1
EXHIBIT 10.1
$50,000,000
AMENDED AND RESTATED
LOAN AGREEMENT
among
METALLURG, INC.,
SHIELDALLOY METALLURGICAL CORPORATION and
METALLURG INTERNATIONAL RESOURCES, INC.
as Borrowers
METALLURG SERVICES, INC.,
MIR (CHINA), INC. and
METALLURG HOLDINGS CORPORATION
as Guarantors
BANKBOSTON, N.A.
as Agent for the lending institutions listed on
Schedule 1 hereto (collectively, the "Banks")
and
the BANKS
October 29, 1999
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TABLE OF CONTENTS
Section 1. Definitions........................................................2
Section 2. Revolving Credit Facility..........................................26
Section 2.1 Commitment to Lend.................................................26
Section 2.2 Interest...........................................................27
Section 2.3 Repayments and Prepayments.........................................28
Section 2.4 Settlements; Failure to Make Funds Available.......................31
Section 2.5 Conversion Options.................................................32
Section 2.6 Funds for Loans....................................................32
Section 3. Letter of Credit Facility..........................................33
Section 3.1 Letter of Credit Commitment........................................33
Section 3.2 Reimbursement Obligation of the Borrowers..........................35
Section 3.3 Letter of Credit Payments..........................................36
Section 3.4 Obligations Absolute...............................................36
Section 3.5 Reliance by Issuer.................................................37
Section 3.6 Letter of Credit Fees..............................................37
Section 3A. Participation in German Loans and German Collateral Instruments....37
Section 3A.1 Participation in German Loans......................................37
Section 3A.2 Participation in German Collateral Instruments.....................38
Section 3A.3 Common Participation Provisions....................................39
Section 3A.4 German Risk Participation Fees.....................................40
Section 3A.5 Nature of Banks' Interest..........................................41
Section 4. Changes in Circumstances...........................................42
Section 4.1 Inability to Determine Eurodollar Rate.............................42
Section 4.2 Illegality.........................................................42
Section 4.3 Additional Costs, etc..............................................42
Section 4.4 Capital Adequacy...................................................44
Section 4.5 Certificate........................................................44
Section 4.6 Indemnity..........................................................44
Section 5. Fees and Payments..................................................45
Section 6. Collateral Security and Guaranty...................................48
Section 6.1 Security of Borrowers..............................................48
Section 6.2 Guaranty and Security of Subsidiaries..............................48
Section 6.3 Collateral Security Perfection.....................................49
Section 6.4 Guaranty...........................................................49
Section 6.5 Borrowers' Waivers of Suretyship Defenses..........................50
Section 6.6 No Restrictions on Foreign Subsidiaries............................51
Section 6.7 German Guaranty....................................................51
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Section 7. Representations and Warranties.....................................54
Section 8. Conditions Precedent...............................................58
Section 9. Covenants..........................................................61
Section 9.1 Affirmative Covenants..............................................61
Section 9.2 Negative Covenants.................................................65
Section 9.3 Financial Covenants................................................70
Section 10. Events of Default; Acceleration....................................71
Section 11. Distribution of Collateral Proceeds................................74
Section 12. Setoff.............................................................75
Section 13. The Agent..........................................................76
Section 13.1 Authorization......................................................76
Section 13.2 Employees and Agents...............................................77
Section 13.3 No Liability.......................................................77
Section 13.4 No Representations.................................................77
Section 13.5 Payments; Distributions; Delinquent Banks..........................77
Section 13.6 Holders of Notes...................................................78
Section 13.7 Indemnity..........................................................78
Section 13.8 Agent as Bank......................................................79
Section 13.9 Resignation........................................................79
Section 13.10 Notification of Defaults and Events of Default.....................79
Section 13.11 Duties in the Case of Enforcement..................................79
Section 13.12 Closing Documentation, etc.........................................80
Section 14. Assignment and Participation.......................................80
Section 14.1 Conditions to Assignment by Banks..................................80
Section 14.2 Certain Representations and Warranties; Limitations; Covenants.....80
Section 14.3 Register...........................................................81
Section 14.4 New Notes..........................................................82
Section 14.5 Participations.....................................................82
Section 14.6 Disclosure.........................................................82
Section 14.7 Assignee or Participant Affiliated with the Borrowers..............82
Section 14.8 Miscellaneous Assignment Provisions................................83
Section 14.9 Assignment by Borrowers............................................83
Section 15. Consents, Amendments, Waivers, Etc.................................83
Section 16. Miscellaneous......................................................84
Section 17. Treatment of Certain Confidential Information......................87
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Section 17.1 Sharing of Information with Section 20 Subsidiary..................87
Section 17.2 Confidentiality....................................................88
Section 17.3 Prior Notification.................................................88
Section 17.4 Other..............................................................88
Section 18. Transitional Arrangements..........................................88
Section 18.1 Original Loan Agreement Superseded.................................88
Section 18.2 Return and Cancellation of Notes...................................89
Section 18.3 Interest and Fees Under Superseded Agreement.......................89
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EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Note
Exhibit C Form of Loan Request
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Security Agreement
Exhibit F-1 Form of MI Stock Pledge Agreement
Exhibit F-2 Form of MHC Stock Pledge Agreement
Exhibit G Form of Compliance Certificate
Schedule 1 Banks, Commitments, Commitment Percentages
Schedule 1.2 Ports of Entry
Schedule 1.3 Management Service Agreements
Schedule 3.1 Existing Letters of Credit
Schedule 7(i) Collective Bargaining Agreements
Schedule 7(l) Subsidiaries; Joint Ventures
Schedule 7(m) Environmental Matters
Schedule 9.2(b) Indebtedness
Schedule 9.2(c) Liens
Schedule 9.2(d) Investments
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AMENDED AND RESTATED
LOAN AGREEMENT
This AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is made as of
October 29, 1999, by and among (a) METALLURG, INC., a Delaware corporation
having its principal place of business at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("MI"), SHIELDALLOY METALLURGICAL CORPORATION, a Delaware corporation
having its principal place of business at 00 Xxxx Xxxxxxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000 ("SMC") and METALLURG INTERNATIONAL RESOURCES, INC., a New York
corporation having its principal place of business at 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("MIR" and together with MI and SMC, the "Borrowers"), (b)
METALLURG SERVICES, INC., a New York corporation having its principal place of
business at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("MSI"), MIR (CHINA),
INC., a Delaware corporation having its principal place of business at 0 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("MIR China"), and METALLURG HOLDINGS
CORPORATION, a New Jersey corporation having its principal place of business at
00 Xxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 ("MHC" and collectively with MSI
and MIR China, the "Guarantors"), (c) BANKBOSTON, N.A. (f/k/a The First National
Bank of Boston), a national banking association with its head office at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and the other lending institutions
listed on Schedule 1 hereto, and (d) BANKBOSTON, N.A., as agent for itself and
such other lending institutions. In addition, BankBoston, N.A., acting through
its London branch office, agrees to join this Agreement and be bound by the
provisions hereof as the German Lender (as such term is hereinafter defined)
hereunder.
BACKGROUND
Pursuant to that certain Loan Agreement, dated as of April 14, 1997 (as
amended and in effect prior to the Restatement Date, the "Original Loan
Agreement"), the Banks extended to the Borrowers a revolving credit facility in
an aggregate principal amount not to exceed $50,000,000, with a sublimit for
letters of credit of $35,000,000. The Borrowers have requested that the Banks
amend and restate such revolving credit facility in an aggregate principal
amount not to exceed $50,000,000, with a sublimit for letters of credit of
$35,000,000 and with provisions for the purchase of risk participation in the
German Loans and German Collateral Instruments (each as defined herein) in an
aggregate amount not to exceed DM20,500,000. The Banks are agreeable to
providing such an amended and restated revolving credit facility to the
Borrowers, with such facility to be on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the parties hereto agrees as follows:
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Section 1. DEFINITIONS. Certain capitalized terms are defined below:
Accounts: All rights of any of the Borrowers or MCL to any payment of money
for goods sold, leased or otherwise marketed in the ordinary course of business,
whether evidenced by or under or in respect of a contract or instrument, and to
all proceeds in respect thereof.
Adjusted Operating Cash Flow: For any period with respect to the North
American Group, the amount equal to (a) EBITDA for such period, plus (b) to the
extent not otherwise included in calculating EBITDA, interest income during such
period and dividends from foreign Subsidiaries during such period, minus (c) to
the extent not otherwise deducted in calculating EBITDA, cash payments for all
taxes paid during such period for the North American Group, minus (d) to the
extent not otherwise deducted in calculating EBITDA, capital expenditures made
during such period for the North American Group to the extent permitted
hereunder.
Adjustment Date. The earlier of: (i) the date on which the Borrowers are to
deliver a Compliance Certificate to the Agent pursuant to Section 9.1(a)(iv) and
(ii) the date on which such Compliance Certificate is actually delivered.
Affiliate. Any Person that directly, or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified, or any corporation or other organization in which such
Person is the direct or indirect beneficial owner of ten percent (10%) or more
of any class of equity securities or ten percent (10%) or more of the aggregate
equity interest.
Agency Agreement: See Section 2.3(c).
Agent: BankBoston, N.A. acting as agent for the Banks.
Agent's Head Office: The Agent's head office located at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel: Xxxxxxx Xxxx LLP or such other counsel as may be
approved by the Agent.
Agreement: See preamble, which term shall include this Agreement and the
Schedules and Exhibits hereto, each as amended and in effect from time to time.
Allowed LME Traded Metal: Tin, aluminum and nickel.
Applicable Margin. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "Rate Adjustment
Period"), the Applicable Margin shall be the applicable margin set forth below
with respect to the Fixed Charge Coverage Ratio, as determined for the Reference
Period ending on the fiscal quarter ended immediately preceding the applicable
Rate Adjustment Period.
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Base Letter
Eurodollar Rate of Commitment
Fixed Charge Rate Loan Loan Credit Fee
Level Coverage Ratio Margin Margin Margin Percentage
----- -------------- ------ ------ ------ ----------
---------------------------------------------------------------------------------------------------------------------------
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I Less than or equal to 1.10:1.00 2.50% 1.00% 2.25% .500%
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II Greater than 1.10:1.00 but less than
or equal to 1.25:1.00 2.25% 0.50% 2.00% .375%
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III Greater than 1.25:1.00 2.00% 0.00% 1.75% .250%
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Notwithstanding the foregoing, (a) until the delivery by the Borrowers to
the Agent of the certificate pursuant to Section 9.1(a)(iv) for the fiscal year
of the Subsidiaries of MI ending December 31, 1999, the Applicable Margin shall
be the Applicable Margin set forth above in Level II, and (b) if the Borrowers
fail to deliver any certificate when required by Section 9.1(a)(iv) hereof then,
for the period commencing on the next Adjustment Date to occur subsequent to
such failure through the day immediately following the date on which such
certificate is delivered, the Applicable Margin shall be the Applicable Margin
set forth above in Level I.
Assignment and Acceptance: See Section 14.1.
Bank Mendes: Bank Mendes Xxxx N.V., a company limited by shares
incorporated under the laws of The Netherlands.
Bank Mendes Accounts: The bank accounts maintained by MI and GfE with Bank
Mendes and subject to the Interest Set-Off Agreement.
Banks: BKB and the other lending institutions listed on Schedule 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to Section 14.
Base Rate: The higher of (a) the annual rate of interest announced from
time to time by Agent at its head office as Agent's "base rate" and (b) one-half
of one percent (1/2%) above the Federal Funds Effective Rate.
Base Rate Loans: Loans bearing interest calculated by reference to the Base
Rate.
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BKB: BankBoston, N.A., a national banking association, formerly known as
The First National Bank of Boston, in its individual capacity.
Borrowers: See preamble.
Borrowing Base: At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
and the most recent appraisal of the Eligible Fixed Assets delivered to the
Banks and the Agent pursuant to Section 9.1(a)(v), which is equal to (a) the sum
of (i) 85% of Eligible Accounts at such time, plus (ii) 60% of the net book
value (valued on an average cost basis at the lower of cost or market (except as
provided below in this definition) by the Borrowers in a manner consistent with
their past practices) of Eligible Consignment Accounts at such time, plus (iii)
60% of the net book value (valued on an average cost basis at the lower of cost
or market (except as provided below in this definition) by the Borrowers in a
manner consistent with their past practices) of Eligible Inventory at such time,
plus (iv) 75% of the Determined Value of Eligible Fixed Assets at such time,
plus (b) after taking into account any requested Loan or Letter of Credit, the
proceeds of which are to be used to fund the Canadian Intercompany Facility, an
amount equal to the lesser of (i) the aggregate amount of the Canadian
Intercompany Outstandings at such time, and (ii) the Canadian Borrowing Base at
such time, plus (c) 60% of the maximum aggregate amount that the beneficiaries
may draw under outstanding documentary Letters of Credit issued in connection
with the purchase of inventory by the Borrowers solely to the extent that such
inventory being purchased, immediately upon any drawing of any such documentary
Letter of Credit, would constitute Eligible Inventory, minus (d) the amount of
any Warehousemen Lien Reserve with respect to inventory of the Borrowers at such
time. Notwithstanding that the Eligible Consignment Accounts and Eligible
Inventory of the Borrowers shall be reported at the lower of cost or market as
provided above, the Agent and the Banks hereby acknowledge that the Borrowers
review their inventory for market adjustment on a quarterly basis only. The
Borrowers hereby agree to adjust their inventory to the lower of cost or market
on a more current basis in the event of any material decrease in the market
price for any such inventory which would cause the amount of Eligible
Consignment Accounts and/or Eligible Inventory to be materially misstated if not
so currently adjusted, and at any time during which the amount of unused
availability that the Borrowers may use to request Loans or Letters of Credit
hereunder shall be less than $5,000,000 in the aggregate, the Agent may, in its
discretion, require the Borrowers to adjust their inventory to the lower of cost
or market on a monthly basis.
The Borrowing Base shall be determined monthly (or at such other interval
as may be specified pursuant to Section 9.1(a)(v)) by the Agent by reference to
the Borrowing Base Report and the appraisals of Eligible Fixed Assets delivered
to the Banks and the Agent pursuant to Section 9.1(a)(vi). The components of the
Borrowing Base and the Canadian Borrowing Base, the advance rates provided for
therein, and the definitions contained in this Agreement governing eligibility
criteria for such components of the Borrowing Base and the Canadian Borrowing
Base may hereafter be adjusted or revised by the Agent in its reasonable
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judgment on the basis of any then recently completed commercial finance
examination or appraisal or other information then recently delivered by the
Borrowers to the Agent and the Banks.
Borrowing Base Availability: On any Business Day of determination, the
excess of (a) the sum of (i) the aggregate amount of Total Outstandings
(excluding German Outstandings) at the close of business on such day plus (ii)
the sum of the German Facility Reserves, if any, of each of the German Borrowers
at the close of business on such day, over (b) the Borrowing Base, determined by
reference to the most recent Borrowing Base Report and appraisal of Eligible
Fixed Assets delivered to the Banks and the Agent.
Borrowing Base Report: A report, with supporting details satisfactory to
the Agent and the Banks, setting forth the Borrowers' computation of the
Borrowing Base, such report to be in the form of the Exhibit A attached hereto.
Business Day: Any day on which banks in Boston, Massachusetts, are open for
business generally and, in the case of Eurodollar Rate Loans, also a day which
is a Eurodollar Business Day.
Canadian Assignment Documents: The Acknowledgment from MCL to the Agent,
dated on or prior to the Restatement Date, the Collateral Assignment of Movable
Hypothec from MI to the Agent, dated on or prior to the Original Closing Date,
as amended and in effect on or prior to the Restatement Date, and the
assignments in favor of the Agent of all security filings against MCL made under
Canadian law, and each of the documents, instruments and agreements executed and
delivered in connection therewith, each as amended from time to time with the
consent of the Agent and the Banks, and each in form and substance satisfactory
to the Agent and the Banks.
Canadian Borrowing Base: At the relevant time of reference thereto, an
amount determined by the Agent by reference to the most recent Borrowing Base
Report delivered to the Banks and the Agent pursuant to Section 9.1(a)(v), which
is equal to the lesser of (a) $7,000,000 and (b) the sum of (i) 85% of Eligible
Canadian Accounts at such time plus (ii) 60% of the net book value (valued on an
average cost basis at the lower of cost or market (except as provided below in
this definition) by MCL in a manner consistent with its past practice) of
Eligible Canadian Inventory at such time, plus (iii) 60% of the maximum
aggregate amount that the beneficiaries may draw under outstanding documentary
Letters of Credit issued for the account of MCL in connection with the purchase
of inventory by MCL solely to the extent that such inventory being purchased,
immediately upon any drawing of any such documentary Letter of Credit, would
constitute Eligible Canadian Inventory, minus (iv) the amount of any
Warehousemen Lien Reserve with respect to inventory of MCL at such time. For
purposes of determining the Canadian Borrowing Base, in order to convert the
value of Eligible Canadian Accounts and Eligible Canadian Inventory from a given
amount of Canadian currency into Dollars, such conversion shall be made at the
Agent's spot rate of exchange for buying Dollars with such amount of Canadian
currency prevailing at the Agent's close of business as of the first Business
Day of the month during which the date of determination occurs or as of such
other date as the Agent may from time to time
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reasonably require. Notwithstanding that the Eligible Canadian Inventory of MCL
shall be reported at the lower of cost or market as provided above, the Agent
and the Banks hereby acknowledge that MCL reviews its inventory for market
adjustment on a quarterly basis only. The Borrowers hereby agree to cause MCL to
adjust its inventory to the lower of cost or market on a more current basis in
the event of any material decrease in the market price for any such inventory
which would cause the amount of Eligible Canadian Inventory to be materially
misstated if not so currently adjusted, and at any time during which the amount
of unused availability that the Borrowers may use to request Loans or Letters of
Credit hereunder shall be less than $7,000,000 in the aggregate, the Agent may,
in its discretion, require the Borrowers to cause MCL to adjust its inventory to
the lower of cost or market on a monthly basis.
Canadian Intercompany Facility: Loans made by MI to, and Letters of Credit
issued for the account of, MCL (for which MCL has agreed to reimburse MI in
respect of any drawing thereunder), in each case pursuant to the Canadian Loan
Documents.
Canadian Intercompany Outstandings: At any time of reference, the sum of
(a) the aggregate principal amount of outstanding loans made by MI to MCL under
the Canadian Intercompany Facility plus (b) the aggregate Maximum Drawing Amount
under all Letters of Credit issued for the account of MCL under the Canadian
Intercompany Facility plus the aggregate amount of unpaid Reimbursement
Obligations under all Letters of Credit issued for the account of MCL under the
Canadian Intercompany Facility, in each case in respect of which MCL has agreed
to reimburse MI for any drawing thereunder. For purposes of determining the
Canadian Intercompany Outstandings, in order to convert the amount of loans and
Letters of Credit in respect thereof from a given amount of Canadian currency
into Dollars, such conversion shall be made at the Agent's spot rate of exchange
for buying Dollars with such amount of Canadian currency prevailing at the
Agent's close of business as of the first Business Day of the month during which
the date of determination occurs or as of such other date as the Agent may from
time to time reasonably require.
Canadian Loan Documents: The Canadian Security Agreements, the Canadian
Note and each of the documents, instruments and agreements executed and
delivered in connection therewith, each as amended from time to time with the
consent of the Agent and the Banks, and each in form and substance satisfactory
to the Agent and the Banks.
Canadian Note: The amended and restated note originally dated October 28,
1993, and amended and restated on or prior to the Restatement Date issued by MCL
in favor of MI, in a principal amount up to $7,000,000, as amended from time to
time with the consent of the Agent and the Banks, in form and substance
satisfactory to the Agent and the Banks, containing provisions prohibiting MCL
from setting off amounts owing to MCL by MI or any of its Affiliates, against
any amounts owing to MI by MCL under the Canadian Note.
Canadian Security Agreements: (a) the General Security Agreement dated on
or prior to the Original Closing Date, made by MCL in favor of MI, and (b) the
Hypothec on Movable Property dated on or prior to the Original Closing Date,
between MCL and MI, each as amended or amended and restated on or prior to the
Restatement Date, pursuant to
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an amendment or amendment and restatement, as the case may be, in form and
substance satisfactory to the Agent and the Banks, and as further amended from
time to time with the consent of the Agent and the Banks.
Capitalized Leases. Leases under which any Borrower or any Subsidiary of
any Borrower is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
Cash Collateral Account: In relation to any Borrower, one or more accounts
of such Borrower with the Agent in which funds are held by the Agent, for the
benefit of the Banks and the Agent, as cash collateral pursuant to the express
provisions of this Agreement to secure Reimbursement Obligations and other funds
from time to time invested by the Agent for the account of such Borrower as
permitted hereby and, in each case, in which the Agent has a prior, perfected
Lien, for the benefit of the Banks and the Agent, to secure the payment of the
Obligations.
Cash Equivalents: Investments of the types referred to in Section
9.2(d)(ii).
CERCLA: See Section 7(m)(i).
Charter Documents: In respect of any entity, the certificate or articles of
incorporation or organization and the by-laws of such entity, or other
constitutive documents of such entity.
Code: The Internal Revenue Code of 1986, as amended or modified and in
effect from time to time.
Collateral: All of the property, rights and interests of the Borrowers and
the Guarantors that are or are intended to be subject to the security interests
and mortgages created by the Security Documents.
Commitment: With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment (a) to make Loans to and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrowers, and (b) to purchase risk participations from the
German Lender in the German Loans and the German Collateral Instruments, in each
case as the same may be reduced from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero. The aggregate Commitments of
all the Banks as of the Restatement Date shall initially be $50,000,000.
Commitment Percentage: With respect to each Bank, the percentage set forth
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
Compliance Certificate: The certificate delivered by the Borrowers to the
Agent pursuant to Section 9.1(a)(iv) in the form of Exhibit G attached hereto.
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Consent: In respect of any person or entity, any permit, license or
exemption from, approval, consent of, registration or filing with any local,
state or federal governmental or regulatory agency or authority, required under
applicable law.
Consignment Accounts: Accounts arising from the sale of Consignment
Inventory prior to the time when title thereto has passed to the ultimate buyer
thereof from the applicable Borrower or MCL or (as the case may be) to the
consignee.
Consignment Inventory: Inventory located at the plant, warehouse or other
location designated by the proposed consignee thereof, or in transit thereto,
but as to which title has not yet passed to the ultimate buyer of such inventory
from the applicable Borrower or MCL or (as the case may be) to the consignee.
Consolidated or consolidated: With reference to any term defined herein,
shall mean that term as applied to the accounts of a given Person and its
Subsidiaries, consolidated in accordance with GAAP.
Conversion Request: A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with Section 2.5
hereof.
Daily Cash Balance. With respect to the Borrowers and the Guarantors on any
Business Day of determination, the aggregate amount of all cash and Cash
Equivalents of the Borrowers and the Guarantors maintained with the Agent,
determined at the close of business on such day.
Default: An event or act which, with the giving of notice and/or the lapse
of time, would become an Event of Default.
Delinquent Bank: See Section 13.5(c).
Determined Value: At the relevant time of reference thereto, the appraised
value of such assets on an "orderly liquidation basis" determined by the most
recent appraisal thereof conducted pursuant to Section 9.1(a)(vi). To the extent
that any Eligible Fixed Asset is encumbered by a Lien which is a Permitted Lien
not securing the Obligations and which has priority over the Lien securing the
Obligations, the amount of the Indebtedness secured by such Lien shall be
deducted from the value determined in accordance with the immediately preceding
sentence of this definition of the term "Determined Value".
Deutschemarks or DM: Deutschemarks in lawful currency of the Federal
Republic of Germany.
Direct Collection Letter: See Section 2.3(c).
Distribution: The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of a Person, other than dividends
payable solely in shares of such class of capital stock of such Person; the
purchase, redemption, or other retirement of
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any shares of any class of capital stock of a Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of capital by a
Person to its shareholders as such; or any other distribution on or in respect
of any shares of any class of capital stock of such Person.
Dollars or $: Dollars in lawful currency of the United States of America.
Dollar Equivalent: On any date of determination, with respect to an amount
denominated in Dollars, such amount of Dollars, and with respect to an amount
denominated in Deutschemarks or Euros, the amount of Dollars required to
purchase that amount of Deutschemarks or Euros at the spot rate of exchange
quoted by the Agent in the London foreign exchange market at or about 11:00 a.m.
(London time) on the date of determination for the purchase of Dollars with
Deutschemarks or Euros, as the case may be.
Domestic Lending Office: Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date: The date on which any Loan is made or is to be made, and the
date on which any Loan is converted or continued in accordance with Section 2.5.
EBITDA: With respect to the North American Group and any particular fiscal
period (a) consolidated net income (or loss) of the North American Group for
such period, after eliminating therefrom all extraordinary nonrecurring items of
income (including gains on the sale of assets and earnings from the sale of
discontinued business lines), and after all expenses and other proper charges
but before payment or provision for (i) any income taxes or interest expenses
for such period, (ii) depreciation for such period, (iii) amortization for such
period, and (iv) all other noncash charges for such period, all determined in
accordance with GAAP, minus (b) to the extent not otherwise deducted in
calculating consolidated net income (or loss) of the North American Group,
non-cash items of income during such period.
Eligible Accounts: Those Accounts of the Borrowers (net of any finance
charges, late charges, credits, rebates, contras or other offsets, commissions,
counterclaims or adjustments) (a) which the Borrowers reasonably determine to be
collectible, (b) the account debtors in respect of which are not reasonably
deemed uncreditworthy by the Majority Banks, are not debtors in any bankruptcy,
insolvency, liquidation, reorganization, dissolution or similar case or
proceeding or assignors for the benefit of creditors, are not affiliated with
the Borrowers or the Guarantors, and purchased the goods or services for
reasonably equivalent value, (c) which are not outstanding for more than ninety
(90) days past the earlier to occur of (i) the date of invoice and (ii) the date
of shipment (as to goods) or of provision (as to services), (d) which are not
more than sixty (60) days past due from the due date thereof and which are on
terms not to exceed thirty (30) days, (e) over which there is no Lien in favor
of any person or entity other than the Agent, for the benefit of the Agent and
the Banks, and in which the Agent has a valid and perfected first-priority
security interest, (f) which are in payment of fully performed and undisputed
obligations, (g) that are
15
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not due from any account debtor with respect to which more than fifty percent
(50%) of the aggregate amount of all Accounts owing from such account debtor are
not Eligible Accounts by reason of the foregoing clauses (c) or (d), (h) which
are not Consignment Accounts, (i) which are payable in Dollars from an account
debtor with its chief executive office or a branch office located within the
United States and invoiced to and payable from such office (except to the extent
that the Agent in its sole discretion shall have agreed to include Accounts
payable by certain specified account debtors from offices outside of the United
States, provided, that the Agent may in its discretion, upon thirty (30) days
prior notice to the Borrowers, exclude any such Accounts payable from offices
outside of the United States and theretofore includable in Eligible Accounts),
(j) that are not due from an account debtor located in Minnesota or New Jersey
unless the owner of such Account (i) has received a certificate of authority to
do business and is in good standing in such state or (ii) has filed a notice of
business activities report with the appropriate office or agency of such state
for the current year, and (k) that are not supported by a letter of credit
unless the Agent has a prior, perfected security interest in such letter of
credit for the benefit of the Banks and the Agent.
Eligible Assignee: Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Eligible Canadian Accounts: Those Accounts of MCL (net of any finance
charges, late charges, credits, rebates, contras or other offsets, commissions,
counterclaims or adjustments) (a) which the Borrowers reasonably determine to be
collectible, (b) the account debtors in respect of which are not reasonably
deemed uncreditworthy by the Majority Banks, are not debtors in any bankruptcy,
insolvency, liquidation, reorganization, dissolution or similar case or
proceeding or assignors for the benefit of creditors, are not affiliated with
the Borrowers, MCL or the Guarantors, and purchased the goods or services for
reasonably equivalent value, (c) which are not outstanding for more than ninety
(90) days past the earlier to occur of (i) the date of invoice and (ii) the date
of shipment (as to goods) or of provision (as to services), (d) which are not
more than sixty (60) days past due from the due date thereof and which are on
terms not to exceed thirty (30) days, (e) over which there is no Lien in favor
of any person or entity other than MI, and in which MI has a valid and perfected
first-priority security interest (which security interest in favor of MI is
collaterally assigned in favor of the Agent, for the benefit of the Agent and
the Banks), (f) which are in payment of fully performed and undisputed
obligations, (g) that are not due
16
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from any account debtor with respect to which more than fifty percent (50%) of
the aggregate amount of all Accounts owing from such account debtor are not
Eligible Accounts by reason of the foregoing clauses (c) or (d), (h) which are
not Consignment Accounts, (i) which are payable in Dollars or Canadian dollars
from an account debtor with its chief executive office or a branch office
located within Canada or the United States and invoiced to and payable from such
office, and (j) that are not supported by a letter of credit unless MI has a
prior, perfected security interest in such letter of credit and such security
interest has been collaterally assigned in favor of the Agent for the benefit of
the Banks and the Agent.
Eligible Canadian Inventory: Inventory owned by MCL (net of reserves for
off grade inventory and intercompany profit, as such reserves may be adjusted by
the Agent in its reasonable discretion on account of improvements or
deteriorations in reporting of inventory), (a) which is owned, possessed and
held for sale by MCL within Canada but not yet shipped (other than Eligible
In-Transit Inventory, which shall not be excluded from Eligible Canadian
Inventory pursuant to this clause (a)), (b) for which, if held on premises
leased by MCL (other than with respect to any warehouses, the storage expenses
with respect to which have been included in calculating the Warehousemen Lien
Reserve for any period as set forth in the definition of Warehousemen Lien
Reserve), a waiver of the lessor and, if any, sublessor, in each case reasonably
satisfactory to the Agent has been delivered to the Agent, (c) over which there
is no Lien in favor of any person or entity other than MI, and in which MI has a
valid and perfected first-priority security interest (which Lien in favor of MI
is collaterally assigned in favor of the Agent, for the benefit of the Agent and
the Banks), (d) which is not Consignment Inventory and which is otherwise in the
possession of MCL (other than Eligible In-Transit Inventory, which shall not be
excluded from Eligible Canadian Inventory solely because it is not in the
possession of MCL) unless the Agent has received a waiver from the party in
possession of such inventory in form and substance reasonably satisfactory to
the Agent, (e) which is not work in process, (f) which is not production and
packing supplies, (g) which does not reflect any capitalized inventory
variances, (h) which is not slow moving, (i) which has not been deemed by the
Majority Banks to be otherwise either obsolete or unmarketable, (j) which is not
held on consignment and is actually owned by MCL, and (k) which is not damaged.
Eligible Consignment Accounts: Consignment Inventory of SMC which would
constitute Eligible Inventory but for the provisions of clause (d) of the
definition of Eligible Inventory (a) as to which appropriate Uniform Commercial
Code financing statements showing SMC as debtor and the Agent as secured party
have been filed in the appropriate filing office or offices in order to perfect
the Agent's security interest therein, (b) as to which appropriate Uniform
Commercial Code financing statements showing SMC as the owner and consignor of
such Consignment Inventory have been filed in the appropriate filing office or
offices in order to evidence SMC's ownership interest therein, such filing(s) to
have been made prior to the relevant consignee's taking possession of such
Consigned Inventory, and as to which such financing statements have been
appropriately assigned in favor of the Agent, and (c) as to which SMC shall have
notified, prior to the relevant consignee's taking possession of such Consigned
Inventory, all secured creditors of such relevant consignee having a security
interest of record in inventory of such relevant consignee of the intention of
SMC to consign inventory to such relevant consignee.
17
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Eligible Fixed Assets: Those fixed personal property assets (excluding all
leaseholds and real property) (a) owned by SMC and located at SMC's Newfield,
New Jersey or Cambridge, Ohio facilities at the relevant time of reference
thereto, (b) in which the Agent has a valid and perfected security interest for
the benefit of the Banks and the Agent, (c) which are properly insured in
accordance with the provisions of Section 9.1(c) and the provisions of the
Security Documents, and (d) with respect to which insurance the Agent is an
additional loss payee.
Eligible In-Transit Inventory: Inventory (a) which is in transit and which
has been shipped from its original place of embarkation and with respect to
which the next place of debarkation is a port of entry in the United States
specified on Schedule 1.2 hereto, (b) which is represented by negotiable
documents of title as to which the Agent is a holder to whom such negotiable
documents of title have been duly negotiated, and (c) as to which the Agent, for
the benefit of the Banks and the Agent, is an additional but primary loss payee
under all insurance policies covering any casualty with respect thereto.
Eligible Inventory: Inventory owned by any of the Borrowers (net of
reserves for off grade inventory and intercompany profit, as such reserves may
be adjusted by the Agent in its reasonable discretion on account of improvements
or deteriorations in reporting of inventory), (a) which is owned, possessed and
held for sale by SMC or MI or MIR within the United States of America but not
yet shipped (other than Eligible In-Transit Inventory, which shall not be
excluded from Eligible Inventory pursuant to this clause (a)), (b) for which, if
held on premises leased by SMC or MI or MIR (other than with respect to any
warehouses, the storage expenses with respect to which have been included in
calculating the Warehousemen Lien Reserve for any period as set forth in the
definition of Warehousemen Lien Reserve), a waiver of the lessor and, if any,
sublessor, in each case reasonably satisfactory to the Agent has been delivered
to the Agent, (c) over which there is no Lien in favor of any person or entity
other than the Agent, for the benefit of the Banks and the Agent, and in which
the Agent has a valid and perfected first-priority security interest, (d) which
is not Consignment Inventory and which is otherwise in the possession of one of
the Borrowers (other than Eligible In-Transit Inventory, which shall not be
excluded from Eligible Inventory solely because it is not in the possession of
the Borrowers) unless the Agent has received a waiver from the party in
possession of such inventory in form and substance reasonably satisfactory to
the Agent, (e) which is not work in process (other than, in the case of SMC,
readily measurable and identifiable work in process awaiting only final
packaging in bags, drums or cans), (f) which is not production and packing
supplies, (g) which does not reflect any capitalized inventory variances, (h)
which, in the case of SMC, is not slow moving, (i) which has not been deemed by
the Majority Banks to be otherwise either obsolete or unmarketable, (j) which is
not held by the Borrowers on consignment and is actually owned by one of the
Borrowers, and (k) which is not damaged.
Environmental Laws: See Section 7(m)(i).
EPA: See Section 7(m)(ii).
18
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ERISA: The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time, and all applicable rules and regulations
thereunder.
ERISA Affiliate: Any Person which is treated as a single employer with the
Borrower under Section 414 of the IRC.
EU Treaties: The treaty establishing the European Community, being the
Treaty of Rome of 25 March 1957, as amended by the Single Xxxxxxxx Xxx 0000 and
by the Treaty on European Union which was signed at Maastrict on February 7,
1992 (and came into being on November 1, 1993) (the Maastrict Treaty) as further
amended and in effect from time to time.
Euros or e: The single currency adopted by certain of the member states of
the European Union in accordance with the EU Treaties.
Eurocurrency Reserve Rate: For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day: Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office: Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate: For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the rate per annum of interest for the
Agent (rounded upwards to the nearest 1/16 of one percent) at which the Agent's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of the Agent to
which such Interest Period applies, divided by (ii) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans: Loans bearing interest calculated by reference to
the Eurodollar Rate.
Event of Default: See Section 10.
19
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Existing Letters of Credit: See Section 3.1(a).
Federal Funds Effective Rate: For any day, the rate per annum 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, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
Fee Letter: See Section 5(a).
Financials: For any person or entity in respect of any period, the
consolidated and consolidating balance sheet of such person or entity and its
Subsidiaries as at the end of such period, and the related consolidated and
consolidating statement of income and consolidated and consolidating statement
of cash flow of such person or entity for such period, each setting forth in
comparative form the consolidated figures for the previous comparable fiscal
period, all in reasonable detail and prepared in accordance with GAAP.
Fixed Charge Coverage Ratio: For any period, the ratio of Adjusted
Operating Cash Flow for such period to Total Debt Service for such period.
Foreign Exchange Contract: Any foreign exchange contract on BKB's customary
form or any other writing or confirmation customary for BKB, entered into from
time to time between any one or more of the Borrowers and BKB.
Foreign Pledge Agreements: Any agreement or instrument entered into from
time to time at the request of the Agent among the Agent and any of the
Borrowers or Guarantors in connection with the pledge in favor of the Agent of
the capital stock of any direct Subsidiary of the Borrowers or the Guarantors
organized under the laws of any foreign country, each as amended from time to
time with the consent of the Agent and the Banks, and each in form and substance
satisfactory to the Agent and the Banks.
GAAP: Generally accepted accounting principles consistent with those
adopted by the Financial Accounting Standards Board and its predecessor, (a)
generally, as in effect from time to time, and (b) for purposes of determining
compliance by the Borrowers with their financial covenants set forth herein, as
in effect for the fiscal year reported in the most recent Financials submitted
to the Agent and the Banks prior to the Restatement Date.
German Borrowers: The "Borrowers", as defined in the German Loan Agreement.
German Borrowing Base: In the case of any German Borrower, the "Borrowing
Base" of such German Borrower, for this purpose as the term Borrowing Base is
defined in the German Loan Agreement.
20
-15-
German Collateral Instrument Fees: The "Collateral Instrument Fees", as
defined in the German Loan Agreement; provided, that for purposes of this
Agreement only, "German Collateral Instrument Fees" shall include only the per
annum fee payable under the German Loan Agreement at the rate of 1.75% of the
face amount of each German Collateral Instrument and shall not include any of
the German Lender's customary issuance, amendment and other administrative
processing fees which are payable under the German Loan Agreement, which
customary issuance, amendment and other administrative processing fees shall be
for the German Lender's own account.
German Collateral Instruments: The "Collateral Instruments", as defined in
the German Loan Agreement.
German Facility Reserve: With respect to each German Borrower at any time,
the Dollar Equivalent of the excess, if any, of (a) the sum of (i) the aggregate
amount of German Loans owing by such German Borrower under the German Loan
Agreement, plus (ii) the maximum aggregate amount available at such time to be
drawn by beneficiaries under all German Collateral Instruments issued for the
account of such German Borrower under the German Loan Agreement, plus (iii) the
aggregate amount of German Unpaid Reimbursement Obligations at such time in
respect of German Collateral Instruments issued for the account of such German
Borrower under the German Loan Agreement over (b) the German Borrowing Base of
such German Borrower at such time.
German Guaranty: The guaranty by each of the Borrowers and the Guarantors,
pursuant to Section 6.7 hereof, of the German Obligations of the German
Borrowers under the German Loan Agreement and each of the other German Loan
Documents.
German Lender: BKB, acting through its branch office in London, in its
capacity as lender under the German Loan Agreement with respect to German Loans
and German Collateral Instruments.
German Loan Agreement: The Loan Agreement dated as of October 20, 1997, as
amended and restated pursuant to that certain Supplemental Agreement dated as of
July 22, 1998, and as further amended pursuant to that certain Third Amendment
to Loan Agreement dated as of the Restatement Date, among the German Borrowers
and the German Lender, as the same may be further amended, restated,
supplemented or otherwise modified and in effect from time to time.
German Loan Documents: The "Loan Documents", as defined in the German Loan
Agreement.
German Loans: The "Loans", as defined in the German Loan Agreement.
German Maximum Drawing Amount: The "Maximum Drawing Amount", as defined in
the German Loan Agreement.
German Obligations: The "Obligations", as defined in the German Loan
Agreement.
21
-16-
German Outstandings: At any time, the sum of (a) the aggregate principal
amount of the German Loans at such time plus (b) the German Maximum Drawing
Amount at such time plus (c) the aggregate amount of German Unpaid Reimbursement
Obligations at such time.
German Reimbursement Obligations: The "Reimbursement Obligations", as
defined in the German Loan Agreement.
German Risk Participation Fee: See Section 3A.4.
German Unpaid Reimbursement Obligations: The "Unpaid Reimbursement
Obligations", as defined in the German Loan Agreement.
GfE: GfE-Gesellschaft fur Elektrometallurgie MBH, a company incorporated
under the laws of Germany and a German Borrower.
Guaranteed Pension Plan: See Section 10(m).
Guarantors: See preamble.
Guaranty: The guaranty by each of the Guarantors, pursuant to Section 6.4
hereof, of the Obligations of the Borrowers under this Agreement and each of the
other Loan Documents.
Hazardous Substances: See Section 7(m)(ii).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized Lease,
22
-17-
(vi) every obligation of such Person under any lease (a "synthetic
lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper, instruments
or documents creating or evidencing a right to payment of money or (C)
other receivables (collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating thereto or a
disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith,
(viii) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights,
(ix) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices (a "derivative contract"),
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such entity,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor and such terms are enforceable under
applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(i) through (x) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (A) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of such primary
obligation, or (C) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
23
-18-
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
Interest Payment Date: (i) As to any Base Rate Loan, the first day of the
calendar month following the calendar month which includes the Drawdown Date
thereof; and (ii) as to any Eurodollar Rate Loan, the last day of each Interest
Period applicable thereto.
Interest Period: With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
(A) for any Base Rate Loan, the last day of the calendar month; and (B) for any
Eurodollar Rate Loan, 1, 2 or 3 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrowers in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
24
-19-
(c) if the Borrowers shall fail to give notice as provided in Section
2.5, the Borrowers shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Eurodollar
Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.
Interest Set-Off Agreement. The Interest Set-Off Agreement-Guarantee dated
as of September 30, 1998 between MI, GfE and Bank Mendes, in the form delivered
to the Agent on or prior to the Restatement Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
IRC: The Internal Revenue Code of 1986, as amended.
Letter of Credit: See Section 3.1(a).
Letter of Credit Application: See Section 3.1(a).
Letter of Credit Participation: See Section 3.1(e).
Letter of Credit Fees: See Section 3.6.
Liens: Any lien, encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any Person including, without limitation, all statutory trust claims under the
laws of Canada or any province thereof.
Liquidity Level. An amount determined for each Business Day equal to the
sum of the Borrowing Base Availability on such day plus the Daily Cash Balance
on such day.
Loan: Any loan made or to be made to the Borrowers pursuant to Section 2.
Loan Documents: This Agreement (including the Guaranty contained herein),
the Notes, the Letter of Credit Applications, the Letters of Credit, the Fee
Letter and the Security Documents, in each case as from time to time amended or
supplemented, and all of the instruments, agreements and documents executed in
connection therewith.
25
-20-
Loan Request: See Section 2.1(c).
Lock Box Account: See Section 2.3(c).
Lock Box Agreement: The Lock Box Agreement among the Borrowers, the
Guarantors and the Agent, as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, and in form and substance
satisfactory to the Agent and the Banks.
M Holdings. Metallurg Holdings, Inc., a Delaware corporation and parent of
MI.
Majority Banks: As of any date (a) the Banks holding at least fifty-one
percent (51%) of the sum of (i) the outstanding principal amount of the Notes on
such date plus (ii) the Letter of Credit Participations of all of the Banks in
the sum of (A) the Maximum Drawing Amount on such date plus (B) any Unpaid
Reimbursement Obligations on such date plus (iii) the Dollar Equivalent of the
aggregate participating interests of all the Banks in the German Outstandings;
and (b) if no such principal amount of the Notes and no Letters of Credit are
outstanding and there are no German Outstandings, the Banks whose aggregate
Commitments constitute at least fifty-one percent (51%) of the Total Commitment.
Management Service Agreements: The several Management Service Agreements
between MSI and several of MI's Subsidiaries described on Schedule 1.3 hereto.
Materially Adverse Effect: Any materially adverse effect on the financial
condition or business operations of the Borrowers and the Guarantors (or, as the
case may be, of the Borrowers, the Guarantors and MCL), taken together, or
material impairment of the ability of any of the Borrowers or any of the
Guarantors (or, as the case may be, of any of the Borrowers, any of the
Guarantors or MCL) to perform their obligations hereunder or under any of the
other Loan Documents.
Material Subsidiaries: At any date of determination, any Subsidiary of MI
that, together with its Subsidiaries, (a) for the most recent fiscal year of MI,
accounted for more than 10% of the consolidated revenues of MI and its
Subsidiaries or (b) as of the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of MI and its Subsidiaries, all as set forth
on the most recently available consolidated financial statements of MI and its
Subsidiaries for such fiscal year, other than Gesellschaft fuer
Elektrometallurgie m.b.H. or Elektrowerk Weisweiler GmbH and their Subsidiaries.
Maturity Date: October 29, 2004.
Maximum Drawing Amount: The maximum aggregate amount from time to time that
the beneficiaries may draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
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MCL: Metallurg (Canada) Ltee./Metallurg (Canada) Ltd., a corporation
organized under the laws of Quebec.
MHC: See preamble.
MI: See preamble.
MI Indenture: The Indenture dated as of November 25, 1997 among MI as
principal obligor, each of the Guarantors as guarantors, and IBJ Xxxxxxxx Bank &
Trust Company, in its capacity as trustee under the MI Indenture, or any
successor thereto.
MIR: See preamble.
MIR China: See preamble
MSI: See preamble.
Net Available Cash: As defined in the MI Indenture, as in effect on the
Restatement Date or as otherwise amended with the consent of the Agent and the
Banks.
New Lending Office: See Section 5(f)(iv).
Non-U.S. Lender: See Section 5(f)(iv).
North American Group: MI, MIR, Metallurg International Resources GmbH,
Metallurg Mexico S.A. de C.V., SMC, MCL, MSI, MIR China, and MHC.
Notes: See Section 2.1(b).
NRC: See Section 7(d).
Obligations: All indebtedness, obligations and liabilities of the Borrowers
and the Guarantors to any of the Banks, the German Lender and the Agent,
individually or collectively, existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement (including the Guaranty and the German Guaranty hereunder) or any
other Loan Document or any Foreign Exchange Contract or in respect of any of the
Loans or German Loans made or Reimbursement Obligations or German Reimbursement
Obligations incurred or any obligations under any Foreign Exchange Contract or
any of the Notes, Letter of Credit Applications, Letters of Credit, German
Collateral Instruments or any interest rate protection arrangements between any
Borrower or Guarantor and any Bank or other instruments at any time evidencing
any thereof.
Operating Account: In relation to any Borrower, the operating account of
such Borrower maintained with the Agent.
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Original Closing Date: April 14, 1997, the date on which the conditions set
forth in Section 8 of the Original Credit Agreement were satisfied.
Original Loan Agreement. See preamble.
OSHA: The Occupational Safety and Health Act, as amended, and all rules,
regulations, judgments, decrees and orders arising thereunder.
Parent Indenture: The Indenture dated as of July 13, 1998, among M Holdings
as principal obligor and United States Trust Company of New York, in its
capacity as trustee under the Parent Indenture, or any successor thereto.
Parent Note Documents: The Parent Notes, the Parent Indenture and each of
the other documents, instruments and agreements executed and delivered in
connection therewith.
Parent Notes: The 12 3/4% Senior Discount Notes due 2008, the 12 3/4%
Senior Discount Exchange Notes due 2008 and the 12 3/4% Senior Discount Private
Exchange Notes due 2008, each issued or to be issued by M Holdings pursuant to
the Parent Note Documents, as in effect on the Restatement Date.
PBGC: The Pension Benefit Guaranty Corporation, and any successor entity or
entities bearing similar responsibilities.
Permitted Acquisition: Any asset or stock acquisition by the Borrowers or
any of their Subsidiaries of assets or Persons in the same or a similar line of
business as the Borrowers, including any business having the same or similar
customer base as that of the Borrowers, where (i) the Borrowers have provided
the Agent with five (5) Business Days prior written notice of proposed
acquisition, which notice shall include a reasonably detailed description of the
person or business to be acquired; (ii) the business to be acquired would not
subject the Agent or the Banks to any additional regulatory or third party
approvals in connection with the exercise of its rights and remedies under this
Agreement or any other Loan Document; (iii) the business and assets so acquired
in such Permitted Acquisition shall be acquired by the Borrowers free and clear
of all liens except for Permitted Liens and all Indebtedness not otherwise
prohibited under Section 9.2(b); (iv) no contingent obligations or liabilities
will be incurred or assumed in connection with such Permitted Acquisition which
could be expected to have a Material Adverse Effect on the business, assets or
financial condition of the Borrowers and their Subsidiaries; (v) the Borrowers
have provided the Agent with such other information as was reasonably requested
by the Agent; (vi) the Borrowers have taken or caused to be taken all necessary
actions to grant to the Agent a first priority perfected lien in all assets and
stock to be acquired and to ensure that any newly acquired Subsidiary becomes a
Guarantor in connection with such Permitted Acquisition except to the extent not
required pursuant to Section 6; (vii) the Borrowers have demonstrated to the
reasonable satisfaction of the Agent, based on a pro forma Compliance
Certificate, compliance with Section 9.3 on a pro forma basis immediately prior
to and after giving effect to such Permitted Acquisition; (viii) the aggregate
purchase price for all Permitted Acquisitions in any fiscal
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year of MI does not exceed $3,000,000; and (ix) the Borrowers have delivered to
the Agent a certificate of the chief financial officer of each Borrower to the
effect that (1) the Borrowers will be solvent upon the consummation of the
Permitted Acquisition; (2) the pro forma Compliance Certificate fairly presents
the financial condition of the Borrowers and their Subsidiaries as of the date
thereof and after giving effect to such Permitted Acquisition and (3) no Default
or Event of Default then exists or would result after giving effect to the
Permitted Acquisition.
Permitted Liens: See Section 9.2(c).
Person: Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Real Estate: All real property at any time owned or leased (as lessee or
sublessee) by any of the Borrowers or any of the Guarantors.
Record: The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Period. A period of four consecutive fiscal quarters of the
Subsidiaries of MI.
Register: See Section 14.3.
Reimbursement Obligation: The Borrowers' obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in Section 3.2.
Requirement of Law: In respect of any person or entity, any law, treaty,
rule, regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such person or entity or
affecting any of its property.
Restatement Date: The first date on which the conditions set forth in
Section 8 have been satisfied and any Loans are to be made hereunder or
converted from loans under the Original Loan Agreement or any Letter of Credit
is to be issued hereunder or converted from a letter of credit under the
Original Loan Agreement.
Restricted Payment. In relation to each Borrower and its Subsidiaries, any
(a) Distribution, or (b) any payment or prepayment of any Indebtedness owing by
any Borrower or its Subsidiaries to MI or M Holdings or to any other Affiliate
of such Borrower or MI or M Holdings.
Safeguard Management Agreement: Any management agreement entered into
between MI and Safeguard Management Company, in accordance with the terms and
conditions set forth in Section 9.2(a) and Section 9.2(e)(iii) hereof.
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Section 20 Subsidiary. A Subsidiary of the bank holding company controlling
any Bank, which Subsidiary has been granted authority by the Federal Reserve
Board to underwrite and deal in certain Ineligible Securities.
Security Agreement: The Amended and Restated Security Agreement, dated or
to be dated on or prior to the Restatement Date, among the Borrowers, the
Guarantors and the Agent, as amended, restated, supplemented or otherwise
modified and in effect from time to time, substantially in the form of Exhibit E
hereto.
Security Documents: The Security Agreement, the Stock Pledge Agreements,
the Foreign Pledge Agreements, the Canadian Assignment Documents, the Agency
Agreements, the Lock Box Agreement and all other security agreements, mortgages,
deeds of trust, assignments, or other instruments or documents, in form and
substance satisfactory to the Agent and the Banks, which shall grant to the
Agent, for the benefit of the Banks and the Agent, Liens upon all of the
Collateral.
Senior Note Documents: The Senior Notes, the MI Indenture, and each of the
other documents, instruments and agreements executed and delivered in connection
therewith, as each may be amended in accordance with the provisions of Section
9.2(j) hereof.
Senior Notes: MI's 11% Senior Notes due 2007, each issued by MI pursuant to
the MI Indenture, as in effect on the Restatement Date and as amended in
accordance with the provisions of Section 9.2(j) hereof.
Settlement: The making of, or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Loans (after giving effect to any Loan
Request) to be equal to each Bank's Commitment Percentage of the outstanding
amount of such Loans (after giving effect to any Loan Request), in any case
where, prior to such event or action, the actual share is not so equal.
Settlement Agreements: Collectively, (i) the Settlement Agreement of
Environmental Claims and Issues by and among MI, SMC, the United States
Environmental Protection Agency and the State of New Jersey, effective as of
February 26, 1997, and (ii) the Settlement Agreement of Environmental Claims and
Issues by and among MI, SMC, the United States Environmental Protection Agency
and the State of Ohio, effective as of February 26, 1997.
Settlement Amount: See Section 2.4(a).
Settlement Date: (a) The Drawdown Date relating to any Loan Request, (b)
Friday of each week, or if Friday is not a Business Day, the Business Day
immediately following such Friday, (c) the Business Day immediately following
the Agent's becoming aware of the existence of an Event of Default, (d) any
Business Day on which the amount of Loans outstanding from BKB plus BKB's
Commitment Percentage of the sum of the Maximum Drawing Amount, any Unpaid
Reimbursement Obligations and the Dollar Equivalent of any
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German Outstandings is equal to or greater than BKB's Commitment Percentage of
the Total Commitment, (e) the Business Day immediately following any Business
Day on which the amount of Loans outstanding increases or decreases by more than
$5,000,000 as compared to the previous Settlement Date, (f) any day on which any
conversion of a Base Rate Loan to a Eurodollar Rate Loan occurs or (g) any
Business Day on which (i) the amount of outstanding Loans decreases due to a
repayment or prepayment pursuant to the provisions of Section 2.3 or otherwise,
and (ii) the amount of the Agent's Loans outstanding equals zero Dollars ($0).
Settling Bank: See Section 2.4(a).
SMC: See preamble.
Stock Pledge Agreements: The several stock pledge agreements, dated or to
be dated on or prior to the Restatement Date, between each of MI and MHC,
respectively, and the Agent, each as amended, restated, supplemented or
otherwise modified and in effect from time to time, substantially in the form of
Exhibits F-1 and F-2, respectively, hereto.
Subsidiary: Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding shares of stock having voting power, regardless of whether such
right to vote depends upon the occurrence of a contingency.
Taxes: See Section 5(f)(i).
Total Commitment: The sum of the Commitments of the Banks, as in effect
from time to time.
Total Debt Service: For any period, the aggregate liability of the North
American Group for interest on Indebtedness, whether expensed or capitalized
including payments consisting of interest in respect of capitalized leases, for
principal payments in respect of Indebtedness and for commitment fees, financing
fees, and other fees and expenses in connection with the borrowing of money or
obtaining of credit which are classified as interest expense, determined in
accordance with GAAP.
Total Outstandings: At any time of reference thereto, the sum of (a) the
aggregate principal amount of the Loans outstanding at such time, (b) the
Maximum Drawing Amount at such time, (c) any Unpaid Reimbursement Obligations at
such time to the extent not included in the Maximum Drawing Amount, and (d) the
Dollar Equivalent of the aggregate German Outstandings at such time.
Transferee: See Section 5(f)(i).
Type: As to any Loan, its nature as a Base Rate Loan or a Eurodollar Rate
Loan.
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Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation: Any Reimbursement Obligation for which the
Borrowers do not reimburse the Agent and the Banks on the date specified in, and
in accordance with, Section 3.2.
Warehousemen Lien Reserve: At the time of reference thereto, the sum of (a)
all storage expenses not then due by any Borrower or MCL, as applicable, for the
then current billing period related thereto and (b) all unpaid storage expenses
due by such Borrower or MCL, as applicable, for that or any earlier billing
period, in each case owing by such Borrower or MCL, as applicable, to a
warehouseman for storage of inventory in a warehouse for which a waiver of the
warehouseman's lien satisfactory to the Bank has not been delivered to the Bank
and which, in the case of each such location, does not exceed the amount of
Eligible Inventory or, as the case may be, Eligible Canadian Inventory, at such
location.
Section 2. REVOLVING CREDIT FACILITY.
Section 2.1. COMMITMENT TO LEND. (a) Subject to the terms and conditions
set forth in this Agreement, each of the Banks severally agrees to lend to the
Borrowers and the Borrowers may borrow, repay, and reborrow from time to time
between the Restatement Date and the Maturity Date upon notice by the Borrowers
to the Agent given in accordance with Section 2.1(c), such sums as are requested
by the Borrowers up to a maximum aggregate amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Bank's Commitment
minus such Bank's Commitment Percentage of the sum of the Maximum Drawing
Amount, all Unpaid Reimbursement Obligations and the Dollar Equivalent of the
aggregate amount of German Outstandings, provided that (i) the aggregate amount
of the Total Outstandings (after giving effect to all amounts requested) shall
not at any time exceed the Total Commitment and (ii) the sum of (A) the
aggregate amount of the Total Outstandings (excluding the German Outstandings)
plus (B) the sum of the German Facility Reserves, if any, of each of the German
Borrowers, shall not at any time exceed the Borrowing Base.
(b) The Loans shall be evidenced by separate promissory notes
of the Borrowers in substantially the form of Exhibit B hereto (each a "Note"),
dated as of the Restatement Date and completed with appropriate insertions. One
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the outstanding amount of all Loans made by
such Bank, plus interest accrued thereon, as set forth below. Each of the
Borrowers irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal on such Bank's Note, an appropriate notation on such Bank's
Record reflecting the making of such Loan or (as the case may be) the receipt of
such
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payment. The outstanding amount of the Loans set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the joint and
several obligations of the Borrowers hereunder or under any Note to make
payments of principal of or interest on any Note when due.
(c) The Borrowers shall give to the Agent written notice in
the form of Exhibit C hereto (or telephonic notice confirmed in a writing in the
form of Exhibit C hereto) of each Loan requested hereunder (a "Loan Request") no
less than (i) one (1) Business Day prior to the proposed Drawdown Date of any
Base Rate Loan and (ii) three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify (A)
the principal amount of the Loan requested, (B) the proposed Drawdown Date of
such Loan, (C) the Interest Period for such Loan and (D) the Type of such Loan.
Promptly upon receipt of any such notice, the Agent shall notify each of the
Banks thereof. Each Loan Request shall be irrevocable and binding on the
Borrowers and shall obligate the Borrowers to accept the Loan requested from the
Banks on the proposed Drawdown Date. Each Loan Request shall be in a minimum
aggregate amount of $500,000 or an integral multiple thereof.
(d) Notwithstanding the notice and minimum amount
requirements set forth in Section 2.1(c) but otherwise in accordance with the
terms and conditions of this Agreement, the Agent may, in its sole discretion
and without conferring with the Banks, make Loans to the Borrowers (i) by entry
of credits to the Borrowers' Operating Accounts to cover checks or other charges
which the Borrowers have drawn or made against such account, (ii) in an amount
sufficient to pay to the Agent any Unpaid Reimbursement Obligations on the date
on which such Reimbursement Obligations become Unpaid Reimbursement Obligations,
(iii) to cover payment of interest, fees or other charges due and payable by the
Borrowers hereunder or under any of the other Loan Documents, or (iv) in an
amount as otherwise requested by the Borrowers. Each of the Borrowers hereby
requests and authorizes the Agent to make from time to time such Loans by means
of paying Unpaid Reimbursement Obligations and by advancing funds that are
credited to the Operating Account sufficient to cover checks and other items or
charges then presented to the Operating Account or to cover such interest, fees
or other charges. Each of the Borrowers acknowledges and agrees that the making
of such Loans shall, in each case, be subject in all respects to the provisions
of this Agreement as if they were Loans covered by a Loan Request including,
without limitation, the limitations set forth in Section 2.1(a) and the
requirements that the applicable provisions of Sections 8(a) and 8(b) (in the
case of Loans made on the Restatement Date) be satisfied. All actions taken by
the Agent pursuant to the provisions of this Section 2.1(d) shall be conclusive
and binding on the Borrowers absent the Agent's gross negligence or willful
misconduct. Loans made pursuant to this Section 2.1(d) shall be Base Rate Loans
until converted in accordance with the provisions of this Agreement and, prior
to a Settlement, such interest shall be for the account of the Agent.
Section 2.2. INTEREST. (a) So long as no Event of Default has occurred and
is continuing, the Borrowers shall pay interest on the Loans as follows:
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(i) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at a rate equal to the
Base Rate plus the Applicable Margin for Base Rate Loans;
(ii) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the
last day of the Interest Period with respect thereto at a rate equal
to the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate
Loans determined for such Interest Period; and
(iii) The Borrowers jointly and severally promise to pay
interest in arrears on each Loan on each Interest Payment Date with
respect thereto.
(b) While an Event of Default is continuing, amounts payable
under any of the Loan Documents shall bear interest (compounded monthly and
payable on demand in respect of overdue amounts) at a rate per annum which is
equal to the greater of (i) two percent (2.00%) per annum above the Base Rate
and (ii) one percent (1.00%) per annum above the rate of interest otherwise
applicable thereto pursuant to the provisions of Section 2.2(a) hereof, in
either case until such amount is paid in full (after as well as before judgment)
or (as the case may be) such Event of Default has been cured or waived in
writing by the Majority Banks.
Section 2.3. REPAYMENTS AND PREPAYMENTS. (a) The Borrowers hereby jointly
and severally agree to pay the Banks on the Maturity Date, and there shall
become absolutely due and payable on the Maturity Date, all of the Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon. If, at any time, for any reason, including fluctuations in currency
exchange rates, (i) the aggregate amount of the Total Outstandings shall exceed
the Total Commitment or (ii) the sum of (A) the aggregate amount of the Total
Outstandings (excluding the German Outstandings) plus (B) the sum of the German
Facility Reserves, if any, of each of the German Borrowers, shall exceed the
Borrowing Base, then in either such case, the Borrowers shall immediately pay
the amount of such excess to the Agent for the respective accounts of the Banks
for application to the Loans or, if no Loans are then outstanding, to be held by
the Agent as cash collateral to secure payment of all Reimbursement Obligations
and all obligations of the Borrowers and the Guarantors in respect of the German
Guaranty on a ratable basis up to the amount of 105% of the sum of the Maximum
Drawing Amount plus the aggregate amount of the German Outstandings. Each
payment of any Unpaid Reimbursement Obligations or German Obligations or
prepayment of Loans shall be allocated among the Banks and the German Lender, as
applicable, in proportion, as nearly as practicable, to each Reimbursement
Obligation or German Obligation or (as the case may be) the respective unpaid
principal amount of each Bank's Note, with adjustments to the extent practicable
to equalize any prior payments or repayments not exactly in proportion.
(b) The Borrowers shall have the right, at their election,
to repay the outstanding amount of the Loans, as a whole or in part, at any time
without penalty or premium, provided that any full or partial prepayment of the
outstanding amount of any
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Eurodollar Rate Loans pursuant to this Section 2.3 which is made on a day other
than the last day of the Interest Period relating thereto shall be accompanied
by payment of all amounts required to be paid by Section 4.6 hereof. The
Borrowers shall give the Agent, no later than 10:00 a.m., Boston time, at least
one (1) Business Day's prior written notice of any proposed prepayment pursuant
to this Section 2.3 of Base Rate Loans, and three (3) Eurodollar Business Days'
prior written notice of any proposed prepayment pursuant to this Section 2.3 of
Eurodollar Rate Loans, in each case specifying the proposed date of prepayment
of Loans and the principal amount to be prepaid, provided that such notice
requirements shall not apply to any required prepayments made pursuant to the
provisions of Section 2.3(c) hereof. Each such partial prepayment of the Loans
pursuant to this Section 2.3 shall be in an integral multiple of $500,000, shall
be accompanied by the payment of accrued interest on the principal prepaid to
the date of prepayment and shall be applied, in the absence of instruction by
the Borrowers, first to the principal of Base Rate Loans and then to the
principal of Eurodollar Rate Loans. Each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Bank's Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion. Any
amounts so repaid may be reborrowed by the Borrowers before the Maturity Date,
upon the terms and subject to the conditions of this Agreement.
(c) Each of the Borrowers will (i) on or prior to the
Restatement Date, either (A) cause each of its banks with which it has an
existing depository lock box account to enter into an agency agreement (an
"Agency Agreement") with the Agent, in form and substance reasonably
satisfactory to the Agent and under which such depository lock box account is
subject to the control of the Agent, or (B) replace any existing depository
account with a depository lock box account with the Agent and under the control
of the Agent, as contemplated by the terms of a Lock Box Agreement (a lock box
account of any Borrower referred to either of the foregoing clauses (A) and (B)
being herein referred to as a "Lock Box Account" of such Borrower), and (ii) in
the case of clause (B), direct its account debtors and obligors on instruments
or other obligors of such Borrower with respect to any of the Collateral
pursuant to a form of notification letter (a "Direct Collection Letter") in form
and substance reasonably satisfactory to the Agent and such Borrower to make all
payments on or with respect to any of the Collateral due or to become due to
such Borrower directly to a Lock Box Account of such Borrower. If,
notwithstanding the issuance of such Direct Collection Letters, such Borrower
receives any cash proceeds of any of the Collateral, whether in the form of
money, checks, wire transfers or otherwise, such Borrower will hold such cash
proceeds in trust for the benefit of the Agent and the Banks and turn such cash
proceeds promptly over to the Agent in the identical form received by deposit to
a Lock Box Account of such Borrower or to the Agent. The Agent shall, on the
first Business Day (or, in the case of wire transfers received by the Agent
directly or from a Lock Box Account of such Borrower before 1:00 p.m. (Boston
time), on the same Business Day if the Agent is able to do so with reasonable
efforts) immediately following the receipt by the Agent of any and all cash
proceeds from account debtors, obligors or (as the case may be) such Borrower so
deposited in the Lock Box Account of such Borrower (or such later date as the
Agent determines that good collected funds will be received by the Agent), and
on a provisional basis until final receipt of good collected funds, apply all
such cash proceeds which were
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deposited to a Lock Box Account of such Borrower or otherwise received by the
Agent in the form of money, checks, wire transfers or like items as follows:
(1) first to be applied to all Obligations then due
and payable;
(2) second to be applied to the Loans (and thereafter,
solely in respect of the net proceeds received in connection with any asset
disposition permitted by Section 9.2(f) or otherwise consented to by the
Agent and the Banks pursuant to Section 9.2(f), to be applied to cash
collateralize Letters of Credit to the extent required by the provisions of
such Section 9.2(f));
(3) third, so long as no Event of Default has occurred
and is continuing, any excess to be credited to the Operating Account of
such Borrower.
From and after the occurrence and during the continuance of an Event of Default,
the Agent shall apply any such cash proceeds from account debtors, obligors or
(as the case may be) any Borrower so deposited in the Lock Box Account of such
Borrower in accordance with the provisions of Section 11 hereof. For purposes of
the foregoing provisions of this Section 2.3(c) the Agent shall not be deemed to
have received any such cash proceeds on any day unless received by the Agent
before 3:00 p.m. (Boston time) on such day. Each of the Borrowers further
acknowledges and agrees that any such provisional credit by the Agent shall be
subject to reversal if final collection in good collected funds of the related
item is not received by the Agent in accordance with the Agent's customary
procedures and practices for collecting provisional items.
(d) The Borrowers jointly and severally agree to pay to the
Agent any and all fees, costs and expenses which the Agent incurs in connection
with the opening of and maintaining each Lock Box Account and depositing for
collection by the Agent any check or other item of payment. Absent gross
negligence or willful misconduct by the Agent, the Borrowers jointly and
severally agree to indemnify the Agent and to hold the Agent harmless from and
against any loss, cost or expense sustained or incurred by the Agent on account
of any claims arising in connection with the Agent's operation of each Lock Box
Account or in respect of any Agency Agreement or the Lock Box Agreement.
(e) The Borrowers shall have the right at any time and from
time to time upon three (3) Business Days' prior written notice to the Agent to
reduce by $1,000,000 or an integral multiple thereof or terminate entirely the
Total Commitment, whereupon the Commitments of the Banks shall be reduced pro
rata in accordance with their respective Commitment Percentages of the amount
specified in such notice or, as the case may be, terminated. Promptly after
receiving any notice of the Borrowers delivered pursuant to this Section 2.3(e),
the Agent will notify the Banks of the substance thereof. Upon the effective
date of any such reduction or termination, the Borrowers shall pay to the Agent
for the respective accounts of the Banks the full amount of any commitment fee
then accrued on the amount of the reduction. No reduction or termination of the
Commitments may be reinstated.
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Section 2.4. SETTLEMENTS; FAILURE TO MAKE FUNDS AVAILABLE.
(a) On each Settlement Date, the Agent shall, not later than
10:00 a.m. (Boston time), give telephonic or facsimile notice (i) to the Banks
and the Borrowers of the respective outstanding amount of Loans made by the
Agent on behalf of the Banks from the immediately preceding Settlement Date
through the close of business on the prior day and (ii) to the Banks of the
amount (a "Settlement Amount") that each Bank (the "Settling Bank") shall pay to
effect a Settlement of any Loan. A statement of the Agent submitted to the Banks
and the Borrowers or to the Banks with respect to any amounts owing under this
Section 2.4 shall be prima facie evidence of the amount due and owing. The
Settling Bank shall, not later than 3:00 p.m. (Boston time) on such Settlement
Date, effect a wire transfer of immediately available funds to the Agent in the
amount of the Settlement Amount. All funds advanced by any Bank as a Settling
Bank pursuant to this Section 2.4 shall for all purposes be treated as a Loan
made by such Settling Bank to the Borrowers and all funds received by any Bank
pursuant to this Section 2.4 shall for all purposes be treated as repayment of
amounts owed with respect to Loans made by such Bank. In the event that any
bankruptcy, reorganization, liquidation, receivership or similar cases or
proceedings in which any of the Borrowers is a debtor prevent a Settling Bank
from making any Loan to effect a Settlement as contemplated hereby, such
Settling Bank will make such disposition and arrangements with the other Banks
with respect to such Loans, either by way of purchase of participations,
distribution, pro tanto assignment of claims, subrogation or otherwise as shall
result in each Bank's share of the outstanding Loans being equal, as nearly as
may be, to such Bank's Commitment Percentage of the outstanding amount of the
Loans.
(b) The Agent may, unless notified to the contrary by any
Bank prior to a Settlement Date, assume that such Bank has made or will make
available to the Agent on such Settlement Date the amount of such Bank's
Settlement Amount, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrowers a corresponding
amount. If any Bank makes available to the Agent such amount on a date after
such Settlement Date, such Bank shall pay to the Agent on demand an amount equal
to the product of (i) the average computed for the period referred to in clause
(iii) below, of the weighted average interest rate paid by the Agent for federal
funds acquired by such Agent during each day included in such period, times (ii)
the amount of such Settlement Amount, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such Settlement Date
to the date on which the amount of such Settlement Amount shall become
immediately available to such Agent, and the denominator of which is 360. A
statement of the Agent submitted to such Bank with respect to any amounts owing
under this paragraph shall be prima facie evidence of the amount due and owing
to the Agent by such Bank. If such Bank's Settlement Amount is not made
available to the Agent by such Bank within three (3) Business Days following
such Settlement Date, the Agent shall be entitled to recover such amount from
the Borrowers on demand, with interest thereon at the rate per annum applicable
to the Loans as of such Settlement Date.
(c) The failure or refusal of any Bank to make available to
the Agent at the aforesaid time and place on any Settlement Date the amount of
its Settlement Amount (i) shall not relieve any other Bank from its several
obligations hereunder to make available to
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the Agent the amount of such other Bank's Settlement Amount and (ii) shall not
impose upon such other Bank any liability with respect to such failure or
refusal or otherwise increase the Commitment of such other Bank.
Section 2.5. CONVERSION OPTIONS.
(a) The Borrowers may elect from time to time to convert any
outstanding Loan to a Loan of another Type, provided that (i) with respect to
any such conversion of a Loan to a Base Rate Loan, the Borrowers shall give the
Agent at least one (1) Business Day's prior written notice of such election;
(ii) with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrowers shall give the Agent at least three (3) Eurodollar
Business Days' prior written notice of such election; (iii) with respect to any
such conversion of a Eurodollar Rate Loan into a Loan of another Type, such
conversion shall only be made on the last day of the Interest Period with
respect thereto; and (iv) no Loan may be converted into a Eurodollar Rate Loan
when any Default or Event of Default has occurred and is continuing. On the date
on which such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may be. All or any
part of outstanding Loans of any Type may be converted into a Loan of another
Type as provided herein, provided that any partial conversion shall be in an
aggregate principal amount of $500,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Loan to a Eurodollar Rate
Loan shall be irrevocable by the Borrowers.
(b) Any Loan of any Type may be continued as a Loan of the
same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrowers with the notice provisions contained in Section
2.5(a); provided that no Eurodollar Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any Default or
Event of Default of which officers of the Agent active upon the Borrowers'
account have actual knowledge. In the event that the Borrowers fail to provide
any such notice with respect to the continuation of any Eurodollar Rate Loan as
such, then such Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto. The
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this Section 2.5 is scheduled to occur.
(c) Any conversion to or from Eurodollar Rate Loans shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of all Eurodollar Rate Loans
having the same Interest Period shall not be less than $500,000 or a whole
multiple of $500,000 in excess thereof.
Section 2.6. FUNDS FOR LOANS.
(a) Not later than 11:00 a.m. (Boston time) on the proposed
Drawdown Date of any Loans, each of the Banks will make available to the Agent,
at the Agent's Head Office, in immediately available funds, the amount of such
Bank's Commitment Percentage
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of the amount of the requested Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Section 8 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrowers the aggregate amount
of such Loans made available to the Agent by the Banks. The failure or refusal
of any Bank to make available to the Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the requested Loans
shall not relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage of
any requested Loans.
(b) The Agent may, unless notified to the contrary by any
Bank prior to a Drawdown Date, assume that such Bank has made available to the
Agent on such Drawdown Date the amount of such Bank's Commitment Percentage of
the Loans to be made on such Drawdown Date, and the Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrowers a corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the average computed for the period
referred to in clause (iii) below, of the weighted average interest rate paid by
the Agent for federal funds acquired by the Agent during each day included in
such period, times (ii) the amount of such Bank's Commitment Percentage of such
Loans, times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown Date to the date on which the amount of
such Bank's Commitment Percentage of such Loans shall become immediately
available to the Agent, and the denominator of which is 360. A statement of the
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of such Loans
is not made available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover such amount
from the Borrowers on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
Section 3. LETTER OF CREDIT FACILITY.
Section 3.1. LETTER OF CREDIT COMMITMENT.
(a) Subject to the terms and conditions hereof and the
execution and delivery by the Borrowers of a letter of credit application on the
Agent's customary form (a "Letter of Credit Application"), the Agent on behalf
of the Banks and in reliance upon the representations and warranties of the
Borrowers and the Guarantors contained herein, agrees, in its individual
capacity, to issue, extend and renew from time to time from the Restatement Date
until but not including the date which is thirty (30) days prior to the then
scheduled Maturity Date, for the account of the Borrowers, standby and
documentary letters of credit (each a "Letter of Credit"), in such form as may
be requested by the Borrowers and agreed to by the Agent; provided, however,
that, after giving effect to such request, (i) the sum of the aggregate Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed
$35,000,000 at any one time and (ii) the sum of the Total Outstandings shall not
exceed the lesser of (A) the Total Commitment and (B) the Borrowing Base. No
Letter of
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Credit shall be issued, extended or renewed with an expiration date occurring
after the date which is 180 days following the then scheduled Maturity Date or
which provides for drafts which may be paid after the date which is 180 days
following the then scheduled Maturity Date. The Agent, on behalf of the Banks
and in reliance upon the agreement of the Banks set forth in Section 3.1(e) and
upon the representations and warranties of the Borrowers and the Guarantors
contained herein, agrees, in its individual capacity, that all letters of credit
issued, extended or renewed by the Banks under the Original Loan Agreement which
are outstanding on the Restatement Date and listed on Schedule 3.1 hereto (the
"Existing Letters of Credit") shall, from and after the Restatement Date, be
deemed Letters of Credit issued pursuant to this Section 3. All Existing Letters
of Credit issued, extended or renewed under the Original Loan Agreement prior to
the Restatement Date shall accrue fees, and all fees thereon shall be payable,
in the amounts and pursuant to the terms of Section 3.6 of this Loan Agreement
from and after the Restatement Date. Any Existing Letters of Credit which are
extended or renewed from and after the Restatement Date shall accrue fees, and
all fees thereon shall be payable, in the amounts and pursuant to the terms of
Section 3.6 of this Agreement.
(b) Each Letter of Credit Application shall be completed to
the satisfaction of the Agent. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of this Agreement,
then the provisions of this Agreement shall, to the extent of any such
inconsistency, govern.
(c) Each Letter of Credit issued, extended or renewed
hereunder shall, among other things, provide for the payment of sight drafts for
honor thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs or, in the case of a
standby Letter of Credit, either the Uniform Customs or the International
Standby Practices.
(d) On or prior to the then scheduled Maturity Date, the
Borrowers shall, with respect to each Letter of Credit then outstanding (i) pay
to the Agent in cash for deposit into the Cash Collateral Account an amount
equal to one hundred and five percent (105%) of the Maximum Drawing Amount of
such Letter of Credit as of such date, which amount shall be held by the Agent
as cash collateral for any Reimbursement Obligations or other obligations
incurred with respect to such Letter of Credit, or (ii) deliver to the Agent a
"back-to-back" letter of credit, in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent in its sole
discretion and naming the Agent as beneficiary in an amount equal to one hundred
and five percent (105%) of the Maximum Drawing Amount of such Letter of Credit
as of such date. Any cash sums deposited into the Cash Collateral Account
pursuant to clause (i) shall be reduced or released, and any back-to-back letter
of credit issued pursuant to clause (ii) shall be reduced in amount or returned,
if and to the extent that the Maximum Drawing Amount with respect to the
applicable Letter of Credit has been reduced or the Letter of Credit has expired
or been cancelled and all Unpaid Reimbursement Obligations and other amounts due
or to become due and owing with respect thereto have been paid.
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(e) Each Bank severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to Section 3.2 (such
agreement for a Bank being called herein the "Letter of Credit Participation" of
such Bank).
(f) Each such payment made by a Bank shall be treated as the
purchase by such Bank of a participating interest in the Borrowers'
Reimbursement Obligation under Section 3.2 in an amount equal to such payment.
Each Bank shall share in accordance with its participating interest in any
interest which accrues pursuant to Section 3.2.
Section 3.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to induce
the Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby jointly and severally agree to
reimburse or pay to the Agent, for the account of the Agent or (as the case may
be) the Banks, with respect to each Letter of Credit issued, extended or renewed
by the Agent hereunder,
(a) except as otherwise expressly provided in Section 3.2(b)
and (c), on each date that any draft presented under such Letter of Credit is
honored by the Agent, or the Agent otherwise makes a payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any fees, charges or other costs and expenses
whatsoever incurred by the Agent or any Bank in connection with any payment made
by the Agent or any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount equal to
such difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with Section 10, an amount equal to 105% of the Maximum
Drawing Amount, which amount shall be held by the Agent for the benefit of the
Banks as cash collateral for all Reimbursement Obligations.
Unless funded by a Loan pursuant to Section 2.1(d), each such payment shall be
made to the Agent at the Agent's Head Office in immediately available funds.
Interest on any and all amounts remaining unpaid by the Borrowers under this
Section 3.2 and not funded by a Loan pursuant to Section 2.1(d) at any time from
the date such amounts become due and payable (whether as stated in this Section
3.2, by acceleration or otherwise) until payment in full (whether before or
after judgment) shall be payable to the Agent on demand at the rate specified in
Section 2.2(b) following an Event of Default.
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Section 3.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrowers fail to reimburse the Agent as
provided in Section 3.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (ii) the amount equal
to such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date the Agent paid the draft presented for honor or
otherwise made payment to the date on which such Bank's Commitment Percentage of
such Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 360. The responsibility of the Agent to
the Borrowers and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
Section 3.4. OBLIGATIONS ABSOLUTE. The Borrowers' joint and several
obligations under this Section 3 relating to Letters of Credit shall be absolute
and unconditional under any and all circumstances and irrespective of the
occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrowers
may have or have had against the Agent, any Bank or any beneficiary of a Letter
of Credit. The Borrowers further agree with the Agent and the Banks that the
Agent and the Banks shall not be responsible for, and the Reimbursement
Obligations shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among the Borrowers, the beneficiary of any Letter of
Credit or any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrowers against
the beneficiary of any Letter of Credit or any such transferee. The Agent and
the Banks shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit other than as a result of
the Agent's or any Bank's gross negligence or willful misconduct. The Borrowers
agree that any action taken or omitted by the Agent or any Bank under or in
connection with each Letter of Credit and the related drafts and documents, if
done in good faith, shall be binding upon the Borrowers and shall not result in
any liability on the part of the Agent or any Bank to the Borrowers.
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Section 3.5. RELIANCE BY ISSUER. To the extent not inconsistent with
Section 3.4, the Agent shall be entitled to rely, and shall be fully protected
in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper person
or entity and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first have received such advice or concurrence of the Majority Banks as
it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Banks and all future holders of the Notes or
of a Letter of Credit Participation.
Section 3.6. LETTER OF CREDIT FEES. The Borrowers shall pay a fee (in each
case, a "Letter of Credit Fee") to the Agent in respect of each Letter of
Credit, an amount equal to the Applicable Margin for Letters of Credit per annum
of the face amount of such Letter of Credit, plus the Agent's customary
issuance, amendment and other administrative processing fees, with a portion of
such Letter of Credit Fee equal to one-eighth percent (.125%) per annum of the
face amount of such Letter of Credit (and such issuance, amendment and other
administrative processing fees) to be for the Agent's own account, and with the
remainder of such Letter of Credit Fee (but not such issuance, amendment and
other administrative processing fees) to be for the accounts of the Banks in
accordance with their respective Commitment Percentages; provided that after the
occurrence and during the continuation of an Event of Default, the Applicable
Margin for Letters of Credit otherwise in effect shall be increased by one
percent (1%) per annum above the rate otherwise in effect until such time as
such Event of Default has been cured or waived in writing by the Majority Banks.
Such Letter of Credit Fees shall be payable (y) with respect to all such per
annum fees (but not such issuance, amendment and other administrative processing
fees) payable on each standby Letter of Credit, in arrears on the first day of
each calendar quarter for the immediately preceding calendar quarter, and (z)
with respect to all such per annum fees payable on each documentary Letter of
Credit and with respect to all such issuance, amendment and other administrative
processing fees payable on all Letters of Credit, on the date of issuance or of
any extension or renewal of any such Letter of Credit and at such other time or
times as such charges are customarily made by the Agent.
Section 3A PARTICIPATION IN GERMAN LOANS AND GERMAN COLLATERAL INSTRUMENTS.
Section 3A.1. PARTICIPATION IN GERMAN LOANS. Each of the Banks hereby
unconditionally and irrevocably agrees to purchase, as the Agent or the German
Lender may at any time request, an undivided participating interest (in
Deutschemarks, in Euros or in Dollars as the case may be) in its ratable share,
determined by reference to its Commitment Percentage, of
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all German Loans made by the German Lender under the German Loan Agreement,
provided that:
(a) each of the Agent and the German Lender hereby agrees
that, unless an Event of Default has occurred and is continuing, it will not
request any such purchase of participating interests unless the Agent or, as the
case may be, the German Lender, has given to the German Borrowers at least three
(3) Business Days' prior notice thereof; and
(b) in the event that any of the Events of Default of the
types described in Sections 10.1(g) or (h) of the German Loan Agreement shall
have occurred with respect to any of the German Borrowers, each Bank shall be
deemed to have purchased, automatically and without request, such participating
interest in the German Loans made by the German Lender to the German Borrowers.
Any such request by the Agent or the German Lender shall be made in writing to
each Bank and shall specify the amount of Deutschemarks, Euros or Dollars
required from such Bank in order to effect the purchase by such Bank of a
participating interest in the amount equal to its Commitment Percentage times
the aggregate then outstanding principal amount of the German Loans (which
participating interest shall thereafter also cover accrued interest thereon and
other amounts owing in connection therewith). Within two (2) Business Days after
receipt of such request, each Bank shall deliver to the Agent (in immediately
available funds) the amount so specified by the Agent or the German Lender. The
Agent shall promptly deliver such amounts to the German Lender in immediately
available funds. Promptly following receipt thereof, the German Lender will
deliver to each Bank (through the Agent) a certificate setting forth the amount
of the German Loans purchased by such Bank, dated the date of receipt of such
funds and in such amount. From and after such purchase (i) each Bank shall also
purchase a participating interest in any further German Loans made to the German
Borrowers in the manner described in the foregoing provisions of this Section
3A.1 immediately upon the making thereof in the amount equal to such Bank's
Commitment Percentage thereof (with the Agent hereby agreeing to provide prompt
notice to each such Bank of its receipt from the German Lender of a notice of
borrowing and of the making of any German Loans), and (ii) all amounts from time
to time accruing, and all amounts from time to time payable, on account of such
German Loans (including any interest and other amounts which were accrued but
unpaid on the date of such purchase) shall be distributed by the German Lender
to the Agent, for the accounts of the Banks, on account of such participating
interests. Notwithstanding anything to the contrary contained in this Section
3A.1, the failure of any Bank to purchase its participating interest in any
German Loans shall not relieve any other Bank of its obligations hereunder to
purchase its participating interest in a timely manner, but no Bank shall be
responsible for the failure of any other Bank to purchase the participating
interest to be purchased by such other Banks on any date.
Section 3A.2. PARTICIPATION IN GERMAN COLLATERAL INSTRUMENTS. Each Bank
severally agrees that it shall be absolutely liable, to the extent of such
Bank's Commitment Percentage (for this purpose, without regard to whether such
Bank's Commitment shall then be terminated), to reimburse the German Lender on
demand for the amount of each draft or other amounts whatsoever paid by the
German Lender under each German Collateral
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Instrument to the extent that such amount is not reimbursed by the German
Borrowers pursuant to the provisions of the German Loan Agreement. If the German
Borrowers fail to reimburse the German Lender as provided in the German Loan
Agreement on or before the date that any draft is paid or other payment is made
by the German Lender in respect of any German Collateral Instrument, the German
Lender may at any time thereafter notify the Banks of the amount of any such
German Unpaid Reimbursement Obligations and shall specify the amount required
from each of the Banks. Within two (2) Business Days after receipt of such
notice, each Bank shall make available to the German Lender, in immediately
available funds, such Bank's Commitment Percentage of such German Unpaid
Reimbursement Obligations. Each such payment made by a Bank shall be treated as
the purchase by such Bank of a participating interest in the German Borrowers'
German Reimbursement Obligations under the German Loan Agreement in an amount
equal to such payment. Each Bank shall share in accordance with any such
participating interest in any interest and fees which accrue thereon pursuant to
the provisions of the German Loan Agreement. The responsibility of the German
Lender to the German Borrowers and the Banks shall be only to determine that the
documents (including each draft) delivered under each German Collateral
Instrument in connection with such presentment shall be in conformity in all
material respects with such German Collateral Instrument.
Section 3A.3. COMMON PARTICIPATION PROVISIONS. (a) If any amount required
to be paid by any Bank pursuant to Sections 3A.1 or 3A.2 is paid to the Agent,
for the account of the German Lender, within three (3) Business Days following
the date upon which such Bank receives notice from the Agent that the German
Loan in which such Bank has purchased a participating interest has been made or,
as the case may be, that any German Reimbursement Obligation has not been paid
by the German Borrowers, such Bank shall pay to the Agent, for the account of
the German Lender, on demand an amount equal to the product of (i) such amount,
times (ii) (A) in the case of any such amount denominated in Deutschemarks, the
discount rate (Diskontsatz) as announced by the German Bundesbank from time to
time, (B) in the case of any such amount denominated in Euros, the discount rate
as announced by the European Central Bank and (C) in the case of any such amount
denominated in Dollars, the Federal Funds Effective Rate from time to time, in
each case as quoted by the Agent, during the period from but not including the
date such payment is required to be made to and including the date on which such
payment is immediately available to the Agent, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any Bank
pursuant to Sections 3A.1 or 3A.2 is not in fact made available to the Agent
within three (3) Business Days following the date upon which such Bank receives
notice from the Agent that the German Loan in which such Bank has purchased a
participating interest has been made or, as the case may be, that any German
Reimbursement Obligation has not been paid by the German Borrowers, the Agent
shall be entitled to recover from such Bank, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to German Loans which are "Overdraft Rate Loans" as defined under the German
Loan Agreement. A certificate from the Agent submitted to any Bank with respect
to any amounts owing under this Section 3A.3(a) shall be conclusive in the
absence of manifest error. Amounts payable by any Bank pursuant to this Section
3A.3(a) shall be paid to the Agent, for the account of the German Lender;
provided that, if the Agent (in its sole discretion) has elected to fund on
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behalf of such Bank the amounts owing to the German Lender, then the amounts
shall be paid to the Agent, for its own account. Any obligations of a Bank
hereunder owing to the German Lender in Deutschemarks or Euros, if payment
therefor is tendered in Dollars, shall be discharged only to the extent that on
the Business Day next following receipt by the German Lender of such payment in
Dollars, the German Lender may, in accordance with normal banking procedures,
purchase Deutschemarks or Euros with such Dollars. If the amount of the
Deutschemarks or Euros which the German Lender is able to so purchase is less
than the sum originally due to the German Lender in Deutschemarks or Euros, such
Bank agrees, as a separate obligation, to indemnify the German Lender against
such loss, and, if the amount of Deutschemarks or Euros which the German Lender
is able to so purchase exceeds the sum originally due to the German Lender in
Deutschemarks or Euros, the German Lender agrees to remit to the Agent such
excess for the account of such Bank.
(b) Whenever, at any time after the German Lender has
received from any Bank such Bank's participating interest in a German Loan or
German Collateral Instrument pursuant to this Section 3A, the German Lender
receives any payment on account thereof, the German Lender will distribute to
the Agent, for the account of such Bank, such Bank's participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Bank's participating interest was
outstanding and funded) in like funds received; provided, however, that in the
event that any such payment received by the German Lender is required to be
returned, such Bank will return to the German Lender any portion thereof
previously distributed by the German Lender to such Bank in like funds as such
payment is required to be returned by the German Lender.
(c) Each Bank's obligation to purchase participating
interests pursuant to this Section 3A shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against the German Lender, any German Borrower, any Borrower, any Guarantor, or
any other Person for any reason whatsoever; (ii) the occurrence and continuation
of any Default or Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of any German Borrower, any Borrower, any Guarantor, or
any other Bank; (iv) any breach of any of the Loan Documents or German Loan
Documents by any German Borrower, any Borrower, any Guarantor, or any other
Bank; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
Section 3A.4. GERMAN RISK PARTICIPATION FEES. In consideration of the
agreements of the Banks to purchase participating interests in the German Loans
and the German Collateral Instruments, the German Lender shall pay to the Agent,
for the ratable accounts of the Banks (other than any Delinquent Bank, with
respect to which the German Lender shall retain such Delinquent Bank's portion
of such payments for its own account), the following amounts (each of the
payments described below in this Section 3A.4 being referred to herein as a
"German Risk Participation Fee"):
(a) As promptly as is practicable following each date upon
which the German Lender receives a payment of interest under the German Loan
Agreement on account of any German Loans, the German Lender shall pay to, or
arrange for payment by, the Agent,
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for the ratable accounts of the Banks in accordance with their Commitment
Percentages, a portion of such interest payment received by the German Lender
equal to two and one-half percent (2.50%) per annum on the outstanding amount of
German Loans (or, with respect to the portion of such payment which is payable
for the account of any Bank which has funded the purchase of a participating
interest in any German Loan pursuant to Section 3A.1, as the case may be, such
Bank's ratable portion of the entire amount of such interest payment received by
the German Lender).
(b) As promptly as is practicable following each date upon
which the German Lender receives a payment of German Collateral Instrument Fees,
the German Lender shall pay to, or arrange for payment by, the Agent, for the
ratable accounts of the Banks in accordance with their Commitment Percentages,
an amount equal to the amount of such German Collateral Instrument Fees received
by the German Lender from the German Borrowers minus an amount, to be retained
by the German Lender for its own account, equal to one-eighth of one percent
(0.125%) per annum of the face amount of each German Collateral Instrument to
which such German Collateral Instrument Fees relate.
(c) As promptly as is practicable following each date upon
which the German Lender receives a payment of commitment fees from the German
Borrowers pursuant to Section 5(b) of the German Loan Agreement, the German
Lender shall pay to, or arrange for payment by, the Agent, for the ratable
accounts of the Banks in accordance with their Commitment Percentages, an amount
equal to the entire amount of such payment received by the German Lender.
All German Risk Participation Fees shall be payable for the ratable accounts of
the Banks, in the currency in which the underlying payment of interest, German
Collateral Instrument Fees or, as the case may be, commitment fees, is paid by
the German Borrowers to the German Lender, in each case as promptly as
practicable after the date upon which the German Lender receives the underlying
payment of interest, German Collateral Instrument Fees or, as the case may be,
commitment fees, from the German Borrowers. Upon the request of any Bank, the
Agent may pay such Bank in Dollars its ratable portion of any German Risk
Participation Fees received in Deutschemarks or Euros by converting such amount
from Deutschemarks or Euros into Dollars in accordance with the Agent's normal
banking procedures for purchasing Dollars with Deutschemarks or Euros.
Section 3A.5. NATURE OF BANKS' INTEREST. For the avoidance of any doubt,
the interest of the Banks in the German Loans and the German Collateral
Instruments (and related interest and fees) shall be a sub-participation only,
and the obligations of the Banks under Section 3A.1 and Section 3A.2 shall not
constitute or be deemed a direct assignment or novation of the German
Obligations in favor of the Banks or otherwise evidence a direct contractual
relationship or any direct rights or obligations between any of the Banks, on
the one hand, and the German Borrowers, on the other. The German Lender is the
sole counterpart to the German Borrowers in respect of the German Loans and
German Collateral Instruments, and the sole claims of each of the Banks in
respect of its interest hereunder shall be to the German Lender in respect of
such Bank's actual share of any payments actually received by the German Lender
in cash or solvent credits, on or in respect of, the principal of, and interest
on, and
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fees accrued with respect to, the German Loans and the German Collateral
Instruments, in each case which shall be payable to such Bank pursuant to the
provisions hereof.
Section 4. CHANGES IN CIRCUMSTANCES.
Section 4.1. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to
the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrowers and the
Banks) to the Borrowers and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determine that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrowers and the Banks.
Section 4.2. ILLEGALITY. Notwithstanding any other provisions herein, if
any change in any present law, regulation, treaty or directive or in the
interpretation or application thereof, or if any future law, regulation, treaty
or directive or interpretation or application thereof, shall make it unlawful
for any Bank to make or maintain Eurodollar Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Borrowers and the other Banks
and thereupon (a) the commitment of such Bank to make Eurodollar Rate Loans or
convert Loans of another Type to Eurodollar Rate Loans shall forthwith be
suspended and (b) such Bank's Loans then outstanding as Eurodollar Rate Loans,
if any, shall be converted automatically to Base Rate Loans on the last day of
each Interest Period applicable to such Eurodollar Rate Loans or within such
earlier period as may be required by law. Each of the Borrowers hereby agrees
promptly to pay the Agent for the account of such Bank, upon demand by such
Bank, any additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with this Section
4.2, including any interest or fees payable by such Bank to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.
Section 4.3. ADDITIONAL COSTS, ETC. If any change in any present applicable
law, or if any future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Bank or the Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law), shall:
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(a) materially change the basis of taxation (other than
changes in respect of any taxes expressly excluded from the definition of the
term Taxes, and without duplication of any changes in respect of (1) any Taxes
(as defined in Section 5(f)(i)) or (2) any other taxes for which any Bank or the
Agent is otherwise indemnified pursuant to the provisions of Section 16(a)
hereof) of payments to any Bank of the principal of or the interest on any Loans
or any other amounts payable to any Bank or the Agent under this Agreement or
any of the other Loan Documents, or
(b) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Bank, or
(c) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, any
Letters of Credit, the Loans, such Bank's Commitment, such Bank's participating
interest in the German Loans or German Collateral Instruments, or any class of
loans, letters of credit or commitments of which any of the Loans or such Bank's
Commitment, or such Bank's participating interest in the German Loans or German
Collateral Instruments, forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or such Bank's Commitment or any Letter of Credit,
or such Bank's participating interest in the German Loans or
German Collateral Instruments, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation, German Reimbursement Obligation,
German Risk Participation Fees or other amount payable to
such Bank or the Agent hereunder on account of such Bank's
Commitment, any Letter of Credit, any of the Loans or such
Bank's participating interest in the German Loans or German
Collateral Instruments, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest, German Risk Participation
Fee, Reimbursement Obligation, German Reimbursement
Obligation or other sum payable hereunder, the amount of
which payment or foregone interest, German Risk
Participation Fee, Reimbursement Obligation, German
Reimbursement Obligation or other sum is calculated by
reference to the gross amount of any sum receivable or
deemed received by such Bank or the Agent from the Borrower
hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be
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sufficient to compensate such Bank or the Agent for such additional cost,
reduction, payment or foregone interest, German Risk Participation Fee,
Reimbursement Obligation, German Reimbursement Obligation or other sum."
Section 4.4. CAPITAL ADEQUACY. If after the Restatement Date any Bank or
the Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by such
Bank or the Agent or any corporation controlling such Bank or the Agent with any
law, governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) of any such entity regarding capital adequacy, has
the effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans or with respect to its participating interest in any German
Obligations to a level below that which such Bank or the Agent could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or the Agent's then existing policies with respect to capital
adequacy and assuming full utilization of such entity's capital) by any amount
deemed by such Bank or (as the case may be) the Agent to be material, then such
Bank or the Agent may notify the Borrowers of such fact. To the extent that the
amount of such reduction in the return on capital is not reflected in the Base
Rate, the Borrowers jointly and severally agree to pay such Bank or (as the case
may be) the Agent for the amount of such reduction in the return on capital as
and when such reduction is determined upon presentation by such Bank or (as the
case may be) the Agent of a certificate in accordance with Section 4.5 hereof.
Each Bank shall allocate such cost increases among its customers in good faith
and on an equitable basis.
Section 4.5. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to Sections 4.3, 4.4 or 5(f) and a brief explanation of
such amounts which are due, submitted by any Bank or the Agent to the Borrowers,
shall be conclusive, absent manifest error, that such amounts are due and owing.
Section 4.6. INDEMNITY. The Borrowers jointly and severally agree to
indemnify each Bank and to hold each Bank harmless from and against any loss,
cost or expense that such Bank may sustain or incur as a consequence of (a)
default by the Borrowers in payment of the principal amount of or any interest
on any Eurodollar Rate Loans as and when due and payable, including any such
loss or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrowers in making a borrowing or conversion after the Borrowers have
given (or are deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with Section 2.1(c) or Section 2.5 or (c) the
making of any payment of a Eurodollar Rate Loan or the making of any conversion
of any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Loans.
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Section 5. FEES AND PAYMENTS.
(a) The Borrowers jointly and severally agree to pay to the Agent a
renewal fee according to the terms of a separate fee letter entered into on or
prior to the Restatement Date (the "Fee Letter") among the Borrowers and the
Agent.
(b) The Borrowers jointly and severally agree to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages, in arrears on the first day of each calendar quarter, and upon the
Maturity Date or any other date upon which the Commitments shall cease to be any
longer in effect, a commitment fee calculated from the Restatement Date at a
rate per annum which is equal to the Commitment Fee Percentage (as set forth in
the definition of Applicable Margin) of the average daily difference by which
the Total Commitment amount exceeds the aggregate amount of the Total
Outstandings during the immediately preceding calendar quarter or portion
thereof; provided, however, that there shall be deducted from the commitment fee
payable under this Section 5(b) for any quarter the amount of any commitment
fees paid by the German Borrowers under Section 5(b) of the German Loan
Agreement for such quarter.
(c) The Borrowers jointly and severally agree to pay to the Agent,
for the Agent's own account, a Collateral administration fee according to the
terms of the Fee Letter.
(d) All payments of principal, interest, Reimbursement Obligations,
commitment fees, Letter of Credit Fees, renewal fees, Collateral administration
fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the Banks
and the Agent, at the Agent's Head Office or at such other location in the
Boston, Massachusetts, area that the Agent may from time to time designate, in
each case in Dollars in immediately available funds. To the extent that the
Agent does not make Loans pursuant to the provisions of Section 2.1(d)(iii)
hereof to cover amounts due and payable under the Loan Documents, the Agent
shall be entitled to charge the Operating Account or any account of the
Borrowers or the Guarantors with the Agent or any of the Agent's affiliates for
any sum due and payable by the Borrowers or the Guarantors to the Agent or any
Bank hereunder or under any of the other Loan Documents.
(e) All computations of interest on the Loans and of commitment fees,
Letter of Credit Fees or other fees shall, unless otherwise expressly provided
herein, be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Records of the Banks from
time to time shall be considered correct and binding on the Borrowers in the
absence of demonstrable error. All payments of the commitment fee, renewal fee,
Collateral administration fee or Letter of Credit Fees payable hereunder shall
be non-refundable.
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(f) (i) Any and all payments by or on behalf of the Borrowers
hereunder and under any of the other Loan Documents shall be made, in accordance
with this Section 5, without setoff or counterclaim and free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
duties, charges, fees, deductions or withholdings of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein, and all liabilities with respect thereto,
excluding (A) taxes based upon or measured by the net income or overall gross
receipts of the Agent or any Bank (or any transferee or assignee thereof,
including a participation holder (any such entity a "Transferee")) and (B)
franchise taxes imposed on the Agent or any such Bank (or Transferee), in each
case by the jurisdiction under the laws of which the Agent or such Bank (or
Transferee) is organized, in which the applicable lending office of the Bank (or
Transferee) is located or in which the Agent or such Bank (or Transferee) is
otherwise subject to tax other than by reason of the execution and performance
of this Agreement, or any political subdivision of such jurisdiction, (all such
nonexcluded taxes, levies, imposts, duties, charges, fees, deductions,
withholdings and liabilities, collectively or individually, being called
"Taxes"). If the Borrowers shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Agent or any Bank (or Transferee), (x) the sum payable shall be increased by the
amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5(f)), the Agent or such Bank (or Transferee), as the case may be,
shall receive an amount equal to the sum it would have received had no such
deductions been made, (y) the Borrowers shall make such deductions and (z) the
Borrowers shall pay the full amount deducted to the relevant governmental
authority in accordance with applicable law.
(ii) The Borrowers hereby jointly and severally agree to
indemnify the Agent and the Banks (and all Transferees) for the full amount of
Taxes paid by any such Person and any liability (including penalties, interest
and expenses (including reasonable attorney fees and expenses)) arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally asserted by the relevant governmental authority. Such indemnification
shall be made within thirty days after the date the Agent or such Bank (or
Transferee) makes written demand therefor. If the Agent or any Bank (or
Transferee) determines that it has received a refund in respect of any Taxes as
to which indemnification or payment has been made by the Borrowers pursuant to
this Section 5(f) and such refund is reasonably determinable by the Agent or
such Bank (or Transferee) to be allocable to such indemnification or payment
made by the Borrowers, it shall promptly remit such refund (including any
interest actually received by it) to the Borrowers, less all out-of-pocket
expenses of the Agent or such Bank (or Transferee); provided, however, that the
Borrowers upon request of the Agent or any Bank (or Transferee), agree promptly
to return such refund (plus any interest) to such party in the event such party
is required to pay the refund to the relevant governmental authorities. The
Agent or such Bank (or Transferee) shall provide the Borrowers with a copy of
any notice or assessment from the relevant governmental authorities (deleting
any confidential information therein) requiring repayment of such refund.
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(iii) As soon as practicable after the date of any payment of
Taxes by the Borrowers to the relevant governmental authority, the Borrowers
will promptly deliver to the Agent the original or a certified copy of a receipt
issued by such governmental authority evidencing payment thereof.
(iv) Each Bank (or Transferee) that is organized under the laws
of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Borrowers and
the Agent (A) two copies of either United States Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from
U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest," an Internal Revenue Service Form
W-8, or any subsequent versions of any such forms or successors thereto (and, if
such Non-U.S. Lender delivers a Form W-8, a certificate representing that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrowers and is not a controlled foreign corporation related to
the Borrowers (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. Federal withholding tax on payments by the
Borrowers under this Agreement and the other Loan Documents, and (B) any other
similar documents reasonably requested by the Borrowers in connection with such
Non-U.S Lender's tax status. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 5(f)(iv), a Non-U.S. Lender
shall not be required to deliver any forms pursuant to this Section 5(f)(iv)
that such Non-U.S. Lender is not legally able to deliver.
(v) The Borrowers shall not be required to indemnify any
Non-U.S. Lender or to pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to Sections 5(f)(i) or
5(f)(ii) to the extent that (A) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office, the
date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this Section 5(f)(v) shall not apply (x) to any
Transferee or New Lending Office that becomes a Transferee or New Lending Office
as a result of an assignment, participation, transfer or designation made at the
request of the Borrowers and (y) to the extent the indemnity payment or
additional amounts any Transferee, or any Bank (or Transferee), acting through a
New Lending Office would be entitled to receive (without regard to this Section
5(f)(v)) do not exceed the indemnity payment or additional amounts that the
Person making the assignment, participation or transfer to such Transferee, or
Bank (or Transferee) making the designation of such New Lending Office, would
have been entitled to receive in the absence
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of such assignment, participation, transfer or designation or (B) the obligation
to pay the indemnity payment or such additional amounts would not have arisen
but for failure by such Non-U.S. Lender to comply with the provisions of Section
5(f)(iv) hereof.
(vi) Any Bank (or Transferee) claiming any indemnity payments or
additional amounts under this Section 5(f) shall use its best efforts
(reasonable under the circumstances and consistent with internal policy and
legal and regulatory restrictions) to change the jurisdiction of its applicable
lending office if the making of such a change would avoid the need for, or
reduce the amount of, any such indemnity payments or additional amounts which
may thereafter accrue and would not, in the reasonable judgment of such Bank (or
Transferee), be otherwise disadvantageous to such Bank (or Transferee).
Section 6. COLLATERAL SECURITY AND GUARANTY.
Section 6.1. SECURITY OF BORROWERS.The Obligations shall be secured by (a)
a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each of the
Borrowers (excluding (i) all fee and leasehold interests of the Borrowers in any
real property, (ii) 100% of the capital stock of MIR China and MSI, (iii) 35% of
the capital stock of MHC and MCL, and (iv) any annuities and trust fund accounts
which are dedicated to the payment of environmental liabilities of the Borrowers
pursuant to the express provisions of the Settlement Agreements, but in any
event including the Borrowers' residual interest (if any) in such annuities and
trust fund accounts), whether now owned or hereafter acquired, and (b) a pledge
of and perfected first priority security interest in 100% of the issued and
outstanding capital stock of MIR and SMC and 65% of the issued and outstanding
capital stock of MHC and MCL; all pursuant to the terms of, and to the extent
provided in, the Security Documents.
Section 6.2. GUARANTY AND SECURITY OF SUBSIDIARIES. The Obligations shall
also be guaranteed by the Guarantors pursuant to the terms of the Guaranty as
provided for in Section 6.4, and the German Obligations shall also be guaranteed
by the Borrowers and the Guarantors pursuant to the terms of the German Guaranty
as provided for in Section 6.7. The obligations of the Guarantors under the
Guaranty, and the Borrowers and the Guarantors, under the German Guaranty, shall
be secured by (a) a perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) in all of the assets
of each of the Borrowers and the Guarantors (excluding (i) all fee and leasehold
interests of the Borrowers or the Guarantors in any real property, (ii) 100% of
the capital stock of MIR China, MSI and the direct Subsidiaries of MHC (other
than GfE) organized under the laws of a foreign country, (iii) 35% of the
capital stock of MHC, MCL and GfE, and (iv) any annuities and trust fund
accounts which are dedicated to the payment of environmental liabilities of the
Borrowers pursuant to the express provisions of the Settlement Agreements, but
in any event including the Borrowers' residual interest (if any) in such
annuities and trust fund accounts), whether now owned or hereafter acquired, and
(b) a pledge of and perfected first priority security interest in 100% of the
issued and outstanding capital stock of MIR and SMC and 65% of the issued and
outstanding capital stock of MHC, MCL and GfE; all pursuant to the terms of, and
to the extent provided in, the Security Documents.
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Section 6.3. COLLATERAL SECURITY PERFECTION. Each of the Borrowers and each
of the Guarantors agrees to take all action that the Agent or any Bank may
reasonably request as a matter of nonbankruptcy law to perfect and protect the
Agent's Liens, for the benefit of the Banks and the Agent, upon the Collateral
and for such Liens to obtain the priority therefor contemplated hereby,
including, without limitation, executing and delivering such financing
statements, providing such notices and assents of third parties, obtaining such
governmental approvals and providing such other instruments and documents in
recordable form as the Agent or any Bank may reasonably request.
Section 6.4. GUARANTY.
(a) The Guarantors absolutely, unconditionally, irrevocably and
jointly and severally guarantee the due and punctual payment and performance by
the Borrowers of the Borrowers' Obligations. Each of the Guarantors further
agrees that the Borrowers' Obligations may be extended or renewed, in whole or
in part, without notice to or further assent from it, and it will remain bound
upon this guaranty notwithstanding any extension or renewal of any of the
Borrowers' Obligations.
(b) Each of the Guarantors waives presentation to, demand for payment
from and protest to the Borrowers or any other person liable in respect of any
of the Obligations, and also waives notice of protest for nonpayment. The joint
and several obligations of the Guarantors hereunder shall not be affected by (i)
the failure of the Agent or any Bank to assert any claim or demand or to enforce
any right or remedy against the Borrowers or any other person liable in respect
of any of the Obligations under the provisions of this Agreement or any other
Loan Document or otherwise; (ii) any extension or renewal of any provision
hereof or thereof; (iii) any rescission, waiver, compromise, acceleration,
amendment or modification of any of the terms or provisions of any of the Loan
Documents or of any of the Collateral; (iv) the release, exchange, waiver or
foreclosure of any Collateral or other security held by the Agent, for the
benefit of the Banks and the Agent, for any of the Obligations; (v) the failure
of the Agent or any Bank to exercise any right or remedy against any other
person liable in respect of any of the Obligations; or (vi) the release or
substitution of any Person liable in respect of any of the Obligations other
than such Guarantor.
(c) Each of the Guarantors further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Agent
or any Bank to any security held for payment of any of the Obligations or to any
balance of any deposit, account or credit on the books of the Agent or any Bank
in favor of the Borrowers or any other person.
(d) Each of the Guarantors hereby waives any defense that it might
have based on a failure to remain informed of the financial condition of the
Borrowers and of any other person liable in respect of any of the Obligations
and any circumstances affecting any of the Collateral for the obligations or the
ability or capacity of the Borrowers to perform under this Agreement.
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(e) The Guarantors' guaranty hereunder shall not be affected by the
genuineness, validity, regularity or enforceability of any of the Obligations,
the Notes, any other Loan Document or any other instrument or document creating
or evidencing any of the Obligations, or by the existence, validity,
enforceability, perfection, or extent of any Collateral or Lien or by any other
circumstance relating to any of the Obligations which might otherwise constitute
a defense to this guaranty. None of the Agent or the Banks makes any
representation or warranty in respect of any such circumstances and none shall
have any duty or responsibility whatsoever to the Guarantors in respect of the
management and maintenance of any of the Obligations.
(f) Upon the Obligations becoming due and payable (by acceleration or
otherwise), the Agent and the Banks shall be entitled to immediate payment of
the Obligations by the Guarantors upon written demand by any of the Agent or the
Banks.
(g) The joint and several obligations of the Guarantors hereunder
shall not be subject to any reduction, limitation, impairment or termination for
any reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Obligations against any
person other than the Guarantors. Without limiting the generality of the
foregoing, the obligations of the Guarantors hereunder shall not be discharged
or impaired or otherwise affected by the failure of the Agent or any Bank to
assert any claim or demand or to enforce any remedy under this Agreement, any of
the other Loan Documents or any other agreement, by any waiver or modification
of any provision thereof, by any default, failure or delay, willful or
otherwise, in the performance of any of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Obligations (whether contingent or otherwise) are paid in full in cash.
(h) All rights of the Guarantors against the Borrowers arising by way
of right of subrogation or otherwise as a result of any payment or performance
by the Guarantors to any of the Agent or the Banks hereunder shall in all
respects be subordinate and junior in right of payment and performance to the
prior final and indefeasible payment in full in cash of all the Obligations
(whether contingent or otherwise). If any amount shall be paid to the Guarantors
for the account of the Borrowers, such amount shall be held in trust for the
benefit of the Agent and the Banks and shall forthwith be paid to the Agent to
be credited to or held as collateral security for the Obligations (whether
contingent or otherwise).
Section 6.5. BORROWERS' WAIVERS OF SURETYSHIP DEFENSES. The obligations of
the Borrowers hereunder are joint and several. Each of the Borrowers hereby
waives any and all suretyship defenses relating to any action or omission to act
by the Agent or any Bank with respect to any other Borrower or any Guarantor as
fully as if such Borrower were itself a Guarantor agreeing to be bound by the
guaranty and suretyship waivers set forth in Section 6.4 with respect to
Obligations of any other Borrower, with any subordination of any rights of
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subrogation of such Borrower also including a subordination of all rights of
such Borrower to contribution from any other Borrower until the prior final and
indefeasible payment in full in cash of all of the Obligations (whether
contingent or otherwise).
Section 6.6. NO RESTRICTIONS ON FOREIGN SUBSIDIARIES.
Notwithstanding anything herein or in any other Loan Document to the contrary,
no one or more negative covenants or similar restrictions contained in this
Agreement or any other Loan Document shall be imposed or implied that
effectively limit the discretion of any Subsidiary of MI (other than MCL)
incorporated or otherwise organized under the laws of a jurisdiction outside of
the United States with respect to the disposition of its assets or the
incurrence of liabilities (whether or not in the ordinary course of its
business).
Section 6.7. GERMAN GUARANTY.
(a) The Borrowers and the Guarantors absolutely, unconditionally,
irrevocably and jointly and severally guarantee to each of the Agent, the Banks
and the German Lender the due and punctual payment and performance by the German
Borrowers of the German Obligations. Each of the Borrowers and the Guarantors
further agrees that the German Obligations may be extended or renewed, in whole
or in part, without notice to or further assent from it, and it will remain
bound upon this guaranty notwithstanding any extension or renewal of any of the
German Obligations.
(b) Each of the Borrowers and the Guarantors waives presentation to,
demand for payment from and protest to the German Borrowers or any other person
liable in respect of any of the German Obligations, and also waives notice of
protest for nonpayment. The joint and several obligations of the Borrowers and
the Guarantors hereunder shall not be affected by (i) the failure of the Agent,
any Bank or the German Lender to assert any claim or demand or to enforce any
right or remedy against the German Borrowers or any other person liable in
respect of any of the German Obligations under the provisions of this Agreement,
the German Loan Agreement or any other German Loan Document or otherwise; (ii)
any extension or renewal of any provision hereof or thereof; (iii) any
rescission, waiver, compromise, acceleration, amendment or modification of any
of the terms or provisions of any of the German Loan Documents or of any of the
collateral security for the German Obligations; (iv) the release, exchange,
waiver or foreclosure of any collateral security for the German Obligations or
other security held by any of the Agent, the Banks or the German Lender, for any
of the German Obligations; (v) the failure of the Agent, any Bank or the German
Lender to exercise any right or remedy against any other person liable in
respect of any of the German Obligations; or (vi) the release or substitution of
any Person liable in respect of any of the German Obligations other than such
Borrower or Guarantor.
(c) Each of the Borrowers and the Guarantors further agrees that this
guaranty constitutes a guaranty of performance and of payment when due and not
just of collection, and waives any right to require that any resort be had by
the Agent, any Bank or the German Lender to any security held for payment of any
of the German Obligations or to
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any balance of any deposit, account or credit on the books of the Agent, any
Bank or the German Lender in favor of the German Borrowers or any other person.
(d) Each of the Borrowers and the Guarantors hereby waives any
defense that it might have based on a failure to remain informed of the
financial condition of the German Borrowers and of any other person liable in
respect of any of the German Obligations and any circumstances affecting any of
the collateral security for the German Obligations or the ability or capacity of
the German Borrowers to perform under the German Loan Agreement.
(e) The Borrowers' and the Guarantors' guaranty hereunder shall not
be affected by the genuineness, validity, regularity or enforceability of any of
the German Obligations any other German Loan Document or any other instrument or
document creating or evidencing any of the German Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
security for the German Obligations or Lien or by any other circumstance
relating to any of the German Obligations which might otherwise constitute a
defense to this guaranty. None of the Agent, the Banks or the German Lender
makes any representation or warranty in respect of any such circumstances and
none shall have any duty or responsibility whatsoever to any of the Borrowers or
the Guarantors in respect of the management and maintenance of any of the German
Obligations.
(f) Upon the German Obligations becoming due and payable (by
acceleration or otherwise), the Agent, the Banks and the German Lender shall be
entitled to immediate payment of the German Obligations by the Borrowers and the
Guarantors upon written demand by any of the Agent, the Banks or the German
Lender.
(g) The joint and several obligations of the Borrowers and the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of any of
the German Obligations against any person other than the Borrowers and the
Guarantors. Without limiting the generality of the foregoing, the obligations of
the Borrowers and the Guarantors hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Agent, any Bank or the German Lender
to assert any claim or demand or to enforce any remedy under the German Loan
Agreement, any of the other German Loan Documents or any other agreement, by any
waiver or modification of any provision thereof, by any default, failure or
delay, willful or otherwise, in the performance of any of the German
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any of the Borrowers and the Guarantors or would otherwise operate as a
discharge of any of the Borrowers and the Guarantors as a matter of law, unless
and until the German Obligations (whether contingent or otherwise) are paid in
full in cash.
(h) All rights of any of the Borrowers and the Guarantors against any
of the German Borrowers arising by way of right of subrogation or otherwise as a
result of any
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payment or performance by any of the Borrowers and the Guarantors to any of the
Agent, the Banks or the German Lender under the German Loan Documents shall in
all respects be subordinate and junior in right of payment and performance to
the prior final and indefeasible payment in full in cash of all the German
Obligations (whether contingent or otherwise) and of all other claims of any
kind of all creditors of any of the German Borrowers (whether contingent or
otherwise). If any amount shall be paid to any of the Borrowers and the
Guarantors for the account of the German Borrowers, such amount shall be held in
trust for the benefit of the Agent, the Banks and the German Lender and shall
forthwith be paid to the Agent to be credited to or held as collateral security
for the German Obligations (whether contingent or otherwise).
(i) Each of the Borrowers and the Guarantors agrees, as a separate
obligation, to indemnify the Agent, each of the Banks and the German Lender for
the Agent's, such Bank's or the German Lender's costs and expenses and the
amount of any loss or shortfall incurred by the Agent, such Bank or the German
Lender (i) in purchasing Deutschemarks or Euros with Dollars in order to fund
any participating interest in any of the German Obligations, (ii) in purchasing
Dollars with Deutschemarks or Euros in order to pay interest or principal on any
amounts borrowed or otherwise obtained by the Agent, such Bank or the German
Lender to fund the underlying obligation or liability in respect of the German
Obligations or with respect to any loss of anticipated profits resulting
therefrom and (iii) otherwise in connection with any payment made in Dollars by
the Borrowers or the Guarantors under this German Guaranty to the extent that
the amount of such payment, when converted to Deutschemarks or Euros by the
Agent, such Bank or the German Lender in accordance with normal banking
procedures, is less than the sum originally due in Deutschemarks or Euros under
this German Guaranty. In the case of any of the foregoing, the Agent, such Bank
or the German Lender, as the case may be, shall have a further separate cause of
action against each of the Borrowers and the Guarantors to recover such amounts.
(j) If and to the extent that the Borrowers and the Guarantors fail
to pay any amount due on demand, the Agent, the Banks and the German Lender may,
in their absolute discretion without notice to any of the Borrowers or the
Guarantors, purchase at any time thereafter so much Deutschemarks or Euros as
the Agent considers necessary or desirable to cover the German Obligations being
guarantied at the then prevailing spot rate of exchange of the Agent, such Bank
or the German Lender (as conclusively determined by the Agent, such Bank or the
German Lender) for purchasing Deutschemarks or Euros and each of the Borrowers
and the Guarantors hereby agrees as a separate obligation to indemnify the
Agent, the Banks and the German Lender against the full cost incurred by the
Agent, such Bank or the German Lender for such purchase.
(k) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency (the "first currency")
into any other currency (the "second currency") the conversion shall be made at
the spot rate of exchange of the Agent (as conclusively determined by the Agent)
on the Business Day preceding the day on which the final judgment is given. If,
however, on the Business Day following receipt by the Agent in the second
currency of any sum adjudged to be due hereunder (or any proportion thereof) the
Agent purchases the first currency with the amount of the second
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currency so received and the first currency so purchased falls short of the sum
originally due hereunder in the first currency (or the same proportion thereof)
each of the Borrowers and the Guarantors shall and agrees as a separate
obligation and notwithstanding any judgment to pay to the Agent as agent for the
Banks and the German Lender in the first currency an amount equal to such
shortfall.
Section 7. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers and each
of the Guarantors represents and warrants to each of the Agent and the Banks on
the Restatement Date, on the date of any Loan Request, on the date of each
request for a Letter of Credit, on each Drawdown Date, and on the date on which
each Letter of Credit is issued, extended or renewed that:
(a) Each of the Borrowers and each of the Guarantors is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified and in good standing in
every other jurisdiction where it is doing business and where failure to qualify
would have a Materially Adverse Effect, and the execution, delivery and
performance by each of the Borrowers and each of the Guarantors of each of the
Loan Documents to which it is a party (i) are within its corporate authority,
(ii) have been duly authorized by all necessary corporate action, (iii) do not
conflict with or contravene its Charter Documents.
(b) Upon the execution and delivery of the Loan Documents by the
respective parties thereto, each Loan Document shall constitute the legal, valid
and binding obligation of the Borrowers and the Guarantors party thereto,
enforceable in accordance with its terms, except that the enforceability thereof
may be subject to any applicable bankruptcy, reorganization, insolvency or other
laws affecting creditors' rights generally;
(c) No Affiliate of any of the Borrowers or any of the Guarantors is
a debtor in any bankruptcy, insolvency, liquidation, reorganization, dissolution
of similar case or proceeding on the Restatement Date or, except where there is
not reasonably likely to be a Materially Adverse Effect relating solely to the
Borrowers, after the Restatement Date.
(d) Each of the Borrowers and each of the Guarantors has good and
marketable title to all its material properties, subject only to Permitted
Liens, and possesses all assets, including intellectual properties, franchises
and Consents, adequate for the conduct of its business as now conducted, without
known conflict with any rights of others. The Borrowers and the Guarantors
maintain insurance from financially responsible insurers, copies of the policies
for which have previously been delivered to the Agent, covering such risks and
in such amounts and with such deductibles as are customary in the Borrowers' and
the Guarantors' businesses and are adequate. The Borrowers have submitted a
decommissioning plan to the Nuclear Regulatory Commission ("NRC") regarding
their Cambridge, Ohio plant and are in material compliance with their current
NRC license while awaiting approval of such plan. The current NRC license for
such Cambridge, Ohio plant expires on June 30, 2000 but is renewable in the
event that the decommissioning plan has not been approved at that time. In 1997,
the Borrowers were issued, and are in material
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compliance with, a renewed NRC license for the operation of their Newfield, New
Jersey plant, which license expires on October 20, 2002 but is renewable
thereafter.
(e) The Borrowers have provided to the Agent and each of the Banks
the audited Financials of MI as at January 31, 1999 for the fiscal year then
ended, and the related Financials of the Subsidiaries of MI as at December 31,
1998 for the fiscal year then ended, and unaudited quarterly Financials of MI
and the Subsidiaries of MI as at the end of and for each fiscal quarter
thereafter through June 30, 1999. Such Financials are complete and correct and
fairly present the position of the Borrowers and the Guarantors as at such dates
and for such periods in accordance with GAAP consistently applied (except that
unaudited Financials are subject to year-end audit adjustments and do not
contain footnote disclosures required by GAAP). The Borrowers have also provided
to the Bank their forecast of the consolidated and consolidating operations of
the Borrowers and the Guarantors for the period from December 31, 1999, through
December 31, 2003, and such forecast has been prepared in good faith based upon
reasonable assumptions.
(f) Since January 31, 1999, there has been no materially adverse
change of any kind in any of the Borrowers or the Guarantors which would
reasonably be expected to have a Materially Adverse Effect.
(g) There are no legal or other proceedings or investigations pending
or threatened against any of the Borrowers or any of the Guarantors before any
court, tribunal or regulatory authority which would, alone or together, be
reasonably expected to have a Materially Adverse Effect. The Borrowers and the
Guarantors have paid all such taxes as are due and payable (except those being
contested in good faith by appropriate proceedings and for which adequate
reserves have been taken) and have funded all employee payrolls (including all
required withholdings) on a periodic basis in the ordinary course of their
businesses consistent with past practices except to the extent that the failure
to pay such taxes or payrolls, singly or in the aggregate, would not reasonably
be expected to have a Materially Adverse Effect.
(h) The execution, delivery, performance of its obligations, and
exercise of its rights under the Loan Documents by each of the Borrowers and
each of the Guarantors, including borrowing under this Agreement and the
obtaining of Letters of Credit (i) do not require any Consents other than those
that have been obtained or will be obtained prior to the Restatement Date and
that are in full force and effect; and (ii) are not and will not be in conflict
with or prohibited or prevented by (A) any Requirement of Law, or (B) any
Charter Document, corporate minute or resolution, instrument, agreement or
provision thereof, in each case binding on it or affecting the property of the
Borrowers or the Guarantors.
(i) None of the Borrowers nor any of the Guarantors is in violation
of (A) any Charter Document, corporate minute or resolution, (B) any instrument
or agreement, in each case binding on it or affecting its property, which
violation could have a Materially Adverse Effect, or (C) any Requirement of Law,
in a manner which could have a Materially Adverse Effect, including, without
limitation, all applicable federal and state tax laws,
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ERISA, OSHA and Environmental Laws. Except as set forth in Schedule 7(i), none
of the Borrowers nor any of the Guarantors is a party to a collective bargaining
agreement.
(j) Upon execution and delivery of this Agreement and the other Loan
Documents and the filing of the UCC financing statements and the taking of all
similar actions contemplated by the Security Documents, the Agent shall have,
for the benefit of the Banks and the Agent, first-priority perfected Liens in
the Collateral (excluding from this representation (i) the necessity for any
registration or filing of the Agent's security interest in trademarks and
copyrights of the Borrowers and the Guarantors, if any, required to be made with
the United States Patent and Trademark Office or the United States Copyright
Office solely to the extent that the Agent has not made such registrations or
filings and (ii) the effect on perfection or priority of the Liens created by
the Stock Pledge Agreements (other than Liens on shares of capital stock which
are otherwise the subject of a Foreign Pledge Agreement) solely to the extent
that laws other than the laws of the United States of America or any state or
other political subdivision thereof shall be deemed to govern such perfection or
priority), subject only to Liens permitted hereunder and entitled to priority
under applicable law.
(k) There are no Liens on any assets of any of the Borrowers or any
of the Guarantors other than Permitted Liens.
(l) All of the Subsidiaries of the Borrowers and the Guarantors are
set forth on Schedule 7(l). Except as set forth in Schedule 7(l), none of the
Borrowers and the Guarantors is a party to any partnership or joint venture.
(m) The Borrowers and the Guarantors have taken all steps reasonably
necessary to investigate the past and present condition and usage of the Real
Estate and the operations conducted thereon and, based upon such investigation,
have determined that, except as otherwise expressly set forth on Schedule 7(m)
hereto:
(i) none of the Borrowers, the Guarantors or any operator of the
Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would be reasonably likely to have a
Materially Adverse Effect;
(ii) none of the Borrowers nor any of the Guarantors has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (A) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party
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under CERCLA with respect to a site listed on the National Priorities List,
40 C.F.R. Part 000 Xxxxxxxx X; (B) that any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substances as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated, transported
or disposed of has been found at any site at which a federal, state or
local agency or other third party has conducted or has ordered that any
Borrower or any of the Guarantors conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law; or (C) that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent
or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances, the result of which, in any such case,
would be reasonably likely to have a Materially Adverse Effect;
(iii) (A) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened
releases of Hazardous Substances on, upon, into or from the properties of
any of the Borrowers or the Guarantors, which releases would be reasonably
likely to have a Materially Adverse Effect; and (B) to the best of the
Borrowers' and the Guarantors' knowledge, there have been no releases on,
upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come to
be located on, and which would be reasonably likely to have a Materially
Adverse Effect; and
(iv) None of the Borrowers and the Guarantors or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to
the effectiveness of any transactions contemplated hereby.
(n) The Borrowers and the Guarantors have (i) reviewed the areas
within their businesses and operations which could be adversely affected by
failure to become "Year 2000 Ready" (i.e. that computer applications, imbedded
microchips and other systems used by the Borrowers or any of the Guarantors or
any of their material vendors, will be able properly to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a detailed plan and timetable to become
Year 2000 Ready in a timely manner, and (iii) committed adequate resources to
support the Year 2000 plan of the Borrowers and the Guarantors. Based upon such
review, the Borrowers and the Guarantors reasonably believe that the Borrowers
and the Guarantors will become "Year 2000 Ready" in a timely manner except to
the extent that failure to do so
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will not have any materially adverse effect on the business or financial
condition of the Borrowers or any of the Guarantors.
Section 8. CONDITIONS PRECEDENT.
(a) The obligation of the Agent to issue, extend or renew the initial
Letters of Credit or to convert the letters of credit under the Original Loan
Agreement into Letters of Credit hereunder, and the obligation of the Banks to
make the initial Loans or to convert the loans under the Original Loan Agreement
into Loans hereunder or to participate in the Letters of Credit, is subject to
the satisfaction of the following conditions precedent in addition to those set
forth in Section 8(b):
(i) Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto, and all of such Loan Documents
shall be in full force and effect and shall be in form and substance
satisfactory to the Agent, the Banks and the Borrowers.
(ii) All corporate action, third-party consents and governmental
approvals necessary for the valid execution, delivery and performance by
each of the Borrowers and each of the Guarantors of each of the Loan
Documents to which it is a party shall have been duly and effectively taken
or (as the case may be) obtained and evidence thereof satisfactory to the
Agent and the Banks shall have been provided to the Agent and the Banks.
(iii) Each of the Agent and the Banks shall have received from
each of the Borrowers and the Guarantors a copy, certified by a duly
authorized officer of such Person to be true and complete on the
Restatement Date, of each of (A) its Charter Documents as in effect on such
date of certification, and (B) the Parent Note Documents and the Senior
Note Documents, each as in effect on the Restatement Date.
(iv) Each of the Agent and the Banks shall have received from the
each of the Borrowers and Guarantors and MCL an incumbency certificate,
dated as of the Restatement Date, signed by a duly authorized officer of
such Borrower or such Guarantor, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (A) to sign, in the
name and on behalf of such Borrower or such Guarantor, each of the Loan
Documents to which such Borrower or such Guarantor is or is to become a
party; (B) in the case of the Borrowers, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (C) to give
notices and to take other action on its behalf under the Loan Documents.
(v) All Uniform Commercial Code and title searches and all
Canadian Lien searches shall have been made, all Uniform Commercial Code
financing statements, releases and notices and assents and all Canadian
security interest filings shall have been executed and delivered (in
recordable form where
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applicable) to the Agent, all relevant insurances shall have been modified
to include the Agent, for the benefit of the Banks and the Agent, as
assignee, additional insured or loss payee as applicable, all Collateral in
which a security interest may be perfected only by the secured party's
possession shall, if so requested by the Agent, have been delivered to the
Agent or its nominee, and all other actions necessary or in the reasonable
opinion of the Agent desirable for the perfection and protection and to
achieve the priority, as contemplated hereby, of all Liens in favor of the
Agent, for the benefit of the Banks and the Agent, shall have been taken to
the satisfaction of the Agent and its counsel (including, without
limitation, the delivery and pledge to the Agent of all promissory notes
(including the Canadian Note) and other instruments delivered by MCL in
favor of MI under the Canadian Loan Documents, and execution, delivery and,
where appropriate, filing, of all necessary documents in connection with
the Agent's Lien on all rights of MI under such Canadian Loan Documents).
(vi) The Agent shall have received certificates of insurance from
an independent insurance broker dated as of the Restatement Date,
identifying insurers, types of insurance, insurance limits, and policy
terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreement.
(vii) The Bank shall have received (i) a favorable opinion from
the general counsel of MI in form and substance satisfactory to the Agent
and the Banks, (ii) favorable opinions from counsel to the Borrowers in New
Jersey and Ohio with respect to such Collateral security and other matters
as requested by the Agent and the Banks and in form and substance
satisfactory to the Agent and the Banks, and (iii) favorable opinions from
counsel to the Borrowers in Canada with respect to the Canadian Loan
Documents and the Canadian Assignment Documents in form and substance
satisfactory to the Agent and the Banks.
(viii) The Bank shall have received, at least three (3) days
prior to the Drawdown Date of any Loan to be made on the Restatement Date
or the proposed date of the issuance of any Letter of Credit to be issued
on the Restatement Date, the most recent Borrowing Base Report required to
be delivered to the Bank in accordance with Section 9.1(a)(v), together
with such supporting details of receivable aging and inventory designations
as the Bank may reasonably request.
(ix) The renewal fee required to have been paid to the Agent on
the Restatement Date pursuant to the Fee Letter shall have been paid to the
Agent on the Restatement Date, and the Collateral administration fee and
all other fees and expense reimbursements due and payable to the Agent and
the Banks hereunder shall have been paid to the Agent or the Banks, as
appropriate.
(x) The Agent and the Banks shall have received the Financials
and the forecast described in Section 7(e) hereof, and no event or
circumstance shall have come to the attention of the Agent or the Banks
that would lead any of them to
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believe that the financial projections as to the Borrowers contained in
such forecast are inaccurate or incomplete in any material respect.
(xi) The Senior Note Documents shall contain terms reasonably
satisfactory to the Agent and the Banks.
(xii) The Agent shall have received certificates of all stock
pledged pursuant to the Stock Pledge Agreements together with updated stock
powers duly executed in blank with respect thereto.
(xiii) The German Loan Agreement shall have been amended in a
form reasonably satisfactory to the Agent.
(xiv) The Canadian Note shall have been amended in a form
reasonably satisfactory to the Agent.
(b) The obligation of the Agent to issue, extend or renew any Letters
of Credit, and the obligation of the Banks to make any Loans, to participate in
any Letters of Credit, or to participate in any German Loans or German
Collateral Instruments, including the initial Loans, Letters of Credit, German
Loans and German Letters of Credit, is subject to the satisfaction of the
following further conditions precedent:
(i) Each of the representations and warranties of each of the
Borrowers and each of the Guarantors to the Agent and the Banks herein or
in any of the other Loan Documents or any document, certificate or other
paper or notice in connection herewith shall be true and correct in all
material respects as of the time made or deemed to have been made or
repeated and shall also be true and correct in all material respects at and
as of the time of the making of such Loan or German Loan or the issuance,
extension or renewal of such Letter of Credit or German Collateral
Instrument, with the same effect as if made at and as of that time (except
to the extent of changes resulting from transactions contemplated or
permitted by this Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date).
(ii) No Default or Event of Default shall have occurred and be
continuing.
(iii) All documents and certificates in connection with the
transactions contemplated hereby shall be in form and substance
satisfactory to the Agent and the Banks, and the Agent and the Banks shall
have received all information as any of them may have reasonably requested.
No change shall have occurred in any law or regulation or in the
interpretation thereof that in the reasonable opinion of any Bank would
make it unlawful for such Bank to make such Loan or German Loan or to
participate in the issuance, extension or renewal of such Letter of Credit
or German Collateral Instrument or in the reasonable opinion of the
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Agent to issue, extend or renew such Letter of Credit or German Collateral
Instrument.
(iv) Each Bank shall have received such statements in substance
and form reasonably satisfactory to such Bank as such Bank shall require
for the purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
(v) If requested by the Agent, the Agent and each of the Banks
shall have received a Borrowing Base Report dated as of the last day of the
calendar week then most recently ended, together with such supporting
details of receivable aging as of the last day of such week and inventory
designations as of the end of the applicable calendar month (in accordance
with the requirements of Section 9.1(a)(v)) as the Agent or any Bank may
reasonably request.
Section 9. COVENANTS.
Section 9.1. AFFIRMATIVE COVENANTS. Each of the Borrowers and the
Guarantors agrees that so long as there are any Loans, Notes, German Loans,
Unpaid Reimbursement Obligations, German Unpaid Reimbursement Obligations,
Letters of Credit or German Collateral Instruments outstanding or any Bank or
the German Lender has any obligation to make Loans or German Loans or the Agent
or the German Lender has any obligation to issue, extend or renew any Letters of
Credit or German Collateral Instruments and until the payment and satisfaction
in full in cash of all of the Obligations, the Borrowers will, the Guarantors
will, and where applicable the Borrowers will cause the Guarantors and MCL to,
comply with its obligations as set forth throughout this Agreement and to:
(a) furnish the Agent and each of the Banks:
(i) as soon as available, but in any event within ninety (90)
days after the close of each fiscal year of MI, the audited world-wide
consolidated and consolidating Financials for MI and its Subsidiaries for
such fiscal year and the audited consolidated and consolidating Financials
for the North American Group for such fiscal year, in each case including a
balance sheet, income statement and cash flow statement, and, in the case
of world-wide consolidated Financials of MI and its Subsidiaries, with all
required note disclosures, all certified by the Borrowers' accountants,
together with a statement from such accountants as to the absence, to their
knowledge, of any Event of Default;
(ii) as soon as available, but in any event within sixty (60)
days after the end of each fiscal quarter of MI, the unaudited world-wide
consolidated and consolidating Financials of the Borrowers and their
Subsidiaries for such quarter and in any event within forty-five (45) days
after the end of each fiscal quarter of the Subsidiaries of MI, the
unaudited consolidated and consolidating Financials of the North American
Group for such quarter, in each case including a balance sheet, income
statement and cash flow statement, certified by the Borrowers' chief
financial
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officer or chief accounting officer or treasurer, and, in the case of each
of the above-described consolidated Financials only, together with
comparisons to the most recently delivered business plan of the Borrowers
describing any material variations therefrom;
(iii) as soon as available, but in any event within forty-five
(45) days after the end of each fiscal month of the Subsidiaries of MI, the
unaudited consolidated and consolidating Financials of the North American
Group for such month, including a balance sheet, income statement and cash
flow statement (in the case of such consolidated Financials with
comparisons to the consolidated Financials for the same fiscal month of the
previous fiscal year), certified by the Borrowers' chief financial officer
or chief accounting officer or treasurer, and, in the case of such
consolidated Financials only, together with comparisons to the most
recently delivered business plan of the Borrowers describing any material
variations therefrom;
(iv) together with its monthly, quarterly and annual Financials,
a certificate of the Borrowers in the form attached hereto as Exhibit G
setting forth computations demonstrating compliance with the Borrowers'
financial covenants set forth herein, and certifying that no Default or
Event of Default has occurred, or if it has, describing the actions taken
by the Borrowers with respect thereto;
(v) (i) within fifteen (15) days following the end of each
calendar month (or at such other interval as the Agent may from time to
time specify), a Borrowing Base Report updating all components of the
Borrowing Base (other than SMC's inventory, with respect to which the
month-end information for the calendar month next previous to the month
most recently ended shall be used, but which information shall be updated
within twenty (20) days following the end of each calendar month to reflect
SMC's inventory as of the end of such calendar month most recently ended
prior thereto) and the Canadian Borrowing Base and recalculating the
Borrowing Base and the Canadian Borrowing Base on the basis thereof,
together with a statement of the Canadian Intercompany Outstandings and a
comprehensive receivables aging for the Borrowers and MCL and inventory
designations of the Borrowers and MCL as of the end of such month as the
Agent or any Bank may have reasonably requested, and together with such
other supporting schedules and documentation as set forth on Exhibit A
hereto or as the Agent or any Bank may have reasonably requested, and (ii)
no later than Wednesday of the calendar week immediately following and as
of the end of any calendar week during which any Loans were outstanding, a
Borrowing Base Report updating the Eligible Accounts and Eligible Canadian
Accounts components of the Borrowing Base and the inventory component of
the Borrowing Base attributable to the inventory of MI and MIR and
recalculating the Borrowing Base on the basis thereof;
(vi) as soon as practicable, but in any event not later than
forty-five (45) days after request by the Agent made after determining in
its discretion that a reappraisal of the value of Eligible Fixed Assets of
the Borrowers is necessary to
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insure the accuracy of the Borrowing Base, a reappraisal of the value of
such Eligible Fixed Assets, which reappraisal shall be conducted at the
expense of the Borrowers by an appraiser selected by the Agent in form and
substance satisfactory to the Agent, provided, however, that solely so long
as no Event of Default shall have occurred and be continuing, such request
shall not be made more often than once in any eighteen month period and so
long as no Event of Default shall have occurred and be continuing, no such
request shall be made prior to January 1, 2000; provided, further, that no
such limitations upon the Agent's ability to make any such request shall
apply following the occurrence and during the continuance of an Event of
Default;
(vii) by December 31 of each fiscal year, the Borrowers' business
plan for the immediately following fiscal year;
(viii) from time to time such other information concerning the
Borrowers or the Guarantors as the Agent or any Bank may reasonably
request; and
(ix) as soon as practicable, but in any event not later than
sixty (60) days after the Restatement Date, certified copies of all
policies evidencing the insurance policies, referred to in Section
8(a)(vi).
(b) keep true and accurate books of account in accordance with GAAP
and permit the Agent and the Banks or their designated representatives during
normal business hours to inspect the Borrowers', the Guarantors' and MCL's
premises and to examine and be advised as to the Borrowers', the Guarantors' and
MCL's business records upon the request of the Agent or any Bank, and to permit
the Agent's commercial finance examiners to conduct periodic commercial finance
examinations;
(c) maintain its corporate existence, business and assets, keep its
business and assets adequately insured by responsible insurers, maintain its
chief executive office in the United States (or, in the case of MCL, Canada),
continue to engage in the same lines of business, fund its payroll, periodically
in the ordinary course of its business consistent with past practices, on a
current basis (including all withholdings), pay all taxes as and when due and
payable (except where contested in good faith by appropriate proceedings and for
which adequate reserves have been taken) and comply with all other Requirements
of Law, including ERISA, OSHA and Environmental Laws, except where failure to do
so will not have a Materially Adverse Effect;
(d) notify the Agent and the Banks promptly in writing of (A) the
occurrence of any Default or Event of Default, (B) any noncompliance with or
obligation under ERISA, OSHA or any Environmental Law or proceeding in respect
thereof which would be reasonably likely to have a Materially Adverse Effect,
(C) any change of address, (D) any pending or, to the knowledge of the
Borrowers, the Guarantors or MCL, threatened litigation or similar proceeding
affecting the Borrowers, the Guarantors or MCL or any material change in any
such litigation or proceeding previously reported, where such litigation or
proceeding could reasonably be expected to have a Materially Adverse Effect,
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(E) any notice which any of the Borrowers has received under any supply or other
contract terminating or threatening to terminate the provisions of supply or the
provisions of other goods or services or otherwise claiming a default thereunder
where such termination or default could reasonably be expected to have a
Material Adverse Effect, (F) the occurrence and details relating to any
bankruptcy, insolvency, liquidation, reorganization, dissolution or similar case
or proceeding relating to any Subsidiary of MI, (G) any claims against any
material amount of assets of the Borrowers or the Guarantors constituting
Collateral or properties of the Borrowers or the Guarantors constituting
Collateral, in either case excluding general litigation claims for monetary
damages, as to which subclause (D) above shall apply, and (H) upon the request
of the Agent, any testing or environmental site assessment reports conducted at
any Real Estate of any of the Borrowers and submitted to any federal or state
regulatory agency or authority;
(e) use the proceeds of the Loans solely for working capital and
general corporate purposes of the Borrowers, and use Letters of Credit solely
for working capital and general corporate purposes approved by the Agent for
Letters of Credit (such approval not to be unreasonably withheld by the Agent).
The proceeds of the Loans and Letters of Credit shall not be used for the
carrying of "margin security" or "margin stock" within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224 unless the Borrowers shall have previously notified the
Agent in writing of their intent to so use the proceeds of the Loans and Letters
of Credit, and if so used, the Borrowers shall comply with, and assist the Agent
and the Banks in complying with, such Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224. No portion
of the proceeds of any Loans is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of knowingly purchasing, or providing
credit support for the purchase of, during the underwriting or placement period
or within 30 days thereafter, any Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary;
(f) cooperate with the Agent and the Banks, take such action, execute
such documents (including security documents), and provide such information as
the Agent or any Bank may from time to time reasonably request in order further
to effect the transactions contemplated by and the purposes of the Loan
Documents and, if requested by the Agent or any Bank for regulatory reasons or
following the occurrence of an Event of Default, deliver to the Agent or such
Bank at the Borrowers' expense appraisals, title insurance, surveys or
environmental assessments relating to the Real Estate of the Borrowers;
(g) unless directed by the Agent in writing, cause all cash, checks
and other payments or proceeds held or received by it, immediately upon receipt
and in the identical form received, to be paid directly into the Lock Box
Accounts or to the Agent in accordance with Section 2.3(c), and notwithstanding
anything herein to the contrary, the Operating Accounts shall at all times be
maintained with the Agent, and neither any of the Borrowers nor any of the
Guarantors shall maintain other deposit or investment accounts, except as
permitted by Section 9.2(d);
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(h) promptly give notice to the Agent and each of the Banks (A) of
any violation of any Environmental Law that any of the Borrowers, the Guarantors
or MCL reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency that is reasonably likely to have a
Materially Adverse Effect and (B) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, of any federal, state or local
environmental agency or board, that is reasonably likely to have a Materially
Adverse Effect; and
(i) maintain its current fiscal year. In connection with any such
change in the fiscal year of MI, the Borrowers hereby agree to provide to the
Agent and the Banks from time to time as and when requested by the Agent or any
Bank such reconciliations and financial information necessary in order for the
Agent and the Banks to determine compliance with the financial covenants set
forth in Section 9.3.
Section 9.2. NEGATIVE COVENANTS. Each of the Borrowers and each of the
Guarantors agrees that so long as there are any Loans, Notes, German Loans,
Unpaid Reimbursement Obligations, German Unpaid Reimbursement Obligations,
Letters of Credit or German Collateral Instruments outstanding or any Bank or
the German Lender has any obligation to make Loans or German Loans or the Agent
or the German Lender has any obligation to issue, extend or renew any Letters of
Credit or German Collateral Instruments and until the payment and satisfaction
in full in cash of all of the Obligations, the Borrowers will not, the
Guarantors will not, and where applicable the Borrowers will not cause or permit
the Guarantors or MCL to:
(a) enter into any contract with an Affiliate for goods, management
or other services, other than one which shall be on an arm's length basis on
terms competitive with those afforded by third parties, or amend, supplement or
otherwise modify the terms of any such contract, in a manner that would be
inconsistent with the requirements set forth in this Section 9.2(a);
(b) create, incur or assume any Indebtedness other than (i)
Indebtedness to the Agent and the Banks arising under the Loan Documents, (ii)
Indebtedness in respect of the acquisition of property or capitalized leases
which does not exceed $1,000,000 in cumulative aggregate amount and refinancings
thereof which do not exceed the amount refinanced, (iii) current liabilities of
the Borrowers, the Guarantors or MCL not incurred through the borrowing of money
or the obtaining of credit except credit on an open account customarily
extended, (iv) Indebtedness in respect of taxes or other governmental charges
contested in good faith and by appropriate proceedings and for which adequate
reserves have been taken; (v) Indebtedness (A) owed by any Borrower to any other
Borrower, or (B) owed by any Borrower to a Subsidiary of any other Borrower,
(vi) Indebtedness not included above and listed on Schedule 9.2(b) hereto, (vii)
Indebtedness of SMC under the settlement agreement with Cyprus Xxxxx dated as of
February 19, 1997, and Indebtedness of MI in respect of its guaranty of the
obligations of SMC under such settlement agreement, not to exceed, in the case
of all such Indebtedness of MI relating to its guaranty thereunder, $2,500,000
in the aggregate, (viii) Indebtedness in respect of the Senior Notes, (ix)
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Indebtedness of MCL to MI under the Canadian Loan Documents, (x) Indebtedness of
the Borrowers consisting of their obligation to reimburse Midlantic Bank in
respect of letters of credit issued by Midlantic Bank, to [the Board of Chosen
Free Holders Cumberland County, New Jersey] as beneficiary, in an amount not to
exceed $115,000 in the aggregate, (xi) Indebtedness of MI in respect of its
guaranty of the obligations of GfE under the Interest Set-Off Agreement not to
exceed the amount permitted under Section 9.2(d)(xii) at any time, (xii)
Indebtedness of MI in respect of an unsecured guaranty of certain obligations of
Companhia Industrial Fluminese in an aggregate principal amount not to exceed
$1,000,000, (xiii) Indebtedness equal to the termination value of derivative
contracts entered into for non-speculative hedging purposes by any Borrower,
Guarantor or MCL in the ordinary course of its business, consistent with past
practices, and (xiv) other Indebtedness in an aggregate amount not to exceed
$1,000,000;
(c) create or incur any Liens on any of the property or assets of the
Borrowers, the Guarantors or MCL except (collectively, "Permitted Liens") (i)
Liens securing the Obligations; (ii) Liens securing taxes or other governmental
charges not yet due; (iii) deposits for utilities, reasonable retainers to
professionals, deposits or pledges made in connection with workmen's
compensation, unemployment insurance or other social security obligations or to
secure the performance of tenders, bids and other contracts in the ordinary
course of business of any of the Borrowers, the Guarantors and MCL consistent
with past practices; (iv) Liens of carriers, warehousemen, mechanics and
materialmen and similar non-consensual Liens arising by operation of law, (A)
less than 120 days old as to obligations not yet due or (B) as to obligations
being contested in good faith by appropriate proceedings, for which adequate
reserves have been taken, with respect to which Liens no foreclosure proceedings
have been commenced, and which Liens shall not have priority over the Liens of
the Agent, for the benefit of the Banks and the Agent, in the Collateral; (v)
easements, rights-of-way, zoning restrictions and similar minor Liens which
individually and in the aggregate do not have a Materially Adverse Effect; (vi)
purchase money security interests in or purchase money mortgages on real or
personal property securing purchase money Indebtedness or capitalized leases
permitted by Section 9.2(b)(ii), covering only the property so acquired or
leased; (vii) Liens on assets of any Guarantor in respect of loans or other
extensions of credit permitted pursuant to Section 9.2(d)(vi) hereof, which
Liens shall be subject and junior to the Liens granted by such Guarantor in
favor of the Bank; (viii) Liens on assets of MCL in favor of MI pursuant to the
Canadian Loan Documents, which Liens have been assigned in favor of the Agent
pursuant to the Canadian Assignment Documents, (ix) other Liens existing on the
Restatement Date and listed on Schedule 9.2(c) hereof, and (x) Liens on any and
all present and future claims of MI on Bank Mendes arising from or in connection
with the Bank Mendes Account securing the Indebtedness permitted by Section
9.2(b)(xi);
(d) purchase securities, make loans, issue guaranties or other
financial accommodations or make any other investments other than investments
(i) in Subsidiaries of any Borrower existing on the Restatement Date and listed
on Schedule 9.2(d) hereto; (ii) in bank certificates of deposits, bank
eurodollar deposits, bank money market funds, government securities, commercial
paper, repos and other cash equivalent securities, in each case having
maturities of thirty days or less and otherwise reasonably acceptable to the
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Agent and comprised in the Cash Collateral Accounts, (iii) in netting accounts
and brokers accounts required by brokers for margin purposes, maintained by the
Borrowers in accordance with the ordinary course of their businesses and not to
exceed $2,000,000 in the aggregate at any one time; (iv) in payroll, xxxxx cash
and other local and sundry accounts, maintained by the Borrowers in the ordinary
course of their businesses consistent with past practices, not to exceed
$900,000 in the aggregate at any one time; (v) consisting of loans to employees
for relocation expenses and other expense reimbursements not to exceed $300,000
in the aggregate outstanding at any time, (vi) in Subsidiaries (other than
investments by MI in SMC, which investments are permitted pursuant to the terms
of Section 9.2(d)(x) hereof) subsequent to the Restatement Date, in each case
net of any repayments or dividends made by such Subsidiaries to the Borrowers,
at no time in excess of:
(A) $7,000,000 in the aggregate in the case of investments in MCL
(including all of the Canadian Intercompany Outstandings),
(B) $5,500,000 in the aggregate in the case of investments in
Brazilian Subsidiaries, Metallurg International Resources GmbH and
Metallurg Mexico S.A. de C.V., considered collectively;
(C) $16,500,00 in the aggregate in the German Borrowers, considered
collectively,
(D) $8,500,000 in the aggregate in London & Scandinavian
Metallurgical Co Ltd. in the form of loans; provided that such loans shall
be evidenced by a promissory note in form and substance satisfactory to
Agent, and such note shall be pledged to the Agent pursuant to a pledge
agreement in form and substance satisfactory to Agent,
(E) $100,000 in the aggregate in the case of all other Subsidiaries,
considered collectively,
(including, for this purpose, inventory sold to such Subsidiaries and for which
payment has not been made within 90 days following the earlier to occur of
shipment or invoice); provided, however, that such investments in Subsidiaries
which shall be in the form of loans or other extensions of credit may be fully
and adequately secured by a Lien on assets of such Subsidiary which Lien shall,
in the case of any Guarantor, be subject and junior to the Liens granted by such
Guarantor in favor of the Bank, (vii) in the Operating Accounts, the Lock Box
Accounts, operating bank accounts of the Guarantors and, subject to Section
9.2(d)(xii) hereof, the Bank Mendes Accounts, (viii) consisting of other
investments not to exceed $750,000 in aggregate cumulative amount, (ix) in
respect of securities received from debtors in settlement of claims in such
debtor's bankruptcy case, (x) by any Borrower in any other Borrower, or by a
Subsidiary of a Borrower in any Borrower, in each case in the form of loans or
other extensions of credit, pursuant to the terms and conditions of Section
9.2(b)(v) hereof, (xi) in bid deposits and similar deposits made in the ordinary
course of business, (xii) in GfE consisting of deposits in the Bank Mendes
Accounts or MI's guaranty of the obligations of GfE under the Interest Set-Off
Agreement, provided, however, that (A) the aggregate
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amount of such investments, together with any investments in the German
Borrowers made pursuant to Section 9.2(d)(vi)(C) hereof, shall not exceed
$16,500,000 at any time and (B) MI shall use its best efforts not to cause or
permit the credit balance in its Bank Mendes Account(s), determined not less
frequently than once per week, to exceed the debit balance in GfE's Bank Mendes
Account(s), determined at such time, (xiii) in Companhia Industrial Fluminese in
respect of the guaranty referred to in Section 9.2(b)(xii), (xiv) in derivative
contracts entered into for non-speculative hedging purposes by any Borrower,
Guarantor or MCL in the ordinary course of its business, consistent with past
practices, (xv) investments consisting of Permitted Acquisitions, and (xvi)
investments consisting of the acquisition of inventory and equipment and the
license of intangible property in the ordinary course of business consistent
with past practices;
(e) make any Restricted Payment other than (i) [intentionally
omitted], (ii) Distributions in the form of dividends by the Guarantors or MCL
to the Borrowers, (iii) so long as no Default or Event of Default shall have
occurred and be continuing, and none would result therefrom, payments under the
Safeguard Management Agreement in an aggregate amount not to exceed $500,000
during any fiscal year of MI, (iv) so long as no Default or Event of Default
shall have occurred and be continuing, and none would result therefrom,
Distributions to M Holdings in each fiscal year up to an aggregate amount equal
to the amount of regularly scheduled cash interest payments that M Holdings is
required to pay on the Parent Notes in such fiscal year, solely for the purpose
of making such interest payments, provided, however, the amount shall not
include any payments to fund any increases in the rate of interest under the
Parent Notes from that in effect on the Restatement Date or any interest accrued
on the Parent Notes for any period prior to July 15, 2003 and provided, further
that such Distributions shall not be made until a date which is not more than
fifteen (15) days prior to the date such interest payments are due and payable
by M Holdings, (iv) so long as no Default or Event of Default shall have
occurred and be continuing, and none would result therefrom, repurchases of
capital stock from employees of MI in connection with the termination of such
employees' employment with MI in an aggregate amount not to exceed $200,000
during any fiscal year of MI, (v) payments for goods and services on an arm's
length basis on terms competitive with those afforded by third parties, (vi)
payments under a tax sharing agreement approved by the Banks and the Agent and
(vii) payments, not otherwise prohibited by the terms of this Agreement, to
Affiliates of M Holdings which are Subsidiaries of MI.
(f) (i) become party to a merger or sale-leaseback transaction, (ii)
effect any disposition of assets (other than (A) dispositions of inventory in
the ordinary course, (B) dispositions of obsolete equipment having a value not
in excess of $400,000 in the aggregate, and (C) other dispositions of assets
having an aggregate value not in excess of $500,000 for all such other
dispositions of assets) without the consent of the Agent and the Banks (and in
the case of any such asset dispositions consented to by the Agent and the Banks,
unless provided otherwise by the terms of such consent, (1) the Net Available
Cash of any such disposition, together with all other net cash proceeds
therefrom, shall be applied to the Obligations then outstanding, with the Total
Commitment also being reduced by the full amount of any such Net Available Cash
and other net cash proceeds, and (2) to the extent that the Loans are reduced to
$0, any Net Available Cash and other net cash proceeds
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received in connection with any such asset disposition shall be applied to cash
collateralize outstanding Letters of Credit and all obligations of the Borrowers
and the Guarantors in respect of the German Guaranty on a ratable basis in an
amount up to 105% of the sum of the Maximum Drawing Amount plus the aggregate
amount of the German Outstandings), or (iii) purchase, lease or otherwise
acquire assets other than (x) in the ordinary course of business, consistent
with past practices or (y) as Permitted Acquisitions;
(g) amend, supplement or otherwise modify the terms of any of the
Management Service Agreements so as to reduce the aggregate amounts payable to
the Borrowers thereunder and likely to be paid without enforcement measures for
all Management Service Agreements or fail to use commercially reasonable efforts
to enforce the terms thereof or to effect renewals thereof on terms not less
favorable to the Borrowers than those then in effect;
(h) permit MI to trade on any metal exchange in any metal other than
Allowed LME Traded Metal, or permit SMC to trade in any metal on any metal
exchange; provided, however, that nothing herein shall prohibit or prevent SMC
from engaging in hedging transactions for non-speculative purposes in the
ordinary course of its business, consistent with past practices;
(i) (i) use any of the Real Estate or any portion thereof for the
handling, processing, storage or disposal of Hazardous Substances, (ii) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (iii) generate any
Hazardous Substances on any of the Real Estate, (iv) conduct any activity at any
Real Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law; if, in any such case, a Materially Adverse Effect would be
reasonably likely to result;
(j) (i) amend, supplement or otherwise modify the terms of the MI
Indenture, the Senior Notes or any of the other Senior Note Documents without
the consent of the Agent and each of the Banks except for any such amendment,
supplement or modification which would not (A) in the reasonable judgment of the
Agent, adversely effect the enforceability of any of the Loan Documents or any
of the Agent's or the Banks' rights thereunder or the validity, priority or
perfection of any Lien granted under the Security Documents, (B) in the
reasonable judgment of the Agent, have a materially adverse effect on the
financial condition or business operations of any of the Borrowers, the
Guarantors and MCL, (C) increase the rate of interest payable in respect of the
Senior Notes or amend or modify the maturity or principal installment payment
schedule in respect of the Senior Notes so as to make such maturity or any such
principal installments due earlier than otherwise required under the terms of
the Senior Note Documents as in effect on the Restatement Date, (D) increase the
required percentage of holders of the Senior Notes necessary to amend or waive
any provision of the Senior Note Documents or decrease the required percentage
of
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holders of the Senior Notes necessary to accelerate the maturity of the
Senior Notes, (E) provide for the granting of any Lien on any property or assets
of the Borrowers or any of their Subsidiaries in favor of the holders of the
Senior Notes as collateral security for the obligations of any of the Borrowers
or the Guarantors in respect of the Senior Notes, or (F) amend, modify or
supplement any affirmative or negative covenants contained in the Senior Note
Documents, any asset sale proceeds application provisions or related redemption
provisions contained in the Senior Note Documents, any default or event of
default provisions contained in the Senior Note Documents or the change of
control definitions or related redemption provisions contained in the Senior
Note Documents, in any such case in a manner less favorable to the Borrowers
than that in effect on the Restatement Date; (ii) prepay, redeem, cause the
defeasance of or repurchase any of the Senior Notes; or (iii) amend, supplement
or otherwise modify the terms of the Canadian Note without the consent of the
Agent and each of the Banks;
(k) notwithstanding anything herein to the contrary, MHC shall not
engage in any trade or business, incur any Indebtedness other than pursuant to
the Guaranty, incur any liabilities other than nominal expenses necessary to
maintain its corporate existence, hold or own any assets or property other than
the capital stock of its Subsidiaries as set forth on Schedule 7(l) hereto, or
sell, pledge, encumber or transfer or cause or permit the sale, pledge,
encumbrance or transfer of the capital stock of any of its direct or indirect
Subsidiaries set forth on Schedule 7(l) hereto except for any pledge thereof in
favor of the Agent for the benefit of the Banks and the Agent.
Section 9.3. FINANCIAL COVENANTS. Each of the Borrowers and each of the
Guarantors agrees that so long as there are any Loans, Notes, German Loans,
Unpaid Reimbursement Obligations, German Unpaid Reimbursement Obligations,
Letters of Credit or German Collateral Instruments outstanding or any Bank or
the German Lender has any obligation to make Loans or German Loans or the Agent
or the German Lender has any obligation to issue, extend or renew any Letters of
Credit or German Collateral Instruments and until the payment and satisfaction
in full in cash of all of the Obligations, the Borrowers will not, the
Guarantors will not, and where applicable the Borrowers will not cause or permit
the Guarantors or MCL to:
(a) permit the Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Subsidiaries of MI to be less than 1.10:1.00;
provided that the Borrowers shall not be required to comply with the
requirements of the foregoing covenant with respect to any such period, if the
Borrowers shall have demonstrated that they are in compliance with the
requirements of Section 9.3(c) below at all times during the fiscal quarter
ending on the last day of such period.
(b) at any time, permit the Total Outstandings to exceed the sum of
(i) 90% of the book value of accounts receivable of MI and the Restricted
Subsidiaries (as such term is defined in the MI Indenture) plus (ii) 75% of the
book value of the inventory of MI and the Restricted Subsidiaries (as such term
is defined in the MI Indenture).
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(c) permit the Liquidity Level to be less than $10,000,000 at any
time; provided that (i) the Borrowers shall not be required to comply with the
requirements of the foregoing covenant if the Borrowers shall have demonstrated
that they are in compliance with the requirements of Section 9.3(a) above with
respect to the period of four fiscal quarters ending on the last day of the
immediately preceeding fiscal quarter; (ii) the Borrowers shall have a fourteen
(14) day period in which to cure or remedy any failure to comply with the
requirements of this Section 9.3(c) (the "Liquidity Cure Right"), and (iii) the
Borrower shall not exercise such Liquidity Cure Right more than once in any six
(6) month period.
Section 10. EVENTS OF DEFAULT; ACCELERATION. If any of the following events
("Events of Default") shall occur:
(a) the Borrowers or the Guarantors shall fail to pay when due and
payable any principal of the Loans or any Reimbursement Obligations not funded
by a Loan pursuant to Section 2.1(d) when the same becomes due and payable
hereunder, or any interest or other sum due under any of the Loan Documents
within five (5) days following the date when the same becomes due and payable
thereunder;
(b) the Borrowers or the Guarantors shall fail to perform any term,
covenant or agreement contained in Section 9.1(d)(A) or (B), Section 9.1(e),
Section 9.2 or Section 9.3;
(c) the Borrowers or the Guarantors shall fail to perform any other
term, covenant or agreement contained in any of the Loan Documents after the
Agent has given written notice of such failure to the Borrowers and a period of
thirty (30) days has passed without such failure having been cured or remedied;
(d) any representation or warranty of the Borrowers or the Guarantors
in any of the Loan Documents or in any document, certificate or other paper or
notice given in connection therewith shall have been false or misleading in any
material respect at the time made or deemed to have been made or repeated;
(e) (i) an "Event of Default" shall have occurred under and as
defined in the German Loan Agreement, (ii) any of the Borrowers, the Guarantors
or M Holdings or MCL shall be in default under (A) the Senior Note Documents,
(B) any agreement or agreements (other than the Loan Documents) evidencing
Indebtedness owing to the Agent or any Bank, or any affiliates of the Agent or
any Bank, or (C) any agreement or agreements evidencing other Indebtedness for
or in respect of borrowed money or capitalized leases in excess of $1,000,000 in
aggregate principal amount, or (iii) any of the Borrowers, the Guarantors or MCL
shall fail to pay any such Indebtedness specified in clauses (ii)(A), (B) or (C)
when due, or within any applicable period of grace;
(f) any of the Loan Documents executed and delivered shall cease to
be in full force and effect, or the Agent's Liens, for the benefit of the Banks
and the Agent, on substantially all of the Collateral shall fail to be perfected
at any time or shall fail to have the priority contemplated hereby at any time;
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(g) any of the Borrowers, the Guarantors or M Holdings, MCL or any of
the other Material Subsidiaries (i) shall make an assignment for the benefit of
creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii) shall seek the
appointment of, or be the subject of an order appointing, a trustee, liquidator
or receiver as to all or part of its assets, (iv) shall commence, approve or
consent to, any case or proceeding under any bankruptcy, reorganization or
similar law and, in the case of an involuntary case or proceeding, such case or
proceeding is not dismissed within sixty (60) days following the commencement
thereof, or (v) shall be the subject of an order for relief in an involuntary
case under federal bankruptcy law;
(h) any of the Borrowers, the Guarantors or M Holdings, MCL or any of
the other Material Subsidiaries shall be generally unable to pay its debts as
they mature;
(i) there shall remain undischarged for more than thirty (30) days
any final judgment or execution action against any of the Borrowers, the
Guarantors or M Holdings or MCL that, together with other outstanding final
judgments and execution actions that have remained undischarged for more than
thirty (30) days exceeds $1,000,000 in the aggregate;
(j) any of the Borrowers, the Guarantors or M Holdings or MCL shall
be enjoined from conducting any part of its business, or there shall occur any
disruption to such business or loss or damage to the Borrowers' inventory, in
each case where such condition would reasonably be likely to have a Materially
Adverse Effect;
(k) (i) M Holdings shall cease to own at least 65% of the capital
stock of MI of every class, (ii) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended),
other than the shareholders of M Holdings as of the Restatement Date, and their
Affiliates, shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said Act) of
more than 50% of the outstanding shares of common or other voting stock of M
Holdings; (iii) during any consecutive two-year period, individuals who were
directors of M Holdings on the first day of such period (together with any new
directors whose election by the board of directors of M Holdings or whose
nomination for election by the stockholders of M Holdings was approved by a vote
of a majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) shall cease for any reason to constitute a majority of
the board of directors of M Holdings; or (iv) a "Change of Control", as defined
under the MI Indenture or the Parent Indenture, each as amended or supplemented
and in effect from time to time, shall occur;
(l) there shall occur a default by a Service Company (as defined in
the Management Service Agreements), other than Gesellshaft fuer
Elektrometallurgic m.b.H or Elektrowerk Weisweiler GmbH, under the terms of any
of the Management Service Agreements which results in a loss of revenue to the
Borrowers under the Management Service Agreements in excess of $300,000 in the
aggregate during any fiscal year; or
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(m) with respect to an employee benefit plan within the meaning of
Section 3.2 of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate, the benefits of which are guaranteed upon termination in full or in
part by the PBGC (other than a multiemployer plan) (each a "Guaranteed Pension
Plan"), a "reportable event" within the meaning of Section 4043 of ERISA for
which the PBGC requires 30 day notice shall have occurred which the Majority
Banks reasonably believe could reasonably be expected to result in the liability
of any of the Borrowers or any of their Subsidiaries or any Guarantor to the
PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000
and such event could reasonably be expected to constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Guaranteed Pension Plan; or the PBGC
shall have instituted proceedings to terminate such Guaranteed Pension Plan;
THEN, or at any time thereafter:
(1) In the case of any Event of Default under clause (g) or
(h), the Commitments shall automatically terminate, the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of
Credit, and the Banks shall be relieved of all further obligations to make
Loans or to participate in the issuance, renewal or extension of any
Letters of Credit, German Loans or German Collateral Instruments, and the
entire unpaid principal amount of the Loans, all interest accrued and
unpaid thereon, all Unpaid Reimbursement Obligations, all obligations of
the Borrowers and the Guarantors in respect of the German Guaranty and all
other amounts payable hereunder and under the other Loan Documents shall
automatically become forthwith due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived by each of the Borrowers, and the Agent may, and upon the request of
the Majority Banks shall, require that cash be delivered to the Agent in
the amount of 105% of the sum of the Maximum Drawing Amount plus the
aggregate amount of the German Outstandings to be held by the Agent, for
the benefit of the Banks and the Agent, as cash collateral for all
Reimbursement Obligations and the obligations of the Borrowers and the
Guarantors in respect of the German Guaranty; and
(2) In the case of any Event of Default other than (g) and
(h) which shall have occurred and be continuing, the Agent may, and upon
the request of the Majority Banks shall, by written notice to the
Borrowers, terminate the Commitments and/or declare the unpaid principal
amount of the Loans, all interest accrued and unpaid thereon, all Unpaid
Reimbursement Obligations, all obligations of the Borrowers and the
Guarantors in respect of the German Guaranty, and all other amounts payable
hereunder and under the other Loan Documents to be forthwith due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by each of the Borrowers,
and the Agent may, and upon the request of the Majority Banks shall,
require that cash be delivered to the Agent in the amount of 105% of the
sum of the Maximum Drawing Amount plus the aggregate amount of the German
Outstandings to be held by the Agent, for the benefit
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of the Banks and the Agent, as cash collateral for all Reimbursement
Obligations and the obligations of the Borrowers and the Guarantors in
respect of the German Guaranty.
In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the Banks shall have accelerated the
maturity of the Obligations pursuant to this Section 10, each Bank, if owed
any amount with respect to the Loans, the Reimbursement Obligations, or the
German Outstandings, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and
the other Loan Documents or any instrument pursuant to which the
Obligations to such Bank are evidenced, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver,
and, if such amount shall have become due, by declaration or otherwise,
proceed to enforce the payment thereof or any other legal or equitable
right of such Bank. No remedy herein conferred upon any Bank or the Agent
or the holder of any Note or purchaser of any Letter of Credit
Participation or participant in any German Obligations is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision
of law.
Section 11. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that
following the occurrence and during the continuance of an Event of Default, the
Agent or any Bank, as the case may be, receives any monies, whether pursuant to
Section 2.3(c), Section 10 or otherwise with respect to the realization upon any
of the Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent, for the benefit of the Agent and
the Banks, under this Agreement or any of the other Loan Documents or in respect
of the Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have, priority
over the rights of the Agent to such monies;
(b) Second, to all other Obligations (other than the Obligations of
the Borrowers and the Guarantors in respect of the German Guaranty) in such
order or preference as the Majority Banks may determine; provided, however, that
distributions in respect of (i) such Obligations shall be made pari passu among
Obligations with respect to the Collateral administration fees payable pursuant
to the Fee Letter and all other Obligations and (ii) Obligations owing to the
Banks with respect to each type of Obligation such as interest, principal, fees
and expenses, shall be made among the Banks pro rata; and provided, further,
that the Agent may in its discretion make proper allowance to take into account
any
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Obligations not then due and payable (including the retaining, in the Agent's
discretion following two days' prior written notice of the occurrence of an
Event of Default given to the Borrowers by the Agent, of a portion or all of
such monies to provide cash collateral in an amount equal to 105% of the Maximum
Drawing Amount to secure Reimbursement Obligations);
(c) Third, to all other Obligations of the Borrowers and the
Guarantors in respect of the German Guaranty in such order or preference as the
Majority Banks may determine; provided, however, that distributions in respect
of (i) such Obligations under the German Guaranty shall be made pari passu among
Obligations with respect to any fees payable for the account of the German
Lender pursuant to the German Loan Documents and all other such Obligations
under the German Guaranty and (ii) Obligations under the German Guaranty owing
to the Banks or the German Lender with respect to each type of Obligation such
as interest, principal, fees and expenses, shall be made among the Banks and the
German Lender pro rata; and provided, further, that the Agent may in its
discretion make proper allowance to take into account any Obligations not then
due and payable (including the retaining, in the Agent's discretion following
two days' prior written notice of the occurrence of an Event of Default given to
the Borrowers by the Agent, of a portion or all of such monies to provide cash
collateral in an amount equal to 105% of the German Outstandings to secure the
Obligations under the German Guaranty);
(d) Fourth, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to each of the Banks and the Agent of all of
the Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(e) Fifth, the excess, if any, shall be returned to the Borrowers or
to such other Persons as are entitled thereto.
Section 12. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Banks to the Borrowers and any securities or other
property of any of the Borrowers in the possession of such Bank may be applied
to or set off by such Bank against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of any of the Borrowers to such Bank.
Each of the Banks agrees with each other Bank that (a) if an amount to be set
off is to be applied to Indebtedness of any of the Borrowers to such Bank, other
than Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations or obligations under the German Guaranty owed to such
Bank, such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Bank or constituting
Reimbursement Obligations or obligations under the German Guaranty owed to such
Bank, and (b) if such Bank shall receive from any of the Borrowers, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations or obligations under the German Guaranty owed to, such
Bank by proceedings against any of the Borrowers at law or in equity or by proof
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thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by, or Reimbursement Obligations or obligations under the German
Guaranty owed to, such Bank any amount in excess of its ratable portion of the
payments received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations or obligations under the German Guaranty owed to, all
of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it or Reimbursement Obligations
or obligations under the German Guaranty owed it, its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
Section 13. THE AGENT.
Section 13.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent, together
with such powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for convenience
only and is used to describe, as a form of convention, the independent
contractual relationship between the Agent and each of the Banks. Nothing
contained in this Agreement nor the other Loan Documents shall be construed to
create an agency, trust or other fiduciary relationship between the Agent and
any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder and
under the other Loan Documents, the Agent is nevertheless a "representative" of
the Banks, as that term is defined in Article 1 of the Uniform Commercial Code,
for purposes of actions for the benefit of the Banks and the Agent with respect
to all collateral security and guaranties contemplated by the Loan Documents.
Such actions include the designation of the Agent as "secured party",
"mortgagee" or the like on all financing statements and other documents and
instruments, whether recorded or otherwise, relating to the attachment,
perfection, priority or enforcement of any security interests, mortgages or
deeds of trust in collateral security intended to secure the payment or
performance of any of the Obligations, all for the benefit of the Banks and the
Agent.
Section 13.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and
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the other Loan Documents. The Agent may utilize the services of such Persons as
the Agent in its sole discretion may reasonably determine, and all reasonable
fees and expenses of any such Persons shall be paid by the Borrowers.
Section 13.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
Section 13.4. NO REPRESENTATIONS. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrowers or any of their
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrowers or any of their Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it by the
Borrowers or any holder of any of the Notes shall have been duly authorized or
is true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrowers or any of their Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
Section 13.5. PAYMENTS; DISTRIBUTIONS; DELINQUENT BANKS.
(a) A payment by the Borrowers to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute a payment to
such Bank. The Agent agrees promptly to distribute to each Bank such Bank's pro
rata share of payments received by the Agent for the account of the Banks except
as otherwise expressly provided herein or in any of the other Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is
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to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its pro rata share of any Loan, to purchase any Letter of
Credit Participation or to purchase a participation in any German Loan or German
Collateral Instrument as required by Section 3A or (ii) to comply with the
provisions of Section 12 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its pro rata share of such payments due
and payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Borrowers, whether on account of outstanding
Loans, German Loans, Unpaid Reimbursement Obligations, German Unpaid
Reimbursement Obligations, interest, fees, German Risk Participation Fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans, German
Loans, Unpaid Reimbursement Obligations and German Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute such
payments to the nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Loans, German Loans, Unpaid Reimbursement Obligations
and German Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Loans, German Loans, Unpaid
Reimbursement Obligations and German Unpaid Reimbursement Obligations of the
nondelinquent Banks, the Banks' respective pro rata shares of all outstanding
Loans, German Loans, Unpaid Reimbursement Obligations and German Unpaid
Reimbursement Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency.
Section 13.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of
any Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
13.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which any of the Agent or its affiliates
has not been reimbursed by the Borrower as required by Section 16(a)), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's or any such
affiliate's actions taken hereunder or thereunder, except to the extent that any
of the same shall be directly caused by the Agent's or any such affiliate's
willful misconduct or gross negligence.
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Section 13.8. AGENT AS BANK. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
Section 13.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrowers. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a rating of not less than A or its equivalent by Standard &
Poor's Corporation. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
Section 13.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 13.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
Section 13.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
Section 13.11. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 8, each Bank that has
executed this Agreement shall be deemed to have consented to, approved or
accepted, or to be satisfied with, each document and matter either sent, or made
available, by the Agent to such Bank for consent, approval, acceptance or
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satisfaction, or required thereunder to be to be consent to or approved by or
acceptable or satisfactory to such Bank, unless an officer of the Agent active
upon the Borrower's account shall have received notice from such Bank not less
than five (5) days prior to the Restatement Date specifying such Bank's
objection thereto and such objection shall not have been withdrawn by notice to
the Agent to such effect on or prior to the Restatement Date.
Section 14. ASSIGNMENT AND PARTICIPATION.
Section 14.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit, German Loans and German
Collateral Instruments); provided that (a) each of the Agent and, unless a
Default or Event of Default shall have occurred and be continuing, the Borrowers
shall have given its prior written consent to such assignment, which consent, in
the case of the Borrowers, will not be unreasonably withheld, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (c) each
assignment shall be in an amount that is at least equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof, (d) each Bank which is a Bank on the
Restatement Date shall retain, free of any such assignment, an amount of its
Commitment of not less than $5,000,000, and (e) the parties to such assignment
shall execute and deliver to the Agent, for recording in the Register, an
Assignment and Acceptance, substantially in the form of Exhibit D hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in Section 14.3, be released from its obligations under this Agreement.
Section 14.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of
any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or the attachment, perfection
or priority of any security interest or mortgage,
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(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers and their Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or observance by
the Borrowers and their Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 7(e) and Section 9.1(a) and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its pro rata share
of Letter of Credit Fees in respect of outstanding Letters of Credit and German
Risk Participation Fees in respect of German Outstandings.
Section 14.3. REGISTER. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to, Letter of Credit
Participations purchased by, and participating interests in German Loans and
German Collateral Instruments purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrowers and the Banks at
any reasonable time and from
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time to time upon reasonable prior notice. Upon each such recordation, the
assigning Bank agrees to pay to the Agent a registration fee in the sum of
$3,500.
Section 14.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrowers, at their own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. The surrendered Notes shall be cancelled and returned to
the Borrowers.
Section 14.5. PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount that is at least equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof, (b) any such
sale or participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrowers and (c) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any commitment
fees or Letter of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest.
Section 14.6. DISCLOSURE. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Agreement
to assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation. For purposes of this Section 14.6
an assignee or participant or potential assignee or participant may include a
counterparty with whom such Bank has entered into or potentially might enter
into a derivative contract referenced to credit or other risks or events arising
under this Agreement or any other Loan Document.
Section 14.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Bank is an affiliate of the Borrowers, then any such assignee Bank
shall have no right to vote
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as a Bank hereunder or under any of the other Loan Documents for purposes of
granting consents or waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents or for purposes of making requests to
the Agent pursuant to Section 10, and the determination of the Majority Banks
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to such assignee Bank's interest in any of the Obligations. If
any Bank sells a participating interest in any of the Obligations or
Reimbursement Obligations to a participant, and such participant is one of the
Borrowers or an Affiliate of one of the Borrowers, then such transferor Bank
shall promptly notify the Agent of the sale of such participation. A transferor
Bank shall have no right to vote as a Bank hereunder or under any of the other
Loan Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to Section 10 to the extent
that such participation is beneficially owned by any of the Borrowers or any
Affiliate of any of the Borrowers, and the determination of the Majority Banks
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Obligations to the
extent of such participation.
Section 14.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16(b) with respect to
any claims or actions arising prior to the date of such assignment. All assignee
Banks and all participants in the Obligations which are Non-U.S. Lenders shall
comply with the provisions of Section 5(f)(iv) hereof. Anything contained in
this Section 14 to the contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
such pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
Section 14.9. ASSIGNMENT BY BORROWERS. None of the Borrowers shall assign
or transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 15. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Agreement to be given by all of the Banks may be
given, and any term of this Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers or any of their Subsidiaries of any
terms of this Agreement, the other Loan Documents or such other instrument or
the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrowers and the written
consent of the Majority Banks. Notwithstanding the foregoing, (a) without the
written consent of the Borrowers and the written consent of each Bank affected
thereby, the rate of interest on the Notes (other than interest accruing
pursuant to Section 2.2(b) following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto) may not be
decreased, the Maturity Date may not be postponed, the amount of the Commitments
of the Banks may not be increased, and the amount of commitment fee or Letter of
Credit Fees or German Risk Participation Fees hereunder may not be decreased;
(b) the definition of Majority Banks may
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not be amended without the written consent of all of the Banks; (c) all or a
material portion of the Collateral may not be released without the written
consent of all of the Banks (other than a release of any Stock Collateral, as
defined in each of the Stock Pledge Agreements, with respect to which the
written consent of only the Majority Banks shall be required); (d) no Guarantor
may be released from its guaranty of the Obligations pursuant to Section 6.4
hereof without the written consent of all of the Banks; (e) no amendments or
waivers hereto which are necessary to permit the making of Loans or the
issuance, extension or renewal of Letters of Credit hereunder such that the
Total Outstandings hereunder shall exceed the Borrowing Base by more than
$200,000 shall be made without the written consent of all of the Banks (provided
that nothing herein shall be construed as an agreement or waiver permitting any
Loans or Letters of Credit to be made hereunder such that the Total Outstandings
would exceed the Borrowing Base, and any such overadvance would be required to
be made in accordance with the immediately preceding sentence and this clause
(e)); (f) the advance rates set forth in the definitions of Borrowing Base and
Canadian Borrowing Base may not be increased above those in effect on the
Restatement Date without the written consent of all of the Banks; and (g) the
amount of the Collateral administration fee or any Letter of Credit Fees payable
for the Agent's account and Section 13 may not be amended without the written
consent of the Agent. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrowers shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances.
Any term of the German Loan Agreement, the other German Loan Documents or
any other instrument related thereto may be amended, and the performance or
observance by the Borrowers or any of their Subsidiaries of any terms of the
German Loan Agreement, the other German Loan Documents or such other instrument
or the continuance of any Default or Event of Default (for this purpose, as such
terms are defined in the German Loan Agreement) may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the German Borrowers and the written consent
of the Majority Banks. Notwithstanding the foregoing, the rate of interest on
the German Loans (other than interest accruing pursuant to Section 2.2(b) of the
German Loan Agreement following the effective date of any waiver by the Majority
Banks of the Default or Event of Default (for this purpose, as such terms are
defined in the German Loan Agreement) relating thereto), the maturity of the
German Loans, the amount of the commitments of the Banks to purchase
participating interests in the German Loans and the German Collateral
Instruments, and the amount of commitment fees payable by the German Borrowers
thereunder and fees in respect of the German Collateral Instruments payable by
the German Borrowers thereunder may not be changed, in each such case without
the written consent of the German Borrowers and the written consent of each Bank
affected thereby.
Section 16. MISCELLANEOUS.
(a) The Borrowers jointly and severally agree to pay (i) the
reasonable costs of producing and reproducing this Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (ii) any
taxes (including any interest and
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penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes expressly excluded from the definition of the term Taxes, and without
duplication of any Taxes (as defined in Section 5(f)(i))) on or with respect to
the transactions contemplated by this Agreement (the Borrowers hereby jointly
and severally agreeing to indemnify the Agent and each Bank with respect
thereto), (iii) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (iv) the
fees, expenses and disbursements of the Agent and its affiliates incurred by the
Agent and its affiliates in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, including all title insurance premiums and surveyor,
engineering and appraisal charges, and including all due diligence fees,
expenses and disbursements of the Agent and its affiliates, including without
limitation, the fees and expenses of environmental and other consultants hired
by the Agent in connection with such due diligence, (v) any fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Agent in establishing, maintaining or handling agency accounts, lock box
accounts and other accounts for the collection of any of the Collateral; (vi)
all reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (A) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrowers or any of their Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(B) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrowers or any of their Subsidiaries and (vii) all reasonable fees, expenses
and disbursements of any Bank or the Agent incurred in connection with UCC
searches, UCC filings or mortgage recordings. The covenants of this Section
16(a) shall survive payment or satisfaction of all other Obligations.
(b) The Borrowers jointly and severally agree to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Agreement or any of the other Loan Documents or
the transactions contemplated hereby including, without limitation, (i) any
actual or proposed use by the Borrowers or any of their Subsidiaries of the
proceeds of any of the Loans or Letters of Credit, (ii) the reversal or
withdrawal of any provisional credits granted by the Agent upon the transfer of
funds from bank agency or lock box accounts or in connection with the
provisional honoring of checks or other items, (iii) any actual or alleged
infringement of any patent, copyright, trademark, service xxxx or similar right
of the Borrowers or any of their Subsidiaries comprised in the Collateral, (iv)
the Borrowers or any of their Subsidiaries entering into or performing this
Agreement or any of the other Loan Documents or (v) with respect to the
Borrowers and their Subsidiaries and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge,
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emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent that they have
been determined by a court of competent jurisdiction by final order to arise
from the bad faith, willful misconduct or gross negligence of such indemnified
person. In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrowers jointly and severally agree to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrowers under this Section 16(b) are unenforceable for any
reason, each of the Borrowers hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 16(b) shall survive
payment or satisfaction in full of all other Obligations.
(c) Except as otherwise expressly provided in this Agreement, all
notices and other communications made or required to be given pursuant to this
Agreement or the Notes or any Letter of Credit Applications shall be in writing
and shall be delivered in hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, facsimile or telex and confirmed by delivery via courier or
postal service, addressed as follows:
(i) if to the Borrowers or the Guarantors, c/o Metallurg, Inc.
at 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx X. Xxxx, Vice President, or at such other address for notice as the
Borrowers shall last have furnished in writing to the Person giving the
notice;
(ii) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Marwan Isbaih, or such other address
for notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(iii) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (A) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (B) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof. Any notice or election required to
be made by or on behalf of the Borrowers hereunder may be made by MI on behalf
of all of the Borrowers.
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(d) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns, but neither the Borrowers nor
the Guarantors may assign its rights or obligations hereunder.
(e) No failure or delay by the Agent or any Bank to exercise any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude any other right,
power or privilege. The provisions of this Agreement are severable and if any
one provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, such invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together with all Exhibits and
Schedules hereto, expresses the entire understanding of the parties with respect
to the transactions contemplated hereby. This Agreement and any amendment hereof
may be executed in several counterparts, each of which shall be an original, and
all of which shall constitute one agreement. In proving this Agreement, it shall
not be necessary to produce more than one such counterpart executed by the party
to be charged. THIS AGREEMENT AND THE NOTES ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND
GOVERNED THEREBY. EACH OF THE BORROWERS AND THE GUARANTORS AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS AND THE
GUARANTORS BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 16(c). EACH OF THE
BORROWERS AND THE GUARANTORS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT. EACH OF THE BORROWERS AND THE GUARANTORS,
AS AN INDUCEMENT TO THE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT, HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION ARISING IN
CONNECTION WITH ANY LOAN DOCUMENT.
Section 17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
Section 17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The
Borrowers and Guarantors each acknowledge that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrowers or one or more of their Subsidiaries, in connection with this
Agreement or otherwise, by a Section 20 Subsidiary. Each Borrower, for itself
and each of its Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary
to share with the Agent and each Bank any information delivered to such Section
20 Subsidiary by such Borrower or any of its Subsidiaries, and (b) the Agent and
each Bank to share with such Section 20 Subsidiary any information delivered to
the Agent or such Bank by such Borrower or any of its Subsidiaries pursuant to
this Agreement, or in connection with the decision of such Bank to enter into
this Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound
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by the confidentiality provisions of this Agreement. Such authorization shall
survive the payment and satisfaction in full of all of Obligations.
Section 17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by any Borrower or its Subsidiaries
pursuant to this Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 17, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in Section 17.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of Section 14.6. Moreover, each
of the Agent, the Banks and any Section 20 Subsidiary is hereby expressly
permitted by each Borrower to refer to such Borrower and any of its Subsidiaries
in connection with any advertising, promotion or marketing undertaken by the
Agent, such Bank or such Section 20 Subsidiary and, for such purpose, the Agent,
such Bank or such Section 20 Subsidiary may utilize any trade name, trademark,
logo or other distinctive symbol associated with such Borrower or any of its
Subsidiaries or any of their businesses.
Section 17.3. PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, each of the Banks and the Agent shall, prior to
disclosure thereof, notify each Borrower of any request for disclosure of any
such non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
Section 17.4. OTHER. In no event shall any Bank or the Agent be obligated
or required to return any materials furnished to it or any Section 20 Subsidiary
by any Borrower or any of its Subsidiaries. The obligations of each Bank under
this Section 17 shall supersede and replace the obligations of such Bank under
any confidentiality letter in respect of this financing signed and delivered by
such Bank to such Borrower prior to the Restatement Date and shall be binding
upon any assignee of, or purchaser of any participation in, any interest in any
of the Loans or Reimbursement Obligations from any Bank.
Section 18. TRANSITIONAL ARRANGEMENTS.
Section 18.1. ORIGINAL LOAN AGREEMENT SUPERSEDED. This Agreement shall on
the Restatement Date supersede the Original Loan Agreement in its entirety,
except as provided
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in this Section 18. On the Restatement Date, the rights and obligations of the
parties evidenced by the Original Loan Agreement shall be evidenced by this
Agreement and the other Loan Documents, the "Loans" as defined in the Original
Loan Agreement shall be converted to Loans as defined herein, and all
outstanding letters of credit issued by the Agent for the account of any of the
Borrowers prior to the Restatement Date shall, for purposes of this Loan
Agreement, constitute Letters of Credit hereunder.
Section 18.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably
practicable after its receipt of its Notes hereunder on the Restatement Date,
each Bank will promptly return to the Borrowers, marked "Substituted" or
"Cancelled", as the case may be, any promissory notes of the Borrowers held by
such Bank pursuant to the Original Loan Agreement.
Section 18.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest
and fees and expenses, if any, owing or accruing under or in respect of the
Original Loan Agreement through the Restatement Date shall be calculated as of
the Restatement Date (prorated in the case of any fractional periods), and shall
be paid on the Restatement Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
95
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first above written.
METALLURG, INC.
By: /s/XXXXX X. XXXX
---------------------------
Name: XXXXX X. XXXX
Title: Vice President, Finance & CFO
SHIELDALLOY METALLURGICAL
CORPORATION
By: /s/XXXXX X. XXXX
---------------------------
Name: XXXXX X. XXXX
Title: Vice President, Finance
METALLURG INTERNATIONAL RESOURCES, INC.
By: /s/XXXXX X. XXXX
---------------------------
Name: XXXXX X. XXXX
Title: Vice President, Finance
METALLURG SERVICES, INC.,
as a Guarantor
By: /s/XXXXX X. XXXX
----------------------------
Name: XXXXX X. XXXX
Title: Vice President, & CFO
MIR (CHINA), INC., as a Guarantor
By: /s/XXXXX X. XXXX
------------------------------
Name: XXXXX X. XXXX
Title: Vice President & CFO
96
METALLURG HOLDINGS CORPORATION,
as a Guarantor
By: /s/XXXXX X. XXXX
--------------------------
Name: XXXXX X. XXXX
Title: Vice President & CFO
BANKBOSTON, N.A., individually
and as Agent
By: /s/XXXXX X. XXXX
----------------------------
Name: XXXXX X. XXXX
Title: Director
NATIONAL BANK OF CANADA
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President & Manager
BANK OF SCOTLAND
By: /s/ XXXXX XXXXX
---------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
97
EXHIBIT A
FORM OF BORROWING BASE REPORT
[INSERT DATE]
Reference is made to a certain Amended and Restated Loan Agreement (as
amended, modified, supplemented or restated and in effect from time to time, the
"Loan Agreement"), dated as of October 29, 1999, by and among METALLURG, INC. a
Delaware corporation, SHIELDALLOY METALLURGICAL CORPORATION, a Delaware
corporation and METALLURG INTERNATIONAL RESOURCES, INC., a New York corporation
(collectively, the "Borrowers"), certain affiliates of the Borrowers, as
guarantors thereunder; the lending institutions from time to time parties
thereto (the "Banks"); and BankBoston, N.A., as Agent for the Banks (in such
capacity, the "Agent"). Capitalized terms which are used herein without
definition and are defined in the Loan Agreement shall have the same meanings
herein as specified in the Loan Agreement.
The undersigned, the [CEO/Treasurer/Controller] of the Borrowers hereby
certifies as follows: (a) the information furnished in the materials attached
hereto was true, correct and complete as of the last day of the calendar month
immediately preceding the date of this certificate; (b) all Eligible Inventory,
Eligible Receivables, and all Eligible Fixed Assets have been duly pledged and
assigned to the Agent and are subject to a valid, first priority, perfected lien
and security interest in favor of the Agent, on behalf of the Banks; (c) none of
the Borrowers has created, permitted, or has permitted any Guarantor to create
or permit, any Lien on any of the Eligible Inventory, Eligible Receivables, or
Eligible Fixed Assets, except as otherwise permitted by the Loan Agreement; (d)
as of the date of this report, there exists no Default or Event of Default; and
(e) all of the representations and warranties of the Borrowers contained in the
Loan Agreement or any other Loan Document were true and correct when made and
continue to be true and correct as of the date of this report.
98
-2-
IN WITNESS WHEREOF, each of the undersigned has executed this Borrowing
Base Report under seal on behalf of the Borrowers as of the date first written
above.
METALLURG, INC.
By:
-------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL
CORPORATION
By:
-------------------------
Name:
Title:
METALLURG INTERNATIONAL
RESOURCES, INC.
By:
-------------------------
Name:
Title:
99
EXHIBIT B
FORM OF AMENDED AND RESTATED NOTE
[$ ] October 29, 1999
--------------------------------
FOR VALUE RECEIVED, the undersigned METALLURG, INC., a Delaware corporation
("MI"), SHIELDALLOY METALLURGICAL CORPORATION, a Delaware corporation ("SMC")
and METALLURG INTERNATIONAL RESOURCES, INC., a New York corporation ("MIR" and
collectively with MI and SMC, the "Borrowers"), hereby jointly and severally
promise to pay to the order of [INSERT NAME OF BANK] (the "Bank"), at the
Agent's Head Office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000:
(a) prior to or on the Maturity Date the principal amount of [________
____($_______)] or, if less, the aggregate unpaid principal amount of Loans
advanced by the Bank to the Borrowers pursuant to the Amended and Restated
Loan Agreement, dated as of October 29, 1999 (as amended, modified,
supplemented or restated and in effect from time to time, the "Loan
Agreement"), among the Borrowers, certain affiliates of the Borrowers
referred to therein as Guarantors, the Bank and the other lending
institutions which are or may become parties thereto, and BankBoston, N.A.,
as Agent for itself and such lending institutions;
(b) the principal outstanding hereunder from time to time at the times
provided in the Loan Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Restatement Date under the Loan Agreement through and
including the maturity date hereof at the times and at the rates provided
in the Loan Agreement.
This Note evidences borrowings under and has been issued by the Borrowers
in accordance with the terms of the Loan Agreement. The Bank and any holder
hereof is entitled to the benefits of the Loan Agreement, the Security Documents
and the other Loan Documents, and may enforce the agreements of the Borrowers
contained therein, and any holder hereof may exercise the respective remedies
provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Loan Agreement.
100
-2-
The Borrowers irrevocably authorize the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Loan or at the time of receipt
of any payment of principal of this Note, an appropriate notation on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, reflecting the making of such Loan or (as
the case may be) the receipt of such payment. The outstanding amount of the
Loans set forth on the grid attached to this Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by the
Bank with respect to any Loans shall be prima facie evidence of the principal
amount thereof owing and unpaid to the Bank, but the failure to record, or any
error in so recording, any such amount on any such grid, continuation or other
record shall not limit or otherwise affect the joint and several obligation of
the Borrowers hereunder or under the Loan Agreement to make payments of
principal of and interest on this Note when due.
The Borrowers have the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Loan Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Loan Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrowers and every endorser and guarantor of this Note or the
obligation represented hereby waive presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
This Note amends, restates and replaces in full (but does not evidence
repayment of) the original Amended and Restated Revolving Credit Note dated as
of April 23, 1999, from the Borrowers to the Bank in the original principal
amount of $[INSERT PRINCIPAL AMOUNT OF BANK'S 4/23/99 NOTE].
101
-3-
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT
OF THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 16(c)(i) OF
THE LOAN AGREEMENT. EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
102
-4-
IN WITNESS WHEREOF, each of the undersigned has caused this Note to be
signed in its corporate name by its duly authorized officer as a sealed
instrument as of the day and year first above written.
METALLURG, INC.
By:
-----------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL
CORPORATION
By:
-----------------------------------
Name:
Title:
METALLURG INTERNATIONAL
RESOURCES, INC.
By:
-----------------------------------
Name:
Title:
103
-5-
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Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
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104
EXHIBIT C
[Insert Date]
BankBoston, N.A.,
as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
RE: REQUEST FOR LOAN UNDER LOAN AGREEMENT, DATED AS OF OCTOBER 29,
1999
Ladies and Gentlemen:
Reference is made to a certain Amended and Restated Loan Agreement, dated
as of October 29, 1999 (as amended, modified, supplemented or restated from time
to time, the "Loan Agreement"), among Metallurg, Inc., Shieldalloy Metallurgical
Corporation and Metallurg International Resources, Inc. (collectively, the
"Borrowers"); certain affiliates of the Borrowers, as guarantors thereunder; the
lending institutions from time to time parties thereto (collectively, the
"Banks"); and BankBoston, N.A., as agent (in such capacity, the "Agent") for the
Banks. Capitalized terms used herein without definition and defined in the Loan
Agreement shall have the same meanings specified therefor in the Loan Agreement.
Pursuant to Section 2.1(c) of the Loan Agreement, the Borrowers hereby
irrevocably request the following Loan:
(a) Principal Amount:
(b) Drawdown Date:
(c) Interest Period:
(d) Type of Loan:
We understand that this request obligates us to accept the requested Loan
on the specified Drawdown Date.
The making of the requested Loan and the use of the proceeds thereof will
in all respects be in compliance with the provisions of Regulation U.
105
-2-
Each of the Borrowers hereby represents and warrants that all of the
conditions set forth in Section 8(a)* and Section 8(b) of the Loan Agreement
have been satisfied on the date of this Loan Request.
No Default or Event of Default has occurred and is continuing and no
Default or Event of Default would occur after giving effect to the requested
Loan.
METALLURG, INC.
By:
-----------------------------
Name:
Title:
SHIELDALLOY
METALLURGICAL
CORPORATION
By:
-----------------------------
Name:
Title:
METALLURG
INTERNATIONAL
RESOURCES, INC.
By:
-----------------------------
Name:
Title:
-----------------
* To be included in the case of the initial Loan
106
EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of [INSERT DATE]
Reference is made to the Amended and Restated Loan Agreement, dated as of
October 29, 1999 (as amended, modified, supplemented or restated from time to
time and in effect, the "Loan Agreement"), among Metallurg, Inc., a Delaware
corporation, Shieldalloy Metallurgical Corporation, a Delaware corporation, and
Metallurg International Resources, a New York corporation (collectively, the
"Borrowers"); certain affiliates of the Borrowers referred to therein as
Guarantors (collectively, the "Guarantors"); the banking institutions referred
to therein as Banks (collectively, the "Banks"); and BankBoston, N.A., a
national banking association, as agent (in such capacity, the "Agent") for the
Banks. Capitalized terms used herein without definition and defined in the Loan
Agreement shall have the same meanings herein as set forth in the Loan
Agreement.
[NAME OF ASSIGNOR] (the "Assignor") and [NAME OF ASSIGNEE] (the "Assignee")
hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment and
Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$[__________] interest in and to the rights, benefits, indemnities and
obligations of the Assignor under the Loan Agreement equal to [___]% in respect
of the Total Commitment immediately prior to the Effective Date (as hereinafter
defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (i) represents and warrants
that (A) it is legally authorized to enter into this Assignment and Acceptance,
(B) as of the date hereof, its Commitment is $[_______], its Commitment
Percentage is [___]%, the aggregate outstanding principal balance of its Loans
equals $[_______] and the aggregate amount of its Letter of Credit
Participations equals $[_______] (in each case before giving effect to the
assignment contemplated hereby and without giving effect to any contemplated
assignments which have not yet become effective), and (C) immediately after
giving effect to all assignments which have not yet become effective, the
Assignor's Commitment Percentage will be sufficient to give effect to this
Assignment and Acceptance, (ii) makes no representation or warranty, express or
implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Agreement
or any of the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
thereto or the attachment, perfection or priority of any security interest or
mortgage, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder free and clear of any claim or encumbrance; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or any of their Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrowers or any of their
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of its obligations under the Loan Agreement or any
of the other Loan Documents or any other instrument or document
107
-2-
delivered or executed pursuant thereto; and (iv) attaches hereto the Note
delivered to it under the Loan Agreement.
The Assignor requests that the Borrowers exchange the Assignor's Note for
new Note(s) payable to the Assignor and the Assignee as follows:
Note Payable to
the Order of: Amount of Note
Assignor $
----------------
Assignee $
----------------
3. ASSIGNEE'S REPRESENTATIONS. The Assignee (i) represents and warrants
that (A) it is duly and legally authorized to enter into this Assignment and
Acceptance, (B) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any agreement binding on the Assignee, (C) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Assignment and
Acceptance, and to render the same the legal, valid and binding obligation of
the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (ii) confirms that it has received a copy of the Loan
Agreement, together with copies of the most recent financial statements
delivered pursuant to the terms of the Loan Agreement and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Assignor, the Agent or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Agreement; (iv) represents and warrants that it
is an Eligible Assignee; (v) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(vi) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Loan Agreement are required to be
performed by it as a Bank; and (vii) acknowledges that it has made arrangements
with the Assignor satisfactory to the Assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
4. EFFECTIVE DATE. The effective date for this Assignment and Acceptance
shall be [______________] (the "Effective Date"). Following the execution of
this Assignment and Acceptance and the consent of the Borrowers hereto having
been obtained, each party hereto shall deliver its duly executed counterpart
hereof to the Agent for acceptance by the Agent and recording in the Register by
the Agent. Schedule 1 to the Loan Agreement shall thereupon be replaced as of
the Effective Date by the Schedule 1 annexed hereto.
5. RIGHTS UNDER LOAN AGREEMENT. Upon such acceptance and recording, from
and after the Effective Date, (i) the Assignee shall be a party to the Loan
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Bank thereunder, and (ii) the Assignor shall,
with respect to that portion of its interest under the Loan Agreement assigned
hereunder, relinquish its rights and be released from its obligations under the
Loan Agreement; provided, however, that the Assignor shall retain its rights to
be
108
-3-
indemnified pursuant to Section 16(b) of the Loan Agreement with respect to
any claims or actions arising prior to the Effective Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by the
Agent and such recording, from and after the Effective Date, the Agent shall
make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT
AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OR
CHOICE OF LAWS).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
109
-4-
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed under seal on its
behalf by its officer thereunto duly authorized, as of the date first above
written.
[INSERT NAME OF ASSIGNOR]
By:
--------------------------------
Name:
Title:
[INSERT NAME OF ASSIGNEE]
By:
--------------------------------
Name:
Title:
CONSENTED TO:
METALLURG, INC.
By:
--------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL CORPORATION
By:
--------------------------------
Name:
Title:
METALLURG INTERNATIONAL RESOURCES, INC.
By:
--------------------------------
Name:
Title:
BANKBOSTON, N.A., as Agent
By:
--------------------------------
Name:
Title:
110
EXHIBIT E
FORM OF AMENDED AND RESTATED
SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as of
October 29, 1999, by and among (a) METALLURG, INC. ("MI"), a Delaware
corporation, SHIELDALLOY METALLURGICAL CORPORATION ("SMC"), a Delaware
corporation and METALLURG INTERNATIONAL RESOURCES, INC., a New York corporation
("MIR" and collectively with MI and SMC, the "Borrowers"), (b) METALLURG
SERVICES, INC., a New York corporation, MIR (CHINA), INC., a Delaware
corporation, and METALLURG HOLDINGS CORPORATION, a New Jersey corporation
(collectively, the "Guarantors" and collectively with the Borrowers, the
"Companies"), and (c) BANKBOSTON, N.A., a national banking association, as agent
(hereinafter, in such capacity, the "Agent") for itself and other banking
institutions (hereinafter, collectively, the "Banks") which are or may become
parties to that certain Amended and Restated Loan Agreement, dated as of October
29, 1999 (as amended, modified, supplemented or restated and in effect from time
to time, the "Loan Agreement"), among the Borrowers, the Guarantors, the Agent,
and the Banks.
WHEREAS, MI and SMC, the Guarantors, the Agent and the Banks entered into
that certain Loan Agreement dated as of April 14, 1997 (as amended and in effect
prior to the date hereof, the "Existing Loan Agreement") and pursuant thereto
entered into a certain Security Agreement dated as of April 14, 1997 (as amended
and in effect prior to the date hereof, the "Existing MI and SMC Security
Agreement");
WHEREAS, MIR became a party to the Existing Loan Agreement and a Borrower
thereunder pursuant to that certain Assumption and Modification Agreement, dated
as of April 23, 1999, and, in connection therewith, entered into a certain
Security Agreement dated as of April 23, 1999 (the "Existing MIR Security
Agreement");
WHEREAS, the Borrowers, the Guarantors, the Banks and the Agent have agreed
to modify certain provisions of the Existing Loan Agreement pursuant to the
terms of the Loan Agreement;
WHEREAS, pursuant to the provisions of Section 6.4 of the Loan Agreement,
the Guarantors have guaranteed to the Banks and the Agent the payment and
performance of the Borrowers' Obligations under or in respect of the Loan
Agreement;
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Borrowers under the Loan Agreement that the
Companies execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a security agreement in substantially the form hereof;
WHEREAS, the Companies wish to amend and restate the Existing MI and SMC
Security Agreement and the Existing MIR Security Agreement pursuant to this
Agreement, in order to continue to grant security interests in favor of the
Agent, for the benefit of the Banks and the Agent, as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged,
111
-2-
the parties hereto agree that from and after the Restatement Date (as defined in
the Loan Agreement) the Existing MI and SMC Security Agreement and the Existing
MIR Security Agreement shall be amended and restated in their entirety as
follows:
1. DEFINITIONS. All capitalized terms used herein without definitions shall
have the respective meanings provided therefor in the Loan Agreement. All terms
defined in the Uniform Commercial Code of the Commonwealth of Massachusetts and
used herein shall have the same definitions herein as specified therein;
provided, however, that the term "instrument" shall be such term as defined in
Article 9 of the Uniform Commercial Code of the Commonwealth of Massachusetts,
rather than Article 3, thereof.
2. GRANT OF SECURITY INTEREST.
2.1. COLLATERAL GRANTED. Each of the Companies hereby grants to the
Agent, for the benefit of the Banks and the Agent, to secure the payment
and performance in full of all of the Obligations, a security interest in
and so pledges and assigns to the Agent, for the benefit of the Banks and
the Agent, the following properties, assets and rights of each of the
Companies, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof (all of the same being
hereinafter called the "Collateral"):
All personal and fixture property of every kind and nature
including without limitation all furniture, fixtures, equipment, raw
materials, inventory, other goods, accounts, contract rights, rights
to the payment of money, insurance refund claims and all other
insurance claims and proceeds, tort claims, chattel paper, documents,
instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general
intangibles including, without limitation, all tax refund claims,
license fees, patents, patent applications, trademarks, trademark
applications, trade names, copyrights, copyright applications, rights
to xxx and recover for past infringement of patents, trademarks and
copyrights, computer programs, computer software, engineering
drawings, service marks, customer lists, goodwill, and all licenses,
permits, agreements of any kind or nature pursuant to which the
Companies possess, use or have authority to possess or use property
(whether tangible or intangible) of others or others possess, use or
have authority to possess or use property (whether tangible or
intangible) of the Companies, and all recorded data of any kind or
nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and
schematics.
2.2. DELIVERY OF INSTRUMENTS, ETC.
(a) Pursuant to the terms hereof, each of the Companies has
endorsed, assigned and delivered to the Agent all negotiable or
non-negotiable instruments (including certificated securities) and
chattel paper pledged by it hereunder, together with instruments of
transfer or assignment duly executed in blank as the Agent may have
specified. In the event that any of the Companies shall, after the
date of this Agreement, acquire any other negotiable or non-negotiable
instruments (including certificated securities) or chattel paper to be
pledged by it hereunder, such Company shall forthwith endorse, assign
and deliver the same to the Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Agent may from
time to time specify.
112
-3-
(b) To the extent that any securities now or hereafter acquired
by any of the Companies are uncertificated and are issued to said
Company or its nominee directly by the issuer thereof, said Company
shall cause the issuer to note on its books the security interest of
the Agent in such securities and shall cause the issuer, pursuant to
an agreement in form and substance reasonably satisfactory to the
Agent, to agree to comply with instructions from the Agent as to such
securities, without further consent of said Company or such nominee.
To the extent that any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired
by any of the Companies are held by said Company or its nominee
through a securities intermediary or commodity intermediary, said
Company shall (i) cause such securities intermediary or (as the case
may be) commodities intermediary, to note on its books the security
interest of the Agent in such securities or other financial assets and
to confirm such notation promptly to the Agent and (ii) at the request
of the Agent, cause such securities intermediary or (as the case may
be) commodities intermediary, pursuant to an agreement in form and
substance reasonably satisfactory to the Agent, to agree to comply
with entitlement orders or other instructions from the Agent to such
securities intermediary or (as the case may be) commodities
intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of any
commodity contract as directed by the Agent to such commodity
intermediary, without further consent of said Company or such nominee.
The Agent agrees with the Companies that the Agent shall not give any
such entitlement orders or instructions or directions to any such
issuer or securities intermediary or commodity intermediary unless an
Event of Default has occurred and is continuing and the Agent has
elected to exercise its rights and remedies as contemplated by Section
14 hereof.
(c) To the extent that any of the Companies is a beneficiary
under any written letter of credit now or hereafter issued in favor of
such Company, it shall deliver such letter of credit to the Agent. The
Agent shall from time to time, at the request and expense of such
Company, make such arrangements with such Company as are in the
Agent's reasonable judgment necessary and appropriate so that such
Company may make any drawing to which it is entitled under such letter
of credit, without impairment of the Agent's perfected security
interest in such Company's rights to proceeds of such letter of credit
or in the actual proceeds of such drawing. At the Agent's request,
such Company shall, for any letter of credit, whether or not written,
now or hereafter issued in favor of such Company as beneficiary,
execute and deliver to the issuer and any confirmer of such letter of
credit an assignment of proceeds form, in favor of the Agent and
satisfactory to the Agent and such issuer or (as the case may be) such
confirmer, requiring the proceeds of any drawing under such letter of
credit to be paid directly to the Agent for application as provided in
the Loan Agreement.
2.3. EXCLUDED COLLATERAL. Notwithstanding the foregoing provisions of
this Section 2, such grant of security interest shall not extend to, and
the term "Collateral" shall not include, (a) any annuities or trust fund
accounts which are dedicated to the payment of environmental liabilities of
the Borrowers pursuant to the express provisions of the Settlement
Agreements; provided that the foregoing grant of security interest shall
extend to, and the term "Collateral" shall include, the Borrowers' residual
interest in such annuities or trust fund accounts and any right of the
Borrowers to any surplus after payment of the liabilities in respect of
which such annuities and trust funds were established, or (b) any chattel
paper and general intangibles which are now or hereafter
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held by any of the Companies as licensee, lessee or otherwise, to the
extent that (i) such chattel paper and general intangibles are not
assignable or capable of being encumbered as a matter of law or under the
terms of the license, lease or other agreement applicable thereto (but
solely to the extent that any such restriction shall be enforceable under
applicable law), without the consent of the licensor or lessor thereof or
other applicable party thereto and (ii) such consent has not been obtained;
provided, however, that the foregoing grant of security interest shall
extend to, and the term "Collateral" shall include, (A) any and all
proceeds of such chattel paper and general intangibles to the extent that
the assignment or encumbering of such proceeds is not so restricted and (B)
upon consent of any such licensor, lessor or other applicable party with
respect to any such otherwise excluded chattel paper or general intangibles
being obtained, thereafter such chattel paper or general intangibles as
well as any and all proceeds thereof that might have theretofore have been
excluded from such grant of a security interest and the term "Collateral".
2.4. STOCK PLEDGE AGREEMENTS. Concurrently herewith Metallurg, Inc.
and Metallurg Holdings Corporation are executing and delivering to the
Agent, for the benefit of the Banks and the Agent, amended and restated
stock pledge agreements (the "Stock Pledge Agreements") pursuant to which
Metallurg, Inc. and Metallurg Holdings Corporation are pledging to the
Agent, for the benefit of the Banks and the Agent, the shares of the
capital stock of their respective subsidiaries described therein. Such
pledge shall be governed by the terms of the Stock Pledge Agreements and
not by the terms of this Agreement.
3. TITLE TO COLLATERAL, ETC. The Companies are the owners of the Collateral
free from any adverse lien, security interest or other encumbrance, except for
the security interest created by this Agreement and other liens permitted by the
Loan Agreement. None of the Collateral constitutes, or is the proceeds of, "farm
products" as defined in Section 9-109(3) of the Uniform Commercial Code of the
Commonwealth of Massachusetts. None of the account debtors in respect of any
accounts, chattel paper or general intangibles and none of the obligors in
respect of any instruments included in the Collateral is a governmental
authority subject to the Federal Assignment of Claims Act.
4. CONTINUOUS PERFECTION. Each Company's place of business or, if more than
one, chief executive office is indicated on the Perfection Certificate delivered
by such Company to the Agent herewith (collectively, the "Perfection
Certificates"). Except as otherwise expressly permitted by the Loan Agreement,
none of the Companies will change the same, or the name, identity or corporate
structure of any Company in any manner, without providing at least 30 days prior
written notice to the Agent. The Collateral, to the extent not delivered to the
Agent pursuant to Section 2.2 hereof, will be kept at those locations listed on
the Perfection Certificates and none of the Companies will remove the Collateral
from such locations, without providing at least 30 days prior written notice to
the Agent.
5. NO OTHER LIENS. Except for the security interest herein granted and
liens permitted by the Loan Agreement, the Companies shall be the owners of the
Collateral free from any lien, security interest or other encumbrance, and each
of the Companies shall defend the same against all claims and demands of all
persons at any time claiming the same or any interests therein adverse to the
Agent or any of the Banks. The Companies shall not pledge, mortgage or create,
or suffer to exist a security interest in the Collateral in favor of any person
other than the Agent, for the benefit of the Banks and the Agent, except for
liens permitted by the Loan Agreement.
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6. NO TRANSFERS. The Companies will not sell or offer to sell or otherwise
transfer the Collateral or any interest therein except as otherwise permitted by
the Loan Agreement.
7. INSURANCE.
7.1. MAINTENANCE OF INSURANCE. Each of the Companies will maintain
with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such
minimum amounts that none of the Companies will be deemed a co-insurer
under applicable insurance laws, regulations and policies and otherwise
shall be in such amounts, contain such terms, be in such forms and be for
such periods as may be reasonably satisfactory to the Agent. In addition,
all such insurance shall be payable to the Agent as loss payee under a
"standard" or "New York" loss payee clause for the benefit of the Banks and
the Agent. Without limiting the foregoing, each of the Companies will (i)
keep all of its physical property insured with casualty or physical hazard
insurance on an "all risks" basis, with broad form flood and earthquake
coverages and electronic data processing coverage, with a full replacement
cost endorsement and an "agreed amount" clause in an amount equal to 100%
of the full replacement cost of such property, (ii) maintain all such
workers' compensation or similar insurance as may be required by law and
(iii) maintain, in amounts and with deductibles equal to those generally
maintained by businesses engaged in similar activities in similar
geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of each of the Companies; business interruption insurance; and
product liability insurance.
7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to the
rights, if any, of other parties with a prior interest in the property
covered thereby, (i) so long as no Default or Event of Default has occurred
and is continuing and to the extent that the amount of such proceeds is
less than $250,000, be disbursed to the appropriate Company for direct
application by said Company solely to the repair or replacement of said
Company's property so damaged or destroyed and (ii) in all other
circumstances, be held by the Agent as cash collateral for the Obligations.
The Agent may, at its sole option, disburse from time to time all or any
part of such proceeds so held as cash collateral, upon such terms and
conditions as the Agent may reasonably prescribe, for direct application by
the applicable Company solely to the repair or replacement of said
Company's property so damaged or destroyed, or the Agent may apply all or
any part of such proceeds to the Obligations with the Total Commitment (if
not then terminated) being reduced by the amount so applied to the
Obligations.
7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
provide for at least thirty (30) days' prior written cancellation notice to
the Agent. In the event of failure by any Company to provide and maintain
insurance as herein provided, the Agent may, at its option, provide such
insurance and charge the amount thereof to said Company. Each of the
Companies shall furnish the Agent with certificates of insurance and
policies evidencing compliance with the foregoing insurance provision.
8. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. Each of the Companies
will keep the Collateral in good order and repair and will not use the same in
violation of law or any policy of insurance thereon. The Agent, or its designee,
may inspect the Collateral at any reasonable time, wherever located, during
normal business hours upon notice to the Companies.
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Each of the Companies will pay promptly when due all taxes, assessments,
governmental charges and levies upon the Collateral or incurred in connection
with the use or operation of such Collateral or incurred in connection with this
Agreement. Each of the Companies has at all times operated, and each of the
Companies will continue to operate, its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances except, in any such case, where any non-compliance would
not reasonably be expected to result in a Materially Adverse Effect or otherwise
impair or effect the validity, perfection or priority of the security interest
of the Agent, for the benefit of the Banks and the Agent, in the Collateral.
9. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
9.1. EXPENSES INCURRED BY AGENT. In its discretion, the Agent may
discharge taxes and other encumbrances at any time levied or placed on any
of the Collateral, make repairs thereto and pay any necessary filing fees.
Each of the Companies agrees to reimburse the Agent on demand for any and
all expenditures so made. The Agent shall have no obligation to any Company
to make any such expenditures, nor shall the making thereof relieve any
Company of any default.
9.2. AGENT'S OBLIGATIONS AND DUTIES. Anything herein to the contrary
notwithstanding, each of the Companies shall remain liable under each
contract or agreement comprised in the Collateral to be observed or
performed by such Company thereunder. Neither the Agent nor any Bank shall
have any obligation or liability under any such contract or agreement by
reason of or arising out of this Agreement or the receipt by the Agent or
any Bank of any payment relating to any of the Collateral, nor shall the
Agent or any Bank be obligated in any manner to perform any of the
obligations of any of the Companies under or pursuant to any such contract
or agreement, to make inquiry as to the nature or sufficiency of any
payment received by the Agent or any Bank in respect of the Collateral or
as to the sufficiency of any performance by any party under any such
contract or agreement, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may
have been assigned to the Agent or to which the Agent or any Bank may be
entitled at any time or times. The Agent's sole duty with respect to the
custody, safe keeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Uniform Commercial Code of the
Commonwealth of Massachusetts or otherwise, shall be to deal with such
Collateral in the same manner as the Agent deals with similar property for
its own account.
10. SECURITIES AND DEPOSITS. The Agent may at any time, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. After the occurrence and during the continuance of
an Event of Default, whether or not any Obligations are due, the Agent may
demand, xxx for, collect, or make any settlement or compromise which it deems
desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Agent or any Bank to any of the
Companies may at any time be applied to or set off against any of the
Obligations.
11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If an Event of
Default shall have occurred and be continuing, each of the Companies shall, at
the request of the Agent, notify account debtors on accounts, chattel paper and
general intangibles of such Company and obligors
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on instruments for which such Company is an obligee of the security interest of
the Agent in any account, chattel paper, general intangible or instrument and
that payment thereof is to be made directly to the Agent or to any financial
institution designated by the Agent as the Agent's agent therefor, and the Agent
may itself, if an Event of Default shall have occurred and be continuing,
without notice to or demand upon the Companies, so notify account debtors and
obligors. After the making of such a request or the giving of any such
notification, each of the Companies shall hold any proceeds of collection of
accounts, chattel paper, general intangibles and instruments received by such
Company as trustee for the Agent, for the benefit of the Banks and the Agent,
without commingling the same with other funds of such Company and shall turn the
same over to the Agent in the identical form received, together with any
necessary endorsements or assignments. The Agent shall apply the proceeds of
collection of accounts, chattel paper, general intangibles and instruments
received by the Agent to the Obligations, such proceeds to be immediately
entered after final payment in cash or solvent credits of the items giving rise
to them.
12. FURTHER ASSURANCES. Each of the Companies, at its own expense, shall
do, make, execute and deliver all such additional and further acts, things,
deeds, assurances and instruments as the Agent may reasonably require more
completely to vest in and assure to the Agent and the Banks their respective
rights hereunder or in any of the Collateral, including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and
continuation statements under the Uniform Commercial Code, (ii) obtaining
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor or other applicable party
referred to in Section 2.3 hereof, (iii) obtaining waivers from mortgagees and
landlords and (iv) taking all actions required by Sections 8-313 and 8-321 of
the Uniform Commercial Code (1990) or Sections 8-106 and 9-115 of the Uniform
Commercial Code (1994), as applicable in each relevant jurisdiction, with
respect to certificated and uncertificated securities.
13. POWER OF ATTORNEY.
13.1. APPOINTMENT AND POWERS OF AGENT. Each of the Companies hereby
irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place
and stead of each of the Companies or in the Agent's own name, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments
that may be necessary or desirable to accomplish the purposes of this
Agreement and, without limiting the generality of the foregoing, hereby
gives said attorneys the power and right, on behalf of each of the
Companies, without notice to or assent by any of the Companies, to do the
following:
(a) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral in such manner
as is consistent with the Uniform Commercial Code of the Commonwealth
of Massachusetts and as fully and completely as though the Agent were
the absolute owner thereof for all purposes, and to do at the
Companies' expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve or realize
upon the Collateral and the Agent's security interest therein, in
order to effect the intent of this Agreement, all as fully and
effectively as each of the Companies might do, including, without
limitation, (i) the filing and prosecuting of registration and
transfer applications with the appropriate federal or local
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agencies or authorities with respect to trademarks, copyrights and
patentable inventions and processes, (ii) upon written notice to each
of the Companies, the exercise of voting rights with respect to voting
securities, which rights may be exercised, if the Agent so elects,
with a view to causing the liquidation in a commercially reasonable
manner of assets of the issuer of any such securities and (iii) the
execution, delivery and recording, in connection with any sale or
other disposition of any Collateral, of the endorsements, assignments
or other instruments of conveyance or transfer with respect to such
Collateral; and
(b) to file such financing statements with respect hereto, with
or without any Company's signature, or a photocopy of this Agreement
in substitution for a financing statement, as the Agent may deem
appropriate and to execute in any Company's name such financing
statements and amendments thereto and continuation statements which
may require such Company's signature.
13.2. RATIFICATION BY THE COMPANIES. To the extent permitted by law,
each of the Companies hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
a power coupled with an interest and shall be irrevocable.
13.3. NO DUTY ON AGENT. The powers conferred on the Agent hereunder
are solely to protect the interests of the Agent and the Banks in the
Collateral and shall not impose any duty upon the Agent to exercise any
such powers. The Agent shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be
responsible to any of the Companies for any act or failure to act, except
for the Agent's own gross negligence or willful misconduct.
14. REMEDIES. If an Event of Default shall have occurred and be continuing,
the Agent may, without notice to or demand upon any of the Companies, declare
this Agreement to be in default, and the Agent shall thereafter have in any
jurisdiction in which enforcement hereof is sought, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Agent may, so far as the
Companies can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Agent may in its
discretion require each of the Companies to assemble all or any part of the
Collateral at such location or locations within the state(s) of the Companies'
principal office(s) or at such other locations as the Agent may designate.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, the Agent shall give to
each of the Companies at least ten (10) Business Days prior written notice of
the time and place of any public sale of Collateral or of the time after which
any private sale or any other intended disposition is to be made. Each of the
Companies hereby acknowledges that ten (10) Business Days prior written notice
of such sale or sales shall be reasonable notice. In addition, each of the
Companies waives any and all rights that it may have to a judicial hearing in
advance of the enforcement of any of the Agent's rights hereunder, including,
without limitation, its right following an Event of Default to take immediate
possession of the Collateral and to exercise its rights with respect thereto. To
the extent that any of the Obligations are to be paid or performed by a person
other than a Company, each Company, to the extent permitted by applicable law,
waives and agrees not to assert any rights or privileges which it may have under
Section 9-112 of the Uniform Commercial Code of the Commonwealth of
Massachusetts.
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15. NO WAIVER, ETC. Each of the Companies waives demand, notice, protest,
notice of acceptance of this Agreement, notice of loans made, credit extended,
Collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect to both the
Obligations and the Collateral, each of the Companies assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Agent may deem advisable. The Agent shall have no duty
as to the collection or protection of the Collateral or any income thereon, nor
as to the preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 9.2 hereof. The Agent shall not be deemed to have waived
any of its rights upon or under the Obligations or the Collateral unless such
waiver shall be in writing and signed by the Agent with the consent of the
Majority Banks. No delay or omission on the part of the Agent in exercising any
right shall operate as a waiver of such right or any other right. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right on
any future occasion. All rights and remedies of the Agent with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Agent deems expedient.
16. MARSHALLING. Neither the Agent nor any Bank shall be required to
marshal any present or future collateral security (including but not limited to
this Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights of the
Agent hereunder and of the Agent or any Bank in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, each of the Companies hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Agent's rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
each of the Companies hereby irrevocably waives the benefits of all such laws.
17. PROCEEDS OF DISPOSITIONS; EXPENSES. The Companies shall pay to the
Agent on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Agent in protecting, preserving or
enforcing the Agent's rights under or in respect of any of the Obligations or
any of the Collateral. After deducting all of said expenses, the residue of any
proceeds of collection or sale of the Obligations or Collateral shall, to the
extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as is provided in the Loan Agreement, proper
allowance and provision being made for any Obligations not then due. Upon the
final payment and satisfaction in full of all of the Obligations and after
making any payments required by Section 9-504(1)(c) of the Uniform Commercial
Code of the Commonwealth of Massachusetts, any excess shall be returned to the
Companies, and each of the Companies shall remain jointly and severally liable
for any deficiency in the payment of the Obligations.
18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
Companies hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Loan Agreement.
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19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). Each of the Companies agrees
that any suit for the enforcement of this Agreement may be brought in the courts
of the Commonwealth of Massachusetts or any federal court sitting therein and
consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon such Company by mail at the address
specified in the Loan Agreement. Each of the Companies hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
20. WAIVER OF JURY TRIAL. EACH OF THE COMPANIES WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, each
of the Companies waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Companies (i) certifies that neither the Agent or
any Bank nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Loan Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks are
relying upon, among other things, the waivers and certifications contained in
this Section 20.
21. CONCERNING REVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE. The
parties acknowledge and agree to the following provisions of this Agreement in
anticipation of the possible application, in one or more jurisdictions to the
transactions contemplated hereby, of the revised Article 9 of the Uniform
Commercial Code in the form or substantially in the form approved in 1998 by the
American Law Institute and the National Conference of Commissioners on Uniform
State Law ("Revised Article 9").
21.1. ATTACHMENT. In applying the law of any jurisdiction in which
Revised Article 9 is in effect, the Collateral is all assets of each of the
Companies, whether or not within the scope of Revised Article 9. The
Collateral shall include, without limitation, the following categories of
assets as defined in Revised Article 9: goods (including inventory,
equipment and any accessions thereto), instruments (including promissory
notes), documents, accounts (including health-care-insurance receivables),
chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is evidenced
by a writing), commercial tort claims, securities and all other investment
property, general intangibles (including payment intangibles and software),
supporting obligations and any and all proceeds of any thereof, wherever
located, whether now owned and hereafter acquired. If any of the Companies
shall at any time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, acquire a commercial tort claim, as defined in
Revised Article 9, such Company shall immediately notify the Agent in a
writing signed by such Company of the brief details thereof and grant to
the Agent in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in
form and substance satisfactory to the Agent.
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21.2. PERFECTION BY FILING. The Agent may at any time and from time to
time, pursuant to the provisions of Section 13, file financing statements,
continuation statements and amendments thereto that describe the Collateral
as all assets of the Companies or words of similar effect and which contain
any other information required by Part 5 of Revised Article 9 for the
sufficiency or filing office acceptance of any financing statement,
continuation statement or amendment, including whether the Company is an
organization, the type of organization and any organization identification
number issued to the Companies. Each Company agrees to furnish any such
information to the Agent promptly upon request. Any such financing
statements, continuation statements or amendments may be signed by the
Agent on behalf of the Companies, as provided in Section 13, and may be
filed at any time in any jurisdiction whether or not Revised Article 9 is
then in effect in that jurisdiction.
21.3. OTHER PERFECTION, ETC. The Companies shall at any time and from
time to time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Agent may reasonably
request for the Agent (a) to obtain an acknowledgement, in form and
substance satisfactory to the Agent, of any bailee having possession of any
of the Collateral that the bailee holds such Collateral for the Agent, (b)
to obtain "control" of any investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper (as such terms are
defined in Revised Article 9 with corresponding provisions in Rev. Sections
9-104, 9-105, 9-106 and 9-107 relating to what constitutes "control" for
such items of Collateral), with any agreements establishing control to be
in form and substance satisfactory to the Agent, and (c) otherwise to
insure the continued perfection and priority of the Agent's security
interest in any of the Collateral and of the preservation of its rights
therein, whether in anticipation and following the effectiveness of Revised
Article 9 in any jurisdiction.
21.4. OTHER PROVISIONS. In applying the law of any jurisdiction in
which Revised Article 9 is in effect, the following references to sections
in this Agreement to existing Article 9 of that jurisdiction shall be to
the Revised Article 9 Section of that jurisdiction indicated below:
---------------------------------------------------------------------------------------------------------------------
Existing Revised
Agreement Section Article 9 Article 9
---------------------------------------------------------------------------------------------------------------------
3 Section 9-103(3) Rev. Section 9-102(a)(34)
---------------------------------------------------------------------------------------------------------------------
9.2 Section 9-207 Rev. Section 9-207
---------------------------------------------------------------------------------------------------------------------
12 Sections 8-106 and 9-115 (1994) Rev. Sections 8-106 and 9-106
---------------------------------------------------------------------------------------------------------------------
17 Section 9-504(1)(c) Rev. Sections 9-608(a)(1)(C) and 9-615(a)(3)
---------------------------------------------------------------------------------------------------------------------
21.5. SAVINGS CLAUSE. Nothing contained in this Section 21 shall be
construed to narrow the scope of the Agent's security interest in any of
the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges or remedies of the
Agent or any Bank hereunder except (and then only to the extent) mandated
by Revised Article 9 to the extent then applicable.
22. MISCELLANEOUS. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon each of
the Companies and its respective successors and assigns, and shall inure to the
benefit of the Agent, the Banks and their respective successors
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and assigns. If any term of this Agreement shall be held to be invalid, illegal
or unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. Each
of the Companies acknowledges receipt of a copy of this Agreement.
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IN WITNESS WHEREOF, intending to be legally bound, each of the Companies
has caused this Agreement to be duly executed under seal as of the date first
above written.
METALLURG, INC.
By:
---------------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL
CORPORATION
By:
---------------------------------------
Name:
Title:
METALLURG INTERNATIONAL
RESOURCES, INC.
By:
---------------------------------------
Name:
Title:
METALLURG SERVICES, INC.
By:
---------------------------------------
Name:
Title:
MIR (CHINA), INC.
By:
---------------------------------------
Name:
Title:
METALLURG HOLDINGS
CORPORATION
By:
---------------------------------------
Name:
Title:
123
-14-
Accepted:
BANKBOSTON, N.A., as Agent
By:
------------------------------
Name:
Title:
124
-15-
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of Metallurg, Inc. and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors, and said ________________ acknowledged said
instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of Shieldalloy Metallurgical
Corporation and that said instrument was signed and sealed on behalf of said
corporation by authority of its Board of Directors, and said ________________
acknowledged said instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
125
-16-
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of Metallurg International
Resources, Inc. and that said instrument was signed and sealed on behalf of said
corporation by authority of its Board of Directors, and said ________________
acknowledged said instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of Metallurg Services, Inc.
and that said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and said ________________ acknowledged said
instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
126
-17-
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of MIR (China), Inc. and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors, and said ________________ acknowledged said
instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this _____ day of October, 1999, personally appeared
__________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of Metallurg Holdings
Corporation and that said instrument was signed and sealed on behalf of said
corporation by authority of its Board of Directors, and said ________________
acknowledged said instrument to be the free act and deed of said corporation.
------------------------------
Notary Public
My commission expires:
127
EXHIBIT F-1
FORM OF
AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
This AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "Agreement") is made
as of this 29th day of October, 1999, by and between METALLURG, INC., a Delaware
corporation (the "Pledgor"), and BANKBOSTON, N.A., a national banking
association, as agent (hereinafter, in such capacity, the "Agent") for itself
and the other banking institutions (collectively, the "Banks") which are or may
become parties to that certain Amended and Restated Loan Agreement, dated
October 29, 1999 (as amended, modified, supplemented or restated and in effect
from time to time, the "Loan Agreement") among the Pledgor, Shieldalloy
Metallurgical Corporation, a Delaware corporation, and Metallurg International
Resources, Inc., a New York corporation (collectively, the "Borrowers"), certain
affiliates of the Borrowers, as guarantors thereunder, the Agent and the Banks.
WHEREAS, the Pledgor, Shieldalloy Metallurgical Corporation, certain
affiliates of the Pledgor, as guarantors, the Agent and the Banks entered into
that certain Loan Agreement dated as of April 14, 1997 (as amended and in effect
prior to the date hereof, the "Existing Loan Agreement") and pursuant thereto
the Pledgor and the Agent entered into a certain Stock Pledge Agreement dated as
of April 14, 1997 (as amended and in effect prior to the date hereof, the
"Existing Stock Pledge Agreement");
WHEREAS, the Pledgor, the other Borrowers, certain affiliates of the
Pledgor, as guarantors, the Agent and the Banks have agreed to modify certain
provisions of the Existing Loan Agreement pursuant to the terms of the Loan
Agreement;
WHEREAS, the Pledgor is the direct or indirect legal and beneficial owner
of the issued and outstanding shares of each class of the capital stock of each
of the corporations described on Annex A (the "Subsidiaries");
WHEREAS, the Pledgor, the Agent and the Banks have agreed to modify certain
provisions of the Existing Stock Pledge Agreement pursuant to the terms of this
Agreement, to release the pledge of the stock of all other Subsidiaries (as
defined in the Existing Stock Pledge Agreement) other than that of the
Subsidiaries (as defined herein);
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Borrowers under the Loan Agreement that the
Pledgor execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a pledge agreement in substantially the form hereof;
WHEREAS, the Pledgors wish to amend and restate the Existing Stock Pledge
Agreement pursuant to this Agreement, in order to continue to grant pledges and
security interests in favor of the Agent, for the benefit of the Banks and the
Agent, as herein provided;
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NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that from and after the
Restatement Date (as defined in the Loan Agreement) the Existing Stock Pledge
Agreement shall be amended and restated in its entirety as follows:
1. PLEDGE OF STOCK, ETC.
1.1. PLEDGE OF STOCK. The Pledgor hereby pledges, assigns and grants a
security interest in and delivers to the Agent, for the benefit of the
Banks and the Agent, (a) all of the issued and outstanding shares owned by
the Pledgor of every class of the capital stock of the Subsidiaries listed
and more fully described on Annex A hereto (other than Metallurg (Canada)
Ltd. and Metallurg Holdings Corporation (collectively, the "Foreign
Subsidiaries") with respect to which the Pledgor hereby pledges, assigns,
and grants a security interest in, and delivers to the Agent, 65% of the
issued and outstanding shares of every class of the capital stock of each
Foreign Subsidiary, as described on Annex A hereto), to be held by the
Agent, for the benefit of the Banks and the Agent, subject to the terms and
conditions hereinafter set forth, and (b) all income, increases or proceeds
with respect to or arising from such shares of the capital stock of the
Subsidiaries of the Pledgor listed on Annex A hereto. The certificates for
such shares described in clause (a), accompanied by stock powers or other
appropriate instruments of assignment thereof duly executed in blank by the
Pledgor, have been delivered to the Agent, for the benefit of the Banks and
the Agent.
1.2. ADDITIONAL STOCK. In case the Pledgor shall acquire any additional
shares of the capital stock of any Subsidiary or corporation which is the
successor of any Subsidiary, or any securities exchangeable for or
convertible into shares of such capital stock of any class of any
Subsidiary, by purchase, stock dividend, stock split or otherwise, then the
Pledgor shall forthwith deliver to and pledge such shares or other
securities to the Agent, for the benefit of the Banks and the Agent, under
this Agreement; provided that the Pledgor shall not be required hereby to
deliver and pledge to the Agent any such additional shares of a Foreign
Subsidiary if the result of such delivery would be to cause greater than
65% of the outstanding capital stock of such Foreign Subsidiary to be
pledged to the Agent for the benefit of the Banks and the Agent hereunder.
The Pledgor shall deliver to the Agent forthwith any certificates therefor,
accompanied by stock powers or other appropriate instruments of assignment
duly executed by the Pledgor in blank. The Pledgor agrees that the Agent
may from time to time attach as Annex A hereto an updated list of the
shares of capital stock or securities at the time pledged with the Agent
hereunder.
1.3. PLEDGE OF CASH COLLATERAL ACCOUNT. The Pledgor also hereby pledges,
assigns, grants a security interest in, and delivers to the Agent, for the
benefit of
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3
the Banks and the Agent, the Cash Collateral Account and all of the Cash
Collateral as such terms are hereinafter defined.
2. DEFINITIONS. The term "Obligations" and all other capitalized terms used
herein without definition shall have the respective meanings provided therefor
in the Loan Agreement. Terms used herein and not defined in the Loan Agreement
or otherwise defined herein that are defined in the Uniform Commercial Code of
Massachusetts have such defined meanings herein, unless the context otherwise
indicates or requires, and the following terms shall have the following
meanings:
Cash Collateral. See Section 4 hereof.
Cash Collateral Account. See Section 4 hereof.
Stock. Includes the shares of stock pledged to the Agent, for the
benefit of the Banks and the Agent, hereunder and described on Annex A
hereto and any additional shares of stock at the time pledged with the
Agent, for the benefit of the Banks and the Agent, hereunder.
Stock Collateral. The property at any time pledged to the Agent, for
the benefit of the Banks and the Agent, hereunder (whether described herein
or not) and all income therefrom, increases therein and proceeds thereof,
including without limitation that included in Cash Collateral but excluding
from the definition of "Stock Collateral" any income, increases or proceeds
received by the Pledgor to the extent expressly permitted by Section 6
hereof.
Time Deposits. See Section 4 hereof.
3. SECURITY FOR OBLIGATIONS. This Agreement and the security interest in
and pledge of the Stock Collateral hereunder are made with and granted to the
Agent, for the benefit of the Banks and the Agent, as security for the payment
and performance in full of all the Obligations.
4. LIQUIDATION, RECAPITALIZATION, ETC.
4.1. DISTRIBUTIONS PAID TO BANK. Any sums or other property paid or
distributed upon or with respect to any of the Stock, whether by dividend
or redemption or upon the liquidation or dissolution of the issuer thereof
or otherwise, shall, except to the limited extent provided in Section 6
hereof, be paid over and delivered to the Agent to be held by the Agent,
for the benefit of the Banks and the Agent, as security for the payment and
performance in full of all of the Obligations. In case, pursuant to the
recapitalization or reclassification of the capital of the issuer thereof
or pursuant to the reorganization thereof, any distribution of capital
shall be made on or in respect of any of the Stock or any property shall be
distributed upon or with respect to any of the Stock, the
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4
property so distributed shall be delivered to the Agent, for the benefit of
the Banks and the Agent, to be held by it as security for the Obligations.
Except to the limited extent provided in Section 6 hereof, all sums of
money and property paid or distributed in respect of the Stock, whether as
a dividend or upon such a liquidation, dissolution, recapitalization or
reclassification or otherwise, that are received by the Pledgor shall,
until paid or delivered to the Agent, be held in trust for the Agent, for
the benefit of the Banks and the Agent, as security for the payment and
performance in full of all of the Obligations.
4.2. CASH COLLATERAL ACCOUNT. All sums of money that are delivered to the
Agent pursuant to this Section 4 shall be deposited into an interest
bearing account with the Agent (the "Cash Collateral Account"). Some or all
of the funds from time to time in the Cash Collateral Account may be
invested in time deposits, including, without limitation, certificates of
deposit issued by the Agent (such certificates of deposit or other time
deposits being hereinafter referred to, collectively, as "Time Deposits"),
that are satisfactory to both the Agent and the Pledgor provided, that, in
each such case, arrangements satisfactory to the Agent are made and are in
place to perfect and to insure the first priority of the Agent's security
interest therein. Interest earned on the Cash Collateral Account and on the
Time Deposits, and the principal of the Time Deposits at maturity that is
not invested in new Time Deposits, shall be deposited in the Cash
Collateral Account. The Cash Collateral Account, all sums from time to time
standing to the credit of the Cash Collateral Account, any and all Time
Deposits, any and all instruments or other writings evidencing Time
Deposits and any and all proceeds or any thereof are hereinafter referred
to as the "Cash Collateral."
4.3. PLEDGOR'S RIGHTS TO CASH COLLATERAL, ETC. Except as otherwise
expressly provided in Section 15 hereof, the Pledgor shall have no right to
withdraw sums from the Cash Collateral Account, to receive any of the Cash
Collateral or to require the Agent to part with the Agent's possession of
any instruments or other writings evidencing any Time Deposits.
5. WARRANTY OF TITLE; AUTHORITY. The Pledgor hereby represents and warrants
that: (a) the Pledgor has good and marketable title to, and is the sole record
and beneficial owner of, the Stock described in Section 1 hereof and pledged to
the Agent, for the benefit of the Banks and the Agent, hereunder, subject to no
pledges, liens, security interests, charges, options, restrictions or other
encumbrances except the pledge and security interest created by this Agreement
and a subordinated pledge and security interest in favor of the Trustee for the
benefit of the holders of the Senior Secured Notes pursuant to the Senior
Secured Note Documents, (b) all of the Stock described in Section 1 is validly
issued, fully paid and non-assessable, (c) the Pledgor has full power, authority
and legal right to execute, deliver and perform its obligations under this
Agreement and to pledge and grant a security interest in all of the Stock
Collateral pursuant to this Agreement, and the execution, delivery and
performance hereof and the pledge of and granting of a security interest in the
Stock Collateral hereunder have been duly authorized by all necessary corporate
or other action and do not contravene any law, rule
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5
or regulation or any provision of the Pledgor's charter documents or by-laws or
of any judgment, decree or order of any tribunal or of any agreement or
instrument to which the Pledgor is a party or by which it or any of its property
is bound or affected or constitute a default thereunder, and (d) the information
set forth in Annex A hereto relating to the Stock is true, correct and complete
in all respects. The Pledgor covenants that it will defend the Agent's rights
and security interest in the Stock pledged to the Agent, for the benefit of the
Banks and the Agent, hereunder against the claims and demands of all persons
whomsoever. The Pledgor further covenants that it will have the like title to
and right to pledge and grant a security interest in the Stock Collateral
hereafter pledged or in which a security interest is granted to the Agent, for
the benefit of the Banks and the Agent, hereunder and will likewise defend the
Agent's rights, pledge and security interest thereof and therein.
6. DIVIDENDS, VOTING, ETC., PRIOR TO MATURITY. So long as no Event of
Default shall have occurred and be continuing, the Pledgor shall be entitled to
receive all cash dividends paid in respect of the Stock, to vote the Stock and
to give consents, waivers and ratifications in respect of the Stock. All such
rights of the Pledgor to receive cash dividends shall cease in case an Event of
Default shall have occurred and be continuing. All such rights of the Pledgor to
vote and give consents, waivers and ratifications with respect to the Stock
shall, at the Agent's option, as evidenced by the Agent's notifying the Pledgor
of such election, cease in case an Event of Default shall have occurred and be
continuing.
7. REMEDIES.
7.1. IN GENERAL. If an Event of Default shall have occurred and be
continuing, the Agent shall thereafter have the following rights and
remedies (to the extent permitted by applicable law) in addition to the
rights and remedies of a secured party under the Uniform Commercial Code of
Massachusetts, all such rights and remedies being cumulative, not
exclusive, and enforceable alternatively, successively or concurrently, at
such time or times as the Agent deems expedient:
(a) if the Agent so elects and gives notice of such election to
the Pledgor, the Agent may vote any or all shares of the Stock pledged
to the Agent hereunder (whether or not the same shall have been
transferred into its name or the name of its nominee or nominees) for
any lawful purpose, including, without limitation, if the Agent so
elects, for the liquidation of the assets of the issuer thereof, and
give all consents, waivers and ratifications in respect of such Stock
and otherwise act with respect thereto as though it were the outright
owner thereof (the Pledgor hereby irrevocably constituting and
appointing the Agent the proxy and attorney-in-fact of the Pledgor,
with full power of substitution, to do so);
(b) the Agent may demand, xxx for, collect or make any compromise
or settlement the Agent deems suitable in respect of any Stock
Collateral;
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(c) the Agent may sell, resell, assign and deliver, or otherwise
dispose of any or all of the Stock Collateral, for cash or credit or
both and upon such terms at such place or places, at such time or
times and to such entities or other persons as the Agent thinks
expedient, all without demand for performance by the Pledgor or any
notice or advertisement whatsoever except as expressly provided herein
or as may otherwise be required by law;
(d) the Agent may cause all or any part of the Stock pledged to
it hereunder and held by it to be transferred into its name or the
name of its nominee or nominees; and
(e) the Agent may set off against the Obligations any and all
sums deposited with it or held by it, including without limitation,
any sums standing to the credit of the Cash Collateral Account and any
Time Deposits issued by the Agent.
7.2. SALE OF STOCK COLLATERAL. In the event of any disposition of the Stock
Collateral as provided in clause (c) of Section 7.1 hereof, the Agent shall
give to the Pledgor at least ten (10) Business Days' prior written notice
of the time and place of any public sale of the Stock Collateral or of the
time after which any private sale or any other intended disposition is to
be made. The Pledgor hereby acknowledges that ten (10) Business Days prior
written notice of such sale or sales shall be reasonable notice. The Agent
may enforce its rights hereunder without any other notice and without
compliance with any other condition precedent now or hereunder imposed by
statute, rule of law or otherwise (all of which are hereby expressly waived
by the Pledgor, to the fullest extent permitted by law). The Agent may buy
any part or all of the Stock Collateral at any public sale and if any part
or all of the Stock Collateral is of a type customarily sold in a
recognized market or is of the type which is the subject of
widely-distributed standard price quotations, the Agent may buy at private
sale and may make payments thereof by any means. The Agent may apply the
cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling and
the like, to reasonable attorneys' fees, travel and all other expenses
which may be incurred by the Agent in attempting to collect the Obligations
or to enforce this Agreement or in the prosecution or defense of any action
or proceeding related to the subject matter of this Agreement, and then to
the Obligations in the order set forth in the Loan Agreement, after proper
allowance for Obligations not then due. Only after such applications, and
after payment by the Agent of any amount required by Section 9-504(1)(c) of
the Uniform Commercial Code of the Commonwealth of Massachusetts, need the
Agent account to the Pledgor for any surplus.
7.3. PRIVATE SALES. The Pledgor recognizes that the Agent may be unable to
effect a public sale of the Stock pledged to it hereunder by reason of
certain
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prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and other applicable laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers. The Pledgor agrees that any such private sales may be at prices
and other terms less favorable to the seller than if sold at public sales
and that such private sales shall not by reason thereof be deemed not to
have been made in a commercially reasonable manner. The Agent shall be
under no obligation to delay a sale of any of such Stock for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act, or such other
applicable laws, even if the issuer would agree to do so. Subject to the
foregoing, the Agent agrees that any sale of the Stock pledged to it
hereunder shall be made in a commercially reasonable manner, and the
Pledgor agrees to use its best efforts to cause the issuer or issuers of
such Stock contemplated to be sold, to execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all at the
Pledgor's expense, all such instruments and documents, and to do or cause
to be done all such other acts and things as may be necessary or, in the
reasonable opinion of the Agent, advisable to exempt such Stock from
registration under the provisions of the Securities Act, and to make all
amendments to such instruments and documents which, in the opinion of the
Agent, are necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto. The Pledgor further agrees to use
its best efforts to cause such issuer or issuers to comply with the
provisions of the securities or "Blue Sky" laws of any jurisdiction which
the Agent shall designate and, if required, to cause such issuer or issuers
to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
8. MARSHALLING. The Agent shall not be required to marshal any present or
future security for (including but not limited to this Agreement and the Stock
Collateral), or other assurances of payment of, the Obligations or any of them,
or to resort to such security or other assurances of payment in any particular
order. All of the Agent's rights hereunder and in respect of such security and
other assurances of payment shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may, the
Pledgor hereby agrees that it will not invoke any law relating to the
marshalling of collateral that might cause delay in or impede the enforcement of
the Agent's rights under this Agreement or under any other instrument evidencing
any of the Obligations or under which any of the Obligations is outstanding or
by which any of the Obligations is secured or payment thereof is otherwise
assured, and to the extent that it lawfully may the Pledgor hereby irrevocably
waives the benefits of all such laws.
9. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Agent or
any Bank of any right, remedy, power or privilege under or in respect of any of
the Obligations or any security thereof (including this Agreement); (b) any
amendment to or modification of the
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Loan Agreement, the Notes, the other Loan Documents or any of the Obligations;
(c) any amendment to or modification of any instrument (other than this
Agreement) securing any of the Obligations, including, without limitation, any
of the Security Documents; or (d) the taking of additional security for, or any
other assurances of payment of, any of the Obligations or the release or
discharge or termination of any security or other assurances of payment or
performance for any of the Obligations; whether or not the Pledgor shall have
notice or knowledge of any of the foregoing.
10. TRANSFER, ETC., BY PLEDGOR. Without the prior written consent of the
Agent, except as otherwise permitted by the Loan Agreement, the Pledgor will not
sell, assign, transfer or otherwise dispose of, grant any option with respect
to, or pledge or grant any security interest in or otherwise encumber or
restrict any of the Stock Collateral or any interest therein, except for the
pledge thereof and security interest therein provided for in this Agreement and
a subordinated pledge and security interest in favor of the Trustee for the
benefit of the holders of the Senior Secured Notes pursuant to the Senior
Secured Note Documents.
11. FURTHER ASSURANCES. The Pledgor will do all such acts, and will furnish
to the Agent all such financing statements, certificates, legal opinions and
other documents and will obtain all such governmental consents and corporate
approvals and will do or cause to be done all such other things as the Agent may
reasonably request from time to time in order to give full effect to this
Agreement and to secure the rights of the Agent, for the benefit of the Banks
and the Agent, hereunder, all without any cost or expense to the Agent or any
Bank. If the Agent so elects, a photocopy of this Agreement may at any time and
from time to time be filed by the Agent as a financing statement in any
recording office in any jurisdiction.
12. BANK'S EXONERATION. Under no circumstances shall the Agent or any of
the Banks be deemed to assume any responsibility for or obligation or duty with
respect to any part or all of the Stock Collateral of any nature or kind or any
matter or proceedings arising out of or relating thereto, other than (a) to
exercise reasonable care in the physical custody of the Stock Collateral and (b)
after a Default or an Event of Default shall have occurred and be continuing to
act in a commercially reasonable manner. Neither the Agent nor any Bank shall be
required to take any action of any kind to collect, preserve or protect its or
the Pledgor's rights in the Stock Collateral or against other parties thereto.
The Agent's prior recourse to any part or all of the Stock Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of any of the Obligations.
13. NO WAIVER, ETC. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the Agent, with the consent of the Majority Banks, and
the Pledgor. No act, failure or delay by the Agent shall constitute a waiver of
its rights and remedies hereunder or otherwise. No single or partial waiver by
the Agent of any default or right or remedy that it may have shall operate as a
waiver of any other default, right or remedy or of the
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9
same default, right or remedy on a future occasion. The Pledgor hereby waives
presentment, notice of dishonor and protest of all instruments, included in or
evidencing any of the Obligations or the Stock Collateral, and any and all other
notices and demands whatsoever (except as expressly provided herein or in the
Loan Agreement).
14. NOTICE, ETC. All notices, requests and other communications hereunder
shall be made in the manner set forth in Section 16(c) of the Loan Agreement.
15. TERMINATION. Upon final payment and performance in full of the
Obligations, this Agreement shall terminate and the Agent shall, at the
Pledgor's request and expense, except as may be otherwise required under the
terms of the Senior Secured Note Documents, return such Stock Collateral in the
possession or control of the Agent as has not theretofore been disposed of
pursuant to the provisions hereof, together with any moneys and other property
at the time held by the Agent hereunder.
16. SUCCESSORS AND ASSIGNS. This Agreement and all obligations of the
Pledgor shall be binding upon the successors and assigns of the Pledgor, and
shall, together with the rights and remedies of the Agent hereunder, inure to
the benefit of the Agent, its successors in title and assigns.
17. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the Pledgor
hereunder shall be a debt secured by the Stock Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Loan Agreement.
18. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS AN
INSTRUMENT UNDER SEAL AND THIS AGREEMENT AND THE OBLIGATIONS OF THE PLEDGOR
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). The Pledgor agrees that any suit for the enforcement of this
Agreement may be brought in the courts of the Commonwealth of Massachusetts or
any federal court sitting therein and consents to the non-exclusive jurisdiction
of such court and to service of process in any such suit being made upon the
Pledgor by mail at the address specified in Section 16(c)(i) of the Loan
Agreement. The Pledgor hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit is
brought in an inconvenient court.
19. WAIVER OF JURY TRIAL. THE PLEDGOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Pledgor waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Pledgor (i)
certifies that neither the Agent or any Bank
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10
nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Loan Agreement and the other Loan
Documents to which the Agent is a party, the Agent and the Banks are relying
upon, among other things, the waivers and certifications contained in this
Section 19.
20. HEADINGS. The descriptive section headings have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
21. SEVERABILITY, ETC. If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
be in no way affected thereby, and this Agreement shall be construed and be
enforceable as if such invalid, illegal or unenforceable term had not been
included herein. The Pledgor acknowledges receipt of a copy of this Agreement.
In the event of any conflict between the terms and conditions of this Agreement
and the terms and conditions of any agreements between the Agent and the Pledgor
(collectively, the "Local Stock Agreements") entered into in order to perfect
the Agent's interest, for the benefit of the Banks and the Agent, in the stock
of certain foreign Subsidiaries of the Pledgor according to the laws of such
foreign Subsidiaries' respective jurisdictions of incorporation, the terms and
conditions of such Local Stock Agreements shall apply.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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11
IN WITNESS WHEREOF, intending to be legally bound, the Pledgor and the
Agent have caused this Agreement to be executed as of the date first above
written.
METALLURG, INC.
By:
----------------------------
Name:
Title:
BANKBOSTON, N.A., as Agent
By:
----------------------------
Name:
Title:
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The undersigned Subsidiaries hereby join in the above Agreement for the
sole purpose of consenting to and being bound by the provisions of Sections 4.1,
6 and 7 thereof, the undersigned hereby agreeing to cooperate fully and in good
faith with the Agent and the Pledgor in carrying out such provisions.
SHIELDALLOY METALLURGICAL
CORPORATION
By:
----------------------------
Name:
Title:
METALLURG INTERNATIONAL
RESOURCES, INC.
By:
----------------------------
Name:
Title:
METALLURG (CANADA) LTD.
By:
----------------------------
Name:
Title:
METALLURG HOLDINGS CORPORATION
By:
----------------------------
Name:
Title:
139
ANNEX A TO PLEDGE AGREEMENT
(METALLURG, INC.)
None of the issuers has any authorized, issued or outstanding shares of its
capital stock of any class or any commitments to issue any shares of its capital
stock of any class or any securities convertible into or exchangeable for any
shares of its capital stock of any class except as otherwise stated in this
Annex A.
NUMBER OF NUMBER OF NUMBER OF PAR OR
RECORD CLASS OF AUTHORIZED ISSUED OUTSTANDING LIQUIDATION OWNED PLEDGED
ISSUER OWNER SHARES SHARES SHARES SHARES VALUE SHARES SHARES
------ ----- ------ ------ ------ ------ ----- ------ ------
Shieldalloy Metallurgical Metallurg, Common 3000 1885 1885 $.01 100% 0000
Xxxxxxxxxxx (XX) Xxx.
Xxxxxxxxx (Xxxxxx) Ltd. Metallurg, Common Unlimited 1100 1100 C $10 100% 715
Inc.
Metallurg Holdings Metallurg, Common 2500 100 100 no par value 100% 65
Corporation Inc.
Metallurg International Metallurg, Common 1000 1000 1000 $.01 100% 1000
Resources, Inc. Inc.
140
EXHIBIT F-2
FORM OF
AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
This AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "Agreement") is made
as of this 29th day of October, 1999, by and between METALLURG HOLDINGS
CORPORATION, a New Jersey corporation (the "Pledgor"), and BANKBOSTON, N.A., a
national banking association, as agent (hereinafter, in such capacity, the
"Agent") for itself and the other banking institutions (collectively, the
"Banks") which are or may become parties to that certain Amended and Restated
Loan Agreement, dated October 29, 1999 (as amended, modified, supplemented or
restated and in effect from time to time, the "Loan Agreement") among the
Metallurg, Inc., a Delaware corporation, Shieldalloy Metallurgical Corporation,
a Delaware corporation, and Metallurg International Resources, Inc., a New York
corporation (collectively, the "Borrowers"), Pledgor and certain other
affiliates of the Borrowers, as guarantors thereunder, the Agent and the Banks.
WHEREAS, the Pledgor, Shieldalloy Metallurgical Corporation, certain
affiliates of the Pledgor, as guarantors, the Agent and the Banks entered into
that certain Loan Agreement dated as of April 14, 1997 (as amended and in effect
prior to the date hereof, the "Existing Loan Agreement") and pursuant thereto
the Pledgor and the Agent entered into a certain Stock Pledge Agreement dated as
of April 14, 1997 (as amended and in effect prior to the date hereof, the
"Existing Stock Pledge Agreement");
WHEREAS, the Pledgor, the other Borrowers, certain affiliates of the
Pledgor, as guarantors, the Agent and the Banks have agreed to modify certain
provisions of the Existing Loan Agreement pursuant to the terms of the Loan
Agreement;
WHEREAS, the Pledgor is the direct or indirect legal and beneficial owner
of the issued and outstanding shares of each class of the capital stock of the
corporation described on Annex A (the "Subsidiary");
WHEREAS, the Pledgor and the Agent and the Banks have agreed to modify
certain provisions of the Existing Stock Pledge Agreement pursuant to the terms
of this Agreement, to release the pledge of the stock of all other Subsidiaries
(as defined in the Existing Stock Pledge Agreement) other than that of the
Subsidiary (as defined herein);
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Borrowers under the Loan Agreement that the
Pledgor execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a pledge agreement in substantially the form hereof;
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WHEREAS, the Pledgor wishes to amend and restate the Existing Stock Pledge
Agreement pursuant to this Agreement, in order to continue to grant pledges and
security interests in favor of the Agent, for the benefit of the Banks and the
Agent, as herein provided;
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that from and after the
Restatement Date (as defined in the Loan Agreement) the Existing Stock Pledge
Agreement shall be amended and restated in its entirety as follows:
1. PLEDGE OF STOCK, ETC.
1.1. PLEDGE OF STOCK. The Pledgor hereby pledges, assigns and grants a
security interest in and delivers to the Agent, for the benefit of the
Banks and the Agent, (a) 65% of the issued and outstanding shares owned by
the Pledgor of every class of the capital stock of its subsidiary,
Gesellschaft fur Elektrometallurgie mbH, as more fully described on Annex A
hereto, to be held by the Agent, for the benefit of the Banks and the
Agent, subject to the terms and conditions hereinafter set forth, and (b)
all income, increases or proceeds with respect to or arising from such
shares of the capital stock of such Subsidiary. The certificates for such
shares described in clause (a), accompanied by stock powers or other
appropriate instruments of assignment thereof duly executed in blank by the
Pledgor, have been delivered to the Agent, for the benefit of the Banks and
the Agent.
1.2. ADDITIONAL STOCK. In case the Pledgor shall acquire any additional
shares of the capital stock of the Subsidiary or any corporation which is
the successor of such Subsidiary, or any securities exchangeable for or
convertible into shares of such capital stock of any class of such
Subsidiary, by purchase, stock dividend, stock split or otherwise, then the
Pledgor shall forthwith deliver to and pledge such shares or other
securities to the Agent, for the benefit of the Banks and the Agent, under
this Agreement; provided that the Pledgor shall not be required hereby to
deliver and pledge to the Agent any such additional shares of such
Subsidiary if the result of such delivery would be to cause greater than
65% of the outstanding capital stock of such Subsidiary to be pledged to
the Agent for the benefit of the Banks and the Agent hereunder. To the
extent that it has not already done so, the Pledgor shall deliver to the
Agent forthwith any certificates therefor, accompanied by stock powers or
other appropriate instruments of assignment duly executed by the Pledgor in
blank. The Pledgor agrees that the Agent may from time to time attach as
Annex A hereto an updated list of the shares of capital stock or securities
at the time pledged with the Agent hereunder.
1.3. PLEDGE OF CASH COLLATERAL ACCOUNT. The Pledgor also hereby pledges,
assigns, grants a security interest in, and delivers to the Agent, for the
benefit of the Banks and the Agent, the Cash Collateral Account and all of
the Cash Collateral as such terms are hereinafter defined.
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2. DEFINITIONS. The term "Obligations" and all other capitalized terms used
herein without definition shall have the respective meanings provided therefor
in the Loan Agreement. Terms used herein and not defined in the Loan Agreement
or otherwise defined herein that are defined in the Uniform Commercial Code of
Massachusetts have such defined meanings herein, unless the context otherwise
indicates or requires, and the following terms shall have the following
meanings:
Cash Collateral. See Section 4 hereof.
Cash Collateral Account. See Section 4 hereof.
Stock. Includes the shares of stock pledged to the Agent, for the
benefit of the Banks and the Agent, hereunder and described on Annex A
hereto and any additional shares of stock at the time pledged with the
Agent, for the benefit of the Banks and the Agent, hereunder.
Stock Collateral. The property at any time pledged to the Agent, for
the benefit of the Banks and the Agent, hereunder (whether described herein
or not) and all income therefrom, increases therein and proceeds thereof,
including without limitation that included in Cash Collateral but excluding
from the definition of "Stock Collateral" any income, increases or proceeds
received by the Pledgor to the extent expressly permitted by Section 6
hereof.
Time Deposits. See Section 4 hereof.
3. SECURITY FOR OBLIGATIONS. This Agreement and the security interest in
and pledge of the Stock Collateral hereunder are made with and granted to the
Agent, for the benefit of the Banks and the Agent, as security for the payment
and performance in full of all the Obligations.
4. LIQUIDATION, RECAPITALIZATION, ETC.
4.1. DISTRIBUTIONS PAID TO BANK. Any sums or other property paid or
distributed upon or with respect to any of the Stock, whether by dividend
or redemption or upon the liquidation or dissolution of the issuer thereof
or otherwise, shall, except to the limited extent provided in Section 6
hereof, be paid over and delivered to the Agent to be held by the Agent,
for the benefit of the Banks and the Agent, as security for the payment and
performance in full of all of the Obligations. In case, pursuant to the
recapitalization or reclassification of the capital of the issuer thereof
or pursuant to the reorganization thereof, any distribution of capital
shall be made on or in respect of any of the Stock or any property shall be
distributed upon or with respect to any of the Stock, the property so
distributed shall be delivered to the Agent, for the benefit of the Banks
and the Agent, to be held by it as security for the Obligations. Except to
the limited extent provided in Section 6 hereof, all sums of money and
property paid or distributed in respect of the Stock, whether as a dividend
or upon such a liquidation, dissolution, recapitalization or
reclassification or otherwise, that are received by the Pledgor shall,
until paid or delivered
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to the Agent, be held in trust for the Agent, for the benefit of the Banks
and the Agent, as security for the payment and performance in full of all
of the Obligations.
4.2. CASH COLLATERAL ACCOUNT. All sums of money that are delivered to the
Agent pursuant to this Section 4 shall be deposited into an interest
bearing account with the Agent (the "Cash Collateral Account"). Some or all
of the funds from time to time in the Cash Collateral Account may be
invested in time deposits, including, without limitation, certificates of
deposit issued by the Agent (such certificates of deposit or other time
deposits being hereinafter referred to, collectively, as "Time Deposits"),
that are satisfactory to both the Agent and the Pledgor provided, that, in
each such case, arrangements satisfactory to the Agent are made and are in
place to perfect and to insure the first priority of the Agent's security
interest therein. Interest earned on the Cash Collateral Account and on the
Time Deposits, and the principal of the Time Deposits at maturity that is
not invested in new Time Deposits, shall be deposited in the Cash
Collateral Account. The Cash Collateral Account, all sums from time to time
standing to the credit of the Cash Collateral Account, any and all Time
Deposits, any and all instruments or other writings evidencing Time
Deposits and any and all proceeds or any thereof are hereinafter referred
to as the "Cash Collateral."
4.3. PLEDGOR'S RIGHTS TO CASH COLLATERAL, ETC. Except as otherwise
expressly provided in Section 15 hereof, the Pledgor shall have no right to
withdraw sums from the Cash Collateral Account, to receive any of the Cash
Collateral or to require the Agent to part with the Agent's possession of
any instruments or other writings evidencing any Time Deposits.
5. WARRANTY OF TITLE; AUTHORITY. The Pledgor hereby represents and warrants
that: (a) the Pledgor has good and marketable title to, and is the sole record
and beneficial owner of, the Stock described in Section 1 hereof and pledged to
the Agent, for the benefit of the Banks and the Agent, hereunder, subject to no
pledges, liens, security interests, charges, options, restrictions or other
encumbrances except the pledge and security interest created by this Agreement,
(b) all of the Stock described in Section 1 is validly issued, fully paid and
non-assessable, (c) the Pledgor has full power, authority and legal right to
execute, deliver and perform its obligations under this Agreement and to pledge
and grant a security interest in all of the Stock Collateral pursuant to this
Agreement, and the execution, delivery and performance hereof and the pledge of
and granting of a security interest in the Stock Collateral hereunder have been
duly authorized by all necessary corporate or other action and do not contravene
any law, rule or regulation or any provision of the Pledgor's charter documents
or by-laws or of any judgment, decree or order of any tribunal or of any
agreement or instrument to which the Pledgor is a party or by which it or any of
its property is bound or affected or constitute a default thereunder, and (d)
the information set forth in Annex A hereto relating to the Stock is true,
correct and complete in all respects. The Pledgor covenants that it will defend
the Agent's rights and security interest in the Stock pledged to the Agent, for
the benefit of the Banks and the Agent, hereunder against the claims and demands
of all persons whomsoever. The Pledgor further covenants that it will have the
like title to and right to pledge and grant a security interest in the Stock
Collateral hereafter pledged or in which a security interest is granted to the
Agent, for the benefit of the Banks and the Agent, hereunder and will likewise
defend the Agent's rights, pledge and security interest thereof and therein.
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6. DIVIDENDS, VOTING, ETC., PRIOR TO MATURITY. So long as no Event of
Default shall have occurred and be continuing, the Pledgor shall be entitled to
receive all cash dividends paid in respect of the Stock, to vote the Stock and
to give consents, waivers and ratifications in respect of the Stock. All such
rights of the Pledgor to receive cash dividends shall cease in case an Event of
Default shall have occurred and be continuing. All such rights of the Pledgor to
vote and give consents, waivers and ratifications with respect to the Stock
shall, at the Agent's option, as evidenced by the Agent's notifying the Pledgor
of such election, cease in case an Event of Default shall have occurred and be
continuing.
7. REMEDIES.
7.1. IN GENERAL. If an Event of Default shall have occurred and be
continuing, the Agent shall thereafter have the following rights and
remedies (to the extent permitted by applicable law) in addition to the
rights and remedies of a secured party under the Uniform Commercial Code of
Massachusetts, all such rights and remedies being cumulative, not
exclusive, and enforceable alternatively, successively or concurrently, at
such time or times as the Agent deems expedient:
(a) if the Agent so elects and gives notice of such election to
the Pledgor, the Agent may vote any or all shares of the Stock pledged
to the Agent hereunder (whether or not the same shall have been
transferred into its name or the name of its nominee or nominees) for
any lawful purpose, including, without limitation, if the Agent so
elects, for the liquidation of the assets of the issuer thereof, and
give all consents, waivers and ratifications in respect of such Stock
and otherwise act with respect thereto as though it were the outright
owner thereof (the Pledgor hereby irrevocably constituting and
appointing the Agent the proxy and attorney-in-fact of the Pledgor,
with full power of substitution, to do so);
(b) the Agent may demand, xxx for, collect or make any compromise
or settlement the Agent deems suitable in respect of any Stock
Collateral;
(c) the Agent may sell, resell, assign and deliver, or otherwise
dispose of any or all of the Stock Collateral, for cash or credit or
both and upon such terms at such place or places, at such time or
times and to such entities or other persons as the Agent thinks
expedient, all without demand for performance by the Pledgor or any
notice or advertisement whatsoever except as expressly provided herein
or as may otherwise be required by law;
(d) the Agent may cause all or any part of the Stock pledged to
it hereunder and held by it to be transferred into its name or the
name of its nominee or nominees; and
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(e) the Agent may set off against the Obligations any and all
sums deposited with it or held by it, including without limitation,
any sums standing to the credit of the Cash Collateral Account and any
Time Deposits issued by the Agent.
7.2. SALE OF STOCK COLLATERAL. In the event of any disposition of the Stock
Collateral as provided in clause (c) of Section 7.1 hereof, the Agent shall
give to the Pledgor at least ten (10) Business Days' prior written notice
of the time and place of any public sale of the Stock Collateral or of the
time after which any private sale or any other intended disposition is to
be made. The Pledgor hereby acknowledges that ten (10) Business Days prior
written notice of such sale or sales shall be reasonable notice. The Agent
may enforce its rights hereunder without any other notice and without
compliance with any other condition precedent now or hereunder imposed by
statute, rule of law or otherwise (all of which are hereby expressly waived
by the Pledgor, to the fullest extent permitted by law). The Agent may buy
any part or all of the Stock Collateral at any public sale and if any part
or all of the Stock Collateral is of a type customarily sold in a
recognized market or is of the type which is the subject of
widely-distributed standard price quotations, the Agent may buy at private
sale and may make payments thereof by any means. The Agent may apply the
cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling and
the like, to reasonable attorneys' fees, travel and all other expenses
which may be incurred by the Agent in attempting to collect the Obligations
or to enforce this Agreement or in the prosecution or defense of any action
or proceeding related to the subject matter of this Agreement, and then to
the Obligations in the order set forth in the Loan Agreement, after proper
allowance for Obligations not then due. Only after such applications, and
after payment by the Agent of any amount required by Section 9-504(1)(c) of
the Uniform Commercial Code of the Commonwealth of Massachusetts, need the
Agent account to the Pledgor for any surplus.
7.3. PRIVATE SALES. The Pledgor recognizes that the Agent may be unable to
effect a public sale of the Stock pledged to it hereunder by reason of
certain prohibitions contained in the Securities Act of 1933, as amended
(the "Securities Act"), and other applicable laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers. The Pledgor agrees that any such private sales may be at prices
and other terms less favorable to the seller than if sold at public sales
and that such private sales shall not by reason thereof be deemed not to
have been made in a commercially reasonable manner. The Agent shall be
under no obligation to delay a sale of any of such Stock for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act, or such other
applicable laws, even if the issuer would agree to do so. Subject to the
foregoing, the Agent agrees that any sale of the Stock pledged to it
hereunder shall be made in a commercially reasonable manner, and the
Pledgor agrees to use its best efforts to cause the issuer or issuers of
such Stock contemplated to be sold, to execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all at the
Pledgor's expense, all such instruments and documents, and to do or cause
to be done all such other acts and things as may be necessary or, in the
reasonable opinion of the Agent, advisable
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to exempt such Stock from registration under the provisions of the
Securities Act, and to make all amendments to such instruments and
documents which, in the opinion of the Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto. The Pledgor further agrees to use its best efforts to cause such
issuer or issuers to comply with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Agent shall designate and, if
required, to cause such issuer or issuers to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
8. MARSHALLING. The Agent shall not be required to marshal any present or
future security for (including but not limited to this Agreement and the Stock
Collateral), or other assurances of payment of, the Obligations or any of them,
or to resort to such security or other assurances of payment in any particular
order. All of the Agent's rights hereunder and in respect of such security and
other assurances of payment shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may, the
Pledgor hereby agrees that it will not invoke any law relating to the
marshalling of collateral that might cause delay in or impede the enforcement of
the Agent's rights under this Agreement or under any other instrument evidencing
any of the Obligations or under which any of the Obligations is outstanding or
by which any of the Obligations is secured or payment thereof is otherwise
assured, and to the extent that it lawfully may the Pledgor hereby irrevocably
waives the benefits of all such laws.
9. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Agent or
any Bank of any right, remedy, power or privilege under or in respect of any of
the Obligations or any security thereof (including this Agreement); (b) any
amendment to or modification of the Loan Agreement, the Notes, the other Loan
Documents or any of the Obligations; (c) any amendment to or modification of any
instrument (other than this Agreement) securing any of the Obligations,
including, without limitation, any of the Security Documents; or (d) the taking
of additional security for, or any other assurances of payment of, any of the
Obligations or the release or discharge or termination of any security or other
assurances of payment or performance for any of the Obligations; whether or not
the Pledgor shall have notice or knowledge of any of the foregoing.
10. TRANSFER, ETC., BY PLEDGOR. Without the prior written consent of the
Agent, except as otherwise permitted by the Loan Agreement, the Pledgor will not
sell, assign, transfer or otherwise dispose of, grant any option with respect
to, or pledge or grant any security interest in or otherwise encumber or
restrict any of the Stock Collateral or any interest therein, except for the
pledge thereof and security interest therein provided for in this Agreement.
11. FURTHER ASSURANCES. The Pledgor will do all such acts, and will furnish
to the Agent all such financing statements, certificates, legal opinions and
other documents and will obtain all such governmental consents and corporate
approvals and will do or cause to be done all such other things as the Agent may
reasonably request from time to time in order to give full
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effect to this Agreement and to secure the rights of the Agent, for the benefit
of the Banks and the Agent, hereunder, all without any cost or expense to the
Agent or any Bank. If the Agent so elects, a photocopy of this Agreement may at
any time and from time to time be filed by the Agent as a financing statement in
any recording office in any jurisdiction.
12. BANK'S EXONERATION. Under no circumstances shall the Agent or any of
the Banks be deemed to assume any responsibility for or obligation or duty with
respect to any part or all of the Stock Collateral of any nature or kind or any
matter or proceedings arising out of or relating thereto, other than (a) to
exercise reasonable care in the physical custody of the Stock Collateral and (b)
after a Default or an Event of Default shall have occurred and be continuing to
act in a commercially reasonable manner. Neither the Agent nor any Bank shall be
required to take any action of any kind to collect, preserve or protect its or
the Pledgor's rights in the Stock Collateral or against other parties thereto.
The Agent's prior recourse to any part or all of the Stock Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of any of the Obligations.
13. NO WAIVER, ETC. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the Agent, with the consent of the Majority Banks, and
the Pledgor. No act, failure or delay by the Agent shall constitute a waiver of
its rights and remedies hereunder or otherwise. No single or partial waiver by
the Agent of any default or right or remedy that it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion. The Pledgor hereby waives presentment, notice of
dishonor and protest of all instruments, included in or evidencing any of the
Obligations or the Stock Collateral, and any and all other notices and demands
whatsoever (except as expressly provided herein or in the Loan Agreement).
14. NOTICE, ETC. All notices, requests and other communications hereunder
shall be made in the manner set forth in Section 16(c) of the Loan Agreement.
15. TERMINATION. Upon final payment and performance in full of the
Obligations, this Agreement shall terminate and the Agent shall, at the
Pledgor's request and expense, return such Stock Collateral in the possession or
control of the Agent as has not theretofore been disposed of pursuant to the
provisions hereof, together with any moneys and other property at the time held
by the Agent hereunder.
16. SUCCESSORS AND ASSIGNS. This Agreement and all obligations of the
Pledgor shall be binding upon the successors and assigns of the Pledgor, and
shall, together with the rights and remedies of the Agent hereunder, inure to
the benefit of the Agent, its successors in title and assigns.
17. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the Pledgor
hereunder shall be a debt secured by the Stock Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Loan Agreement.
18. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS AN
INSTRUMENT UNDER SEAL AND THIS AGREEMENT AND THE
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OBLIGATIONS OF THE PLEDGOR HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). The Pledgor agrees that any suit
for the enforcement of this Agreement may be brought in the courts of the
Commonwealth of Massachusetts or any federal court sitting therein and consents
to the non-exclusive jurisdiction of such court and to service of process in any
such suit being made upon the Pledgor by mail at the address specified in
Section 16(c)(i) of the Loan Agreement. The Pledgor hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit is brought in an inconvenient court.
19. WAIVER OF JURY TRIAL. THE PLEDGOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Pledgor waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Pledgor (i)
certifies that neither the Agent or any Bank nor any representative, agent or
attorney of the Agent or any Bank has represented, expressly or otherwise, that
the Agent or any Bank would not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that, in entering into the Loan
Agreement and the other Loan Documents to which the Agent is a party, the Agent
and the Banks are relying upon, among other things, the waivers and
certifications contained in this Section 19.
20. HEADINGS. The descriptive section headings have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
21. SEVERABILITY, ETC. If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
be in no way affected thereby, and this Agreement shall be construed and be
enforceable as if such invalid, illegal or unenforceable term had not been
included herein. The Pledgor acknowledges receipt of a copy of this Agreement.
In the event of any conflict between the terms and conditions of this Agreement
and the terms and conditions of any agreements between the Agent and the Pledgor
(collectively, the "Local Stock Agreements") entered into in order to perfect
the Agent's interest, for the benefit of the Banks and the Agent, in the stock
of the Subsidiary according to the laws of the Subsidiary's jurisdiction of
incorporation, the terms and conditions of such Local Stock Agreements shall
apply.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
149
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IN WITNESS WHEREOF, intending to be legally bound, the Pledgor and the
Agent have caused this Agreement to be executed as of the date first above
written.
METALLURG HOLDINGS CORPORATION
By:
----------------------------
Name:
Title:
BANKBOSTON, N.A., AS AGENT
By:
----------------------------
Name:
Title:
150
ANNEX A TO PLEDGE AGREEMENT
(METALLURG HOLDINGS CORPORATION)
None of the issuers has any authorized, issued or outstanding shares of its
capital stock of any class or any commitments to issue any shares of its capital
stock of any class or any securities convertible into or exchangeable for any
shares of its capital stock of any class except as otherwise stated in this
Annex A.
NUMBER OF NUMBER OF PAR OR
RECORD AUTHORIZED OUTSTANDING LIQUIDATION OWNED PLEDGED
ISSUER OWNER SHARES SHARES VALUE SHARES SHARES
------ ----- ------ ------ ----- ------ ------
Gesellschaft fuer Elektrometallurgic Metallurg Holdings DM 6,000,000 DM 6,000,000 N/A 99.19% (a) 3,900,000
m.b.H. Corporation
----------
(a) Evidence of ownership of shares delivered to the Bank; shares could not be
removed from country of incorporation.
151
EXHIBIT G
FORM OF
COMPLIANCE CERTIFICATE
[INSERT DATE]
To the Banks Party to the
Loan Agreement Referred to Below
c/o BankBoston, N.A., as Agent
000 Xxxxxxx Xxxxxx, 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: ___________________
Ladies and Gentlemen:
Reference is made to the Amended and Restated Loan Agreement, dated as of
October 29, 1999 (as amended, modified, supplemented or restated and in effect
from time to time, the "Loan Agreement"), by and among METALLURG, INC., a
Delaware corporation, SHIELDALLOY METALLURGICAL CORPORATION, a Delaware
corporation, METALLURG INTERNATIONAL RESOURCES, INC., a New York corporation
(collectively, the "Borrowers"), BANKBOSTON, N.A. and the other lending and
financial institutions which are or may become parties thereto from time to time
(collectively, the "Banks"), and BankBoston, N.A., as agent (in such capacity,
the "Agent") for the Banks. Capitalized terms used herein without definition
that are defined in the Loan Agreement shall have the respective meanings
assigned to such terms in the Loan Agreement.
Pursuant to Section 9.1(a)(iv) of the Loan Agreement, the principal
financial or accounting officer of each of the Borrowers hereby certifies to
each of you as follows: (a) the information furnished in the calculations
attached hereto was true and correct as of the last day of the fiscal [year]
[quarter] next preceding the date of this certificate; (b) as of the date of
this certificate, there exists no Default or Event of Default or condition which
would, with either or both the giving of notice or the lapse of time, result in
a Default or an Event of Default; and (c) the financial statements delivered
herewith were prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods (except, in the case
of quarterly statements, for year-end adjustments and provisions for footnotes).
152
-2-
IN WITNESS WHEREOF, the undersigned officers have duly executed this Compliance
Certificate as of the date first written above.
METALLURG, INC.
By:
------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL
COPORATION
By:
------------------------------
Name:
Title:
METALLURG INTERNATIONAL
RESOURCES, INC.
By:
------------------------------
Name:
Title:
153
SCHEDULE NO. 1
TO COMPLIANCE CERTIFICATE
(THIS SCHEDULE IS AS OF __________ AND PERTAINS
TO THE PERIOD FROM _________ TO __________, THE "MEASUREMENT PERIOD")
FIXED CHARGE COVERAGE RATIO (SECTION 9.3(a))
(for a period of four consecutive fiscal quarters)
1. ADJUSTED OPERATING CASH FLOW:
A. EBITDA:
(1) consolidated net income (or loss) of the North
American Group after eliminating therefrom
extraordinary non-recurring items of income, and
after all expenses and other proper charges: $
-------------
(2) plus income tax expense: $
-------------
(3) plus depreciation and amortization: $
-------------
(4) plus all other non-cash charges: $
-------------
(5) minus non-cash items of income not
otherwise deducted in calculating
consolidated net income: $
-------------
(6) TOTAL EBITDA: $
-------------
B. Interest income and dividends from foreign
Subsidiaries (to the extent not included
in calculating EBITDA): $
-------------
C. Cash payments for all taxes paid during such
period for the North American Group (to the
extent not otherwise deducted in calculating
EBITDA): $
-------------
D. Capital expenditures made during such period
for the North American Group to the extent
permitted under the Loan Agreement (to the
extent not otherwise deducted in calculating
EBITDA): $
-------------
E. ADJUSTED OPERATING CASH FLOW
(Item A(6) plus (B) minus (C) minus (D): $
-------------
154
-ii-
2. TOTAL DEBT SERVICE:
Aggregate liability of the North American Group
for interest on Indebtedness, whether expensed
or capitalized, including payments consisting of
interest in respect of capitalized leases, for principal
payments in respect of Indebtedness and for commitment
fees, financing fees, and other fees and expenses in
connection with the borrowing of money or obtaining
of credit which are classified as interest expenses,
determined in accordance with GAAP: $
-------------
3. FIXED CHARGE COVERAGE RATIO
(Ratio of Item 1(E) to Item 2)
not to be less than 1.10:1.00: : 1.00
-------------
155
SCHEDULE NO. 2
TO COMPLIANCE CERTIFICATE
(THIS SCHEDULE IS AS OF ______________ AND PERTAINS
TO THE PERIOD FROM _________ TO __________, THE "MEASUREMENT PERIOD.")
TOTAL OUTSTANDINGS (SECTION 9.3(b))
(at all times)
1. TOTAL OUTSTANDINGS:
(a) aggregate principal amount of the
Loans outstanding: $
-------------
(b) plus the Maximum Drawing Amount: $
-------------
(c) plus any Unpaid Reimbursement Obligations: $
-------------
(d) plus the Dollar Equivalent of the aggregate
German Outstandings: $
-------------
(e) TOTAL OUTSTANDINGS
(Item 1(a) plus 1(b) plus 1(c) plus 1(d)): $
-------------
2. BOOK VALUES OF ACCOUNTS RECEIVABLE AND INVENTORY:
(a) 90% of the book value of accounts receivable
of MI and the Restricted Subsidiaries (as
defined in the MI Indenture): $
-------------
(b) plus 75% of the book value of the inventory
of MI and the Restricted Subsidiaries (as
defined in the MI Indenture): $
-------------
(c) TOTAL BOOK VALUES (Item 2(a) plus 2(b)): $
-------------
3. ITEM 1(e) MINUS ITEM 2(c) (not to be less than $0): $
-------------
156
-2-
SCHEDULE NO. 3
TO COMPLIANCE CERTIFICATE
(THIS SCHEDULE IS AS OF ______________ AND PERTAINS
TO THE PERIOD FROM __________ TO _________, THE "MEASUREMENT PERIOD.")
LIQUIDITY LEVEL (SECTION 9.3(c))
(at all times)
1. LIQUIDITY LEVEL
(a) Borrowing Base Availability:
(i) aggregate amount of Total Outstandings
(excluding German Outstandings) $
-------------
(ii) plus the sum of the German Facility Reserves,
if any, of each of the German Borrowers $
-------------
(iii) Sum of Items 1(a)(i) plus 1(a)(ii): $
-------------
(iv) Borrowing Base: $
-------------
(v) Borrowing Base Availability $
(Item 1(a)(iii) minus 1(a)(iv)): -------------
(b) Daily Cash Balance: $
-------------
(c) TOTAL LIQUIDITY LEVEL
(Item 1(a)(v) plus Item 1(b))
(not to be less than $10,000,000): $
-------------
