBOR Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period applicable thereto at a rate per annum
equal to the applicable LIBOR Rate. Interest on each LIBOR Loan shall be
payable on the last day of the applicable Interest Period, unless the duration
of such Interest Period exceeds three (3) months, in which case such interest
shall be payable at the end of the first three (3) months of such Interest
Period and on the last day of such Interest Period, and at the maturity of the
Notes, whether by reason of acceleration or otherwise. From and after the
maturity of the Notes, whether by reason of acceleration or otherwise, each
LIBOR Loan shall bear interest, payable on demand, for each day until paid, at
a rate per annum equal to the sum of Two Percent (2%) plus the higher of (i)
the LIBOR Rate for the immediately preceding Interest Period applicable to
such LIBOR Loan or (ii) the Adjusted Prime Rate.
(c) The Agent shall determine each interest rate applicable to the
Loans hereunder and its determination thereof shall be conclusive in the
absence of manifest error.
2.06 Fees. (a) From the date of this Agreement to but excluding the
last day of the Revolving Credit Period, Borrower shall pay to the Agent for
the account of each Bank a nonrefundable commitment fee on the unused portion
of the Commitment of such Bank (determined by subtracting such Bank's Pro Rata
Share of the Total Outstandings (other than any portion of the Total
Outstandings consisting of the undrawn face amount of any Letters of Credit
which are commercial Letters of Credit) from such Bank's Commitment) at a rate
per annum equal to the Applicable Commitment Fee Rate. Such commitment fee
shall be (i) calculated on a daily basis, (ii) payable quarterly in arrears on
each January 1, April 1, July 1 and October 1 during the Revolving Credit
Period commencing January 1, 1997, and on the last day of the Revolving Credit
Period and (iii) calculated on an actual day, 360-day year basis.
(b) From the date of this Agreement to but excluding the last day of
the Revolving Credit Period, Borrower shall pay to the Agent for its own
account a nonrefundable fee on the unused portion of the total Commitments of
all of the Banks (determined by subtracting the Total Outstandings (other than
any portion of the Total Outstandings consisting of the undrawn face amount of
any Letters of Credit which are commercial Letters of Credit) from the total
Commitments of all of the Banks) at the rate of One-Sixteenth of One Percent
(1/16%) per annum. Such fee shall be (i) calculated on a daily basis, (ii)
payable quarterly in arrears on each January 1, April 1, July 1 and October 1
during the Revolving Credit Period commencing January 1, 1997, and on the last
day of the Revolving Credit Period and (iii) calculated on an actual day,
360-day year basis.
(c) Borrower hereby agrees to pay the Agent a semi-annual
collateral examination fee in the amount of $7,500.00 payable on the date
hereof and every six (6) months thereafter during the Revolving Credit Period.
In addition to said quarterly collateral examination fee, Borrower hereby
agrees to reimburse the Agent upon demand for any reasonable out-of-pocket
costs and expenses incurred by the Agent in connection with any collateral
examination conducted by the Agent.
2.07 Termination or Reduction of Commitments. Borrower may, upon
three (3) Domestic Business Days' prior written notice to the Agent, terminate
entirely at any time, or proportionately reduce from time to time on a pro
rata basis among the Banks based on their respective Pro Rata Shares by an
aggregate amount of $5,000,000.00 or any larger multiple of $1,000,000.00 the
unused portions of the Commitments; provided, however, that (i) at no time
shall the Commitments be reduced to a figure less than the Total Outstandings,
(ii) at no time shall the Commitments be reduced to a figure greater than zero
but less than $20,000,000.00 and (iii) any such termination or reduction shall
be permanent and Borrower shall have no right to thereafter reinstate or
increase, as the case may be, the Commitment of any Bank.
2.08 Early Payments. (a) Borrower may, upon notice to the Agent
specifying that it is paying its Prime Loans, pay without penalty or premium
its Prime Loans in whole at any time, or from time to time in part in amounts
aggregating $200,000.00 or any larger multiple of $50,000.00, by paying the
principal amount to be paid together with all accrued and unpaid interest
thereon to and including the date of payment; provided, however, that in no
event may Borrower make a partial payment of Prime Loans which results in the
total outstanding Prime Loans being greater than zero but less than
$200,000.00. Each such optional payment shall be applied to pay the Prime
Loans of the several Banks in proportion to their respective Pro Rata Shares.
(b) Borrower may, upon at least one (1) Eurodollar Business Day's
notice to the Agent specifying that it is paying its LIBOR Loans, pay without
penalty or premium on the last day of any Interest Period its LIBOR Loans to
which such Interest Period applies, in whole, or in part in amounts
aggregating $2,000,000.00 or any larger multiple of $500,000.00, by paying the
principal amount to be paid together with all accrued and unpaid interest
thereon to and including the date of payment; provided, however, that in no
event may Borrower make a partial payment of LIBOR Loans which results in the
total outstanding LIBOR Loans with respect to which a given Interest Period
applies being greater than zero but less than $2,000,000.00. Borrower may,
upon at least one (1) Eurodollar Business Day's notice to the Agent specifying
that it is paying its LIBOR Loans, pay its LIBOR Loans to which a given
Interest Period applies on other than the last day of such Interest Period, in
whole, or in part in amounts aggregating $2,000,000.00 or any larger multiple
of $500,000.00, by paying the principal amount to be paid together with all
accrued and unpaid interest thereon to and including the date of payment and
any funding losses and other amounts payable under Section 2.10; provided,
however, that in no event may Borrower make a partial payment of LIBOR Loans
which results in the total outstanding LIBOR Loans with respect to which a
given Interest Period applies being greater than zero but less than
$2,000,000.00. Each such optional payment shall be applied to pay such LIBOR
Loans of the several Banks in proportion to their respective Pro Rata Shares.
(c) Upon receipt of a notice of payment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's Pro Rata Share of such payment and such notice shall not thereafter be
revocable by Borrower.
2.09 General Provisions as to Payments. Borrower shall make each
payment of principal of, and interest on, the Revolving Credit Loans and of
fees and all other amounts payable hereunder, not later than 12:00 noon (St.
Louis time) on the date when due, in Federal or other funds immediately
available in St. Louis, Missouri, to the Agent at its address referred to in
Section 10.07. The Agent will promptly distribute to each Bank in immediately
available funds its Pro Rata Share of each such payment received by the Agent
for the account of the Banks. Whenever any payment of principal of, or
interest on, the Revolving Credit Loans or of fees shall be due on a day which
is not a Domestic Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon, at
the then applicable rate, shall be payable for such extended time.
2.10 Funding Losses. Notwithstanding any provision contained herein
to the contrary, if Borrower makes any payment of principal with respect to
any LIBOR Loan (pursuant to Sections 2 or 7 or otherwise) on any day other
than the last day of an Interest Period applicable thereto, or if Borrower
fails to borrow or pay any LIBOR Loan after notice has been given to the Agent
in accordance with Section 2.02, 2.04 or 2.08(b), Borrower shall reimburse
each Bank on demand for any resulting losses and expenses incurred by it,
including, without limitation, any losses incurred in obtaining, liquidating
or employing deposits from third parties, but excluding loss of margin for the
period after any such payment, provided that such Bank shall have delivered to
Borrower a certificate as to the amount of such losses and expenses, which
certificate shall be conclusive in the absence of manifest error.
2.11 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(i) the Agent is advised by Mercantile that deposits in
dollars (in the applicable amounts) are not being offered to Mercantile in the
relevant market for such Interest Period, or
(ii) Banks holding Notes evidencing 50% or more in
aggregate principal amount of the affected LIBOR Loans (or having 50% or more
of the aggregate amount of the total Commitments of all of the Banks, if no
LIBOR Loans are then outstanding) advise the Agent that the LIBOR Rate as
determined by the Agent will not adequately and fairly reflect the cost to
such Banks of maintaining or funding their LIBOR Loans for such Interest
Period,
the Agent shall forthwith give notice thereof to Borrower and the Banks,
whereupon until the Agent notifies Borrower that the circumstances giving rise
to such suspension no longer exist, (a) the obligations of the Banks to make
LIBOR Loans shall be suspended, and (b) Borrower shall repay in full the then
outstanding principal amount of each of its LIBOR Loans together with all
accrued and unpaid interest thereon, on the last day of the then current
Interest Period applicable to such Loan. Concurrently with repaying each such
LIBOR Loan of each Bank pursuant to this Section, Borrower may borrow a Prime
Loan in an equal principal amount from such Bank, and, if Borrower so elects,
such Bank shall make such a Prime Loan to Borrower.
2.12 Illegality. If, after the date of this Agreement, the adoption
of any applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any governmental or
regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency shall
make it unlawful or impossible for any Bank to make, maintain or fund its
LIBOR Loans to Borrower and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and Borrower. Upon
receipt of such notice, Borrower shall repay in full the then outstanding
principal amount of each of its LIBOR Loans from such Bank, together with all
accrued and unpaid interest thereon, on either (a) the last day of the then
current Interest Period applicable to such LIBOR Loan if such Bank may
lawfully continue to maintain and fund its LIBOR Loans to such day or (b)
immediately if such Bank may not lawfully continue to fund and maintain its
LIBOR Loan to such day. Concurrently with repaying each LIBOR Loan of such
Bank, Borrower may borrow a Prime Loan in an equal principal amount from such
Bank, and, if Borrower so elects, such Bank shall make such a Prime Loan to
Borrower.
2.13 Increased Cost. (a) If (i) Regulation D or (ii) after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank with any request or directive (whether or not having the force of
law) of any such governmental or regulatory authority, central bank or
comparable agency (a "Regulatory Change"):
(A) shall subject any Bank to any tax, duty or other charge
with respect to its LIBOR Loans, its Note or its obligation to make LIBOR
Loans, or shall change the basis of taxation of payments to any Bank of the
principal of or interest on its LIBOR Loans or any other amounts due under
this Agreement in respect of its LIBOR Loans or its obligation to make LIBOR
Loans (except for taxes on or changes in the rate of tax on the overall net
income of such Bank); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of Governors
of the Federal Reserve System), special deposit, capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended or committed to be extended by, any Bank or shall, with respect to
any Bank or the London interbank market, impose, modify or deem applicable any
other condition affecting its LIBOR Loans, its Note or its obligation to make
LIBOR Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D, to impose a cost on or increase the cost to) such Bank
of making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by such Bank under this Agreement or under its Notes
with respect thereto, by an amount deemed by such Bank, in its good faith
judgment, to be material, and if such Bank is not otherwise fully compensated
for such increase in cost or reduction in amount received or receivable by
virtue of the inclusion of the reference to "LIBOR Reserve Percentage" in the
calculation of the interest rate applicable to LIBOR Loans, then, within
fifteen (15) days after notice by such Bank to Borrower together with a copy
of the official notice of the applicable change in law (if applicable) and a
work sheet showing how the increase in cost or reduction in amount received or
receivable was calculated (with a copy to the Agent and all of the other
Banks), Borrower shall pay for the account of such Bank as additional
interest, such additional amount or amounts as will compensate such Bank for
such increased cost or reduction. Each Bank will promptly notify Borrower,
the Agent and all of the other Banks of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to compensation
pursuant to this Section. The determination by any Bank under this Section of
the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount or
amounts, such Bank may use any reasonable averaging and attribution methods.
(b) If any Bank demands compensation under this Section, Borrower may
at any time, upon at least two (2) Domestic Business Days' prior notice to
such Bank and the Agent, repay in full its then outstanding LIBOR Loans from
such Bank, together with all accrued and unpaid interest thereon to the date
of prepayment and any funding losses and other amounts due under Section 2.10.
Concurrently with repaying such LIBOR Loans of such Bank, Borrower may borrow
from such Bank a Prime Loan in an amount equal to the aggregate principal
amount of such LIBOR Loans, and, if Borrower so elects, such Bank shall make
such a Prime Loan to Borrower.
2.14 Prime Loans Substituted for Affected LIBOR Loans. If notice has
been given by a Bank pursuant to Sections 2.11 or 2.12 or by Borrower pursuant
to Section 2.13 requiring LIBOR Loans of any Bank to be repaid, then, unless
and until such Bank notifies Borrower that the circumstances giving rise to
such repayment no longer apply, all Loans which would otherwise be made by
such Bank to Borrower as LIBOR Loans shall be made instead as Prime Loans.
Such Bank shall promptly notify Borrower if and when the circumstances giving
rise to such repayment no longer apply.
2.15 Capital Adequacy. If, after the date of this Agreement, any
Bank shall have determined in good faith that the adoption of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or will have the effect of reducing the rate of return on such
Bank's capital in respect of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy), then from time to time Borrower shall pay to such Bank upon
demand such additional amount or amounts as will compensate such Bank for such
reduction. All determinations made in good faith by such Bank of the
additional amount or amounts required to compensate such Bank in respect of
the foregoing shall be conclusive in the absence of manifest error. In
determining such amount or amounts, such Bank may use any reasonable averaging
and attribution methods.
2.16 Survival of Indemnities. All indemnities and all provisions
relating to reimbursement to Bank of amounts sufficient to protect the yield
to Bank with respect to the Revolving Credit Loans, including, without
limitation, Sections 2.10, 2.11, 2.12, 2.13 and 2.15 hereof, shall survive the
payment of the Notes and the other Borrower's Obligations and the termination
of this Agreement.
2.17 Discretion of Bank as to Manner of Funding. Notwithstanding any
provision contained in this Agreement to the contrary, each of the Banks shall
be entitled to fund and maintain its funding of all or any part of its LIBOR
Loans in any manner it elects, it being understood, however, that for purposes
of this Agreement all determinations hereunder (including, without limitation,
the determination of each Bank's funding losses and expenses under Section
2.10) shall be made as if such Bank had actually funded and maintained each
LIBOR Loan through the purchase of deposits having a maturity corresponding to
the maturity of the applicable Interest Period relating to the applicable
LIBOR Loan and bearing an interest rate equal to the applicable LIBOR Rate.
2.18 Late Payment Fees. If Borrower fails to make any payment of any
principal of or interest on any Revolving Credit Loan within ten (10) days
after the date the same shall become due and payable, whether by reason of
maturity, acceleration or otherwise, in addition to all of the other rights
and remedies of the Agent and the Banks under this Agreement and at law or in
equity, Borrower shall pay the Agent for the ratable benefit of the Banks on
demand with respect to each such late payment a late fee in an amount equal to
the greater of $100.00 or Five Percent (5%) of the amount of each such late
payment.
2.19 Computation of Interest. Interest on Prime Loans hereunder
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
Interest on LIBOR Loans shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed, calculated as to each Interest
Period from and including the first day thereof to but excluding the last day
thereof.
2.20 Maturity. All Revolving Credit Loans not paid prior to the last
day of the Revolving Credit Period, together with all accrued and unpaid
interest thereon and all fees and other amounts owing by Borrower to the Banks
with respect thereto, shall be due and payable on the last day of the
Revolving Credit Period.
2.21 Sharing of Payments. The Banks agree among themselves that, in
the event that any of the Banks shall directly or indirectly obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, banker's lien or counterclaim, through the realization, collection,
sale or liquidation of any Collateral or otherwise) on account of or in
respect of any of the Loans or any of the other Borrower's Obligations in
excess of its Pro Rata Share of all such payments, such Bank(s) shall
immediately purchase from the other Bank(s) participations in the Loans or
other Borrower's Obligations owed to such other Bank(s) in such amounts, and
make such other adjustments from time to time, as shall be equitable to the
end that the Banks share such payment ratably in accordance with their
respective Pro Rata Shares of the outstanding Loans and other Borrower's
Obligations. The Banks further agree among themselves that if any such excess
payment to a Bank shall be rescinded or must otherwise be restored, the other
Bank(s) which shall have shared the benefit of such payment shall, by
repurchase of participation theretofore sold, or otherwise, return its share
of that benefit to the Bank whose payment shall have been rescinded or
otherwise restored. Borrower agrees that any Bank(s) so purchasing a
participation in the Loans or other Borrower's Obligations owed to the other
Bank(s) may exercise all rights of set-off, banker's lien and/or counterclaim
as fully as if such Bank(s) were a holder of such Loan or other Borrower's
Obligations in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any of the Banks receives a
secured claim in lieu of a set-off to which this Section 2.21 would apply,
such Bank(s) shall, to the extent practicable, exercise their rights in
respect of such secured claim in a manner consistent with the rights of the
Bank(s) entitled under this Section 2.21 to share in the benefits of any
recovery of such secured claim.
SECTION 3. LETTERS OF CREDIT.
3.01 Letter of Credit Commitment. (a) Subject to the terms and
conditions of this Agreement and so long as no Default or Event of Default
under this Agreement has occurred and is continuing (provided, however, that
Mercantile shall have no liability to any of the other Banks for issuing a
Letter of Credit after the occurrence of any Default or Event of Default under
this Agreement unless Mercantile has previously received notice in writing
from Borrower or any of the other Banks of the occurrence of such Default or
Event of Default), during the Revolving Credit Period, Mercantile hereby
agrees to issue irrevocable commercial and/or standby letters of credit for
the account of Borrower (individually, a "Letter of Credit" and collectively,
the "Letters of Credit") in an amount and for the term specifically requested
by Borrower by notice in writing to Mercantile in the form of Exhibit C
attached hereto and incorporated herein by reference (a "Letter of Credit
Request") at least three (3) Domestic Business Days prior to the requested
issuance thereof; provided, however, that:
(i) Borrower shall have executed and delivered to
Mercantile a Letter of Credit Application with respect to such Letter of
Credit;
(ii) the term of any such Letter of Credit shall not
extend beyond the date one (1) year after the date of issuance thereof;
(iii) any Letter of Credit may only be utilized to
guaranty the payment of obligations of Borrower, a Subsidiary of Borrower or
any other entity in which Borrower or any Subsidiary of Borrower has an equity
investment to third parties;
(iv) the Total Outstandings shall not at any one time
exceed the lesser of (A) the sum of (1) total Commitments of all of the Banks
at such time minus (2) the aggregate undrawn face amount of all commercial
Letters of Credit outstanding at such time or (B) the Borrowing Base at such
time;
(v) the sum of (A) the aggregate undrawn face amount of
all outstanding Letters of Credit plus (B) the aggregate principal amount of
all outstanding Letter of Credit Loans shall not at any one time exceed the
lesser of (A) the lesser of (1) the total Commitments of all of the Banks at
such time or (2) the sum of the Borrowing Base at such time plus the aggregate
undrawn face amount of all commercial letters of credit outstanding at such
time or (B) $8,000,000.00; and
(vi) the text of any such Letter of Credit is provided to
Mercantile no less than three (3) Domestic Business Days prior to the
requested issuance date, which text must be acceptable to Mercantile in its
sole and absolute discretion.
(b) The payment of drafts under each Letter of Credit shall be made
in accordance with the terms thereof and, in that connection, Mercantile shall
be entitled to honor any drafts and accept any documents presented to it by
the beneficiary of such Letter of Credit in accordance with the terms of such
Letter of Credit and believed in good faith by Mercantile to be genuine.
Mercantile shall not have any duty to inquire as to the accuracy or
authenticity of any draft or other drawing document that may be presented to
it other than the duties contemplated by the applicable Letter of Credit
Application. If Mercantile shall have received documents that in its good
faith judgment constitute all of the documents that are required to be
presented before payment or acceptance of a draft under a Letter of Credit, it
shall be entitled to pay or accept such draft provided such documents conform
on their face to the requirements of such Letter of Credit.
(c) In the event of any payment by Mercantile of a draft presented
under a Letter of Credit, Borrower agrees to pay to Mercantile in immediately
available funds at the time of such drawing an amount equal to the sum of such
drawing plus Mercantile's customary negotiation, processing and other fees
related thereto. Borrower hereby authorizes Mercantile to charge or cause to
be charged Borrower's bank accounts at Mercantile to the extent there are
balances of immediately available funds therein, in an amount equal to the sum
of such drawing plus Mercantile's customary negotiation, processing and other
fees related thereto, and Borrower agrees to pay the amount of any such
drawing (and/or Mercantile's customary negotiation, processing and other fees
related thereto) not so charged prior to the close of business of Mercantile
on the day of such drawing. In the event any payment under a Letter of Credit
is made by Mercantile prior to receipt of payment from Borrower, such payment
by Mercantile shall constitute a loan (a "Letter of Credit Loan") by
Mercantile to Borrower, payable on demand of Mercantile. Borrower agrees to
pay interest on demand of Mercantile on any unpaid Letter of Credit Loan at a
rate per annum equal to Two Percent (2%) over and above the Adjusted Prime
Rate until such Letter of Credit Loan is paid in full, calculated on an actual
day, 360-day year basis.
(d) Borrower hereby further agrees to pay to the order of Mercantile:
(i) with respect to each Letter of Credit which is a
standby Letter of Credit, a nonrefundable issuance fee in the amount of
$125.00 and with respect to each Letter of Credit which is a commercial Letter
of Credit, a nonrefundable issuance fee in the amount of $135.00 (the "Letter
of Credit Issuance Fees"), which Letter of Credit Issuance Fees shall be due
and payable on the date of issuance of each such Letter of Credit;
(ii) with respect to each Letter of Credit which is a
standby Letter of Credit, a nonrefundable commitment fee at a rate per annum
equal to Applicable Standby Letter of Credit Commitment Fee Rate (calculated
on an actual day, 360-day year basis) on the face amount (taking into account
any scheduled increases or decreases therein during the period in question) of
each such Letter of Credit ("Letter of Credit Commitment Fee"), which Letter
of Credit Commitment Fee shall be due and payable quarterly in advance on the
date of issuance of each such Letter of Credit and on each January 1, April 1,
July 1 and October 1 during the term of each such Letter of Credit;
(iii) with respect to each Letter of Credit which is a
commercial Letter of Credit, a nonrefundable negotiation fee in an amount
equal to One-Quarter of One Percent (1/4%) of the amount of each draw on each
such Letter of Credit ("Letter of Credit Negotiation Fee"), which Letter of
Credit Negotiation Fee shall be due and payable on the date of each draw of
each such Letter of Credit; and
(iv) with respect to each Letter of Credit, such other
fees as may be charged by Mercantile from time to time in accordance with
Mercantile's published schedule of fees in effect from time to time, which
fees shall be due and payable on demand by Mercantile.
3.02 Existing Letters of Credit. Notwithstanding any provision
contained in this Agreement to the contrary, (i) all references in this
Agreement to Letters of Credit shall include the irrevocable standby and
commercial letters of credit listed on Schedule 3.02 attached hereto which
have heretofore been issued by Mercantile for the account of Borrower (the
"Existing Letters of Credit") and (ii) all references in this Agreement to the
Letter of Credit Applications shall include the applications and agreements
for irrevocable standby and commercial letters of credit heretofore executed
by Borrower, as account party, with respect to the Existing Letters of Credit.
3.03 Participation by Other Banks. Upon the issuance of a Letter of
Credit by Mercantile (and on the date of this Agreement with respect to the
Existing Letters of Credit), an undivided participation interest therein
(including, without limitation, an undivided participation interest in the
reimbursement risk relating to such Letter of Credit, in all payments and
Letter of Credit Loans made by Mercantile in connection with such Letter of
Credit and in all collateral for such Letter of Credit) shall automatically be
granted by Mercantile to and accepted by each of the other Banks in an amount
based on each such other Bank's Pro Rata Share of the face amount of such
Letter of Credit, which participation shall be evidenced by a single Letter of
Credit Participation Certificate executed by Mercantile in favor of such Bank
in the form attached hereto as Exhibit D and incorporated herein by reference.
If Mercantile shall make payment on any draft presented or accepted under a
Letter of Credit, Mercantile shall give notice of such payment to the other
Banks, and each of the other Banks hereby authorizes and requests Mercantile
to advance for their respective accounts, pursuant to the terms hereof, their
respective shares of any such payment based upon their respective Pro Rata
Shares. If such drawing is not paid by Borrower in immediately available
funds prior to the close of business of Mercantile on the date of such
drawing, Mercantile shall promptly so notify the other Banks and each of the
other Banks agrees to immediately reimburse Mercantile in immediately
available funds for its Pro Rata Share of the amount of such drawing, plus
interest calculated on its Pro Rata Share of such amount at a rate per annum
equal to the Fed Funds Rate calculated from the date of such payment by
Mercantile to but excluding the date of reimbursement by such other Bank and
on an actual-day, 360-day year basis. Each of the other Banks will be
entitled to its Pro Rata Share of any Letter of Credit Commitment Fees, any
Letter of Credit Negotiation Fees and any interest on Letter of Credit Loans
paid by Borrower, but such other Banks shall have no right to share in any
Letter of Credit Issuance Fees or any other fees paid by Borrower to
Mercantile in connection with any of the Letters of Credit.
3.04 Replacement or Collateralization of Letters of Credit.
Notwithstanding any provision contained in this Agreement or any of the Letter
of Credit Applications to the contrary: (a) if any of the Letters of Credit
remain outstanding on the last day of the Revolving Credit Period, Borrower
shall, on or before 12:00 noon (St. Louis time) on the last day of the
Revolving Credit Period, surrender the originals of the applicable Letter(s)
of Credit to Mercantile for cancellation; and (b) if the Borrower Security
Agreement is no longer in full force and effect, upon the occurrence of any
Event of Default under this Agreement (including, without limitation,
Borrower's failure to comply with the requirements of clause (a) above), at
Mercantile's option and without demand or further notice to Borrower, an
amount equal to the aggregate undrawn face amount of all Letter(s) of Credit
then outstanding shall be deemed (as between Mercantile and Borrower) to have
been paid or disbursed by Mercantile (notwithstanding that such amounts may
not in fact have been so paid or disbursed by Mercantile), and a Letter of
Credit Loan to Borrower in such amount to have been made and accepted by
Borrower, which Letter of Credit Loan shall be immediately due and payable.
In lieu of the foregoing, at the election of Mercantile, if the Borrower
Security Agreement is no longer in full force and effect, Borrower shall, upon
Mercantile's demand, deliver to Mercantile cash, or other collateral
acceptable to the Required Banks in their sole and absolute discretion, having
a value, as determined by the Required Banks, at least equal to aggregate
undrawn face amount of all outstanding Letters of Credit and execute and
deliver to Mercantile such agreements as the Required Banks may require to
grant Mercantile a first priority perfected security interest in such cash or
other collateral. Any such collateral and/or any amounts received by
Mercantile in payment of the Letter of Credit Loan made pursuant to this
Section 3.04 shall be held by Mercantile in a separate account at Mercantile
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by Mercantile as collateral
security for the payment of the Borrower's Obligations. Cash amounts
delivered to Mercantile pursuant to the foregoing requirements of this Section
3.04 shall be invested, at the request and for the account of Borrower, in
investments of a type and nature and with a term acceptable to the Required
Banks. Such amounts, including in the case of cash amounts invested in the
manner set forth above, any investment realized thereon, shall not be used by
Mercantile to pay any amounts drawn or paid under or pursuant to any Letter of
Credit, but may be applied to reimburse Mercantile for drawings or payments
under or pursuant to the Letters of Credit which Mercantile has paid, or if no
such reimbursement is required to the payment of such other of Borrower's
Obligations as the Required Banks shall determine. Any amounts remaining in
any cash collateral account established pursuant to this Section 3.04 after
the payment in full of all of the Borrower's Obligations and the expiration or
cancellation of all of the Letters of Credit shall be returned to Borrower
(after deduction of Mercantile's expenses, if any).
SECTION 4. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.
4.01 Initial Revolving Credit Loan or Letter of Credit.
Notwithstanding any provision contained in this Agreement to the contrary,
none of the Banks shall have any obligation to make the initial Revolving
Credit Loan under this Agreement and Mercantile shall have no obligation to
issue the initial Letter of Credit under this Agreement unless the Agent shall
have first received:
(a) this Agreement, executed by a duly authorized officer
of Borrower and each of the Guarantors;
(b) the Notes, each executed by a duly authorized officer
of Borrower;
(c) the Borrower Security Agreement and such Uniform
Commercial Code financing statements and other documents as the Collateral
Agent or any of the Creditors may require in connection therewith, each
executed by a duly authorized officer of Borrower;
(d) the Huntco Nevada Security Agreement and such Uniform
Commercial Code financing statements and other documents as the Agent or any
of the Banks may require in connection therewith, each executed by a duly
authorized officer of Huntco Nevada;
(e) the Huntco Steel Security Agreement and such Uniform
Commercial Code financing statements and other documents as the Agent or any
of the Banks may require in connection therewith, each executed by a duly
authorized officer of Huntco Steel;
(f) the Midwest Products Security Agreement and such
Uniform Commercial Code financing statements and other documents as the Agent
or any of the Banks may require in connection therewith, each executed by a
duly authorized officer of Midwest Products;
(g) the HSI Aviation Security Agreement and such Uniform
Commercial Code financing statements and other documents as the Agent or any
of the Banks may require in connection therewith, each executed by a duly
authorized officer of HSI Aviation;
(h) the Intercreditor Agreement, executed by duly
authorized officers of each of Borrower, the Guarantors, the Creditors and the
Collateral Agent;
(i) a copy of resolutions of the Board of Directors of
Borrower, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the Notes, the Letter of Credit Applications,
the Borrower Security Agreement, the Intercreditor Agreement and the other
Transaction Documents executed by the Borrower, certified by the Secretary of
Borrower;
(j) a copy of resolutions of the Board of Directors of
Huntco Nevada, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the Huntco Nevada Security Agreement, the
Intercreditor Agreement and the other Transaction Documents executed by Huntco
Nevada, certified by the Secretary of Huntco Nevada;
(k) a copy of resolutions of the Board of Directors of
Huntco Steel, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the Huntco Steel Security Agreement, the
Intercreditor Agreement and the other Transaction Documents executed by Huntco
Steel, certified by the Secretary of Huntco Steel;
(l) a copy of resolutions of the Board of Directors of
Midwest Products, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the Midwest Products Security Agreement, the
Intercreditor Agreement and the other Transaction Documents executed by
Midwest Products, certified by the Secretary of Midwest Products;
(m) a copy of resolutions of the Board of Directors of HSI
Aviation, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the HSI Aviation Security Agreement, the
Intercreditor Agreement and the other Transaction Documents executed by HSI
Aviation, certified by the Secretary of HSI Aviation;
(n) a copy of the Articles of Incorporation of Borrower,
including any amendments thereto, certified by the Secretary of State of the
State of Missouri;
(o) a copy of the Certificate of Incorporation of Huntco
Nevada, including any amendments thereto, certified by the Secretary of State
of the State of Nevada;
(p) a copy of the Certificate of Incorporation of Huntco
Steel, including any amendments thereto, certified by the Secretary of State
of the State of Delaware;
(q) a copy of the Articles of Incorporation of Midwest
Products, including any amendments thereto, certified by the Secretary of
State of the State of Missouri;
(r) a copy of the Articles of Incorporation of HSI
Aviation, including any amendments thereto, certified by the Secretary of
State of the State of Missouri;
(s) a copy of the By-Laws of Borrower, including any
amendments thereto, certified by the Secretary of Borrower;
(t) a copy of the By-Laws of Huntco Nevada, including any
amendments thereto, certified by the Secretary of Huntco Nevada;
(u) a copy of the By-Laws of Huntco Steel, including any
amendments thereto, certified by the Secretary of Huntco Steel;
(v) a copy of the By-Laws of Midwest Products, including
any amendments thereto, certified by the Secretary of Midwest Products;
(w) a copy of the By-Laws of HSI Aviation, including any
amendments thereto, certified by the Secretary of HSI Aviation;
(x) an incumbency certificate, executed by the Secretary of
Borrower, which shall identify by name and title and bear the signatures of
all of the officers of Borrower executing any of the Transaction Documents;
(y) an incumbency certificate, executed by the Secretary of
Huntco Nevada, which shall identify by name and title and bear the signatures
of all of the officers of Huntco Nevada executing any of the Transaction
Documents;
(z) an incumbency certificate, executed by the Secretary of
Huntco Steel, which shall identify by name and title and bear the signatures
of all of the officers of Huntco Steel executing any of the Transaction
Documents;
(aa) an incumbency certificate, executed by the Secretary
of Midwest Products, which shall identify by name and title and bear the
signatures of all of the officers of Midwest Products executing any of the
Transaction Documents;
(bb) an incumbency certificate, executed by the Secretary
of HSI Aviation, which shall identify by name and title and bear the
signatures of all of the officers of HSI Aviation executing any of the
Transaction Documents;
(cc) a certificate of corporate good standing of Borrower
issued by the Secretary of State of the State of Missouri;
(dd) a certificate of corporate good standing of Huntco
Nevada issued by the Secretary of State of the State of Nevada;
(ee) certificates of corporate good standing of Huntco
Steel issued by the Secretaries of State of the States of Delaware, Arkansas,
Missouri, Illinois, Oklahoma, Texas, Tennessee, Kansas, Kentucky and South
Carolina;
(ff) certificates of corporate good standing of Midwest
Products issued by the Secretaries of State of the States of Missouri and
Pennsylvania;
(gg) a certificate of corporate good standing of HSI
Aviation issued by the Secretary of State of the State of Missouri;
(hh) an opinion of counsel of Peper, Martin, Xxxxxx,
Xxxxxxx and Xxxxxxx, independent counsel for Borrower and the Guarantors, in
the form of Exhibit G attached hereto and incorporated herein by reference;
(ii) the initial Borrowing Base Certificate required by
Section 2.01(b);
(jj) the Notice of Borrowing required by Section 2.02
and/or the Letter of Credit Request and the Letter of Credit Application
required by Section 3.01(a), as the case may be; and
(kk) evidence satisfactory to the Agent of the insurance
required by the Security Agreements together with loss payable endorsements in
form and substance satisfactory to the Agent naming the Collateral Agent as
loss payee, duly executed by the insurance company;
(ll) such other agreements, documents, instruments and
certificates as the Agent or any of the Banks may reasonably request.
4.02 All Revolving Credit Loans. Notwithstanding any provision
contained in this Agreement to the contrary, none of the Banks shall have any
obligation to make any Revolving Credit Loan under this Agreement unless:
(a) the Agent shall have received a current Borrowing Base
Certificate as required by Section 2.01(b);
(b) the Agent shall have received a Notice of Borrowing for
such Revolving Credit Loan as required by Section 2.02;
(c) on the date of and immediately after such Revolving
Credit Loan, no Default or Event of Default under this Agreement shall have
occurred and be continuing;
(d) no material adverse change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial
or otherwise) of Borrower and its Subsidiaries taken as a whole shall have
occurred since the date of this Agreement and be continuing; and
(e) all of the representations and warranties of Borrower
and the Guarantors contained in this Agreement and in the other Transaction
Documents shall be true and correct in all material respects on and as of the
date of such Revolving Credit Loan as if made on and as of the date of such
Revolving Credit Loan (and for purposes of this Section 4.02(d), the
representations and warranties made by Borrower in Section 5.04 shall be
deemed to refer to the most recent financial statements of Borrower delivered
to the Banks pursuant to Section 6.01(a)).
Each request for a Revolving Credit Loan by Borrower hereunder shall be
deemed to be a representation and warranty by Borrower on the date of such
Revolving Credit Loan as to the facts specified in clauses (c), (d) and (e) of
this Section 4.02.
4.03 All Letters of Credit. Notwithstanding any provision contained
in this Agreement to the contrary, Mercantile shall have no obligation to
issue any Letter of Credit under this Agreement unless:
(a) Mercantile shall have received a current Borrowing Base
Certificate as required by Section 2.01(b);
(b) Mercantile shall have received a Letter of Credit
Request for such Letter of Credit as required by Section 3.01(a);
(c) Mercantile shall have received a Letter of Credit
Application for such Letter of Credit as required by Section 3.01(a), duly
executed by an authorized officer of Borrower as account party;
(d) Borrower shall have complied with all of the procedures
and requirements set forth in Section 3.01;
(e) on the date of and immediately after the issuance of
such Letter of Credit, no Default or Event of Default under this Agreement
shall have occurred and be continuing;
(f) no material adverse change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial
or otherwise) of Borrower and its Subsidiaries taken as a whole shall have
occurred since the date of this Agreement and be continuing;
(g) all of the representations and warranties of Borrower
and the Guarantors contained in this Agreement and in the other Transaction
Documents shall be true and correct in all material respects on and as of the
date of the issuance of such Letter of Credit as if made on and as of the date
of the issuance of such Letter of Credit (and for purposes of this Section
4.03(f), the representations and warranties made by Borrower in Section 5.04
shall be deemed to refer to the most recent financial statements of Borrower
delivered to the Banks pursuant to Section 6.01(a)); and
(h) Mercantile shall have received such other documents,
certificates and agreements as it may reasonably request.
Each request for the issuance of a Letter of Credit by Borrower hereunder
shall be deemed to be a representation and warranty by Borrower on the date of
the issuance of such Letter of Credit as to the facts specified in clauses
(e), (f) and (g) of this Section 4.03.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to the Agent and each of the
Banks that:
5.01 Corporate Existence and Power. Borrower and each Subsidiary:
(a) is duly incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; (b) has all requisite corporate
powers required to carry on its business as now conducted; (c) has all
requisite governmental and regulatory licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except such
licenses, authorizations, consents and approvals the failure to have could not
reasonably be expected to have a Material Adverse Effect; and (d) is qualified
to transact business as a foreign corporation in, and is in good standing
under the laws of, all states in which it is required by applicable law to
maintain such qualification and good standing except for those states in which
the failure to qualify or maintain good standing could not reasonably be
expected to have a Material Adverse Effect.
5.02 Corporate Authorization. The execution, delivery and
performance by Borrower of this Agreement, the Notes, the Letter of Credit
Applications and the other Transaction Documents executed by Borrower are
within the corporate powers of Borrower and have been duly authorized by all
necessary corporate action on the part of Borrower. The execution, delivery
and performance by each Guarantor of this Agreement and the other Transaction
Documents to which it is a party are within the corporate powers of such
Guarantor and have been duly authorized by all necessary corporate action on
the part of such Guarantor.
5.03 Binding Effect. This Agreement, the Notes, the Letter of Credit
Applications and the other Transaction Documents executed contemporaneously
with the execution of this Agreement have been duly executed and delivered by
such of Borrower and the Guarantors as are parties thereto and constitute the
legal, valid and binding obligations of such of Borrower and the Guarantors as
are parties thereto enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law); and the Letter of Credit Applications
and the other Transaction Documents not executed contemporaneously with the
execution of this Agreement, when executed and delivered in accordance with
this Agreement, will constitute the legal, valid and binding obligations of
such of Borrower and the Guarantors as are parties thereto enforceable in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
5.04 Financial Statements. Borrower has furnished each of the Banks
with the following financial statements, identified by the chief financial
officer of Borrower (or such other officer of Borrower as shall be reasonably
acceptable to the Required Banks): (a) a consolidated balance sheet and
statements of income, changes in shareholders' equity and cash flows of
Borrower and its Subsidiaries as of and for the fiscal year ended April 30,
1997, all certified by Borrower's independent certified public accountants,
which financial statements have been prepared in accordance with GAAP
consistently applied; and (b) an unaudited consolidated balance sheet and
statements of income and cash flows of Borrower and its Subsidiaries as of and
for the fiscal quarter ended October 31, 1997, certified by the chief
financial officer of Borrower (or such other officer of Borrower as shall be
reasonably acceptable to the Required Banks) as being true and correct to the
best of his or her knowledge and as being prepared in accordance with GAAP
consistently applied. Borrower further represents and warrants to each of the
Banks that: (i) said balance sheets and their accompanying notes fairly
present in all material respects the condition of Borrower and its
Subsidiaries as of the dates thereof; (ii) there has been no material adverse
change in the condition or operation, financial or otherwise, of Borrower or
any of its Subsidiaries since October 31, 1997; and (iii) neither Borrower nor
any of its Subsidiaries had any direct or contingent liabilities which were
not disclosed on said financial statements or the notes thereto (to the extent
such disclosure is required by GAAP).
5.05 Litigation. Except as disclosed on Schedule 5.05 attached
hereto, there is no action or proceeding pending or, to the knowledge of
Borrower, threatened against or affecting Borrower or any Subsidiary before
any court, arbitrator or any governmental, regulatory or administrative body,
agency or official which, if adversely determined against Borrower or any
Subsidiary, could reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary is in default with respect to any order,
writ, injunction, decision or decree of any court, arbitrator or any
governmental, regulatory or administrative body, agency or official, a default
under which could reasonably be expected to have a Material Adverse Effect.
There are no outstanding judgments against Borrower or any Subsidiary.
5.06 Pension and Welfare Plans. Each Pension Plan and Welfare Plan
complies in all material respects with ERISA and all other applicable statutes
and governmental and regulatory rules and regulations; no Reportable Event has
occurred and is continuing with respect to any Pension Plan; neither Borrower
nor any Subsidiary nor any ERISA Affiliate has withdrawn from any Multi-
Employer Plan in a "complete withdrawal" or a "partial withdrawal" as defined
in Sections 4203 or 4205 of ERISA, respectively; neither Borrower nor any
Subsidiary nor any ERISA Affiliate has entered into an agreement pursuant to
Section 4204 of ERISA; neither Borrower nor any Subsidiary nor any ERISA
Affiliate has in the past contributed to or currently contributes to a Multi-
Employer Plan; neither Borrower nor any Subsidiary nor any ERISA Affiliate has
any withdrawal liability with respect to a Multi-Employer Plan; no steps have
been instituted by Borrower or any Subsidiary or any ERISA Affiliate to
terminate any Pension Plan; no condition exists or event or transaction has
occurred in connection with any Pension Plan, Multi-Employer Plan or Welfare
Plan which could result in the incurrence by Borrower or any Subsidiary or any
ERISA Affiliate of any material liability, fine or penalty; and neither
Borrower nor any Subsidiary nor any ERISA Affiliate is a "contributing
sponsor" as defined in Section 4001(a)(13) of ERISA of a "single-employer
plan" as defined in Section 4001(a)(15) of ERISA which has two or more
contributing sponsors at least two of whom are not under common control.
Except as disclosed on the consolidated financial statements of Borrower and
its Subsidiaries delivered by Borrower to the Banks, neither Borrower nor any
Subsidiary nor any ERISA Affiliate has any liability with respect to any
Welfare Plan.
5.07 Tax Returns and Payment. Borrower and its Subsidiaries have
filed all Federal, state, local and other tax returns which are required to be
filed and have paid all taxes which have become due pursuant to such returns
and all other taxes, assessments, fees and other governmental charges upon
Borrower and its Subsidiaries and upon their respective Properties, assets,
income and franchises which have become due and payable by Borrower or any of
its Subsidiaries, except those wherein the amount, applicability or validity
are being contested by Borrower or any such Subsidiary by appropriate
proceedings being diligently conducted in good faith and in respect of which
adequate reserves in accordance with GAAP have been established. There is no
proposed, asserted or assessed tax deficiency against Borrower or any of its
Subsidiaries which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
5.08 Subsidiaries. Borrower has no Subsidiaries other than as
identified on Schedule 5.08 attached hereto, as the same may from time to time
be amended, modified or supplemented as provided herein. Schedule 5.08
attached hereto correctly sets forth, for each Subsidiary, the number of
shares of each class of common and preferred stock authorized for such
Subsidiary, the number of outstanding and the percentage of the outstanding
shares of each such class owned, directly or indirectly, by Borrower or one or
more of its Subsidiaries. All of the issued and outstanding capital stock of
each Subsidiary is duly authorized, validly issued and fully paid and
nonassessable. Except as disclosed on Schedule 5.08 attached hereto and
except for Investments permitted by clause (i) of the definition of Restricted
Investments, neither Borrower nor any of its Subsidiaries, individually or
collectively, owns or holds, directly or indirectly, any capital stock or
equity security of, or any equity interest in, any corporation or business
other than Borrower's Subsidiaries. Borrower may at any time amend, modify or
supplement Schedule 5.08 by notifying the Agent and each of the Banks in
writing of any changes thereto, including any formation, acquisition, merger
or liquidation of Subsidiaries or any change in the capitalization of any
Subsidiary, in each case, in accordance with the terms of this Agreement, and
thereby the representations and warranties contained in this Section 5.08
shall be amended accordingly so long as such amendment, modification or
supplement is made within thirty (30) days after the occurrence of any such
changes in the facts stated therein and that such changes reflect transactions
that are permitted under this Agreement.
5.09 Compliance With Other Instruments; None Burdensome. Neither
Borrower nor any Subsidiary is a party to any contract or agreement or subject
to any charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect and which is not disclosed on
Borrower's financial statements heretofore submitted to the Banks; none of the
execution and delivery by Borrower and the Guarantors of the Transaction
Documents, the consummation of the transactions therein contemplated or the
compliance with the provisions thereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on Borrower or any
of the Guarantors, or any of the provisions of the Certificates or Articles of
Incorporation or By-Laws of Borrower or any of the Guarantors or any of the
provisions of any indenture, agreement, document, instrument or undertaking to
which Borrower or any of the Guarantors is a party or subject, or by which
Borrower or any of the Guarantors or any Property or assets of Borrower or any
of the Guarantors is bound, or conflict with or constitute a default
thereunder or result in the creation or imposition of any Lien pursuant to the
terms of any such indenture, agreement, document, instrument or undertaking
(other than in favor of the Collateral Agent for the equal and ratable benefit
of the Creditors under the Security Agreements). No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory, administrative or public
body or authority, or any subdivision thereof, or any other Person is required
to authorize, or is required in connection with, the execution, delivery or
performance of, or the legality, validity, binding effect or enforceability
of, any of the Transaction Documents.
5.10 Other Debt, Guarantees and Capitalized Leases. Except as
disclosed on Schedule 5.10 attached hereto and except for Indebtedness of any
Subsidiary to Borrower or any other Subsidiary, neither Borrower nor any
Subsidiary is a borrower, guarantor or obligor with respect to, or a lessee
under, any Debt, Guarantees or Capitalized Leases. Borrower may at any time
amend, modify or supplement Schedule 5.10 by notifying the Agent and each of
the Banks in writing of any changes thereto, and thereby the representations
and warranties contained in this Section 5.10 shall be amended accordingly so
long as such amendment, modification or supplement is made within thirty (30)
days after the occurrence of any such changes in the facts stated therein and
that such changes reflect transactions that are permitted under this
Agreement.
5.11 Labor Matters. Neither Borrower nor any Subsidiary is a party
to any labor dispute which could reasonably be expected to have a Material
Adverse Effect. There are no strikes or walkouts relating to any labor
contract to which Borrower or any Subsidiary is subject. Hours worked and
payments made to the employees of Borrower and its Subsidiaries have not been
in violation of (a) the Fair Labor Standards Act or (b) any other applicable
law dealing with such matters, the violation of which could reasonably be
expected to have a Material Adverse Effect. All payments due from Borrower or
any Subsidiary, or for which any claim may be made against any of them, in
respect of wages, employee health and welfare insurance and/or other benefits
have been paid or accrued as a liability on their respective books.
5.12 Title to Property. Borrower and each Subsidiary is the sole and
absolute owner of, or has the legal right to use and occupy, all Property it
claims to own or which is necessary for Borrower or such Subsidiary to conduct
its business, and all of such Property is free and clear of all Liens other
than Permitted Liens. Borrower and its Subsidiaries enjoy peaceful and
undisturbed possession in all material respects under all material leases
under which they are operating as lessees.
5.13 Regulation U. Borrower is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U of
The Board of Governors of the Federal Reserve System, as amended) and no part
of the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately (i) to purchase or carry
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock, or to refund or repay indebtedness originally incurred
for such purpose or (ii) for any purpose which entails a violation of, or
which is inconsistent with, the provisions of any of the Regulations of The
Board of Governors of the Federal Reserve System, including, without
limitation, Regulations G, U, T or X thereof, as amended. If requested by any
of the Banks, Borrower shall furnish to the Agent a statement in conformity
with the requirements of Federal Reserve Form U-1 referred to in Regulation U.
5.14 Multi-Employer Pension Plan Amendments Act of 1980. Borrower
and each Subsidiary is in compliance with the Multi-Employer Pension Plan
Amendments Act of 1980, as amended ("MEPPAA"), and has no liability for
pension contributions pursuant to MEPPAA.
5.15 Investment Company Act of 1940; Public Utility Holding Company
Act of 1935. Borrower is not an "investment company" as that term is defined
in, and is not otherwise subject to regulation under, the Investment Company
Act of 1940, as amended. Borrower is not a "holding company" as that term is
defined in, and is not otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
5.16 Patents, Licenses, Trademarks, Etc. Except as disclosed on
Schedule 5.16 attached hereto, neither Borrower nor any Subsidiary has any
patents, trademarks, trademark rights or copyrights which are material to the
business of Borrower or any Subsidiary. Borrower may at any time amend,
modify or supplement Schedule 5.16 by notifying the Agent and each of the
Banks in writing of any changes thereto, and thereby the representations and
warranties contained in the first sentence of this Section 5.16 shall be
amended accordingly so long as such amendment, modification or supplement is
made within thirty (30) days after the occurrence of any such changes in the
facts stated therein and that such changes reflect transactions that are
permitted under this Agreement. Borrower and each Subsidiary possesses all
necessary patents, licenses, trademarks, trademark rights, trade names, trade
name rights and copyrights to conduct its business without conflict with any
patent, license, trademark, trade name or copyright of any other Person.
5.17 Environmental and Safety and Health Matters. Except as
disclosed on Schedule 5.17 attached hereto: (i) the operations of Borrower
and each Subsidiary comply in all material respects with (A) all applicable
Environmental Laws and (B) all applicable Occupational Safety and Health Laws;
(ii) none of the operations of Borrower or any Subsidiary are subject to any
Environmental Claim or any judicial, governmental, regulatory or
administrative proceeding alleging the violation of any Occupational Safety
and Health Law, which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect; (iii) to the best of Borrower's knowledge
after due inquiry, none of the operations of Borrower or any Subsidiary is the
subject of any Federal or state investigation evaluating whether any remedial
action is needed to respond to any Release of Hazardous Substances or any
unsafe or unhealthful condition at any premises owned, leased or operated by
Borrower or such Subsidiary; (iv) neither Borrower nor any Subsidiary has
filed any notice under any Environmental Law or Occupational Safety and Health
Law indicating or reporting (A) any past or present Release into the
environment of, or treatment, storage or disposal of, any Hazardous Substance
or (B) any unsafe or unhealthful condition at any premises owned, leased or
operated by Borrower or such Subsidiary; and (v) neither Borrower nor any
Subsidiary has any material contingent liability in connection with (A) any
Release into the environment of, or otherwise with respect to, any Hazardous
Substances or (B) any unsafe or unhealthful condition at any premises owned,
leased or operated by Borrower or such Subsidiary.
5.18 Investments. Except as disclosed on Schedule 5.18 attached
hereto, neither Borrower nor any Subsidiary has any Restricted Investments.
5.19 No Default. No Default or Event of Default under this Agreement
has occurred and is continuing. There is no existing default or event of
default under or with respect to any indenture, contract, agreement, lease or
other instrument to which Borrower or any Subsidiary is a party or by which
any Property of Borrower or any Subsidiary is bound or affected, a default
under which could reasonably be expected to have a Material Adverse Effect.
Borrower and each Subsidiary of Borrower has and is in full compliance with
and in good standing with respect to all governmental permits, licenses,
certificates, consents and franchises necessary to continue to conduct its
business as previously conducted by it and to own or lease and operate its
Properties as now owned or leased by it, the failure to have or noncompliance
with which could reasonably be expected to have a Material Adverse Effect,
and, to the best of Borrower's knowledge, none of said permits, certificates,
consents or franchises contain any term, provision, condition or limitation
more burdensome than such as are generally applicable to Persons engaged in
the same or similar business as Borrower or such Subsidiary, as the case may
be. Neither Borrower nor any Subsidiary of Borrower is in violation of any
applicable statute, law, rule, regulation or ordinance of the United States of
America, of any state, city, town, municipality, county or of any other
jurisdiction, or of any agency thereof, a violation of which could reasonably
be expected to have a Material Adverse Effect.
5.20 Government Contracts. Neither Borrower nor any Subsidiary is a
party to or bound by any supply or purchase agreements with the Federal
government or any state or local government or any agency thereof, the
termination or cancellation of which could reasonably be expected to have a
Material Adverse Effect.
5.21 Purchase and Other Commitments and Outstanding Bids. No
material purchase or other commitment of Borrower or any Subsidiary is in
excess of the normal, ordinary and usual requirements of its business, or was
made at any price in excess of the then current market price, or, to the best
of Borrower's knowledge, contains terms and conditions more onerous than those
usual and customary in the applicable industry. There is no material
outstanding bid, sales proposal, contract or unfilled order of Borrower or any
Subsidiary which (i) will, or could if accepted, require Borrower or any
Subsidiary to supply goods or services at a cost to Borrower or any Subsidiary
in excess of the revenues to be received therefor or (ii) quotes prices which
do not include a markup over reasonably estimated costs consistent with past
markups on similar business based on market conditions current at that time.
5.22 Disclosure. Neither this Agreement nor any of the Exhibits or
Schedules hereto nor any certificate or other data furnished to the Agent or
any of the Banks in writing by or on behalf of Borrower or any Subsidiary in
connection with the transactions contemplated by this Agreement contains any
untrue or incorrect statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading. To the best knowledge of Borrower, there is no fact peculiar to
Borrower or any of its Subsidiaries which presently has a Material Adverse
Effect or in the future (so far as Borrower can now foresee) could reasonably
be expected to have a Material Adverse Effect, which has not heretofore been
disclosed in writing by Borrower to the Agent and each of the Banks.
SECTION 6. COVENANTS.
6.01 Affirmative Covenants of Borrower. Borrower covenants and
agrees that, so long as (i) any of the Banks has any obligation to make any
Loan under this Agreement or Mercantile has any obligation to issue any Letter
of Credit under this Agreement, (ii) any Letter of Credit remains outstanding
or (iii) any of Borrower's Obligations remain unpaid:
(a) Information. Borrower will deliver to each of the Banks:
(i) as soon as available and in any event within one hundred
(100) days after the end of each fiscal year of Borrower, a consolidated
balance sheet of Borrower and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, changes in
shareholders' equity and cash flows for such fiscal year, setting forth in
each case, in comparative form, the figures for the previous fiscal year, all
such financial statements to be prepared in accordance with GAAP consistently
applied and reported on by and accompanied by the unqualified opinion of Price
Waterhouse or other independent certified public accountants of nationally
recognized standing selected by Borrower and reasonably acceptable to the
Required Banks together with (A) a certificate from such accountants to the
effect that, in making the examination necessary for the signing of such
annual audit report, such accountants have not become aware of any Default or
Event of Default that has occurred and is continuing, or, if such accountants
have become aware of any such event, describing it and the steps, if any,
being taken to cure it and (B) the computations of such accountants evidencing
Borrower's compliance with the financial covenants contained in Sections
6.01(q), 6.02(a)(vi), 6.02(b) and 6.02(i) of this Agreement (such accountants,
however, shall not be liable to the Agent or any of the Banks by reason of
their failure to obtain knowledge of any Default or Event of Default which
would not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards); provided, however, that delivery
pursuant to Section 6.01(a)(iii) below of copies of the Annual Report on Form
10-K of Borrower for such fiscal year filed with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions of
the Securities and Exchange Commission) shall be deemed to satisfy the
requirements of this Section 6.01(a)(i) with respect to consolidated financial
statements;
(ii) as soon as available and in any event within fifty (50)
days after the end of each of the first three (3) fiscal quarters of each
fiscal year of Borrower, a consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related consolidated
statements of income, changes in shareholders' equity and cash flows for such
fiscal quarter and for the portion of Borrower's fiscal year ended at the end
of such fiscal quarter, setting forth in each case in comparative form, the
figures for the corresponding fiscal quarter and the corresponding portion of
Borrower's previous fiscal year, all in reasonable detail and satisfactory in
form to the Required Banks and certified (subject to normal year-end
adjustments and footnote disclosures) as to fairness of presentation, GAAP and
consistency by the chief financial officer of Borrower (or such other officer
of Borrower as shall be reasonably acceptable to the Required Banks);
provided, however, that delivery pursuant to Section 6.01(a)(iii) below of
copies of the Quarterly Report on Form 10-Q of Borrower for such fiscal
quarter filed with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and Exchange
Commission) shall be deemed to satisfy the requirements of this Section
6.01(a)(ii) with respect to consolidated financial statements;
(iii) within five (5) days after the sending or filing
thereof, copies of all such financial statements, proxy statements, notices
and reports as Borrower or any Subsidiary shall send to the holders of the
Class A Common Stock, $.01 par value, of Borrower and copies of all
registration statements (without exhibits) and all reports which Borrower or
any Subsidiary files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission);
(iv) simultaneously with the delivery of each set of financial
statements referred to in Sections 6.01(a)(i) and (ii) above, a certificate of
the chief financial officer of Borrower (or such other officer of Borrower as
shall be reasonably acceptable to the Required Banks) in the form attached
hereto as Exhibit H and incorporated herein by reference, accompanied by
supporting financial work sheets where appropriate, (A) evidencing Borrower's
compliance with the financial covenants contained in Sections 6.01(q),
6.02(a)(vi), 6.02(b) and 6.02(i) of this Agreement, (B) stating whether there
exists on the date of such certificate any Default or Event of Default and, if
any Default or Event of Default then exists, setting forth the details thereof
and the action which Borrower is taking or proposes to take with respect
thereto and (C) certifying that all of the representations and warranties of
Borrower and the Guarantors contained in this Agreement and in the other
Transaction Documents are true and correct in all material respects on and as
of the date of such certificate as if made on and as of the date of such
certificate;
(v) promptly upon receipt thereof, any reports submitted to
Borrower or any Subsidiary (other than reports previously delivered pursuant
to Sections 6.01(a)(i) and (ii) above) by independent accountants in
connection with any annual, interim or special audit made by them of the books
of Borrower or any Subsidiary;
(vi) as soon as available and in any event within ninety (90)
days after the beginning of each fiscal year of Borrower, consolidated balance
sheet, income statement and cash flow projections for Borrower and its
Subsidiaries for such fiscal year, all in form and detail reasonably
acceptable to the Required Banks; and
(vii) with reasonable promptness, such further information
regarding the business, affairs and financial condition of Borrower or any
Subsidiary as the Agent or any of the Banks may from time to time reasonably
request.
Each of the Banks is hereby authorized to deliver a copy of any financial
statement or other information made available by Borrower or any Subsidiary to
any regulatory authority having jurisdiction over such Bank, pursuant to any
request therefor.
(b) Payment of Indebtedness. Borrower will, and it will cause each
of its Subsidiaries to, (i) pay and discharge any and all Indebtedness payable
or Guaranteed by Borrower or such Subsidiary, as the case may be, and any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) in accordance with the
agreement, document or instrument relating to such Indebtedness or Guarantee
and (ii) faithfully perform, observe and discharge all covenants, conditions
and obligations which are imposed upon Borrower or such Subsidiary, as the
case may be, by any and all agreements, documents, instruments and indentures
evidencing, securing or otherwise relating to such Indebtedness or Guarantee.
(c) Maintenance of Books and Records; Consultations and Inspections.
Borrower will, and it will cause each of its Subsidiaries to, maintain books
and records in accordance with GAAP and in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities. Borrower will, and it will cause each of its
Subsidiaries to, upon two (2) Domestic Business Days prior oral or written
notice to Borrower from the Agent or any Bank (provided, however, that no
notice need be given if any Default or Event of Default under this Agreement
has occurred and is continuing), permit the Agent and each of the Banks (and
any Person appointed by the Agent or any of the Banks to whom the Borrower
does not reasonably object) to discuss the affairs, finances and accounts of
Borrower and each Subsidiary with the officers of Borrower and each Subsidiary
and their independent public accountants, all at such reasonable times and as
often as the Agent or any of the Banks may from time to time reasonably
request (but not so often as to materially interfere with the business of the
Borrower or any of its Subsidiaries). Borrower will also permit, and will
cause each of its Subsidiaries to permit, inspection of its Properties, books
and records by the Agent and each of the Banks during normal business hours
and at other reasonable times. In addition to the collateral examination fees
set forth in Section 2.06 of this Agreement, Borrower will reimburse the Agent
and each of the Banks upon demand for all reasonable costs and expenses
incurred by the Agent or any of the Banks in connection with any such
inspection conducted by the Agent or any of the Banks while any Default or
Event of Default under this Agreement has occurred and is continuing.
Borrower irrevocably authorizes the Agent and each of the Banks to, upon two
(2) Domestic Business Days prior oral or written notice to Borrower from the
Agent or any Bank (provided, however, that no notice need be given if any
Default or Event of Default under this Agreement has occurred and is
continuing), communicate directly with its independent public accountants and
irrevocably authorizes and directs such accountants to disclose to the Agent
and each of the Banks any and all information with respect to the business and
financial condition of Borrower and its Subsidiaries as the Agent or any of
the Banks may from time to time reasonably request in writing.
(d) Payment of Taxes. Borrower will, and it will cause each of its
Subsidiaries to, duly file all Federal, state and local income tax returns and
all other tax returns and reports of Borrower or such Subsidiary, as the case
may be, which are required to be filed and duly pay and discharge promptly all
taxes, assessments and other governmental charges imposed upon it or any of
its Property; provided, however, that neither Borrower nor any Subsidiary
shall be required to pay any such tax, assessment or other governmental charge
the payment of which is being contested in good faith and by appropriate
proceedings being diligently conducted and for which adequate reserves in
accordance with GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all such taxes,
assessments and governmental charges forthwith upon the commencement of
proceedings to foreclose any Lien which is attached as security therefor,
unless such foreclosure is stayed by the filing of an appropriate bond in a
manner reasonably satisfactory to the Required Banks.
(e) Payment of Claims. Borrower will, and it will cause each of its
Subsidiaries to, promptly pay and discharge (i) all trade accounts payable in
accordance with usual and customary business practices (but in no event later
than thirty (30) days after the due date thereof) and (ii) all claims for
work, labor or materials which if unpaid might become a Lien upon any of its
Property or assets; provided, however, that neither Borrower nor any
Subsidiary shall be required to pay any such account payable or claim the
payment of which is being contested in good faith and by appropriate
proceedings being diligently conducted and for which adequate reserves in
accordance with GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all such
accounts payable and claims forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless such
foreclosure is stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to the Required Banks.
(f) Corporate Existence. Borrower will, and it will cause each of
its Subsidiaries to, do all things necessary to (i) preserve and keep in full
force and effect at all times its corporate existence and all permits,
licenses, franchises and other rights material to its business and (ii) be
duly qualified to do business in all jurisdictions where the nature of its
business or its ownership of Property requires such qualification.
(g) Maintenance of Property. Borrower will, and it will cause each
of its Subsidiaries to, at all times, preserve and maintain all of the
Property used or useful in the conduct of its business in good condition,
working order and repair, ordinary wear and tear excepted.
(h) Compliance with Laws, Regulations, Etc. Borrower will, and it
will cause each of its Subsidiaries to, comply with any and all laws,
ordinances and governmental and regulatory rules and regulations to which
Borrower or such Subsidiary, as the case may be, is subject (including,
without limitation, all Occupational Safety and Health Laws and all
Environmental Laws) and obtain any and all licenses, permits, franchises and
other governmental and regulatory authorizations necessary to the ownership of
its Properties or to the conduct of its business, which violation or failure
to obtain could reasonably be expected to have a Material Adverse Effect.
(i) Environmental Matters. Borrower shall give the Agent and each of
the Banks prompt written notice of (i) any Environmental Claim or any other
action or investigation with respect to the existence or potential existence
of any Hazardous Substances instituted or threatened with respect to Borrower
or any Subsidiary or any of the Properties or facilities owned, leased or
operated by Borrower or any Subsidiary which, if determined adversely to
Borrower or any Subsidiary, could reasonably be expected to have a Material
Adverse Effect and (ii) any condition or occurrence on any of the Properties
or facilities owned, leased or operated by Borrower or any Subsidiary which
constitutes a violation in any material respect of any Environmental Laws or
which gives rise to a reporting obligation or requires removal or remediation
under any Environmental Laws. Within thirty (30) days after the giving of any
such notice, Borrower shall deliver to each of the Banks Borrower's plan with
respect to removal or remediation and Borrower agrees to take all action which
is reasonably necessary in connection with such action, investigation,
condition or occurrence in accordance with such plan with due diligence and to
complete such removal or remediation as promptly as possible and in all events
within the time required by any Environmental Laws or any other applicable
law, rule or regulation. Borrower shall promptly provide the Agent and each
of the Banks with copies of all documentation relating thereto, and such other
information with respect to environmental matters as the Agent or any of the
Banks may request from time to time.
(j) ERISA Compliance. If Borrower, any Subsidiary or any ERISA
Affiliate shall have any Pension Plan, Borrower, such Subsidiary or such ERISA
Affiliate, as the case may be, shall comply in all material respects with all
requirements of ERISA relating to such Pension Plan. Without limiting the
generality of the foregoing, Borrower will not, and it will not cause or
permit any Subsidiary or any ERISA Affiliate to:
(i) permit any Pension Plan maintained by Borrower, any
Subsidiary or any ERISA Affiliate to engage in any nonexempt "prohibited
transaction," as such term is defined in Section 4975 of the Code;
(ii) permit any Pension Plan maintained by Borrower, any
Subsidiary or any ERISA Affiliate to incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, 29 U.S.C. Section
1082, whether or not waived;
(iii) terminate any Pension Plan in a manner which could
result in the imposition of a Lien on any Property of Borrower, any Subsidiary
or any ERISA Affiliate pursuant to Section 4068 of ERISA, 29 U.S.C. Section
1368; or
(iv) take any action which would constitute a complete or
partial withdrawal from a Multi-Employer Plan within the meaning of Sections
4203 or 4205 of Title IV of ERISA.
Notwithstanding any provision contained in this Section 6.01(j) to the
contrary, an act by Borrower or any Subsidiary shall not be deemed to
constitute a violation of this Section 6.01(j) unless the Required Banks
determine in good faith that said action, individually or cumulatively with
other acts of Borrower and its Subsidiaries, has or could reasonably be
expected to have a Material Adverse Effect.
(k) Notices. Borrower will notify the Agent and each of the Banks in
writing of any of the following within three (3) Domestic Business Days after
learning of the occurrence thereof, describing the same and, if applicable,
the steps being taken by the Person(s) affected with respect thereto:
(i) the occurrence of any Default or Event of Default under
this Agreement;
(ii) the occurrence of any default or event of default by
Borrower, any other Obligor or any Subsidiary under any note, indenture, loan
agreement, mortgage, deed of trust, security agreement, lease or other similar
agreement, document or instrument to which Borrower, any other Obligor or any
Subsidiary, as the case may be, is a party or by which it is bound or to which
it is subject;
(iii) the institution of any litigation, arbitration
proceeding or governmental or regulatory proceeding affecting Borrower, any
other Obligor or any Subsidiary, whether or not considered to be covered by
insurance, in which the prayer or claim for relief seeks recovery of an amount
in excess of $500,000.00 (or, if no dollar amount is specified in the prayer
or claim for relief, in which there is a reasonable likelihood of recovery of
an amount in excess of $500,000.00) or any form of equitable relief;
(iv) the entry of any judgment or decree against Borrower, any
other Obligor or any Subsidiary;
(v) the occurrence of a Reportable Event with respect to any
Pension Plan; the filing of a notice of intent to terminate a Pension Plan by
Borrower, any ERISA Affiliate or any Subsidiary; the institution of
proceedings to terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial withdrawal" as defined in
Sections 4203 and 4205, respectively, of ERISA by Borrower, any ERISA
Affiliate or any Subsidiary from any Multi-Employer Plan; or the incurrence of
any material increase in the contingent liability of Borrower or any
Subsidiary with respect to any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA which covers retired employees and their beneficiaries;
(vi) the occurrence of any material adverse change in the
Properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower, any other Obligor or any
Subsidiary; and
(vii) any notices required to be provided pursuant to other
provisions of this Agreement and notice of the occurrence of such other events
as the Agent or any of the Banks may from time to time reasonably specify.
(l) Insurance. Borrower will, and it will cause each of its
Subsidiaries to, insure all of its Property of the character usually insured
by corporations engaged in the same or similar businesses similarly situated,
against loss or damage of the kind customarily insured against by such
corporations, unless higher limits or coverage are reasonably required in
writing by the Required Banks, and carry adequate liability insurance and
other insurance of a kind and in an amount generally carried by corporations
engaged in the same or similar businesses similarly situated, unless higher
limits or coverage are reasonably required in writing by the Required Banks.
All insurance required by this Section 6.01(l) shall be with insurers rated
A-XI or better by A.M. Best Company (or accorded a similar rating by another
nationally or internationally recognized insurance rating agency of similar
standing if A.M. Best Company is not then in the business of rating insurers
or rating foreign insurers) or such other insurers as may from time to time be
reasonably acceptable to the Required Banks; provided, however, that if any
such insurance is not available at commercially reasonable rates from any
insurer rated A-XI or better by A.M. Best Company (or accorded a similar
rating by another nationally or internationally recognized insurance rating
agency of similar standing if A.M. Best Company is not then in the business of
rating insurers or rating foreign insurers), then Borrower or such Subsidiary,
as the case may be, may obtain such insurance from an insurer rated B or
better by A.M. Best Company (or accorded a similar rating by another
nationally or internationally recognized insurance rating agency of similar
standing if A.M. Best Company is not then in the business of rating insurers
or rating foreign insurers) and such insurer shall be deemed to be reasonably
acceptable to the Required Banks. All such insurance may be subject to
reasonable deductible amounts. Simultaneously with each delivery of financial
statements under Section 6.01(a)(i), Borrower shall deliver to the Agent and
each of the Banks a certificate of an officer of Borrower specifying the
details of all insurance then in effect and evidence of the payment of all
premiums therefor.
(m) Further Assurances. Borrower will, and it will cause each of the
Guarantors to, execute and deliver to the Agent, at any time and from time to
time, any and all further agreements, documents and instruments, and take any
and all further actions which may be required under applicable law, or which
the Agent or any of the Banks may from time to time reasonably request, in
order to effectuate the transactions contemplated by this Agreement and the
other Transaction Documents.
(n) Accountant. Borrower will give each of the Banks prompt notice
of any change of Borrower's independent certified public accountants and a
statement of the reasons for such change (the Banks acknowledge that any
report on Form 8-K which may be filed by Borrower with the Securities and
Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission) in connection with any
change of the Borrower's independent certified public accountants shall be
deemed to satisfy the requirements of this sentence so long as a copy of the
same is promptly delivered to each of the Banks). Borrower shall at all times
utilize independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Banks.
(o) Ownership of Guarantors. Borrower will at all times be the sole
legal, beneficial and record owner of all of the issued and outstanding shares
of each class of capital stock of Huntco Nevada. Borrower will cause Huntco
Nevada to at all times be the sole legal, beneficial and record owner of all
of the issued and outstanding shares of each class of capital stock of each of
Huntco Steel and Midwest Products. Borrower will cause Huntco Steel to at all
times be the sole legal, beneficial and record owner of all of the issued and
outstanding shares of each class of capital stock of HSI Aviation.
(p) Covenant to Secure Borrower's Obligations Equally. Borrower
will, if it or any Subsidiary shall create or assume any Lien upon any of its
Property or assets, whether now owned or hereinafter acquired, other than
Permitted Liens (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Section 10.11 of this Agreement),
make or cause to be made effective provision whereby all of the Borrower's
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured so long as any such other Indebtedness
shall be so secured as evidenced by documentation which is acceptable to the
Required Banks. Borrower acknowledges and agrees that compliance with this
covenant will not cure a violation of Section 6.02(b) of this Agreement or any
other covenant contained in this Agreement.
(q) Financial Covenants.
(i) Minimum Consolidated Tangible Net Worth. Borrower will at
all times keep and maintain a Consolidated Tangible Net Worth in an amount not
less than the sum of (A) $100,000,000.00 plus (B) Sixty Percent (60%) of the
Consolidated Net Income of Borrower and its Subsidiaries for each fiscal
quarter of Borrower ending on or after October 31, 1996 (such required
increases to be cumulative for each such fiscal quarter), provided that for
purposes of the foregoing calculation, Consolidated Net Income shall be deemed
to be $0.00 for any fiscal quarter for which Consolidated Net Income is less
than or equal to $0.00.
(ii) Maximum Consolidated Debt to Consolidated EBITDA Ratio.
Borrower will have and maintain as of the last day of each fiscal quarter of
Borrower ending on or after the Collateral Release Date a Consolidated Debt to
Consolidated EBITDA Ratio of not more than 3.75 to 1.0.
(iii) Maximum Leverage Ratio. Borrower will at all times have
and maintain a ratio, expressed as a percentage, of (A) Consolidated Funded
Debt to (B) Consolidated Total Capitalization which is less than or equal to
Fifty Percent (50%).
(iv) Minimum Consolidated Debt Service Coverage Ratio.
Borrower will have and maintain a Consolidated Debt Service Coverage Ratio of
at least (A) 1.75 to 1.0 for the four (4) consecutive fiscal quarter period of
Borrower ended on December 31, 1997, (B) 1.75 to 1.0 for the four (4)
consecutive fiscal quarter period of Borrower ending on March 31, 1998, (C)
1.75 to 1.0 for the four (4) consecutive fiscal quarter period of Borrower
ending on June 30, 1998, (D) 1.0 to 1.0 for the four (4) consecutive fiscal
quarter period of Borrower ending on September 30, 1998, (E) 1.0 to 1.0 for
the four (4) consecutive fiscal quarter period of Borrower ending on December
31, 1998, and (F) 1.2 to 1.0 for each four (4) consecutive fiscal quarter
period of Borrower ending on or after March 31, 1999.
(r) Guarantees by New Subsidiaries. If Borrower creates, forms or
acquires any Subsidiary on or after the date of this Agreement, Borrower will,
contemporaneously with the creation, formation or acquisition of such
Subsidiary, cause such Subsidiary to guaranty the payment and performance of
the Borrower's Obligations and to secure said guaranty with a security
interest in and lien on all of the Specified Collateral of such Subsidiary,
all pursuant to documentation in form and substance reasonably satisfactory to
the Required Banks.
6.02 Negative Covenants of Borrower. Borrower covenants and agrees
that, so long as (i) any of the Banks has any obligation to make any Loan
under this Agreement or Mercantile has any obligation to issue any Letter of
Credit under this Agreement, (ii) any Letter of Credit remains outstanding or
(iii) any of the Borrower's Obligations remain unpaid, unless the prior
written consent of the Required Banks is obtained:
(a) Limitation on Indebtedness. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, incur or be obligated on any
Indebtedness, either directly or indirectly, by way of Guarantee, suretyship
or otherwise, other than:
(i) the Borrower's Obligations to the Agent and the Banks;
(ii) unsecured trade accounts payable and other normal
accruals incurred in the ordinary course of business which are not more than
thirty (30) days past due;
(iii) Indebtedness existing as of the date hereof and listed
on Schedule 5.10 attached hereto;
(iv) Subordinated Indebtedness;
(v) Indebtedness of any Subsidiary to Borrower or any other
Subsidiary;
(vi) Indebtedness of any Subsidiary to any Person other than
Borrower or any other Subsidiary not otherwise permitted by this Section
6.02(a), provided that after giving effect thereto the sum of (A) the
aggregate outstanding principal amount of all Indebtedness secured by Liens
permitted by clause (f) of the definition of Permitted Liens plus (B) the
aggregate outstanding principal amount of all such Indebtedness, determined on
a combined basis for all Subsidiaries of Borrower and without duplication,
does not at any time exceed Ten Percent (10%) of Consolidated Tangible Net
Worth as of the end of the fiscal quarter of Borrower immediately preceding
the date of determination; and
(vii) other Indebtedness of Borrower to the extent not
otherwise prohibited by this Agreement.
(b) Limitation on Liens. Borrower will not, and will not cause or
permit any of its Subsidiaries to, create, incur or assume, or suffer to be
incurred or to exist, any Lien on any of its or their Property or assets,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, except for Permitted Liens.
(c) Consolidation, Merger, Sale of Assets, Etc. (i) Borrower will
not, and it will not cause or permit any Subsidiary to, directly or indirectly
merge or consolidate with or into any other Person or permit any other Person
to merge into or with or consolidate with it, except that: (A) any Subsidiary
may merge or consolidate with or into Borrower (provided that Borrower shall
be the continuing or surviving corporation) or with or into any one or more
other Subsidiaries; (B) any Subsidiary may merge or consolidate with or into
any other Person or permit any other Person to merge into or with or
consolidate with it, provided that, upon the consummation of such merger or
consolidation (1) the continuing or surviving corporation of such merger or
consolidation shall be a Subsidiary, (2) the continuing or surviving
corporation of such merger or consolidation shall, pursuant to documentation
reasonably acceptable to the Required Banks, (x) either (a) expressly assume
all of the obligations and liabilities of the Subsidiary being merged or
consolidated under Section 9 of this Agreement if such Subsidiary was a
Guarantor or (b) guaranty the payment and performance of all of the Borrower's
Obligations and (y) grant the Collateral Agent for the equal and ratable
benefit of the Creditors a security interest in all of the Specified
Collateral of the continuing or surviving corporation as security for its
guaranty of the Borrower's Obligations and (3) no Default or Event of Default
shall exist; and (C) Borrower may permit any Person to merge into or with or
consolidate with it, provided that, upon the consummation of such merger or
consolidation (1) Borrower is the continuing or surviving corporation of such
merger or consolidation and (2) no Default or Event of Default shall exist.
(ii) Borrower will not, and will not cause or permit any of its
Subsidiaries to, sell, assign, lease, transfer, abandon or otherwise dispose
of any of its Property (including, without limitation, any shares of capital
stock of a Subsidiary owned by Borrower or another Subsidiary) or issue, sell
or otherwise dispose of any shares of capital stock of any Subsidiary, except
for (A) sales of Inventory in the ordinary course of business, (B) sales of
fixed assets which are obsolete, worn-out or otherwise not used or useable in
the ordinary course of its business, so long as the net proceeds thereof are
used solely to purchase replacement fixed assets or assets of comparable
quality or to pay or prepay Debt of Borrower or such Subsidiary, as the case
may be, (C) other sales of fixed assets which are not used or useable in the
ordinary course of its business, so long as the gross sale proceeds from all
such asset sales by Borrower and its Subsidiaries does not exceed
$1,000,000.00 in the aggregate in any fiscal year, (D) sales or transfers of
fixed assets from (x) Borrower to any Subsidiary, (y) any Subsidiary to any
other Subsidiary or (z) any Subsidiary to Borrower and (E) sale and leaseback
transactions permitted by Section 6.02(d).
(d) Sale and Leaseback Transactions. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby Borrower or such Subsidiary shall in one or
more related transactions sell, transfer or otherwise dispose of any Property
owned by Borrower or such Subsidiary to any Person other than Borrower or a
Wholly-Owned Subsidiary and then rent or lease, as lessee, such Property or
any part thereof for a period or periods which in the aggregate would exceed
twelve (12) months from the date of commencement of the lease term (a "Sale-
Leaseback Transaction"); provided, however, that notwithstanding the
foregoing, Borrower or any of its Subsidiaries may enter into a Sale-Leaseback
Transaction with a municipal authority in connection with an industrial
revenue bond financing so long as (i) Borrower and/or one or more of its
Wholly-Owned Subsidiaries is the owner of all of the bonds issued in
connection with such industrial revenue bond financing, (ii) the net proceeds
of such Sale-Leaseback Transaction are used by the entity selling the Property
solely to pay down Debt of such entity and (iii) the consummation of such
Sale-Leaseback Transaction and the related industrial revenue bond financing
do not violate any of the other covenants contained in this Agreement. A
sale, transfer or other disposition by Borrower or any Subsidiary of rights
under a purchase order or other contract to purchase Property prior to the
purchase of such Property by Borrower or any Subsidiary shall not constitute a
Sale-Leaseback Transaction for purposes of this Section 6.02(d) even if such
Property is thereafter leased by Borrower or any Subsidiary from the Person
purchasing such Property so long as neither Borrower nor any Subsidiary pays
any portion of the purchase price of such Property.
(e) Sale or Discount of Accounts. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, sell or discount any of its notes
or accounts receivable or chattel paper.
(f) Transactions with Affiliates. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, enter into or be a party to any
material transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of Property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
course of business and pursuant to the reasonable requirements of Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to Borrower or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate.
(g) Changes in Nature of Business. Borrower will not, and it will
not cause or permit any of its Subsidiaries to, engage in any business if, as
a result, the general nature of the business which would then be engaged in by
Borrower and its Subsidiaries, considered as a whole, would be substantially
changed from the general nature of the business engaged in (or proposed to be
engaged in) by Borrower and its Subsidiaries as of the date of this Agreement,
which is the business of metals processing, general manufacturing and related
distribution activities including transportation.
(h) Fiscal Year. Borrower will not, and it will not cause or permit
any of its Subsidiaries to, change its fiscal year unless (i) any such change
is effected in accordance with GAAP and in a manner approved by Borrower's
independent certified public accountants and (ii) if the Required Banks, in
their sole and absolute discretion, determine that any such change has any
significant effect on any of the financial covenants contained in this
Agreement (A) with respect to those financial covenant(s) upon which the
effect of such fiscal year change can be determined with mathematical
certainty, such financial covenant(s) shall be amended to reflect the effect
of such fiscal year change (and Borrower, each of the Guarantors, the Agent
and each of the Banks shall be obligated to promptly execute an amendment to
such effect) and (B) with respect to those financial covenant(s) upon which
the effect of such fiscal year change cannot be determined with mathematical
certainty, Borrower and the Banks shall, in good faith, negotiate and use
their best efforts to agree upon new financial covenant(s) reasonably
acceptable to Borrower and the Required Banks to replace the affected
financial covenant(s) (which new financial covenant(s) shall, to the extent
reasonably possible, approximate the effect of such fiscal year change on the
existing financial covenant(s)), and if Borrower and the Required Banks
cannot, in good faith, agree on said new financial covenant(s), the existing
financial covenant(s) shall remain in full force and effect. Each such
amendment shall be evidenced by an instrument in writing signed by Borrower,
each of the Guarantors, the Agent and each of the Banks and, until such
amendment has been fully executed, the existing financial covenant(s) shall
remain in full force and effect.
(i) Stock Redemptions and Distributions. Borrower will not, and it
will not cause or permit any of its Subsidiaries to, declare or incur any
liability to make any Distribution in respect of the capital stock of Borrower
or the capital stock of such Subsidiary, as the case may be, except that (i)
the Wholly-Owned Subsidiaries of Borrower shall be permitted to declare and
pay cash dividends on their respective capital stock and (ii) so long as no
Default or Event of Default under this Agreement has occurred and is
continuing or is created thereby or would result therefrom, (A) Borrower shall
be permitted to declare and pay cash dividends on its capital stock in an
aggregate amount of up to $5,000,000.00 during each fiscal year of Borrower,
(B) the Subsidiaries of Borrower (other than Wholly-Owned Subsidiaries of
Borrower) shall be permitted to declare and pay cash dividends on their
respective capital stock and (C) Borrower shall be permitted to redeem,
repurchase or otherwise acquire shares of its capital stock so long as the
aggregate consideration paid or committed to be paid by Borrower for all
shares so redeemed, repurchased or otherwise acquired by Borrower during any
fiscal year of Borrower does not exceed the sum of $250,000.00.
(j) Pension Plans. Borrower will not, and it will not cause or
permit any of its Subsidiaries to, (a) permit any condition to exist in
connection with any Pension Plan which might constitute grounds for the PBGC
to institute proceedings to have such Pension Plan terminated or a trustee
appointed to administer such Pension Plan or (b) engage in, or permit to exist
or occur, any other condition, event or transaction with respect to any
Pension Plan which could result in the incurrence by Borrower, any Subsidiary
or any ERISA Affiliate of any material liability, fine or penalty.
(k) Subordinated Indebtedness. Borrower will not make any payments
of principal, interest or other amounts on or with respect to any of its
Subordinated Indebtedness to the extent prohibited by the subordination
provisions governing the same.
(l) Limitations on Acquisitions. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, make or suffer to exist any
Acquisition of any Person, except Acceptable Acquisitions, unless such
Acquisitions are funded solely by, or from the proceeds of, the issuance of
capital stock by Borrower.
(m) Restricted Investments. Borrower will not, and it will not cause
or permit any of its Subsidiaries to, directly or indirectly, make any
Restricted Investments.
(n) Limitations on Restrictive Agreements. Borrower will not, and it
will not cause or permit any of its Subsidiaries to, enter into, or suffer to
exist, any agreement with any Person which prohibits or limits the ability of
any Subsidiary to (a) pay dividends or make other distributions or prepay any
Indebtedness owed to Borrower or any other Subsidiary, (b) make loans or
advances to Borrower or any other Subsidiary, (c) transfer any of its
properties or assets to Borrower or any other Subsidiary (other than with
respect to assets subject to Liens permitted by clause (f) of the definition
of Permitted Liens) or (d) create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired (other than with respect to assets subject to Liens permitted by
clause (f) of the definition of Permitted Liens); provided that the foregoing
shall not apply to (i) restrictions in effect on the date of this Agreement
contained in agreements governing Debt outstanding on the date of this
Agreement and listed on Schedule 6.02(n) attached hereto and, if such Debt is
renewed, extended or refinanced, restrictions in the agreements governing the
renewed, extended or refinanced Debt (and successive renewals, extensions and
refinancings thereof) if such restrictions are no more restrictive than those
contained in the agreements governing the Debt being renewed, extended or
refinanced or (ii) restrictions contained in agreements governing Debt
incurred after the date of this Agreement by Borrower or any Subsidiary in
compliance with this Agreement provided that such restrictions are no more
restrictive than those contained in this Agreement (without giving effect to
any amendment or modification thereof in violation of Section 6.02(o) hereof).
(o) Financial Covenants and Collateral Provisions of Note Purchase
Agreements and other Restricted Agreements. Borrower will not, and it will
not cause or permit any of its Subsidiaries to: (i) enter into any indenture,
agreement or other instrument under which any Debt of Borrower or any
Subsidiary may be issued (a "Restricted Agreement") or (ii) agree to any
amendment, waiver, consent, modification, refunding, refinancing or
replacement of any of the Note Purchase Agreements or any other Restricted
Agreement, in either case, with terms the effect of which is to (A) include a
Financial Covenant which is not contained in this Agreement, (B) revise or
alter any Financial Covenant contained therein the effect of which is to
increase or expand the restriction on Borrower or any Subsidiary or (C) except
for Permitted Liens, grant collateral for the obligations of Borrower or any
Subsidiary thereunder, unless Borrower or such Subsidiary, as the case may be,
concurrently incorporates herein such additional, altered or revised Financial
Covenant or grant of collateral (as the case may be). The incorporation of
each such additional Financial Covenant is hereby deemed to occur
automatically and concurrently by reason of the execution of this Agreement
without any further action or the execution of any additional document by any
of the parties to this Agreement (and Borrower hereby agrees to give the Agent
and each of the Banks prompt written notice of each such Financial Covenant so
incorporated into this Agreement). Without limiting the foregoing, neither
Borrower nor any Subsidiary, directly or indirectly, will offer any economic
inducement (including, without limitation, any collateral) to any holder of
any Private Placement Notes under the Note Purchase Agreements or to any other
Person who is a party to any other Restricted Agreement for the purpose of
inducing such holder or such other Person to enter into any waiver of any
event of default under the Note Purchase Agreements or such other Restricted
Agreement or event which with the lapse of time or the giving of notice, or
both, would constitute such an event of default, unless the same such economic
inducement has been concurrently offered and paid on a pro-rata basis
(determined with respect to the aggregate Commitments hereunder, whether used
or unused) to all of the Banks (it being understood and agreed that the
offering of such economic inducement to the Banks shall not be deemed or
construed to obligate any such Bank to enter into any waiver of any Default or
Event of Default hereunder). Borrower acknowledges and agrees that compliance
with this covenant will not cure a violation of Section 6.02(b) of this
Agreement or any other covenant contained in this Agreement.
6.03 Use of Proceeds. Borrower covenants and agrees that (i) the
proceeds of the Revolving Credit Loans will be used solely for working capital
and general corporate purposes of Borrower and/or its Subsidiaries (including
the funding of all or any portion of any Acceptable Acquisitions); and (ii) no
part of the proceeds of any Loan will be used in violation of any applicable
law or regulation.
SECTION 7. EVENTS OF DEFAULT.
If any of the following (each of the following herein sometimes called
an "Event of Default") shall occur and be continuing:
7.01 Borrower shall fail to pay any of Borrower's Obligations
constituting interest within five (5) days after the date the same shall first
become due and payable, whether by reason of demand, maturity, acceleration or
otherwise;
7.02 Borrower shall fail to pay any of Borrower's Obligations (other
than interest) as and when the same shall become due and payable, whether by
reason of demand, maturity, acceleration or otherwise;
7.03 Any representation or warranty of Borrower or any of the
Guarantors made in this Agreement, in any other Transaction Document to which
Borrower or any of the Guarantors is a party or in any certificate, agreement,
instrument or statement furnished or made or delivered pursuant hereto or
thereto or in connection herewith or therewith, shall prove to have been
untrue or incorrect in any material respect when made or effected;
7.04 Borrower shall fail to perform or observe any term, covenant or
provision contained in Section 2.01(c), Section 2.01(d), Section 3.04, Section
6.01(c) (except the first sentence of Section 6.01(c)), Section 6.01(k),
Section 6.01(l), Section 6.01(m), Section 6.01(o), Section 6.01(p), Section
6.01(q), Section 6.02 or Section 6.03;
7.05 Borrower shall fail to perform or observe any other term,
covenant or provision contained in this Agreement (other than those specified
in Sections 7.01, 7.02, 7.03 or 7.04 above) and any such failure shall remain
unremedied for thirty (30) days after the earlier of (i) written notice of
default is given to Borrower by the Agent or any of the Banks or (ii) any
officer of Borrower obtaining knowledge of such default;
7.06 This Agreement or any of the other Transaction Documents shall
at any time for any reason cease to be in full force and effect or shall be
declared to be null and void by a court of competent jurisdiction, or if the
validity or enforceability thereof shall be contested or denied by Borrower or
any of the Guarantors, or if the transactions completed hereunder or
thereunder shall be contested by Borrower or any of the Guarantors or if
Borrower or any of the Guarantors shall deny that it has any further liability
or obligation hereunder or thereunder;
7.07 Borrower, any other Obligor or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent
to the institution of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official of itself or of a substantial part of its
Property or assets, (iv) file an answer admitting the material allegations of
a petition filed against itself in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in writing
its inability or fail generally to pay its debts as they become due or (vii)
take any corporate or other action for the purpose of effecting any of the
foregoing;
7.08 An involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Borrower, any other Obligor or any Subsidiary, or of a
substantial part of the Property or assets of Borrower, any other Obligor or
any Subsidiary, under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership, liquidation or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or
similar official of Borrower, any other Obligor or any Subsidiary or of a
substantial part of the Property or assets of Borrower, any other Obligor or
any Subsidiary or (iii) the winding-up or liquidation of Borrower, any other
Obligor or any Subsidiary; and such proceeding or petition shall continue
undismissed for sixty (60) consecutive days or an order or decree approving or
ordering any of the foregoing shall continue unstayed and in effect for sixty
(60) consecutive days;
7.09 Any of the Letter of Credit Applications shall at any time for
any reason cease to be in full force and effect or shall be declared to be
null and void by a court of competent jurisdiction, or if the validity or
enforceability of any of the Letter of Credit Applications shall be contested
or denied by Borrower, or if Borrower shall deny that it has any further
liability or obligation under any of the Letter of Credit Applications or if
Borrower shall fail to comply with or observe any of the terms, provisions or
conditions contained in any of the Letter of Credit Applications;
7.10 Any "Event of Default" (as defined therein) shall occur under or
within the meaning of any of the Security Agreements;
7.11 Other than by reason of the termination of the Intercreditor
Agreement in accordance with its terms, (a) the Intercreditor Agreement shall
at any time for any reason cease to be in full force and effect or shall be
declared to be null and void by a court of competent jurisdiction, (b) the
validity or enforceability of the Intercreditor Agreement shall be contested
or denied by Borrower or any of the Guarantors, (c) Borrower or any of the
Guarantors shall deny that it has any further liability or obligation under
the Intercreditor Agreement or (d) Borrower or any of the Guarantors shall
fail to comply with or observe any of the terms, provisions, conditions,
agreements or covenants contained in the Intercreditor Agreement;
7.12 Borrower, any other Obligor or any Subsidiary shall be declared
by any of the Banks to be in default on, or pursuant to the terms of, (1) any
other present or future obligation to such Bank(s), including, without
limitation, any other loan, line of credit, revolving credit, guaranty or
letter of credit reimbursement obligation, or (2) any other present or future
agreement purporting to convey to such Bank(s) a Lien upon any Property or
assets of Borrower, such other Obligor or such Subsidiary, as the case may be;
7.13 The occurrence of any default or event of default under or
within the meaning of any agreement, document or instrument evidencing,
securing, guaranteeing the payment of or otherwise relating to any Debt of
Borrower, any other Obligor or any Subsidiary (other than the Borrower's
Obligations) having an aggregate outstanding principal balance in excess of
$500,000.00 which is not cured within any applicable cure period (if any);
7.14 Any "Event of Default" (as defined therein) shall occur under or
within the meaning of any of the Note Purchase Agreements;
7.15 Borrower, any other Obligor or any Subsidiary shall have a
judgment entered against it by a court having jurisdiction in the premises and
such judgment shall not be appealed in good faith or satisfied by Borrower,
such other Obligor or such Subsidiary, as the case may be, within thirty (30)
days after the entry of such judgment;
7.16 The occurrence of a Reportable Event with respect to any Pension
Plan; the filing of a notice of intent to terminate a Pension Plan by
Borrower, any ERISA Affiliate or any Subsidiary; the institution of
proceedings to terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial withdrawal" as defined in
Sections 4203 and 4205, respectively, of ERISA by Borrower, any ERISA
Affiliate or any Subsidiary from any Multi-Employer Plan; or the incurrence of
any material increase in the contingent liability of Borrower or any
Subsidiary with respect to any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA which covers retired employees and their beneficiaries;
or
7.17 The institution by Borrower, any ERISA Affiliate or any
Subsidiary of steps to terminate any Pension Plan if, in order to effectuate
such termination, Borrower, such ERISA Affiliate or such Subsidiary, as the
case may be, would be required to make a contribution to such Pension Plan, or
would incur a liability or obligation to such Pension Plan, in excess of
$500,000.00; or the institution by the PBGC of steps to terminate any Pension
Plan;
THEN, and in each such event (other than an event described in Sections
7.07 or 7.08), the Agent may, or if requested in writing by the Required Banks
the Agent shall, declare that the obligation of the Banks to make Revolving
Credit Loans under this Agreement and the obligation of Mercantile to issue
Letters of Credit under this Agreement have terminated, whereupon such
obligations of the Banks and Mercantile shall be immediately and forthwith
terminated, and the Agent may further, or if requested in writing by the
Required Banks the Agent shall further, declare on behalf of each of the Banks
that the entire outstanding principal balance of and all accrued and unpaid
interest on the Notes and all of the other Borrower's Obligations are
forthwith due and payable, whereupon all of the unpaid principal balance of
and all accrued and unpaid interest on the Notes and all such other Borrower's
Obligations shall become and be immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Borrower, and the Agent and the Banks may exercise
any and all other rights and remedies which any of them may have under this
Agreement or any of the other Transaction Documents or under applicable law;
provided, however, that upon the occurrence of any event described in Sections
7.07 or 7.08, the obligation of the Banks to make Revolving Credit Loans under
this Agreement and the obligation of Mercantile to issue Letters of Credit
under this Agreement shall automatically terminate and the entire outstanding
principal balance of and all accrued and unpaid interest on the Notes and all
of the other Borrower's Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Borrower, and the Agent and
the Banks may exercise any and all other rights and remedies which any of them
may have under this Agreement or any of the other Transaction Documents or
under applicable law.
SECTION 8. AGENT
8.01 Appointment. Mercantile Bank National Association is hereby
appointed by the Banks as Agent under this Agreement, the Notes and the other
Transaction Documents. The Agent agrees to act as such upon the express
conditions contained in this Agreement.
8.02 Powers. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to the Agent by the terms of this
Agreement and the other Transaction Documents, together with such powers as
are reasonably incidental thereto. The Agent shall have no implied duties to
the Banks, nor any obligation to the Banks to take any action under this
Agreement or any of the other Transaction Documents, except any action
specifically provided by the this Agreement or any of the other Transaction
Documents to be taken by the Agent. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default or Event of Default, except as expressly provided in Section 7.
8.03 General Immunity. Neither the Agent nor any of its directors,
officers, employees, agents or advisors shall be liable to any of the Banks
for any action taken or not taken by it in connection with this Agreement or
any of the other Transaction Documents (i) with the consent or at the request
of the Required Banks (this clause (i), however, shall not exculpate the Agent
from its own gross negligence or willful misconduct in the manner in which it
takes any action with the consent of or at the request of the Required Banks)
or (ii) in the absence of its own gross negligence or willful misconduct.
8.04 No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, employees, agents or advisors shall (i) be
responsible for or have any duty to ascertain, inquire into or verify any
recitals, reports, statements, representations or warranties contained in this
Agreement or any of the other Transaction Documents or furnished pursuant
hereto or thereto; (ii) be responsible for any Loans or Letters of Credit
hereunder, (iii) be bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement or any of the other
Transaction Documents; (iv) be responsible for the satisfaction of any
condition specified in Section 4, except receipt of items required to be
delivered to the Agent; (v) be responsible for the validity, effectiveness,
genuineness or enforceability of this Agreement or any of the other
Transaction Documents; or (vi) be responsible for the creation, attachment,
perfection or priority of any security interests or liens purported to be
granted to the Collateral Agent, the Agent or any of the Banks pursuant to
this Agreement or any of the other Transaction Documents.
8.05 Right to Indemnity. Notwithstanding any other provision
contained in this Agreement to the contrary, to the extent Borrower fails to
reimburse the Agent pursuant to Section 10.03, Section 10.04 or Section 10.05,
or if any Default or Event of Default shall occur under this Agreement, the
Banks shall ratably in accordance with their respective Pro Rata Shares
indemnify the Agent and hold it harmless from and against any and all
liabilities, losses (except losses occasioned solely by failure of Borrower to
make any payments or to perform any obligations required by this Agreement
(excepting those described in Sections 10.03, 10.04 and 10.05), the Notes, the
Letter of Credit Applications or any of the other Transaction Documents),
costs and/or expenses, including, without limitation, any liabilities, losses,
costs and/or expenses arising from the failure of any Bank to perform its
obligations hereunder or in respect of this Agreement, and also including,
without limitation, reasonable attorneys' fees and expenses, which the Agent
may incur, directly or indirectly, in connection with this Agreement, the
Notes or any of the other Transaction Documents, or any action or transaction
related hereto or thereto; provided only that the Agent shall not be entitled
to such indemnification for any losses, liabilities, costs and/or expenses
directly and solely resulting from its own gross negligence or willful
misconduct. This indemnity shall be a continuing indemnity, contemplates all
liabilities, losses, costs and expenses related to the execution, delivery and
performance of this Agreement, the Notes and the other Transaction Documents,
and shall survive the satisfaction and payment of the Loans, the expiration or
other termination of the Letters of Credit and the termination of this
Agreement.
8.06 Action Upon Instructions of Required Banks. The Agent agrees,
upon the written request of the Required Banks, to take any action of the type
specified in this Agreement or any of the other Transaction Documents as being
within the Agent's rights, duties, powers or discretion. Notwithstanding the
foregoing, the Agent shall be fully justified in failing or refusing to take
any action hereunder, unless it shall first be indemnified to its satisfaction
by the Banks pro rata against any and all liabilities, losses, costs and
expenses (including, without limitation, attorneys' fees and expenses) which
may be incurred by it by reason of taking or continuing to take any such
action, other than any liability which may arise out of Agent's gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance
with written instructions signed by the Required Banks, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on
all of the Banks and on all holders of the Notes. In the absence of a request
by the Required Banks, the Agent shall have authority, in its sole discretion,
to take or not to take any action, unless this Agreement or any of the other
Transaction Documents specifically requires the consent of the Required Banks
or of all of the Banks.
8.07 Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder by or through employees, agents and attorneys-
in-fact and shall not be answerable to the Banks, except as to money or
securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it in good
faith and with reasonable care. The Agent shall be entitled to advice and
opinion of legal counsel concerning all matters pertaining to the duties of
the agency hereby created.
8.08 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of legal counsel selected by the Agent.
8.09 May Treat Payee as Owner. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any person, firm
or corporation who at the time of making such request or giving such authority
or consent is the holder of any such Note shall be conclusive and binding on
any subsequent holder, transferee or assignee of such Note or of any Note
issued in exchange therefor.
8.10 Agent's Reimbursement. Each Bank agrees to reimburse the Agent
pro rata in accordance with its Pro Rata Share for (a) any out-of-pocket costs
and expenses not reimbursed by Borrower for which the Agent is entitled to
reimbursement by the Borrower under this Agreement or any of the other
Transaction Documents and (b) for any other out-of-pocket costs and expenses
incurred by the Agent on behalf of the Banks in connection with the
preparation, execution, delivery, amendment, modification, extension, renewal
and/or enforcement of this Agreement and/or any of the other Transaction
Documents.
8.11 Rights as a Bank. With respect to its Commitment, the Loans
made by it, the Letters of Credit issued by it and the Note issued to it, the
Agent shall have the same rights and powers hereunder as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent may accept deposits from, lend money to,
issue letters of credit for the account of and generally engage in any kind of
banking or trust business with the Borrower and its Subsidiaries and
Affiliates as if it were not the Agent.
8.12 Independent Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank and
based on the financial statements referred to in Section 5.04 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Transaction
Documents. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank 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 and
the other Transaction Documents.
8.13 Resignation of Agent. Subject to the appointment of a successor
Agent, the Agent may resign as Agent for the Banks under this Agreement and
the other Transaction Documents at any time by thirty (30) days' notice in
writing to the Banks and Borrower. Such resignation shall take effect upon
appointment of such successor Agent. The Required Banks shall have the right
to appoint a successor Agent who shall be entitled to all of the rights of,
and vested with the same powers as, the original Agent under this Agreement
and the other Transaction Documents. In the event a successor Agent shall not
have been appointed within the thirty (30) day period following the giving of
notice by the Agent, the Agent may appoint its own successor. Resignation by
the Agent shall not affect or impair the rights of the Agent under Sections
8.05 and 8.10 hereof with respect to all matters preceding such resignation.
Any successor Agent must be a national banking association or a bank chartered
in any State of the United States having a combined capital and surplus of at
least $500,000,000.00.
8.14 Duration of Agency. The agency established by Section 8.01
hereof shall continue, and Sections 8.01 through and including this Section
8.14 shall remain in full force and effect, until all of the Borrower's
Obligations shall have been paid in full, all of the Letters of Credit have
expired or been terminated and the Banks' commitments to make Loans, issue
Letters of Credit and/or extend credit to or for the benefit of the Borrower
shall have terminated or expired.
SECTION 9. GUARANTY.
9.01 Guarantee. (a) Each of the Guarantors hereby absolutely and
unconditionally guarantees the due and punctual payment and performance of all
of the Borrower's Obligations, including, without limitation, (i) the due and
punctual payment of the principal of and interest on the Revolving Credit
Loans and the Letter of Credit Loans made to Borrower pursuant to this
Agreement and (ii) the due and punctual payment of all other amounts
(including, without limitation, reimbursement obligations with respect to
Letters of Credit issued for the account of Borrower) payable by Borrower
under this Agreement or any of the other Transaction Documents. Upon failure
by Borrower to pay any such amount when due and payable, whether by reason of
demand, maturity, acceleration or otherwise, upon demand by the Agent or the
Required Banks, the Guarantors shall forthwith pay to the Agent for the
ratable account of each of the Banks the amount not so paid at the place and
in the manner and with the effect specified in this Agreement. Each of the
Guarantors hereby agrees: (i) that the obligation of such Guarantor under this
Section 9 is primary and may be enforced directly against such Guarantor
independently of and without proceeding against Borrower or any other Obligor
or Obligors or foreclosing any collateral pledged to the Agent or any of the
Banks; (ii) that the Agent and/or the Banks in their sole and absolute
discretion may extend the time of payment, change the interest rates and renew
or change the manner, place, time and terms of payment of and make any other
changes with respect to any or all of the Borrower's Obligations; (iii) that
the Agent and/or the Banks may in their sole and absolute discretion sell,
exchange, release, surrender and otherwise deal with all or any of the
collateral pledged to the Agent or any of the Banks by Borrower, any other
Obligor or any other person to secure any or all of the Borrower's
Obligations; (iv) that the Agent and/or the Banks may in their sole and
absolute discretion release and otherwise deal with any other Obligor or
Obligors; and (v) that the Agent and/or the Banks may exercise or refrain from
exercising any rights against Borrower or any other Obligor or Obligors and
otherwise act or refrain from acting, and may settle or compromise any or all
of the Borrower's Obligations with Borrower; all without notice to or consent
of such Guarantor and without releasing such Guarantor from its obligations
under this Section 9.
(b) Notwithstanding the foregoing, the maximum liability of a
Guarantor under this Section 9 as of any date of determination thereof shall
in no event exceed such Guarantor's Maximum Guaranteed Amount (as defined
below) as determined as of the date of the execution and delivery of this
Agreement (unless a later date shall be deemed by a court of competent
jurisdiction to be applicable to the determination of the solvency of such
Guarantor for purposes of any applicable federal or state bankruptcy,
insolvency, fraudulent transfer, fraudulent conveyance or similar law
governing debtors and the enforceability of debtors' obligations ("Applicable
Insolvency Law"), in which event such other date shall apply), increased by
any increase (but not decreased by any subsequent decrease) in such
Guarantor's Maximum Guaranteed Amount, unless the inclusion of any such
increase is contrary to any Applicable Insolvency Law. For purposes of this
paragraph, "Maximum Guaranteed Amount" shall mean, with respect to each
Guarantor, the greater of (i) the aggregate amount of the Borrower's
Obligations to the extent the proceeds thereof are used to make a Valuable
Transfer (as defined below) to such Guarantor and (ii) Ninety-Five Percent
(95%) of the Adjusted Net Worth (as defined below) of such Guarantor, provided
that in no event shall the amount specified in this clause (ii) be an amount
that would result in such Guarantor having unreasonably small capital, as such
term is used in any Applicable Insolvency Law. For purposes of this
paragraph, a "Valuable Transfer" to a Guarantor shall mean the amount of (i)
all loans, advances or capital contributions made to such Guarantor with
proceeds of any of the Borrower's Obligations (and all loans, advances and/or
capital contributions made by Borrower to such Guarantor shall be deemed to
have been made directly or indirectly with the proceeds of the Borrower's
Obligations unless such Guarantor can prove otherwise), (ii) all debt
securities or other obligations of such Guarantor acquired from such Guarantor
or retired by such Guarantor with proceeds of any of the Borrower's
Obligations (and all debt securities and/or other obligations of such
Guarantor acquired by Borrower from such Guarantor shall be deemed to have
been acquired directly or indirectly with the proceeds of the Borrower's
Obligations unless such Guarantor can prove otherwise), (iii) the fair market
value of all property acquired with proceeds of any of the Borrower's
Obligations and transferred, absolutely and not as collateral, to such
Guarantor (and all property acquired by Borrower and transferred, absolutely
and not as collateral, to such Guarantor shall be deemed to have been acquired
directly or indirectly with the proceeds of the Borrower's Obligations unless
such Guarantor can prove otherwise), (iv) all equity securities of such
Guarantor acquired from such Guarantor with proceeds of any of the Borrower's
Obligations (and all equity securities of such Guarantor acquired by Borrower
from such Guarantor shall be deemed to have been acquired directly or
indirectly with the proceeds of the Borrower's Obligations unless such
Guarantor can prove otherwise), (v) the aggregate amount of all reimbursement
obligations with respect to all Letters of Credit issued for the account of
Borrower and for the benefit of or with respect to the obligations of such
Guarantor and (vi) the value of any quantifiable economic benefits not
included in clauses (i) through (v), above, but includable in accordance with
Applicable Insolvency Law, accruing to such Guarantor as a result of any of
the Guaranteed Indebtedness. For purposes of this paragraph, the "Adjusted
Net Worth" of a Guarantor shall mean the excess of (i) the amount of the
"present fair salable value" of the assets of such Guarantor as of the date of
determination, over (ii) the amount of all "liabilities of such Guarantor,
contingent or otherwise", as of the date of determination, as such quoted
terms are determined in accordance with Applicable Insolvency Law. In
determining the Adjusted Net Worth of a Guarantor for purposes of calculating
the Maximum Guaranteed Amount for such Guarantor, the liabilities of such
Guarantor to be used in such determination pursuant to clause (ii) of the
preceding sentence shall not include any amounts owed by such Guarantor under
this Section 9 unless inclusion of such amounts is required by any Applicable
Insolvency Law.
9.02 Unconditional Obligation. The obligations of each of the
Guarantors under this Section 9 shall be absolute and unconditional and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver
or release in respect of any of the Borrower's Obligations or of any of the
obligations of any of the other Guarantors under this Section 9;
(b) any change in the corporate existence, structure or
ownership of Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Borrower or any of its Property or assets;
(c) the existence of any claims or set-off or other rights
which such Guarantor may have at any time against Borrower, the Agent, any of
the Banks or any other Person, whether in connection herewith or any unrelated
transactions;
(d) any invalidity or unenforceability relating to or
against Borrower for any reason of all or any provision of this Agreement or
any of the other Transaction Documents, or any provision of applicable law or
regulation purporting to prohibit the payment by Borrower of the principal of
or interest on any Loan or any of the other Borrower's Obligations; or
(e) any other act or omission to act or delay of any kind
by Borrower, the Agent, any of the Banks or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of such Guarantor's obligations
under this Section 9.
9.03 Period in Force. The obligations of each Guarantor under this
Section 9 shall remain in full force and effect until all of the Borrower's
Obligations shall have been fully, finally and indefeasibly paid in cash, all
of the Letters of Credit have expired or been terminated and this Agreement
and the other Transaction Documents shall have terminated in accordance with
their terms. If at any time any payment of the principal of or interest on
any Loan made to Borrower or any of the other Borrower's Obligations is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of Borrower or otherwise, the obligations of each
of the Guarantors under this Section 9 with respect to such payment shall be
revived and continued in full force and effect as if such payment had not been
made.
9.04 Waiver. EACH OF THE GUARANTORS HEREBY WAIVES ACCEPTANCE HEREOF,
PRESENTMENT, DEMAND, PROTEST AND ANY NOTICE NOT PROVIDED FOR HEREIN, AS WELL
AS ANY REQUIREMENT THAT AT ANY TIME ANY ACTION BE TAKEN BY ANY PERSON AGAINST
BORROWER OR ANY OTHER PERSON OR AGAINST ANY COLLATERAL OR OTHER SECURITY FOR
ANY OF THE BORROWER'S OBLIGATIONS. None of the Guarantors shall have any
right of subrogation, reimbursement, contribution or indemnity whatsoever with
respect to Borrower or any other guarantor(s) of any or all of the Borrower's
Obligations or any right of recourse to or with respect to any assets or
property of Borrower or any other guarantor(s) of any or all of the Borrower's
Obligations or to any collateral or other security for the payment of any of
the Borrower's Obligations unless and until all of the Borrower's Obligations
shall have been fully, finally and indefeasibly paid in cash, all of the
Letters of Credit have expired or been terminated and this Agreement and the
other Transaction Documents shall have been terminated.
9.05 Effect of Stay. In the event that the demand for payment of any
amount payable by Borrower under this Agreement or the other Transaction
Documents is stayed upon the insolvency, bankruptcy or reorganization of
Borrower, all such amounts otherwise subject to acceleration under the terms
of this Agreement or any of the other Transaction Documents shall nonetheless
be payable by the Guarantors hereunder forthwith upon demand by the Agent or
the Required Banks.
SECTION 10. GENERAL.
10.01 No Waiver. No failure or delay by the Agent or any of the
Banks in exercising any right, remedy, power or privilege hereunder or under
any other Transaction Document shall operate as a waiver thereof; nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
remedies provided herein and in the other Transaction Documents are cumulative
and not exclusive of any remedies provided by law. Nothing herein contained
shall in any way affect the right of any of the Banks to exercise any
statutory or common law right of banker's lien or set-off.
10.02 Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default, each of the Banks is hereby authorized at
any time and from time to time, without notice to Borrower or any of the
Guarantors (any such notice being expressly waived by Borrower and each of the
Guarantors) and to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held by such Bank(s) and any and all other indebtedness at
any time owing by such Bank(s) to or for the credit or account of Borrower or
any of the Guarantors against any and all indebtedness, liabilities and
obligations of Borrower or the applicable Guarantor(s), as the case may be, to
the Agent and the Banks under this Agreement and the other Transaction
Documents irrespective of whether or not such Bank(s) shall have made any
demand hereunder or under any of the other Transaction Documents and although
such obligations may be contingent or unmatured. Each of the Banks agrees to
promptly notify Borrower or the applicable Guarantor(s), as the case may be,
after any such set-off and application made by such Bank(s), provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Banks under this Section
10.02 are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which the Banks may have. Nothing
contained in this Agreement or any other Transaction Document shall impair the
right of any of the Banks to exercise any right of set-off or counterclaim it
may have against Borrower or any of the Guarantors and to apply the amount
subject to such exercise to the payment of indebtedness, liabilities or
obligations of Borrower or the applicable Guarantor(s), as the case may be,
unrelated to this Agreement or the other Transaction Documents.
10.03 Cost and Expenses. Borrower agrees, whether or not any Loan is
made hereunder or any Letter of Credit is issued hereunder, to pay the Agent
and each of the Banks upon demand (i) all reasonable out-of-pocket costs and
expenses and all Attorneys' Fees of the Agent in connection with the
preparation, documentation, negotiation and execution of this Agreement, the
Notes, the Letter of Credit Applications and the other Transaction Documents,
(ii) all recording, filing and search fees and expenses incurred in connection
with this Agreement and the other Transaction Documents, (iii) all
out-of-pocket costs and expenses and all Attorneys' Fees of the Agent and each
of the Banks in connection with the (A) the preparation, documentation,
negotiation and execution of any amendment, modification, extension or renewal
of this Agreement, the Notes, the Letter of Credit Applications and/or any of
the other Transaction Documents, (B) the preparation of any waiver or consent
hereunder or under any of the other Transaction Documents or (C) any Default
or Event of Default or alleged Default or Event of Default hereunder, (iv) if
an Event of Default occurs, all out-of-pocket costs and expenses and all
Attorneys' Fees incurred by the Agent and each of the Banks in connection with
such Event of Default and collection and other enforcement proceedings
resulting therefrom and (v) all other Attorneys' Fees incurred by the Agent or
any of the Banks relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents. Borrower further agrees
to pay or reimburse the Agent and each of the Banks for any stamp or other
taxes which may be payable with respect to the execution, delivery, recording
and/or filing of this Agreement, the Notes, the Letter of Credit Applications
or any of the other Transaction Documents. All of the obligations of Borrower
under this Section 10.03 shall survive the satisfaction and payment of
Borrower's Obligations and the termination of this Agreement.
10.04 Environmental Indemnity. Borrower hereby agrees to indemnify
the Agent and each of the Banks and hold the Agent and each of the Banks
harmless from and against any and all losses, liabilities, damages, injuries,
costs, expenses and claims of any and every kind whatsoever (including,
without limitation, court costs and attorneys' fees and expenses) which at any
time or from time to time may be paid, incurred or suffered by, or asserted
against, the Agent or any of the Banks for, with respect to or as a direct or
indirect result of the violation by Borrower or any Subsidiary of any
Environmental Laws; or with respect to, or as a direct or indirect result of
the presence on or under, or the Release from, properties utilized by Borrower
and/or any Subsidiary in the conduct of their respective businesses into or
upon any land, the atmosphere or any watercourse, body of water or wetland, of
any Hazardous Substances or any other hazardous or toxic waste, substance or
constituent or other substance (including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising
under the Environmental Laws); and the provisions of and undertakings and
indemnification set out in this Section 10.04 shall survive the satisfaction
and payment of Borrower's Obligations and the termination of this Agreement.
10.05 General Indemnity. In addition to the payment of expenses
pursuant to Section 10.03, whether or not the transactions contemplated hereby
shall be consummated, Borrower hereby agrees to indemnify, pay and hold the
Agent and each of the Banks and any holder(s) of the Notes, and the officers,
directors, employees, agents and affiliates of the Agent, each of the Banks
and such holder(s) (collectively, the "Indemnitees") harmless from and against
any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitees shall be designated a party thereto), that may
be imposed on, incurred by or asserted against the Indemnitees, in any manner
relating to or arising out of this Agreement, any of the other Transaction
Documents or any other agreement, document or instrument executed and
delivered by Borrower or any other Obligor in connection herewith or
therewith, the statements contained in any commitment letters delivered by the
Agent or any of the Banks, the agreement of any of the Banks to make the Loans
hereunder, the agreement of Mercantile to issue the Letters of Credit
hereunder or the use or intended use of the proceeds of any Loan hereunder
(collectively, the "indemnified liabilities"); provided that Borrower shall
have no obligation to an Indemnitee hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of that
Indemnitee as determined by a court of competent jurisdiction in a final
nonappealable order. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Borrower shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them. The provisions of the undertakings and
indemnification set out in this Section 10.05 shall survive the satisfaction
and payment of Borrower's Obligations and the termination of this Agreement.
10.06 Authority to Act. The Agent shall be entitled to act on any
notices and instructions (telephonic or written) believed by the Agent in good
faith to have been sent or delivered by any person identifying himself as X.X.
Xxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxx or Xxxxxxx X. Xxxxxxxxx (or any
other person from time to time authorized to act on behalf of Borrower
pursuant to a resolution adopted by the Board of Directors of Borrower and
certified by the Secretary of Borrower and delivered to the Agent), regardless
of whether such notice or instruction was in fact delivered by such person,
and Borrower hereby agrees to indemnify the Agent and hold the Agent harmless
from and against any and all losses and expenses, if any, ensuing from any
such action.
10.07 Notices. Any notice, request, demand, consent, confirmation or
other communication hereunder shall be in writing and delivered in person or
sent by telecopy or registered or certified mail, return receipt requested and
postage prepaid, to the applicable party at its address or telecopy number set
forth on the signature pages hereof, or at such other address or telecopy
number as any party hereto may designate as its address for communications
hereunder by notice so given. Such notices shall be deemed effective on the
day on which delivered or sent if delivered in person or sent by telecopy, or
on the third (3rd) Domestic Business Day after the day on which mailed, if
sent by registered or certified mail; provided, however, that notices to the
Agent under Section 2 shall not be effective until actually received by the
Agent.
10.08 Consent to Jurisdiction; Waiver of Jury Trial. BORROWER AND
EACH GUARANTOR IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY
MISSOURI STATE COURT OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE
EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AS THE AGENT MAY ELECT, IN ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT. BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE
HELD AND DETERMINED IN ANY OF SUCH COURTS. BORROWER AND EACH GUARANTOR
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
BORROWER OR SUCH GUARANTOR MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND BORROWER
AND EACH GUARANTOR FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. BORROWER AND EACH GUARANTOR HEREBY EXPRESSLY WAIVE ALL RIGHTS OF ANY
OTHER JURISDICTION WHICH BORROWER OR SUCH GUARANTOR MAY NOW OR HEREAFTER HAVE
BY REASON OF ITS PRESENT OR SUBSEQUENT DOMICILES. BORROWER AND EACH GUARANTOR
AUTHORIZE THE SERVICE OF PROCESS UPON BORROWER OR SUCH GUARANTOR BY REGISTERED
MAIL SENT TO BORROWER OR SUCH GUARANTOR AT ITS ADDRESS SET FORTH IN SECTION
10.07. BORROWER, THE GUARANTORS, THE AGENT AND THE BANKS IRREVOCABLY WAIVE
THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND/OR
ANY OR THE GUARANTORS AND THE AGENT AND/OR ANY OF THE BANKS ARE PARTIES
RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER TRANSACTION DOCUMENTS.
10.09 Governing Law. This Agreement, the Notes and the Letter of
Credit Applications shall be governed by and construed in accordance with the
substantive laws of the State of Missouri (without reference to conflict of
law principles).
10.10 Amendments and Waivers. Any provision of this Agreement, the
Notes, the Letter of Credit Applications or any of the other Transaction
Documents may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by Borrower and the Required Banks (and, if the
rights or duties of the Agent in its capacity as Agent are affected thereby,
by the Agent; and if the rights or duties of Mercantile in its capacity as the
issuer or the Letters of Credit are affected thereby, by Mercantile); provided
that no such amendment or waiver shall, unless signed by all of the Banks, (i)
increase the Commitment of any Bank, (ii) reduce the principal amount of or
rate of interest on any Loan or any fees hereunder (other than any fees
relating to the Letters of Credit other than Letter of Credit Commitment Fees
and Letter of Credit Negotiation Fees), (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees hereunder, (iv)
change the percentage of the Commitments or of the aggregate principal amount
of Loans or Letters of Credit or the number of Banks which shall be required
for the Banks or any of them to take any action or obligations under this
Section or any other provision of this Agreement, (v) change the definition of
"Required Banks", (vi) voluntarily release any of the Guarantors from their
obligations under Section 9 of this Agreement, (vii) knowingly waive any of
the conditions precedent to the initial Loan set forth in Section 4.01 or
(viii) amend this Section 10.10.
10.11 References; Headings for Convenience. Unless otherwise
specified herein, all references herein to Section numbers refer to Section
numbers of this Agreement, all references herein to Exhibits "A", "B", "C",
"D", "E", "F", "G", "H" and "I" refer to annexed Exhibits "A", "B", "C", "D",
"E", "F", "G", "H" and "I" which are hereby incorporated herein by reference
and all references herein to Schedules 3.02, 5.05, 5.08, 5.10, 5.12, 5.16,
5.17, 5.18 and 6.02(n) refer to annexed Schedules 3.02, 5.05, 5.08, 5.10,
5.12, 5.16, 5.17, 5.18 and 6.02(n) which are hereby incorporated herein by
reference. The Section headings are furnished for the convenience of the
parties and are not to be considered in the construction or interpretation of
this Agreement.
10.12 Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither Borrower nor any of the
Guarantors may assign or otherwise transfer any of its rights or delegate any
of its obligations or duties under this Agreement without the prior written
consent of the Agent and each of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
financial institutions (each a "Participant") participating interests in its
Commitment, any or all of its Loans or its interest in any of the Letters of
Credit. In the event of any such grant by a Bank of a participating interest
to a Participant, whether or not upon notice to Borrower and the Agent, such
Bank shall remain responsible for the performance of its obligations
hereunder, and Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may grant such
a participating interest shall provide that such Bank shall retain the sole
right and responsibility to enforce the obligations of Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided, that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clauses (i),
(ii) and (iii) of the proviso to Section 10.10 of this Agreement without the
consent of the Participant. Borrower agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled to the
benefits of Sections 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16 and 2.17 of this
Agreement with respect to its participating interest. An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
financial institutions (each an "Assignee") all, or a proportionate part of
all, of its rights and obligations under this Agreement and its Note, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit I attached
hereto executed by such Assignee and such transferor Bank, with (and subject
to) the subscribed consent of Borrower and the Agent, which, in each case,
shall not be unreasonably withheld or delayed; provided, however, that (i) if
any Assignee is an affiliate of such transferor Bank or, immediately prior to
such assignment, a Bank, no consent shall be required and (ii) if any Event of
Default under this Agreement has occurred and is continuing no consent of
Borrower to such assignment shall be required. Upon execution and delivery of
such instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this Agreement and shall
have all the rights and obligations of a Bank with a Commitment as set forth
in such instrument of assumption, and the transferor Bank shall be released
from its obligations hereunder to a corresponding extent, and no further
consent or action by any party shall be required. Upon the consummation of
any assignment pursuant to this subsection (c), the transferor Bank, the
Agent, Mercantile and Borrower shall make appropriate arrangements so that, if
required, new Note(s) and/or Letter of Credit Participation Certificate(s) are
issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500.00.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from any of its obligations
hereunder.
10.13 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT
ENFORCEABLE. TO PROTECT BORROWER, THE GUARANTORS, THE AGENT AND THE BANKS
FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER,
THE GUARANTORS, THE AGENT AND THE BANKS COVERING SUCH MATTERS ARE CONTAINED IN
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH AGREEMENT AND OTHER
TRANSACTION DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS
AMONG BORROWER, THE GUARANTORS, THE AGENT AND THE BANKS, EXCEPT AS BORROWER,
THE GUARANTORS, THE AGENT AND THE BANKS MAY LATER AGREE IN WRITING TO MODIFY
THEM. This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings
(oral or written) relating to the subject matter hereof.
10.14 Severability. In the event any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
10.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.16 Resurrection of Borrower's Obligations. To the extent that any
of the Banks receives any payment on account of any of Borrower's Obligations,
and any such payment(s) or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, subordinated and/or
required to be repaid to a trustee, receiver or any other Person under any
bankruptcy act, state or Federal law, common law or equitable cause, then, to
the extent of such payment(s) received, Borrower's Obligations or part thereof
intended to be satisfied and any and all Liens upon or pertaining to any
Property or assets of Borrower or any of the Guarantors and theretofore
created and/or existing in favor of such Bank(s) or the Collateral Agent as
security for the payment of such Borrower's Obligations shall be revived and
continue in full force and effect, as if such payment(s) had not been received
by such Bank(s) and applied on account of Borrower's Obligations.
10.17 Independence of Covenants. All of the covenants contained in
this Agreement and the other Transaction Documents shall be given independent
effect so that if a particular action, event or condition is prohibited by any
one of such covenants, the fact that it would be permitted by an exception to,
or otherwise be in compliance within the provisions of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is
taken, such event occurs or such condition exists.
10.18 No Novation. This Agreement and the other Transaction Documents
are being amended and restated in their entirety for the convenience of the
parties hereto. This Agreement and the other Transaction Documents merely
amend, modify and restate the indebtedness, liabilities and obligations
evidenced hereby and thereby and do not constitute or effect, and it is the
express intent of the parties hereto that this Agreement and the other
Transaction Documents do not constitute or effect, a novation of the existing
indebtedness, liabilities and obligations incurred by the Borrower and the
Guarantors pursuant to the Original Revolving Credit Agreement and the other
"Transaction Documents" (as defined in the Original Revolving Credit
Agreement). Such indebtedness, liabilities and obligations continue to remain
outstanding and are amended and modified only to the extent this Agreement and
the other Transaction Documents amend and modify the Original Revolving Credit
Agreement and the other "Transaction Documents" (as defined in the Original
Revolving Credit Agreement).
IN WITNESS WHEREOF, Borrower, the Guarantors, the Agent and the Banks
have executed this Amended and Restated Revolving Credit Agreement this 24th
day of March, 1998.
HUNTCO INC.
By /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice Chairman & CFO
00000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000 Xxxxx
Xxxx & Country, Missouri 63017
Attention: Vice Chairman and CFO
Telecopy number: (000) 000-0000
HUNTCO NEVADA, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
Title: President
0000 Xxxx Xxxxxxxx
Xxxxx Xxx Xxxxx, Xxxxxx 00000
Attention: President
Telecopy number: (000) 000-0000
HUNTCO STEEL, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
Title: Vice President & Secretary
00000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000 Xxxxx
Xxxx & Country, Missouri 63017
Attention: Vice President
Telecopy number: (000) 000-0000
MIDWEST PRODUCTS, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
Title: Vice President & Secretary
00000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000 Xxxxx
Xxxx & Country, Missouri 63017
Attention: Vice President
Telecopy number: (000) 000-0000
HSI AVIATION, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
Title: President
00000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000 Xxxxx
Xxxx & Country, Missouri 63017
Attention: President
Telecopy number: (000) 000-0000
MERCANTILE BANK NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx - 0X
Xxxxxxx, Xxxxxxxx 00000
THE FIRST NATIONAL BANK OF CHICAGO
BANK OF AMERICA NT&SA
000 Xxxxx XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
SUNTRUST BANK, ATLANTA
00 Xxxx Xxxxx, N.E., Mail Code 124
Xxxxxxx, Xxxxxxx 00000
MERCANTILE BANK NATIONAL ASSOCIATION, as Agent
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
