EXHIBIT 4.1
AMENDED AND RESTATED OVERRIDE AGREEMENT
dated as of
October 10, 1995
among
Xxxxxxxx Xxxxxxx Corporation,
a Delaware corporation,
Xxxxxxxx Xxxxxxx Corporation
an Ohio corporation,
The Banks and Other
Financial Institutions
Named Herein,
Mellon Bank, N.A., as Agent
and
Bank of America National Trust and Savings Association,
as Metra Agent
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . 22
1.3. General Construction. . . . . . . . . . . . . . . . . . . . . . 22
1.4. Certain Contingent Obligations. . . . . . . . . . . . . . . . . 22
ARTICLE II SATISFACTION OF THE BORROWERS'
OBLIGATIONS UNDER EXISTING AGREEMENTS . . . . . . . . . . . . . 22
2.1. Acknowledgement of Obligations. . . . . . . . . . . . . . . . . 22
2.2. Conversion of Contingent to Funded Obligation . . . . . . . . . 22
2.3. Maturity of Existing Indebtedness; Termination Date . . . . . . 22
2.4. Deferred Payments and Amortization. . . . . . . . . . . . . . . 23
2.5. Interest Rates; Deferral of Interest and Letter of Credit
Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.6. Payment of Deferred Interest. . . . . . . . . . . . . . . . . . 24
2.7. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) The Agent's Fee . . . . . . . . . . . . . . . . . . . . . . 25
(b) The Collateral Agent's Fee. . . . . . . . . . . . . . . . . 25
(c) Fees Cumulative . . . . . . . . . . . . . . . . . . . . . . 25
2.8. Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . 25
2.9. Mandatory Prepayment. . . . . . . . . . . . . . . . . . . . . . 25
2.10. Application of Payments . . . . . . . . . . . . . . . . . . . . 26
2.11. General Provisions as to Payments . . . . . . . . . . . . . . . 27
2.12. Recalculation . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.13. Delivery of Reallocation Certificates.. . . . . . . . . . . . . 31
2.14. Computation of Interest and Fees. . . . . . . . . . . . . . . . 31
2.15. Cash Management System. . . . . . . . . . . . . . . . . . . . . 31
2.16. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE III ADDITIONAL AMENDMENTS TO THE EXISTING AGREEMENTS AND EFFECT ON
EXISTING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 33
3.1. Waiver of Covenants.. . . . . . . . . . . . . . . . . . . . . . 33
3.2. Non-Exercise of Certain Remedies. . . . . . . . . . . . . . . . 34
3.3. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.4. Effect on Existing Agreements . . . . . . . . . . . . . . . . . 34
ARTICLE IV SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.1. The Borrowers' Obligations. . . . . . . . . . . . . . . . . . . 35
4.2. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . 35
5.1. Conditions Precedent to Effectiveness of Agreement. . . . . . . 35
(a) Restructuring Documents . . . . . . . . . . . . . . . . . . 35
(b) Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 36
(c) Pending and Threatened Litigation . . . . . . . . . . . . . 36
(d) The T-Co Restructuring. . . . . . . . . . . . . . . . . . . 36
(e) Other Matters . . . . . . . . . . . . . . . . . . . . . . . 36
i
(f) Representations and Warranties. . . . . . . . . . . . . . . 36
(g) No Default or Event of Default. . . . . . . . . . . . . . . 36
(h) Defaults Under Indebtedness . . . . . . . . . . . . . . . . 36
ARTICLE VI REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 37
6.1. Organization and Qualification. . . . . . . . . . . . . . . . . 37
6.2. Corporate Power and Authorization; Binding Effect . . . . . . . 37
6.3. No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.4. No Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.5. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . 38
6.6. No Default under the Restructuring Documents. . . . . . . . . . 38
6.7. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.8. Material Contracts. . . . . . . . . . . . . . . . . . . . . . . 38
6.9. Correctness of Collateral Schedules . . . . . . . . . . . . . . 39
6.10. Correctness of Financial Information. . . . . . . . . . . . . . 39
6.11. Security Documents. . . . . . . . . . . . . . . . . . . . . . . 39
6.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.13. No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . 40
6.14. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 40
6.16. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . 40
6.17. Governmental Authorizations; Permits, Licenses and
Accreditations; Other Rights. . . . . . . . . . . . . . . . . . 41
6.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . 41
6.19. No Material Adverse Effect. . . . . . . . . . . . . . . . . . . 42
6.20. Consolidated Subsidiaries; Subsidiaries . . . . . . . . . . . . 42
6.21. Margin Securities . . . . . . . . . . . . . . . . . . . . . . . 42
6.22. Investment Company Act. . . . . . . . . . . . . . . . . . . . . 42
6.23. Business Locations and Trade Names. . . . . . . . . . . . . . . 42
6.24. Title to Real Property and Other Assets . . . . . . . . . . . . 43
6.25. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.26. Employment and Investment Agreements. . . . . . . . . . . . . . 43
6.27. No Misstatements. . . . . . . . . . . . . . . . . . . . . . . . 43
6.28. T-Co Restructuring. . . . . . . . . . . . . . . . . . . . . . . 44
6.29. MK Rail Lock Box. . . . . . . . . . . . . . . . . . . . . . . . 44
6.30. Cash Management System. . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 44
7.1. Financial Statements; Additional Reporting Requirements . . . . 44
7.2. Provision of Notices. . . . . . . . . . . . . . . . . . . . . . 46
7.3. Filing of Returns; Payment of Taxes . . . . . . . . . . . . . . 48
7.4. Maintenance of Existence. . . . . . . . . . . . . . . . . . . . 48
7.5. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 48
7.6. Maintenance of Properties . . . . . . . . . . . . . . . . . . . 48
7.7. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.8. Books and Records . . . . . . . . . . . . . . . . . . . . . . . 49
7.9. Compliance With Terms of All Real Property Related Agreements . 49
7.10. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 49
7.11. Intellectual Property Assignments . . . . . . . . . . . . . . . 50
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7.12. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 50
7.13. Inspection of Property, Books and Records . . . . . . . . . . . 50
7.14. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 50
7.15. Compliance with Asset Disposition Program . . . . . . . . . . . 50
7.16. Cash Management System. . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 51
8.1. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.2. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . 52
8.3. Prohibition of Fundamental Changes. . . . . . . . . . . . . . . 53
8.4. Prohibition on Sale of Assets . . . . . . . . . . . . . . . . . 53
8.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . 54
8.7. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . 54
8.8. Transactions With Affiliates. . . . . . . . . . . . . . . . . . 54
8.9. Sale/Lease-Backs. . . . . . . . . . . . . . . . . . . . . . . . 55
8.10. Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . 55
8.11. Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . 55
8.12. Amendment of Charter or Bylaws. . . . . . . . . . . . . . . . . 55
8.13. No Consent to Subordination . . . . . . . . . . . . . . . . . . 55
8.14. Intercompany Obligations. . . . . . . . . . . . . . . . . . . . 55
ARTICLE IX DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 56
9.2. The Existing Lenders' Remedies. . . . . . . . . . . . . . . . . 59
9.3. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 59
9.4. Waivers by the Borrowers. . . . . . . . . . . . . . . . . . . . 60
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.2. The Agent and Affiliates. . . . . . . . . . . . . . . . . . . . 61
10.3. Retention of Documents and Information to the Existing
Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.4. Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . 61
10.5. Limitation of Liability . . . . . . . . . . . . . . . . . . . . 61
10.6. Reliance by the Agent. . . . . . . . . . . . . . . . . . . . . 62
10.7. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . 63
10.8. Non-Reliance on the Agent and the Other Existing Lenders. . . . 63
10.9. Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.10. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 64
10.11. The Agent in its Individual Capacity. . . . . . . . . . . . . . 64
10.12. The Successor Agent . . . . . . . . . . . . . . . . . . . . . . 64
10.13. Applicability of Section to The Borrowers . . . . . . . . . . . 65
10.14. Delivery to the Agent of Existing Agreements. . . . . . . . . . 65
ARTICLE XI JOINT AND SEVERAL LIABILITY . . . . . . . . . . . . . . . . . . 66
11.1. Joint and Several Liability . . . . . . . . . . . . . . . . . . 66
11.2. The Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 66
11.3. Guarantees Unconditional. . . . . . . . . . . . . . . . . . . . 66
11.4. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . 67
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11.5. Waivers by The Borrowers. . . . . . . . . . . . . . . . . . . . 67
11.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.7. Stay of Acceleration. . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.2. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 70
12.3. No Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.4. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . 70
12.5. Set-Off; Sharing Upon Set-Off Reductions in Liability and
Conversion Events . . . . . . . . . . . . . . . . . . . . . . . 71
12.6. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . 74
12.7. Effect of Waivers; Modification of Documents. . . . . . . . . . 74
12.8. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 75
12.9. Headings and Captions . . . . . . . . . . . . . . . . . . . . . 76
12.10. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . 76
12.11. Inconsistencies With Other Documents. . . . . . . . . . . . . . 76
12.12. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.14. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . 77
12.15. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . 77
12.16. Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . 77
12.17. Survival of Representations and Warranties. . . . . . . . . . . 77
12.18. Relationship of the Parties . . . . . . . . . . . . . . . . . . 78
12.19. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.20. Voting by the Metra Lenders . . . . . . . . . . . . . . . . . . 78
12.21. Payments to the Metra Lenders . . . . . . . . . . . . . . . . . 79
12.22. Affirmation of Payments of Obligations. . . . . . . . . . . . . 79
12.23. Amendment of Metra Credit Agreement . . . . . . . . . . . . . . 79
12.24. Acknowledgement and Acceptance of the Intercreditor Agreement . 79
12.25 Approval of First Amendment to Collateral Agent Agreement . . . .79
iv
EXHIBITS AND SCHEDULES
EXHIBIT A BUDGET
EXHIBIT B FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT C-1 FORM OF WARRANT FOR EXISTING LENDERS OTHER THAN WITH RESPECT
TO METRA OBLIGATIONS
EXHIBIT C-2 FORM OF WARRANT WITH RESPECT TO METRA OBLIGATIONS
EXHIBIT D FIRST AMENDMENT TO COLLATERAL AGENT AGREEMENT AND MORTGAGE
TRUST
SCHEDULE A SCHEDULE OF EXISTING LENDERS AND EXISTING AGREEMENTS
SCHEDULE B SCHEDULE OF DOCUMENTS
SCHEDULE C SCHEDULE FOR NOTICES
SCHEDULE D SCHEDULE OF GUARANTORS
SCHEDULE E CASH MANAGEMENT SYSTEM
SCHEDULE F SCHEDULE OF REAL PROPERTY COLLATERAL
SCHEDULE 1.1(a) SCHEDULE OF EXISTING CONTINGENT INDEBTEDNESS
SCHEDULE 1.1(b) SCHEDULE OF WARRANTS
SCHEDULE 2.9 BRAZILIAN LOAN AGREEMENT
SCHEDULE 5.1(c) SCHEDULE OF PENDING AND THREATENED LITIGATION
SCHEDULE 5.1(h) SCHEDULE OF FUNDED DEBT DEFAULTS
SCHEDULE 6.7A SCHEDULE OF INDEBTEDNESS
SCHEDULE 6.7B SCHEDULE OF CONTINGENT OBLIGATIONS
SCHEDULE 6.8 SCHEDULE OF MATERIAL CONTRACTS
SCHEDULE 6.8A SCHEDULE OF MATERIAL DEFAULTS
SCHEDULE 6.14 SCHEDULE OF JUDGMENTS
SCHEDULE 6.16 SCHEDULE OF MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY
SCHEDULE 6.19 SCHEDULE OF MATERIAL ADVERSE EFFECTS
SCHEDULE 6.20 SCHEDULE OF SUBSIDIARIES
SCHEDULE 6.23A SCHEDULE OF BUSINESS LOCATIONS
SCHEDULE 6.23B SCHEDULE OF TRADE NAMES
SCHEDULE 6.24 SCHEDULE OF CONTRACTS OR OPTIONS FOR SALE OR LEASE OF REAL
PROPERTY COLLATERAL
SCHEDULE 6.26 SCHEDULE OF EMPLOYMENT AND INVESTMENT AGREEMENTS
SCHEDULE 7.1(k) BACKLOG CERTIFICATE
SCHEDULE 7.2(c)(A) SCHEDULE OF REPORTABLE EVENTS
SCHEDULE 7.2(c)(B) SCHEDULE OF PBGC ACTION
SCHEDULE 8.1 SCHEDULE OF EXISTING INDEBTEDNESS
SCHEDULE 8.2 SCHEDULE OF PERMITTED LIENS
SCHEDULE 8.5 SCHEDULE OF PERMITTED INVESTMENTS
SCHEDULE 8.10 SCHEDULE OF OPERATING LEASES
SCHEDULE 12.4 SCHEDULE OF STEERING COMMITTEE LENDERS
v
AMENDED AND RESTATED OVERRIDE AGREEMENT
This Amended and Restated Override Agreement (the "Agreement") dated
as of October 10, 1995 is entered into among Xxxxxxxx Xxxxxxx Corporation
("MKD"), a Delaware corporation, and Xxxxxxxx Xxxxxxx Corporation ("MKO"), an
Ohio corporation (each a "Borrower" and collectively the "Borrowers"), and the
banks and other financial institutions named herein and whose names appear on
the signature pages hereof (each, together with its successors and assigns, an
"Existing Lender," and collectively, the "Existing Lenders"), Mellon Bank, N.A.
as the agent for the Existing Lenders (in such capacity, the "Agent"), and Bank
of America National Trust and Savings Association, in its capacity as the Metra
Agent (as hereinafter defined).
The parties hereto agree as follows:
RECITALS
A. The Borrowers are currently indebted to certain lenders (the "Bridge
Loan Lenders") pursuant to that certain Amended and Restated Credit Agreement
dated as of July 31, 1995 (the "Bridge Loan Agreement") in the maximum principal
amount of $100,000,000 (the "Bridge Loan").
B. MKO and MKD have obligations (funded, contingent or otherwise) to the
Existing Lenders pursuant to the terms of the respective loan agreements and
other financing arrangements set forth on the Schedule of Existing Lenders
attached hereto as SCHEDULE A (as heretofore amended and as amended hereby and
together with the Metra Guaranty (as hereinafter defined), the "Existing
Agreements").
C. The Borrowers are currently indebted to Fidelity and Deposit Company
of Maryland and Colonial American Casualty and Surety Company and certain other
sureties for payment and/or performance bonds.
D. The Borrowers, the Existing Lenders, the Bridge Loan Lenders, Fidelity
and Deposit Company of Maryland and Colonial American Casualty and Surety
Company agreed to a restructuring of certain of the Existing Agreements, the
Bridge Loan and the establishment of certain interim credit facilities in
preparation for the formation of American Passenger Rail Car Company, L.L.C., a
limited liability company ("T-Co"), and the subsequent transfer of the assets of
MKO's transit division (the "Transit Division") to T-Co. Such restructuring
shall collectively be referred to as the "July 31, 1995 Restructuring."
E. In connection with the July 31, 1995 Restructuring, certain of the
Existing Agreements were modified pursuant to the terms of that certain Override
Agreement dated as of July 31,
1
1995 (the "Original Override Agreement") among the Borrowers, the Existing
Lenders and the Agent.
F. In connection with the formation of T-Co and the transfer of the
Transit Division assets to T-Co, the Borrowers have requested, and the Bridge
Loan Lenders, the Existing Lenders, Fidelity and Deposit Company of Maryland and
Colonial American Casualty and Surety Company have agreed, to repay and
terminate the interim facilities previously established, amend and restate the
Original Override Agreement, establish certain new credit facilities with T-Co
as the borrower and enter into certain other related transactions (such
transactions, together with the formation of T-Co and the transfer of the
Transit Division assets, shall collectively be referred to as the "T-Co
Restructuring").
G. The Existing Lenders have agreed to such requests on the terms and
conditions set forth herein and in the documents executed in connection
herewith, including the condition that the Borrowers secure their obligations
under this Agreement with substantially all of their assets.
In consideration of the foregoing, MKD, MKO, each of the Existing Lenders
and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. The following terms, as used herein, have the following
meanings:
"Account" has the meaning assigned to it in SCHEDULE E.
"Additional Capital Expenditure Indebtedness" has the meaning assigned
to it in SECTION 8.1(e).
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. As used herein, the term "control" means possession, directly or
indirectly, or the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means Mellon Bank, N.A., in its capacity as the agent for the
Existing Lenders hereunder, and its successors in such capacity.
"Agent's Fee" has the meaning assigned to it in SECTION 2.7(a).
2
"Aggregate Exposure" means, as of the date of determination, the
aggregate amount of the Exposure for all Existing Lenders.
"All Existing Lenders" means one hundred percent (100%) of the
Existing Lenders without regard to their Pro Rata Share.
"Asset Disposition Program" means a program designed by the Borrowers
setting forth a detailed list of actions to be taken by specified dates with
respect to the proposed disposition of assets, including dates when materials
are to be prepared and when solicitations are to be commenced relating to the
Borrowers or the following Subsidiaries: MK Rail; XxXxxxxxx Xxxxxx Corporation
Limited; AmeriBank; and Xxxxxxxx Xxxxxxx Investments, Inc. For purposes of this
Agreement, any disposition of MKO's interest under any leases or subleases
pertaining to real property in Fayette County, West Virginia, shall be
considered a disposition under the Asset Disposition Program.
"Assignee" has the meaning assigned to it in SECTION 12.8(c).
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a Multi-
employer Plan and which is maintained or otherwise contributed to by any member
of the ERISA Group.
"Bonding Company" means, collectively, Fidelity and Deposit Company of
Maryland and Colonial American Casualty and Surety Company or any such other
Person that provides the Borrowers or their Subsidiaries with payment or
performance bonds.
"Borrower" means MKD or MKO and the "Borrowers" means both of the
foregoing.
"Bridge Loan" has the meaning assigned to it in RECITAL A.
"Bridge Loan Agreement" means the Bridge Loan Agreement referred to in
RECITAL A, as the same may be amended, modified, supplemented and restated from
time to time.
"Bridge Loan Lenders" has the meaning assigned to it in RECITAL A.
"Budget" means the projections of the Borrowers for the period from
July 1, 1995 through the Termination Date attached hereto as EXHIBIT A or such
other budget submitted by the Borrowers and accepted by the Majority Lenders as
an acceptable substitute Budget.
3
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City, New York, Los Angeles, California or
Pittsburgh, Pennsylvania are authorized by law to close.
"Capital Expenditures" means, as to any Person, any expenditures for
the acquisition or construction of fixed assets which would be capitalized on a
balance sheet of such Person prepared in accordance with Generally Accepted
Accounting Principles.
"Capital Lease" means, as to any Person, any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Generally Accepted Accounting Principles.
"Capital Lease Obligation" means, as to any Person, collectively, the
capitalized amount of the obligations of such Person and its Subsidiaries under
all Capital Leases.
"Cash Equivalent" means, at any time, (a) United States of America
government securities having a maturity not exceeding one year from the date
acquired, (b) commercial paper rated at least A-l+ by Standard & Poor's Ratings
Group or P-1 by Xxxxx'x Investors Service, Inc., having a maturity not exceeding
one year from the date acquired, (c) certificates of deposit or time deposits of
commercial banks with capital and undivided surplus of at least $300,000,000
issuing commercial paper rated as described in the preceding clause (b) and
organized and existing under the laws of the United States or any State thereof
or the District of Columbia, having a maturity not exceeding one year from the
date acquired, and (d) time deposits (of one year or less) and demand deposits
with any FDIC insured bank, not exceeding the maximum amount insured thereby.
"Cash Management System" means the Cash Management System set forth on
SCHEDULE E.
"Closing Date" means October 10, 1995, or such other later date on
which the Agent shall have determined that all conditions precedent set forth in
ARTICLE V have been satisfied in full or waived.
"Collateral" means collectively, all real and personal property,
fixtures and interests in such property and proceeds thereof presently owned or
hereafter created or acquired by the Borrowers or the Guarantors, including the
Real Property Collateral, in which a security interest, Mortgage or ship
mortgage is granted in favor of the Collateral Agent for the benefit of the
Existing Lenders to secure the Obligations.
4
"Collateral Agent" means the entity or person serving as the
"Collateral Agent and Mortgage Trustee" under and as defined in the Collateral
Agent Agreement, in its capacity as the agent or trustee for the Existing
Lenders, or any successor agent or trustee pursuant to the terms thereof.
"Collateral Agent Agreement" means the Collateral Agent Agreement and
Mortgage Trust dated as of July 31, 1995 among the Existing Lenders, the Agent
and the Collateral Agent, as supplemented and amended by that certain First
Amendment to Collateral Agent Agreement and Mortgage Trust dated
October 10, 1995, as the same may be further amended, supplemented or restated
from time to time.
"Commonly Controlled Entity" means a Person, which is under common
control with a Borrower within the meaning of Section 414(b) or Section 414(c)
of the Internal Revenue Code.
"Concentration Account" has the meaning assigned to it in SCHEDULE E.
"Consolidated," when used with respect to any of the terms defined
herein, refers to such terms as reflected in a consolidation of the accounts or
other items of the Borrowers and of the accounts or other items of the
Borrowers' Subsidiaries, if any, in conformity with Generally Accepted
Accounting Principles.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be Consolidated in accordance with Generally
Accepted Accounting Principles with those of the Borrowers in their Consolidated
financial statements if such statements were prepared as of such date; PROVIDED,
that any Consolidated Subsidiary which ceases to be a Consolidated Subsidiary
solely because it is classified as a discontinued operation shall be deemed to
be a Consolidated Subsidiary so long as it remains a Subsidiary.
"Contingent Indebtedness Account" has the meaning assigned to that
term in SECTION 2.11(b).
"Contingent Obligations" means, as to any Person, collectively, all
Indebtedness, obligations or other liabilities of such Person guarantying or in
effect guarantying the payment or performance of any Indebtedness, obligation or
other liability, whether or not contingent (collectively, the "primary
obligations"), of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including any Indebtedness, obligation or other
liability of such Person (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property,
5
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) for any contingent reimbursement obligation of such
Person in respect of any letter of credit or any other financing accommodations,
or (e) otherwise to assure or hold harmless the owner of such primary obligation
against loss with respect thereto.
"Contractual Obligation" means, as to any Person, collectively, any
Indebtedness, obligation or other liability of such Person (whether for the
payment of money or otherwise), now existing or hereafter arising, whether due
or not due, absolute or contingent, liquidated or unliquidated, direct or
indirect, express or implied, individually or jointly with others, pursuant to
the provisions of any security issued by such Person or any document, instrument
or agreement to which such Person is a party or by which such Person or any of
its property is or may be bound or affected.
"Conversion Event" shall mean (a) with respect to Existing Contingent
Indebtedness which arises on account of an Existing Letter of Credit, a Draw
under the applicable Existing Letter of Credit, (b) with respect to Existing
Contingent Indebtedness which arises on account of a guaranty by either
Borrower, the delivery to the Agent of a certificate by the Existing Lender who
is the beneficiary of such guaranty stating: (i) that all or a portion of the
obligations so guaranteed have become due and payable; (ii) that, but for the
terms of SECTION 2.3 and ARTICLE III of this Agreement or the occurrence of an
Event of Default specified in SECTION 9.1(f) OR 9.1(g), the Existing Lender
would be entitled to seek immediate payment from a Borrower pursuant to such
guaranty, and (iii) the amount of such payment, and (c) with respect to the
Metra Obligations, the occurrence of the Metra Final Accounting Date.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means a rate of interest equal to the Prime Rate plus
two percent (2%) per annum; PROVIDED, that to the extent the Default Rate
exceeds the Maximum Lawful Rate, the Default Rate shall be a rate equal to the
Maximum Lawful Rate.
"Deferral Period" means July 1, 1995 through the earlier of March 31,
1996 and the Termination Date.
"Deferred Interest" means all interest on Existing Loans, all Facility
Fees and all Letter of Credit Fees, in each case, accruing during the Deferral
Period, other than Letter of Credit Fees in connection with the NYCTA/PB Letters
of Credit,
6
and shall include interest accruing on such interest, Facility Fees and Letter
of Credit Fees during the Deferral Period.
"Deposit Bank" has the meaning assigned to it in SCHEDULE E.
"Distribution Agreement" means that certain Distribution Agreement,
dated as of October 10, 1995, by and between Fidelity and Deposit Company of
Maryland, Mellon Bank, N.A., as agent and collateral agent for itself and the
other Existing Lenders, the Borrowers, and each of the Subsidiaries who are
signatories thereto.
"Draw" means a payment by the issuer of an Existing Letter of Credit
on account of a presentation made to the issuer by the beneficiary thereunder
giving rise to a reimbursement obligation of the Borrowers or the Guarantors
which remains unpaid other than pursuant to SECTION 2.11.
"Environmental Laws" means all Federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and any applicable judicial
or administrative interpretation thereof relating to the disposal of waste and
the regulation and protection of human health, safety, the environment and
natural resources (including ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and vegetation).
Environmental Laws include the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 ET
SEQ.) ("CERCLA"); the Hazardous Material Transportation Act, as amended (49
U.S.C. Sections 1801 ET SEQ.); the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. Sections 136 ET SEQ.); the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 ET SEQ.)
("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C. Sections 2601
ET SEQ.); the Clean Air Act, as amended (4D2 U.S.C. Sections 7400 ET SEQ.); the
Federal Water Pollution Control Act, as amended (33 U.S.C. Sections 1251 ET
SEQ.); the Occupational Safety and Health Act, as amended (29 U.S.C. Sections
651 ET SEQ.) ("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C.
Sections 300(f) ET SEQ.); and any and all regulations promulgated thereunder,
and all analogous state and local counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Equilibrium" means any point at which the Non-Metra Exposure
Percentage equals the Metra Exposure Percentage determined in accordance with
the most recent Recalculation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrowers and their Subsidiaries and all
members of a controlled group of
7
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrowers or any of their Subsidiaries,
are treated as a single employer under Section 414 of the Internal Revenue Code.
"Event of Default" has the meaning set forth in SECTION 9.1.
"Existing Agreements" has the meaning assigned to it in RECITAL B;
PROVIDED that unless the context otherwise requires, all references to Existing
Agreements shall be references to the Existing Agreements as modified by this
Agreement.
"Existing Contingent Indebtedness" means the Existing Indebtedness to
the Existing Lenders listed on SCHEDULE 1.1(a) to the extent outstanding from
time to time.
"Existing Indebtedness" means the Indebtedness under the Existing
Agreements to the extent outstanding from time to time.
"Existing Lender" and "Existing Lenders" have the meanings assigned to
them in the preamble hereto, and shall include the Agent, in its individual
capacity.
"Existing Letters of Credit" means letters of credit issued by the
Existing Lenders and listed on SCHEDULE A to the extent outstanding from time to
time.
"Existing Loans" means for each Existing Lender, all Indebtedness
described in Clause (b) of the definition of "Exposure" and all Liquidated
Contingent Liabilities of such Existing Lender to the extent outstanding from
time to time.
"Exposure" means, with respect to each Existing Lender at any time,
the following: (a) such Existing Lender's share of the maximum aggregate
principal amount of the Metra Obligations; (b) with respect to Existing
Agreements listed under the heading "Funded Debt" on the Schedule of Existing
Lenders, the amount of principal owed by the Borrowers to such Existing Lender
under its Existing Agreement; (c) with respect to Existing Agreements listed
under the heading "Letter of Credit Facilities" on the Schedule of Existing
Lenders, such Existing Lender's share of the maximum amount drawable under the
Existing Letter of Credit of such Existing Lender, as shown opposite such
Existing Lenders name on the Schedule of Existing Lenders or as subsequently
reduced, and the principal amount of such Existing Lender's Liquidated
Contingent Liabilities with respect to such Existing Letter of Credit; (d) with
respect to Existing Agreements listed under the heading "Guarantee Obligations"
on the Schedule of Existing Lenders, the maximum aggregate principal amount of
the Contingent Obligations of the Borrowers (or either of them, but without
duplication for both) to such Existing
8
Lender under all such Existing Agreements at such time and the principal amount
of such Existing Lender's Liquidated Contingent Liabilities with respect to such
Contingent Obligations; and (e) all interest, fees, and other charges then
accrued and unpaid with respect to any of the foregoing.
"Facility Fees" means facility fees payable in respect of Existing
Agreements pursuant to the terms of the applicable Existing Agreements.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; PROVIDED, that (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to Mellon
Bank, N.A. on such day on such transactions as determined by the Agent.
"Financing Shortfall" means the amounts set forth on the Budget as
"Financing Shortfall."
"Financing Statements" means any Uniform Commercial Code financing
statement on form UCC-1 or a comparable form executed pursuant to the provisions
of this Agreement or any of the other Loan Documents or any such similar
statement to be filed in Canada.
"Form 10-K" means the annual report on Form 10-K as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Form 10-Q means the report on Form 10-Q as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Generally Accepted Accounting Principles" means accounting principles
that are generally accepted and consistently applied and maintained throughout
the period indicated and that are consistent with the prior financial practices
of the Borrowers, except for changes mandated by the Financial Accounting
Standards Board or any similar accounting authority of comparable standing.
"Governmental Authority" means any nation, province, state or other
political subdivision thereof, any government or any natural person or entity
exercising executive, legislative,
9
regulatory or administrative functions of or pertaining to government.
"Guarantor" means each of the indirectly or directly wholly-owned
Subsidiaries of each Borrower listed on SCHEDULE D and "Guarantors" means all of
the foregoing.
"Guaranty" means a Guaranty Agreement dated as of July 31, 1995 made
by a Guarantor in favor of the Agent for the benefit of the Existing Lenders
guarantying the Obligations.
"Guaranty Security Agreement" means a Security and Pledge Agreement
(Guaranty) dated as of July 31, 1995 between a Guarantor and the Collateral
Agent securing the Obligations under such Guarantor's Guaranty.
"Hazardous Materials" means (i) any substance, material or waste,
which is either (a) defined as, (b) included in the definition, listing or
identification of, or (c) otherwise regulated as, a "solid waste," "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous waste"
or "restricted hazardous waste" or other similar term or phrase under any
Environmental Laws, or (ii) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls, or radioactive substances.
"Indebtedness" of any Person means without duplication, any obligation
of such Person for borrowed money, including (a) any obligation of such Person
evidenced by bonds, debentures, notes or other similar debt instruments, (b) any
obligation of such Person for the deferred purchase price of any property or
services, except trade accounts payable of such Person with a maturity of not
greater than 90 days incurred in the ordinary course of such Person's business,
(c) any obligation of such Person as lessee under a Capital Lease,
(d) Contingent Obligations, (e) any reimbursement obligation in respect of any
letter of credit or any other financing accommodations, and (f) any obligation
for borrowed money which is non-recourse to such Person but which is secured by
a Lien on any asset of such Person.
"Individual Collateral" means with respect to any individual Existing
Lender or a group of Existing Lenders, any property owned or leased by the
Borrowers in which such Existing Lender or a group of Existing Lenders has a
security interest or lien prior in interest to the security interests and liens
granted or created pursuant to the Loan Documents; PROVIDED that such term shall
not include the property in which a security interest or lien has been or is
granted under the Restructuring Documents to secure the obligations under the
Bridge Loan Agreement.
"Initial Exposure" means, with respect to each Existing Lender, such
Existing Lender's Exposure as of July 1,
10
1995, exclusive of that portion of such Existing Lenders Exposure described in
Clause (e) of the definition of "Exposure."
"Intercreditor Agreement" means that certain Intercreditor and
Subordination Agreement dated as of October 10, 1995, by and among Fidelity and
Deposit Company of Maryland, Mellon Bank, N.A., as administrative agent and
collateral agent for itself and the other Bridge Loan Lenders, Mellon Bank,
N.A., as agent and collateral agent for itself and the other Existing Lenders,
and T-Co.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investments" has the meaning assigned to it in SECTION 8.5.
"July 31, 1995 Restructuring" has the meaning assigned to it in
RECITAL D.
"Letter of Credit Fees" means fees payable in respect of Existing
Letters of Credit pursuant to the terms of the applicable Existing Agreements.
"Lien" means, as to any asset, (a) any lien, charge, claim, mortgage,
security interest, pledge or other encumbrance of any kind with respect to such
asset, (b) any interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset, (c) any reservation, exception, encroachment, easement, right-of-way,
covenant, condition, restriction, lease or other title exception affecting such
asset, or (d) any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction other than a precautionary financing statement with respect
to a lease that is not in the nature of a security interest).
"Liquidated Contingent Liability" means, as to any Non-Metra Lender,
the aggregate amount of all Initial Exposure with respect to which a Conversion
Event has occurred, less any reductions which may have occurred by reason of
Reductions in Liability or distributions under this Agreement pursuant to
SECTION 2.11.
"Loan Documents" means this Agreement, the Security Documents, each
Guaranty, the Collateral Agent Agreement, the Warrants, the Securities Purchase
Agreement, the Intercreditor Agreement, the Distribution Agreement and any
documents (i) listed on the Schedule of Documents and therein specified to be
executed and delivered, or caused to be executed and delivered,
11
by the Borrowers or the Guarantors to the Agent, the Existing Lenders or the
Collateral Agent in connection with this Agreement or (ii) listed on the
Schedule of Documents for the July 31, 1995 Restructuring and executed or
delivered in connection with the Original Override Agreement; PROVIDED, that the
Bridge Loan Agreement and related loan documents, the T-Co Credit Agreement and
related loan documents, the Metra Credit Agreement and related loan documents,
and the T-Co Asset Purchase Documents shall not be included in the definition of
Loan Documents.
"Majority Lenders" means the Existing Lenders holding at least sixty-
six and two-thirds percent (66 2/3%) of the Pro Rata Shares.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Borrower, Guarantor or any of their Consolidated Subsidiaries; (b) the ability
of any Borrower, Guarantor or their Consolidated Subsidiaries to pay or perform
the Obligations under the Loan Documents in accordance with the terms thereof;
(c) the Collateral or the Collateral Agent's Liens on the Collateral or the
priority of any such Lien; or (d) the Existing Lenders' rights and remedies
under any Loan Documents or the other Restructuring Documents.
"Material Contract" means, as to the Borrowers or their Consolidated
Subsidiaries, a Contractual Obligation (a) the cancellation, non-performance or
non-renewal of which by any party thereto could have or result in a Material
Adverse Effect on the Borrowers or the Borrowers and their Consolidated
Subsidiaries taken as a whole or (b) which involves amounts, payments or
Indebtedness in excess of $10,000,000.
"Maximum Lawful Rate" means the highest rate of interest permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable under this Agreement.
"Metra" means the Commuter Rail Division of the Regional
Transportation Authority, d/b/a Metra/Metropolitan Rail.
"Metra Agent" means the agent under the Metra Credit Agreement.
"Metra Collateral" means collateral granted to the Metra Agent for the
benefit of Metra Lenders by T-Co in connection with and solely for the benefit
of the Metra Credit Agreement and related documents.
"Metra Contract" means that certain contract, as amended, executed as
of March 9, 1992 by and between Metra and MKO, as assigned to and assumed by
T-Co.
12
"Metra Credit Agreement" means that certain Revolving Credit Agreement
dated as of October 10, 1995 among T-Co, Bank of America National Trust and
Savings Association as agent and the Metra Lenders.
"Metra Exposure Percentage" means, as of the date of determination, a
percentage derived by dividing (a) the aggregate amount of the Metra Obligations
as of such date less the amount of the Metra Holdback by (b) the amount of the
Metra Obligations as of July 1, 1995.
"Metra Final Accounting Date" means the time at which the Metra Agent
shall have delivered to the Agent, the Metra Agent's written certification
stating: (a) that the Metra Agent has released, disposed of or collected upon
all Metra Collateral; (b) the amount of the Metra Exposure Percentage as of such
date; (c) the amount of the Metra Obligations as of such date; (d) that all of
the Metra Obligations have become due and payable; (e) that but for the terms of
SECTION 2.3 and ARTICLE III of this Agreement or the occurrence of an Event of
Default specified in SECTION 9.1(f) OR 9.1(g), the Metra Agent, for the benefit
of the Metra Lenders, would be entitled to seek immediate payment from a
Borrower pursuant to the Metra Guaranty.
"Metra Guaranty" means that certain Guaranty dated as of October 10,
1995 made by MKO and MKD in favor of the Metra Agent for the benefit of the
Metra Lenders guarantying the obligations of T-Co to the Metra Lenders under the
Metra Credit Agreement.
"Metra Holdback" has the meaning assigned to it in SECTION 2.11(e).
"Metra Lenders" means those Existing Lenders that are banks under the
Metra Credit Agreement in their capacity as banks under the Metra Credit
Agreement, and their respective successors and assigns.
"Metra Letter of Credit" means that certain letter of credit, as
amended, issued by Bank of America National Trust and Savings Association for
the benefit of Metra and for the account of T-Co in connection with the Metra
Contract.
"Metra Obligations" means, as of the date of determination, the
maximum principal amount advanced (and not repaid) or which the Metra Lenders
may thereafter be obligated to advance, which principal amounts are guaranteed
under the Metra Guaranty together with interest, fees and other charges then
accrued and unpaid, which amounts are guaranteed under the Metra Guaranty;
PROVIDED, that the principal amount of the Metra Obligations measured as of
July 1, 1995 shall be deemed to be $141,704,301.94 and each Existing Lender's
Initial Exposure with respect to the Metra Obligations shall be based upon such
amount.
13
"MKD" means Xxxxxxxx Xxxxxxx Corporation, a Delaware corporation, and
its successors.
"MKD Security Agreement" means the Pledge and Security Agreement dated
as of July 31, 1995, executed by MKD in favor of the Collateral Agent, for the
benefit of the Agent and the Existing Lenders, granting a security interest in
the personal property Collateral described therein, as the same may be amended,
modified, supplemented and restated from time to time.
"MKO" means Xxxxxxxx Xxxxxxx Corporation, an Ohio corporation, and its
successors.
"MKO Security Agreement" means the Pledge and Security Agreement dated
as of July 31, 1995, executed by MKO in favor of the Collateral Agent, for the
benefit of the Agent and the Existing Lenders, granting a security interest in
the personal property Collateral described therein, as the same may be amended,
modified, supplemented and restated from time to time.
"MK Rail" means MK Rail Corporation, a Delaware corporation.
"MK Rail Global Settlement Agreement" means the Global Settlement
Agreement dated as of June 15, 1995 by and among MKO, MK Rail and MKD.
"MK Rail Note" means that certain Note dated June 26, 1995, issued by
MK Rail in favor of MKO in the amount of $52,200,000, which Note was issued
pursuant to the MK Rail Global Settlement Agreement.
"Mortgages" means, collectively, the fee and leasehold deeds of trust
and mortgages and any modifications thereto, executed by any Borrower or
Guarantor in favor of the Collateral Agent for the benefit of the Existing
Lenders, granting a lien on and security interest in the Real Property
Collateral.
"Multi-employer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Cash Proceeds" means, with respect to either the sale or
refinancing of any asset of any Borrower or any Consolidated Subsidiary or any
other transaction identified in SECTION 2.9, all amounts payable to such
Borrower or such Consolidated Subsidiary as a result of such transaction after
14
payment of (i) all reasonable and customary closing costs, including brokerage
commissions, appraisal fees, recording fees, attorneys' fees, title insurance
premiums, inspection report charges, prepayment penalties payable to senior
lienholders, escrow credits in favor of the purchaser or financier, customary
prorations, transfer and other taxes, escrow fees, points and other loan fees,
and (ii) Indebtedness secured by Senior Permitted Liens on such asset.
"New Bonds Agreement" means that certain agreement dated as of October
10, 1995 among Fidelity and Deposit Company of Maryland, the Borrowers and the
other parties listed on the signature pages thereto.
"Non-Metra Exposure Percentage" means, as of the date of
determination, a percentage derived by dividing (a) the aggregate principal,
interest, fees and other charges owing as of such date with respect to those
Existing Loans which were outstanding as of July 1, 1995, by (b) the aggregate
principal amount of Existing Loans outstanding as of July 1, 1995.
"Non-Metra Lenders" means those Existing Lenders acting in any
capacity other than Banks under the Metra Credit Agreement.
"North Pacific Operations" means, collectively, the operations of
E.E. Black, Limited, X.X. Xxxxxx Construction Company, Inc., Black Micro
Corporation, P.T.E.E. Black Indonesia, and Black Construction Corporation.
"Notice of Acceleration" means a written notice sent to the Borrowers
pursuant to SECTION 9.2, accelerating the Obligations.
"Notice of Default" means a written notice sent to the Borrowers
notifying the Borrowers that an Event of Default has occurred.
"NYCTA/PB Letters of Credit" means the Existing Letters of Credit
issued by Xxxxxx Guaranty Trust Company of New York or Citibank, N.A. for the
account of either Borrower for the benefit of the New York City Transit
Authority or Pitney Xxxxx Corporation.
"Obligations" means, as to each Borrower or Guarantor, collectively,
all liabilities of the Borrowers and the Guarantors, arising in connection with
or pursuant to the provisions of this Agreement or the Loan Documents and the
Existing Agreements owing to the Agent or the Existing Lenders of any kind and
description, now existing or hereafter arising, whether due or not due, absolute
or contingent, liquidated or unliquidated, direct or indirect, express or
implied, individually or jointly with others, howsoever evidenced or acquired
(including, without limitation, any interest which
15
accrues on any such amounts after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Borrower or Guarantor, whether or not allowed or allowable as a claim in any
such proceeding), including the payment and performance of all Indebtedness,
obligations and other liabilities of such Borrower or Guarantor and overdraft
coverage and account funding obligations in connection with the Cash Management
System, arising in connection with or pursuant to the Existing Agreements, this
Agreement or the other Loan Documents.
"Operating Lease" means, as to any Person, any lease of property
(whether real, personal or mixed) by such Person as lessee which is not a
Capital Lease.
"Original Closing Date" means August 10, 1995.
"Original Override Agreement" has the meaning assigned to it in
RECITAL E.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under the Existing
Agreements or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Existing Agreement.
"Participant" has the meaning set forth in SECTION 12.8(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Periodic Exposure" has the meaning set forth in SECTION 2.12.
"Permitted Liens" means, collectively, those certain Liens, in
existence on the date hereof, described in SCHEDULE 8.2 and as permitted under
SECTION 8.2.
"Person" means an individual, corporation, limited liability company,
partnership, trust, business trust, association, joint stock company, joint
venture, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity not specifically listed
herein.
"Plan" means at any time an employee pension benefit plan (other than
a Multi-employer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any
16
time within the preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Prime Rate" means, for any day, a rate per annum equal to the higher
of (i) the rate of interest publicly announced by Mellon Bank, N.A. from time to
time as its prime rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Professionals" means, collectively, all attorneys, accountants,
paraprofessionals, appraisers, auditors, inspectors, engineers, title insurance
companies, and environmental experts employed, retained, or internally used by
each of the Steering Committee Lenders, the Collateral Agent, or the Agent in
connection with the Borrowers' performance of the Obligations or in asserting
any of the Collateral Agent's, the Agent's and Existing Lenders' rights or
remedies under this Agreement.
"Pro Rata Share" means, for each Existing Lender, at any time, the
proportion that (i) such Existing Lender's Exposure bears to (ii) the Aggregate
Exposure; PROVIDED, that in calculating Pro Rata Shares for purposes of
distributions to the Existing Lenders or to the Contingent Indebtedness Account
(not including distributions from the Contingent Indebtedness Account to
Existing Lenders on account of Conversion Events) under SECTION 2.11 and for
purposes of voting under this Agreement, (a) such Existing Lender's Exposure
shall be reduced by any amounts being held for its account in the Contingent
Indebtedness Account pursuant to SECTION 2.11, and (b) the Aggregate Exposure
shall be reduced by the aggregate amount being held in the Contingent
Indebtedness Account with respect to all Existing Lenders; PROVIDED FURTHER,
that in calculating Pro Rata Shares for purposes of distributions under this
Agreement during any period when Equilibrium has not been reached, (i) if
pursuant to SECTION 2.11, any portion of a distribution is to be distributed
solely to the Metra Lenders, only the Metra Obligations shall be included in the
calculation of each Existing Lender's Exposure and the Aggregate Exposure and
(ii) if pursuant to SECTION 2.11, any portion of a distribution is to be
distributed solely to the Non-Metra Lenders, only Existing Loans and Existing
Contingent Indebtedness shall be included in the calculation of each Existing
Lender's Exposure and the Aggregate Exposure.
"Pro Rata Share of the Deferred Interest" means, for any Existing
Lender at any time, the proportion that (i) the amount of accrued but unpaid
Deferred Interest owing to such Existing Lender at such time bears to (ii) the
amount of accrued but unpaid Deferred Interest owing to all Existing Lenders at
such time.
"Reallocation Certificate" means an Existing Lender's reallocation
certificate stating the current amount of
17
such Existing Lender's Exposure, current amount of such Existing Lender's
Existing Loans and describing all Conversion Events and the amount of all
Reductions in Liability which have occurred with respect to such Existing Lender
during the period from the date of the last such Reallocation Certificate (or,
in the case of the first such Reallocation Certificate, since July 1, 1995)
through the date of such Reallocation Certificate. Each Reallocation
Certificate shall additionally state: (a) the dates upon which each Conversion
Event described therein shall have occurred; (b) the date upon which each
Reduction in Liability described therein has occurred; (c) the amount of
interest payable hereunder through the date of the Reallocation Certificate on
account of Existing Loans arising by reason of such Conversion Events described
therein; (d) the amount of Letter of Credit Fees and Facility Fees accrued and
unpaid under such Existing Lender's Existing Agreements; and (e) as to any
Reallocation Certificate provided with respect to Metra Obligations, all
interest, fees and other charges then accrued and unpaid under the Metra
Guaranty.
"Real Property" means all of the right, title and interest of any
Borrower or Guarantor in and to land, improvements and fixtures (to the extent
interests therein arise under the real property law of the jurisdiction where
located).
"Real Property Collateral" means, collectively, all of any Borrower's
or Guarantor's right, title and interest in and to the real property more
specifically described on SCHEDULE F attached hereto, including their fee and
leasehold interests in such real property, pledged by such Borrower or
Guarantor, in favor of the Collateral Agent for the benefit of the Existing
Lenders, pursuant to the Mortgages.
"Real Property Lien" has the meaning assigned to it in SECTION
11.5(b)(ii).
"Recalculation" has the meaning assigned to it in SECTION 2.12.
"Reductions in Liability" means (a) with respect to Existing
Contingent Indebtedness, a reduction in the principal amount of Existing
Contingent Indebtedness which occurs by reason of (i) a reduction in the undrawn
portion of any Existing Letter of Credit for any reason other than a Conversion
Event, or (ii) a reduction in the principal amount of Contingent Obligations
under a guaranty for any reason other than a distribution under this Agreement
pursuant to SECTION 2.11; (b) a reduction in the principal amount of any
Liquidated Contingent Liability which occurs for any reason other than a
distribution under this Agreement pursuant to SECTION 2.11; and (c) with respect
to the Metra Obligations, a reduction in the Metra Obligations for any reason
other than a distribution under this Agreement pursuant to SECTION 2.11.
18
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reportable Event" means any of the events set forth under Section
4043(b) of ERISA or the PBGC regulations thereunder for which notice to the PBGC
has not been waived by applicable law or administrative guidance.
"Requirement of Law" means, as to any Person, collectively, (a) the
partnership agreement, certificate of incorporation, bylaws or other
organizational or governing documents of such Person; (b) any Federal, state or
local law, treaty, ordinance, rule or regulation; and (c) any order, decree or
determination of a court, arbitrator 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.
"Restructuring Documents" means this Agreement, the Security
Documents, each Guaranty, the Collateral Agent Agreement, the Warrants, the
Securities Purchase Agreement, the Bridge Loan Agreement, the Intercreditor
Agreement, the Distribution Agreement, the Metra Guaranty and any other of those
documents (i) listed on the Schedule of Documents and therein specified to be
executed and delivered, or caused to be executed and delivered, by the Borrowers
or the Guarantors in connection with the T-Co Restructuring or (ii) listed on
the Schedule of Documents for the July 31, 1995 Restructuring and executed or
delivered in connection with the July 31, 1995 Restructuring.
"Returned Payment" has the meaning assigned to it in SECTION 12.5(b).
"Schedule for Notices" means the schedule annexed as SCHEDULE C
hereto, listing the name, address and wiring instructions for each Existing
Lender.
"Schedule of Documents" means the schedule annexed as SCHEDULE B
hereto, listing those documents to be delivered in connection with the closing
of the transactions contemplated by this Agreement and the other Restructuring
Documents.
"Schedule of Existing Lenders" means the schedule annexed as
SCHEDULE A hereto, listing the name of each Existing Lender, such Existing
Lender's Initial Exposure, such Existing Lender's initial Pro Rata Share, and
such Existing Lender's Existing Agreements.
"Securities Purchase Agreement" means that certain Securities Purchase
Agreement dated as of July 31, 1995 by and among MKD, the banks and other
financial institutions named therein and Mellon Bank, N.A., as agent.
19
"Security Agreements" means the MKD Security Agreement and the MKO
Security Agreement.
"Security Documents" means the Mortgages, the Security Agreements, the
Guaranty Security Agreements, the Financing Statements, the Ship Mortgage and
all documents, instruments and agreements now or hereafter executed or delivered
pursuant thereto or in connection therewith.
"Senior Permitted Liens" means any Permitted Lien that is senior to
the Lien of the Collateral Agent on any Collateral.
"Ship Mortgage" means the Second Preferred Mortgage dated as of July
31, 1995, executed by MKO in favor of Mellon Bank, N.A. as "Mortgage Trustee"
under and as defined in the Collateral Agent Agreement, with respect to the
vessel "Xxxxx L", as supplemented and amended by that certain First Supplement
and Amendment to Second Preferred Mortgage dated as of October 10, 1995, and as
the same may be further supplemented or amended from time to time.
"Single Employer Plan" means any Plan which is not a Multi-employer
Plan.
"Steering Committee Lenders" means that certain group of Existing
Lenders acting as the Steering Committee, as such group is constituted on the
Closing Date and may be reconstituted from time to time.
"Subject Equipment" has the meaning set forth in SECTION 8.4.
"Subsidiary" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means any Subsidiary of MKD or MKO.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
either Borrower pursuant to this Agreement or the other Restructuring Documents,
and all liabilities with respect thereto, EXCLUDING (i) in the case of each
Existing Lender, the Collateral Agent and the Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by a jurisdiction under
the laws of which such Existing Lender, the Collateral Agent or the Agent (as
the case may be) is organized or in which its principal executive office is
located and (ii) in the case of each Existing Lender, any United States
withholding tax imposed on such payments but only to the extent that such
Existing Lender is subject to United States withholding
20
tax at the time such Existing Lender first becomes a party to this Agreement.
"T-Co" has the meaning assigned to it in RECITAL D.
"T-Co Asset Purchase Agreement" means that certain Asset Purchase
Agreement dated as of October 10, 1995 between the Borrowers, the Subsidiary
signatories thereto and T-Co.
"T-Co Asset Purchase Documents" means the T-Co Asset Purchase
Agreement and the documents executed by any Borrower in connection therewith,
including the New Bonds Agreement.
"T-Co Restructuring" has the meaning assigned to it in RECITAL F.
"Termination Date" means December 31, 1996, or such earlier date as
the Obligations are accelerated pursuant to SECTION 9.2.
"Transit Division" has the meaning assigned to it in RECITAL D.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as the
same may, from to time, be in effect in the Commonwealth of Pennsylvania;
PROVIDED, that in the event that, by reason of mandatory provisions of law, any
or all of the attachment, perfection or priority of, or remedies with respect
to, the Collateral Agent's or Existing Lenders' security interests in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the Commonwealth of Pennsylvania, the term "Uniform
Commercial Code" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions of the Loan Documents relating
to such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
21
"Warrants" means those certain Warrants in substantially the form of
EXHIBITS C-1 AND C-2 issued by MKD pursuant to the Securities Purchase Agreement
to the Existing Lenders listed on SCHEDULE 1.1(b) in the amounts set forth on
SCHEDULE 1.1(b).
1.2. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with Generally Accepted
Accounting Principles.
1.3. GENERAL CONSTRUCTION. As used in this Agreement, the masculine,
feminine and neuter genders, and the plural and singular numbers shall be deemed
to include the others in all cases where they would so apply. "Includes" and
"including" are not limiting, and "or" is not exclusive.
1.4. CERTAIN CONTINGENT OBLIGATIONS. Any reference to principal payable
with respect to an Existing Agreement which is a guaranty shall mean and refer
to the principal payable with respect to the primary obligation.
ARTICLE II
SATISFACTION OF THE BORROWERS'
OBLIGATIONS UNDER EXISTING AGREEMENTS
2.1. ACKNOWLEDGEMENT OF OBLIGATIONS. The Borrowers agree and acknowledge
that, as of July 1, 1995, they were obligated to the respective Existing Lenders
under their respective Existing Agreements in the amount of each such Existing
Lender's Initial Exposure.
2.2. CONVERSION OF CONTINGENT TO FUNDED OBLIGATION. Upon the occurrence of
a Conversion Event, the amount of the relevant Existing Lender's Existing Loans
shall be increased by the amount of the Liquidated Contingent Liability arising
by reason of such Conversion Event, and the amount of such Existing Lender's
Existing Contingent Indebtedness shall be decreased by a like amount.
2.3. MATURITY OF EXISTING INDEBTEDNESS; TERMINATION DATE. Each Existing
Loan and all other Obligations with respect to which a Conversion Event shall
have then occurred shall mature, and the principal amount thereof shall be due
and payable, on the Termination Date notwithstanding any earlier maturity date
or termination date in the Existing Agreements as in effect immediately prior to
the Original Closing Date. Any obligation of either Borrower or any Guarantor
to prefund or cash collateralize Existing Contingent Indebtedness or the Metra
Guaranty is hereby suspended until the Termination Date, other
22
than as required by SECTION 2.11. On the Termination Date, the Agent on behalf
of Existing Lenders holding outstanding Existing Contingent Indebtedness or the
Metra Obligations, may require that such Existing Contingent Indebtedness or the
Metra Guaranty be prepaid or cash collateralized as required pursuant to the
terms of the applicable Existing Agreements as in effect immediately prior to
the Original Closing Date or, with respect to the Metra Guaranty, the Closing
Date, by delivering such prepayment or cash collateral to the Collateral Agent.
On the Termination Date, the Agent may demand payment in full of all Existing
Loans and take any other action as provided in ARTICLE IX. Nothing in this
Agreement or any of the other Restructuring Documents, shall restrict or impair
any Existing Lender's right to seek recovery of Existing Contingent Indebtedness
or Obligations under the Metra Credit Agreement, and interest, fees and other
amounts payable in respect thereof from any Person other than the Borrowers and
the Guarantors.
2.4. DEFERRED PAYMENTS AND AMORTIZATION.
(a) Subject to the terms of this Agreement, each Existing Lender
agrees to defer payment of all unpaid principal due under its Existing
Agreements from July 1, 1995, until the Termination Date, except pursuant to
SECTION 2.4(b).
(b) On September 30, 1996, the Borrowers shall pay to the Agent for
the benefit of the Existing Lenders in respect of the then unpaid amount of
their Existing Indebtedness, an amount equal to $100,000,000 plus interest and
fees accrued on Existing Loans as of such date, plus interest, fees and other
charges then accrued and unpaid under the Metra Guaranty to the extent necessary
to achieve and maintain Equilibrium. Such payment shall be paid to the Agent
for the benefit of the Existing Lenders, shall be payable to each Existing
Lender in an amount equal to such Existing Lender's Pro Rata Share of such
payment as provided in SECTION 2.11, and applied to the Obligations as provided
in SECTION 2.10.
2.5. INTEREST RATES; DEFERRAL OF INTEREST AND LETTER OF CREDIT FEES.
(a) Except as provided in SECTION 2.5(b), each Existing Loan shall
bear interest on the outstanding principal amount thereof, for each day after
July 1, 1995 until it becomes due, at a rate per annum equal to the Prime Rate;
PROVIDED, HOWEVER, that interest owing on Existing Loans which arise by reason
of a Conversion Event shall begin to accrue as of the date of such Conversion
Event. The Borrowers agree that to the extent the Agent is required to
distribute payments into the Metra Holdback, as provided in SECTION 2.11(a), to
achieve and maintain Equilibrium, the Borrowers shall pay additional amounts to
the Agent to insure full payment of the amounts required to be paid to the Non-
Metra Lenders under SECTION 2.11(a) and this SECTION 2.5(a). Deferred Interest
shall be paid as set forth in
23
SECTION 2.6. The Deferred Interest accruing during each calendar month shall be
calculated as of the last day of such calendar month and interest on such amount
shall begin to accrue on the first day of the following calendar month.
Interest on Existing Loans, Facility Fees and Letter of Credit Fees accruing
after the Deferral Period until the Termination Date shall be payable on the
last day of each calendar month and on the Termination Date. Except as provided
in SECTION 2.5(b), interest shall accrue on the Deferred Interest at a rate per
annum equal to the Prime Rate and during the Deferral Period shall be added to
the Deferred Interest. Letter of Credit Fees and Facility Fees shall accrue in
the amounts provided under the applicable Existing Agreements. Letter of Credit
Fees with respect to the NYCTA/PB Letters of Credit shall be paid directly to
the respective issuers thereof. Interest, fees and other charges accruing under
the Metra Guaranty shall be payable hereunder only to the extent necessary to
achieve and maintain Equilibrium at the time of any payment to the Non-Metra
Lenders.
(b) Any Letter of Credit Fees, Facility Fees, principal of or
interest on any Existing Loan, any Deferred Interest and interest thereon and
any other amounts payable hereunder (including sums necessary to achieve
Equilibrium as more particularly described in the second sentence of SECTION
2.5(a)) not paid in the time specified in this Agreement (or to the extent
applicable, the Existing Agreement) shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate. In addition,
from and after the occurrence of any Event of Default (including any Event of
Default resulting from the filing of a bankruptcy case) and continuing until
such Event of Default is cured or has been waived in writing in accordance with
the terms of this Agreement, interest shall accrue on all Existing Loans at the
Default Rate and shall be payable on demand. Any interest, reasonable
professional fees and expenses of the Agent and the Collateral Agent, or other
reasonable professional fees, expenses and charges of the Steering Committee
Lenders due under SECTION 12.4, which are not paid as and when due, shall bear
interest at the Default Rate and be payable on demand. The interest rate
increase shall take effect immediately upon the occurrence of an Event of
Default, without prior notice to the Borrowers.
(c) For the purposes of calculating interest owing under an Existing
Agreement which constitutes a Contingent Obligation, such interest shall at all
times be deemed to accrue on unpaid principal at the rate at which interest is
then accruing with respect to Existing Loans. In no event shall interest be
deemed to have accrued with respect to the unfunded principal portion of any
Obligation.
2.6. PAYMENT OF DEFERRED INTEREST. The Deferred Interest shall be repaid
in six equal monthly installments, together with interest accruing on the unpaid
amount thereof, on the last day of each calendar month commencing on April 30,
1996 (unless such
24
Deferred Interest has been repaid pursuant to a prepayment as provided in
SECTION 2.8 and SECTION 2.9). Each such payment shall be paid to the Agent for
the benefit of the Existing Lenders, shall be payable to each Existing Lender in
an amount equal to such Existing Lender's Pro Rata Share of the Deferred
Interest as provided in SECTION 2.11.
2.7. FEES.
(a) THE AGENT'S FEE. The Borrowers shall pay to the Agent a non-
refundable monthly fee on the first day of each month in advance, in an amount
equal to $30,000 per month (the "Agent's Fee"), commencing the date the
obligations under the Bridge Loan Agreement are paid in full until such time as
the Borrowers and the Agent have no obligations under this Agreement and the
other Loan Documents (other than the Warrants). The obligation to pay the
Agent's Fee shall survive the payment in full of the Obligations under this
Agreement.
(b) THE COLLATERAL AGENT'S FEE. The Borrowers shall pay to the
Collateral Agent a non-refundable monthly fee on the first day of each month in
advance, in an amount equal to $30,000 per month (the "Collateral Agent's Fee"),
commencing the date the obligations under the Bridge Loan Agreement are paid in
full until such time as the Borrowers and the Collateral Agent have no
obligations under this Agreement and the other Loan Documents (other than the
Warrants). The obligation to pay the Collateral Agent's Fee shall survive the
payment in full of the Obligations under this Agreement.
(c) FEES CUMULATIVE. All fees payable under this Agreement shall be
cumulative, and fully earned on the date such payment is due.
2.8. OPTIONAL PREPAYMENTS.
(a) Subject to the terms and conditions of the Intercreditor
Agreement and the Distribution Agreement, the Borrowers may, upon at least one
Business Day's notice to the Agent, prepay all or any portion of the
Obligations, in each case in whole at any time, or from time to time in part in
amounts aggregating $1,000,000 or any larger multiple of $1,000,000. Each such
optional prepayment shall be paid to the Agent for the benefit of the Existing
Lenders, shall be payable to the Existing Lenders as provided in SECTION 2.11
and applied to the Obligations as provided in SECTION 2.10.
(b) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Existing Lender of the contents thereof and
of such Existing Lender's share of such prepayment and such notice shall not
thereafter be revocable by the Borrowers.
25
2.9. MANDATORY PREPAYMENT. Subject to the terms and conditions of the
Intercreditor Agreement, the Borrowers shall make prepayments as provided in
this SECTION 2.9. Each such prepayment shall be paid to the Agent for the
benefit of the Existing Lenders, shall be payable to the Existing Lenders as
provided in SECTION 2.11 and applied to the Obligations as provided in
SECTION 2.10.
(a) Immediately upon receipt by any Borrower or any Consolidated
Subsidiary (other than Emkay Development Company, Inc.) or the Agent of (i) Net
Cash Proceeds of any sale, lease or other disposition of assets (other than
sales in the ordinary course of business, sales under SECTION 8.4(ii), (iii),
(iv) and (v) or sales of equipment which are promptly replaced), (ii) Net Cash
Proceeds of any issuance of capital stock by the Borrowers or (iii) insurance
proceeds, the Borrowers shall pay or cause to be paid such Net Cash Proceeds or
insurance proceeds to the Agent on account of the Obligations for the benefit of
Existing Lenders; PROVIDED, HOWEVER, that so long as no Event of Default exists
and is continuing at the time such proceeds are received and unless otherwise
set forth in the Security Documents, (x) the Borrowers may retain up to an
aggregate amount of $1,000,000 of insurance proceeds to rebuild or replace
insured property destroyed or damaged, if such property is capable of being
rebuilt or replaced within a reasonable period of time, (y) the Borrowers may
retain up to the first $10,000,000 of the Net Cash Proceeds from the first to
sell of the capital stock of the North Pacific Operations and XxXxxxxxx Xxxxxx
Corporation Limited, and (z) the Borrowers may retain up to $10,000,000, in
aggregate, of the Net Cash Proceeds from the sale of the capital stock of
Western Aircraft, Inc. and the funds repatriated from Xxxxxxxx Xxxxxxx
Engenharia S.A. pursuant to that certain Loan Agreement between MKD and Xxxxxxxx
Xxxxxxx Engenharia S.A. dated July 7, 1995 and that certain Loan Agreement
between MKD and Xxxxxxxx Xxxxxxx Engenharia S.A. dated __________, 1995 in
substantially the form attached hereto as Schedule 2.9.
(b) Immediately upon receipt by the Borrowers of any repayment or
prepayment of the MK Rail Note, the Borrowers shall pay the amount of such
payment received in connection with the MK Rail Note to the Agent on account of
the Obligations for the benefit of the Existing Lenders.
(c) Immediately upon receipt by the Borrowers of any tax refund, the
Borrowers shall pay or cause to be paid the amount of such tax refunds to the
Agent on account of the Obligations for the benefit of the Existing Lenders.
2.10. APPLICATION OF PAYMENTS. Each Non-Metra Lender shall apply each
payment received by it on account of any of the Obligations (other than
Obligations under the Cash Management System which shall be paid pursuant to
Section 4.5 of the Collateral Agent Agreement) as follows (regardless of how
each Existing Lender may treat such payments for purposes of its own
26
accounting): FIRST to interest on Deferred Interest (to the extent then due);
SECOND to then due Letter of Credit Fees and interest on the Existing Loans
(other than Deferred Interest) accrued and unpaid prior to the date such funds
are received by the Existing Lenders; THIRD to Deferred Interest (to the extent
then due); and FOURTH to the unpaid principal amount of the Obligations.
Subject to the requirements of SECTION 2.11(b), sums payable to any of the Metra
Lenders hereunder shall be paid to the Metra Agent for the account of the Metra
Lenders and for distribution and application in accordance with the terms of the
Metra Credit Agreement.
2.11. GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrowers shall make each payment of principal of, and
interest on, the Existing Loans and of fees and of all other Obligations (other
than Obligations payable under the Cash Management System and Letter of Credit
Fees with respect to the NYCTA/PB Letters of Credit), not later than 12:00 Noon
(Pittsburgh, Pennsylvania time) on the date when due, in Federal or other funds
immediately available in Pittsburgh, Pennsylvania, to the Agent at its address
referred to in the Schedule for Notices. Subject to the provisions of this
SECTION 2.11, the Agent will promptly distribute each payment received by it on
account of the Obligations, FIRST, to the Agent on account of then due and
outstanding fees and expenses or other charges of the Agent or the Collateral
Agent under this Agreement or any of the other Loan Documents to the extent
payable by the Borrowers; SECOND, ratably in accordance with their Pro Rata
Shares, either to the Non-Metra Lenders or the Metra Lenders to the extent
required to achieve Equilibrium; THIRD, ratably to all Existing Lenders in
accordance with their Pro Rata Shares; and, FOURTH, to all other Obligations.
The Borrowers agree to pay to the Agent, upon demand, the amount of any payment
received by the Agent pursuant to the terms of the Cash Management System that
is subsequently returned to any bank that has transferred funds to the
Concentration Account in accordance with the Cash Management System, because
such bank transferred funds in advance of final collection and such funds are
not finally collected. If such payment has already been applied in accordance
with SECTION 2.10 and is not paid by the Borrowers within one (1) Business Day
after the Agent's demand therefor, then each Existing Lender shall pay to the
Agent the share of such returned payment that it received and the Agent may
direct the Collateral Agent to disburse the share of such returned payment
deposited in the Contingent Indebtedness Account to the Agent. Upon receipt by
the Agent of any such payment from the Borrowers, or from the Existing Lenders
and the Contingent Indebtedness Account in the event the Borrowers fail to make
such payment after the Agent's demand, the Agent shall pay such funds to Bank of
America Illinois, Bank of America National Trust and Savings Association or Key
Bank of Idaho, as appropriate, in such bank's capacity as a Deposit Bank in
order to pay the bank that transferred funds that were not finally collected and
the Borrowers' Obligations
27
shall be reinstated to the extent the Agent makes such payment. The Agent's
determination of each Existing Lender's share of a returned payment received or
deposited in the Contingent Indebtedness Account shall be conclusive absent
manifest error. Whenever any payment in respect of the Obligations shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) The Agent shall make the distributions on account of the Existing
Contingent Indebtedness and, prior to the Metra Final Accounting Date, the Metra
Guaranty into an account established pursuant to SECTION 6.1 of the Collateral
Agent Agreement (the "Contingent Indebtedness Account"). From and after the
Metra Final Accounting Date, sums payable to any Metra Lender hereunder shall be
paid to the Metra Agent for distribution under the Metra Credit Agreement.
Funds distributed to the Non-Metra Lenders pursuant to SECTION 2.11(a) shall be
distributed, FIRST, ratably to each Non-Metra Lender in accordance with its
share of interest on the Deferred Interest; SECOND, to the extent of any
remaining balance, ratably to each Non-Metra Lender in accordance with its share
of the then due Letter of Credit Fees and interest on the Existing Loans (other
than Deferred Interest) accrued and unpaid prior to the date such funds are
received by the Non-Metra Lenders; THIRD, to the extent of any remaining
balance, ratably to each Non-Metra Lender in accordance with its share of the
Deferred Interest (to the extent then due); and FOURTH, to the extent of any
remaining balance, ratably to each Non-Metra Lender in accordance with its Pro
Rata Share for application to the unpaid principal amount of the Obligations.
(c) In the event that Conversion Events have occurred with respect to
Existing Contingent Indebtedness since the date of the last Recalculation, the
Agent shall request the Collateral Agent to disburse funds from the Contingent
Indebtedness Account to the Agent for distribution to each holder of Existing
Contingent Indebtedness for which such a Conversion Event has occurred, to the
extent necessary to provide that each such holder shall receive cash bearing the
same proportion to the amount of Existing Contingent Indebtedness that shall
have become Existing Loans at such time as the proportion that the aggregate
amount of all principal payments made under this Agreement with respect to any
Existing Loans outstanding July 1, 1995 bears to the outstanding principal
amount of such Existing Loans as of July 1, 1995. In the event a Conversion
Event occurs with respect to the Metra Obligations, and the Metra Exposure
Percentage (calculated, for the purposes of this SECTION 2.11(c), as if the
Metra Holdback is zero) then exceeds the Non-Metra Exposure Percentage, then the
Agent will instruct the Collateral Agent to disburse funds from the Contingent
Indebtedness Account to the Agent for distribution to the Metra Agent for the
benefit
28
of the Metra Lenders in such amount sufficient to achieve Equilibrium
(calculated, for the purposes of this SECTION 2.11(c), as if the Metra Holdback
is zero). In the event that either (i) funds remain in the Metra Holdback after
the disbursement described in the preceding sentence or (ii) following a
Conversion Event with respect to the Metra Obligations, the Non-Metra Exposure
Percentage then equals or exceeds the Metra Exposure Percentage (calculated, for
the purposes of this SECTION 2.11(c), as if the Metra Holdback is zero), then
the Agent shall request that the Collateral Agent deliver the balance then held
in the Metra Holdback to the Agent and the Agent shall promptly distribute such
amount in the same manner as if it were a new payment to be distributed pursuant
to this SECTION 2.11, including making a distribution to the Contingent
Indebtedness Account on account of the Existing Contingent Indebtedness and, to
the extent then so required, to the Metra Lenders on account of the Metra
Obligations.
(d) If any Reductions in Liability shall occur at any time with
respect to any Existing Contingent Indebtedness, the Agent shall request the
Collateral Agent to disburse excess funds which may have arisen in the
Contingent Indebtedness Account as follows: FIRST, the Agent shall calculate
the percentage that (i) the aggregate amount of all principal payments paid
under this Agreement with respect to any Existing Loans outstanding on July 1,
1995 bears to (ii) the outstanding principal amount of such Existing Loans as of
July 1, 1995; SECOND, the Agent shall determine the amount of funds that should
remain in the Contingent Indebtedness Account by multiplying such percentage by
the aggregate principal amount of all Existing Contingent Indebtedness
immediately after giving effect to any such Reduction in Liability; and THIRD,
to the extent that the amount of funds on deposit in the Contingent Indebtedness
Account exceeds the amount that should remain on deposit, as so determined by
the Agent, the Agent shall request that the Collateral Agent deliver such excess
to the Agent and the Agent shall promptly distribute such amount in the same
manner as if it were a new payment to be distributed pursuant to this
SECTION 2.11, including making a distribution to the Contingent Indebtedness
Account on account of the Existing Contingent Indebtedness and, to the extent
then required, to the Metra Lenders on account of the Metra Obligations. Upon
the occurrence of each Reduction in Liability with respect to the Metra
Obligations the Agent shall request the Collateral Agent to disburse from the
Metra Holdback the lesser of (i) the entire balance of the Metra Holdback and
(ii) an amount necessary to achieve Equilibrium (by the resulting increase in
the Metra Exposure Percentage). The Agent shall promptly distribute funds so
disbursed in the same manner as if it were a new payment to be distributed
pursuant to this SECTION 2.11, including making a distribution to the Contingent
Indebtedness Account on account of the Existing Contingent Indebtedness and, to
the extent then required, to the Metra Lenders on account of the Metra
Obligations.
29
(e) Except as set forth in SECTION 2.11(c) and SECTION 2.11(f), funds
that would otherwise have been distributed to the Metra Agent for the benefit of
the Metra Lenders pursuant to SECTIONS 2.11(b), 2.11(c) and 2.11(d) shall remain
in the Contingent Indebtedness Account (the "Metra Holdback") until the Metra
Final Accounting Date.
(f) If eight years after the Termination Date, no Event of Default
under SECTION 9.1(f) or 9.1(g) has occurred and funds remain in the Contingent
Indebtedness Account, the Agent shall distribute to each Existing Lender its Pro
Rata Share of the Contingent Indebtedness Account; PROVIDED, that for the
purposes of determining each Existing Lender's Pro Rata Share under this
SECTION 2.11(f), only Existing Loans or other Obligations with respect to which
a Conversion Event has occurred shall be included in the calculation of each
Existing Lender's Exposure and the Aggregate Exposure, unless all Existing Loans
and all other Obligations with respect to which a Conversion Event has occurred
have been paid in full, in which case, the Agent shall distribute to each
Existing Lender holding Existing Contingent Indebtedness and Metra Obligations
(if the Metra Final Accounting Date has not occurred) its Pro Rata Share of the
Contingent Indebtedness Account. Any distribution to Existing Lenders on
account of the Metra Obligations or Existing Contingent Indebtedness shall be
held by such Existing Lender as cash collateral and applied to such Obligations
upon maturity.
2.12. RECALCULATION. On the Original Closing Date and on the first day
of each calendar quarter, commencing with the calendar quarter beginning
October 1, 1995, at such other times as may be requested by the Majority Lenders
or the Metra Agent, and at such other time or times as Agent may deem
appropriate for the purposes of determining distributions, voting, or any other
act under this Agreement to which each Existing Lender's Pro Rata Share may be
relevant, the Agent shall recalculate (a "Recalculation") each Existing Lender's
Existing Contingent Indebtedness, Existing Loans and Metra Obligations on the
basis of Reallocation Certificates most recently submitted pursuant to SECTION
2.13 to determine the amount of each such Existing Lender's Exposure as of each
such date (the "Periodic Exposure"). For purposes of voting and of making
distributions pursuant to SECTION 2.11, the Agent shall use the Pro Rata Shares
and Pro Rata Shares of Deferred Interest determined as of the Original Closing
Date until the next Recalculation, and thereafter the Agent shall use the Pro
Rata Shares and Pro Rata Shares of Deferred Interest determined as of the most
recent Recalculation. In the event that any such Reallocation Certificate
states that any Reductions in Liabilities have occurred then the Agent shall:
(a) recalculate each Existing Lender's Pro Rata Share; (b) indicate to each
Existing Lender who shall have experienced Reductions in Liability, the amount,
if any, by which such Existing Lender has received distributions pursuant to
this Agreement in excess of the amount such Existing Lender would otherwise be
entitled to receive under this Agreement (calculated
30
other than for purposes of accruing interest and fees, as if such Reduction in
Liability had occurred before July 1, 1995) and the amount of Obligations, if
any, to be purchased by such Existing Lender pursuant to SECTION 12.5(b) by
reason of any Reductions of Liability (in which event such Existing Lender shall
promptly comply with its obligations under SECTION 12.5(b) of this Agreement);
and (c) comply with the Agent's obligations regarding the Contingent
Indebtedness Account as more particularly described in SECTION 2.11 above. In
the event that any such Reallocation Certificate states that any Conversion
Events have occurred, then the Agent shall (a) determine the amount of interest
then due and payable on account of any Existing Loans which may have been
created by such Conversion Event and so advise the Borrowers and (b) comply with
the Agent's obligations regarding the Contingent Indebtedness Account as more
particularly described in SECTION 2.11 above.
2.13. DELIVERY OF REALLOCATION CERTIFICATES. Five (5) Business Days
prior to the beginning of each calendar quarter, commencing with the calendar
quarter beginning October 1, 1995, each Existing Lender who is the holder of
Existing Loans or Existing Contingent Indebtedness shall deliver to the Agent a
current Reallocation Certificate, and the Metra Agent shall deliver to the Agent
a current Reallocation Certificate with respect to the Metra Obligations held by
each Metra Lender. In addition to Reallocation Certificates required under the
first sentence of this Section, within five (5) Business Days after request by
the Agent, any Existing Lender or the Metra Agent, as the case may be, shall
deliver to the Agent a current Reallocation Certificate. Each of the Existing
Lenders and the Metra Agent may, in its discretion and from time to time,
deliver to the Agent a current Reallocation Certification. Should any Existing
Lender or the Metra Agent fail to comply with its obligations under this
SECTION 2.13 the Agent may withhold distribution of funds otherwise payable to
such Existing Lender or the Metra Agent, as the case may be, under this
Agreement until such Existing Lender or the Metra Agent has so complied. If
such Existing Lender or the Metra Agent has not complied ninety (90) days after
written request from the Agent (including the Agent's initial request) and
forty-five (45) days after a second written request from the Agent, such
Existing Lender's Exposure, or, in the case of the Metra Agent, the Metra
Obligations, shall be deemed to be zero (0).
2.14. COMPUTATION OF INTEREST AND FEES. Interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
2.15. CASH MANAGEMENT SYSTEM. Each Borrower has established, on or
prior to the Original Closing Date, and each Borrower will maintain until the
Obligations have been paid in full, the Cash Management System described in
SCHEDULE E.
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2.16. TAXES.
(a) Any and all payments by either Borrower to or for the account of
any Existing Lender or the Agent hereunder or any other Loan Document shall be
made without deduction for any Taxes or Other Taxes; PROVIDED, that if either
Borrower shall be required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this SECTION 2.16) such Existing Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, (iii)
such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) such
Borrower shall furnish to the Agent, at its address referred to in the Schedule
for Notices, the original or a certified copy of a receipt evidencing payment
thereof.
(b) The Borrowers agree to indemnify each Existing Lender and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
SECTION 2.16) paid by such Existing Lender or the Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be paid within 15 days after
such Existing Lender or the Agent (as the case may be) makes demand therefor.
(c) Each Existing Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Existing Lender listed on the signature
pages hereof and on or prior to the date on which it becomes an Existing Lender
in the case of each other Existing Lender, and from time to time thereafter if
requested in writing by the Borrowers (but only so long as such Existing Lender
remains lawfully able to do so), shall provide the Borrowers with Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Existing Lender
is entitled to benefits under an income tax treaty to which the United States is
a party which exempts the Existing Lender from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Existing Lender or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States.
(d) For any period with respect to which an Existing Lender has
failed to provide the Borrowers with the appropriate form pursuant to
SECTION 2.16(c) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required
32
to be provided), such Existing Lender shall not be entitled to indemnification
under SECTION 2.16(b) or 2.16(c) with respect to Taxes imposed by the United
States on payments by such Borrower; PROVIDED, that if an Existing Lender, which
is otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to Taxes because of its failure to deliver a form required
hereunder, such Borrower shall take such steps as such Existing Lender shall
reasonably request to assist such Existing Lender to recover such Taxes.
(e) If either Borrower is required to pay additional amounts to or
for the account of any Existing Lender pursuant to this SECTION 2.16, then such
Existing Lender will change the jurisdiction of its lending office to an office
it maintains if, in the judgment of such Existing Lender, such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is not otherwise disadvantageous to such Existing Lender.
ARTICLE III
ADDITIONAL AMENDMENTS TO THE EXISTING AGREEMENTS
AND EFFECT ON EXISTING AGREEMENTS
3.1. WAIVER OF COVENANTS. Except to the extent provided in the last
sentence of SECTION 3.4, each Existing Lender (a) waives the Borrowers' and
Guarantors' obligations to comply with any of the terms contained in the
Existing Agreements from the Original Closing Date through the Termination Date,
other than (i) terms with respect to the payment of principal, interest and fees
in respect of the Existing Loans and payment of reimbursement obligations,
interest thereon and Letter of Credit Fees, and any guaranty with respect to
such payment (in each case, which terms shall be modified as provided herein),
and (ii) terms providing for the ongoing payment of Letter of Credit Fees under
the reimbursement agreements applicable to which the NYCTA/PB Letters of Credit
were issued, (b) waives all defaults and events of default existing on the
Original Closing Date or which may arise on or after the Original Closing Date
under any Existing Agreement to which it is a party due to (i) the execution,
delivery or performance of the Loan Documents and the other Restructuring
Documents, (ii) the incurrence by the Borrowers and any of the Guarantors of
obligations under the Loan Documents and the other Restructuring Documents, and
(iii) the granting of the security interests, liens and mortgages to secure such
obligations under the Loan Documents and the other Restructuring Documents,
(c) waives compliance with the provisions in any Existing Agreement to which it
is a party that may result in the creation of a Lien under its Existing
Agreement upon the execution, delivery or performance of the Loan Documents or
other Restructuring Documents; (d) agrees that neither the execution and
delivery nor performance of the Loan Documents or the other Restructuring
Documents by the Borrowers or the
33
Guarantors will conflict with or result in a default or creation of a Lien under
any Existing Agreement to which it is a party; and (e) waives all breaches and
defaults occurring or existing under the Existing Agreements on or prior to the
Original Closing Date. The Borrowers and each Existing Lender waive the
obligations of each Existing Lender to comply with the terms contained in the
Existing Agreements from and after the date of this Agreement, except to the
extent otherwise provided in the last sentence of SECTION 3.4.
3.2. NON-EXERCISE OF CERTAIN REMEDIES. Other than as provided in ARTICLE
IX, each Existing Lender and the Metra Agent agree that it will not take any
action to exercise any rights or remedies it may have under its Existing
Agreements, including any rights or remedies it may have to accelerate the
Borrowers' or the Guarantors' obligations under its Existing Agreements (if not
previously accelerated), to terminate its Existing Agreements (if not previously
terminated), or to enforce its interest in its Individual Collateral.
3.3. TERM. The rights and obligations of the Borrowers arising under
this Agreement with respect to any Existing Lender, and the rights of such
Existing Lender arising under this Agreement with respect to the Borrowers,
shall continue in full force and effect with respect to such Existing Lender
including at all times after the Termination Date unless and until the Borrowers
shall have paid and performed all of their obligations under such Existing
Lender's Existing Agreements, as modified by this Agreement.
3.4. EFFECT ON EXISTING AGREEMENTS. This Agreement supplements and amends
each Existing Lender's Existing Agreements and in the event of any conflict
between the terms hereof and the terms of any Existing Agreements or any
instruments, documents or agreements executed in connection therewith with
respect to the subject matter, the terms of this Agreement and the Loan
Documents shall govern and control. Each of the Existing Agreements and such
other related instruments, documents or agreements, and all obligations of the
Borrowers and Guarantors and all rights and remedies of each Existing Lender
thereunder, as existing prior to the execution of this Agreement, shall remain
in full force and effect except to the extent modified hereby or in conflict
with the terms of this Agreement and the other Loan Documents. Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not (i) waive
or amend the provisions of Articles VII or X or Sections 11.02, 11.03(a), (b)
(except that Section 11.03(b) as it applies to each "Bank" (as defined in the
Credit Agreement described below) is hereby amended and restated as of the date
hereof by SECTION 12.4(b) of this Agreement), 11.07, 11.08, 11.09 or 11.10 of
the Credit Agreement dated as of March 31, 1994 among the Borrowers, the banks
listed therein and Xxxxxx Guaranty Trust Company of New York, as the Agent, the
respective definitions for all capitalized terms used therein and the notes
issued thereunder,
34
it being understood that this Agreement constitutes an amendment and restatement
of all other provisions of such Credit Agreement and (ii) appoint Mellon Bank,
N.A., as the Metra Agent under the Metra Guaranty.
ARTICLE IV
SECURITY
4.1. THE BORROWERS' OBLIGATIONS. The Obligations of the Borrowers to pay
all sums due to the Agent, the Collateral Agent and the Existing Lenders and to
perform all other covenants and agreements under this Agreement, the other Loan
Documents and the Existing Agreements, as modified by this Agreement, shall be
secured to the extent provided in the Security Documents and the Intercreditor
Agreement.
4.2. FURTHER ASSURANCES. The Borrowers shall, and shall cause the
Guarantors to, at their sole cost and expense, execute and deliver to the Agent
or the Collateral Agent for the benefit of the Existing Lenders all such further
documents, instruments and agreements and hereby agree to perform all such other
acts which may be required in the opinion of the Agent to enable the Collateral
Agent, the Agent and the Existing Lenders to exercise and enforce their
respective rights as the secured parties or beneficiaries under the Security
Documents. To the extent permitted by applicable law, the Borrowers hereby
authorize the Collateral Agent or the Agent on behalf of the Existing Lenders to
file Financing Statements and continuation statements with respect to the
security interests granted under the Security Documents in favor of the
Collateral Agent for the benefit of the Agents and the Existing Lenders and to
execute such Financing Statements and continuation statements on behalf of the
Borrowers and the Guarantors. In addition to, and without in any respect
limiting the requirements of SECTIONS 2.12 AND 2.13, each Existing Lender shall
promptly certify such information regarding the Existing Indebtedness or the
Obligations as the Agent may request from time to time.
ARTICLE V
CONDITIONS PRECEDENT
5.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. This Agreement
shall become effective only upon the satisfaction by the Borrowers of the
following conditions precedent, unless each Existing Lender shall otherwise
agree:
(a) RESTRUCTURING DOCUMENTS. The Agent shall have received
counterpart originals of this Agreement, the other Restructuring Documents not
previously delivered in connection with the July 31, 1995 Restructuring and all
the other
35
certificates, schedules, the T-Co Asset Purchase Documents and other items as
specified in the Schedule of Documents attached hereto as SCHEDULE B, each duly
and validly executed and acknowledged, where appropriate, by or on behalf of all
the parties hereto or thereto (as the case may be).
(b) CONSENTS. The Agent shall have received evidence reasonably
satisfactory to it in its sole discretion that the Borrowers and any Guarantors
have obtained all requisite consents and approvals required to be obtained from
any Governmental Authority, Person or entity whatsoever, to permit the
transactions contemplated by the Restructuring Documents and the T-Co Asset
Purchase Documents to be consummated in accordance with their respective terms
and conditions.
(c) PENDING AND THREATENED LITIGATION. The Agent shall have received
SCHEDULE 5.1(c) and shall have reviewed all such pending or threatened
litigation against the Borrowers and their Subsidiaries, and such disclosures
shall reveal no conditions unacceptable to the Agent in its sole discretion.
(d) THE T-CO RESTRUCTURING. The T-Co Restructuring shall have been
consummated with all conditions to the effectiveness having been satisfied,
subject only to the execution of this Agreement and the other Loan Documents.
(e) OTHER MATTERS. The Agent shall have received all other
documents, instruments, agreements, opinions, certificates, insurance policies,
consents and evidences of other legal matters, in form and substance
satisfactory to the Agent and its counsel, as the Agent reasonably may request.
(f) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Borrowers and each of them set forth in this Agreement, or the
other Restructuring Documents or, in any certificate or opinion by or on behalf
of the Borrowers in connection herewith, shall be correct on and as of the date
of any requested Existing Loans as if made on and as of such date; PROVIDED,
HOWEVER, the Borrowers may, from time to time, amend SCHEDULE 6.8 (Material
Contracts), SCHEDULE 6.20 (Subsidiaries) and SCHEDULE 6.26 (Employment and
Investment Agreements) by providing the Agent with amendments to such Schedules.
(g) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing, assuming the effectiveness of this
Agreement.
(h) DEFAULTS UNDER INDEBTEDNESS. The Agent shall have received
SCHEDULE 5.1(h), certified by the chief executive officer and chief financial
officer of each Borrower, describing any default or failure of performance or
any event which with the giving of notice, or lapse of time, or both, would
become a default by such Borrower under any indenture, loan agreement,
36
guaranty, promissory note or other Indebtedness to which the Borrowers or any
Guarantors are a party constituting a liability (contingent or otherwise) equal
to or in excess of $2,000,000.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Existing Lenders to enter into
this Agreement, the Borrowers hereby make the following representations and
warranties to the Agent and to each Existing Lender:
6.1. ORGANIZATION AND QUALIFICATION. Each of the Borrowers and the
Guarantors is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and is duly qualified
and in good standing in each jurisdiction wherein the conduct of its business or
the ownership of its properties requires such qualification, except for those
jurisdictions in which the failure to be qualified and in good standing would
not have or result in a Material Adverse Effect or would not materially
adversely affect the ability of the Collateral Agent to collect any material
account receivable.
6.2. CORPORATE POWER AND AUTHORIZATION; BINDING EFFECT. Each of the
Borrowers and the Guarantors has the corporate power and has taken all corporate
action necessary to authorize it to execute, deliver, and perform this
Agreement, each of the other Restructuring Documents and the T-Co Asset Purchase
Documents, executed by it and to grant the security interests and liens granted
or created thereunder. This Agreement constitutes, and when executed the other
Restructuring Documents and the T-Co Asset Purchase Documents, will constitute,
legal and valid obligations of each Borrower binding upon it and enforceable in
accordance with their respective terms, except as the enforceability of each
such Restructuring Document and T-Co Asset Purchase Document may be subject to
or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws relating to or affecting the rights of creditors and except
as the availability of equitable remedies are subject to the application of
equitable principles.
6.3. NO CONFLICT. The execution, delivery and performance of this
Agreement, the other Restructuring Documents and the secured financing
transactions contemplated hereby, and the T-Co Asset Purchase Documents, the use
of proceeds thereof, and the performance by the Borrowers and the Guarantors (a)
do not conflict with or violate any provision of the Articles of Incorporation
or Certificate of Incorporation, as the case may be, or By-Laws of any Borrower
or any Guarantor, any material Requirement of Law or any Contractual Obligation
of any Borrower or any Guarantor, (b) do not conflict with, constitute a default
or require any consent under any Contractual Obligation of any
37
Borrower or any Guarantor, and (c) do not result in the creation of any Lien
other than a Permitted Lien upon any property or assets of any Borrower or any
Guarantor.
6.4. NO CONSENTS. All necessary consents, approvals and authorizations of,
filings with, and acts by or with respect to all Governmental Authorities and
other Persons (except possession of certain collateral or filings with the
appropriate Governmental Authorities necessary to perfect the security interests
under the Security Documents) required to be obtained, made or taken by the
Borrowers or the Guarantors in connection with the secured financing
transactions contemplated hereby or with the execution, delivery, performance,
validity or enforceability of this Agreement, the other Restructuring Documents
or the T-Co Asset Purchase Documents, have been obtained, made or taken, and
remain in effect. All applicable waiting periods have expired without any
Governmental Authority or other Person taking any action which restricts,
prevents or imposes materially adverse conditions upon the consummation of the
secured financing transactions contemplated hereby.
6.5. ABSENCE OF LITIGATION. Except as otherwise set forth in
SCHEDULE 5.1(c), there are no actions, suits, proceedings or other litigation
(including proceedings by or before any arbitrator or Governmental Authority)
pending, or, to the Borrowers' knowledge, threatened, against or affecting the
Borrowers or the Guarantors or any of their Consolidated Subsidiaries or, to the
knowledge of the Borrowers, any basis therefor, (a) which challenge the validity
or propriety of the secured financing transactions contemplated hereby, (b)
which could reasonably be expected to have or result in, individually or in the
aggregate, a Material Adverse Effect, or (c) which could materially affect the
ability of the Borrowers to perform their obligations under this Agreement or
the other Restructuring Documents.
6.6. NO DEFAULT UNDER THE RESTRUCTURING DOCUMENTS. No Default or Event of
Default has occurred and is continuing.
6.7. INDEBTEDNESS. Set forth on SCHEDULE 6.7A hereto is a complete and
correct list of all Indebtedness of the Borrowers and the Guarantors in excess
of $2,000,000, other than Contingent Obligations, and the approximate aggregate
principal amount thereof outstanding. Set forth on SCHEDULE 6.7B is a complete
and correct list of all Contingent Obligations for which the principal amount
outstanding or the amount for which the Borrowers or the Guarantors are liable
exceeds $1,000,000, and the approximate aggregate amount of such principal or of
such liability outstanding.
6.8. MATERIAL CONTRACTS. Set forth on SCHEDULE 6.8 hereto is a complete
and accurate list of (a) each Material Contract, and (b) each Capital Lease
Obligation of the Borrowers and the Guarantors existing on the Original Closing
Date which
38
exceeds $10,000,000 annually; other than as set forth in SCHEDULE 6.8 or
otherwise disclosed in writing to the Agent, each such Material Contract or
Capital Lease is, and after giving effect to the consummation of the
transactions contemplated by the T-Co Restructuring will be, in full force and
effect in accordance with the terms thereof. Except as previously disclosed to
the Agent and the Existing Lenders or as listed in SCHEDULE 6.8A hereto, there
are no defaults by the Borrowers or the Guarantors or, to the best of their
knowledge, by any other party under any such Material Contract which could
reasonably be expected to have or result in a Material Adverse Effect, or could
reasonably be expected to affect the Borrowers' or the Guarantors' ability to
perform their Obligations under this Agreement and the other Restructuring
Documents and the T-Co Asset Purchase Documents. Neither the Borrowers nor the
Guarantors are in default (nor has any event occurred which, with notice or
lapse of time or both would constitute a default) under any of the Existing
Agreements. The Borrowers and the Guarantors have delivered to the Agent a true
and complete copy of each Material Contract required to be listed on
SCHEDULE 6.8.
6.9. CORRECTNESS OF COLLATERAL SCHEDULES. The Certification of Schedules
listed as Item No. 4.00 of the Schedule of Documents and delivered to the Agent
in connection herewith are complete and correct in all material respects.
6.10. CORRECTNESS OF FINANCIAL INFORMATION. The financial statements
described in Item No. 2.00 of the Schedule of Documents delivered in connection
with the July 31, 1995 Restructuring, and delivered to the Agent in connection
herewith are true and correct and (a) present fairly, in all material respects,
the Consolidated financial condition of the Borrowers, the Guarantors and their
Consolidated Subsidiaries as of the date thereof, (b) disclose all material
liabilities of the Borrowers, the Guarantors and their Consolidated
Subsidiaries, whether liquidated or unliquidated, fixed or contingent, that are
required to be disclosed under Generally Accepted Accounting Principles as of
the date thereof, and (c) have been prepared in accordance with Generally
Accepted Accounting Principles, consistently applied. Each of the Budget and
the projections delivered to the Agent in connection herewith are based upon
reasonable estimates and assumptions, and reflect the reasonable estimates of
the Borrowers and their Consolidated Subsidiaries of the results of
operations and other information projected therein.
6.11. SECURITY DOCUMENTS. The Security Documents to which the
Borrowers and the Guarantors are a party create in favor of the Collateral Agent
for the benefit of the Existing Lenders to secure the Obligations valid, and,
upon the proper filing by the Collateral Agent of Financing Statements at
appropriate offices, a first priority, perfected security interests in the
property and assets described in the Security Documents capable of being
perfected by the filing of a Financing Statement, subject only to Permitted
Liens.
39
6.12. TAXES. The Borrowers and the Guarantors have filed all tax
returns which were required to be filed in any jurisdiction, and paid all taxes
shown thereon to be due or otherwise due upon the Borrowers and the Guarantors
or any of their properties, income or franchises, including interest,
assessments, fees and penalties (other than any immaterial amounts, which the
Borrowers or the Guarantors shall pay or make provision to pay), or have
provided adequate reserves for the payment thereof. To the best knowledge of
the Borrowers, no claims are threatened, pending or being asserted with respect
to, or in connection with any return referred to in this SECTION 6.12, which
could reasonably be expected to have or result in a Material Adverse Effect, or
could reasonably be expected to affect the Borrowers' ability to perform their
Obligations under this Agreement and the other Restructuring Documents.
6.13. NO BURDENSOME RESTRICTIONS. No Material Contract and no material
Requirement of Law relating to or otherwise affecting the Borrowers or the
Guarantors will result in a Material Adverse Effect.
6.14. JUDGMENTS. There are no outstanding or unpaid judgments against
the Borrowers or the Guarantors in excess of (a) $100,000 individually, or
(b) $2,000,000 in the aggregate, except as expressly set forth in SCHEDULE 6.14.
6.15. COMPLIANCE WITH LAWS. The Borrowers and the Guarantors are not
and will not be in violation of, or not in compliance with, any Requirement of
Law binding upon the Borrowers and the Guarantors or their properties and
assets, including any building, zoning, occupational safety and health
ordinances or regulations relating to their structure or equipment, or the
operation thereof or of its respective business, or any applicable fair
employment, equal opportunity or similar law, ordinance or regulation, the
noncompliance with which could reasonably be expected to have or result in a
Material Adverse Effect, and are not a party to any agreement or instrument, or
subject to any judgment, order, writ, rule, regulation, code or ordinance which
could reasonably be expected to have or result in a Material Adverse Effect.
6.16. COMPLIANCE WITH ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multi-employer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could reasonably result in the imposition of a Lien
40
or the posting of a bond or other security under ERISA or the Internal Revenue
Code or (iii) except as set forth on SCHEDULE 6.16, incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
6.17. GOVERNMENTAL AUTHORIZATIONS; PERMITS, LICENSES AND
ACCREDITATIONS; OTHER RIGHTs. The Borrowers and the Guarantors have all
licenses, permits, approvals, qualifications, consents, certificates of needs
and accreditations (where such are required) and other authorizations necessary
for the lawful conduct of their respective businesses or operations wherever now
conducted and as planned to be conducted, pursuant to all applicable statutes,
laws, ordinances, rules and regulations of all Governmental Authorities having,
asserting or claiming jurisdiction over the Borrowers or the Guarantors, except
where such failure could not have or result in a Material Adverse Effect.
Copies of all such licenses, permits, approvals, qualifications, consents and
other authorizations shall be provided to the Agent upon request. Neither the
Borrowers nor the Guarantors are in default under any of such licenses, permits,
approvals, consents, qualifications or authorizations and no event has occurred,
and no condition exists, which, with the giving of notice, the passage of time,
or both, would constitute a default thereunder or would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization or accreditation, except where such failure could
not have or result in a Material Adverse Effect. The continuation, validity and
effectiveness of all material licenses, permits, approvals, consents,
qualifications and authorizations will not be adversely affected by the
transactions contemplated by this Agreement. The Borrowers know of no reason
why they or the Guarantors will not be able to maintain all licenses, permits,
approvals, consents, qualifications, accreditations and other authorizations
necessary or appropriate to own and operate their respective current businesses
and to obtain such licenses, permits, approvals, consents, qualifications and
other authorizations necessary to own and operate their respective current
businesses, and otherwise conduct the business of the Borrowers, the Guarantors
and their Consolidated Subsidiaries as now conducted and presently proposed to
be conducted.
6.18. ENVIRONMENTAL MATTERS. In the ordinary course of their business,
the Borrowers conduct an ongoing review of the effect of Environmental Laws on
the business, operations and properties of the Borrowers, the Guarantors and
their Consolidated Subsidiaries, in the course of which they identify and
evaluate associated liabilities and costs (including any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related
41
constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in connection with off-
site disposal of wastes or Hazardous Materials, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrowers have reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have or result in a Material Adverse
Effect.
6.19. NO MATERIAL ADVERSE EFFECT. Since June 26, 1995, there has been
no Material Adverse Effect, other than as disclosed in SCHEDULE 6.19.
6.20. CONSOLIDATED SUBSIDIARIES; SUBSIDIARIES. Each of the Borrowers'
and the Guarantors' Consolidated Subsidiaries is a corporation or other entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all legal powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Set forth on SCHEDULE 6.20 is a complete and
correct list of each of the Borrower's Subsidiaries. Set forth on SCHEDULE D is
a complete and correct list of each of the Borrower's wholly-owned Subsidiaries
other than foreign wholly-owned subsidiaries, Emkay Development Company, Inc.
and Emkay Capital Investments, Inc.
6.21. MARGIN SECURITIES. Neither Borrower nor any Guarantor is engaged
principally in, nor has as one of its most important activities, the business of
extending credit for the purpose of purchasing or carrying "margin stock" as
that term is defined in Regulation U promulgated by the Board of Governors of
the Federal Reserve System, as now in effect. No part of the Existing
Indebtedness or Indebtedness otherwise created in connection with this Agreement
or the other Restructuring Documents, shall be used, directly or indirectly, for
the purpose of purchasing any such margin stock. If requested by the Agent, the
Borrowers shall furnish or cause to be furnished to the Agent a statement, in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U, to the foregoing effect.
6.22. INVESTMENT COMPANY ACT. Neither of the Borrowers nor any
Guarantor is an "investment company" nor a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as now in
effect.
6.23. BUSINESS LOCATIONS AND TRADE NAMES. Set forth on SCHEDULE 6.23A
is a complete and correct list of each location where each of the Borrowers and
the Guarantors maintains its chief executive office, its principal place of
business, an office, a place of business or any material financial records.
42
Set forth on SCHEDULE 6.23B is a complete and correct list of each name under or
by which each Borrower and Guarantor conducts its business, or by which each
Borrower and Guarantor (or its predecessors in interest) has conducted its
business during the past five years.
6.24. TITLE TO REAL PROPERTY AND OTHER ASSETS. The Borrowers and the
Guarantors have good and marketable title (or good and marketable leasehold
interests with respect to leased property) to all their Real Property and all
personal property assets and fixtures subject to no Liens other than Permitted
Liens. The Borrowers and the Guarantors hold directly the fee and leasehold
interest in all facilities constituting the Real Property Collateral. As of the
Original Closing Date, there are no contracts or options by either Borrower, any
Guarantor or any of their Subsidiaries for the sale or lease of any of the Real
Property Collateral, except as set forth on SCHEDULE 6.24. All easements,
servitudes and rights of way necessary to the operations presently conducted or
proposed to be conducted at the facilities constituting the Real Property
Collateral have been obtained.
6.25. LABOR MATTERS. There are no controversies pending between the
Borrowers, the Guarantors or their Subsidiaries and their employees which may
constitute or result in a Material Adverse Effect.
6.26. EMPLOYMENT AND INVESTMENT AGREEMENTS. Set forth in SCHEDULE 6.26
is a complete and accurate list of (i) all employment agreements and executive
compensation arrangements to which any Borrower, any Guarantor or any Subsidiary
of a Borrower or a Guarantor is a party which provides for aggregate
compensation to any Person (assuming compliance with or satisfaction of all
contingencies or conditions) of more than $150,000 per year, and (ii) all
agreements relating to the voting or disposition of any outstanding shares of
capital stock of each Borrower, Guarantor or any of their Subsidiaries. The
Borrowers and the Guarantors have delivered to the Agent a true and complete
copy of each of the agreements required to be listed in SCHEDULE 6.26.
6.27. NO MISSTATEMENTS. Neither this Agreement, the other
Restructuring Documents, nor any document, instrument and other agreement,
certificate, statement or other information referred to herein or expressly
furnished to the Agent or to any of the Existing Lenders pursuant hereto or
thereto, contains any misstatement of a material fact or omits to state any
material fact or any fact necessary to make the statements contained herein or
therein not misleading on the date furnished or on the Closing Date, except as
otherwise subsequently disclosed to the Agent and all Existing Lenders in
writing on or prior to the Closing Date.
43
6.28. T-CO RESTRUCTURING. The T-Co Restructuring has occurred.
6.29. MK RAIL LOCK BOX. Lock Box number 98485 maintained at Bank of
America Illinois is used solely for collections related to MK Rail and not
collections related to any Borrower or any Guarantor. No Borrower or Guarantor
has instructed any account debtor or other person owing any monies to such
Borrower or such Guarantor to make any payment to Lock Box number 98485.
6.30. CASH MANAGEMENT SYSTEM. Each Borrower acknowledges that the Cash
Management System is part of this Agreement and that each of the representations
and warranties made by each Borrower in the Cash Management System constitutes
representations and warranties of this Agreement.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as this Agreement is in effect the Borrowers, and, without
duplication, each of them, shall, unless the Majority Lenders shall otherwise
agree:
7.1. FINANCIAL STATEMENTS; ADDITIONAL REPORTING REQUIREMENTS. Furnish to
the Agent:
(a) Not later than ten (10) Business Days prior to the start of each
calendar quarter, a projected consolidating income statement for such quarter
and a weekly consolidating cash flow statement for such quarter in the form of
the Budget, certified by the chief financial officer as containing appropriate
assumptions to the best of such officer's knowledge;
(b) Not later than three (3) Business Days after each calendar week,
an unaudited consolidating cash flow statement in the form of the Budget for
such week setting forth a comparison to the Budget for such calendar week,
certified by the chief financial officer as complete and correct to the best of
his knowledge;
(c) Not later than the twenty-fifth (25th) day after each calendar
month, an unaudited consolidating income statement, balance sheet and cash flow
statement (including MK Rail on an equity basis using the most current monthly
information available), in each case for such month, and setting forth a
comparison to the projections for such calendar month and the actual results for
such calendar month in the previous fiscal year, certified by the chief
financial officer as complete and correct, subject to normal accounting
adjustments and without footnotes;
44
(d) As soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of MKD, a
Consolidated balance sheet of MKD and its Consolidated Subsidiaries as of the
end of such quarter and the related Consolidated statements of income and cash
flows for such quarter and for the portion of MKD's fiscal year ended at the end
of such quarter, setting forth in the case of such income and cash flows in
comparative form the figures for the corresponding quarter and the corresponding
portion of MKD's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, Generally Accepted Accounting
Principles and consistency by the chief financial officer, controller or
treasurer of MKD;
(e) As soon as available and in any event by April 15, 1996, a
Consolidated balance sheet of MKD and its Consolidated Subsidiaries as of the
end of such fiscal year and the related Consolidated statements of income,
retained earnings and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on in a manner acceptable to the Securities and Exchange Commission by
independent public accountants of nationally recognized standing, together with
an unaudited annual report prepared on a consolidating basis in conformity with
Generally Accepted Accounting Principles;
(f) Promptly upon the mailing thereof to the shareholders of MKD
generally, copies of all financial statements, reports and proxy statements so
mailed;
(g) Promptly upon the filing thereof, copies of all reports on Forms
10-K, 10-Q and 8-K (or their equivalents) which MKD shall have filed with the
Securities and Exchange Commission;
(h) Promptly after the furnishing thereof, copies of any statement
or report furnished to any other holder of the securities or any Indebtedness of
the Borrowers pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Agent pursuant to
any other clause of this SECTION 7.1;
(i) On a monthly basis a statement listing the outstanding receivable
and payable accounts between the Borrowers, and Affiliates of the Borrowers;
PROVIDED, HOWEVER, that any transfers or group of related transfers of cash or
other assets in excess of $1,000,000 between the Borrowers, and Affiliates of
the Borrowers, shall be reported on a weekly basis;
(j) On a monthly basis, within twenty five (25) days of the close of
the prior calendar month, a report outlining work status for jobs involving
either Borrower or any Consolidated Subsidiary valued by any Borrower or
Consolidated Subsidiary in excess of $10,000,000 certified by the chief
financial officer as complete and correct;
45
(k) On a monthly basis, within twenty five (25) days of the close of
the prior calendar month, a report outlining the status of each of the
Borrowers' backlog, certified by the chief financial officer as complete and
correct in the form attached hereto as SCHEDULE 7.1(k);
(l) On a monthly basis a report prepared by each of the Borrowers'
financial advisors regarding the status of asset sales by either Borrower or any
Consolidated Subsidiary (excluding the asset sales involving AmeriBank and
Western Aircraft, Inc.), certified by the chief financial officer as complete
and correct;
(m) On a daily basis, each Borrower's daily cash balances and
outstanding loan balances;
(n) On a weekly basis, a report of any reductions of letter of credit
obligations under the Existing Agreements;
(o) On a weekly basis, the management operation reports prepared for
each of the Borrowers' divisions; and
(p) From time to time such additional information regarding the
financial position, business, properties or operations of MKD, MKO and any of
their Consolidated Subsidiaries as the Agent, at the request of any Existing
Lender, may reasonably request.
7.2. PROVISION OF NOTICES. Give notice to the Agent of the occurrence of
any of the following events not later than three (3) Business Days after the
Borrowers know of such event:
(a) DEFAULT. Any Default or Event of Default.
(b) OTHER DEFAULT OR LITIGATION. (i) Any default or event of default
under any Contractual Obligation of any Borrower or Guarantor of greater than
$1,000,000 or which could otherwise have or result in a Material Adverse Effect;
(ii) any litigation, investigation or proceeding which may exist at any time
between the Borrowers and any Governmental Authority; or (iii) any other
litigation, which, as relates to (i) or (ii) above, if adversely determined,
could (y) if the remedies prayed for do not include damages, have or result in a
Material Adverse Effect, and (z) if the remedies prayed for include damages,
would result in a liability equal to or in excess of $5,000,000 if the claim is
fully covered by insurance, and in excess of $1,000,000 if the claim is not
covered by insurance.
(c) REPORTABLE EVENTS. Except as provided on SCHEDULE 7.2(c)A, any
Reportable Event with respect to any Single Employer Plan maintained by the
Borrowers or (b) the institution of proceedings or except as provided on
SCHEDULE 7.2(c)B the taking or expected taking of any other action by the PBGC,
any Borrower or any Commonly Controlled Entity to terminate, withdraw
46
or partially withdraw from any Single Employer Plan maintained by any Borrower
and with respect to a Multi-employer Plan, the reorganizational insolvency of
the Plan. In addition to such notice, the Borrowers shall as soon as
practicable deliver to the Agent and each Existing Lender whichever of the
following may be applicable: (i) a certificate of the chief executive officer
and the chief financial officer of each Borrower setting forth details as to
such Reportable Event and the action, if any, that it or the Commonly Controlled
Entity proposes to take with respect thereto, together with the copy of any
notice of such Reportable Event that is required to be filed with PBGC, or (ii)
any notice delivered by PBGC evidencing its intent to institute such proceedings
or any notice to PBGC that such Plan is to be terminated, as the case may be.
(d) ENVIRONMENTAL MATTERS. (i) Any event which makes any of the
representations set forth in SECTION 6.18 inaccurate in any respect or (ii) the
receipt by any Borrower of any notice, order, directive or other written
communication from a Governmental Authority alleging violations of or
noncompliance with any Environmental Laws.
(e) MATERIAL CONTRACTS; MATERIAL OBLIGATIONS. (i) Any proposed
material amendment, change or modification to, or waiver of any material
provision of, or any termination of, any Material Contract, other than
amendments, changes, modifications, waivers or terminations in the ordinary
course of business as presently conducted, and (ii) any new Material Contract
which has not been previously disclosed to the Existing Lender in financial
reports or otherwise in writing.
(f) CASUALTY LOSSES. Any casualty loss or losses, not covered by
insurance, in excess of $1,000,000.
(g) NOTICES RE: BONDING ISSUES. The receipt by any of the Borrowers
of any notice or other communication from the Bonding Company regarding material
changes in the Bonding Company's issuance of payment or performance bonds in
connection with the projects to be performed by the Borrowers or their
Consolidated Subsidiaries, including any breach or default under the New Bonds
Agreement.
(h) NOTICES OF VIOLATION. The receipt by any Borrower of any notice,
order, directive or other written communication from a Governmental Authority
commencing an investigation or inquiry by any Governmental Authority or alleging
violations of or noncompliance with any Requirement of Law which could
reasonably be expected to have or result in a Material Adverse Effect.
(i) CHANGES TO SCHEDULES. Any changes to the information on
SCHEDULES 6.23A and 6.23B.
47
7.3. FILING OF RETURNS; PAYMENT OF TAXES. File all tax returns when due
and pay or cause to be paid before the same shall become delinquent and before
penalties have accrued thereon, all taxes, assessments and governmental charges
or levies imposed on the income, profits, franchises, property or business of
the Borrowers except to the extent and so long as (a) the same are being
contested in good faith by appropriate proceedings, and (b) as to which adequate
reserves in conformity with Generally Accepted Accounting Principles with
respect thereto have been provided on the books of the Borrowers.
7.4. MAINTENANCE OF EXISTENCE. Maintain and preserve, and, will cause each
Consolidated Subsidiary to maintain and preserve, its respective existence as a
corporation or other form of business organization, as the case may be, and all
rights, privileges, licenses, patents, patent rights, copyrights, trademarks,
trade names, franchises and other authority to the extent material and necessary
for the conduct of its respective business in the ordinary course as conducted
from time to time.
7.5. COMPLIANCE WITH LAWS. Comply, and cause each Consolidated Subsidiary
to comply, with all Requirements of Law in all material respects except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings.
7.6. MAINTENANCE OF PROPERTIES. Maintain, preserve and keep all of its
buildings, tangible properties, equipment and other property and assets, whether
owned or leased, used and necessary in its business, in good repair, working
order and condition, and from time to time to make all necessary and proper
repairs and replacements so that at all times the utility, efficiency or value
thereof shall not be impaired in any material respect.
7.7. INSURANCE. Maintain (a) insurance (in addition to any insurance
required under the Security Documents) on all insurable property and assets
owned or leased by the Borrowers or the Guarantors in the manner, to the extent
and against at least such risks (in any event, including liability and casualty,
including hazard, fire and business interruption coverage) usually done by
owners of similar businesses and properties in similar geographic areas, and
adequate workers' compensation insurance and (b) appropriate self-insurance
reserve funds covering those risks for which the Borrowers or the Guarantors
presently self-insure, which self-insurance reserves shall be funded to the
extent from time to time required by the insurer for the Borrowers and the
Guarantors (which insurer shall be acceptable to the Agent) or another excess
insurance carrier for the Borrowers or the Guarantors acceptable to the Agent.
All such insurance shall be in such amounts and form and with such insurance
companies as are reasonably satisfactory to the Agent and shall name the
Collateral Agent, for the benefit of the Existing Lenders, as an additional
insured. The Borrowers or the Guarantors shall furnish the following to the
Agent: (x) annually
48
or at any time upon written request, full information as to such insurance
carried, including the amounts of all self-insurance reserve funds; (y) lender
loss payable endorsements (Form 438 BFU) in favor of the Collateral Agent (for
the benefit of the Existing Lenders), in form and substance satisfactory to the
Agent; and (z) at least annually and on such other times as reasonably requested
by the Agent, certificates of insurance from such insurance companies and
certified copies of such insurance policies. All policies of insurance shall
provide for not less than 30 days prior written cancellation notice to the
Agent.
7.8. BOOKS AND RECORDS. Keep and maintain full and accurate books of
record and accounts of its operations, dealings and transactions in relation to
its business and activities, in conformity with Generally Accepted Accounting
Principles and all Requirements of Law.
7.9. COMPLIANCE WITH TERMS OF ALL REAL PROPERTY RELATED Agreements. Make
all payments and otherwise perform all of its obligations in respect of all Real
Property Collateral with respect to which the failure to so perform could have a
material adverse effect on the security afforded thereby, and use its best
efforts to keep, and take all action to keep, the leases on all leaseholds in
full force and effect, and not allow such leases to lapse or be terminated or
any rights to renew such leases to be forfeited or canceled, and notify the
Agent of any defaults of the Borrowers or any default of any other party with
respect to such leases and cooperate in all respects with all actions of the
Agent to cure such defaults.
7.10. HAZARDOUS MATERIALS. Except in compliance with all applicable
Environmental Laws, the Borrowers shall not and shall use their reasonable best
efforts not to cause or permit any other person or entity to, cause or permit
the presence, use, generation, manufacture, installation, release, discharge,
storage or disposal of any Hazardous Materials on, under, in or about any real
property owned by the Borrowers or any Subsidiary or any real property leased,
subleased, occupied or used by the Borrowers or any Subsidiary, or the
transportation of any Hazardous Materials to or from any such real property
unless such use or transportation is on a temporary basis incidental to the
conduct of its business in the ordinary course and is performed in a manner that
does not cause a material violation of any applicable Environmental Law. In the
event of any breach or violation of the foregoing, or in the event of any other
release or threatened release of Hazardous Materials on, under, in or about any
Real Property owned by the Borrowers or any Real Property leased, subleased,
occupied or used by the Borrowers, the Borrowers shall promptly commence and
diligently complete a clean-up or other remediation of any such environmental
contamination to the extent required by applicable Environmental Law using a
duly qualified, licensed and insured contractor. In the event of any release or
threatened release of Hazardous Material on, under, in or about any real
property owned by any
49
Subsidiary or any real property leased, subleased, occupied or used by any
Subsidiary, the Borrowers shall cause such Subsidiary to promptly commence and
diligently complete a clean-up or other remediation of any such environmental
contamination to the extent required by applicable Environmental Law using a
duly qualified, licensed and insured contractor.
7.11. INTELLECTUAL PROPERTY ASSIGNMENTS. Execute intellectual property
assignments in form and substance satisfactory to the Agent, upon the Borrowers'
applications with any state or federal agency for or registration of any
patents, trademarks or other intellectual property or licenses thereof, and
cooperate with the Agent to have such assignments or other documents filed with
the appropriate state or federal agency.
7.12. FURTHER ASSURANCES. Perform, make, execute and deliver and cause
their Consolidated Subsidiaries to perform, make, execute and deliver all such
additional and further acts, things, deeds, occurrences and instruments as the
Agent or the Majority Lenders may reasonably require to document and consummate
the transactions contemplated hereby and to vest completely in and ensure the
Agent and the Existing Lenders their respective rights under this Agreement and
the other Restructuring Documents.
7.13. INSPECTION OF PROPERTY, BOOKS AND RECORDS. Keep, and will cause
each Consolidated Subsidiary to keep, proper books of record and account in
which full, true and correct entries in conformity with Generally Accepted
Accounting Principles shall be made of all dealings and transactions in relation
to its business and activities; and will permit, and will cause each
Consolidated Subsidiary to permit, representatives and Professionals of the
Agent or any Steering Committee Lender, including Ernst & Young (at the
Borrowers' expense), to enter upon the Real Property Collateral, to take and
remove soil and groundwater samples from the Real Property Collateral, to
conduct tests on any part of the Real Property Collateral, to visit, inspect,
and appraise any of the Collateral, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all at such times and as often as may be desired.
7.14. USE OF PROCEEDS. None of the proceeds of the Existing Loans have
been or will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.
7.15. COMPLIANCE WITH ASSET DISPOSITION PROGRAM.
(a) Timely comply with the terms of their Asset Disposition Program,
subject to the restrictions of SECTIONS 8.3 AND 8.4.
50
(b) Provide a brief description of any bona fide offer in excess of
$3,500,000 for any proposed disposition of assets.
7.16. CASH MANAGEMENT SYSTEM. Comply with each of the covenants
contained in the Cash Management System.
ARTICLE VIII
NEGATIVE COVENANTS
So long as this Agreement is in effect, the Borrowers shall not,
unless the Majority Lenders shall otherwise agree:
8.1. INDEBTEDNESS. Create, incur, assume or suffer to exist, or permit any
Consolidated Subsidiary to create, incur, assume or suffer to exist, any
Indebtedness, EXCEPT:
(a) Indebtedness of the Borrowers in connection with this Agreement;
Indebtedness existing, or relating to commitments existing, on
the Original Closing Date and the Metra Obligations, all as set forth on
SCHEDULE 8.1 and any extensions, refundings or renewals thereof on terms
satisfactory to the Majority Lenders;
(c) Indebtedness with respect to financed insurance premiums which is
not past due;
(d) Indebtedness for performance guaranties and performance or
payment bonds incurred in the ordinary course of the Borrowers' or any
Consolidated Subsidiary's business;
(e) Purchase money Indebtedness with respect to Capital Expenditures
obtained from financing sources other than the Existing Lenders ("Additional
Capital Expenditure Indebtedness"); PROVIDED, that (i) no Default or Event of
Default has occurred and is continuing at the time the Additional Capital
Expenditure Indebtedness is to be incurred, (ii) the amount of such Additional
Capital Expenditure Indebtedness outstanding at any time shall in no event
exceed $1,000,000, and (iii) each of the Borrowers shall have delivered notice
to the Agent of its intention to incur any Additional Capital Expenditure
Indebtedness;
(f) Indebtedness of XxXxxxxxx Xxxxxx Corporation Limited that is not
guaranteed by the Borrowers; or
(g) Indebtedness of MKO pursuant to a guaranty of the Corporate Card
Account Agreement between American Express
51
Travel Services Company, Inc. and MKO's wholly-owned subsidiary Rocky Mountain
Remediation Services Limited Liability, Inc.
8.2. NEGATIVE PLEDGE. Create, assume or suffer to exist, or permit any
Consolidated Subsidiary to create, assume or suffer to exist, any Lien on any
asset now owned or hereafter acquired by them, except:
(a) Liens of the Restructuring Documents and the T-Co Asset Purchase
Documents including Liens of the Bonding Company thereunder; provided that (i)
no cash collateral may be provided to the Bonding Company (except for cash
collateral permitted to be disbursed to or for the benefit of the Bonding
Company under the Distribution Agreement) or to T-Co except as permitted by
SECTION 8.4, and (ii) no security interest in office equipment or furnishings,
including computers, shall be provided to either the Bonding Company or T-Co;
(b) Liens existing on the Original Closing Date securing Indebtedness
outstanding on the Original Closing Date which are listed on SCHEDULE 8.2
hereto;
(c) Any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring such
asset; PROVIDED, that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition thereof; and PROVIDED, FURTHER, that such
Lien is confined solely to the asset so acquired;
(d) Any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Indebtedness is not
increased and is not secured by any additional assets;
(e) Liens for taxes either not yet due or being contested in good
faith by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of any material asset and the
Borrowers shall maintain in accordance with Generally Accepted Accounting
Principles appropriate reserves therefor;
(f) Materialmen's, mechanic's, workmen's repairmen's or other like
Liens arising in the ordinary course of business (including those arising under
maintenance agreements entered into in the ordinary course of business) securing
obligations that are not overdue or are being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any material
danger of the sale, forfeiture or loss of any material asset;
(g) Liens which are bonded in a manner reasonably satisfactory to the
Majority Lenders; and
52
(h) Liens permitted by the Ship Mortgage on the vessel thereby
encumbered.
8.3. PROHIBITION OF FUNDAMENTAL CHANGES. Directly or indirectly, (whether
in one transaction or a series of transactions), (a) enter into any transaction
of merger, consolidation or amalgamation; (b) liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution); (c) convey, sell, lease,
transfer or otherwise dispose of all or a substantial part of its respective
business or assets; (d) acquire by purchase or otherwise all or substantially
all the business or assets, or stock or other evidence of beneficial ownership,
of any Person; (e) make any material change, which could have an adverse effect
on the Borrowers' ability to perform their Obligations hereunder, in their
present method of conducting business; (f) enter into any agreement or
transaction where they are bound to do or permit any of the foregoing; or
(g) permit any Consolidated Subsidiary to do any of the foregoing.
8.4. PROHIBITION ON SALE OF ASSETS. Sell, transfer, convey, lease or
otherwise dispose of, or permit any Consolidated Subsidiary, except Emkay
Development Company, Inc., to sell, transfer, convey, lease, or otherwise
dispose of, all or any of the assets of the Borrowers and their Consolidated
Subsidiaries except (i) sales of inventory in the ordinary course of business;
(ii) sales of equipment not exceeding $50,000 for which no consent shall be
required; (iii) sales of equipment greater than $50,000 but less than $600,000
which sales shall require the consent of the Agent; (iv) sales of equipment
greater than $600,000 in the aggregate but less than $1,500,000 in the aggregate
which sales shall require the consent of the Majority Lenders; and (v) sales of
equipment in excess of $1,500,000 in the aggregate which sales shall require the
consent of All Lenders; provided, however, to the extent that any such equipment
constitutes equipment that is subject to the Intercreditor Agreement and secures
new bonds issued by the Bonding Company (the "Subject Equipment"), the Borrowers
and the Consolidated Subsidiaries shall be permitted to sell, transfer, convey,
lease or otherwise dispose of any and all Subject Equipment without the consent
of the Existing Lenders or the Agents and notwithstanding SECTION 2.9(a) hereof,
the Borrowers and the Consolidated Subsidiaries (except Emkay Development
Company, Inc.) shall be permitted to retain the Net Cash Proceeds of such
Subject Equipment so long as (x) such Net Cash Proceeds are used to cash-
collateralize new bonds obtained from the Bonding Company, and (y) such Net Cash
Proceeds are used as the first money to be expended to replace any such Subject
Equipment.
8.5. INVESTMENTS. Make or commit to make any loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes, debentures or
other securities of, or make any other investment in any Person (all such
transactions
53
being called "Investments"), or permit any Guarantor to do any of the foregoing,
except:
(a) Investments in Cash Equivalents;
(b) Investments existing on the Original Closing Date and set forth
in SCHEDULE 8.5 hereto and consented to by the Majority Lenders; and
(c) Investments made in any Person in accordance with the Budget.
8.6. COMPLIANCE WITH ERISA.
(a) Terminate any Single Employer Plan maintained by any Borrower or
a Commonly Controlled Entity so as to result in any material liability to PBGC.
(b) Engage in any "prohibited transaction" (as defined in Section
4975 of the Code) involving any Single Employer Plan maintained by any Borrower
or a Commonly Controlled Entity which would result in a material liability for
an excise tax or civil penalty in connection therewith.
(c) Incur or suffer to exist any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived,
involving any Single Employer Plan maintained by any Borrower or a Commonly
Controlled Entity.
(d) Allow or suffer to exist any event or condition, which presents a
material risk of incurring a material liability to PBGC by reason of the
termination of any Plan.
8.7. RESTRICTED PAYMENTS. (a) Declare, pay or make (i) any dividends or
other distributions with respect to their capital stock or rights to acquire
capital stock or any payment on account of such capital stock or rights to
acquire capital stock, or (ii) any prepayment of principal or prepayment of
interest on account of any of their Indebtedness, (b) set apart assets for a
sinking or any analogous fund for the purchase, redemption, or retirement or
other acquisition of, any shares of their capital stock or rights to acquire
capital stock or any of their Indebtedness, or (c) purchase, defease, acquire or
redeem any of their Indebtedness; PROVIDED, that the Borrowers may make required
or permitted payments or prepayments on account of Indebtedness under the
Restructuring Documents.
8.8. TRANSACTIONS WITH AFFILIATES. Enter into any transaction, or permit
any Guarantor to enter into any transaction, including any purchase, sale, lease
or exchange of property or the rendering of any service, with any Affiliate or
employee; except transactions which are contemplated by this Agreement or are in
the ordinary course of such Borrower's or Guarantor's business and are made in
accordance with the Budget.
54
8.9. SALE/LEASE-BACKS. Enter into any arrangements, directly or
indirectly, with any Persons whereby a Borrower or Guarantor shall sell or
transfer any property, whether now owned or hereafter acquired in connection
with the rent or lease of (i) such property or (ii) other property which such
Borrower or Guarantor intends to use for substantially the same purpose or
purposes as the property so sold or transferred.
8.10. OPERATING LEASES. Incur, or permit any Guarantor to incur, at
any time any additional annual lease payments as lessee under Operating Leases,
excluding (i) scheduled increases in lease payments in connection with leases
existing on the Original Closing Date and as set forth in SCHEDULE 8.10 or
replacements of such leases upon expiration thereof and (ii) conversions of
existing Capital Leases to Operating Leases, so long as such conversion does not
have the effect of increasing total annual lease payments to the lessor; and
(iii) lease payments in connection with new Operating Leases, PROVIDED that the
aggregate annual lease payments for such Operating Leases shall not exceed
$1,000,000.
8.11. CAPITAL EXPENDITURES. Make, or permit any Guarantor to make, any
Capital Expenditures other than (a) items included in the Budget for Mining,
Transit, Infrastructure, and EC&E or (b) other Capital Expenditures aggregating
not more than $1,000,000.
8.12. AMENDMENT OF CHARTER OR BYLAWS. Amend their, or any of the
Guarantors', articles of incorporation to revise, in any material respect, the
Borrowers' capital structure, or to change the names of the Borrowers, or make
any other material amendments thereto or to their bylaws without promptly
providing a copy thereof to the Agent.
8.13. NO CONSENT TO SUBORDINATION. Give their consent, or permit any
Consolidated Subsidiary to give its consent, to the subordination of any of
their rights or claims (including any subordination in the form of an agreement
to defer remedies or extend maturities) to any right or claim of any other
Person other than subordination of the MK Rail Note in connection with the MK
Rail Global Settlement Agreement.
8.14. INTERCOMPANY OBLIGATIONS. Adjust, settle or compromise any
amounts receivable from any Subsidiary or Affiliate including accounts
receivable, notes receivable, or any other intercompany account reflected on the
books of the Borrowers; PROVIDED, that the Borrowers may adjust, settle or
compromise any amounts receivable from any Subsidiary or Affiliate if the
aggregate amount of such adjustments, settlements, or compromises does not
exceed $500,000.
55
ARTICLE IX
DEFAULTS
9.1. EVENTS OF DEFAULT. Any one or more of the following described events
shall constitute an Event of Default hereunder, whether such occurrence shall be
voluntary or involuntary, or occur or be effected by operation of law or
otherwise:
(a) Any Borrower shall fail to pay when due any principal, interest,
fees, expenses, or any other amount owing in respect of the Obligations when due
and payable pursuant to the terms thereof or hereof and as modified by ARTICLE
II and ARTICLE III;
(b) Any Borrower shall fail to observe or perform any covenant
contained in ARTICLE VIII;
(c) Any Borrower or any Guarantor shall fail to observe or perform
any covenant or agreement contained in this Agreement or the other Restructuring
Documents (other than those covered by clause (a) or (b) above) for 10 days
after written notice thereof has been given to any Borrower by the Agent;
(d) Any representation or warranty of any Borrower or any Guarantor
set forth in this Agreement, or the other Restructuring Documents or in any
other certificate, opinion or other statement at any time provided by or on
behalf of any Borrower pursuant hereto shall prove to be in any material respect
false or misleading at the time given or deemed given;
(e) Any Borrower, any Guarantor or any Consolidated Subsidiary shall
fail to make any payment in respect of any Indebtedness when due or within any
applicable grace period, or any event or condition shall occur which results in
the acceleration of the maturity of any Indebtedness or set-off of such
Indebtedness of any Borrower, Guarantor or any Consolidated Subsidiary or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holder of such Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(f) Any Borrower, any Guarantor or any Consolidated Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Indebtedness under
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its Indebtedness as it becomes due,
56
or shall take any corporate action to authorize any of the foregoing;
(g) An involuntary case or other proceeding shall be commenced
against any Borrower, any Guarantor or any Consolidated Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
Indebtedness under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 20 days; or an order for relief shall
be entered against any Borrower or any Consolidated Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(h) Any writ of execution, attachment or garnishment or any lien, any
judgment or any other legal process to be issued against any Borrower or any
Guarantor or any of the property of any Borrower, any Guarantor or their
Subsidiaries (including the Collateral) which by itself or together with all
other such legal processes is for an amount in excess of $1,000,000 which shall
remain unvacated, unbonded or unstayed;
(i) The project owner makes any demand under any indemnity agreement
between the Bonding Company and any Borrower;
(j) Actual disbursements of any type shall exceed the total projected
disbursements as set forth in the Budget by $10,000,000 in any one week or
$20,000,000 in the aggregate;
(k) Actual Financing Shortfall shall exceed the projected amount as
set forth in the Budget by $10,000,000 in any one week or $20,000,000 in the
aggregate;
(l) All or substantially all of the property of any Borrower,
Guarantor or any Consolidated Subsidiary shall be condemned, seized or otherwise
appropriated;
(m) Any Borrower, any Guarantor or any Consolidated Subsidiary shall
voluntarily suspend the transaction of substantially all of its business for
more than three (3) consecutive Business Days;
(n) Any Borrower or any Commonly Controlled Entity shall engage in
(a) any "prohibited transaction" (as defined in ERISA or Section 4975 of the
Code) involving any Single Employer Plan maintained by any Borrower or a
Commonly Controlled Entity, (b) any "accumulated funding deficiency" (as defined
in ERISA), whether or not waived, shall exist with respect to any Single
Employer Plan maintained by any Borrower or a Commonly Controlled Entity, (c) 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
57
Single Employer Plan, which Reportable Event or institution of proceedings
presents a material risk of termination of such Plan for purposes of Title IV of
ERISA, and, in the case of a Reportable Event, the continuance of such
Reportable Event unremedied for ten days after notice of such Reportable Event
pursuant to Section 4043(a), (c) or (d) of ERISA is given or the continuance of
such proceedings for ten days after commencement thereof, as the case may be,
(d) any Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(e) the withdrawal or partial withdrawal from any Multi-employer Plan, (f) the
reorganization or insolvency of a Single Employer Plan maintained by any
Borrower or a Commonly Controlled Entity or (g) it shall be determined that
Unfunded Liabilities exist, and in each case in clauses (a) through (g) above,
such event or condition together with all other such events or conditions, if
any, would subject any Borrower to any tax, penalty or other liabilities in
excess of $1,000,000 or would otherwise have a Materially Adverse Effect;
(o) Any person or group of persons (within the meaning of Section 12
or 14 of the Securities Exchange Act of 1934, as amended), other than the
Existing Lenders, shall acquire beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said Act) of
35% or more of the outstanding shares of common stock of MKD;
(p) Any of the Restructuring Documents or provisions thereof, for any
reason whatsoever, ceases to be valid and binding on any Borrower or any
Guarantor or any Bridge Loan Lender or Existing Lender or the Bonding Company,
or any Borrower or any Guarantor or any Bridge Loan Lender or Existing Lender or
the Bonding Company shall so assert, or the Liens granted pursuant to any of the
Security Documents shall not constitute valid, perfected, first-priority Liens
on the properties and assets described therein, subject only to the Permitted
Liens, or any Borrower or any Guarantor shall be in default under the Security
Documents, subject to any cure periods contained therein;
(q) Any other event or condition occurs or exists which could have or
result in a Material Adverse Effect;
(r) The occurrence of any breach or default under the Distribution
Agreement or the Intercreditor Agreement;
(s Breach of any representation, warranty, covenant, obligation or
undertaking set forth in the Cash Management System or any agreement related
thereto;
(t) There shall be any amendment or other modification of the Metra
Guaranty, the Metra Credit Agreement or any related documents that increases the
maximum amount payable under the Metra Guaranty or the Metra Credit Agreement
without
58
the consent of All Existing Lenders, including amendments or modifications
relating to the maximum principal amount, the rate of interest, or fees and
other charges payable under the Metra Guaranty, the Metra Credit Agreement or
any related documents; or
(u) Any claim is made by T-Co or any other Person asserting that the
Borrowers have breached a representation, warranty, or covenant contained in the
T-Co Asset Purchase Documents or any payments are made by the Borrowers on
account of any such claim or breach, in each case in an aggregate amount in
excess of $500,000; PROVIDED, HOWEVER, that no Event of Default shall exist
under this SECTION 9.1(u) if the Borrowers are contesting, in good faith, the
claim that they have breached a representation, warranty or covenant contained
in the T-Co Asset Purchase Documents.
(v) There shall be any amendment or other modification to the T-Co
Asset Purchase Documents, including the New Bonds Agreement and the
Reimbursement Agreement, without the consent of the Majority Lenders.
9.2. THE EXISTING LENDERS' REMEDIES. Subject to the Intercreditor
Agreement and the Distribution Agreement, upon the occurrence of an Event of
Default or at any time thereafter, after notice and the lapse of any cure
period, where applicable, and in each and every case, until such Event of
Default shall have been remedied or waived in writing in accordance with SECTION
12.6, upon the request of the Majority Lenders, the Agent shall, by notice in
writing to the Borrowers (a "Notice of Acceleration") declare all the
Obligations due hereunder, under the other Loan Documents, under the Existing
Agreements to be immediately due and payable, without presentment, demand,
protest or notice of any kind (other than notices provided herein), all of which
are hereby expressly waived to the extent permitted by applicable law; PROVIDED,
HOWEVER, that upon the occurrence of any event specified in either SECTION
9.1(f) or SECTION 9.1(g) (and, in the case of SECTION 9.1(g), after the lapse of
the 20 day period referred to therein) all amounts owing under this Agreement,
the other Loan Documents and the Existing Agreements immediately shall
automatically be due and payable in full without declaration or other notice
(other than notices provided herein) to the Borrowers. The Agent immediately,
and without expiration of any period of grace (other than that specifically
provided herein), may enforce payment of all Obligations of any Borrower to the
Agent and the Existing Lenders and the Agent shall be entitled to all remedies
available hereunder and thereunder.
9.3. OTHER REMEDIES. Subject to the Intercreditor Agreement and the
Distribution Agreement, upon the occurrence of an Event of Default or at any
time thereafter, after notice and the lapse of any cure period, where
applicable, and in each and every case, until such Event of Default shall have
been remedied
59
or waived in writing in accordance with SECTION 12.6, in addition to the
remedies listed in SECTION 9.2 upon the earlier of a Notice of Acceleration or
acceleration of the Obligations, the Existing Lenders acting by and through the
Agent and the Collateral Agent shall have all rights, powers and remedies
available under each of the Restructuring Documents and applicable law,
including (i) commencing judicial or nonjudicial foreclosure proceedings against
the Real Property Collateral, (ii) enforcing the Collateral Agent's security
interest in the Collateral by means of one or more public or private sales
thereof, (iii) taking possession of all or any portion of the Collateral, in
person or by means of a court appointed receiver (who shall be appointed without
regard to the value of Collateral Agent's security), and (iv) exercising any or
all of the rights of a beneficiary or secured party pursuant to applicable law.
All rights, powers and remedies of the Agents or the Existing Lenders in
connection with each of the Restructuring Documents may be exercised at any time
or from time to time, are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided by law or equity. Upon the
request of the Majority Lenders after the occurrence of an Event of Default, the
Agent shall instruct the Collateral Agent to exercise any remedies under the
Restructuring Documents, including collection of funds in deposit accounts,
foreclosure on Real Property Collateral, seeking a receiver to take possession
of any Collateral and/or the Real Property Collateral, and commencement of or
actions in court proceedings.
9.4. WAIVERS BY THE BORROWERS. Except as otherwise provided for in this
Agreement and applicable law, the Borrowers waive (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by the Agent, the Collateral Agent or the Existing Lenders on
which the Borrowers may in any way be liable and hereby ratify and confirm
whatever the Agent, the Collateral Agent or the Existing Lenders may do in this
regard, (ii) all rights to notice and a hearing prior to the Collateral Agent's
taking possession or control of, or replevy, attachment or levy upon, the
Collateral, or any bond or security which might be required by any court prior
to allowing the Agent or the Collateral Agent to exercise any of its remedies,
and (iii) the benefit of all valuation, appraisal and exemption laws. Each
Borrower acknowledges that it has been advised by counsel of its choice with
respect to the effect of the foregoing waivers and this Agreement, the other
Restructuring Documents and the transactions evidenced by this Agreement and the
other Restructuring Documents, generally.
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ARTICLE X
THE AGENT
10.1. APPOINTMENT. Each Existing Lender hereby (a) irrevocably
appoints Mellon Bank, N.A. as the Agent of such Existing Lender under this
Agreement and the other Loan Documents and, subject to the last sentence of
SECTION 3.1, the Existing Agreements, and (b) irrevocably authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers 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 anything to the contrary herein, the Agent shall have
no duties, except those expressly set forth in this Agreement and the other Loan
Documents, and no implied covenants, responsibilities, duties, obligations or
liabilities shall be read into this Agreement and the other Loan Documents or
otherwise exist against the Agent.
10.2. THE AGENT AND AFFILIATES. The Agent shall have the same rights
and powers under this Agreement as any other Existing Lender and may exercise or
refrain from exercising the same as though it were not the Agent, and the Agent,
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with either Borrower or any Subsidiary or Affiliate of
either Borrower as if it were not the Agent hereunder.
10.3. RETENTION OF DOCUMENTS AND INFORMATION TO THE EXISTING LENDERS.
The Agent shall deliver to each Existing Lender any material documents and
written information required under this Agreement to be delivered by the
Borrowers to the Agent within a reasonable period after the Agent's receipt of
such documents or information.
10.4. DELEGATION OF DUTIES. The Agent may exercise any of its powers
or execute any of its duties under this Agreement and the other Loan Documents
by or through one or more agents or attorneys-in-fact and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to
such rights and duties. The Agent may utilize the services of such agents and
attorneys-in-fact as the Agent in its sole discretion reasonably determines, and
all fees and expenses of such agents and attorneys-in-fact shall be paid by the
Borrowers on demand. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by the Agent with
reasonable care.
10.5. LIMITATION OF LIABILITY. Neither the Agent nor their officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (a)
liable for any waiver, consent or approval given or any action taken or omitted
to be given or
61
taken by them or by such Person under or in connection with this Agreement or
the other the Loan Documents or (b) responsible for the consequences of any
oversight or error in judgment by them or such Person whatsoever, except for
their or such Person's own gross negligence or willful misconduct. The Agent
shall not be responsible for (v) the execution, validity, enforceability,
effectiveness or genuineness of this Agreement or the other Loan Documents or
Existing Agreements, (w) the collectability of any amounts owing under this
Agreement or the other Loan Documents or Existing Agreements, (x) the value,
sufficiency, enforceability or collectability of any Collateral security
therefor, (y) the failure by any Borrower to perform its Obligations hereunder
or (z) the truth, accuracy and completeness of the recitals, statements,
representations or warranties made by any Borrower or any officer or agent
thereof contained in this Agreement, the other Loan Documents or Existing
Agreements or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent in connection with, this
Agreement or the other Loan Documents or Existing Agreements.
10.6. RELIANCE BY THE AGENT. The Agent shall not have any obligation
(a) to ascertain or to inquire as to the observance or performance of any of the
conditions, covenants or agreements in this Agreement or the other Loan
Documents or in any document, instrument or agreement at any time constituting,
or intended to constitute, collateral security therefor, (b) to ascertain or
inquire as to whether any notice, consent, waiver or request delivered to them
shall have been duly authorized or is genuine, accurate and complete, or (c) to
inspect the properties, books or records of the Borrowers. The Agent shall be
entitled to rely, and shall be fully protected in relying, (x) upon any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document, instrument or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, or (y)
upon advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. The Agent may deem and treat each Existing
Lender party hereto or any Assignee as an Existing Lender for all purposes
unless a written notice of the assignment, negotiation or transfer thereof, in
accordance with the provisions of this Agreement shall have been delivered to
the Agent identifying the name of any successor or Assignee. The Agent shall be
entitled to fail or refuse, and shall be fully protected in failing or refusing,
to take any action under this Agreement or the other Loan Documents unless (a)
it first shall receive such advice or concurrence of the Majority Lenders as it
deems appropriate, or (b) it first shall be indemnified to its satisfaction by
the Existing 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. In
all cases the Agent shall be fully protected in acting, or in refraining from
acting, under this Agreement or the Loan Documents in accordance
62
with a request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Existing Lenders
and all future holders of Existing Indebtedness.
10.7. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default unless the Agent
has received notice from an Existing Lender or the Borrowers referring to this
Agreement, describing such Event of Default and stating that such notice is a
"notice of default." If the Agent receives such a notice or has actual
knowledge of the occurrence of an Event of Default, the Agent promptly shall
give notice thereof to the Existing Lenders. The Agent shall take such action
with respect to such Event of Default as shall be directed by the Majority
Lenders; PROVIDED, HOWEVER, 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 Event of Default as it
deems advisable in the best interests of the Existing Lenders.
10.8. NON-RELIANCE ON THE AGENT AND THE OTHER EXISTING LENDERS. Each
Existing Lender 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. The Agent shall have no obligation or
liability to any of the Existing Lenders regarding the creditworthiness or
financial condition of any Borrower. No act by the Agent hereinafter taken,
including any review of the Borrowers, shall be deemed to constitute any
representation or warranty by the Agent to any Existing Lender. Each Existing
Lender represents to the Agent that, independently and without reliance upon the
Agent or any other Existing Lender and based on such documents and information
as it has deemed appropriate, it has made its own appraisal of and investigation
into the business, operations, property, financial and other condition and
creditworthiness of the Borrowers and has made its own decision to enter into
this Agreement. Each Existing Lender also represents that, independently and
without reliance upon the Agent or any other Existing Lender, and based on such
documents and information as it deems appropriate at the time, it shall 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
Borrowers. Except for notices, reports and other documents expressly required
to be furnished to the Existing Lenders by the Agent hereunder, the Agent shall
have no obligation or liability to provide any Existing Lender with any credit
or other information concerning the business, operations, property, financial
and other condition or creditworthiness of the Borrowers which may come into the
possession of either of the
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Agent or any of their officers, directors, employees, agents, attorneys-in-fact
or affiliates.
10.9. COLLATERAL. Each of the Existing Lenders represents to the Agent
and each of the other Existing Lenders that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
10.10. INDEMNIFICATION. Each of the Existing Lenders shall indemnify,
defend and hold harmless the Agent in its capacity as such (to the extent not
reimbursed by the Borrowers and without limiting the obligation of the Borrowers
to do so), ratably according to their Pro Rata Share as of date demand for
payment is made upon such Existing Lenders from and against any and all claims,
demands, lawsuits, costs, expenses, fees, liabilities, obligations, losses,
damages, actions, recoveries, judgments, suits, costs, expenses or disbursements
of any kind whatsoever, including interest, penalties and attorneys' fees and
costs, whether direct, indirect, consequential or incidental, which at any time
(including at any time following the payment of all amounts payable under the
Existing Agreements and the Restructuring Documents) may be imposed on, incurred
by or asserted against the Agent in its capacity as such and not in its
individual capacity in any way relating to, resulting from or arising out of
this Agreement, or the Restructuring Documents, the transactions contemplated
hereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing; PROVIDED, HOWEVER, that no Existing Lender shall be liable
for the payment of any portion of such claims, demands, lawsuits, costs,
expenses, fees, liabilities, obligations, losses, damages, actions, remedies,
judgments, suits, costs, expenses or disbursements to the extent such result
from the Agent's gross negligence or willful misconduct. The agreements in this
SECTION 10.10 shall survive the payment of all amounts payable under
Restructuring Documents and shall be in addition to and not in lieu of any other
indemnification agreements set forth in the Restructuring Documents.
10.11. THE AGENT IN ITS INDIVIDUAL CAPACITY. The Agent in its
individual capacity, and its Affiliates, may make loans and other financial
accommodations to, accept deposits from and generally engage in any kind of
business with the Borrowers and their Subsidiaries as though the Agent was not
the Agent hereunder. With respect to its Existing Indebtedness and any other
Indebtedness made or renewed by it, the Agent in its individual capacity shall
have the same benefits, rights, powers and privileges under this Agreement, and
the Loan Documents as any Existing Lender and may exercise the same as though it
were not the Agent, and the terms "Existing Lender" and "Existing Lenders" shall
include the Agent in its individual capacity.
10.12. THE SUCCESSOR AGENT. The Agent may resign as such upon ten days'
prior written notice to the Existing Lenders. The
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Agent shall concurrently provide the Borrowers with a copy of such notice. If
the Agent shall resign as such under this Agreement, then the Majority Lenders
shall appoint from among the Existing Lenders a successor agent for the Existing
Lenders. A successor agent may also be appointed by the Majority Lenders if the
Agent ceases to have any Existing Indebtedness, and upon such appointment of a
successor agent the Agent shall resign as such. Upon acceptance of its
appointment as the successor agent in writing, (a) such successor agent shall
succeed to the rights, powers, privileges and duties of the Agent as the case
may be, (b) the retiring Agent shall be discharged of all its obligations and
liabilities in such capacity under this Agreement, and the Loan Documents, (c)
the term "Agent" shall mean such successor agent effective upon its appointment,
and (d) the retiring Agent's rights, powers and duties as the Agent as the case
may be 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 their successors
and assigns. With respect to any actions taken or omitted to be taken by the
retiring Agent while it was the Agent (for which retiring Agent may still have
liability), the retiring Agent shall continue to receive the benefits of this
ARTICLE X, including SECTION 10.10.
10.13. APPLICABILITY OF SECTION TO THE BORROWERS. Notwithstanding any
other provision contained in this ARTICLE X, the rights and obligations of the
Borrowers under this Agreement shall not be affected by any provision otherwise
included in this ARTICLE X. The Borrowers shall be permitted to rely on
communications from the Agent which it reasonably believes are made on behalf of
the Agent and, if specified therein, the Existing Lenders, and except as
otherwise set forth specifically herein, all notices and payments to be made by
the Borrowers hereunder shall be made to the Agent. Further, if any Existing
Lender shall be in default hereunder, such default shall not affect the right
and obligations of the Borrowers hereunder. The Agent shall provide the
Borrowers with prompt notice of any default by any Existing Lender.
10.14. DELIVERY TO THE AGENT OF EXISTING AGREEMENTS. If requested by
the Agent in order to enforce any of the rights or remedies of the Existing
Lenders under the Loan Documents, each Existing Lender shall deliver to the
Agent the originals of any promissory notes or other Existing Agreements held by
such Existing Lender evidencing the Existing Indebtedness, and if requested by
the Agent from time to time for any other reason shall deliver to the Agent
copies of any such promissory notes or other Existing Agreements.
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ARTICLE XI
JOINT AND SEVERAL LIABILITY
11.1. JOINT AND SEVERAL LIABILITY. Each Borrower agrees that such
Borrower is jointly and severally liable for the Obligations hereunder and that
all Obligations of each Borrower now or hereafter existing under this Agreement,
whether for principal, interest, fees, indemnification, expenses or other- wise,
will be paid strictly in accordance with the terms of this Agreement and the
other Restructuring Documents regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Existing Lenders with respect thereto. So long as
the Obligations have not been paid in full, the liability of each Borrower
hereunder shall be absolute and unconditional irrespective of:
(a) any taking, exchange, release, or nonperfection of any Collateral
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or
(b) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Borrower.
11.2. THE GUARANTEES. If and to the extent any Obligation of any
Borrower to the Agent or any Existing Lender shall be considered an obligation
of guaranty or suretyship, each Borrower hereby unconditionally guarantees the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the Obligations. Upon failure by either Borrower to pay
punctually any such amount, the other Borrower shall forthwith on demand pay the
amount not so paid at the place and in the manner specified in this Agreement.
11.3. GUARANTEES UNCONDITIONAL. The Obligations of each Borrower
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) Any extension, renewal, settlement, compromise, waiver or release
in respect of any Obligation of the other Borrower under this Agreement, the
Existing Agreements, the other Restructuring Documents or by operation of law or
otherwise;
(b) Any modification or amendment of or supplement to this Agreement,
the Existing Agreements or the other Restructuring Documents;
(c) Any release, impairment, non-perfection or invalidity of any
direct or indirect security for any Obligation
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of the other Borrower under this Agreement, the Existing Agreements or the other
Restructuring Documents;
(d) Any change in the corporate existence, structure or ownership of
the other Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the other Borrower or its assets or any resulting
release or discharge of any Obligation of the other Borrower contained in this
Agreement, the Existing Agreements or the other Restructuring Documents;
(e) The existence of any claim, set-off or other rights which a
Borrower may have at any time against the other Borrower, the Agent, any
Existing Lender or any other Person, whether in connection herewith or any
unrelated transactions; PROVIDED, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(f) Any invalidity or unenforceability relating to or against the
other Borrower for any reason of this Agreement, the Existing Agreements or the
other Restructuring Documents, or any provision of applicable law or regulation
purporting to prohibit the payment by the other Borrower of the principal,
interest or any other amount payable by it under this Agreement or the other
Restructuring Documents; or
(g) Any other act or omission to act or delay of any kind by the
other Borrower, the Agent, any Existing Lender or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of its Obligations under this
Agreement, the Existing Agreements or the other Restructuring Documents.
11.4. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The Borrowers' Obligations hereunder shall remain in full force
and effect until the Obligations have been paid in full. If at any time any
payment of the principal of or interest on any Existing Indebtedness or any
other amount payable by a Borrower under this Agreement is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of a Borrower or otherwise, the other Borrower's Obligations hereunder with
respect to such payment shall be reinstated at such time as though such payment
had been due but not made at such time.
11.5. WAIVERS BY THE BORROWERS. The following waivers shall apply to
the guarantees under this ARTICLE XI:
(a) EACH BORROWER EXPRESSLY WAIVES THE RIGHT TO REQUIRE THE AGENT,
THE COLLATERAL AGENT OR ANY EXISTING LENDER FIRST TO PURSUE THE OTHER BORROWER
OR ANY OTHER PERSON, THE COLLATERAL, OR ANY OTHER SECURITY OR GUARANTY THAT MAY
BE HELD FOR THE OBLIGATIONS, OR TO APPLY ANY SUCH SECURITY OR GUARANTY TO
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THE OBLIGATIONS BEFORE SEEKING FROM SUCH BORROWER PAYMENT IN FULL OF ITS
OBLIGATIONS TO THE AGENT AND THE EXISTING LENDERS OR PROCEEDING AGAINST SUCH
BORROWER FOR SAME;
(b) EACH BORROWER ACKNOWLEDGES THAT:
(i) IF A DEFAULT OR EVENT OF DEFAULT OCCURS AND SUCH BORROWER
PAYS TO THE AGENT AND THE EXISTING LENDERS ALL OR PART OF THE OBLIGATIONS, SUCH
BORROWER WOULD HAVE A RIGHT TO PROCEED AGAINST THE OTHER BORROWER TO THE EXTENT
OF THE OBLIGATIONS SO PAID BY SUCH BORROWER AND TO HAVE THE BENEFIT OF ANY
SECURITY HELD BY THE AGENT OR COLLATERAL AGENT FOR THE OBLIGATIONS TO THE EXTENT
OF THE OBLIGATIONS SO PAID BY THE BORROWER. SUCH RIGHT IS COMMONLY KNOWN AS THE
"RIGHT OF SUBROGATION."
(ii) IF AN EVENT OF DEFAULT OCCURS, THE AGENT, AMONG OTHER
THINGS, MAY ENFORCE ANY LIEN UPON ANY INTEREST IN REAL PROPERTY ("REAL PROPERTY
LIEN") BY MEANS OF JUDICIAL ACTION OR BY NON-JUDICIAL ACTION COMMONLY KNOWN AS A
"NON-JUDICIAL FORECLOSURE," "TRUSTEE'S SALE" OR "POWER OF SALE FORECLOSURE."
(iii) IF AN EVENT OF DEFAULT OCCURS, AND THE AGENT ENFORCES ANY
REAL PROPERTY LIEN BY MEANS OF A NON-JUDICIAL FORECLOSURE, TRUSTEE'S SALE OR
POWER OF SALE FORECLOSURE, SUCH BORROWER'S RIGHT OF SUBROGATION TO PROCEED
AGAINST THE OTHER BORROWER WOULD BE EXTINGUISHED BY THE OPERATION OF CALIFORNIA
CODE OF CIVIL PROCEDURE ("CCP") SECTION 580 OR SIMILAR LAWS, AND, IN SUCH CASE,
SUCH BORROWER MIGHT HAVE A DEFENSE AGAINST PAYMENT.
(iv) IF AN EVENT OF DEFAULT OCCURS, AND THE AGENT ENFORCES ANY
REAL PROPERTY LIEN BY MEANS OF JUDICIAL ACTION, SUCH BORROWER'S RIGHT TO PROCEED
AGAINST THE OTHER BORROWER MIGHT BE LIMITED BY THE OPERATION OF CCP SECTION 580
OR SIMILAR LAWS, IN WHICH CASE SUCH BORROWER MIGHT HAVE A COMPLETE OR PARTIAL
DEFENSE AGAINST PAYMENT.
NEVERTHELESS, SUCH BORROWER EXPRESSLY, KNOWINGLY AND
INTENTIONALLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, DEFENSES OR BENEFITS
THE BORROWER MIGHT HAVE UNDER CCP SECTIONS 580(b) OR 580(d) OR SIMILAR LAWS.
(v) IN ADDITION, THE BORROWER WAIVES ALL RIGHTS AND DEFENSES
ARISING OUT OF AN ELECTION OF REMEDIES BY THE EXISTING LENDERS, EVEN THOUGH THAT
ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY
FOR A GUARANTEED OBLIGATION, HAS DESTROYED THE GUARANTOR'S RIGHTS OF SUBROGATION
AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION OF CCP SECTION 580, OR
SIMILAR LAWS OR OTHERWISE.
(vi) SUCH BORROWER ALSO AGREES THAT THIS AGREEMENT WILL REMAIN
FULLY EFFECTIVE, AND SUCH BORROWER WILL BE LIABLE TO THE AGENT AND THE EXISTING
LENDERS FOR ANY OBLIGATIONS EVEN IF THE AGENT SELLS AN INTEREST IN REAL PROPERTY
BY JUDICIAL
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FORECLOSURE ACTION AND SUCH BORROWER'S RIGHTS AGAINST THE BORROWERS ARE LIMITED
BY THE OPERATION OF CCP SECTIONS 580b OR 580d OR SIMILAR LAWS.
(c) SUCH BORROWER AGREES THAT THE AGENT AND THE EXISTING LENDERS
SHALL BE UNDER NO OBLIGATION TO: MARSHAL ANY ASSETS IN FAVOR OF SUCH PERSON, TO
PROCEED FIRST AGAINST ANY OTHER PERSON OR ANY PROPERTY OF ANY OTHER PERSON OR
AGAINST ANY COLLATERAL, ENFORCE FIRST ANY OTHER GUARANTY OBLIGATIONS WITH
RESPECT TO, OR SECURITY FOR, THE OBLIGATIONS, PURSUE ANY OTHER REMEDY IN THE
AGENT'S OR ANY EXISTING LENDER'S POWER THAT SUCH BORROWER MAY NOT BE ABLE TO
PURSUE ITSELF AND THAT MAY LIGHTEN SUCH BORROWER'S BURDEN, ANY RIGHT TO WHICH
SUCH BORROWER HEREBY EXPRESSLY WAIVES.
EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A
MATERIAL INDUCEMENT TO THE AGENT'S, THE CO-AGENTS' AND EACH EXISTING LENDER'S
ENTERING INTO THIS AGREEMENT AND THAT THE AGENT, THE CO-AGENTS AND EACH EXISTING
LENDER ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH SUCH
BORROWER. EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE
FOREGOING WAIVERS WITH ITS LEGAL COUNSEL.
11.6. SUBROGATION. Each Borrower agrees that it shall have no right of
subrogation, contribution or reimbursement against the other Borrower until the
Obligations are paid in full. Each Borrower agrees upon making any payment
hereunder to be subrogated to the rights of the payee against the other Borrower
with respect to such payment or against any direct or indirect security
therefor, or otherwise to be reimbursed, indemnified or exonerated by or for the
account of the other Borrower in respect thereof.
11.7. STAY OF ACCELERATION. In the event that acceleration of the time
for payment of any amount payable by either Borrower under this Agreement is
stayed upon insolvency, bankruptcy or reorganization of such Borrower, all such
amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the other Borrower hereunder forthwith on demand
by the Agent made at the request of the Majority Lenders.
ARTICLE XII
MISCELLANEOUS
12.1. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, facsimile transmission
or similar writing) and shall be given to such party at its address or facsimile
number set forth on the Schedule for Notices attached hereto or such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the
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Borrowers. Each such notice, request or other communication shall be effective,
(i) if given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (ii) if given
by mail, seventy-two (72) hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iii) if given
by any other means, when delivered at the address specified in this Section;
PROVIDED, that notices to the Agent under ARTICLE II shall not be effective
until received.
12.2. ENTIRE AGREEMENT. The execution and delivery of this Agreement
and the other Loan Documents supersede all the negotiations or stipulations
concerning matters thereof which preceded or accompanied the execution and
delivery hereof and thereof. This Agreement, and the other Loan Documents are
intended, by the parties hereto and thereto, to be a complete and exclusive
statement of the terms and conditions hereof and thereof.
12.3. NO WAIVERS. No failure or delay by the Agent or any Lender in
exercising any right, power or privilege hereunder or under the other
Restructuring Documents shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
12.4. EXPENSES; INDEMNIFICATION.
(a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses
of the Agent and the Steering Committee Lenders as a group, as such group is
constituted on the Closing Date (as set forth in the attached SCHEDULE 12.4) and
as such group may be reconstituted from time to time including reasonable fees
and disbursements of the Professionals retained by the Steering Committee
Lenders as a whole, in connection with the preparation and administration of
this Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder, (ii) if an Event of Default occurs, all
reasonable out-of-pocket expenses incurred by the Agent and each Steering
Committee Lender, or their Professionals, including the reasonable fees and
disbursements of counsel (including allocated costs of internal counsel), in
connection with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom, and (iii) all reasonable out-
of-pocket legal fees and expenses of each Existing Lender accruing from and
after the Termination Date in connection with payment of the Obligations.
(b) The Borrowers agree to indemnify the Agent and each Existing
Lender, their respective Affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee
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harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel), which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened (i) relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Existing Loans hereunder or (ii) directly
or indirectly resulting from, arising out of, or based upon (x) the presence,
use, generation, manufacture, installation, release, discharge, storage or
disposal, at any time, of any Hazardous Materials on, under, in or about, or the
transportation of any such materials to or from, any Real Property or real
property owned, leased or operated by Borrower or any Affiliate of Borrower
(collectively, the "Subject Property") or (y) the violation or alleged violation
by Borrower or any Affiliate of Borrower of any law, statute, ordinance, order,
rule, regulation, permit, judgment or license relating to the use, generation,
manufacture, installation, release, discharge, storage or disposal of Hazardous
Materials to or from the Subject Property; PROVIDED, that no Indemnitee shall
have the right to be indemnified hereunder (A) for such Indemnitee's own gross
negligence or willful misconduct or (B) in the case of any Existing Lender, for
its failure to perform the duties expressly required to be performed by it by
the terms of this Agreement, in each case as determined by a court of competent
jurisdiction.
12.5. SET-OFF; SHARING UPON SET-OFF REDUCTIONS IN LIABILITY AND
CONVERSION EVENTS.
(a) In addition to any rights and remedies of the Existing Lenders
provided by law, the Existing Lenders each shall have a security interest in any
and all deposits of the Borrowers (general or special, time or demand,
provisional or final) at any time held by any Existing Lender which security
interest shall secure the Obligations. Upon the occurrence and during the
continuance of an Event of Default, provided that it has first received the
written consent of the Agent, without prior notice to the Borrowers (any such
notice being specifically waived by the Borrowers to the fullest extent
permitted by applicable law) each Existing Lender may set off and apply against
any Obligations, whether matured or unmatured, of the Borrowers to the Existing
Lenders, any amount owing from the Existing Lenders to the Borrowers. No
Existing Lender shall exercise any right of set-off it may have against any
Borrower or Guarantor in connection with the Obligations without the prior
written consent of the Agent. Each Existing Lender promptly shall notify the
Borrowers and the Agent after any such setoff and application made by any such
Existing Lender; PROVIDED, HOWEVER, that failure to give such notice shall not
affect the validity of such setoff and application. Provided that an Event of
Default described in either SECTION 9.1(f) or SECTION 9.1(g) has not occurred,
Bank of America National Trust and Savings Association expressly agrees
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that it will not exercise set-off rights with respect to cash in the Cash
Management System for application against any Indebtedness, liabilities or other
obligations of any of the Borrowers, Guarantors or any Consolidated Subsidiaries
under any agreements, other than the Existing Agreements and the other
Restructuring Documents. Any such set-off rights will be subject to the
Intercreditor Agreement.
(b) Each Existing Lender (other than Citibank, N.A. and Xxxxxx
Guaranty Trust Company of New York with respect to Letter of Credit Fees under
the reimbursement agreements under which the NYCTA/PB Letters of Credit were
issued) agrees that:
(i) to the extent that it shall receive or shall have received
or collect, in respect of any of the Obligations, any payment or distribution of
any cash or other property of any Borrower or any Guarantor at any time,
including by payment or distribution from any Borrower or any Guarantor, by
exercise of any right of set-off or counterclaim by liquidation of Collateral,
by reason of Conversion Events or Reductions in Liability, as a distribution in
a bankruptcy, insolvency or similar proceeding or otherwise, and any such
payment or distribution results in such Existing Lender's receiving or having
received more than it would otherwise be entitled to receive under this
Agreement (in the case of a Reduction in Liability, calculated, other than for
purposes of accruing interest and fees, as if such Reduction in Liability had
occurred before July 1, 1995), such Existing Lender shall promptly deliver the
same to the Agent in cash or the form received (except for the endorsement or
the assignment of or by such Existing Lender where necessary), and subject to
SECTION 12.5(d), the Agent shall promptly distribute the same to all Existing
Lenders in the same manner as if it were a payment to be distributed pursuant to
SECTION 2.11 (and such payment shall be applied as provided in SECTION 2.10),
including making a distribution to the Contingent Indebtedness Account on
account of the Existing Contingent Indebtedness and the Metra Guaranty as
provided in SECTION 2.11(b), and until so delivered or disbursed pursuant to
SECTION 2.11(f), the same shall be held in trust by such Existing Lender as
property of all Existing Lenders; and
(ii) to the extent that any payment or other transfer made under
this Agreement on account of the principal portion of any Obligations shall be
recovered (a "Returned Payment") from any Existing Lender pursuant to any
preference, fraudulent transfer of similar provision under any bankruptcy,
insolvency or similar law or otherwise, each other Existing Lender shall
purchase from such Existing Lender a participation in its Pro Rata Share of such
Returned Payment; PROVIDED, that nothing in this Section shall impair the right
of any Existing Lender (other than Bank of America National Trust and Savings
Association with respect to the Cash Management System) to exercise any right of
set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of
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Indebtedness of a Borrower other than its Existing Indebtedness; AND PROVIDED
FURTHER, that no Existing Lender shall be required to purchase any such
participation pursuant to this SECTION 12.5(b) because of a Reduction in
Liability, except to the extent such Existing Lender has, as determined pursuant
to SECTION 2.12, received amounts under this Agreement in excess of the amount
that it is otherwise entitled to receive under this Agreement (calculated, other
than for purposes of accruing interest and fees, as if such Reduction in
Liability had occurred before July 1, 1995).
(c) To the extent that any Existing Lender is required by the
provisions of SECTION 12.5(b) to purchase a participation in the Existing Loans
of one or more other Existing Lenders, such purchase shall be effected by (i)
the payment to the Agent by the Existing Lender making such purchase of the
amount required to be paid, and (ii) the Agent's distribution of the amount or
amounts required to be paid to the respective Existing Lender or Existing
Lenders from whom such purchase is required to be made. To the extent that any
Existing Lender is required by the provisions of SECTION 12.5(b) to purchase a
participation in the Existing Contingent Indebtedness or the Contingent
Obligations with respect to the Metra Guaranty of one or more other Existing
Lenders, such purchase shall be effected by (x) the payment to the Agent by the
Existing Lender making such purchase of the amount required to be paid, and
(y) the Agent's distribution into the Contingent Indebtedness Account pursuant
to SECTION 2.11(b) of the amount or amounts required to be paid for the account
of the respective Existing Lender or Existing Lenders from whom such purchase is
required to be made; PROVIDED that funds held in the Contingent Indebtedness
Account may be applied by the Agent to effect the purchase of a participation by
Existing Lenders on whose behalf such funds are held. Each Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
holder of a participation in Existing Indebtedness, whether or not acquired
pursuant to the foregoing arrangements, may exercise any rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of such Borrower in the
amount of such participation.
(d) The Existing Lenders shall deliver to the Agent any distributions
of property other than cash (distributions of cash shall be treated as provided
in SECTION 12.5(b)) received from the Borrowers, the Guarantors or their
successors in interest on account of the Obligations in connection with any
recapitalization of the Borrowers (other than a recapitalization in connection
with any bankruptcy or insolvency proceeding) that the Existing Lenders receive
on account of the Obligations. The Agent shall deposit such property with the
Collateral Agent and upon the liquidation of such property, such property shall
be distributed to the Existing Lenders as provided in SECTION 2.11 and applied
to the Obligations as provided in SECTION 2.10.
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(e) Each Existing Lender agrees to the provisions of this SECTION
12.5 on behalf of any assignee under its Existing Agreement.
12.6. AMENDMENTS AND WAIVERS. Any provision of this Agreement or the
other Loan Documents other than the Warrants may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Borrowers,
the Agent and the Majority Lenders; PROVIDED, that (i) the consent of All
Existing Lenders shall be required to amend, modify or waive any provision
relating to (a) a change in the amount or the time of payment of any amount
owing on any of the Existing Indebtedness, (b) a change in the rate of interest
or fees to be paid by the Borrowers with respect to any of the Existing
Indebtedness, (c) a change in the definitions of "All Lenders," "Conversion
Event," "Equilibrium," "Exposure," "Liquidated Contingent Liability," "Majority
Lenders," "Metra Exposure Percentage," "Metra Final Accounting Date," "Metra
Lenders," "Non-Metra Exposure Percentage," "Non-Metra Lenders," "Pro Rata
Share," "Pro Rata Share of Deferred Interest," "Reductions in Liability," or the
definitions referred to therein, (d) any change that subjects any Existing
Lender to any additional obligation, (e) this SECTION 12.6, SECTION 2.11,
SECTION 12.5(b), SECTION 12.20, or SECTION 12.21, (f) the release of any
Guarantor or any Borrower, (g) any change in the lien priorities created by, or
other material terms of, the Intercreditor Agreement or the Distribution
Agreement, and
(h) release of any Collateral that is not identified in the Asset Disposition
Program (for which the consent of the Majority Lenders shall be required) or
otherwise permitted to be released in connection with the Loan Documents; (ii)
any change in the duties of or indemnities in this Agreement in favor of any
Existing Lender or in an Existing Lender's Pro Rata Share or Pro Rata Share of
Deferred Interest shall require the consent of such Existing Lender; and
(iii) any change in the duties of or indemnities in favor of the Agent shall
require the consent of the Agent. Notwithstanding anything to the contrary
herein, the Agent and the Majority Lenders may modify, amend, restate,
supplement or waive any provision of ARTICLE X, other than SECTION 10.13,
without the consent of the Borrowers; AND PROVIDED further that amendments or
waivers of this Agreement are subject to the Intercreditor Agreement.
12.7. EFFECT OF WAIVERS; MODIFICATION OF DOCUMENTS. The Agent's, the
Collateral Agent's or the Existing Lenders' failure, at any time or times, to
require strict performance by the Borrowers or any other Person of any provision
of this Agreement or any of the other Loan Documents shall not waive, affect or
diminish any right of the Agent, the Collateral Agent or the Existing Lenders
thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by the Agent, the Collateral Agent or the Existing Lenders
of a Default or Event of Default under this Agreement or any of the other Loan
Documents, shall not suspend, waive or affect any other Default
74
or Event of Default under this Agreement or any of the other Loan Documents,
whether the same is prior or subsequent thereto and whether of the same or of a
different type. Subject to SECTION 12.20 and the Intercreditor Agreement, no
waiver of any provision of this Agreement or any other Loan Documents, nor
consent to any departure by the Borrowers, or any other person or entity
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent or the Majority Lenders or All Existing Lenders, as the
case may be, necessary to effectuate such waiver or consent and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
12.8. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that neither Borrower may assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of All
Existing Lenders.
(b) Any Existing Lender may at any time grant a participating
interest in its Existing Indebtedness to any Person (a "Participant"). In the
event of any such grant by an Existing Lender of a participating interest to a
Participant, whether or not upon notice to the Borrowers and the Agent, such
Existing Lender shall remain responsible for the performance of its obligations
hereunder, and the Borrowers and the Agent shall continue to deal solely and
directly with such Existing Lender in connection with such Existing Lender's
rights and obligations under this Agreement. Any agreement pursuant to which
any Existing Lender may grant such a participating interest shall provide that
such Existing Lender shall retain the sole right and responsibility to enforce
the Obligations of the Borrowers hereunder, including the right to approve any
amendment, modification or waiver of any provision of this Agreement. The
Borrowers agree that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of ARTICLE II with respect
to its participating interest. An assignment or other transfer which is not
permitted by subsection (c) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Existing Lender may at any time assign to any Person (each an
"Assignee") all of its rights and obligations under this Agreement or its
Existing Agreements, as modified hereby or any part thereof, and such Assignee
shall assume such rights and obligations, pursuant to an assignment and
assumption agreement executed by such Assignee and such transferor Existing
Lender in substantially the form attached hereto as EXHIBIT B. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Existing Lender of an amount
75
equal to the purchase price agreed to between such transferor Existing Lender
and such Assignee, such Assignee shall be deemed to be an Existing Lender under
this Agreement and shall have all of the rights and obligations of an Existing
Lender with a proportionate share of the transferor Existing Lender's Pro Rata
Share and Pro Rata Share of Deferred Interest, if any, as set forth in such
instrument of assumption, and the transferor Existing Lender shall be released
from its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required.
(d) Notwithstanding anything to the contrary in the foregoing, the
assignment and transfer of rights and obligations of any Metra Lenders under the
Metra Guaranty shall also be subject to any conditions or limitations set forth
in the Metra Credit Agreement.
(e) Each Existing Lender agrees that it shall not assign all or any
portion of its interests under its Existing Agreements or the Metra Guaranty
unless the assignee has agreed to be bound by SECTION 12.5.
12.9. HEADINGS AND CAPTIONS. The headings and captions used in this
Agreement and the other Restructuring Documents are solely for the purpose of
reference and are not to be considered as construing or interpreting the
provisions hereof or thereof.
12.10. INTERPRETATION. Neither this Agreement or the other
Restructuring Documents, nor any uncertainty or ambiguity herein or therein
shall be construed or resolved against the Agent, the Existing Lenders or the
Borrowers, whether under any rule of construction or otherwise. This Agreement
and the other Restructuring Documents have been reviewed by all the parties
hereto and thereto and shall be construed and interpreted according to the
ordinary meaning of the words used as to fairly accomplish the purposes and
intentions of all such parties.
12.11. INCONSISTENCIES WITH OTHER DOCUMENTS. In the event there is a
conflict or inconsistency between this Agreement and the other Loan Documents,
FIRST the terms of the Intercreditor Agreement shall control and SECOND the
terms of this Agreement shall control; PROVIDED, HOWEVER, that any provision of
the Security Documents which imposes additional burdens on the Borrowers or
further restricts the rights of the Borrowers or gives the Existing Lenders
additional rights shall not be deemed to be in conflict or inconsistent with
this Agreement and shall be given full force and effect.
12.12. SEVERABILITY. If any portion of this Agreement, and the other
Loan Documents shall be judged by a court of competent jurisdiction to be
unenforceable, the remaining portions shall be valid and enforceable to the
extent that the remaining terms thereof provide for the grant of collateral
security for the Obligations under this Agreement, and the payment of principal
76
and interest on the Existing Loans substantially on the same terms and subject
to the same conditions as set forth herein and therein.
12.13. GOVERNING LAW. THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS,
UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
12.14. CONSENT TO JURISDICTION. THE BORROWERS HEREBY IRREVOCABLY
CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
PITTSBURGH, PENNSYLVANIA IN ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
EXISTING AGREEMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWERS HEREBY IRREVOCABLY
CONSENT TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY
ACTION, CLAIM OR PROCEEDING BROUGHT BY THE AGENT OR ANY EXISTING LENDER IN
CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE EXISTING
AGREEMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF THEMSELVES AND THEIR
PROPERTY, IN THE MANNER SPECIFIED IN SECTION 12.1 (PROVIDED TELECOPY NOTICES MAY
NOT BE USED FOR THIS PURPOSE). NOTHING IN THIS SECTION 12.14 SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY EXISTING LENDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE AGENT OR ANY EXISTING LENDER
TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWERS OR THEIR PROPERTIES IN
THE COURTS OF ANY OTHER JURISDICTIONS.
12.15. WAIVER OF JURY TRIAL. THE AGENT, EACH EXISTING LENDER AND THE
BORROWERS EACH HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE EXISTING
AGREEMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
12.16. CUMULATIVE REMEDIES. All rights and remedies provided in and
contemplated by this Agreement, and the other Restructuring Documents are
cumulative and not exclusive of any right or remedy otherwise provided herein,
therein, at law or in equity.
12.17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Borrowers set forth in this Agreement, and the other
Restructuring Documents and in any other certificate, opinion or other statement
provided at any time by or on behalf of the Borrowers in connection herewith
shall survive the execution of the delivery of this Agreement, and the other
Restructuring Documents and the payment of all Existing Loans and other amounts
due hereunder.
77
12.18. RELATIONSHIP OF THE PARTIES. Neither the Agent nor the Existing
Lenders shall be deemed partners or joint venturers with the Borrowers or any
Affiliate thereof in making this Agreement or by any action taken hereunder.
12.19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
12.20. VOTING BY THE METRA LENDERS. Any vote (a) at any time at which
the Non-Metra Exposure Percentage exceeds the Metra Exposure Percentage, with
respect to the following:
(i) the reduction in the amount or a postponement of the time of
payment of any amount owing on any of the Obligations,
(ii) the reduction of the rate of interest or fees to be paid by the
Borrowers with respect to any of the Obligations,
(iii) the release of any Guarantor or Borrower,
(iv) the release or subordination of any lien on any Collateral that
is not identified in the Asset Disposition Program,
(v) the conversion of all or any portion of the Obligations to equity
or some other form of property,
(vi) the sale, transfer, or other disposition of all or substantially
all of the capital stock or assets of a Guarantor or a Borrower, or of a
business unit or units of a Guarantor or a Borrower, other than assets described
in the Asset Disposition Program; and
(b) with respect to any instruction to the Collateral Agent to sell or
otherwise dispose of property (other than cash) received in connection with a
recapitalization of any Borrower or any Guarantor, including property received
in connection with the events specified in subclauses (a)(v) and (a)(vi) of this
SECTION 12.20;
shall require the consent of All Existing Lenders, PROVIDED that if one Metra
Lender does not consent and all other Existing Lenders do consent, such vote
shall be deemed to be All Existing Lenders (i.e., if one Metra Lender does not
consent, the requisite vote will have been obtained and if two Metra Lenders do
not consent, the requisite vote will not have been obtained); PROVIDED FURTHER
that any such action shall equally affect an amount of each Existing Lender's
Exposure equal to a common percentage of such Existing Lender's Initial
Exposure. The provisions of this SECTION 12.20 shall be construed as applying
only to any amendments, waivers or modifications to this Agreement or of the
rights and remedies of the Existing Lenders under this Agreement or the other
Loan Documents to the extent that both before and after giving effect to such
amendment, waiver or modification, the Metra Exposure Percentage
78
does not exceed the Non-Metra Exposure Percentage. This SECTION 12.20 shall not
apply in a bankruptcy proceeding.
12.21. PAYMENTS TO THE METRA LENDERS. The Metra Agent and each Metra
Lender hereby agree, for the benefit of each Existing Lender with any
Obligations other than Metra Guaranty, that notwithstanding any provision of any
writing to the contrary, neither the Metra Agent nor any Metra Lender shall be
entitled to receive any payment or distribution at any time in respect of the
Metra Guaranty from the Borrowers, any Guarantor or proceeds of Collateral in
connection with this Agreement or the other Loan Documents prior to the first
time on or after the Metra Final Accounting Date that the Metra Exposure
Percentage equals or exceeds the Non-Metra Exposure Percentage calculated, for
the purpose of this SECTION 12.21 as if the Metra Holdback is zero (0). If any
such payments are received they shall be paid to the Agent pursuant to SECTION
12.5.
12.22. AFFIRMATION OF PAYMENTS OF OBLIGATIONS. Nothing contained in
SECTIONS 2.10, 2.11 or 12.5, or any other provision of this Agreement, is
intended to or shall impair the obligations of the Borrowers and the Guarantors,
which are absolute and unconditional, to pay all amounts owing in respect of the
Obligations as and when the same shall become due and payable in accordance with
their terms.
12.23. AMENDMENT OF METRA CREDIT AGREEMENT. The Metra Agent and the
Metra Lenders hereby agree that they shall not enter into any amendment or
modification of the Metra Credit Agreement that increases the maximum amount
payable under the Metra Credit Agreement without the consent of All Existing
Lenders.
12.24. ACKNOWLEDGEMENT AND ACCEPTANCE OF THE INTERCREDITOR AGREEMENT.
Each of the Existing Lenders and the Metra Agent agree to and acknowledge the
terms of the Intercreditor Agreement and agree to be bound by the terms thereof
as it applies to the Existing Lenders and the Agent.
12.25. APPROVAL OF FIRST AMENDMENT TO COLLATERAL AGENT AGREEMENT. The
Agent and the Existing Lenders hereby agree to the terms of the First Amendment
to Collateral Agent Agreement and Mortagage Trust in the form of EXHIBIT D,
agree to be bound by such amendment as if they had executed it, and appoint
Mellon Bank, N.A. as Collateral Agent and Mortgage Trustee thereunder, as set
forth therein.
79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXXX XXXXXXX CORPORATION
(a Delaware corporation), as a Borrower
/s/ X. X. Xxxxxxx
By
----------------------------------
Name: X. X. Xxxxxxx
Title: VP & Treasurer
XXXXXXXX XXXXXXX CORPORATION
(an Ohio corporation), as a Borrower
/s/ X. X. Xxxxxxx
By
----------------------------------
Name: X. X. Xxxxxxx
Title: VP & Treasurer
MELLON BANK, N.A., as Agent and an Existing Lender
/s/ Xxxx X. Xxxxxxx
By
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Metra Agent and an Existing Lender
/s/ Xxxxx X. Xx
By
----------------------------------
Name: Xxxxx X. Xx
Title: Senior Vice President
[ADDITIONAL SIGNATURES FOR EXISTING LENDERS CONTINUED ON NEXT PAGE]
80
EXISTING LENDERS:
Bank of Montreal
/s/ X. Xxxxxxxxxxx
By:
-------------------------
Name: X. Xxxxxxxxxxx
Title: Vice President
The Bank of Nova Scotia
/s/ X. X. Xxxxxxxxx
By:
-------------------------
Name: X. X. Xxxxxxxxx
Title: Assistant General Manager
The Bank of Tokyo, Ltd.,
Seattle Branch
/s/ Xxxxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Banque Nationale de Paris
/s/Xxxxxxxxx Xxxxx
By:
-------------------------
Name: Xxxxxxxxx Xxxxx
Title: Vice President
/s/ Xxxxxxx X. Xxxxxx
By:
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Banque Paribas
/s/Xxxx Xxxx
By:
-------------------------
Name: Xxxx Xxxx
Title: Group Vice President
/s/ Xxxx X. XxXxxxxxx
By:
-------------------------
Name: Xxxx X. XxXxxxxxx
Title: Regional General Manager
CIBC Inc.
/s/ Xxxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Citibank, N.A.
/s/ Xxxxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Credit Lyonnais, Canada
/s/ Xxxxxxx Xxxxxxxx
By:
-------------------------
Name: Xxxxxxx Xxxxxxxx
Title: VP & Asst Mngr Eastern Region
/s/ Xxxx Xxxxxx
By:
-------------------------
Name: Xxxx Xxxxxx
Title: Manager, Corporate Banking
Credit Lyonnais, New York Branch
/s/ Xxxx Xxxxxxx
By:
-------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
Deutsche Bank AG,
Los Angeles Branch and/or Cayman Islands Branch
/s/ Xxxxxxxx X. Xxxxxxx
By:
-------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Director
/s/ J. Xxxxx Xxxxxx
By:
-------------------------
Name: J. Xxxxx Xxxxxx
Title: Vice President
The Hongkong and Shanghai
Banking Corporation Limited
/s/ Xxxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
[ADDITIONAL SIGNATURES FOR EXISTING LENDERS CONTINUED ON NEXT PAGE]
The Industrial Bank of Japan, Limited, Los Angeles Agency
/s/ Illegible
By:
-------------------------
Name: Illegible
Title: SVP
Key Bank of Idaho
/s/ Xxxxx Xxxxxx
By:
-------------------------
Name: Xxxxx Xxxxxx
Title: VP
The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency
/s/ Xxxx X. Xxxxx
By:
-------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Manager
Xxxxxx Guaranty Trust Company
/s/ D. Xxxxx Xxxxxxxxxx
By:
-------------------------
Name: D. Xxxxx Xxxxxxxxxx
Title: Vice President
National Westminster Bank PLC
/s/Xxxxxxxx X. Xxxxxxx
By:
-------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President & Counsel
Royal Bank of Canada
/s/ Xxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Manager
San Paolo Bank SpA
/s/ Xxxxxx X. Xxxxx
By:
-------------------------
Name: Xxxxxx X. Xxxxx
Title: Branch Manager
/s/ Xxxx Xxxxxx
By:
-------------------------
Name: Xxxx Xxxxxx
Title: VP
Society National Bank
/s/ Xxx X. Xxxxxx
By:
-------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
Union Bank of Switzerland
/s/ Xxxxx Xxxxxxx
By:
-------------------------
Name: L. Xxxxx Xxxxxxx
Title: Vice President
/s/ Xxxxx X. Xxxxxx
By:
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Westdeutsche Landesbank
Girozentrale, New York and
Cayman Islands Branches
/s/ Xxxxxxxxx Xxxxxxxxxx
By:
-------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Vice President
Credit Department
/s/ Xxxxxxxxx Xxxxxxx
By:
-------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Associate
SCHEDULES AND EXHIBITS
THE REGISTRANT AGREES TO PROVIDE TO THE
SECURITIES AND EXCHANGE COMMISSION, UPON REQUEST,
WITH COPIES OF THE SCHEDULES AND EXHIBITS HERETO.
