SPECIAL METALS CORPORATION
$375,000,000
SENIOR SECURED CREDIT AGREEMENT
DATED AS OF OCTOBER 28, 1998
CREDIT LYONNAIS NEW YORK BRANCH,
AS AGENT
CREDIT LYONNAIS NEW YORK BRANCH,
AS ARRANGER
MANUFACTURERS & TRADERS TRUST COMPANY,
AS DOCUMENTATION AGENT
MELLON BANK, N.A.,
AS SYNDICATION AGENT
AND
THE BANK OF NOVA SCOTIA,
AS CO-AGENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS
1.1. DEFINED TERMS
1.2. OTHER DEFINITIONAL PROVISIONS
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
2.1. TERM LOANS
2.2. PROCEDURE FOR TERM LOAN BORROWING
2.3. REPAYMENT OF TRANCHE A TERM LOANS
2.4. REPAYMENT OF TRANCHE B TERM LOANS
2.5. EVIDENCE OF TERM LOAN DEBT
2.6. USE OF PROCEEDS OF TERM LOANS
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1. REVOLVING CREDIT COMMITMENTS
3.2. PROCEDURE FOR REVOLVING CREDIT BORROWING
3.3. REPAYMENT OF REVOLVING CREDIT LOANS; EVIDENCE OF DEBT
3.4. COMMITMENT FEE
3.5. TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS
3.6. USE OF PROCEEDS OF REVOLVING CREDIT LOANS
SECTION 4. LETTERS OF CREDIT
4.1. ISSUANCE
4.2. PARTICIPATION BY REVOLVING CREDIT LENDERS
4.3. DRAWINGS
4.4. OBLIGATIONS ABSOLUTE
4.5. OTHER LENDERS
4.6. INDEMNIFICATION
4.7. LIABILITY OF THE ISSUING BANK
4.8. LETTER OF CREDIT FEE
SECTION 5. GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS
5.1. PREPAYMENTS
5.2. CONVERSION AND CONTINUATION OPTIONS
5.3. MINIMUM AMOUNTS OF TRANCHES
5.4. INTEREST RATES AND PAYMENT DATES
5.5. COMPUTATION OF INTEREST AND FEES
5.6. INABILITY TO DETERMINE INTEREST RATE
5.7. PRO RATA TREATMENT AND PAYMENTS
5.8. ILLEGALITY
5.9. REQUIREMENTS OF LAW
5.10. TAXES
5.11. INDEMNITY
5.12. CHANGE OF LENDING OFFICE
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1. FINANCIAL CONDITION
6.2. NO CHANGE
6.3. CORPORATE EXISTENCE; COMPLIANCE WITH LAW
6.4. CORPORATE POWER, AUTHORIZATION; ENFORCEABLE OBLIGATIONS
6.5. NO LEGAL BAR
6.6. NO MATERIAL LITIGATION
6.7. NO DEFAULT
6.8. OWNERSHIP OF PROPERTY; LIENS
6.9. INTELLECTUAL PROPERTY
6.10. NO BURDENSOME RESTRICTIONS
6.11. TAXES
6.12. FEDERAL REGULATIONS
6.13. ERISA
6.14. INVESTMENT COMPANY ACT; OTHER REGULATIONS
6.15. CAPITAL STOCK; SUBSIDIARIES; INVESTMENTS
6.16. ENVIRONMENTAL MATTERS
6.17. REGULATION H
6.18. SECURITY DOCUMENTS
6.19. ACQUISITION APPROVALS
6.20. ACCURACY OF INFORMATION
6.21. INSURANCE
6.22. SOLVENCY
6.23. LABOR RELATIONS
6.24. INDEBTEDNESS
6.25. BANK ACCOUNTS
6.26. REPRESENTATIONS AND WARRANTIES IN TRANSACTION DOCUMENTS
6.27. YEAR 2000 PROBLEM
SECTION 7. CONDITIONS PRECEDENT
7.1. CONDITIONS TO INITIAL LOANS
(A) LOAN DOCUMENTS
(B) ACQUISITION DOCUMENTS
(C) ACQUISITION CLOSING
(E) REFINANCING
(F) CLOSING CERTIFICATE
(G) CORPORATE PROCEEDINGS OF THE BORROWER
(H) BORROWER INCUMBENCY CERTIFICATE
(I) CORPORATE PROCEEDINGS OF SUBSIDIARIES
(J) SUBSIDIARY INCUMBENCY CERTIFICATES
(K) CORPORATE DOCUMENTS
(L) FINANCIAL STATEMENTS OF INCO ENTITIES
(M) BORROWER FINANCIAL STATEMENTS
(N) CLOSING FINANCIAL CERTIFICATE
(O) CORPORATE AND CAPITAL STRUCTURE
(P) CONSENTS, APPROVALS, ETC.
(Q) FEES AND EXPENSES
(R) FILINGS
(S) LIEN SEARCHES
(T) PLEDGED COLLATERAL
(U) TITLE INSURANCE POLICIES; SURVEYS
(V) FLOOD INSURANCE
(W) COPIES OF DOCUMENTS
(X) INSURANCE
(Y) LEGAL OPINIONS
(Z) AGENT'S FEES AND EXPENSES
(AA) OUTSTANDING INDEBTEDNESS
(BB) ENVIRONMENTAL AUDITS
(CC) NO MATERIAL ADVERSE CHANGE
(DD) NO LITIGATION
(EE) SOLVENCY CERTIFICATE
(FF) ERISA; RETIREE BENEFITS
(GG) TERMINATION OF RECEIVABLES FROM RECEIVABLES PROGRAM
7.2. CONDITIONS TO EACH LOAN
(A) REPRESENTATIONS AND WARRANTIES
(B) NO DEFAULT
(C) ADDITIONAL MATTERS
SECTION 8. AFFIRMATIVE COVENANTS
8.1. FINANCIAL STATEMENTS
8.2. CERTIFICATES; OTHER INFORMATION
8.3. PAYMENT OF TAXES AND OTHER OBLIGATIONS
8.4. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE
8.5. MAINTENANCE OF PROPERTY; INSURANCE
8.6. INSPECTION OF PROPERTY, BOOKS AND RECORDS; DISCUSSIONS
8.7. NOTICES
8.8. ENVIRONMENTAL LAW
8.9. MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS
8.10. PLEDGE OF AFTER ACQUIRED PROPERTY
8.11. INTEREST RATE PROTECTION
8.12. FOREIGN SUBSIDIARIES SECURITY
8.13. COLLATERAL ACCOUNT
8.14. BANK ACCOUNTS
8.15. YEAR 2000
SECTION 9. NEGATIVE COVENANTS
9.1. FINANCIAL CONDITION COVENANTS
(A) EBITDA MAINTENANCE
(B) LEVERAGE RATIO
(C) INTEREST COVERAGE RATIO
(D) FIXED CHARGE RATIO
9.2. LIMITATION ON INDEBTEDNESS
9.3. LIMITATION ON LIENS
9.4. LIMITATION ON GUARANTEE OBLIGATIONS
9.5. LIMITATION ON FUNDAMENTAL CHANGES
9.6. LIMITATION ON SALE OF ASSETS
9.7. RESTRICTED PAYMENTS
9.8. LIMITATION ON CAPITAL EXPENDITURES
9.9. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES
9.10. LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT INSTRUMENTS
AND CAPITAL STOCK
9.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES
9.12. LIMITATION ON SALES AND LEASEBACKS
9.13. LIMITATION ON CHANGES IN FISCAL YEAR AND ACCOUNTING POLICIES
9.14. LIMITATION ON NEGATIVE PLEDGE CLAUSES
9.15. LIMITATION ON LINES OF BUSINESS
9.16. LIMITATION ON ENTERING INTO CERTAIN HEDGING AGREEMENTS
9.17. LIMITATION ON NEW BANK ACCOUNTS
9.18. LIMITATION ON ISSUANCE OF CAPITAL STOCK
9.19. MODIFICATIONS TO ACQUISITION DOCUMENTS, PREFERRED STOCK DOCUMENTS AND
SUPPLY CONTRACTS
SECTION 10. EVENTS OF DEFAULT
SECTION 11. THE AGENT
11.1. APPOINTMENT
11.2. DELEGATION OF DUTIES
11.3. EXCULPATORY PROVISIONS
11.4. RELIANCE BY AGENT
11.5. NOTICE OF DEFAULT
11.6. NON-RELIANCE ON AGENT AND OTHER LENDERS
11.7. INDEMNIFICATION
11.8. AGENT IN ITS INDIVIDUAL CAPACITY
11.9. SUCCESSOR AGENT
11.10. CONCERNING THE COLLATERAL
SECTION 12. MISCELLANEOUS
12.1. AMENDMENTS AND WAIVERS
12.2. NOTICES
12.3. NO WAIVER; CUMULATIVE REMEDIES
12.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12.5. PAYMENT OF EXPENSES AND TAXES; INDEMNITY
12.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS
12.7. ADJUSTMENTS; SET-OFF
12.8. COUNTERPARTS
12.9. SEVERABILITY
12.10. INTEGRATION
12.11. GOVERNING LAW
12.12. SUBMISSION TO JURISDICTION; WAIVERS
12.13. ACKNOWLEDGMENTS
12.14. WAIVERS OF JURY TRIAL
12.15. INTEREST RATE LIMITATION
12.16. CONFIDENTIALITY
SCHEDULES:
Schedule I Lenders, Notice Addresses, Commitments, Commitment Percentages
Schedule II Closing Date Mortgaged Property
Schedule III Bilateral Mortgages
Schedule 6.1(c) Guaranteed Obligations; Sales or Transfers
Schedule 6.4 Consents, Authorizations, Filings
Schedule 6.9 Intellectual Property
Schedule 6.11 Taxes
Schedule 6.15 Subsidiaries
Schedule 6.16 Environmental Matters
Schedule 6.18 Filing Offices
Schedule 6.21 Insurance
Schedule 6.23 Labor Matters
Schedule 6.24 Indebtedness to Remain Outstanding
Schedule 6.25 Bank Accounts
Schedule 7.1(u) Title Insurance Policies
Schedule 9.2 Permitted Indebtedness
Schedule 9.3(i) Existing Liens
Schedule 9.9 Investments
EXHIBITS:
Exhibit A-1 Form of Borrower Security Agreement
Exhibit A-2 Forms of Borrower Patent and Trademark Security Agreement and
Copyright Security Agreement
Exhibit B Form of Collateral Assignment
Exhibit C Form of Bilateral Mortgage
Exhibit D Form of Mortgage/Deed of Trust
Exhibit E Form of Subsidiaries Guarantee
Exhibit F-1 Form of Subsidiary Security Agreement
Exhibit F-2 Forms of Subsidiary Patent and Trademark Security Agreement
and Copyright Security Agreement
Exhibit G-1 Form of Tranche A Term Note
Exhibit G-2 Form of Tranche B Term Note
Exhibit H Form of Revolving Credit Note
Exhibit I Form of Letter of Credit Request
Exhibit J Form of Closing Certificate
Exhibit K Form of Closing Financial Certificate
Exhibit L-1 Form of Opinion of Counsel to Borrower
Exhibit L-2 Form of Opinion of Local Counsel to Borrower
Exhibit M Form of Compliance Certificate
Exhibit N Form of Assignment and Acceptance
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of October 28, 1998, among SPECIAL METALS
CORPORATION, a Delaware corporation (the "BORROWER"), the several banks and
other financial institutions from time to time parties to this Agreement
(collectively, the "LENDERS"), CREDIT LYONNAIS NEW YORK BRANCH, as Issuing Bank
with respect to the Letters of Credit, and CREDIT LYONNAIS NEW YORK BRANCH, as
agent for the Lenders and the Issuing Bank hereunder (in such capacity, the
"AGENT").
The parties hereto hereby agree as follows:
SECTION
DEFINITIONS
DEFINED TERMS.
As used in this Agreement, the following terms shall have the following
meanings:
"ACQUISITION": the acquisition of the shares of the Inco Entities owned
by the Sellers pursuant to the Purchase Agreement.
"ACQUISITION DOCUMENTS": the Purchase Agreement, the Noncompetition
Agreement dated as of the Closing Date between the Borrower and Inco Inc., the
Tradename and Trademark License Agreement dated as of the Closing Date between
the Borrower and Inco Limited, the Transitional Services Agreement dated as of
the Closing Date between Inco United States, Inc. and Inco Alloys International,
Inc., the Quitclaim Assignment effective as of the Closing Date between Inco
Limited and Inco Alloys Canada Limited, and any other agreements, instruments
and other documents delivered in connection therewith, as amended, supplemented
or otherwise modified in accordance with the terms of this Agreement.
"AFFILIATE": with respect to any Person, any other Person (other than,
in the case of the Borrower, a Wholly-Owned Domestic Subsidiary) which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person, (including, but not limited to, all directors and officers of
such Person). For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 5% or more of the securities
having ordinary voting power for the election of directors or other governing
body of such Person or (b) direct or cause the direction of the management and
policies of such Person, through the ownership of Voting Stock or other
ownership interests, by contract or otherwise.
"AGENT": Credit Lyonnais New York Branch, together with its affiliates,
as the arranger of the Commitments and as the agent for itself, the Lenders and
the Issuing Bank under this Agreement and the other Loan Documents or its
successor appointed pursuant to subsection 11.9.
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"AGREEMENT": this Credit Agreement, including the schedules and
exhibits hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"APPLICABLE MARGIN": (a) with respect to Revolving Credit Loans and the
Tranche A Term Loans, the amount set forth below for the applicable Type of Loan
(with X being the Leverage Ratio), as of the last day of the most recent fiscal
quarter:
Level Leverage Ratio Base Rate Eurodollar Rate
----- -------------- --------- ---------------
I X<2.00 0.00% 0.75%
II 2.00<=X<2.50 0.00% 1.00%
III 2.50<=X<3.00 0.00% 1.25%
IV 3.00<=X<3.50 0.25% 1.50%
V 3.50<=X<4.00 0.50% 1.75%
VI X>=4.00 0.75% 2.00%
provided that, notwithstanding the foregoing, (i) during the period commencing
on the Closing Date and ending on the six month anniversary of the Closing Date,
the Applicable Margin shall be 0.50% if such Loans are Base Rate Loans and 1.75%
if such Loans are Eurodollar Loans, (ii) during any period in which an Event of
Default shall have occurred and be continuing, the Applicable Margin shall be
0.75% if such Loans are Base Rate Loans and 2.00% if such Loans are Eurodollar
Loans, and (iii) if the Borrower shall have failed to deliver the financial
statements required by subsection 8.1(a) or (b) when due (without giving effect
to any grace period or notice requirement), the Applicable Margins shall be as
set forth in clause (ii) above until such time as such delivery shall have been
made; and
(b) with respect to the Tranche B Term Loans, 1.00% if such Loans are
Base Rate Loans and 2.25% if such Loans are Eurodollar Loans; PROVIDED that when
and so long as no Default or Event of Default has occurred and is continuing,
and the Leverage Ratio as of the last day of the most recent fiscal quarter is
less than or equal to 2.75:1, the Applicable Margin for Tranche B Term Loans
shall be 0.75% if such Loans are Base Rate Loans and 2.00% if such Loans are
Eurodollar Loans; PROVIDED FURTHER that (i) during any period in which an Event
of Default shall have occurred and be continuing, the Applicable Margin shall be
1.00% if such Loans are Base Rate Loans and 2.25% if such Loans are Eurodollar
Loans, and (ii) if the Borrower shall have failed to deliver the financial
statements required by subsection 8.1(a) or (b) (without giving effect to any
grace period or notice requirement), the Applicable Margin shall be as set forth
in clause (i) above until such time as such delivery shall have been made.
Any change in the Applicable Margin shall be effective on the Business
Day following delivery of the financial statements under subsection 8.1(a) or
(b), subject to clauses (a)(iii) and (b)(ii) above.
"ASSET SALE": any sale or other disposition (including any sale and
leaseback of assets, and any mortgage or lease of real property) (other than a
mortgage in favor of the
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Agent or a Permitted Asset Sale) subsequent to the Closing Date of any property
of the Borrower or any of its Subsidiaries
"ASSIGNEE": as defined in subsection 12.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in subsection 12.6(c).
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day or (b) the Federal Funds Rate in effect on such day PLUS 1/2
of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by Credit Lyonnais New York Branch as
its prime rate in effect at its principal office in New York City (the Prime
Rate is not intended to be the lowest rate of interest charged by Credit
Lyonnais New York Branch in connection with extensions of credit to debtors);
and "FEDERAL FUNDS RATE" shall mean, for any day, the weighted average of the
per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rates are not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall
be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Rate.
"BASE RATE LOANS": Loans the rate of interest applicable to which is
based upon the Base Rate.
"BILATERAL MORTGAGE": each Bilateral Mortgage executed or to be
executed and delivered by the Borrower and a Governmental Authority,
substantially in the form of Exhibit C (with any changes required by applicable
Requirements of Law), covering the property listed on Schedule III, subject to
the receipt of all required consents, and any real property hereafter owned by a
Governmental Authority and leased to the Borrower or any Domestic Subsidiary for
which the Agent requests a Bilateral Mortgage, in each case as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"BOARD OF GOVERNORS": the Board of Governors of the Federal Reserve
System or any successor to the functions and powers thereof.
"BORROWER PRO FORMA FINANCIAL STATEMENTS": as defined in subsection
6.1(d).
"BORROWER SECURITY AGREEMENT": collectively, the Borrower Pledge and
Security Agreement to be executed and delivered by the Borrower, substantially
in the form of Exhibit A-1, as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time, and the Patent and
Trademark Security Agreement and the Copyright Security Agreement to be executed
and delivered by the Borrower,
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substantially in the forms of Exhibit A-2(a) and (b), as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"BORROWING DATE": any Business Day specified in a notice delivered
pursuant to subsection 2.2, 3.2 or 4.1 as a date on which the Borrower requests
the Lenders to make Loans hereunder or the Issuing Bank to issue a Letter of
Credit hereunder.
"BUSINESS": as defined in subsection 6.16.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; PROVIDED, HOWEVER, that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in the New York interbank market.
"CAPITAL EXPENDITURES": with respect to any Person for any period, the
sum of (a) all expenditures of such Person in respect of the purchase or other
acquisition of fixed or capital assets (excluding any such asset acquired in
connection with normal replacement and maintenance programs properly charged to
current operations) that are paid or due and payable in cash during such period
and (b) all Financing Lease expenses of such Person that are paid or (without
duplication) due and payable in cash during such period; PROVIDED, HOWEVER, that
Capital Expenditures of the Borrower and its consolidated Subsidiaries for the
fiscal quarter ended March 31, 1998 shall be $7,199,000 and for the fiscal
quarter ended June 30, 1998 shall be $10,091,000.
"CAPITAL STOCK": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, regardless
of type, class, preference or designation, any and all equivalent ownership
interests in a Person other than a corporation, including membership interests,
partnership interests or other equity interests, and any and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls or
claims of any character with respect thereto.
"CASH EQUIVALENTS": any of the following in which the Agent holds a
duly perfected first priority security interest: (a) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than one year
from the date of acquisition, (b) time deposits and certificates of deposit,
having maturities of not more than one year from the date of acquisition, of any
Lender or of any domestic commercial bank the long-term debt of which is rated
at the date of acquisition thereof at least A or the equivalent thereof by
Standard & Poor's Corporation or A-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. and having capital and surplus in excess of
$500,000,000, (c) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (a) and (b) entered
into with any bank meeting the qualifications specified in clause (b) above and
(c) commercial paper rated at the date of acquisition thereof at least A-2 or
the equivalent thereof by Standard & Poor's Corporation or P-2 or the equivalent
thereof by
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Xxxxx'x Investors Service, Inc. and in either case maturing within 270 days
after the date of acquisition.
"CASUALTY LOSS": with respect to any asset owned or used by the
Borrower or any of its Subsidiaries: (a) any damage to or loss or destruction of
such asset; or (b) any actual condemnation or taking, by exercise of the power
of eminent domain or otherwise.
"CERCLA": the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C.
ss. 9601 et seq.
"CHANGE OF CONTROL": one or more of the following events: (a) in any
three year period, a majority of the members of the Board of Directors of the
Borrower elected during such three year period shall have been elected against
the recommendation of the management of the Borrower or the Board of Directors
in office immediately prior to such election; (b) any Person other than SIMA and
its Affiliates (each, a "DESIGNATED PERSON") or Persons acting in concert with
them shall, except as provided in clause (c) below, acquire (whether by merger,
consolidation, sale, assignment, lease, transfer or otherwise, in one
transaction or any series of related transactions) or otherwise beneficially own
a majority of the Voting Stock of the Borrower; (c) upon consummation of a
consolidation or merger of a Person with a Designated Person in which the
holders of the Voting Stock of the Borrower immediately prior to such
consolidation or merger would not own Voting Stock representing at least a
majority of the outstanding Voting Stock of such Designated Person or its
ultimate parent upon consummation of such consolidation or merger; or (d) upon
the sale, transfer or assignment (it being understood that the pledge of, or the
granting of a security interest in, assets of the Borrower or its Subsidiaries
shall not be deemed a sale, transfer or assignment hereunder) of all or
substantially all of the assets of the Borrower to any Person in a single
transaction or series of related transactions; PROVIDED, HOWEVER, that a sale,
transfer or assignment of all or substantially all of the assets of the Borrower
to the Principal Shareholders or to any entity the holders of at least a
majority of the Voting Stock of which (or of such entity's ultimate parent) were
holders of Voting Stock of the Borrower immediately prior to such sale, transfer
or assignment shall not constitute a "change of control" hereunder; or (e) at
such time as the Principal Shareholders fail to beneficially own, in the
aggregate, at least 30% of the voting power of the outstanding Voting Stock of
the Borrower.
"CLOSING BALANCE SHEETS": the "Preliminary Closing Balance Sheet" and
the "Final Closing Balance Sheet," each as defined in the Purchase Agreement.
"CLOSING DATE": the date (which may be no later than October 30, 1998)
on which the conditions precedent set forth in subsection 7.1 shall be satisfied
or waived in accordance with this Agreement and the initial Loans are made or
the initial Letters of Credit are issued.
"CLOSING LETTER": that certain letter dated of even date with this
Agreement executed by the Borrower in favor of the Agent with respect to certain
post-closing matters.
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"CODE": the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
"COLLATERAL": all assets of the Loan Parties, whether now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"COLLATERAL ACCOUNT": as defined in subsection 8.13.
"COLLATERAL ASSIGNMENT": the Collateral Assignment of Purchase
Agreement and Tradename and Trademark License Agreement, to be executed and
delivered by the Borrower or its Subsidiary which is party thereto, and
acknowledged by the Sellers, substantially in the form of Exhibit B, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"COMMITMENT": with respect to any Lender, the collective reference to
such Lender's Tranche A Term Loan Commitment, Tranche B Term Loan Commitment,
and/or Revolving Credit Commitment; collectively, as to all the Lenders, the
"COMMITMENTS".
"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
which (a) the sum of (i) such Lender's then unused Commitments PLUS (ii) such
Lender's Loans then outstanding (assuming, in the case of each Revolving Credit
Lender, that such Lender has made a Loan in an amount equal to its Pro Rata
Share of the Letters of Credit Outstanding) then constitutes of (b) the sum of
(x) the aggregate outstanding then unused Commitments of all the Lenders PLUS
(y) the aggregate principal amount of Loans of all the Lenders then outstanding
(assuming, in the case of the Revolving Credit Lenders, that such Lenders have
made Loans in an aggregate principal amount equal to the Letters of Credit
Outstanding).
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CURRENT ASSETS": with respect to any Person at any date
of determination, all assets which would, in accordance with GAAP, be classified
on a consolidated balance sheet of such Person and its Subsidiaries as current
assets.
"CONSOLIDATED CURRENT LIABILITIES": with respect to any Person at any
date of determination, all liabilities which would, in accordance with GAAP, be
classified on a consolidated balance sheet of such Person and its Subsidiaries
as current liabilities.
"CONSOLIDATED EBITDA": with respect to any Person for any period, the
sum of (a) Consolidated Net Income PLUS (b) to the extent deducted in computing
such Consolidated Net Income, the sum of (i) Consolidated Income Tax Expense,
(ii) Consolidated Interest Expense, (iii) depreciation and amortization expense,
(iv) Preferred Stock Dividends, (v) non-cash charges which will not result in a
cash payment and (vi) any
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loss which did not result in a cash payment, MINUS, (c) to the extent added in
computing such Consolidated Net Income, the sum of (x) any interest income, (y)
all non-cash income and (z) any gain which did not result from a cash payment,
and plus losses or minus gains incurred by a Person which are either unusual in
nature or infrequent in occurrence, all as determined on a consolidated basis
with respect to such Person and its Subsidiaries in accordance with GAAP;
PROVIDED, HOWEVER, that EBITDA of the Borrower and its consolidated Subsidiaries
for the fiscal quarter ended March 31, 1998 shall be $25,350,000 and for the
fiscal quarter ended June 30, 1998 shall be $25,274,000.
"CONSOLIDATED INCOME TAX EXPENSE": with respect to any Person for any
period, income taxes (and other taxes of a similar nature or imposed in lieu
thereof) paid in cash by such Person and its consolidated Subsidiaries;
PROVIDED, HOWEVER, that Consolidated Income Tax Expense for the Borrower and its
consolidated Subsidiaries for the fiscal quarter ended March 31, 1998 shall be $
0 and for the fiscal quarter ended June 30, 1998 shall be $ 0.
"CONSOLIDATED INTEREST EXPENSE": with respect to any Person for any
period, interest and fees paid or (without duplication) due and payable (whether
or not paid) in cash by such Person and its consolidated Subsidiaries during
such period in respect of Total Debt plus net payments paid or (without
duplication) due and payable (whether or not paid) in cash by such Person and
its consolidated Subsidiaries in respect of interest rate Hedging Agreements,
all determined on a consolidated basis in accordance with GAAP; PROVIDED,
HOWEVER, that Consolidated Interest Expense of the Borrower and its consolidated
Subsidiaries for the fiscal quarter ended March 31, 1998 shall be $ 0 and for
the fiscal quarter ended June 30, 1998 shall be $ 0.
"CONSOLIDATED NET INCOME": with respect to any Person for any period
the net income or loss of such Person and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP (PROVIDED that there shall be excluded (a) the income or
loss of any Person in which any other Person (other than the Borrower or any of
its Subsidiaries) has an interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries or the amount of any capital calls or contributions or other
fundings of losses actually required from the Borrower or any of its
Subsidiaries during such period; (b) the income of any of the Borrower's
Subsidiaries to the extent that the declaration or payment of dividends or other
distributions by that Subsidiary is not at the time permitted by operation of
the terms of its charter or other governing documents, or any agreement,
instrument, judgment, decree, order, or Requirements of Law applicable to such
Subsidiary except to the extent of dividends or other distributions actually
paid to the Borrower or any Wholly-Owned Subsidiary that is not subject to the
restrictions described in this clause (b); and (c) the net income or loss of any
Person accrued prior to the date on which it becomes a Subsidiary (other than
the Inco Entities and their Subsidiaries) or is merged into or consolidated with
such Person or any of its Subsidiaries or the date such Person's assets are
acquired by the Borrower or any of its Subsidiaries).
8
"CONSOLIDATED WORKING CAPITAL": with respect to any Person at any date
of determination, Consolidated Current Assets (exclusive of cash and Cash
Equivalents) of such Person and its consolidated Subsidiaries MINUS Consolidated
Current Liabilities (excluding the current portion of any long term debt) of
such Person and its consolidated Subsidiaries.
"DEBT SERVICE": with respect to any Person for any period, the sum of
the following for such Person and its consolidated Subsidiaries (a) Consolidated
Interest Expense for such period PLUS (b) scheduled principal amortization of
Total Debt for such period (whether or not such payments are made).
"DEFAULT": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC BANK ACCOUNTS": as defined in subsection 6.25.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower which is
incorporated in any state or other jurisdiction of the United States of America.
"EBITDA THRESHOLD": as defined in subsection 9.8.
"ENVIRONMENTAL CLAIMS": any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, Liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "CLAIMS"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Materials of
Environmental Concern, (c) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law and (d) any alleged injury or threat of injury to health, safety or the
environment due to the presence of Materials of Environmental Concern.
"ENVIRONMENTAL LAWS": any and all foreign, federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes or
decrees of any Governmental Authority or other Requirements of Law (including
common law) regulating, relating to or imposing liability or standards of
conduct concerning Materials of Environmental Concern or protection of human
health or the environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
9
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board of Governors) maintained by a member bank of the
Federal Reserve System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which Credit Lyonnais New York Branch is offered Dollar deposits in the New York
interbank market at or about 10:00 A.M., New York time, two Business Days prior
to the beginning of such Interest Period for delivery in immediately available
funds on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its Eurodollar Loan to be
outstanding during such Interest Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
--------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 10, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both has
been satisfied.
"EXCESS CASH FLOW": with respect to the Borrower and its Subsidiaries
on a consolidated basis for any fiscal year, (a) Consolidated EBITDA for such
fiscal year MINUS (b) the sum of (i) Debt Service for such fiscal year actually
paid in cash, (ii) any voluntary prepayments of Term Loans during such fiscal
year, (iii) Capital Expenditures during such fiscal year permitted under
subsection 9.8, (iv) Consolidated Income Tax Expense paid during such fiscal
year, (v) Restricted Payments paid in cash during such fiscal year, (vi)
consideration for Permitted Acquisitions paid in cash during such fiscal year,
and (vii) an amount equal to any increase in Consolidated Working Capital during
such fiscal year, PLUS (c) an amount equal to any decrease in Consolidated
Working Capital during such fiscal year, excluding decreases attributable to
pension or other post-retirement benefits reflected as current liabilities but
not paid in cash during such fiscal year.
"EXISTING CREDIT AGREEMENT": the Credit Agreement dated as of October
18, 1996 among the Borrower, certain lenders, and Credit Lyonnais New York
Branch as issuing lender and agent, as amended.
10
"EXISTING LETTERS OF CREDIT": as defined in subsection 4.1(b).
"FDIC": the Federal Deposit Insurance Corporation or any successor to
the functions and powers thereof.
"FEDERAL FUNDS RATE": as defined in the definition of "Base Rate."
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"FIXED CHARGES": with respect to any Person for any fiscal period, the
sum of the following for such Person and its consolidated Subsidiaries (a) Debt
Service for such period, (b) Capital Expenditures by such Person and its
consolidated Subsidiaries during such period, (c) Consolidated Income Tax
Expense paid during such period and (d) Preferred Stock Dividends paid during
such period, all determined on a consolidated basis in accordance with GAAP.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower which is not a
Domestic Subsidiary.
"GAAP": generally accepted accounting principles in the United States
of America in effect on the Closing Date.
"GOVERNMENTAL AUTHORITY": any supranational, national, foreign,
federal, state or other court or governmental agency, authority, instrumentality
or regulatory body.
"GUARANTEE": any guarantee by any Loan Party of the Obligations,
including the Subsidiaries' Guarantees.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counter indemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include
11
(A) endorsements of instruments for deposit or collection in the ordinary course
of business; (B) customary and reasonable indemnity obligations of the Borrower
and its Subsidiaries (x) under any agreement or document and (y) under
Acquisition Documents pursuant to which, in any such case described in clauses
(x) and (y), the Borrower or a Subsidiary thereof may indemnify a party to any
such agreement or document with respect to losses incurred by such party as a
result of the failure of a representation or warranty of the Borrower or such
Subsidiary to be true or as a result of an event occurring after the effective
date of such agreement or document or acquisition by the Borrower or such
Subsidiary or to indemnify such party as a result of the negligence or other
culpable conduct of the Borrower or its Subsidiary, as the case may be; (C)
customary "comfort letters" which do not require a Person to make payments or to
maintain working capital, equity capital, net worth or solvency of the primary
obligor; or (D) product warranties incurred in the ordinary course of business.
The amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (i) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee Obligation
is made and (ii) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"GUARANTOR": any Person executing and delivering a Guarantee pursuant
to this Agreement.
"HEDGING AGREEMENT": any interest rate protection agreement, interest
rate future, interest rate option, interest rate swap, cap or collar agreement
or other interest rate hedge arrangement, currency swap agreement, foreign
exchange agreement or other agreement or arrangement with respect to foreign
exchange or any foreign currency, or forward contracts for the purchase of
commodities, selected by the Borrower and, with respect to interest rate Hedging
Agreements, with a counterparty acceptable to the Agent, to or under which the
Borrower or any of its Subsidiaries is a party or a beneficiary on the date
hereof or becomes a party or a beneficiary after the date hereof.
"INCO ENTITIES": collectively, Inco Alloys International, Inc., a
Delaware corporation, Rescal S.A., a French societe anonyme, Inco Alloys
Limited, a limited company incorporated under the laws of England and Wales,
Inco Alloys International Ltd., a limited company incorporated under the laws of
England and Wales, Inco Alloys Canada Limited, a Canadian corporation, and Daido
Inco Alloys Ltd., a corporation incorporated under the laws of Japan.
"INDEBTEDNESS": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than unsecured current liabilities not the
result of the borrowing of money or the obtaining of credit or the leasing of
property for accounts payable and
12
expense accruals incurred or assumed in the ordinary course of business for
current purposes and not represented by a note or other evidence of indebtedness
and payable in accordance with customary practices), (b) any other indebtedness
of such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) the principal component of all obligations of such Person under
Financing Leases, (d) all liabilities secured (or for which the holder has an
existing right, contingent or otherwise to be secured by) by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof and (e) the net obligations of
such Person under all Hedging Agreements to the extent required to be recognized
as a liability under GAAP. Indebtedness of a Person shall include any
Indebtedness of a partnership in which such Person is a general partner, unless
such partnership Indebtedness is without recourse to such general partner.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": with respect to any Person, such Person's
intellectual property, including United States and foreign patents, patent
applications, registered and common law trademarks, trademark applications,
service names, service marks, service xxxx applications, logos, trade names,
trade secrets, proprietary technology, research records, technical knowledge and
processes, inventions (whether or not patentable and whether or not reduced to
practice), invention disclosures and improvements thereto, know-how, formal or
informal licensing arrangements, technical specifications, computer software,
registered and unregistered copyrights, copyright applications, and all
embodiments of the foregoing and all rights with respect thereto, together with
the goodwill of the business symbolized by or connected with any of the
foregoing.
"INTERCOMPANY NOTE(S)": any promissory note executed by a Subsidiary of
the Borrower in favor of the Borrower or any Domestic Subsidiary, each of which
shall be in form and substance satisfactory to the Agent, and shall be pledged
to the Agent for the benefit of the Lenders pursuant to the terms of the
Security Agreement, including without limitation the SMC Acquisition Note, the
SMC (UK) Notes, the SMC (France) Note and the SMC (Canada) Note.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding, and, in the case of Term Loans, on each scheduled payment date of
principal thereof, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months, the day
which is three months after the first day of such Interest Period and the last
day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan: (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by
13
the Borrower in its notice of borrowing or notice of conversion, as the case may
be, given with respect thereto; and (b) thereafter, each period commencing on
the last day of the immediately preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto (subject to availability from each Lender); PROVIDED, that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend (A) in
the case of Revolving Credit Loans which are Eurodollar Loans, beyond
the Tranche A and Revolver Termination Date or (B) in the case of Term
Loans which are Eurodollar Loans, beyond the date final payment is due
on such Term Loans, shall end on the Tranche A and Revolver Termination
Date or such date of final payment, as the case may be;
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INVESTMENT": as defined in subsection 9.9.
"IRB CONSENTS": any and all consents required under the IRB Documents
in connection with this Agreement and the transactions contemplated thereby,
including the approvals of the Bilateral Mortgages by the Oneida County
Industrial Development Agency, the County of Chautauqua Industrial Development
Agency and the City of Princeton, Kentucky.
"IRB DOCUMENTS": collectively, (a) the Lease Agreement by and between
Oneida County Industrial Development Agency ("ONEIDA XXX") and Borrower, dated
February 1, 1994, as modified and amended by agreements dated February 28, 1997
and January 22, 1998; (b) the Amended and Restated Payment in Lieu of Tax
Agreement, dated as of February 28, 1997, by and between Oneida XXX and
Borrower, as amended by a First Amendment to Amended and Restated Payment in
Lieu of Tax Agreement, dated January 22, 1998; (c) the Lease between County of
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxxx Xxxxxx
00
("XXXXXXXXXX XXX"), as lessor, and Borrower, as lessee, dated as of November 1,
1990; (d) the Payment in Lieu of Taxes Agreement, dated as of November 1, 1990,
by and between Chautauqua XXX and Borrower; and (e) the Amended and Restated
Lease between City of Princeton, Kentucky, as landlord, and Borrower, as tenant,
dated as of September 1, 1990, in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"ISSUING BANK": Credit Lyonnais New York Branch or any Lender which,
with the approval of the Agent, may at any time issue or be requested to issue a
Letter of Credit for the account of the Borrower. If there is more than one
Issuing Bank, all references to "the Issuing Bank" shall be deemed to refer to
each Issuing Bank or all Issuing Banks, as the context requires.
"JOINT VENTURE": a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that all liabilities of such Person shall be non-recourse to Borrower.
"LENDERS": as defined in the first paragraph of this Agreement. When
used with reference to the Security Documents and the Collateral, the term
"Lender" includes the Issuing Bank.
"LETTER OF CREDIT": a letter of credit issued by, and subject to terms
and conditions acceptable to, the Issuing Bank on behalf of the Borrower
pursuant to Section 4, which letter of credit shall have an expiration date no
later than the earlier of (a) one year after its date of issuance or (b) 30 days
prior to the Tranche A and Revolver Termination Date.
"LETTER OF CREDIT REQUEST": as defined in subsection 4.1.
"LETTERS OF CREDIT OUTSTANDING": any time, the sum of (a) the aggregate
stated amount of all outstanding Letters of Credit PLUS (without duplication)
(b) the aggregate amount of all drawings made under any Letter of Credit for
which the Issuing Bank has not received reimbursement from the Borrower by means
of a borrowing of Revolving Credit Loans pursuant to Section 3 or otherwise.
"LEVEL": as specified in the definition of Applicable Margin.
"LEVERAGE RATIO": as of any date of determination, the ratio of Total
Debt of the Borrower and its consolidated Subsidiaries as of the last day of the
most recent fiscal quarter of the Borrower prior to such date with respect to
which the Borrower has delivered to the Agent financial statements of the
Borrower and its consolidated Subsidiaries in conformity with the requirements
of subsection 8.1 to Consolidated EBITDA of the Borrower and its consolidated
Subsidiaries for the most recent four fiscal quarters of the Borrower ending on
such date.
15
"LIEN": with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, hypothecation, preference, charge or security
interest in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, Financing Lease or title retention agreement
relating to such asset and (c) in addition, in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN": any Revolving Credit Loan or Term Loan made by any Lender
pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Notes, the Letters of Credit, the
Letter of Credit Requests (including the related reimbursement agreements), the
Guarantees, the Security Documents, the Closing Letter, any agreement between a
Loan Party and the Agent with respect to the payment of fees, and any interest
rate Hedging Agreement (if entered into with a Lender or an Affiliate of a
Lender), and each other document, agreement, instrument or certificate delivered
pursuant to the terms hereof or thereof, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower (after
giving effect to the Acquisition) which is a party to a Loan Document, and any
other Person which guarantees all or any portion of the Obligations and/or
grants a Lien on any of its assets to secure payment and/or performance of the
Obligations.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, assets, liabilities, property, performance or condition
(financial or otherwise) or prospects of the Borrower or any Material Subsidiary
or the Borrower and its Subsidiaries, taken as a whole, or (b) the validity or
enforceability of this Agreement, any Note or any of the other Loan Documents or
(c) the rights or remedies of the Agent, the Issuing Bank or the Lenders
hereunder or thereunder.
"MATERIAL SUBSIDIARY": any Subsidiary whose assets, as of the end of
the most recent fiscal quarter, were at least 10% of the total assets of the
Borrower and its Subsidiaries, taken as a whole, determined in accordance with
GAAP.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls, urea-formaldehyde insulation, lead-based paint,
radiation, radioactive materials and electromagnetic fields.
"MORTGAGE": each Mortgage or Deed of Trust executed or to be executed
and delivered by any Loan Party, substantially in the form of Exhibit D (with
any changes required by applicable Requirements of Law), covering the interests
in real property listed on Schedule II and any interests in real property
located in the United States hereafter acquired by the Borrower or any Domestic
Subsidiary of the Borrower for which the Agent
16
requests a Mortgage, in each case as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
"MORTGAGED PROPERTIES": all of the interests in real estate in which
Liens are purported to be granted to the Agent pursuant to the Mortgages and the
Bilateral Mortgages.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 3(37) or 4001(a)(3) of ERISA.
"NET PROCEEDS": (a) 100% of the cash proceeds of any Asset Sale by the
Borrower or any of its Subsidiaries (including any cash payments received by way
of deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale net of (i) reasonable attorneys' fees, accountants'
fees, investment banking fees, survey costs, title insurance premiums, and
related search and recording charges, transfer taxes, deed or mortgage recording
taxes, required debt payments secured by Liens on such assets (other than
pursuant hereto), other customary expenses and brokerage, consultant and other
customary fees actually incurred in connection therewith and (ii) taxes paid or
payable as a result thereof; (b) 100% of Qualifying Insurance and Other
Proceeds; (c) 100% of all Pension Plan Reversion Proceeds; (d) 100% of the cash
proceeds of any issuance of equity securities of the Borrower after the Closing
Date, net of reasonable attorneys' and accounting fees, investment banking or
underwriting fees or discounts and other customary expenses actually incurred in
connection therewith; and (e) 100% of the cash proceeds of any issuance of debt
securities by the Borrower or any of its Subsidiaries after the Closing Date
(other than Indebtedness permitted by subsection 9.2), net of reasonable
attorneys' fees and other customary expenses actually incurred in connection
therewith.
"NEW SUBSIDIARY": each Subsidiary of the Borrower organized, formed or
acquired after the Closing Date.
"NEW YORK MORTGAGE LOANS": the loans from the County of Oneida and the
State of New York to the Borrower in aggregate principal amount of $2,000,000,
secured by a first priority Lien on a portion of the real property and equipment
located in New Hartford, New York.
"NON-EXCLUDED TAXES": as defined in subsection 5.10(a).
"NOTES": the collective reference to the Revolving Credit Notes and the
Term Notes.
"OBLIGATIONS": means all direct or indirect debts, liabilities and
obligations of any Person of any and every type and description at any time
arising under or in connection with the Credit Agreement or any other Loan
Document, to the Agent, the Issuing Bank, Credit Lyonnais, any Lender (including
in its capacity as a counterparty to an interest rate Hedging Agreement), or any
other Person entitled to indemnification pursuant to the Credit Agreement or any
other Loan Document, in each case whether now outstanding
17
or hereafter created or incurred, whether or not the right to payment in respect
of any such debts, liabilities or obligations is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured and whether or not such claim
is discharged, stayed or otherwise affected by any bankruptcy case or
insolvency, reorganization, receivership, dissolution or liquidation proceeding,
and shall include (a) all liabilities of such Person for principal of and
interest on any and all Loans at any time outstanding under the Credit
Agreement, (b) all liabilities of such Person in respect of Letters of Credit at
any time issued pursuant to the Credit Agreement, (c) all liabilities of such
Person under the Loan Documents for any fees, costs, taxes, expenses,
indemnification and other amounts payable thereunder, (d) all liabilities of
such Person under any interest rate Hedging Agreement entered into with any
Lender or any of its Affiliates, and (e) all other liabilities of such Person
under or in respect of any of the Loan Documents or any of the transactions
contemplated thereby.
"OTHER TAXES": as defined in subsection 5.10(a).
"PARTICIPANT": as defined in subsection 12.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PENSION PLAN REVERSION PROCEEDS": the amount of the cash and the fair
market value of any and all other property received (directly or indirectly) by
the Borrower or any Commonly Controlled Entity after the Closing Date from the
termination of any stock, bonus, pension or profit-sharing plan (or trust
thereunder) which was treated by the Borrower or such Commonly Controlled Entity
as a plan qualified under Code Section 401(a) which shall not have been applied
by the Borrower or such Commonly Controlled Entity to payment of (a) taxes, if
any, imposed with respect to the receipt of such cash or other property or (b)
the payment of reasonable costs and expenses (including legal, actuarial and
accounting fees) actually incurred in obtaining such cash or other proceeds.
"PERMITTED ACQUISITION": (a) the acquisition by the Borrower or one of
its Subsidiaries of the minority shares of Rescal S.A. resulting in Rescal S.A.
being a Wholly- Owned Subsidiary, for an aggregate price of not more than
$1,000,000; and (b) the acquisition by Borrower or any Wholly-Owned Subsidiary
of the Capital Stock of a Person that becomes a Wholly-Owned Subsidiary or all
or substantially all of the assets or line of business of a Person or the
acquisition of an interest in a Joint Venture if (i) after giving effect to such
acquisition, the Borrower and its Subsidiaries have complied with subsections
8.10 and 9.15; (ii) before and after giving effect to such acquisition, Borrower
and its Subsidiaries are in compliance on a PRO FORMA basis with the covenants
contained in subsection 9.1 for the most recent period; (iii) no Default or
Event of Default has occurred and is continuing or will result from such
acquisition; (iv) the Person or assets to be acquired or (if the Joint Venture
has had prior operations) the Joint Venture, as the case may be, shall have had
a positive Consolidated EBITDA for the most recent 12 month period for which
financial statements are available; and (v) the aggregate consideration for all
acquisitions
18
permitted under this clause (b) does not exceed $20,000,000 in each of 1999 and
2000, $30,000,000 in each of 2001 and 2002 or $40,000,000 in any year
thereafter.
"PERMITTED ASSET SALE": an Asset Sale permitted by any of subsections
9.6(a), (b), (c), (e), (f), (g), or (h).
"PERMITTED LIENS": as defined in subsection 9.3.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PREFERRED STOCK": 1,940,000 shares of the Borrower's 6.625% Series A
Senior Convertible Preferred Stock (subject to adjustment in accordance with the
terms of the Preferred Stock Documents).
"PREFERRED STOCK DIVIDENDS": with respect to any period, dividends paid
in cash on the Preferred Stock.
"PREFERRED STOCK DOCUMENTS": the Investment Agreement dated as of July
8, 1998 among the Borrower, Titanium Metals Corporation and TIMET Finance
Management Company, as amended by Amendment to Investment Agreement dated as of
the Closing Date, the Investment Agreement dated as of the Closing Date between
the Borrower and Inco Limited, the Registration Rights Agreements each dated as
of the Closing Date between the Borrower and TIMET Management Finance Company
and between the Borrower and Inco Limited, the Certificate of Designations of
the Preferred Stock, and the Preferred Stock, as amended, supplemented or
otherwise modified from time to time to the extent permitted under subsection
9.19.
"PRINCIPAL SHAREHOLDERS": SIMA, LWH Holdings S.A. and Advanced
Materials Investments Holdings S.A. and their Affiliates.
"PRO RATA REVOLVING SHARE": with respect to any Revolving Credit Lender
at any time, that percentage equal to the Revolving Credit Commitment Percentage
of such Revolving Credit Lender at such time.
"PURCHASE AGREEMENT": the Stock Purchase Agreement, dated as of July 8,
1998, by and among the Sellers and the Borrower, as amended by a letter
agreement, dated as of the Closing Date, together with all exhibits and
schedules thereto, as amended, supplemented or otherwise modified to the extent
permitted under subsection 9.19.
19
"QUALIFYING INSURANCE AND OTHER PROCEEDS": any (a) insurance proceeds
payable to the Borrower or any of its Subsidiaries after the Closing Date on
account of a Casualty Loss which shall not have been applied by the Borrower or
such Subsidiary to the payment of the cost of repair or replacement of the
property subject to such Casualty Loss within six months of the date such
insurance proceeds are actually received by the Borrower or such Subsidiary, or
committed to such repair or replacement which has commenced within such six
months and has been completed within the next six months and (b) payments made
by any Seller to the Borrower or any of its Subsidiaries pursuant to the
Purchase Agreement after the Closing Date (other than payments made by any
Seller to the Borrower or any of its Subsidiaries on account of a liability
incurred by the Borrower or any of its Subsidiaries to a third party, for
reimbursement of costs and expenses paid by the Borrower or any of its
Subsidiaries or for services rendered by the Borrower or any of its
Subsidiaries), including any payment receivable by the Borrower from any Seller
as a result of a downward adjustment to the purchase price under the Purchase
Agreement, MINUS, in the case of clauses (a) and (b), reasonable costs and
expenses (including legal and accounting fees) actually incurred by the Borrower
or its Subsidiaries in recovering such proceeds or payments.
"RECEIVABLES PROGRAM": as defined in the Purchase Agreement.
"REFINANCING": as defined in subsection 7.1(e).
"REGISTER": as defined in subsection 12.6(d).
"REGULATION U": Regulation U of the Board of Governors as in effect
from time to time.
"REORGANIZATION": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA,
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived pursuant to PBGC Reg. ss. 4043.
"REQUIRED LENDERS": at any time, Lenders the Commitment Percentages of
which aggregate in excess of 50%.
"REQUIRED REVOLVING CREDIT LENDERS": at any time, Revolving Credit
Lenders the Revolving Credit Commitment Percentages of which aggregate in excess
of 50%.
"REQUIRED TRANCHE A LENDERS": at any time, Tranche A Lenders the
Tranche A Commitment Percentages of which aggregate in excess of 50%.
"REQUIRED TRANCHE B LENDERS": at any time, Tranche B Lenders the
Tranche B Commitment Percentages of which aggregate in excess of 50%.
20
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": with respect to the Borrower or any Subsidiary,
any one of the chairman of the board, the chief executive officer, the president
and any vice president of the Borrower or such Subsidiary or, with respect to
financial matters, the chief financial officer or treasurer of the Borrower or
such Subsidiary.
"RESTRICTED PAYMENT": as defined in subsection 9.7.
"REVOLVING CREDIT COMMITMENT": with respect to each Revolving Credit
Lender, the amount set forth opposite such Revolving Credit Lender's name on
Schedule I under the heading "Revolving Credit Commitment" or in the applicable
Assignment and Acceptance, as such amount may be reduced from time to time
pursuant to this Agreement; collectively, as to all the Revolving Credit
Lenders, the "REVOLVING CREDIT COMMITMENTS".
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Revolving Credit
Lender at any time, the percentage of such Revolving Credit Lender's Revolving
Credit Commitment of the aggregate outstanding Revolving Credit Commitments of
all the Revolving Credit Lenders or if the Revolving Credit Commitments have
been terminated, the percentage which the sum of its outstanding Revolving
Credit Loans PLUS its proportionate share of the Letters of Credit Outstanding
constitutes of the aggregate outstanding Revolving Credit Loans and Letters of
Credit Outstanding of all Revolving Credit Lenders.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including the
Closing Date to but not including the Tranche A and Revolver Termination Date or
such earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"REVOLVING CREDIT LENDER": any Lender with an unused Revolving Credit
Commitment hereunder and/or any Revolving Credit Loans outstanding hereunder or
participations in any Letters of Credit Outstanding; collectively, the
"REVOLVING CREDIT LENDERS".
"REVOLVING CREDIT LOANS": as defined in subsection 3.1(a).
"REVOLVING CREDIT NOTE": as defined in subsection 3.3(e).
"SEC": the United States Securities and Exchange Commission or any
successor thereto.
"SECURITY AGREEMENTS": collectively, the Borrower Security Agreement
and the Subsidiary Security Agreements.
21
"SECURITY DOCUMENTS": collectively, the Bilateral Mortgages, the
Mortgages, the Security Agreements, and all other security documents hereafter
delivered to the Agent granting or purporting to xxxxx x Xxxx on any asset or
assets of any Person to secure the Obligations of the Borrower and/or any other
Loan Party hereunder and/or under any of the other Loan Documents or to secure
any guarantee of any such obligations and liabilities.
"SELLERS": collectively, Inco Limited, a corporation continued under
the laws of Canada, Inco United States, Inc., a Delaware corporation, Inco
Europe Limited, a limited company incorporated under the laws of England and
Wales, and Inco S.A., a French societe anonyme.
"SIMA": Societe Industrielle de Materiaux Avances, as societe anonyme
organized under the laws of the Republic of France.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"SMC ACQUISITION": IAII Acquisition Co., a Delaware corporation, a
Wholly-Owned Subsidiary of the Borrower, which will be merged with and into Inco
Alloys International, Inc. in connection with the Acquisition.
"SMC (CANADA)": IACL Acquisition Inc., a Canadian corporation, a
Wholly- Owned Subsidiary of the Borrower, which will be amalgamated with and
into Inco Alloys Canada Limited. in connection with the Acquisition.
"SMC (FRANCE)": Special Metals S.A.R.L., a French soci,t, ...
responsabilit, limit,e, a Wholly-Owned Subsidiary of SMC (UK).
"SMC (UK)": IAL Holdings Limited, a corporation established under the
laws of England, a Wholly-Owned Subsidiary of the Borrower.
"SMC ACQUISITION NOTE": the promissory note dated October 28, 1998 in
the original principal amount of $178,000,000, executed by SMC Acquisition in
favor of the Borrower.
"SMC (CANADA) NOTE": the promissory note dated October 28, 1998 in the
original principal amount of $4,875,000, executed by SMC (Canada) in favor of
the Borrower.
"SMC (FRANCE) NOTE": the promissory note(s) in an original principal
amount not to exceed $7,000,000, executed by SMC (France) in favor of the
Borrower, or in favor of SMC (UK) and assigned to the Borrower after the Closing
Date.
"SMC (UK) NOTES": collectively, (a) the promissory note dated October
28, 1998 in the original principal amount of $64,400,000, (b) the promissory
note(s) dated October 28, 1998 in an original principal amount not to exceed
$7,000,000, and (c) the
22
promissory note in the original principal amount of $1,000,000 issued by SMC
(UK) in connection with the assignment of the note issued to SMC (UK) by SMC
(France), each executed by SMC (UK) in favor of the Borrower.
"SOLVENT": when used with respect to any Person, means that, as of any
date of determination, (a) the "fair value" of the property of such Person will,
as of such date, exceed such Person's "total liabilities" (as such quoted terms
are determined in accordance with applicable federal, state or foreign laws
governing insolvency of debtors), (b) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount
that will be required to pay all "liabilities of such Person, contingent or
otherwise", as of such date (as such quoted terms are determined in accordance
with applicable federal, state or foreign laws governing determinations of the
insolvency of debtors) as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature, taking into account the timing of and amounts of cash to
be received by such Person and the timing of and amounts of cash to be payable
on or in respect of indebtedness of such Person; in each case after giving
effect to (i) as of the Closing Date, the making of the Loans to be made on the
Closing Date and the application of the proceeds of such Loans, and the
consummation of the Transactions and (ii) on any date after the Closing Date,
the making of any Revolving Credit Loan to be made on such date, and to the
application of the proceeds of such Revolving Credit Loan, or the issuance of
any Letter of Credit on such date. For purposes of this definition, "debt" means
liability on a "claim", and "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of Capital Stock having ordinary voting power (excluding
Capital Stock having such power only as a result of the occurrence of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower, and shall include all Domestic
Subsidiaries and Foreign Subsidiaries of the Borrower after giving effect to the
Acquisition.
"SUBSIDIARIES' GUARANTEE": the Guarantee executed or to be executed and
delivered by each Domestic Subsidiary of the Borrower substantially in the form
of Exhibit E, in each case as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
23
"SUBSIDIARY SECURITY AGREEMENT": collectively, (a) the Subsidiary
Pledge and Security Agreement executed or to be executed and delivered by each
Domestic Subsidiary of the Borrower in favor of the Agent, substantially in the
form of Exhibit F-1, in each case as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time and (b) the Patent
and Trademark Security Agreement and the Copyright Security Agreement executed
or to be executed by each Domestic Subsidiary in favor of the Agent,
substantially in the forms of Exhibit F-2(a) and (b) in each case as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"SUPPLY CONTRACTS": collectively, (a) the nickel supply contracts and
cobalt supply contract(s) entered into on or prior to the Closing Date between
Inco Alloys International, Inc., or Inco Alloys Limited and one or more of the
Sellers or its Affiliates in each case as such agreement or understanding may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"TERM LOAN": a Tranche A Term Loan or a Tranche B Term Loan, as the
context shall require; collectively, the "TERM LOANS".
"TERM LOAN COMMITMENTS": the collective reference to the Tranche A
Commitments and the Tranche B Commitments; individually, a "TERM LOAN
COMMITMENT".
"TERM LOAN COMMITMENT PERCENTAGE": as to any Term Loan Lender at any
time, the percentage of the Term Loan Commitments then constituted by such Term
Loan Lender's Term Loan Commitments (or, after the Term Loans are made, the
percentage of the aggregate Term Loans then constituted by such Term Loan
Lender's Term Loans).
"TERM LOAN LENDER": any Lender with an unused Term Loan Commitment
hereunder and/or any Term Loans outstanding hereunder; collectively, the "TERM
LOAN LENDERS".
"TERM NOTE": a Tranche A Term Note or a Tranche B Term Note, as the
context shall require; collectively, the "TERM NOTES".
"TOTAL DEBT": with respect to any Person at any time, all Indebtedness
of such Person and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP, including (without duplication), if such Person is the
Borrower, the aggregate principal amount of all outstanding Loans.
"TRANCHE": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).
"TRANCHE A AND REVOLVER TERMINATION DATE": the fifth anniversary of the
Closing Date.
24
"TRANCHE A COMMITMENT": as to any Tranche A Lender, its obligation to
make a Tranche A Term Loan to the Borrower in an amount equal to the amount set
forth opposite such Tranche A Lender's name in Schedule I under the heading
"Tranche A Commitment", or in the applicable Assignment and Acceptance, as such
amount may be reduced from time to time pursuant to this Agreement;
collectively, as to all the Tranche A Lenders, the "TRANCHE A COMMITMENTS".
"TRANCHE A COMMITMENT PERCENTAGE": as to any Tranche A Lender at any
time, the percentage of the Tranche A Commitments then constituted by such
Tranche A Lender's Tranche A Commitment (or, after the Tranche A Term Loans are
made, the percentage of the aggregate Tranche A Term Loans then constituted by
such Tranche A Lender's Tranche A Term Loan).
"TRANCHE A LENDER": any Lender with an unused Tranche A Commitment
hereunder and/or any Tranche A Term Loans outstanding hereunder, collectively,
the "TRANCHE A LENDERS".
"TRANCHE A TERM LOAN": as defined in subsection 2.1(a).
"TRANCHE A TERM NOTE": as defined in subsection 2.5(d)(i).
"TRANCHE B COMMITMENT": as to any Tranche B Lender, its obligation to
make a Tranche B Term Loan to the Borrower in an amount equal to the amount set
forth opposite such Tranche B Lender's name in Schedule I under the heading
"Tranche B Commitment", or in the applicable Assignment and Acceptance, as such
amount may be reduced from time to time pursuant to this Agreement;
collectively, as to all the Tranche B Lenders, the "TRANCHE B COMMITMENTS".
"TRANCHE B COMMITMENT PERCENTAGE": as to any Tranche B Lender at any
time, the percentage of the Tranche B Commitments then constituted by such
Tranche B Lender's Tranche B Commitment (or, after the Tranche B Term Loans are
made, the percentage of the aggregate Tranche B Term Loans then constituted by
such Tranche B Lender's Tranche B Term Loan).
"TRANCHE B LENDER": any Lender with an unused Tranche B Commitment
hereunder and/or any Tranche B Term Loans outstanding hereunder; collectively,
the "TRANCHE B LENDERS".
"TRANCHE B MATURITY DATE": the seventh anniversary of the Closing Date.
"TRANCHE B TERM LOAN": as defined in subsection 2.1(a).
"TRANCHE B TERM NOTE": as defined in subsection 2.5(d)(ii).
25
"TRANSACTIONS": the Loans and Letters of Credit issued on the Closing
Date, the Acquisition, the Refinancing and the purchase and sale of the
Preferred Stock, and all other related transactions.
"TRANSACTION DOCUMENTS": the Loan Documents, the Acquisition Documents,
the Preferred Stock Documents, and the Supply Contracts.
"TRANSFEREE": as defined in subsection 12.6(f).
"TYPE": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"UNUSED REVOLVING CREDIT COMMITMENT": as to any Revolving Credit Lender
at any time, an amount equal to the excess, if any, of (a) the amount of such
Revolving Credit Lender's Revolving Credit Commitment at such time over (b)(i)
the aggregate principal amount of all Revolving Credit Loans made by such Lender
then outstanding PLUS (ii) such Lender's Pro Rata Revolving Share of Letters of
Credit Outstanding at such time.
"VOTING STOCK": as to any Person, the Capital Stock of such Person
normally entitled to vote in the election of directors or other governing body
of such Person, and securities convertible into such Capital Stock.
"WHOLLY OWNED SUBSIDIARY": a Subsidiary of the Borrower of which the
Borrower owns, directly or indirectly, all of the Capital Stock, exclusive of
Capital Stock of a Foreign Subsidiary required to be owned by residents of the
jurisdiction in which such Foreign Subsidiary is organized or located and
commonly referred to as "director's qualifying shares."
"YEAR 2000 PROBLEM": any significant risk that computer hardware,
software or equipment containing embedded microchips material to the business or
operations of the Borrower or any of its Subsidiaries (or, prior to the Closing
Date, of the Inco Entities and their Subsidiaries) will not, in the case of
dates or time periods occurring after December 31, 1999, function at least as
effectively and reliably as in the case of times or time periods occurring
before January 1, 2000, including the making of accurate leap year calculations.
OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any Loan Document or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Loan Document and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
26
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references in this Agreement are to this Agreement unless
otherwise specified. The terms "including" "include" and "includes" when used in
this Agreement or any other Loan Document shall be deemed to mean "including
without limitation," and the word "will" shall be construed to have the meaning
and effect as "shall."
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Sections and subsections headings in this Agreement are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or in any way affect the meaning or construction
of any provision of this Agreement.
(f) Unless otherwise specified herein or the context otherwise
requires, all references to (i) any Requirement of Law defined or referred to
herein shall be deemed to refer to such Requirement of Law or any successor
Requirement of Law, as the same may have been or may be amended or supplemented
from time to time and (ii) to any document, instrument or agreement defined or
referred to herein shall be deemed to refer to such document, instrument or
agreement (and in the case of any Note or other instrument, any instrument
issued in substitution therefor), as the same may have been or may be amended,
supplemented, amended and restated, waived or otherwise modified from time to
time (subject, however, to any restrictions on amendments or other modifications
herein).
SECTION
AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
TERM LOANS. Subject to the terms and conditions hereof, (a) each
Tranche A Lender severally (and not jointly) agrees to make a term loan (a
"TRANCHE A TERM LOAN") to the Borrower on the Closing Date in an amount equal to
the Tranche A Commitment of such Tranche A Lender and (b) each Tranche B Lender
severally (and not jointly) agrees to make a term loan (a "TRANCHE B TERM LOAN")
to the Borrower on the Closing Date in an amount equal to the Tranche B
Commitment of such Tranche B Lender. The Term Loans may from time to time be
Eurodollar Loans, Base Rate Loans or a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with subsections 2.2 and 5.2.
No portion of the Term Loan Commitments which has not been borrowed on the
Closing Date may be borrowed thereafter, and no portion of any Term Loan which
is repaid or prepaid may be reborrowed.
PROCEDURE FOR TERM LOAN BORROWING. The Borrower hereby requests a
Tranche A Term Loan borrowing on the Closing Date in an amount equal to the
aggregate amount of the Tranche A Commitments of the Tranche A Lenders and a
Tranche B Term Loan borrowing on the Closing Date in an amount equal to the
aggregate amount of the Tranche B Commitments of the Tranche B
27
Lenders. The Borrower shall give the Agent irrevocable notice prior to 10:00
A.M., New York City time, at least three Business Days prior to the Closing Date
if all or any part of the Term Loans are to be initially Eurodollar Loans,
specifying the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Periods therefor. If no such notice is given by
the Borrower, the Term Loans shall initially be Base Rate Loans. Upon receipt of
such notice the Agent shall promptly notify the Term Loan Lenders thereof. Each
Term Loan Lender will make the amount of its PRO RATA share of each borrowing of
Term Loans available to the Agent for the account of the Borrower at the office
of the Agent specified in subsection 12.2 prior to 10:00 A.M., New York City
time, on the Closing Date in Dollars and in funds immediately available to the
Agent. The Agent shall, by 12:00 noon, New York City time, on the Closing Date
credit the account of the Borrower on the books of such office of the Agent or
such other account as specified by the Borrower with the aggregate of the
amounts made available to the Agent by the Term Loan Lenders and in like funds
as received by the Agent.
REPAYMENT OF TRANCHE A TERM LOANS. The Borrower hereby unconditionally
promises to pay to the Agent for the account of the Tranche A Lenders in
repayment of the principal amount of the Tranche A Term Loans made by such
Tranche A Lenders the amounts set forth below on the last Business Day of each
month and year set forth below; PROVIDED that, notwithstanding the foregoing,
the aggregate then unpaid principal amount of the Tranche A Term Loans shall be
payable on the Tranche A and Revolver Termination Date (or such earlier date on
which the Tranche A Term Loans become due and payable pursuant to Section 5 or
10):
Month, Year Amount
----------- ------
December, 1998 $2,500,000
March, 1999 $2,500,000
June, 1999 $2,500,000
September, 1999 $2,500,000
December, 1999 $3,750,000
March, 2000 $3,750,000
June, 2000 $3,750,000
September, 2000 $3,750,000
December, 2000 $6,250,000
March, 2001 $6,250,000
June, 2001 $6,250,000
September, 2001 $6,250,000
December, 2001 $8,750,000
March, 2002 $8,750,000
June, 2002 $8,750,000
September, 2002 $8,750,000
December, 2002 $10,000,000
March, 2003 $10,000,000
28
June, 2003 $10,000,000
Tranche A and Revolver
Termination Date $10,000,000
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Tranche A Term Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 5.4.
REPAYMENT OF TRANCHE B TERM LOANS. The Borrower hereby unconditionally
promises to pay to the Agent for the account of the Tranche B Lenders in
repayment of the principal amount of the Tranche B Term Loans made by such
Tranche B Lenders the amounts set forth below on the last Business Day of each
month and year set forth below; PROVIDED that, notwithstanding the foregoing,
the aggregate then unpaid principal amount of the Tranche B Term Loans shall be
payable on the Tranche B Maturity Date (or such earlier date on which the
Tranche B Term Loans become due and payable pursuant to Section 5 or 10):
Month, Year Amount
----------- ------
December, 1998 $250,000
March, 1999 $250,000
June, 1999 $250,000
September, 1999 $250,000
December, 1999 $250,000
March, 2000 $250,000
June, 2000 $250,000
September, 2000 $250,000
December, 2000 $250,000
March, 2001 $250,000
June, 2001 $250,000
September, 2001 $250,000
December, 2001 $250,000
March, 2002 $250,000
June, 2002 $250,000
September, 2002 $250,000
December, 2002 $250,000
March, 2003 $250,000
June, 2003 $250,000
September, 2003 $250,000
December, 2003 $11,875,000
March, 2004 $11,875,000
29
June, 2004 $11,875,000
September, 2004 $11,875,000
December, 2004 $11,875,000
March, 2005 $11,875,000
June, 2005 $11,875,000
Tranche B Maturity Date $11,875,000
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Tranche B Term Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 5.4.
EVIDENCE OF TERM LOAN DEBT. (a) Each Term Loan Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Term Loan Lender resulting from the Tranche
A Term Loans and/or Tranche B Term Loans made by such Term Loan Lender from time
to time, including the amounts of principal and interest payable and paid to
such Term Loan Lender from time to time under this Agreement.
(b) The Agent shall maintain the Register pursuant to subsection
12.6(d), and a subaccount therein for each Term Loan Lender, in which shall be
recorded (i) the amount of each Tranche A Term Loan and Tranche B Term Loan made
hereunder, the Type thereof and, in the case of Eurodollar Loans, each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Term Loan Lender
hereunder and (iii) both the amount of any sum received by the Agent hereunder
from the Borrower and each Term Loan Lender's share thereof, if any.
(c) The entries made in the Register and the accounts of each Term Loan
Lender maintained by the Agent pursuant to subsection 2.5(b) shall, to the
extent permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Borrower therein recorded; PROVIDED, HOWEVER,
that the failure of any Term Loan Lender or the Agent to maintain any such
account or the Register, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the Tranche A
Term Loans and/or Tranche B Term Loans made to the Borrower by such Term Loan
Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that at the closing on the Closing Date the
Borrower will execute and deliver to such Term Loan Lender (i) a promissory note
of the Borrower evidencing the Tranche A Term Loans made by such Tranche A
Lender, substantially in the form of Exhibit G-1 (a "TRANCHE A TERM NOTE"),
payable to the order of such Tranche A Lender and in a principal amount equal
to, the lesser of (A) the initial Tranche A Commitment of such Tranche A Lender
or (B) the aggregate unpaid principal amount of all Tranche A Term Loans made by
such Tranche A Lender, and/or (ii) a promissory note of the Borrower evidencing
the Tranche B Term Loan made by such Tranche B Lender, substantially in the form
of Exhibit G-2 (a "TRANCHE B TERM NOTE"), payable to the order of
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such Tranche B Lender and in a principal amount equal to the lesser of (i) the
initial Tranche B Commitment of such Tranche B Lender or (ii) the aggregate
unpaid principal amount of all Tranche B Term Loans made by such Tranche B
Lender. Each Term Loan Lender is hereby authorized to record the date, Type and
amount of each Tranche A Term Loan or Tranche B Term Loan, as the case may be,
made by such Term Loan Lender, the date and amount of each payment or prepayment
of principal thereof, each continuation thereof, each conversion of all or a
portion thereof to another Type and, in the case of Eurodollar Loans, the length
of each Interest Period and Eurodollar Rate with respect thereto, on the
schedule annexed to and constituting a part of its Tranche A Term Note or
Tranche B Term Note, as the case may be; PROVIDED, HOWEVER, that the failure to
make any such recordation (or any error therein) shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the Tranche A
Term Loans and/or Tranche B Term Loans made to the Borrower in accordance with
the terms of this Agreement.
USE OF PROCEEDS OF TERM LOANS. The proceeds of the Term Loans shall be
used by the Borrower on the Closing Date to (a) finance the prepayment of
certain outstanding Indebtedness, including any Indebtedness under the Existing
Credit Agreement, and to pay related fees and expenses and (b) to finance a
portion of the Acquisition, including funding the loans evidenced by the
Intercompany Notes, and/or to pay related fees and expenses.
SECTION
AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and conditions
hereof, each Revolving Credit Lender severally (and not jointly) agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to its Pro Rata Revolving
Share of Letters of Credit Outstanding, does not exceed the amount of such
Revolving Credit Lender's Revolving Credit Commitment. Subject to the foregoing
and to the satisfaction of all conditions for borrowing, during the Revolving
Credit Commitment Period, the Borrower may use the Revolving Credit Commitments
within the limits set forth herein by borrowing and prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with subsections 3.2 and 5.2;
PROVIDED that no Revolving Credit Loan shall be made as a Eurodollar Loan after
the day that is one month prior to the Tranche A and Revolver Termination Date.
PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may borrow under
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day; PROVIDED that the Borrower shall give the Agent irrevocable
notice (which notice must be received by the
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Agent (a) prior to 10:00 A.M., New York City time, three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be initially Eurodollar Loans or (b) prior to 12:00 noon New
York City time, one Business Day prior to the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of such Type of Loan and
the respective lengths of the initial Interest Periods therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $100,000 or a whole multiple thereof and (y) in the
case of Eurodollar Loans, $1,000,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Agent shall
promptly notify each Revolving Credit Lender thereof. Each Revolving Credit
Lender will make the amount of its PRO RATA share of each borrowing available to
the Agent for the account of the Borrower at the office of the Agent specified
in subsection 12.2 prior to 11:00 A.M., New York City time, on the Borrowing
Date requested by the Borrower and in funds immediately available to the Agent.
Such borrowing will then be made available by 1:00 P.M., New York City time, to
the Borrower by the Agent crediting the account of the Borrower on the books of
such office or such other account as specified by the Borrower with the
aggregate of the amounts made available to the Agent by the Revolving Credit
Lenders and in like funds as received by the Agent.
REPAYMENT OF REVOLVING CREDIT LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of each
Revolving Credit Lender the then unpaid principal amount of each Revolving
Credit Loan made by such Lender on the Tranche A and Revolver Termination Date
(or such earlier date on which the Revolving Credit Loans become due and payable
pursuant to Section 5 or 10). The Borrower hereby further agrees to pay interest
on the unpaid principal amount of the Revolving Credit Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 5.4.
(b) Each Revolving Credit Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Revolving Credit Lender resulting from each Revolving Credit Loan made by
such Revolving Credit Lender from time to time, including the amounts of
principal and interest payable and paid to such Revolving Credit Lender from
time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection
12.6(d), and a subaccount therein for each Revolving Credit Lender, in which
shall be recorded (i) the amount of each Revolving Credit Loan made hereunder,
the Type thereof and, in the case of Eurodollar Loans, each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Revolving Credit Lender
hereunder and (iii) both the amount of any sum received by the Agent hereunder
from the Borrower and each Revolving Credit Lender's share thereof, if any.
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(d) The entries made in the Register and the accounts of each Revolving
Credit Lender maintained by the Agent pursuant to subsection 3.3(c) shall, to
the extent permitted by applicable law, be PRIMA FACIE evidence of the existence
and amounts of the obligations of the Borrower therein recorded; PROVIDED,
HOWEVER, that the failure of any Revolving Credit Lender or the Agent to
maintain any such account or the Register, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Revolving Credit Loans made to the Borrower by such Revolving
Credit Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that at the closing on the Closing Date, the
Borrower will execute and deliver to such Revolving Credit Lender a promissory
note of the Borrower evidencing the Revolving Credit Loans made by such
Revolving Credit Lender, substantially in the form of Exhibit H (a "REVOLVING
CREDIT NOTE"), dated the Closing Date and payable to the order of such Revolving
Credit Lender and in a principal amount equal to the amount of the Revolving
Credit Commitment of such Revolving Credit Lender. Each Revolving Credit Lender
is hereby authorized to record the date, Type and amount of each Revolving
Credit Loan made by such Revolving Credit Lender, each continuation thereof,
each conversion of all or a portion thereof to another Type, the date and amount
of each payment or prepayment of principal thereof and, in the case of
Eurodollar Loans, the length of each Interest Period and Eurodollar Rate with
respect thereto, on the schedule annexed to and constituting a part of its
Revolving Credit Note; PROVIDED, HOWEVER, that the failure to make any such
recordation (or any error therein) shall not in any manner affect the obligation
of the Borrower to repay (with applicable interest) the Revolving Credit Loans
made to the Borrower in accordance with the term of this Agreement.
COMMITMENT FEE. The Borrower agrees to pay to the Agent for the account
of each Revolving Credit Lender during the Revolving Credit Commitment Period a
commitment fee, payable quarterly in arrears on the last day of each March,
June, September and December and on the Tranche A and Revolver Termination Date
or such earlier date as the Revolving Credit Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof, such fee to be computed at the rate of (a) 0.375% per annum for the
number of days that either Level I or Level II is in effect during the period
for which payment is made and (b) 0.500% per annum for the number of days that
any one of Level III, Level IV, Level V or Level VI is in effect during the
period for which payment is made, on the average daily amount of the Unused
Revolving Credit Commitment of such Revolving Credit Lender during the period
for which payment is made; PROVIDED that Level V shall be deemed in effect
during the period specified in (a) (i) of the proviso to the definition of
Applicable Margin and Level VI shall be deemed in effect in the circumstances
contemplated by clause (a)(ii) or (iii) of said proviso.
TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The Borrower
shall have the right, upon not less than five Business Days' prior written
notice to the Agent, which notice shall be irrevocable, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments. Any such reduction shall be in a minimum amount
equal to $500,000
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or an integral multiple of $100,000 in excess thereof or, if less, the entire
remaining balance of the Revolving Credit Commitments and shall reduce
permanently the Revolving Credit Commitments then in effect; PROVIDED, that no
such termination or reduction shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the aggregate principal amount of the Revolving Credit Loans PLUS the
aggregate Letters of Credit Outstanding then outstanding would exceed the
Revolving Credit Commitments then in effect. All reductions shall be made
ratably among all Revolving Credit Lenders in accordance with their respective
Revolving Credit Commitments
USE OF PROCEEDS OF REVOLVING CREDIT LOANS. The proceeds of the
Revolving Credit Loans shall be used by the Borrower to finance a portion of the
Acquisition, including funding the loans evidenced by the Intercompany Notes,
and/or to pay related fees and expenses, for working capital and general
corporate purposes (including capital expenditures, Permitted Acquisitions and
Investments permitted hereunder) in the ordinary course of the Borrower's and
its Subsidiaries' business.
SECTION
LETTERS OF CREDIT
ISSUANCE. (a) Subject to the terms and conditions hereof, the Issuing
Bank on behalf of the Revolving Credit Lenders agrees to issue on any Business
Day any Letter of Credit (or amendments thereof) requested by the Borrower
during the period from the Closing Date until the date 60 days prior to the
Tranche A and Revolver Termination Date; PROVIDED, HOWEVER, that the Issuing
Bank shall have no obligation to issue any such Letter of Credit (or amendments
thereof) if (i) the Closing Date shall not have previously occurred, or (ii)
such issuance would cause the aggregate amount outstanding at any time of all
Letters of Credit Outstanding to exceed $25,000,000. Each Letter of Credit shall
be issued pursuant to a request, given not later than 12:00 noon., New York City
time, on the fourth Business Day prior to the date of any proposed issuance, by
the Borrower to the Agent, which shall give to the Issuing Bank and each
Revolving Credit Lender prompt notice thereof by telecopy, telex or cable. Such
request by the Borrower for the issuance of a Letter of Credit (or amendments
thereof) shall be made by telephone, telecopy, telex or cable, confirmed
immediately in writing if by telephone, in substantially the form of Exhibit I,
together with a signed letter of credit application (including the related
reimbursement agreement) on the Issuing Bank's then-standard form (or other form
acceptable to the Issuing Bank and appropriate, in the sole opinion of the
Issuing Bank, in the circumstances) (a "LETTER OF CREDIT REQUEST") duly executed
by the Borrower and may be cancelled by notice thereof prior to issuance of such
Letter of Credit by telephone, telecopy, telex or cable, confirmed immediately
in writing if by telephone, to the Issuing Bank and the Agent. Within the limits
of each Revolving Credit Lender's Unused Revolving Credit Commitment and the
other restrictions set forth herein, the Borrower's ability to request the
issuance of Letters of Credit shall be fully revolving.
(b) All letters of credit issued under the Existing Credit Agreement
and outstanding on the Closing Date (the "EXISTING LETTERS OF CREDIT") shall
automatically be
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deemed Letters of Credit under this Agreement, and subject to the terms hereof
for all purposes.
PARTICIPATION BY REVOLVING CREDIT LENDERS. Immediately upon issuance or
amendment by the Issuing Bank of any Letter of Credit in accordance with the
procedures set forth in this Section 4, each Revolving Credit Lender shall be
deemed to have irrevocably and unconditionally purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Revolving Credit Lender's Pro Rata Revolving
Share of such Letter of Credit (including, without limitation, all Obligations
of the Borrower with respect thereto, other than amounts owing to the Issuing
Bank under subsection 4.8, and any security therefor or guaranty pertaining
thereto).
DRAWINGS. In the event that any drawing shall be made under a Letter of
Credit, by demand or claim (including, without limitation, any draft), the
Issuing Bank shall notify the Borrower via telephone, telecopy or telex of such
drawing and the Borrower shall (whether or not the Issuing Bank has notified the
Borrower of such drawing) reimburse the Issuing Bank in immediately available
funds for any amount paid or to be paid by the Issuing Bank under such Letter of
Credit on the date of such payment. In the event that any drawing under a Letter
of Credit is not reimbursed by the Borrower on the date of payment by the
Issuing Bank, and, pursuant to Section 3, the Borrower is then permitted to
obtain Revolving Credit Loans hereunder (without regard to the Dollar limitation
set forth in subsection 3.2 on the minimum amount of any borrowing), the
Borrower shall be deemed to have requested a borrowing of Revolving Credit Loans
consisting of Base Rate Loans in an aggregate amount equal to such unreimbursed
payment. Unless an Event of Default under subsection 10(f) exists, the Revolving
Credit Lenders shall make the requested Revolving Credit Loans as of the date of
such payment by the Issuing Bank, and the proceeds of such Revolving Credit
Loans shall automatically be applied to repay the Issuing Bank for such drawing
in full. In the event that any drawing under a Letter of Credit is not
reimbursed by the Borrower on the date of payment by the Issuing Bank and such
Revolving Credit Loans are not made hereunder for any reason, a default
specified in subsection 10(a) shall have occurred and the Issuing Bank shall
promptly notify the Agent thereof, and the Agent shall promptly notify each
Lender. Immediately upon receipt of such notice, the Revolving Credit Lenders
will pay to the Issuing Bank the amount of their respective participations in
the Letter of Credit. In the event that any Revolving Credit Lender fails timely
to make the Revolving Credit Loan or pay the amount of its participation as
required by this subsection 4.3, interest shall accrue thereon at the Federal
Funds Rate for the first three Business Days following the date of payment by
the Issuing Bank and the Federal Funds Rate plus 1% for the period thereafter to
the date of payment thereof by such Revolving Credit Lender. The Issuing Bank
shall distribute to each Revolving Credit Lender which has paid all amounts
payable by it under this subsection 4.3 with respect to any Letter of Credit
such Revolving Credit Lender's Pro Rata Revolving Share of all payments received
by the Issuing Bank in reimbursement of drawings honored by the Issuing Bank
under such Letter of Credit when such payments are received.
OBLIGATIONS ABSOLUTE. The obligations of the Borrower and the Revolving
Credit Lenders under subsection 4.3 shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms
hereof, under all circumstances whatsoever, including, without limitation, the
circumstances listed below:
(a) any lack of validity or enforceability of this Agreement, any of
the other Loan Documents, any Letter of Credit, any drawings thereunder or any
related contract;
(b) any amendment or waiver of or any consent to any departure from all
or any of this Agreement or any of the other Loan Documents;
(c) the existence of any claim, set-off, defense or other right which
the Borrower at any time may have against the Issuing Bank, the Agent, any of
the Lenders, any beneficiary or transferee of any Letter of Credit, or any other
Person, whether in connection with this Agreement, the other Loan Documents, any
Letter of Credit or any unrelated transactions;
(d) any statement or any other document presented under any Letter of
Credit that proves to be forged, fraudulent or invalid or insufficient in any
respect or any statement therein that proves to be untrue or inaccurate in any
respect whatsoever;
(e) payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate or other document that does not comply
with the terms of such Letter of Credit; or
(f) any other circumstances or happening whatsoever whether or not
similar to any of the foregoing;
PROVIDED, HOWEVER, that neither the Borrower nor the Revolving Credit Lenders
shall have any obligation to the Issuing Bank pursuant to subsection 4.3 if, but
for the willful misconduct or gross negligence of the Issuing Bank (as
determined in a final, non-appealable judgment by a court of competent
jurisdiction), the obligations for which the Issuing Bank seeks reimbursement or
payment would not have arisen.
OTHER LENDERS. Any action taken or omitted to be taken by the Issuing
Bank under or in connection with any Letter of Credit, if taken or omitted in
the absence of gross negligence or willful misconduct, shall not put the Issuing
Bank under any resulting liability to any Lender or relieve any Revolving Credit
Lender of its obligations hereunder to the Issuing Bank. In determining whether
to pay under any Letter of Credit, the Issuing Bank shall have no obligation to
the Lenders other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit.
INDEMNIFICATION. The Borrower shall indemnify and hold harmless the
Issuing Bank from and against any and all claims, damages, losses, liabilities,
reasonable costs and expenses of any kind whatsoever, including reasonable fees
and expenses of attorneys and paralegals that the
35
Issuing Bank may incur (or that may be claimed against the Issuing Bank by any
Person), together with all reasonable costs and expenses resulting from the
compromise or defense of any claims or liabilities hereinafter described, by
reason of or in connection with (a) the execution and delivery or transfer of,
or payment or failure to pay under, any Letter of Credit, (b) any suit, action
or proceeding brought by any person to require or prevent payment under any
Letter of Credit, or (c) any breach by the Borrower of any warranty, covenant,
term or condition in, or the occurrence of any default under, any of the Loan
Documents (to the extent related to Letters of Credit), any Letter of Credit or
any related contract, together with all reasonable expenses resulting from the
compromise or defense of any claims or liabilities arising as a result of any
such breach or default and defense against any legal action commenced to
challenge the validity of any of such documents; PROVIDED, HOWEVER, that the
Borrower shall not be required to indemnify the Issuing Bank for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (i) the gross negligence or willful misconduct (as determined
in a final, non-appealable judgment in a court of competent jurisdiction) of the
Issuing Bank in determining whether a draft, certificate or other documents
presented under any Letter of Credit complied with the terms of such Letter of
Credit, or (ii) the Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary thereof of a draft,
certificate or other document strictly complying with the terms and conditions
of such Letter of Credit. Nothing in this subsection 4.6 is intended to limit or
modify in any way the reimbursement obligations of the Borrower set forth in
subsection 4.3. In case any action or proceeding is brought against the Issuing
Bank in respect of which indemnity may be sought under this Agreement, the
Issuing Bank shall promptly give notice of any such action or proceeding to the
Borrower and may require the Borrower, upon such notice, to assume the defense
of the action or proceeding; PROVIDED that failure of the Issuing Bank to give
such notice shall not relieve the Borrower of any of its obligations under this
subsection 4.6. Upon receipt of such notice from the Issuing Bank requesting
that the Borrower assume such defense, the Borrower shall resist and defend such
action or proceeding at the Borrower's sole cost and expense. The obligations of
the Borrower under this subsection 4.6 shall survive the termination of the
Letters of Credit and this Agreement.
LIABILITY OF THE ISSUING BANK. The Borrower assumes all risks of the
acts or omissions of the users of any Letter of Credit and all risks of the
misuse of any Letter of Credit. Neither the Issuing Bank, nor any of its
officers, directors, employees or agents shall be liable or responsible for: (a)
the use which may be made of any Letter of Credit or for any acts or omissions
of any Person and any transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement or endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment against
presentation of documents which do not comply with the terms of the applicable
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to such Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except only that the Borrower shall have a claim against the Issuing Bank, and
the Issuing Bank shall be liable to the Borrower to the extent, but only to the
extent, of damages suffered by the Borrower which were caused by (i) the Issuing
Bank's gross negligence or willful
36
misconduct (as determined in a final, non-appealable judgment by a court of
competent jurisdiction) in determining whether documents presented under any
Letter of Credit comply with the terms of such Letter of Credit (it being
understood that any such noncompliance in any immaterial respect shall not be
deemed gross negligence or willful misconduct of the Issuing Bank) or (ii) the
Issuing Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary thereof of a draft, certificate or other
document strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary unless the Issuing Bank shall have been ordered not
to accept such documents by a court of competent jurisdiction.
LETTER OF CREDIT FEE. The Borrower agrees to pay to the Agent a
non-refundable letter of credit fee, to be distributed by the Agent to each
Revolving Credit Lender according to its Revolving Credit Commitment Percentage,
equal to the L/C Rate (as defined below) on the daily amount of outstanding
issued Letters of Credit, payable quarterly on the last day of each September,
December, March and June, and on the Tranche A and Revolver Termination Date.
With respect to each Letter of Credit, the Borrower agrees to pay to the Issuing
Bank, solely for the account of the Issuing Bank, (a) a non-refundable issuing
fee of 1/4 of 1% per annum on the face amount of such Letter of Credit for the
term of such Letter of Credit, payable in advance on the date of issuance
thereof for the three-month period following the date of issuance and on each
date occurring every three-months after the date of issuance; and (b) the
Issuing Bank's customary administrative fee. "L/C RATE", as used above, means an
interest rate per annum equal to the Applicable Margin for Revolving Credit
Loans which are Eurodollar Loans.
SECTION
GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS
PREPAYMENTS. (a) The Borrower may on the last day of any Interest
Period with respect thereto, upon at least three Business Days' irrevocable
written notice to the Agent, in the case of Eurodollar Loans, or at any time and
from time to time, upon at least one Business Days' irrevocable written notice
to the Agent in the case of Base Rate Loans, prepay the Loans, in whole or in
part, without premium or penalty, which notices shall specify the date and
amount of prepayment and whether the prepayment is of Term Loans or Revolving
Credit Loans or a combination thereof, of Eurodollar Loans, Base Rate Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
affected Lender. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 5.11, if any, and, in the case of
prepayments of the Term Loans, accrued interest to such date on the amount
prepaid. Subject to the provisions of subsection 5.1(d), partial prepayments of
the Term Loans shall be applied on a PRO RATA basis between the Term Loans and
shall be applied to the remaining installments of principal thereof in the
inverse order of their maturities. Such
37
partial prepayments shall be in an aggregate principal amount of $500,000 or a
whole multiple thereof.
(b) If with respect to any of its fiscal years, commencing with its
fiscal year ending December 31, 1998, the Borrower shall have Excess Cash Flow
for such fiscal year, the Loans shall be prepaid in an aggregate amount equal to
75% of such Excess Cash Flow or, with respect to any fiscal year as to which the
Leverage Ratio as of the end of the last fiscal quarter of such fiscal year was
less than or equal to 2.75:1, 50% of such Excess Cash Flow as set forth in the
second succeeding sentence; PROVIDED that, with respect to the period ending
December 31, 1998, Excess Cash Flow shall, notwithstanding anything to the
contrary herein, be determined with respect to the period beginning on the
Closing Date and ending on December 31, 1998. Each such prepayment shall be made
on or before the date which is 90 days after the end of such fiscal year. All
amounts used to prepay Loans pursuant to this subsection 5.l(b) shall be applied
as follows:
FIRST, subject to subsection 5.1(d), to the prepayment in full of all
outstanding Term Loans, PRO RATA between the Tranche A Term Loans and Tranche B
Term Loans, and in each case ratably among the applicable Lenders, and applied
to the remaining installments in inverse order of their maturities;
SECOND, to the prepayment in full of all outstanding Revolving Credit
Loans ratably among the Revolving Credit Lenders, and
THIRD, to a cash collateral account maintained with the Agent in
respect of the Letters of Credit Outstanding.
(c) All Net Proceeds shall be applied toward the prepayment of the
Loans, and deposited in the cash collateral account in the order specified in
subsection 5.1(b), and, to the extent applied to the Revolving Credit Loans or
to the cash collateral account as specified therein, shall permanently reduce
the Revolving Credit Commitments.
(d) Any Tranche B Lender may (i) so long as any Tranche A Term Loans
are outstanding, elect not to have any optional prepayment made pursuant to
subsection 5.1(a) applied to such Lender's Tranche B Term Loan until all Tranche
A Term Loans have been paid in full, in which case the amount not so applied
shall be utilized to prepay the Tranche A Term Loans in the manner specified in
subsection 5.1(a); and (ii) so long as any Tranche A Term Loans are outstanding,
elect not to have any mandatory prepayment made pursuant to subsection 5.1(b) or
subsection 5.1(c) applied to such Lender's Tranche B Term Loan until all such
Tranche A Term Loans have been paid in full, in which case the amount not so
applied shall be utilized to prepay the Tranche A Term Loans in the manner
specified in subsection 5.1(b) or subsection 5.1(c), as the case may be. The
Agent shall notify each Tranche B Lender of any proposed prepayment, and each
Tranche B Lender shall have 3 Business Days following such notification to
advise the Agent in writing that it elects not to have any prepayment applied to
its Tranche B Loan. Failure to deliver such notice to the Agent within the time
provided shall be deemed an election by such Tranche B Lender to accept such
prepayment.
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CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to Base Rate Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election; PROVIDED
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert Base Rate Loans to Eurodollar Loans by giving the Agent at least
three Business Days' prior irrevocable notice of such election. Any such notice
of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period or Interest Periods therefor. Upon receipt of any such notice
the Agent shall promptly notify each affected Lender thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be converted as provided
herein; PROVIDED that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Agent has, or the
Required Revolving Credit Lenders (in the case of conversions of Revolving
Credit Loans), Required Tranche A Lenders (in the case of conversions of Tranche
A Term Loans) or Required Tranche B Lenders (in the case of conversions of
Tranche B Term Loans) have, determined that such a conversion is not
appropriate, and (ii) no Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Tranche A and Revolver Termination Date (in
the case of conversions of Revolving Credit Loans) or the date of the final
installment of principal of the Term Loans (in the case of conversions of Term
Loans).
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the
definition of the term "INTEREST PERIOD" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans; PROVIDED
that, no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Agent has, or the Required Revolving
Credit Lenders (in the case of continuations of Revolving Credit Loans),
Required Tranche A Lenders (in the case of continuations of Tranche A Term
Loans) or Required Tranche B Lenders (in the case of continuations of Tranche B
Term Loans) have, determined that such a continuation is not appropriate or (ii)
after the date that is one month prior to the Tranche A and Revolver Termination
Date (in the case of continuations of Revolving Credit Loans) or the date of the
final installment of principal of the Term Loans (in the case of continuations
of Term Loans); and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso, such Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period.
MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto (a) the aggregate principal amount of the
Loans comprising each Tranche shall be equal to $1,000,000 or a whole multiple
of $100,000 in excess thereof and (b) no more than seven separate Tranches shall
be outstanding at any time.
INTEREST RATES AND PAYMENT DATES.
(a) Subject to the provisions of subsection 5.4(c), each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
PLUS the Applicable Margin.
(b) Subject to the provisions of subsection 5.4(c), each Base Rate Loan
shall bear interest at a rate per annum equal to the Base Rate PLUS the
Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any commitment fee or other amount payable
hereunder or under any other Loan Document shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is 2% over the rate otherwise applicable
thereto, in each case from the date of such non-payment until such amount is
paid in full (before as well as after the applicable judgment, if any).
(d) Interest shall be payable in arrears on each Interest Payment Date;
PROVIDED that interest accruing pursuant to paragraph (c) of this subsection
shall be payable from time to time on demand.
COMPUTATION OF INTEREST AND FEES. (a) Commitment fees, Letter of Credit
fees and interest shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Agent shall as soon as practicable notify the Borrower
and the affected Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Agent shall as
soon as practicable notify the Borrower and the affected Lenders of the
effective date and the amount of each such change in interest rate. (b) Each
determination of an interest rate by the Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrower and the affected
Lenders in the absence of manifest error.
INABILITY TO DETERMINE INTEREST RATE. If on the day which is two
Business Days prior to the first day of any Interest Period:
(a) the Agent shall have determined that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate with respect to any Eurodollar Loan to be
outstanding during such Interest Period, or
(b) the Agent shall have determined that the Eurodollar Rate with
respect to any Eurodollar Loan to be outstanding during such Interest Period
will not adequately and fairly reflect the cost to the Lenders of making or
maintaining their affected Eurodollar Loans during such Interest Period, or
(c) Dollar deposits in the principal amount of the Eurodollar Loans are
not generally available in the relevant interbank market,
39
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
affected Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans, (y) any affected Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any affected outstanding
Eurodollar Loans that were to have been continued as such shall be converted on
the first day of such Interest Period to Base Rate Loans. Until such time as the
Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert Base
Rate Loans to Eurodollar Loans. Each determination by the Agent hereunder shall
be conclusive absent manifest error.
PRO RATA TREATMENT AND PAYMENTS. (a) All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 12:00 Noon, New York City time, on the
due date thereof to the Agent, for the account of the Revolving Credit Lenders,
the Term Loan Lenders, the Issuing Bank or the Agent, as the case may be, at the
Agent's office specified in subsection 12.2, in Dollars and in immediately
available funds. Payments received by the Agent after such time shall be deemed
to have been received on the next Business Day. The Agent shall distribute such
payments to the Lenders entitled to receive the same promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day (and, with respect to
payments of principal, interest shall be payable thereon at the then applicable
rate during such extension) unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.
(b) Unless the Agent shall have been notified in writing by any
Revolving Credit Lender or Term Loan Lender prior to a Borrowing Date for
Revolving Credit Loans or Term Loans, as the case may be, that such Lender will
not make the amount that would constitute its share of such borrowing on such
Borrowing Date available to the Agent, the Agent may assume that such Lender is
making such amount available to the Agent, and the Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate for the
period until such Lender makes such amount immediately available to the Agent. A
certificate of the Agent submitted to any Lender with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error. If such Lender's share of such borrowing is not made available to the
Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall also be entitled to recover such amount with
40
interest thereon at the rate per annum applicable to Base Rate Loans hereunder,
on demand, from the Borrower, without prejudice to any rights of the Borrower
against the Lender which has failed to make its share of any borrowing available
to the Agent.
(c) Each borrowing by the Borrower of Tranche A Term Loans, Tranche B
Term Loans, and Revolving Credit Loans shall be made ratably from the Tranche A
Lenders, Tranche B Lenders, and Revolving Credit Lenders, respectively, in
accordance with their respective Term Loan Commitment Percentages and Revolving
Credit Commitment Percentages.
ILLEGALITY. (a) Notwithstanding any other provision herein, if at any
time any Lender determines (which determination, if made in good faith, shall be
final and conclusive and binding upon all parties) that the adoption of or any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
makes it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made
by such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Loan shall, as to such Lender only, be deemed a request for
a Base Rate Loan unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by
such Lender be converted to Base Rate Loans, in which event all such
Eurodollar Loans shall be automatically converted to Base Rate Loans as
of the effective date of such notice as provided if paragraph (b)
below.
In the event any Lender shall exercise its rights under (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the Base Rate Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this subsection 5.8, a notice to the Borrower by
any Lender shall be effective, if lawful, on the last day of the then current
Interest Period; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
REQUIREMENTS OF LAW. (a) If after the date of this Agreement the
adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the administration or interpretation thereof (whether or not having the
force of law):
(i) shall change the basis of taxation of payments to any
Lender in respect of the principal of or interest on any Eurodollar
Loan made by such
41
Lender or such Lender's issuance of any Letter of Credit or
participation in Letters of Credit Outstanding or any fees or other
amounts payable hereunder (other than taxes imposed on or measured by
the overall net income of such Lender by the jurisdiction in which such
Lender has its principal office (or lending office) or by any political
subdivision or taxing authority therein);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or other similar requirement against
assets of, deposits with or for the account of, or other extensions of
credit by, any office of such Lender (which requirement is not
otherwise included in the determination of the Eurodollar Rate); or
(iii) shall impose on such Lender any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or
such Lender's issuance of any Letter of Credit or participation in
Letters of Credit Outstanding;
and the result of any of the foregoing is to increase the cost to such Lender by
an amount which such Lender deems to be material of making, converting into,
continuing or maintaining Eurodollar Loans, or issuing Letters of Credit or
participations in Letters of Credit Outstanding or to reduce any amount
receivable hereunder in respect thereof by an amount deemed by such Lender to be
material, then, in any such case, the Borrower shall pay to such Lender within 2
Business Days after demand, any additional amounts necessary to compensate such
Lender for such increased cost incurred or reduction suffered. If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall promptly notify the Borrower, with a copy to the Agent, of the event by
reason of which it has become so entitled. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) If any Lender shall have determined that the applicability of any
law, rule, regulation or guideline adopted after the date hereof pursuant to or
arising out of the July 1988 report of the Basic Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any other law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender or any Lender's holding company with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority, central bank or comparable agency,
has or would have the effect of increasing the amount or cost of capital
required to be maintained by such Lender or such holding company or reducing the
rate of return on such Lender's or such holding company's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such holding company's
policies with respect to capital adequacy) by an
42
amount deemed by such Lender to be material, then from time to time, within 2
Business Days after submission by such Lender to the Borrower (with a copy to
the Agent) of a written request therefor, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for any such
reduction suffered. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in subsection 5.9(a) or (b) above, as the case may be, shall be
delivered to the Borrower (with a copy to the Agent) and shall be conclusive
absent manifest error. The Borrower shall pay each Lender the amount shown as
due on any such certificate delivered by it within 10 Business Days after its
receipt of the same.
TAXES. (a) All payments made by the Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, EXCLUDING (i) net
income taxes, franchise taxes, or any other taxes imposed on or measured by the
net income or profits of the Agent or such Lender, in each case by the
jurisdiction under the laws of which the Agent or such Lender is organized or
any political subdivision thereof or by the jurisdiction in which the applicable
lending or issuing office of the Agent or such Lender is located or any
political subdivision thereof and (ii) U.S. withholding taxes payable with
respect to payments hereunder under laws (including any treaty, ruling,
determination or regulation) in effect on the date hereof, but not any increase
in U.S. withholding tax resulting from any subsequent change in such laws
occurring (x) after the date hereof in the case of the Agent and any Lender as
of the date of this Agreement, and (y) in the case of any other Lender, the date
of Assignment and Acceptance pursuant to which it became a Lender (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings the "NON-EXCLUDED TAXES"). In addition, the Borrower agrees to pay
to the relevant Governmental Authority in accordance with applicable law any
current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement ("OTHER TAXES"). If any Non-Excluded Taxes or Other Taxes are
required by law to be withheld from any amounts payable to the Agent or any
Lender hereunder (including with respect to Letters of Credit) or under the
Notes, the amounts so payable to the Agent or such Lender shall be increased to
the extent necessary to yield to the Agent or such Lender interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, upon receipt thereof the Borrower shall send to the
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of any original official receipt received by the Borrower
showing payment thereof. The Borrower shall indemnify the Agent and the Lenders
for the full amount of Non-Excluded Taxes,
43
Other Taxes and any taxes imposed by any jurisdiction on amounts payable under
this subsection 5.10(a) that are paid by such Lender or Agent, (including
penalties, incremental taxes, interest and expenses arising therefrom or with
respect thereto), whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally imposed. If the Borrower determines in good faith that a
reasonable basis exists for contesting any Non-Excluded Taxes or Other Taxes,
such Lender or the Agent shall cooperate with the Borrower in challenging such
Non-Excluded Taxes or Other Taxes at the Borrower's expense if requested by the
Borrower (it being understood and agreed that the Agent or such Lender shall
have no obligation to contest or responsibility for contesting such Non-Excluded
Taxes or Other Taxes). If any Lender receives a refund in respect of any
Non-Excluded Taxes or Other Taxes for which such Lender has received payment
from the Borrower hereunder, such Lender shall, within 30 days of receipt by
such Lender, repay such refund to the Borrower, PROVIDED that the Borrower, upon
the request of such Lender, agrees to return such refund (plus any penalties,
interest or other charges) to the Lender in the event such Lender is required to
repay such refund. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) in the case of a Lender that is a "bank" under Section
881(c)(3)(A) of the Code;
(1) on or before the date of the first payment to
such Lender pursuant to this Agreement following the Closing
Date or on or before the effective date of the Assignment and
Acceptance, deliver to the Borrower and the Agent (x) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, and (y) an Internal Revenue Service Form W-8 or W-9,
or successor applicable form, as the case may be;
(2) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date
that any such form or certification expires or becomes
obsolete and promptly upon the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(3) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of a Lender that is not a "bank" under
Section 881(c)(3)(A) of the Code:
(1) deliver to the Borrower and the Agent (A) a
statement under penalties of perjury that such Lender (x) is
not a "bank" under Section
44
881(c)(3)(A) of the Code, is not subject to regulatory or
other legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any
Governmental Authority, any application made to a rating
agency or qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a 10-percent
shareholder within the meaning of Section 881(c)(3)(B) of the
Code and (z) is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section
881(c)(3)(C) of the Code and (B) an Internal Revenue Service
Form W-8;
(2) deliver to the Borrower and the Agent a further
copy of said Form W-8, or any successor applicable form or
other manner of certification on or before the date that any
such Form W-8 expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
form previously delivered by such Lender; and
(3) obtain such extensions of time for filing and
complete such forms or certifications as may be reasonably
requested by the Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders any such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Participant pursuant to
subsection 12.6 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms and statements required pursuant to this
subsection to the Lender from which the related participation shall have been
purchased.
INDEMNITY. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower for any reason in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower for any reason in
making any payment when due, including after the Borrower has given a notice of
prepayment in accordance with the provisions of this Agreement, (c) the making
of a payment (whether voluntary or mandatory) of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto for any reason,
or (d) the conversion of any Eurodollar Loan to a Base Rate Loan on a day which
is not the last day of an Interest Period
45
with respect thereto. Such loss or expense may include any loss, including loss
of anticipated profits, costs or expenses incurred by reason of the liquidation
or reemployment of deposits or other funds in order to fund or maintain such
Loans. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
CHANGE OF LENDING OFFICE. Each Lender agrees that it will use all
reasonable efforts (so long as such designation would not be adverse to it, as
determined in its sole judgment) to designate a lending office or a different
lending office if the making of such a designation would reduce or obviate the
need for the Borrower to make payments under subsection 5.9 or 5.10(a), or would
eliminate or reduce the effect of any adoption or change described in subsection
5.8.
SECTION
REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Issuing Bank and the Lenders to enter into
this Agreement, to make the Loans and to issue Letters of Credit, the Borrower
hereby represents and warrants to the Agent, the Issuing Bank and each Lender
(after giving effect to the Acquisition except as otherwise noted below and
subject to the limitations of subsection 7.2(a) with respect to certain
representations and warranties made on the Closing Date) that:
FINANCIAL CONDITION. (a)(i) The audited consolidated balance sheets of
the Borrower and its consolidated Subsidiaries (without giving effect to the
Acquisition), as of December 31, 1996 and 1997 and the related audited
consolidated statements of income, shareholders' equity and cash flows for the
two years then ended, copies of which have heretofore been furnished to the
Agent, have been certified by Ernst & Young, L.L.P. and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such dates and the consolidated results of their operations
and their cash flows for the two years then ended in conformity with GAAP.
(ii) The audited combined balance sheets of the Inco Entities as of
December 31, 1996 and December 31, 1997, and the related audited combined
statements of income, shareholders' equity and cash flows for the two years then
ended, copies of which have heretofore been furnished to the Agent, have been
certified by Price Waterhouse LLP and present fairly the combined financial
condition of the Inco Entities and their Subsidiaries as at such dates and the
results of their operations and their cash flows for the two years then ended in
conformity GAAP.
(b)(i) The unaudited consolidated balance sheets of the Borrower and
its consolidated Subsidiaries (without giving effect to the Acquisition), for
(i) the fiscal quarters ended March 31, 1998 and June 30, 1998, and the related
unaudited consolidated statements of income for such fiscal quarter certified by
a Responsible Officer, copies of which have heretofore been furnished to the
Agent, present fairly the consolidated financial condition of the Borrower and
its consolidated Subsidiaries as at such date, and the consolidated results of
their operations for the period then ended (subject to normal year-end audit
adjustments and the
46
absence of certain notes thereto). All such financial statements, including the
related schedules and notes thereto, have been prepared on a basis consistent
with the December 31, 1997 financial statements of the Borrower and its
consolidated Subsidiaries.
(ii) The unaudited combined balance sheets of the Inco Entities and
their Subsidiaries for the fiscal quarter ended March 31, 1998, and the related
unaudited combined statement of income for such fiscal quarter, copies of which
have heretofore been furnished to the Agent, present fairly the combined
financial condition of the Inco Entities and their Subsidiaries as at such date,
and the results of their operations for the period then ended (subject to normal
year-end audit adjustments and the absence of certain notes thereto). All such
financial statements, including the related schedules and notes thereto, have
been prepared on a basis consistent with the December 31, 1997 combined
financial statements of the Inco Entities and their Subsidiaries.
(c) Neither the Borrower nor any of its consolidated Subsidiaries nor
any of the Inco Entities nor any of their consolidated Subsidiaries had, at
December 31, 1997 or March 31, 1998 any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term Financing Lease or
unusual forward or long-term commitment, including, without limitation, any
Hedging Agreement required to be reflected on a balance sheet (or in the notes
thereto) prepared in accordance with GAAP, which is not reflected in the
foregoing statements or in the notes thereto or disclosed on Schedule 6.1(c).
Except as set forth on Schedule 6.1(c), during the period from December 31, 1997
to and including the date hereof there has been no sale, transfer or other
disposition by the Borrower or any of its consolidated Subsidiaries or by any of
the Inco Entities or any of their Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any Capital Stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at December 31, 1997, other than the Acquisition.
(d) The PRO FORMA balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 1998, and the PRO FORMA statements of income of the
Borrower and its consolidated Subsidiaries for the six-month period ended on
June 30, 1998 (all such PRO FORMA financial statements, the "BORROWER PRO FORMA
FINANCIAL STATEMENTS"), copies of which have been heretofore furnished to each
Lender, adjusted to give effect to (as if such events had occurred on such date)
(i) in the case of the PRO FORMA balance sheet, the Refinancing, the issuance of
the Preferred Stock and the initial borrowings (including borrowings in
connection with the Acquisition) by the Borrower hereunder, and (ii) in the case
of the PRO FORMA balance sheet and the PRO FORMA statement of income, the
Acquisition, were prepared based on good faith assumptions and on the best
information available to the Borrower as of the date of delivery thereof and
fairly presents on a PRO FORMA basis the consolidated financial position of the
Borrower and its consolidated Subsidiaries as at June 30, 1998, as adjusted, as
described above, assuming such events had occurred at such date.
(e) The Borrower has delivered to each Lender projected financial
statements for the Borrower and its Subsidiaries dated September 16, 1998,
including projected income
47
statements, cash flow statements and balance sheets, for the fiscal years ending
1998-2007. Such projections were prepared by the Borrower in good faith and on
the basis of the best information available at that time and on the assumptions
stated therein, which assumptions the Borrower believes to be reasonable.
NO CHANGE. Since March 31, 1998 (a) there has been no material adverse
change, or any development involving a prospective material adverse change, in
the business, operations, properties, assets, liabilities, performance or
condition (financial or otherwise) or prospects of the Borrower or any of its
Material Subsidiaries or as of the Closing Date, of any of the Inco Entities or
any of their Material Subsidiaries, except to the extent that a reduction in
projected sales of the Borrower and its Subsidiaries is reflected in the
projections dated September 16, 1998 delivered to Agent and the Lenders prior to
the Closing Date, and (b) no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of the
Capital Stock of the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower or any of its Subsidiaries except as
permitted by subsection 9.7.
CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of Borrower and each of
its Subsidiaries (a) is duly organized, validly existing and (where applicable)
in good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority and all licenses, permits and other approvals
of any Governmental Authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and (where
applicable) in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except where the failure to so qualify or be in good
standing could not, individually or in the aggregate, have a Material Adverse
Effect and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, individually or in the
aggregate, have a Material Adverse Effect.
CORPORATE POWER, AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Borrower
and each of its Subsidiaries has the corporate power and authority to make,
deliver and perform the Transaction Documents to which it is a party, in the
case of the Borrower, to borrow hereunder and to issue the Preferred Stock and
to enter into Letter of Credit Requests, and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and any Notes, to issue the Preferred Stock and to authorize the execution,
delivery and performance of the Transaction Documents to which it is a party. No
consent, approval or authorization of, filing with, notice to or other act by
any Governmental Authority or any other Person is required in connection with
the Transactions, other than (a) with respect to (i) the Acquisition, the
filings listed on Schedule 6.4, (ii) the Refinancing, the filings listed on
Schedule 6.4 in order to release all outstanding Liens on the properties and
assets of the Borrower and its Subsidiaries (other than Permitted Liens), and
(iii) the issuance of the Preferred Stock, the filings listed on Schedule 6.4C,
(b) filings and recordings in order to perfect the Liens in favor of the Agent
for the benefit of the Lenders created by the Mortgages and the Bilateral
48
Mortgages and the recording of the Mortgages and the Bilateral Mortgages in the
appropriate recording office, (c) such orders, consents, approvals and
authorizations of, and all notices and all written assumptions of obligations
to, Governmental Authorities and any other Persons which have been heretofore
obtained, made or given and are in full force and effect, and complete and
correct copies of which have heretofore been furnished to the Agent, (d) any
consent, approval, authorization, filing or notice, the failure of which to
obtain would not have a Material Adverse Effect or subject the Borrower or any
of its Subsidiaries to criminal penalty or sanction, (e) filings of Uniform
Commercial Code financing statements listed on Schedule 6.18 in the filing
offices designated thereon in favor of the Agent for the benefit of the Lenders
in order to perfect the Liens of the Agent for the benefit of the Lenders
created by the Security Documents and (f) filings related to any Intellectual
Property of the Borrower or its Subsidiaries to perfect the Liens of the Agent
for the benefit of the Lenders created by any Security Document. This Agreement,
the Preferred Stock Agreement , the Purchase Agreement and the Supply Contracts
each has been, and each other Transaction Document to which any of the Borrower
or any of its Subsidiaries is or will be a party will be, duly executed and
delivered on behalf of such Person that is a party thereto. This Agreement, the
Preferred Stock Agreement, the Purchase Agreement and the Supply Contracts each
constitutes, and each other Transaction Document to which any of the Borrower or
any of its Subsidiaries is or will be a party when executed and delivered will
constitute, a legal, valid and binding obligation of each such Person
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
NO LEGAL BAR. The execution, delivery and performance of the
Transaction Documents to which the Borrower or any of its Subsidiaries is a
party, the borrowings hereunder and the use of the proceeds thereof and the
issuance of the Preferred Stock and consummation of the Transactions will not
violate any Requirement of Law or result in a material violation of any
indenture, agreement or other instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property is bound and will
not result in, or require, the creation or imposition of any Lien (except in
favor of the Agent) on any of their respective properties or revenues pursuant
to any such Requirement of Law or any such indenture, agreement or other
instrument.
NO MATERIAL LITIGATION. Except as set forth on Schedule 6.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of any Loan Party,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the
Transaction Documents or any of the Transactions contemplated hereby or thereby
or (b) which could reasonably be expected to have a Material Adverse Effect.
NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any indenture, agreement or other instrument to
which such Person is a party or by which it or any of its property is bound in
any respect which could reasonably be
49
expected to have a Material Adverse Effect except for any such indenture,
agreement or other instrument related to Indebtedness that will be satisfied and
from which the relevant Person will be released on the Closing Date. No default
or event of default has occurred and is continuing under the IRB Documents. No
Default or Event of Default has occurred and is continuing.
OWNERSHIP OF PROPERTY; LIENS. The Borrower and each of its Subsidiaries
has good record and marketable title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other material property except for such minor defects in
title and other matters disclosed in the title insurance policies delivered to
the Agent pursuant to subsection 7.1(u) that do not affect the ability to use
such property in the conduct of its business, and none of such property is
subject to any Lien except Permitted Liens.
INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all Intellectual Property necessary for the conduct of
its business as currently conducted except for those the failure to own or
license could not reasonably be expected to have a Material Adverse Effect.
Schedule 6.9 sets forth all interests of the Borrower and its Subsidiaries in
all material Intellectual Property existing as of the Closing Date and the
registration information for all such Intellectual Property. To the best of the
Borrower's knowledge, except as set forth on Schedule 6.6, no claim has been
asserted or is pending by any Person challenging or questioning the use of any
such material Intellectual Property by the Borrower or any of its Subsidiaries
or the validity or effectiveness of any such Intellectual Property except for
such claims which even if successful could not reasonably be expected to have a
Material Adverse Effect, nor does the Borrower know of any valid basis for any
such claim. To the best knowledge of the Borrower, the use of such Intellectual
Property by the Borrower or any of its Subsidiaries does not infringe on the
rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
NO BURDENSOME RESTRICTIONS. After giving effect to the Transactions, no
indenture, agreement or other instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property is bound could
reasonably be expected to have a Material Adverse Effect.
TAXES. Except as set forth on Schedule 6.11, each of the Borrower and
its Subsidiaries has filed or caused to be filed all material foreign, federal,
state and local tax returns which, to the knowledge of the Borrower, are
required to be filed, taking into account all applicable extensions, and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property and all other material taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any such taxes or assessments the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of such Person). No tax Lien has been filed against the Borrower or any of
its Subsidiaries and, to the knowledge of the Borrower, except as set forth on
Schedule 6.11, no claim is being asserted with respect to any taxes, fees, or
other charges.
50
FEDERAL REGULATIONS. No part of the proceeds of any Loans will be used
for "purchasing" or "carrying" any "margin stock" within the respective meanings
of each of the quoted terms under Regulation U as now and from time to time
hereafter in effect. Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulation T, U
or X of the Board of Governors. If requested by any Lender or the Agent, the
Borrower will furnish to the Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U.
ERISA. Neither a Reportable Event (other than the Acquisition) nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA and whether or not waived) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan that remains outstanding in any respect and
that could reasonably be expected to have a Material Adverse Effect, and each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. No termination of a Single Employer Plan has occurred, and
no Lien in favor of the PBGC or a Plan has arisen, during such five-year period
that has resulted in any material liability. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made and no such Multiemployer Plan is in
Reorganization or Insolvent, except in each instance where such liability,
reorganization or insolvency could not reasonably be expected to have a Material
Adverse Effect. The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Borrower for post retirement
benefits to be provided to its current and former employees under Plans which
are welfare benefit plans (as defined in Section 3(l) of ERISA) does not, in the
aggregate, exceed the assets under all such Plans allocable to such benefits by
an amount which could reasonably be expected to have a Material Adverse Effect.
Each Commonly Controlled Entity that has liability for post-retirement benefits
has adopted Financial Accounting Standard No. 106. All benefit plans or
arrangements covering non-U.S. employees comply in all material respects with
applicable Requirements of Law. Each benefit plan or arrangement covering
non-U.S. employees, including expatriate employees, has been funded, if required
by local law, in accordance with reasonable actuarial assumptions and methods in
the relevant jurisdiction, to provide all benefits accrued thereunder by
reference to service completed prior to the date hereof. Each benefit plan or
arrangement covering non-U.S. employees has received all applicable approvals or
certifications of appropriate Governmental Authorities (other than with respect
to the Inco Alloys Limited Pension Plan, for which Inland Revenue approval
51
is pending), and no events or circumstances have occurred, to the best knowledge
of Borrower, which are likely to prejudice such approval or certification.
INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940 as amended. The
Borrower is not subject to regulation under any Requirement of Law which limits
its ability to incur Indebtedness.
CAPITAL STOCK; SUBSIDIARIES; INVESTMENTS.
(a) The authorized, issued and outstanding shares of Capital Stock of
the Borrower are as set forth on Schedule 6.15. All such outstanding shares have
been duly authorized, are validly issued and outstanding and are fully paid and
non-assessable. To the best of the Borrower's knowledge, there are no
outstanding options or other rights pertaining to the Capital Stock of the
Borrower, other than as set forth on Schedule 6.15. The Borrower has no
obligation to repurchase or redeem any shares of its Capital Stock.
(b) The Persons listed on Schedule 6.15 constitute all the Subsidiaries
of the Borrower and all other Persons constituting Investments by the Borrower
and its Subsidiaries in Capital Stock at the date hereof after giving effect to
the Acquisition. Such Schedule identifies the state or country of organization
of each such Subsidiary or Investment and the percentage ownership of such
Subsidiary or Investment directly or indirectly owned by the Borrower and the
ownership chain for such Subsidiary or Investment, and the number of authorized
and outstanding shares of Capital Stock. Except as set forth on Schedule 6.15,
there are no preemptive rights with respect to the Capital Stock of such
Subsidiaries or Investments and no options, warrants or other rights to acquire
the Capital Stock of any such Subsidiary or Investment, and no securities
convertible into such Capital Stock.
ENVIRONMENTAL MATTERS.
(a) Except as disclosed on Schedule 6.16, no real estate currently or
formerly owned or leased by the Borrower or any or its Subsidiaries contains,
nor, to the best of the Borrower's knowledge, has previously contained, any
Materials of Environmental Concern in amounts or concentrations which could
reasonably be expected to give rise to a material liability under any
Environmental Law.
(b) Except as disclosed in Schedule 6.16, all real estate currently or
formerly owned or leased by the Borrower and its Subsidiaries and all operations
thereon are in material compliance with all applicable Environmental Laws, and
there is no contamination at, under or about such real estate or violation of
any Environmental Law with respect to such real estate or the business operated
by the Borrower or any of its Subsidiaries (the "BUSINESS") which could
reasonably be expected to have a Material Adverse Effect or interfere with the
continued operation of such real estate.
(c) Except as disclosed in Schedule 6.16, there are no existing or, to
the knowledge of the Borrower, threatened Environmental Claims against the
Borrower or any of its Subsidiaries, and neither the Borrower nor any of its
Subsidiaries has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the real estate
currently or formerly owned, leased or operated by the Borrower or any of
52
its Subsidiaries or the Business, which in either case could reasonably be
expected to have a Material Adverse Effect.
(d) Except as disclosed in Schedule 6.16, Materials of Environmental
Concern have not been transported or disposed of from the real estate currently
or formerly owned, leased or operated by the Borrower or any of its Subsidiaries
by the Borrower or any of such Subsidiaries in violation of, or in a manner or
to a location which could give rise to material liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, released, stored or disposed of at, on or under any of such
real estate in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law which could
reasonably be expected to have a Material Adverse Effect.
(e) Except as disclosed in Schedule 6.16, no judicial proceeding or
governmental or administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the Borrower or any
of its Subsidiaries is or will be named as a party with respect to any real
estate currently or formerly owned, leased or operated by the Borrower or any of
its Subsidiaries or the Business which could reasonably be expected to have a
Material Adverse Effect, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
such real estate or the Business which could reasonably be expected to have a
Material Adverse Effect.
REGULATION H. No Mortgage or Bilateral Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968, except for the real property located in Huntington, West Virginia
as to which the Borrower has obtained and maintains such flood insurance in the
amount and for the term described in subsection 7.1(v).
SECURITY DOCUMENTS. (a) After giving effect to the Acquisition and the
Refinancing and the release of the related Liens, the security interests created
by the Security Agreements will be effective to create in favor of the Agent,
for the ratable benefit of the Lenders, a legal, valid and enforceable security
interest in accordance with their respective terms in the Capital Stock and
instruments described therein and proceeds thereof and shall constitute a
perfected first Lien on, and security interest in, all right, title and interest
of the pledgor party thereto in such pledged collateral, subject to no other
Liens.
(b) After giving effect to the Acquisition and the Refinancing and the
release of the related Liens, the security interest created by the Mortgages and
Bilateral Mortgages will be effective to grant to the Agent, for the ratable
benefit of the Lenders, legal, valid and enforceable mortgage Liens in
accordance with their respective terms on all of the right, title and interest
of each Loan Party thereto in the Mortgaged Property described therein. Such
Mortgages and Bilateral Mortgages, when recorded in the appropriate recording
office, will
53
constitute perfected first Liens on, and security interests in, such Mortgaged
Property, subject to no other Liens, other than Permitted Liens.
(c) After giving effect to the Acquisition and the Refinancing and the
release of the related Liens, the security interests created by the Security
Agreements will be effective to create in favor of the Agent, for the ratable
benefit of the Lenders, a legal, valid and enforceable fully perfected security
interest of first priority in accordance with their respective terms in all
right, title and interest of each Loan Party in the Collateral described
therein, subject to no other Liens, other than Permitted Liens. Schedule 6.18
sets forth all filing offices in each jurisdiction in which a financing
statement is required to be filed to perfect the Agent's security interest in
such Collateral.
(d) The Agent, for the ratable benefit of the Lenders, has a legal,
valid and enforceable fully perfected security interest of first priority in the
deposit accounts of the Borrower and its Domestic Subsidiaries.
ACQUISITION APPROVALS. The Borrower and each of its Subsidiaries and
the Sellers have duly and timely filed all filings which are required to be
filed by it in connection with the Acquisition and all approvals and consents
required to consummate the Acquisition have been received, and all waiting
periods have expired.
ACCURACY OF INFORMATION. All factual information furnished by or on
behalf of the Borrower or any of its Subsidiaries in writing to the Agent or any
Lender on or prior to the Closing Date in connection with this Agreement, the
other Transaction Documents and the Transactions is, and all other factual
information hereafter furnished by or on behalf of the Borrower or any of its
Subsidiaries in writing to the Agent or any Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
furnished and not incomplete by omitting to state any material fact necessary to
make such information not misleading.
INSURANCE. Schedule 6.21 lists all insurance maintained by the Loan
Parties as of the Closing Date.
SOLVENCY. As of the Closing Date each Loan Party is Solvent and on each
date on which a Revolving Credit Loan will be made or Letter of Credit issued
(after giving effect to the transactions being consummated on such day) will be
Solvent.
LABOR RELATIONS. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect and, except as set forth on Schedule 6.23, there is (a)
no unfair labor practice complaint pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, before the National Labor Relations Board or any other Governmental
Authority, and no material grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Borrower or
any of
54
its Subsidiaries or, to the best knowledge of the Borrower, threatened against
any of them, (b) no strike, labor dispute, slow down or stoppage pending against
the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries and (c)
neither the Borrower nor any of its Subsidiaries is subject to a collective
bargaining agreement and, to the best knowledge of the Borrower, no union
representation proceeding is pending with respect to the employees of the
Borrower or any of its Subsidiaries, except (with respect to any matter
specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as could not reasonably be expected to have a Material Adverse
Effect.
INDEBTEDNESS. Schedule 6.24 sets forth a true and complete list of all
Indebtedness (excluding the Term Loans, the Revolving Credit Loans, the Letters
of Credit Outstanding , Indebtedness to Inco, Inc. in connection with the
Receivables Program, and currency and commodity Hedging Agreements entered into
in the ordinary course of business) of the Borrower and its respective
Subsidiaries as of the initial Borrowing Date and which is to remain outstanding
after giving effect to the Transactions, in each case showing the aggregate
principal amount thereof and the name of the respective Borrower and any other
entity which directly or indirectly guaranteed such debt.
BANK ACCOUNTS. Schedule 6.25 (as the same may be updated pursuant to
the provisions of subsection 8.15 after the Closing Date) sets forth a true and
complete list of all accounts of whatever nature maintained with a bank or other
financial institution by each of the Borrower and its Domestic Subsidiaries (the
"DOMESTIC BANK ACCOUNTS") and by each of its Foreign Subsidiaries, after giving
effect to the Transactions.
REPRESENTATIONS AND WARRANTIES IN TRANSACTION DOCUMENTS. All
representations and warranties of the Borrower and its Subsidiaries contained in
the Acquisition Documents, all representations and warranties of the Borrower
contained in the Preferred Stock Documents and to the best knowledge of the
Borrower, all representations and warranties of the Inco Entities and their
Subsidiaries and the Sellers contained in the Acquisition Documents were or are
true and correct in all material respects as of the date made or deemed made;
PROVIDED that for all times after the Closing Date the foregoing representation
and warranty as to the Inco Entities and their Subsidiaries and the Sellers
shall not be untrue or incorrect in any material respect if the failure of such
representation and warranty to be true and correct could not have a Material
Adverse Effect, taking into account all rights to indemnity under the Purchase
Agreement.
YEAR 2000 PROBLEM.
(a) The Borrower has reviewed, or caused a review to be conducted of,
its operations and those of its Subsidiaries existing prior to consummation of
the Acquisition with a view to assessing whether the business or operations of
the Borrower or any of such Subsidiaries will be vulnerable to a Year 2000
Problem, or to the effects of a Year 2000 Problem suffered by any of their
material suppliers or vendors, and has determined that no Year 2000 Problem can
reasonably be expected to have a Material Adverse Effect on Borrower and such
Subsidiaries taken as a whole.
55
(b) Based upon its due diligence investigation conducted prior to the
Closing Date, Borrower has determined that a Year 2000 Problem exists at one or
more of the Inco Entities. The Inco Entities have hired Ernst & Young to
implement a program to address their Year 2000 Problem, including overall
project management and implementation of Borrower's Oracle software code at the
Inco Entities. With this engagement of Ernst & Young, Borrower reasonably
believes that the Year 2000 Problem at the Inco Entities will be addressed in
such a manner that no Material Adverse Effect is likely to occur.
SECTION
CONDITIONS PRECEDENT
CONDITIONS TO INITIAL LOANS. The agreement of each Lender to make the
initial Loans requested to be made by it and of the Issuing Bank to issue the
initial Letters of Credit requested to be issued hereunder are subject to the
satisfaction, immediately prior to or concurrently with the making of any such
Loan on the Closing Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, with a
counterpart for each Lender, (ii) for the account of each Revolving Credit
Lender, a Revolving Credit Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrower, (iii) for the account of
each Tranche A Lender, a Tranche A Term Note conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower, (iv) for the
account of each Tranche B Lender, a Tranche B Term Note conforming to the
requirements hereof and executed by a duly authorized officer of the Borrower,
(v) each of the Security Agreements, each executed and delivered by a duly
authorized officer of each Domestic Subsidiary, with a counterpart for the Agent
and a counterpart or a conformed copy for each Lender, (vi) each of the
Guarantees, each executed and delivered by a duly authorized officer of Domestic
Subsidiary, with a counterpart for the Agent and a counterpart or a conformed
copy for each Lender, (vii) each of the Mortgages covering the Mortgaged
Properties listed on Schedule II, each executed and delivered by a duly
authorized officer of each Loan Party party thereto, with a counterpart for the
Agent and a counterpart or a conformed copy for each Lender, (viii) each of the
Bilateral Mortgages covering the leased properties listed on Schedule III, each
executed and delivered by a duly authorized officer of each Loan Party party
thereto, with a counterpart for the Agent and a counterpart or a conformed copy
for each Lender and (ix) the Closing Letter, executed by a duly authorized
officer of the Borrower, with a counterpart for the Agent and a counterpart or
conformed copy for each Lender. In the event that any Letters of Credit are to
be issued on the Closing Date, the Agent shall have received a Letter of Credit
Request from the Borrower with respect to each such Letter of Credit as provided
in Section 4.1.
(b) ACQUISITION DOCUMENTS. The Agent shall have received, with a copy
for each Lender, true and correct copies, certified as to authenticity by the
Borrower, of the Purchase Agreement and the other material Acquisition
Documents, and such other documents or instruments as may
56
be reasonably requested by the Agent, including, without limitation, the Supply
Contracts and a copy of any debt instrument or security agreement to which the
Borrower or its Subsidiaries may be a party upon the consummation of the
Acquisition, and all such documents shall be in form and substance satisfactory
to the Agent and the Lenders. No material term of any Acquisition Document or
Supply Contract shall have been amended, waived, or otherwise modified without
the consent of the Agent and the Required Lenders; PROVIDED that the Purchase
Agreement shall have been amended to permit the assignment by the Borrower to
the Agent for the benefit of the Lenders, the Issuing Bank and the Agent of all
of the rights (but not the obligations) of the Borrower and its Subsidiaries
thereunder, or the Borrower shall have delivered a consent of the Sellers
thereto, in form and substance satisfactory to the Agent.
(c) ACQUISITION CLOSING. The Agent shall have received, with a copy for
each Lender, a certificate of a Responsible Officer of the Borrower attaching a
true and correct copy of each governmental and material third-party approval
(including landlords' and other consents) necessary for the Acquisition and
certifying that such approvals have not been rescinded, amended or modified in
any manner. Each approval necessary in connection with Acquisition shall have
been obtained (without imposition of conditions not satisfactory to the Agent),
be in full force and effect and no longer subject to appeal or challenge, and
all applicable waiting periods shall have expired without any action being taken
or threatened by any competent Governmental Authority, and no Requirement of Law
shall (in the judgment of the Agent) be applicable, which would restrain,
prevent or otherwise impose materially adverse conditions on the Acquisition or
the Borrower or any of its Subsidiaries.
(d) PREFERRED STOCK DOCUMENTS; ISSUANCE OF PREFERRED STOCK. The Agent
shall have received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of the Preferred Stock Documents,
and each Preferred Stock Document shall be in form and substance satisfactory to
the Agent and the Lenders. No material term of any Preferred Stock Document
shall have been amended, waived or otherwise modified without the consent of the
Agent and the Required Lenders. The Borrower shall have issued and sold the
Preferred Stock in consideration of not less than $97,000,000, of which
$80,000,000 is in cash.
(e) REFINANCING. The Agent shall have received evidence satisfactory to
it that all of the Indebtedness of the Borrower and its Subsidiaries (other than
the Indebtedness described in Schedule 6.24, Indebtedness to Inco, Inc. with
respect to the Receivables Program and currency and commodity Hedging Agreements
entered into in the ordinary course of business) shall contemporaneously be
repaid with the proceeds of Term Loans and Revolving Credit Loans (the
"REFINANCING"). The Agent shall have received, with a copy for each Lender,
executed copies of all payout or assignment letters, Lien releases or
assignments, termination or assignment statements, satisfactions, agreements,
certificates and other documents entered into in connection with the
Refinancing, all of which payout letters, Lien releases or assignments,
termination or assignment statements, satisfactions, agreements, certificates
and other documents shall be in form and substance satisfactory to the Agent.
(f) CLOSING CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a certificate of the Borrower, dated the Closing
Date, substantially in the form of Exhibit J, with appropriate insertions and
attachments, executed by a Responsible Officer of the Borrower.
(g) CORPORATE PROCEEDINGS OF THE BORROWER. The Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions, in form
and substance reasonably satisfactory to the Agent, of the Board of Directors of
the Borrower authorizing (i) the execution, delivery and performance of (w) this
Agreement and the other Loan Documents to which it is a party, (x) the
Acquisition Documents, (y) all agreements and other documents to effect the
Refinancing, (z) the Preferred Stock Documents, (ii) the borrowings contemplated
hereunder, (iii) the granting by it of the Liens created pursuant to the
Security Documents to which the Borrower is a party, and (iv) consummation of
the Transactions, certified by the Secretary or an Assistant Secretary of the
Borrower as of the Closing Date, which certificate shall be in form and
substance reasonably satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(h) BORROWER INCUMBENCY CERTIFICATE. The Agent shall have received,
with a counterpart for each Lender, a certificate of the Borrower, dated the
Closing Date, as to the incumbency and signature of the officers of the Borrower
executing any Loan Document, reasonably satisfactory in form and substance to
the Agent, executed by a Responsible Officer and the Secretary or any Assistant
Secretary of the Borrower.
(i) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions, in form
and substance reasonably satisfactory to the Agent, of the Board of Directors or
other governing body of each Subsidiary of the Borrower which is a party to a
Loan Document authorizing (i) the execution, delivery and performance of the
Loan Documents to which it is a party and (ii) the granting by it of the Liens
created pursuant to the Security Documents to which it is a party, certified by
the Secretary or an Assistant Secretary of each such Subsidiary as of the
Closing Date, which certificate shall be in form and substance reasonably
satisfactory to the Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(j) SUBSIDIARY INCUMBENCY CERTIFICATES. The Agent shall have received,
with a counterpart for each Lender, a certificate of each Subsidiary of the
Borrower which is a Loan Party, dated the Closing Date, as to the incumbency and
signature of the officers of such Subsidiaries executing any Loan Document,
reasonably satisfactory in form and substance to the Agent, executed by a
Responsible Officer and the Secretary or any Assistant Secretary of each such
Subsidiary.
(k) CORPORATE DOCUMENTS. The Agent shall have received, with a copy for
each Lender, such documents as the Agent or any Lender may reasonably request
relating to the organization, existence and good standing of the Borrower and
its Domestic Subsidiaries and any material Foreign Subsidiary whose Capital
Stock is pledged pursuant to any Security Agreement, including true and complete
copies of the certificate of incorporation and by-laws (or other governing
documents) of the Borrower and each of such Subsidiaries, certified as of the
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Closing Date as complete and correct copies thereof by an officer of such
Person, and all such documents shall be satisfactory to the Agent and the
Lenders.
(l) FINANCIAL STATEMENTS OF INCO ENTITIES. The Lenders shall have
received a copies of the audited combined financial statements of the Inco
Entities for the fiscal years ended December 31, 1996 and 1997 and the unaudited
combined financial statements of the Inco Entities for the first quarter ended
March 31, 1998, and June 30, 1998, which financial statements shall have been
prepared in accordance with GAAP and shall not reflect any material adverse
change in the financial condition of the Inco Entities as reflected in the
financial statements or projections previously delivered to the Lenders.
(m) BORROWER FINANCIAL STATEMENTS. The Lenders shall have received
copies of the audited consolidated financial statements of the Borrower for the
fiscal years ended December 31, 1996 and 1997 and the unaudited consolidated
financial statements of the Borrower for the fiscal quarter ended March 31, 1998
and June 30, 1998, in each case without giving effect to the Acquisition, which
financial statements shall have been prepared in accordance with GAAP and shall
not reflect any material adverse change in the consolidated financial condition
of the Borrower as reflected in the financial statements or projections
previously delivered to the Lenders.
(n) CLOSING FINANCIAL CERTIFICATE. The Agent shall have received, with
a copy for each Lender, a certificate of a Responsible Officer, substantially in
the form of Exhibit K, based upon the Borrower Pro Forma Financial Statements,
certifying that PRO FORMA Consolidated EBITDA of the Borrower and its
Subsidiaries, after giving effect to the Acquisition, for the twelve-month
period ended June 30 equals at least $90,000,000. The PRO FORMA capital
structure shall be acceptable to the Agent and shall not differ materially from
the PRO FORMA capital structure shown in the projections furnished to the Agent
and the Lenders contained in the Confidential Memorandum dated July 1998, other
than a reduction in the amount of Preferred Stock.
(o) CORPORATE AND CAPITAL STRUCTURE. The corporate, legal and capital
structure of the Borrower and each of its Subsidiaries after giving effect to
the Transactions shall be satisfactory to the Agent and the Lenders.
(p) CONSENTS, APPROVALS, ETC. The Agent shall have received, with a
copy for each Lender, a certificate of a Responsible Officer of the Borrower
attaching a true and correct copy of each governmental and third-party approval
(including any consents required to pledge the Capital Stock of the Subsidiaries
and Investments of the Borrower and its Subsidiaries pledged pursuant to the
Security Agreements, each in form and substance satisfactory to the Agent)
necessary in connection with the Refinancing and the transactions contemplated
by the Loan Documents or certifying that true and correct copies of all such
approvals have been delivered by the Borrower to the Agent, with a copy for each
of the Lenders, and that such approvals have not been rescinded, amended or
modified in any manner. Each such approval shall have been obtained, be in full
force and effect and no action shall have been taken or threatened by any
competent authority, and no Requirement of Law shall (in the judgment of the
Agent) be applicable, which would restrain, prevent or otherwise impose
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materially adverse conditions on the Refinancing or the transactions
contemplated by the Loan Documents. The Loans shall be in compliance with
Regulations T, U and X of the Board of Governors.
(q) FEES AND EXPENSES. The Agent shall have received reasonably
satisfactory evidence that the fees and expenses to be incurred by the Borrower
and its Subsidiaries in connection with the Transactions will not exceed an
aggregate amount reasonably acceptable to the Agent.
(r) FILINGS. All filings and other actions required to create and
perfect a first priority security interest in favor of the Agent for the benefit
of the Lenders on all Collateral owned or to be owned by the Loan Parties shall
have been duly made or taken, and all such Collateral shall be free and clear of
other Liens except Permitted Liens, or to the extent that all filings and other
actions required to create and perfect a first priority security interest in the
Collateral are not made or taken on or prior to the Closing Date, the Agent and
the Lenders shall be reasonably satisfied that the filings or other actions made
or taken on or prior to the Closing Date are sufficient to give the Lenders the
practical benefit of the Collateral and that all other filings and other actions
which have not been made or taken on or prior to the Closing Date will be
completed as soon as practicable after the Closing Date.
(s) LIEN SEARCHES. The Agent shall have received the results of a
recent search by a Person satisfactory to the Agent of the Uniform Commercial
Code, judgment and tax lien filings (or equivalent searches with respect to
material Foreign Subsidiaries) which may have been filed with respect to
personal property of the Borrower and such Subsidiaries, and the results of such
search shall reveal no Liens on any of the assets of the Borrower or its
Subsidiaries except for Permitted Liens and Liens to be released on the Closing
Date.
(t) PLEDGED COLLATERAL. The Agent shall have received the certificates
representing the shares of Capital Stock pledged pursuant to each of the
Security Agreements, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof (or, in the case of the Foreign Subsidiaries, the applicable action
required to perfect the Agent's pledge shall have been taken). The Agent shall
have received the SMC Acquisition Note, the SMC (UK) Notes and the SMC (Canada)
Note and all other instruments required to be pledged pursuant to the Security
Agreements, together with an undated endorsement for each such instrument
executed in blank by a duly authorized officer of the pledgor thereof.
(u) TITLE INSURANCE POLICIES; SURVEYS. The Agent shall have received in
respect of each parcel covered by each Mortgage and Bilateral Mortgage to be
delivered on the Closing Date a mortgagee's title policy (or policies) or marked
up unconditional binder for such insurance dated the Closing Date. Each such
policy shall (i) be in an amount set forth on Schedule 7.1(u); (ii) be issued at
ordinary rates; (iii) insure that the Mortgage or Bilateral Mortgage insured
thereby creates a valid first Lien on such parcel free and clear of all defects
and encumbrances, except as approved by Agent; (iv) name the Agent for the
benefit of the Lenders as the insured thereunder; (v) be in the form of ALTA
Loan Policy - 1990 (Amended 10/17/92); (vi) contain such endorsements and
affirmative coverage as the Agent may request; and (vii) be
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issued by title companies reasonably satisfactory to the Agent (including any
such title companies acting as co-insurers or reinsurers, at the option of the
Agent). The Agent shall have received evidence reasonably satisfactory to it
that all premiums in respect of each such policy, and all charges for mortgage
recording tax, if any, have been paid. The Agent shall have received in respect
of each parcel covered by each Mortgage and Bilateral Mortgage to be delivered
on the Closing Date a certified ALTA/ACSM survey prepared by a registered
independent surveyor and in form and substance satisfactory to the Agent and the
company issuing the title insurance policy for such parcel.
(v) FLOOD INSURANCE. The Agent shall have received (i) a policy of
flood insurance which (A) covers any parcel of improved real property which is
encumbered by any Mortgage or Bilateral Mortgage to be delivered on the Closing
Date and located in a flood plain, (B) is written in an amount not more than the
fair market value of the property subject to such Mortgage or Bilateral Mortgage
or the maximum limit of coverage made available with respect to the particular
type of property under the National Flood Insurance Act, whichever is less, and
(C) has a term ending not earlier than the maturity of the Indebtedness secured
by such or Mortgage or Bilateral Mortgage and (ii) confirmation that the
Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board of Governors.
(w) COPIES OF DOCUMENTS. The Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the title
policy or policies referred to in subsection 7.1(u) and a copy, certified by
such parties as the Agent may reasonably deem appropriate, of all other
documents affecting the property covered by each Mortgage or Bilateral Mortgage
to be delivered on the Closing Date.
(x) INSURANCE. The Agent shall have received evidence in form and
substance reasonably satisfactory to it that all of the requirements of
subsection 8.5, and the Mortgages or Bilateral Mortgages shall have been
satisfied.
(y) LEGAL OPINIONS. The Agent shall have received, with a counterpart
for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Bond, Xxxxxxxxx & Xxxx, LLP,
counsel to the Borrower and the other Loan Parties, substantially in
the form of Exhibit L-1, and covering such other matters as the Agent
may request;
(ii) the executed legal opinion of such special local counsel
to the Borrower and the other Loan Parties as the Agent shall request,
substantially in the form of Exhibit L-2, and covering such other
matters as the Agent may request;
(iii) the executed legal opinion of foreign counsel to the
Borrower and the Foreign Subsidiaries with respect to such matters as
the Agent may request; and
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(iv) the executed legal opinion of counsel to each of the
Sellers and the Borrower delivered pursuant to the Purchase Agreement,
addressed to the Agent and the Lenders (or a duly executed reliance
letter).
(z) AGENT'S FEES AND EXPENSES. The Agent shall have received all fees,
expenses and other consideration required to be paid or delivered on or prior to
the Closing Date under any Loan Document, and all fees and expenses of counsel
to the Agent, including any local or foreign counsel.
(aa) OUTSTANDING INDEBTEDNESS. The Agent shall have received, with a
counterpart for each Lender, a certificate of a Responsible Officer of the
Borrower, in form and substance reasonably satisfactory to the Agent, certifying
that none of the Borrower or any of its Subsidiaries shall have any outstanding
Indebtedness after giving effect to the Refinancing, other than as permitted by
subsection 9.2.
(bb) ENVIRONMENTAL AUDITS. The Borrower shall have provided to the
Agent, with a copy for each Lender, copies of the results of all Phase I
environmental audits of such of the properties and operations of the Borrower
and its Subsidiaries as the Agent shall specify (including properties to be
acquired in the Acquisition as specified by the Agent) (for purposes of this
clause, the "REPORTS"), from an environmental consulting firm satisfactory to
the Agent, such Reports to be in form and substance satisfactory to the Agent.
The Agent shall be satisfied with the amount and nature of any Environmental
Claims and the actions the Borrower or the applicable Subsidiary plans to take
with respect thereto
(cc) NO MATERIAL ADVERSE CHANGE. There shall have occurred no material
adverse change, and no development involving a prospective material adverse
change, (i) in the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or any of its Material
Subsidiaries (determined after giving effect to consummation of the Acquisition)
or (ii) in the loan syndication or financial or capital market conditions
generally, and all information provided to the Agent and the Lenders by or on
behalf of the Borrower with respect to the Transactions and the business,
condition (financial or otherwise), operations, performance, and properties of
the Borrower and its Subsidiaries and the Inco Entities and their Subsidiaries
shall be true and correct in all material respects.
(dd) NO LITIGATION. There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or Governmental Authority that (i) would reasonably be likely to have
a Material Adverse Effect or (ii) purports to materially affect any of the
Transactions or the rights and remedies of the Agent and the Lenders.
(ee) SOLVENCY CERTIFICATE. The Borrower shall have delivered to the
Agent, with a counterpart or a conformed copy for each Lender, a certificate of
its chief financial officer attesting that, after giving effect to the
Transactions, each Loan Party will be Solvent, which certificate shall be in
form and substance satisfactory to the Agent.
(ff) ERISA; RETIREE BENEFITS. The Lenders shall be satisfied that the
Borrower and its Subsidiaries will be able to meet their respective obligations
under all employee and retiree welfare benefit plans, that such plans are in all
material respects funded in accordance with the minimum statutory requirements
under ERISA or other applicable Requirements of Law, that no material Reportable
Event has occurred as to any such plan and that no termination of, or withdrawal
from, any such employee benefit plan has occurred or is contemplated that could
result in a material liability of the Borrower or any of its Subsidiaries.
(gg) TERMINATION OF RECEIVABLES FROM RECEIVABLES PROGRAM. All
obligations and liabilities of Inco Alloys International, Inc. relating to the
Receivables Program shall have been terminated, and Inco Inc. shall have
repurchased the receivables of Inco Alloys International Inc. from such
Receivables Program and assigned such receivables to the Borrower, free and
clear of all Liens, all on terms and conditions, and pursuant to documentation,
satisfactory to the Agent and the Lenders.
CONDITIONS TO EACH LOAN. The agreement of each Lender to make any Loan
requested to be made by it on any date (including, without limitation, its
initial Loan, but excluding at all times Loans made pursuant to subsection 4.3),
and of the Issuing Bank to issue any Letter of Credit, is subject to (i) the
making of such Loans complying in all respects with the margin regulations of
the Board of Governors and (ii) the satisfaction of the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower or any of its Subsidiaries in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date immediately prior to, and after giving effect to the Loan or Letter of
Credit as if made on and as of such date (except that any such representation or
warranty that is expressly stated as being made only as of a specified earlier
date shall be true and correct in all material respects as of such earlier date
and that the representations and warranties made on the Closing Date relating to
the Inco Entities and their Subsidiaries shall be deemed limited to those set
forth in the Purchase Agreement).
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Loans requested to be
made on such date or to the issuance of the Letter of Credit to be issued on
such date.
(c) ADDITIONAL MATTERS. The timely receipt of a notice of borrowing or
request for a Letter of Credit. Each borrowing by the Borrower hereunder and
each issuance of a Letter of Credit shall constitute a representation and
warranty by the Borrower as of the date of such Loan or Letter of Credit that
the conditions contained in this subsection 7.2 have been satisfied. Each Lender
agrees to make Loans in the circumstances contemplated by subsection 4.3 whether
or not the conditions contained in this subsection 7.2 have been satisfied.
SECTION
AFFIRMATIVE COVENANTS
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The Borrower hereby agrees that, from and after the Closing Date, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding, any Loan remains outstanding and unpaid or any other amount is
owing to any Lender, the Issuing Bank or the Agent hereunder unless the Required
Lenders, and the Issuing Bank if any Letter of Credit shall be outstanding,
shall have otherwise consented in writing, the Borrower shall and (where
applicable) shall cause each of its Subsidiaries to:
FINANCIAL STATEMENTS. Furnish to the Agent, with a copy for each
Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such year and the related consolidated and consolidating
statements of income and retained earnings and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous year
with the unqualified opinion of Ernst & Young LLP or other independent certified
public accountants of nationally recognized standing acceptable to the Agent;
and
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated and consolidating statements of income and
retained earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as fairly presenting the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries (subject to normal year-end audit adjustments and the
absence of certain notes).
All such financial statements shall be prepared in accordance with
generally accepted accounting principles (subject, in the case of interim
financial statements, to normal year-end audit adjustments and the absence of
certain notes) applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein). Notwithstanding the foregoing, so long as
the Borrower is required to file periodic and other reports with the SEC under
the Securities Exchange Act of 1934, as amended, (x) it may satisfy the
requirements of this subsection 8.1(b) by delivering to the Lenders within two
Business Days after the filing thereof with the SEC but in any event no later
than 45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the Borrower's Quarterly Report on Form 10-Q for
such quarter and (y) it may satisfy the requirement of subsection 8.1(a) by
delivering to the Lenders within two Business Days after the filing thereof with
the SEC but in any event no later than 90 days after the end of each fiscal year
of the Borrower, the Borrower's Annual Report on Form 10-K for such fiscal year,
and the Borrower's annual report to shareholders, when available.
CERTIFICATES; OTHER INFORMATION. Furnish to the Agent, with a copy for
each Lender:
(a) concurrently with the delivery of the financial statements referred
to in subsection 8.1(a), a written statement of the independent certified public
accountants reporting on such financial statements (unless such accountants are
prohibited by law or the Financial Accounting Standards Board (or any successor)
from providing such statement) to the effect that in the course of the audit
upon which their certification of such financial statements was based (but
without any special or additional audit procedures for the purpose) they
obtained knowledge of no condition or event relating to the financial covenants
set forth in Section 9.1 which constitutes a Default or an Event of Default or,
if such accountants shall have obtained in the course of such audit knowledge of
any Default or Event of Default, disclosing in such written statement the nature
and period of existence thereof, it being understood that such accountants shall
be under no liability, directly or indirectly, to the Lenders for failure to
obtain knowledge of any such condition or event;
(b) concurrently with the delivery of the financial statements referred
to in subsections 8.1(a) and 8.1(b), a certificate of a Responsible Officer
certifying that, to the best of such officer's knowledge, each of the Borrower
and its Subsidiaries during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition contained in this
Agreement and the other Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such officer has no knowledge of any
Default or Event of Default except as specified in such certificate;
(c) concurrently with the delivery of the financial statements referred
to in subsections 8.1(a) and 8.1(b), a certificate of a Responsible Officer,
substantially in the form of Exhibit M hereto (the "COMPLIANCE CERTIFICATE"),
showing in detail satisfactory to the Agent (including, where applicable,
differences in the application of generally accepted accounting principles used
in such financial statements and the application of GAAP) compliance by the
Borrower with the covenants contained in subsections 9.1, 9.2, 9.6, 9.7, 9.8,
and 9.9 hereof and a computation of the amount of the Borrower's and its
Subsidiaries' Capital Expenditures made during such period and during the
portion of the fiscal year through the end of the period covered by such
Compliance Certificate;
(d) not later than 90 days after the end of each fiscal year of the
Borrower, subject to the provisions of subsection 12.16, a copy of the
projections by the Borrower of the budget of the Borrower and its Subsidiaries
for the current fiscal year, which shall included projected quarterly income
statements, cash flow statements and balance sheets, such projections to be
accompanied by a certificate of a Responsible Officer to the effect that such
projections have been prepared in good faith and based upon reasonable
assumptions and that such officer has no reason to believe they are incorrect or
misleading in any material respect;
(e) within two Business Days after the same are sent, copies of all
financial statements and other financial information, proxy materials and other
information and reports (including reports on Form 8K) which the Borrower files
with the SEC or any securities exchange on which the Borrower's common stock is
traded or delivers to its
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stockholders or to holders of its Indebtedness (or any trustee, agent or other
representative therefor);
(f) promptly upon receipt, copies of (i) the Closing Balance Sheets,
(ii) all correspondence regarding any post-closing adjustment to the purchase
price payable by the Borrower under the Purchase Agreement and all payments to
the Sellers with respect to the receivables repurchased from the Receivables
Program, (iii) all correspondence regarding any indemnification claim made by
the Borrower or any Seller pursuant to the Purchase Agreement, and (iv) notice
of receipt of any payment made by any Seller pursuant to the Purchase Agreement;
(g) promptly after the receipt thereof by the Borrower or any of its
Subsidiaries, subject to the provisions of subsection 12.16, a copy of any
"management letter" received by any such Person from its certified public
accountants and the management's responses thereto;
(h) promptly upon, and in any event within ten Business Days after, an
officer of the Borrower or any of its Subsidiaries obtains knowledge thereof,
notice of one or more of the following environmental matters, unless such
officer reasonably concludes that such environmental matters would not,
individually or when aggregated with all other such environmental matters except
those matters disclosed on Schedule 6.16, have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any real property owned or
operated, or formerly owned or operated, by the Borrower or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from any real
property currently or formerly owned or operated by the Borrower or any
of its Subsidiaries that (a) results in noncompliance by the Borrower
or any of its Subsidiaries with any applicable Environmental Law or (b)
could reasonably be expected to form the basis of an Environmental
Claim against the Borrower or any of its Subsidiaries or any such real
property;
(iii) any condition or occurrence on any real property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to cause such real
property to be subject to any restrictions on the ownership, occupancy,
use or transferability by the Borrower or any of its Subsidiaries of
such real property under any Environmental Laws; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Material of Environmental
Concern on any real property currently or formerly owned or operated by
the Borrower or any of its Subsidiaries as required by any
Environmental Law or any Governmental Authority except the removal of
any Material of
63
Environmental Concern in the ordinary course of business; PROVIDED that
in any event the Borrower shall deliver to each Lender all material
notices received by it or any of its Subsidiaries from any Governmental
Authority under, or pursuant to, CERCLA;
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Borrower's or such Subsidiary's response thereto. In addition, the Borrower
will provide the Lenders with copies of all material communications with any
Governmental Authority relating to Environmental Laws, all communications with
any Person (other than its attorneys) relating to any Environmental Claim of
which notice is required to be given pursuant to this Section 8.2(h), and such
detailed reports (not subject to attorney-client or attorney work product
privileges) of any such Environmental Claim as may reasonably be requested by
any Lender; and
(i) promptly, such additional financial and other information which is
in the Borrower's possession as any Lender may from time to time reasonably
request through the Agent.
PAYMENT OF TAXES AND OTHER OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of its taxes and other obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with generally accepted
accounting principles with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries (after giving effect to the Acquisition) and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
subsection 9.5; comply with all Requirements of Law and any indenture, agreement
or other instrument to which the Borrower or any of its Subsidiaries is a party
or by which it or any of its property is bound except where such non-compliance
could not have a Material Adverse Effect.
MAINTENANCE OF PROPERTY; INSURANCE. Keep all property including,
without limitation, all Collateral useful and necessary in its business in good
working order and condition, normal wear and tear excepted; maintain with
financially sound and reputable insurance companies insurance with respect to
the Mortgaged Properties as required by the Mortgages and Bilateral Mortgages
and otherwise with respect to its properties including, without limitation, all
Collateral , business and potential liabilities in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business;
deliver to the Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance during the month of December in each calendar
year
64
commencing in 1998, and furnish to each Lender such supplemental reports with
respect thereto as such Lender may from time to time reasonably request, all of
which shall be in form and substance satisfactory to the Agent or the applicable
Lender. All such insurance shall provide that no cancellations, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Agent of written notice thereof, and
shall name the Agent as an additional insured and loss payee on all casualty
insurance with respect to any Collateral and as an additional insured on all
business interruption insurance (including, with respect to the casualty
insurance for any Mortgaged Property, a standard noncontributory mortgagee
clause or endorsement naming the Agent (and/or such other party as may be
designated by the Agent) as the party to which all payments made by such
insurance company shall be paid) and the Agent and the Lenders as additional
insureds on all commercial general liability insurance.
INSPECTION OF PROPERTY, BOOKS AND RECORDS; DISCUSSIONS. Keep proper
books of records and account in conformity with generally accepted accounting
principles and applicable regulatory standards; and permit representatives of
any Lender to visit and inspect any of its properties and examine and make
copies of or abstracts from any of its books and records at any reasonable time
upon reasonable prior notice and as often as may be reasonably required and to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers of the Borrower and its
Subsidiaries and with its independent certified public accountants.
NOTICES. Promptly give written notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any indenture, agreement
or other instrument to which the Borrower or any of its Subsidiaries is a party
or by which it or any of its property is bound which is material to the Borrower
or to any Material Subsidiary or to the Borrower and its Subsidiaries taken as a
whole, or (ii) litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case of clauses (i) or (ii) of this paragraph (b), if
not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or other proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought or which
could reasonably be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after an officer of the Borrower knows thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any lien (within
the meaning of Section 4068 of ERISA) in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, (ii) the institution of proceedings
65
or the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan or (iii) analogous
events (if any) under any foreign Requirement of Law, in each case which could
result in a liability of the Borrower or any of its Subsidiaries greater than
$5,000,000;
(e) any development or event which in the reasonable judgment of the
Borrower has had or could reasonably be expected to have a Material Adverse
Effect;
(f) any Environmental Claim asserted by any Governmental Authority or
third party or any discovery by Borrower or any Subsidiary of any occurrence or
condition with respect to any Material of Environmental Concern that is
reasonably likely to involve remediation costs or liability greater than
$5,000,000; and
(g) any Casualty Loss with respect to any material portion of the
Collateral.
Each notice pursuant to the foregoing paragraphs of this subsection
shall be accompanied by a statement of a Responsible Officer setting forth
details of the occurrence referred to therein and stating what action the
Borrower or the relevant Subsidiary proposes to take with respect thereto.
ENVIRONMENTAL LAW. (a) Comply in all material respects with, and use
reasonable efforts to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants, if any, obtain and comply in all material respects with and
maintain, any and all material licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws (the "REMEDIAL WORK") and diligently comply in all material
respects with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are being
contested in good faith and with due diligence by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect and reserves in conformity with generally accepted
accounting principles with respect thereto have been provided on the books of
the Borrower or the applicable Subsidiary, as the case may be.
(c) If the Borrower or any of its Subsidiaries does not within a
reasonable period of time (and in any event within such period as required by
any Requirement of Law) commence and diligently prosecute to completion the
Remedial Work, and is not contesting the need to perform Remedial Work as
provided in subsection 8.8(b) above, the Agent may (but shall not be obligated
to), upon 30 days prior written notice to the Borrower of its intention to do
so, cause such Remedial Work to be performed. The Borrower shall pay or
reimburse the Agent on demand for all expenses (including attorneys' fees and
66
disbursements), reasonably relating to or incurred by the Agent in connection
with monitoring, reviewing or performing any Remedial Work.
MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS. (a) Promptly, upon the
reasonable request of the Agent, at the Borrower's expense, execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record, or cause to be registered, filed or
recorded, in an appropriate governmental office, any document or instrument
supplemental to or confirmatory of the Security Documents or otherwise
reasonably deemed by the Agent necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered
thereby; and (b) promptly, written notice of any change (i) in any Loan Party's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral or any office or
facility at which Collateral is located (including the establishment of any such
new office or facility), (iii) in any Loan Party's identity or corporate
structure, (iv) resulting in any tangible Collateral being located in any
jurisdiction in which a financing statement must be, but has not been, filed in
order to perfect the Agent's Liens, (v) in respect of any newly acquired
Intellectual Property or applications therefor in the United States owned by or
licensed to any Loan Party, or (vi) in any Loan Party's federal taxpayer
identification number. The Loan Parties will not effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral and will promptly notify the
Agent if any material portion of the Collateral is damaged or destroyed.
PLEDGE OF AFTER ACQUIRED PROPERTY. If at any time following the Closing
Date the Borrower or any of its Domestic Subsidiaries shall acquire at any time
property of any nature whatsoever which is required by the terms hereof or of
the applicable Security Document to be and is not otherwise subject to the Lien
created by each Security Document, as soon as possible and in no event later
than 30 days after the relevant acquisition date grant to the Agent for the
ratable benefit of the Lenders a first priority Lien on such property as
collateral security for the Obligations pursuant to documentation reasonably
satisfactory in form and substance to the Agent. The Borrower, at its own
expense, shall execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record in an
appropriate governmental office, any document or instrument (including legal
opinions, title insurance, consents and corporate documents) and take all such
actions reasonably deemed by the Agent to be necessary or desirable to ensure
the creation, priority and perfection of such Lien. Without limiting the
generality of the foregoing, the Borrower will deliver to the Agent the SMC
(France) Note promptly following issuance thereof to Borrower, duly endorsed in
blank, and an opinion of French counsel in form and substance satisfactory to
the Agent. The Borrower shall cause each New Subsidiary of the Borrower which is
a Wholly-Owned Domestic Subsidiary created or acquired after the date hereof,
immediately upon such creation or acquisition, to execute instruments in form
and substance
67
reasonably satisfactory to the Agent pursuant to which such New Subsidiary shall
become a party to the Subsidiary Security Agreements and the Subsidiaries'
Guarantee as a guarantor thereunder. With respect to each New Subsidiary which
is a direct Subsidiary of the Borrower or a Domestic Subsidiary, the Borrower
shall execute and deliver a supplement to the Borrower Security Agreement in
form and substance reasonably satisfactory to the Agent, or shall cause any
Wholly-Owned Domestic Subsidiary of the Borrower which holds the Capital Stock
of any New Subsidiary to execute and deliver a Subsidiary Security Agreement or
a supplement to the Subsidiary Security Agreement to which it is a party,
providing for the pledge of 100% of the issued and outstanding Capital Stock of
such New Subsidiary to the Agent for the benefit of the Lenders (65% in the case
of a New Foreign Subsidiary), and the Borrower shall deliver to the Agent the
stock certificates evidencing such Capital Stock together with undated stock
powers for each such certificate, duly executed in blank (or, in the case of a
New Foreign Subsidiary, take such other action as has the same substantive
effect under applicable law) and execute, or cause its Subsidiary to execute,
such financing statements as may be required to perfect all Liens in favor of
the Agent.
INTEREST RATE PROTECTION. Within 30 days following the Closing Date,
enter into a Hedging Agreement or Agreements providing to the Borrower interest
rate protection reasonably satisfactory to the Agent with respect to not less
than 50% of the aggregate outstanding principal amount of the Term Loans, and
having an expiry date from the Closing Date acceptable to the Agent, and the
Borrower agrees and confirms that the Borrower Security Agreement grants to the
Agent, for the benefit of the Lenders, a first priority perfected security
interest in its rights under any such Hedging Agreements.
FOREIGN SUBSIDIARIES SECURITY. If, following a change in the relevant
sections of the Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Agent and the Required Lenders does not
within 30 days after a request from the Agent or the Required Lenders deliver
evidence, in form and substance reasonably satisfactory to the Agent and the
Required Lenders, with respect to any Foreign Subsidiary which has not already
had all of its stock pledged pursuant to the applicable Pledge Agreement that
Section 956 of the Code does not apply to the pledge of more than 66 2/3% of the
Capital Stock and no other materially adverse consequences would result, under
applicable tax laws from a pledge of such Capital Stock, then that portion of
such Foreign Subsidiary's outstanding Capital Stock not theretofore pledged
pursuant to such Pledge Agreement shall be pledged to the Agent for the benefit
of the Lenders pursuant to a pledge agreement in form and substance reasonably
satisfactory to the Agent and the Required Lenders, to the extent that the
entering into such pledge agreement is permitted by the laws of the respective
foreign jurisdiction, and with all other related documents to be delivered
pursuant to this subsection 8.12 to be in form and substance reasonably
satisfactory to the Agent and the Required Lenders.
COLLATERAL ACCOUNT. In the event that the Borrower or any of its
Subsidiaries (a) receives any insurance proceeds on account of Casualty Losses
in excess of $1,000,000 in the aggregate in any fiscal year (provided that such
first $1,000,000 shall be used solely to repair or
68
replace, or to commence the repair or replacement of, the asset subject to such
Casualty Loss within six months of the date received or be deposited in the
Collateral Account (as defined below) and provided further that such first
$1,000,000 shall be paid to the Agent if an Event of Default shall have occurred
and be continuing), or (b) receives any payments made by any Seller to the
Borrower pursuant to the Purchase Agreement or (c) is required to deposit cash
in a cash collateral account on account of the Letters of Credit as contemplated
herein, all such proceeds and payments shall promptly be deposited in a bank
account or accounts (the "COLLATERAL ACCOUNT") maintained by, and under the
control of, the Agent all as provided in the Security Agreement. The amounts
deposited into the Collateral Account pursuant to clause (a) or (b) shall be
released to the Borrower upon receipt by the Agent of a certificate from the
Borrower certifying that (i) such amounts under clause (a) shall be used
immediately upon receipt to repair or replace property subject to a Casualty
Loss or (ii) such amounts under clause (b) shall be used immediately upon
receipt to satisfy obligations to any third parties that resulted in a payment
by the Sellers pursuant to the Purchase Agreement, as applicable or to reimburse
the Borrower for losses, costs and expenses sustained or incurred by the
Borrower or one of its Subsidiaries. Any Qualifying Insurance and Other Proceeds
in the Collateral Account shall be applied in accordance with subsection 5.1(c).
BANK ACCOUNTS. The Borrower and its Subsidiaries shall, at their
expense, take all such actions, or cause such actions to be taken, as are
necessary or desirable in the judgment of the Agent to cause the Agent for the
benefit of the Lenders to have a legal, valid and enforceable fully perfected
security interest of first priority in all of the Domestic Bank Accounts of the
Borrower and its Domestic Subsidiaries, including the Collateral Account. If
under the laws of any state, the Agent shall not be able to take such a security
interest in a checking or similar account, then the Borrower shall not permit
the account balance in any such account to exceed $1,000,000 at any time (after
payment of all checks payable on such date) or the account balances in all such
accounts collectively to exceed $1,000,000 in the aggregate at any time.
YEAR 2000. The Borrower shall promptly implement a program to assess
the computer hardware, software or equipment containing embedded microchips
essential to the business or operations of the Inco Entities in order to
determine the steps to be taken with respect to any Year 2000 Problem for any of
the Inco Entities. The Borrower will diligently pursue any reprogramming,
upgrading or maintenance of computer hardware, software or equipment required in
order to address any Year 2000 Problem of the Borrower and its Subsidiaries
(including the Inco Entities and their Subsidiaries). The Borrower will report
on the status of its program to assess and ameliorate any Year 2000 Problem in
each Quarterly Report on Form 10-Q and each Annual Report on Form 10-K filed
with the SEC (copies of which will be provided to the Agent in accordance with
subsection 8.1) in accordance with applicable rules and interpretive release of
the SEC, and on the request of the Agent or any Lender will provide such
additional information with respect to any Year 2000 Problem as may be
reasonably requested.
69
SECTION
NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding, any Loan remains outstanding and unpaid or any other amount is
owing to any Lender, the Issuing Bank or the Agent hereunder, unless the
Required Lenders, and the Issuing Bank if any Letter of Credit is outstanding,
shall have otherwise consented in writing the Borrower shall not, and shall not
permit any of the Borrower's Subsidiaries to, directly or indirectly:
FINANCIAL CONDITION COVENANTS.
(a) EBITDA MAINTENANCE. Permit Consolidated EBITDA of the Borrower and
its consolidated Subsidiaries for any period of four consecutive fiscal quarters
ending on a date specified below to be less than the amount set forth opposite
such period below:
PERIOD ENDING Consolidated EBITDA
12/31/98 $ 85,000,000
3/31/99 87,500,000
6/30/99 87,500,000
9/30/99 90,000,000
12/31/99 95,000,000
3/31/2000 100,000,000
6/30/2000 100,000,000
9/30/2000 100,000,000
12/31/2000 105,000,000
3/31/2001 110,000,000
6/30/2001 110,000,000
9/30/2001 115,000,000
12/31/2001 120,000,000
3/31/2002 120,000,000
6/30/2002 125,000,000
9/30/2002 130,000,000
12/31/2002 135,000,000
3/31/2003 135,000,000
6/30/2003 135,000,000
9/30/2003 140,000,000
12/31/2003 145,000,000
and thereafter
(b) LEVERAGE RATIO. Permit the Leverage Ratio as of the last day of
each fiscal quarter set forth below to exceed the ratio set forth opposite such
fiscal quarter below:
70
PERIOD ENDING Ratio
12/31/98 4.35
3/31/99 4.00
6/30/99 4.00
9/30/99 4.00
12/31/99 3.50
3/31/2000 3.50
6/30/2000 3.50
9/30/2000 3.50
12/31/2000 3.00
3/31/2001 3.00
6/30/2001 3.00
9/30/2001 3.00
12/31/2001 2.75
3/31/2002 2.75
6/30/2002 2.75
9/30/2002 2.75
12/31/2002 2.50
3/31/2003 2.50
6/30/2003 2.50
9/30/2003 2.50
12/31/2003 2.25
3/31/2004 2.25
6/30/2004 2.25
9/30/2004 2.25
12/31/2004 2.00
and thereafter
(c) INTEREST COVERAGE RATIO. Commencing the fiscal quarter ended
December 31, 1998, permit the ratio of Consolidated EBITDA of the Borrower and
its consolidated Subsidiaries for any period of four consecutive fiscal quarters
of the Borrower and its consolidated Subsidiaries to Consolidated Interest
Expense of the Borrower and its consolidated Subsidiaries for such period to be
less than 2.75 to 1.
(d) FIXED CHARGE RATIO. Commencing the fiscal quarter ended December
31, 1998, permit the ratio of Consolidated EBITDA of the Borrower and its
consolidated Subsidiaries for any period of four consecutive fiscal quarters
ending on the last day of such quarter, to Fixed Charges of the Borrower and its
consolidated Subsidiaries for such period to be less than 1.00 to 1.
LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness (i) of the Borrower to any Subsidiary and (ii) of any
Wholly-Owned Domestic Subsidiary of the Borrower to the Borrower or any other
Subsidiary; PROVIDED that any such Indebtedness referred to in clause (i) of
this subsection 9.2(b) or of any such Wholly Owned Domestic Subsidiary to any
other Subsidiary shall be expressly subordinated to the Loans and the Guarantees
on terms and conditions reasonably satisfactory to the Agent and (iii) of any
Wholly-Owned Foreign Subsidiary of the Borrower to the Borrower or Wholly-Owned
Subsidiary of the Borrower which, together with Indebtedness outstanding under
subsections 9.2(e) and (g) below, does not exceed, individually or in the
aggregate, the amounts set forth on Schedule 9.2; PROVIDED that each such
Domestic or Foreign Subsidiary which is a borrower shall have executed a note in
favor of the Borrower or such Domestic Subsidiary evidencing such Indebtedness
and such note has been pledged to the Agent (for the ratable benefit of the
Lenders) pursuant to the applicable Security Agreement.
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
solely in order to finance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) in an aggregate principal
amount not exceeding as to the Borrower and its Subsidiaries $10,000,000 at any
time outstanding;
(d) Indebtedness under Hedging Agreements required under subsection
8.11 or permitted under subsection 9.16, and under currency and commodity
Hedging Agreements entered into the ordinary course of business to hedge
currency fluctuations and commodity prices (and not for speculation), in the
case of interest rate Hedging Agreements with a counterparty approved by the
Agent;
(e) With respect to each Foreign Subsidiary, Indebtedness of such
Foreign Subsidiary to one or more lenders located in such Foreign Subsidiary's
place of business under a revolving credit line entered into for working capital
purposes, or bank overdraft lines entered into in the ordinary course of
business; PROVIDED that such Indebtedness, together with Indebtedness
outstanding under subsection 9.2(b)(iii) above and 9.2(g) below, may not at any
time (i) exceed for any Foreign Subsidiary individually or all Foreign
Subsidiaries in the aggregate the amounts set forth on Schedule 9.2 or (ii) be
secured by any assets (real, personal or mixed) of such Foreign Subsidiary other
than current assets or of any other Person, or (iii) be supported by any
Guarantee Obligation of the Borrower or any Domestic Subsidiary;
(f) Indebtedness evidenced by the SMC Acquisition Note, the SMC
(Canada) Note, the SMC (France) Note and the SMC (UK) Notes; PROVIDED that each
such note is pledged to the Agent (for the ratable benefit of the Lenders)
pursuant to the applicable Security Agreement and any amounts repaid under such
notes may not be reborrowered;
(g) Indebtedness described on Schedule 6.24;
71
(h) the New York Mortgage Loans;
(i) from the Closing Date until February 1, 1999, Indebtedness to Inco,
Inc. with respect to the Receivables Program in a principal amount not to exceed
$35,000,000;
(j) intercompany Indebtedness of one or more Foreign Subsidiaries to
the Borrower or a Domestic Subsidiary in a principal amount not to exceed
$15,000,000 arising out of intercompany Indebtedness of one or more of the Inco
Entities existing as of the Closing Date which is being assumed as part of the
Acquisition;
(k) Indebtedness of a Foreign Subsidiary to another Foreign Subsidiary;
and
(l) other unsecured Indebtedness of the Borrower or any Domestic
Subsidiary in an aggregate amount outstanding not to exceed $5,000,000.
LIMITATION ON LIENS. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for the following (collectively, the "PERMITTED LIENS"):
(a) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with generally accepted
accounting principles;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
lessors', landlords' or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each case
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary;
72
(f) Liens securing Indebtedness of the Borrower and its Wholly Owned
Subsidiaries permitted by subsection 9.2(c) incurred to finance the acquisition
of fixed or capital assets; PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and the proceeds thereof, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed 100% of
the original purchase price of such property;
(g) Liens on the property or assets of a Person which becomes a
Subsidiary after the Closing Date or on assets purchased from any Person after
the Closing Date securing Indebtedness permitted by subsection 9.2(c); PROVIDED
that (i) such Liens existed at the time such Person became a Subsidiary and were
not created in anticipation thereof, (ii) any such Lien does not cover any
property or assets of such Person not covered immediately prior thereto, and
(iii) the amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) Liens existing on the Closing Date securing Indebtedness permitted
by subsection 9.2(g), and covering only the assets set forth on Schedule 9.3,
and not otherwise required to be released by reason of the Refinancing, PROVIDED
(i) that such Lien is not enforceable against any other property or asset, (ii)
that such Lien secures only those obligations that it secures on the date
hereof, and (iii) that no such Lien is amended after the Closing Date to cover
any additional property or to secure additional Indebtedness;
(j) any Lien arising by operation of law pursuant to Section 107(l) of
the Comprehensive Environmental Response, Compensation and Liability Act, or
pursuant to analogous state law, for costs or damages (i) which are not yet due
(by virtue of a written demand for payment by a Governmental Authority) or (ii)
which are being contested in good faith by appropriate proceedings or (iii)
which are on property that the Borrower or one of its Subsidiaries has
determined to abandon if the sole recourse for such costs or damages is such
property; PROVIDED, in any case, that the liability of the Borrower (or the
Subsidiary of the Borrower that directly owns or operates the affected property)
with respect to the matter giving rise to such Lien shall not, in the reasonable
estimate of the Agent (in light of all attendant circumstances, including the
likelihood of contribution by third parties), exceed $5,000,000 for all such
Liens;
(k) the mortgages securing the New York Mortgage Loans; and
(l) Liens permitted by subsection 9.2(e)(ii).
LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or suffer to
exist any Guarantee Obligation except:
73
(a) the Guarantees, including any Guarantee Obligations arising under
any rights of contribution thereunder;
(b) Guarantee Obligations made in the ordinary course of its business
by (i) the Borrower of Indebtedness or liabilities of any Wholly Owned Domestic
Subsidiary or (ii) by any Foreign Subsidiary of the Indebtedness or liabilities
of any other Foreign Subsidiary, in each case which Indebtedness and liabilities
are otherwise permitted hereunder.; and
(c) those Guarantee Obligations listed on Schedule 6.1(c).
LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any Wholly Owned Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more Wholly
Owned Subsidiaries of the Borrower; PROVIDED that in each case, after giving
effect to such merger or consolidation, (i) the continuing or surviving
corporation's net worth shall not be less than that of either of the
corporations so consolidated or merged immediately prior to such merger or
consolidation and (ii) no Default or Event of Default exists;
(b) any Wholly Owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any other Wholly Owned Domestic Subsidiary of the Borrower that
is a Guarantor;
(c) any Foreign Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any Wholly-Owned Subsidiary of the Borrower;
(d) mergers, consolidations or amalgamations occurring in connection
with the Acquisition; and
(e) a merger, consolidation or amalgamation effected in connection with
a Permitted Acquisition.
LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person other than the Borrower or any Wholly
Owned Domestic Subsidiary that is a Guarantor, except:
(a) the sale of inventory in the ordinary course of business;
74
(b) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(c) as permitted by subsection 9.5;
(d) Asset Sales, PROVIDED that (x) the consideration received for such
Asset Sale is in cash or Cash Equivalents in an amount at least equal to the
fair market value of the property, business or assets sold in connection
therewith (as determined in good faith by the Board of Directors of the
Borrower), and (y) the Net Proceeds of such Asset Sales are applied in
accordance with subsection 5.1(c) and PROVIDED, FURTHER, that neither the
Borrower nor any of its Subsidiaries may sell Capital Stock issued by any of
their respective Subsidiaries unless, as a result of such sale, neither the
Borrower nor any of its Subsidiaries shall own, directly or indirectly, any
interest whatsoever in the Subsidiary whose Capital Stock is being sold;
(e) sales of equipment and other property, including leasehold
interests, in the ordinary course of business;
(f) the sale, transfer or other disposition of any asset in the
ordinary course of business which is obsolete for its intended use;
(g) the New York Mortgage Loans; and
(h) leases or subleases of excess space in any facility of the Borrower
or any of its Subsidiaries entered into in the ordinary course of business for
space which is not material in area to such facility.
RESTRICTED PAYMENTS. Declare or pay any dividend (other than dividends
payable solely in common stock of the Borrower and other than dividends payable
by any Subsidiary to the Borrower or another Subsidiary, directly or indirectly)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Capital Stock or any warrants
or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary (each, a "RESTRICTED PAYMENT"); PROVIDED that so long as no
Default or Event of Default has occurred and is continuing or would result from
the making of such payment, (a) the Borrower may declare and pay cash dividends
on its Preferred Stock in accordance with the terms of the Preferred Stock
Documents as in effect on the Closing Date; (b) the Borrower may repurchase its
Capital Stock from employees in accordance with the Borrower's Long Term Stock
Incentive Plan in an aggregate amount in any fiscal year not to exceed
$2,000,000; and (c) the Borrower or its Subsidiary may purchase the minority
shares of Rescal S.A. for an aggregate amount not to exceed $1,000,000.
LIMITATION ON CAPITAL EXPENDITURES. Make (by way of the acquisition of
securities of a Person or otherwise) any Capital Expenditures, except for
expenditures in the ordinary course of business not exceeding, in the aggregate
for the Borrower and its consolidated Subsidiaries, during any fiscal year of
the Borrower an amount equal to:
(a) $44,000,000 in the fiscal year ending December 31, 1998;
(b) the amount set forth below if the EBITDA Threshold was met for the
immediately preceding fiscal year:
FISCAL YEAR Amount
----------- ------
1999 $40,000,000
2000 40,000,000
2001 35,000,000
2002 40,000,000
2003 40,000,000
2004 and thereafter 40,000,000
(c) if the EBITDA Threshold was not met for the immediately preceding
fiscal year, the amount set forth in the table above for the applicable fiscal
year less the amount by which the actual Consolidated EBITDA for the immediately
preceding fiscal year was less than the applicable EBITDA Threshold; and
(d) in the case of clause (a) or (b), up to 100% of the amount of
permitted Capital Expenditures not expended in the immediately preceding fiscal
year. Notwithstanding the foregoing, in any event the Borrower and its
Subsidiaries shall be permitted to make Capital Expenditures in each fiscal year
of up to $15,000,000.
(e) "EBITDA THRESHOLD": for any fiscal year set forth below,
Consolidated EBITDA of at least the amount set forth below:
FISCAL YEAR Amount
----------- ------
1998 $ 95,000,000
1999 105,000,000
2000 120,000,000
2001 130,000,000
2002 145,000,000
2003 and thereafter 150,000,000
LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance, loan,
extension of credit or capital contribution to, or purchase or acquire any
Capital Stock, bonds, notes, debentures or other securities of or any
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assets constituting a business unit of, or make any other investment in, any
Person (collectively, "INVESTMENTS"), except:
(a) extensions of trade credit and accounts receivable generated in the
ordinary course of business;
(b) Investments in Cash Equivalents in which the Agent has a duly
perfected first priority Lien;
(c) in connection with the Acquisition in the amounts of debt and
equity Investments set forth on Schedule 9.9;
(d) Investments by the Borrower in its Wholly-Owned Domestic
Subsidiaries which are Guarantors and Investments by such Subsidiaries in the
Borrower and in other Wholly-Owned Domestic Subsidiaries which are Guarantors;
PROVIDED that no Investment may be made by the Borrower and its Domestic
Subsidiaries in any Foreign Subsidiary (other than the Indebtedness permitted to
be incurred under subsections 9.2(b)(iii), 9.2(f) and 9.2(j) and transactions
permitted under subsections 9.9(a) and (f));
(e) Permitted Acquisitions; and
(f) other Investments in an aggregate amount not in excess of
$1,000,000.
LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT INSTRUMENTS
AND CAPITAL STOCK.
(a) Make any optional payment or prepayment or any purchase or
redemption of any Indebtedness for borrowed money (other than the Loans and the
Refinancing and the repayment of working capital lines and overdraft facilities
permitted under subsection 9.2(e) or any Intercompany Notes) or (b) amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the terms of any such Indebtedness for borrowed money (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon) or (c) amend the Certificate of
Incorporation (or other governing document) of the Borrower or any Material
Subsidiary.
LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of the
Borrower's or such Subsidiary's business and (c) upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary, as the case may be, than
it would obtain in a comparable arm's-length transaction with a Person which is
not an Affiliate, PROVIDED that the foregoing restriction shall not apply to (i)
the indemnification of directors of the Borrower and its Subsidiaries in
accordance with customary practice, or (ii) the granting of extended payment
terms to Subsidiaries or Affiliates of the Borrower in the ordinary course of
business or (iii) payments to SIMA not to exceed $500,000 in any fiscal year
under the terms of the Managerial Assistance Agreement dated as of February 25,
1997.
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LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property which has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary.
LIMITATION ON CHANGES IN FISCAL YEAR AND ACCOUNTING POLICIES. Permit
the fiscal year of the Borrower to end on a day other than December 31, or
change its accounting policies or reporting practices from those of the Borrower
in effect on the Closing Date, except to the extent such change is required by
generally accepted accounting principles.
LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any Person any
agreement after the Closing Date, other than (a) this Agreement, (b) operating
leases with respect to any leased asset, (c) purchase money mortgages or
Financing Leases permitted by this Agreement (in the case of clauses (b) and
(c), any prohibition or limitation shall only be effective against the assets
financed thereby), which prohibits or limits the ability of the Borrower or any
of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter acquired
or of any of the Subsidiaries to declare or pay dividends or to make loans or
other advances to the Borrower, directly or indirectly.
LIMITATION ON LINES OF BUSINESS. Enter into any business either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement, after
giving effect to the Acquisition, the manufacture and sale of engineered ceramic
materials and composites and other similar businesses which are directly related
thereto and, with respect to any Permitted Acquisition, a business that uses the
products manufactured by Borrower or its Subsidiaries in its manufacturing
business or any distributor of such products.
LIMITATION ON ENTERING INTO CERTAIN HEDGING AGREEMENTS. Enter into any
interest rate Hedging Agreement which would cause the aggregate notional amount
of all such Hedging Agreements to which the Borrower and its Subsidiaries are
parties to exceed 100% of the aggregate original outstanding principal amount of
the Term Loans.
LIMITATION ON NEW BANK ACCOUNTS. Open any new Domestic Bank Account
unless the Agent shall have a perfected first priority Lien therein.
LIMITATION ON ISSUANCE OF CAPITAL STOCK. Issue any additional preferred
stock (other than as required by the Preferred Stock Documents as in effect on
the Closing Date) or permit any direct or indirect Subsidiary of the Borrower to
issue or grant any Capital Stock of such Subsidiary to any Person, other than
the Borrower or a Wholly Owned Subsidiary of the Borrower, and with respect to
Foreign Subsidiaries, as required by applicable Requirements of Law.
MODIFICATIONS TO ACQUISITION DOCUMENTS AND PREFERRED STOCK DOCUMENTS.
(a) Amend, supplement or otherwise modify any Acquisition Document except
changes that are effective only after 20 days' prior written notice to the Agent
and the
77
Lenders and if the Required Lenders have not delivered a notice to the Borrower
that such change would, in the opinion of the Required Lenders, be adverse to
the interests of the Lenders, or fail to enforce the rights of the Borrower and
its Subsidiaries thereunder if such failure to enforce such rights would be
adverse to the Borrower or any of its Subsidiaries or the Lenders; or (b) amend,
supplement or otherwise modify the provisions of any Preferred Stock Document
relating to redemption of, or the payment of dividends on, the Preferred Stock.
SECTION
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing ("EVENT OF
DEFAULT"):
(a) The Borrower shall fail to pay any principal of any Loan when due;
or the Borrower shall fail (i) to reimburse any drawing on any Letter of Credit
when due or (ii) to provide any or all of the cash collateral required to be
deposited with the Issuing Bank pursuant to a Letter of Credit Request strictly
in accordance with the terms thereof; or the Borrower shall fail to pay any
interest on any Loan, or any fee or other amount payable hereunder within three
days after any such interest, fees or other amount becomes due; or
(b) Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries herein or in any other Loan Document
or which is contained in any certificate, document or financial or other written
statement furnished by it pursuant to the Loan Documents shall prove to have
been false or misleading in any material respect on or as of the date made or
deemed made; or
(c) The Borrower or any of its Subsidiaries shall default in the
observance or performance of any agreement contained in subsections 8.1, 8.2(b)
or (c), 8.7(a), Section 9, or Section 3.4 of each of the Security Agreements; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c)
and paragraph (m) of this Section), and such default shall continue unremedied
for a period of 30 days after notice thereof from the Agent or any Lender to the
Borrower; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the Loans)
or in the payment of any Guarantee Obligation, beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations in respect of which such default or defaults shall
have occurred is at least $5,000,000 in the aggregate; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
(including, without
78
limitation, any mandatory prepayment event) shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness or beneficiary or beneficiaries of
such Guarantee Obligation (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, after the giving of notice if
required, such Indebtedness to become due (whether by acceleration, mandatory
prepayment or otherwise) prior to its stated maturity or such Guarantee
Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
the Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or
any Commonly Controlled Entity, (ii) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other similar event or condition shall occur or exist with respect to
any foreign employee benefit plan, program or arrangement; and in each case in
clauses (ii) through (vi) above, such event or condition,
79
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability (to
the extent not paid or covered by insurance) of $5,000,000 or more, and all such
judgments or decrees shall not have been satisfied, vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof; or
(i) (i) Except in connection with an Asset Sale permitted under
subsection 9.6, any of the Security Documents shall cease, for any reason, to be
in full force and effect, or the Borrower or any other Loan Party which is a
party to any of the Security Documents shall so assert or (ii) the Lien created
by any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby (except as expressly
provided by such Security Document); or
(j) Any Guarantee shall cease, for any reason (except as expressly
provided in such Guarantee), to be in full force and effect or any Guarantor
shall so assert; or
(k) A Change of Control shall have occurred; or
(l) The Borrower's Voting Stock shall cease to be traded on a principal
securities exchange or Borrower shall fail to make a material filing with the
SEC when due (after giving effect to any extension granted by the SEC in the
ordinary course); or
(m) The Borrower or any other Loan Party shall fail timely to comply
with any of its agreements and covenants in the Closing Letter and the Agent
shall have delivered to the Borrower written notice that such failure
constitutes an "Event of Default" under this paragraph (m);
then, and in any such event and at any time thereafter during the continuation
of such an Event of Default, (A) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent shall, by written notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Agent may, or upon the request of the Required Lenders, the Agent shall, by
written notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
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In addition, upon demand by the Issuing Bank, the Agent or the Required
Revolving Credit Lenders after the occurrence of any Event of Default, the
Borrower shall deposit with the Agent for the benefit of the Revolving Credit
Lenders with respect to each Letter of Credit then outstanding, promptly upon
such demand, cash or Cash Equivalents in an amount equal to the greatest amount
for which such Letter of Credit may be drawn. Such deposit shall be held by the
Agent for the benefit of the Issuing Bank and the Revolving Credit Lenders as
security for, and to provide for the payment of, the Letters of Credit
Outstanding.
SECTION
THE AGENT
APPOINTMENT. Each Lender and the Issuing Bank hereby irrevocably
designates and appoints Credit Lyonnais New York Branch as the Agent of such
Lender and the Issuing Bank under this Agreement and the other Loan Documents,
and each such Lender and the Issuing Bank irrevocably authorizes Credit Lyonnais
New York Branch, as the Agent for such Lender and the Issuing Bank, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender or the Issuing Bank,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. None of the Documentation Agent, the
Syndication Agent or the Co-Agent shall have any duties or responsibilities
hereunder or any fiduciary relationship with any Lender, the Agent or the
Issuing Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against such Persons.
DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
EXCULPATORY PROVISIONS. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders and the Issuing Bank for, or
have any duty to ascertain or inquire as to, any recitals, statements,
representations or warranties made
81
by the Borrower or any of its Subsidiaries or any officer thereof contained in
this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or the creation,
enforceability, perfection or priority of any Lien or for any failure of the
Borrower or any of its Subsidiaries to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender and the
Issuing Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower or any of its Subsidiaries, or, except as expressly set forth in any
Loan Document, to disclose (and shall not be liable for any failure to disclose)
any information relating to the Borrower or any of its Subsidiaries or
Affiliates that is communicated to the Agent or any of its Affiliates in any
capacity.
RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall treat the payee of any Note as the owner thereof for all
purposes unless the assignment or transfer shall have been recorded in the
Register. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and the Issuing Bank and all
future holders of the Notes.
NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall promptly give notice thereof to the Lenders and the
Issuing Bank. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
PROVIDED that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders and the Issuing Bank.
NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender and the Issuing
Bank expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower and/or any of its
82
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Lender and the Issuing Bank. Each Lender and the Issuing Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender and the
Issuing Bank also represents that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders or the Issuing Bank by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender or the
Issuing Bank with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower and its Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so to the extent required by the
terms of any Loan Document), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought under this
subsection (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct (as determined in a final,
non-appealable judgment by a court of competent jurisdiction). The agreements in
this subsection shall survive the payment of the Notes and all other amounts
payable hereunder.
AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower and its Subsidiaries and Affiliates as though the Agent were not
83
the Agent hereunder and under the other Loan Documents. With respect to its
Loans made or renewed by it, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
SUCCESSOR AGENT. The Agent may resign as Agent upon 30 days' written
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, with the consent of the Borrower
(which consent will not be unreasonably withheld or delayed) whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent, and
the term "Agent" shall mean such successor agent effective upon such appointment
and approval, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes. If no
successor shall have been appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent's notice
hereunder, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a bank with an office in New York City or an
Affiliate of such bank. After any retiring Agent's resignation as Agent, the
provisions of this subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Loan Documents.
CONCERNING THE COLLATERAL.
(a) The Agent, the Issuing Bank and each of the Lenders authorizes and
directs the Agent to enter into the Security Documents for its benefit and the
benefit of the Lenders and the Issuing Bank and to perform all obligations of
the Agent thereunder, including (without limitation) obligations to release
Collateral. Each holder of any Obligations agrees that any action taken by the
Required Lenders (or, where required by the express terms of this Agreement, a
greater or lesser proportion of the Lenders) in accordance with the provisions
of this Agreement or the Security Documents, and the exercise by the Required
Lenders (or, where so required, such greater or lesser proportion) of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the holders of
Obligations.
(b) Each Lender hereby agrees that it will, upon request of the
Borrower or the Agent, confirm the Agent's authority to release, or direct the
Agent to release, any Lien held by the Agent:
(i) against all of the Collateral, upon payment in full of the
Obligations and expiration or termination of the obligations of the
Lenders under this Agreement;
(ii) against any part of the Collateral sold or disposed of by
the Borrower or any Subsidiary, if such sale or disposition is
permitted by and is made in accordance with this Agreement; and
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(iii) against any Collateral which the Agent is required to
release pursuant to the Security Documents or applicable law.
(c) The Agent shall not be accountable or liable for any release of
Collateral which (i) the Agent in good faith believes is required under the
Security Documents or any other Loan Document, or (ii) results from any failure
to give, or delay in giving, any notice of termination of any rights of the
Borrower pursuant to the Security Documents or any other Loan Document.
SECTION
MISCELLANEOUS
AMENDMENTS AND WAIVERS. Neither this Agreement, any Note or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower or any applicable
Loan Party written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower or any applicable Loan Party hereunder or thereunder or
otherwise amending the terms of this Agreement or any other Loan Document or (b)
waive, on such terms and conditions as the Required Lenders or the Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or extend any Letter
of Credit beyond the Tranche A and Revolver Termination Date, or reduce the
stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the aggregate amount or extend the
expiration date of any Lender's Commitments, in each case without the consent of
each Lender affected thereby, (ii) amend, modify or waive any provision of
subsection 2.2, 2.3, 2.4, 3.3, 3.4 or 12.1 or reduce the percentage specified in
the definition of Required Lenders, or consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents or release all or any substantial portion of the Collateral
(except as otherwise provided in any Loan Document) or release any Guarantor
from its obligations under any Guarantee or modify the terms of any Loan
Document to change the ratable sharing of Collateral among the Lenders, in each
case without the written consent of all the Lenders and the Issuing Bank, (iii)
amend, modify or waive any provision of Section 2 or the order of application of
prepayments in subsection 5.1 without the written consent of the Required
Tranche A Lenders or reduce the percentage in the definition of Required Tranche
A Lenders without the consent of all the Tranche A Lenders, (iv) amend, modify
or waive any provision of Section 2 or the order of application of prepayments
in subsection 5.1 without the written consent of the Required Tranche B Lenders
or reduce the
85
percentage in the definition of Required Tranche B Lenders without the consent
of all the Tranche B Lenders, (v) amend, modify or waive any provision of
Section 3 or the order of application of prepayments in subsection 5.1 without
the prior written consent of the Required Revolving Credit Lenders or reduce the
percentage in the definition of Required Revolving Credit Lenders without the
consent of all the Revolving Credit Lenders, (vi) amend, modify or waive any
provision of Section 4 without the prior written consent of both the Issuing
Bank and the Required Revolving Credit Lenders or (vii) amend, modify or waive
any provision of Section 11 without the written consent of the then Agent
(PROVIDED that the rights of any prior Agent or Agents shall not be adversely
affected thereby). Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and the Issuing Bank,
and shall be binding upon the Borrower, or any applicable Loan Party, the
Lenders, the Issuing Bank and the Agent. In the case of any waiver, the
Borrower, or any applicable Loan Party, the Lenders, the Issuing Bank and the
Agent shall be restored to their former position and rights hereunder and under
the outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
NOTICES. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, one Business Day after being deposited
with an overnight courier, or five Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower and the Agent, and as set forth
in Schedule I in the case of the other parties hereto, or to such other address
as may be hereafter notified by the respective parties hereto and any future
holders of the Notes:
The Borrower: Special Metals Corporation
0000 Xxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Agent: Credit Lyonnais New York Branch
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Leveraged Finance (Xxxx
Xxxxxxx)
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsections 2.2, 3.2, 3.5, 4.1, 4.5, 5.1, 5.2 or 5.7 shall not be
effective until received.
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NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
PAYMENT OF EXPENSES AND TAXES; INDEMNITY. The Borrower agrees (a) to
pay or reimburse the Agent for all its out-of-pocket costs and expenses incurred
in connection with the preparation and execution of, and any amendment,
supplement, modification or waiver to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
including, without limitation, the fees and disbursements of Xxxxxx & Xxxxxxx,
special counsel to the Agent, as well as local and foreign counsel to the Agent,
(b) to pay or reimburse each Lender, the Issuing Bank and the Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents or the Transactions
(including during any work-out or restructuring of the Loans or during the
pendency of any bankruptcy, insolvency or similar proceeding), including,
without limitation, the fees and disbursements of counsel to the Agent and to
each Lender and any advisors, appraisers, consultants or other professionals
engaged by them or such counsel, and (without duplication) allocated costs of
in-house counsel, and (c) to pay, indemnify, and hold each Lender, the Issuing
Bank and the Agent harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
documentary stamp, excise and other taxes, if any, which may be payable or
determined to be payable by reason of the execution and delivery of this
Agreement and the other Loan Documents and any such other documents, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect thereof and (d) to indemnify, and hold each Lender, the Issuing Bank and
the Agent and their respective affiliates, officers, directors, employees,
agents and advisors (each, an "INDEMNIFIED PARTY") harmless from and against any
87
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and other charges) with respect to the
execution, delivery, performance and consummation of this Agreement, the other
Loan Documents and any such other documents, including, without limitation, any
of the foregoing relating to, or arising out of (i) the preparation for a
defense of, or participation in, any investigation, litigation, proceeding or
other action related to or arising out of the Loan Documents or any other such
documents, or any of the Transactions (whether or not such Indemnified Party is
a party to such proceeding or other action and whether any such investigation,
litigation or proceeding or other action is brought by the Borrower, its
stockholders or creditors, by an Indemnified Party or by any other Person) or
(ii) the violation of, noncompliance with or liability under, any Environmental
Law applicable to the Borrower, any of its Subsidiaries or any of the Mortgaged
Properties (all the foregoing in this clause (d), collectively, the "INDEMNIFIED
LIABILITIES"), PROVIDED, that the Borrower shall have no obligation hereunder to
an Indemnified Party with respect to indemnified liabilities arising solely from
the gross negligence or willful misconduct of such Indemnified Party (as
determined in a final non-appealable judgment by a court of competent
jurisdiction). A certificate as to any amounts payable pursuant to this
subsection 12.5 submitted to the Borrower by the Agent, any Lender or an
Indemnified Party shall be conclusive in the absence of manifest error. The
Borrower further agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Borrower
or any of its Affiliates, security holders or creditors except to the extent
such liability is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct or the Indemnified Party's breach of its
obligations under the Loan Documents. The agreements in this subsection shall
survive repayment of the Loans and all other amounts payable hereunder.
SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Issuing Bank, the Agent and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender and the Issuing Bank.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents (which participations may be on a
non-pro rata basis) without the consent of the Agent or the Borrower. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible to
88
the other parties for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower, the Agent and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower also
agrees that each Participant shall be entitled to the benefits of subsections
5.9, 5.10 and 5.11 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if it was a Lender; PROVIDED that no
Participant shall be entitled to any greater payment under such subsections than
the applicable Lender would have been entitled to receive with respect to the
interest sold. The Borrower agrees that if any Obligations are due and unpaid,
or shall have been declared or shall have become due and payable upon the
occurrence and during the continuance of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Note; PROVIDED that such right of setoff
shall be subject to the obligations of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
subsection 12.7. Each Lender agrees that any agreement between such Lender and
any such Participant in respect of such participating interest shall not
restrict such Lender's right to agree to any amendment, supplement, waiver or
modification to this Agreement or any other Loan Document, except where the
result of any of the foregoing would be to extend the final maturity of any Loan
in which the Participant has an interest or reduce the rate or extend the time
of payment of interest thereon or reduce the principal amount thereof or release
all or substantially all of the Collateral (except as expressly provided in the
Loan Documents).
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to any
Lender or any Affiliate thereof or, with the consent of the Agent and (so long
as no Event of Default shall have occurred and be continuing) the Borrower
(which consents shall not be unreasonably withheld or delayed), to another
Person (an "ASSIGNEE") all or any part of its rights and obligations under this
Agreement and the other Loan Documents (which assignments may be on a non-pro
rata basis) pursuant to an Assignment and Acceptance, substantially in the form
of Exhibit N (an "ASSIGNMENT AND ACCEPTANCE"), executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Agent) and delivered to the Agent for its
acceptance and recording in the Register, PROVIDED that, in the case of any such
assignment to an additional Assignee, the sum of the aggregate principal amount
of the Loans and the aggregate amount of the unused Commitments being assigned
and, if such assignment is of less than all of the rights and obligations of the
assigning Lender, the sum of the aggregate principal amount of the Loans and the
aggregate amount of the unused Commitments remaining with the assigning Lender
are each not less than $5,000,000. Assignments may be made on a non pro rata
basis of a Lender's Revolving Credit Commitment and Revolving Credit Loans,
Tranche A Term Loans and Tranche B Term Loans. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
89
hereto and, to the extent of the interest assigned to it in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the assigning Lender thereunder shall,
to the extent of the interest assigned to it in such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto), (but shall continue to be entitled to the
benefits of subsections 5.9, 5.10, 5.11 and 12.5). Notwithstanding any provision
of paragraph (e) of this subsection, unless requested by the Assignee and/or the
assigning Lender, Notes shall not be required to be executed and delivered by
the Borrower, for any assignment which occurs at any time when any of the events
described in Section 10(f) shall have occurred and be continuing.
(d) The Agent, on behalf of the Borrower, shall maintain at the address
of the Agent referred to in subsection 12.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "REGISTER") for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal
amounts of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation hereunder as
the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding any notice to the contrary. Any assignment of any
Loan or other obligation hereunder shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Agent) together with payment by
the Assignee or the assigning Lender to the Agent of a registration and
processing fee of $5,000, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) Subject to the provisions of subsection 12.16, the Borrower
authorizes each Lender to disclose to any Participant or Assignee (each, a
"TRANSFEREE") and any prospective Transferee any and all financial information
in such Lender's possession concerning the Borrower, its Subsidiaries and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower, its Subsidiaries and its Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law, PROVIDED that no such assignment shall
release a Lender from any of its obligations hereunder.
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ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITED LENDER") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 10(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The provisions of this subsection 12.7(a) shall
not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to the Borrower or any
of its Subsidiaries or Affiliate thereof (as to which the provisions of this
subsection 12.7(a) shall apply). The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loan may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise after
the occurrence of an Event of Default) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the Agent after
any such set-off and application made by such Lender, PROVIDED that the failure
to give such notice shall not affect the validity of such set-off and
application.
COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the Agent.
SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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INTEGRATION. This Agreement and the other Loan Documents represent the
agreement of the Borrower and the Subsidiaries, the Agent, the Issuing Bank and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties of any party hereto
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents. Any previous agreement with respect to
the subject matter hereof is superseded by this Agreement and the other Loan
Documents.
GOVERNING LAW. THIS AGREEMENT AND THE LOANS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE LOANS SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in subsection 12.2 or at such other address of which the Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
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ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor the Issuing Bank nor any Lender has any
fiduciary relationship with or duty to it arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Agent, Issuing Bank and Lenders, on one hand, and it, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders (including the Issuing Bank) or among it and the Lenders (including the
Issuing Bank).
WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUING BANK AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY AND FOR ANY COUNTERCLAIM THEREIN. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. Each of the parties to this Agreement
acknowledges that this waiver is a material inducement for each of the parties
to this Agreement to enter into a business relationship, that each of the
parties to this Agreement have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
INTEREST RATE LIMITATION. Notwithstanding anything herein or in the
Notes to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively, the "CHARGES"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender, shall exceed the maximum lawful rate (the
"MAXIMUM RATE") which may be contracted for, charged, taken, received or
reserved by such Lender in accordance with applicable law, the rate of interest
payable under the Note held by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
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CONFIDENTIALITY. The Lenders shall hold in confidence all non-public
information obtained pursuant to the requirements of this Agreement or furnished
at the request of a Lender which has been identified as such in writing by the
Borrower, PROVIDED that any Lender may make disclosure (i) reasonably required
by any Transferee or prospective Transferee pursuant to subsection 12.6 (subject
to the execution by such Transferee or prospective Transferee of a
confidentiality letter of the same scope as this subsection 12.16) or (ii) as
required or requested by any governmental agency or representative thereof or
required by law, rule or regulation or (iii) pursuant to legal process or (iv)
to its employees, directors, agents, attorneys, accountants and other
professional advisors; PROVIDED, FURTHER, that in no event shall any Lender be
obligated or required to return any materials furnished by the Borrower.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SPECIAL METALS CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
CREDIT LYONNAIS NEW YORK BRANCH,
as Agent, as a Lender and as Issuing Bank
By:________________________________
Name:___________________________
Title:__________________________
MANUFACTURERS & TRADERS TRUST
COMPANY,
as Documentation Agent and as a Lender
By:________________________________
Name:___________________________
Title:__________________________
MELLON BANK, N.A.,
as Syndication Agent and as a Lender
By:________________________________
Name:___________________________
Title:__________________________
00
XXX XXXX XX XXXX XXXXXX,
as Co-Agent and as a Lender
By:________________________________
Name:___________________________
Title:__________________________
KEYBANK NATIONAL ASSOCIATION,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
BANK UNITED,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
BANQUE NATIONALE DE PARIS,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
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SOCIETE GENERALE, NEW YORK
BRANCH,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
FLEET NATIONAL BANK,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
NATIONAL BANK OF CANADA,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
CREDIT AGRICOLE - INDOSUEZ,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
96
NATEXIS BANQUE,
as Lender
By:________________________________
Name:___________________________
Title:__________________________
