EXECUTION COPY
LOAN AND SECURITY AGREEMENT
Dated as of September 7, 1994
AMENDED AND RESTATED
as of August 20, 1997
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as the Agent
and
LACLEDE STEEL COMPANY
and
LACLEDE CHAIN MANUFACTURING COMPANY
and
LACLEDE MID AMERICA INC.
as the Borrowers
TABLE OF CONTENTS
ARTICLE 1INTERPRETATION OF THIS AGREEMENT
1.1 Restatement and Amendment 2
1.2 Definitions 2
1.3 Accounting Terms 27
1.4 Other Terms 27
1.5 Computation of Time Periods 28
ARTICLE 2LOANS AND LETTERS OF CREDIT
2.1 Total Facility 28
2.2 Revolving Loans 28
2.3 Term Loans 33
2.4 Letters of Credit 34
ARTICLE 3INTEREST AND FEES
3.1 Interest 39
3.2 Conversion or Continuation 40
3.3 Special Provisions Governing LIBO Rate Loans 41
3.4 Maximum Interest Rate 44
3.5 Restructuring Fee 44
3.6 Facility Fee 44
3.7 Servicing Fee 44
3.8 Letter of Credit Fee 45
3.9 Audit Fees 45
3.10 Performance Fees 45
ARTICLE 4PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans 46
4.2 Termination of Revolver Facility 46
4.3 Repayment of the Term Loans 47
4.4 Voluntary Prepayments of the Term Loans 47
4.5 Mandatory Prepayments of the Term Loans 47
4.6 Place and Form of Payments; Extension of Time 47
4.7 Payments as Revolving Loans 47
4.8 Apportionment, Application and Reversal of Payments 48
4.9 Indemnity for Returned Payments 48
4.10 Increased Capital 49
4.11 Register; Agent's and Lenders' Books and Records; Monthly
Statements 49
ARTICLE 5COLLATERAL
5.1 Grant of Security Interest 49
5.2 Perfection and Protection of Security Interest 53
5.3 Location of Collateral 54
5.4 Title to, Liens on, and Sale and Use of Collateral 55
5.5 Appraisals 55
5.6 Access and Examination; Confidentiality 55
5.7 Collateral Reporting 56
5.8 Accounts 56
5.9 Collection of Accounts; Payments 58
5.10 Inventory 58
5.11 Equipment 59
5.12 Assigned Contracts 59
5.13 Documents, Instruments, and Chattel Paper 60
5.14 Right to Cure 60
5.15 Power of Attorney 61
5.16 The Agent's and Lenders' Rights, Duties and Liabilities 61
ARTICLE 6BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
6.1 Books and Records 62
6.2 Financial Information 62
6.3 Notices to the Lenders 64
ARTICLE 7GENERAL WARRANTIES AND REPRESENTATIONS
7.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents 66
7.2 Validity and Priority of Security Interest 67
7.3 Organization and Qualification 67
7.4 Corporate Name; Prior Transactions 67
7.5 Subsidiaries and Affiliates 67
7.6 Financial Statements and Projections 67
7.7 Capitalization 68
7.8 Solvency 68
7.9 Debt 68
7.10 Distributions 68
7.11 Title to Property 68
7.12 Real Estate; Leases 68
7.13 Proprietary Rights 69
7.14 Trade Names and Terms of Sale 69
7.15 Litigation 69
7.16 Restrictive Agreements 69
7.17 Labor Disputes 69
7.18 Environmental Laws 69
7.19 No Violation of Law 71
7.20 No Default 71
7.21 ERISA 71
7.22 Taxes 73
7.23 Investment Act, Etc. 73
7.24 Public Utility Holding Company 73
7.25 Margin Securities 73
7.26 Broker's Fees 74
7.27 No Material Adverse Change 74
7.28 Disclosure 74
7.29 Bank Accounts 74
ARTICLE 8AFFIRMATIVE AND NEGATIVE COVENANTS
8.1 Taxes and Other Obligations 74
8.2 Corporate Existence and Good Standing 74
8.3 Compliance with Law and Agreements 74
8.4 Maintenance of Property 75
8.5 Insurance 75
8.6 Condemnation 76
8.7 Environmental Laws 77
8.8 ERISA 77
8.9 Mergers, Consolidations or Sales 78
8.10 Distributions; Capital Change; Restricted Investments;
Permitted Acquisitions 79
8.11 Transactions Affecting Collateral or Obligations 80
8.12 Guaranties 80
8.13 Debt 80
8.14 Prepayment 81
8.15 IRB Debt 81
8.16 Transactions with Affiliates 81
8.17 Investment Banking and Finder's Fees 81
8.18 Business Conducted 82
8.19 Liens 82
8.20 Sale and Leaseback Transactions 82
8.21 New Subsidiaries 82
8.22 Capital Expenditures 82
8.23 Operating Lease Obligations 82
8.24 Consolidated Fixed Charge Coverage Ratio 82
8.25 Consolidated Adjusted Net Worth 83
8.26 Fiscal Year 84
8.27 Title Policies 84
8.28 Further Assurances 84
ARTICLE 9CONDITIONS OF LENDING
9.1 Conditions Precedent to Each Loan 84
9.2 Conditions Precedent to Making of Loans on and after the
Restructuring Date 85
ARTICLE 10DEFAULT; REMEDIES
10.1 Events of Default 86
10.2 Remedies 90
ARTICLE 11TERM AND TERMINATION
11.1 Term and Termination 91
ARTICLE 12AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
12.1 No Implied Waivers 92
12.2 Amendments and Waivers 92
12.3 Assignments; Participations 93
12.4 Binding Effect; Assignment 95
ARTICLE 13THE AGENT
13.1 Appointment 95
13.2 Nature of Duties 96
13.3 Rights, Exculpation, Etc. 96
13.4 Reliance 97
13.5 Indemnification of the Agent by the Lenders 97
13.6 Agent in Individual Capacity 97
13.7 Successor Agent 98
13.8 Collateral Matters 98
13.9 Restrictions on Actions by Lenders; Sharing of Payments 99
13.10 Agency for Perfection 100
13.11 Payments by Agent to Lenders. 100
13.12 Concerning the Collateral and the Related Loan Documents 100
ARTICLE 14MISCELLANEOUS
14.1 Cumulative Remedies; No Prior Recourse to Collateral 101
14.2 Severability 101
14.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver 101
14.4 Survival of Representations and Warranties 102
14.5 Other Security and Guaranties 102
14.6 Fees and Expenses 103
14.7 Notices 103
14.8 Indemnity of the Agent and the Lenders by the Borrowers 105
14.9 Waiver of Notices 106
14.10 Final Agreement 106
14.11 Counterparts 106
14.12 Captions 106
14.13 Right of Setoff 106
14.14 Taxes 107
14.15 Joint and Several Liability 107
14.16 Contribution and Indemnification among the Borrowers 108
14.17 Agency of the Parent for each other Borrower 109
EXHIBITS AND SCHEDULES
EXHIBIT A - Form of Term Loan Note (Secs. 2.3(c), 12.3(d))
EXHIBIT B - Form of Borrowing Base Certificate (Defs.)
EXHIBIT C - Financial Statements (Defs., Sec. 7.6(a))
EXHIBIT D - List of Closing Documents (Sec. 9.2(f))
EXHIBIT E - Form of Notice of Borrowing (Sec. 2.2(b))
EXHIBIT F - Form of Notice of Conversion/Continuation (Sec. 3.2(b))
EXHIBIT G - Form of Assignment and Acceptance (Sec. 12.3(a) and (d))
SCHEDULE 2.4 - Existing Letters of Credit (Secs. 2.4(a), 2.4(f))
SCHEDULE 5.3 - Locations of Collateral (Sec. 5.3)
SCHEDULE 7.2 - Permitted Liens (Defs., Secs. 5.4, 7.2)
SCHEDULE 7.4 - Trade Names (Secs. 7.4, 7.14)
SCHEDULE 7.5 - Subsidiaries and Affiliates (Secs. 7.5, 8.21)
SCHEDULE 7.9 - Debt (Sec. 7.9)
SCHEDULE 7.12 - Real Property and Leases; Permitted Sales (Defs., Secs.
7.11, 7.12)
SCHEDULE 7.13 - Proprietary Rights (Defs., Sec. 7.13)
SCHEDULE 7.15 - Litigation (Sec. 7.15)
SCHEDULE 7.17 - Labor Contracts and Disputes (Sec. 7.17)
SCHEDULE 7.18 - Environmental Matters (Secs. 7.18, 8.7)
SCHEDULE 7.21 - Employee Benefit Plans (Sec. 7.21)
SCHEDULE 7.29 - Bank Accounts (Sec. 7.29)
SCHEDULE 8.10 - Restricted Investments (Defs.)
This LOAN AND SECURITY AGREEMENT (the "Agreement") is dated as of
September 7, 1994 and amended and restated as of August 20, 1997 among
BANKAMERICA BUSINESS CREDIT, INC., a Delaware corporation ("BABC"), BNY
FINANCIAL CORPORATION, a New York corporation ("BNY") formerly known as Bank of
New York Commercial Corporation, NATIONSBANK, N.A., a national banking
association ("NB") (BABC, BNY and NB and their respective successors and
assigns being sometimes hereinafter referred to collectively as the "Lenders"
and each of BABC, BNY and NB and its successors and assigns being sometimes
hereinafter referred to individually as a "Lender"), BANKAMERICA BUSINESS
CREDIT, INC., a Delaware corporation, as agent for the Lenders (in such
capacity as agent, the "Agent"), LACLEDE STEEL COMPANY, a Delaware corporation
(the "Parent"), with an office at One Metropolitan Square, 000 Xxxxx Xxxxxxxx,
Xx. Xxxxx, Xxxxxxxx 00000-0000, and LACLEDE CHAIN MANUFACTURING COMPANY, a
Delaware corporation ("Laclede Chain"), with an office at One Metropolitan
Square, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000, and LACLEDE MID
AMERICA INC., an Indiana corporation ("Laclede Mid America"), with an office at
One Metropolitan Square, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000
(the Parent, Laclede Chain and Laclede Mid America being sometimes hereinafter
referred to collectively as the "Borrowers" and each of the Parent, Laclede
Chain and Laclede Mid America being sometimes hereinafter referred to
individually as a "Borrower"). In consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable
consideration, the receipt of which is hereby acknowledged, the Lenders, the
Agent and the Borrowers hereby agree as follows:
RECITALS
A. The Borrowers, the Lenders and the Agent are parties to a
certain Loan and Security Agreement dated as of September 7, 1994, as amended
pursuant to a certain Amendment No. 1 dated as of February 15, 1995, Amendment
No. 2 dated as of May 10, 1995, Amendment No. 3 dated as of June 1, 1995,
Amendment No. 4 dated as of December 7, 1995, Amendment No. 5 dated as of
January 26, 1996, Amendment No. 6 dated as of June 26, 1996, Amendment No. 7
dated as of July 30, 1996, Amendment No. 8 dated as of November 14, 1996,
Amendment No. 9 dated as of February 7, 1997, Amendment No. 10 dated as of
February 26, 1997 and Amendment No. 11 dated as of June 25, 1997 (such Loan and
Security Agreement, as so amended, being hereinafter referred to as the
"Original Agreement"), providing for certain loans and other financial
accommodations by the Lenders and the Agent to the Borrowers.
B. The Borrowers, the Lenders and the Agent have agreed to amend
the Original Agreement in certain respects, and have agreed to execute and
deliver this Agreement as a restatement of the Original Agreement, in order to
incorporate the new amendments and all prior amendments into a single document.
C. It is the intent of the parties hereto that the execution and
delivery of this Agreement, made for the purpose described in the immediately
preceding Recital, not effectuate a novation of the indebtedness outstanding
under the Original Agreement, but rather a substitution of certain of the terms
governing the payment and performance of such indebtedness.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Restatement and Amendment. The Borrowers, the Lenders and the
Agent hereby agree that, effective upon the execution and delivery of this
Agreement by each such party: (a) the terms and provisions of the Original
Agreement shall be and hereby are amended, superseded and restated in their
entirety by the terms and provisions of this Agreement, except that any grant
of security by any Borrower to the Agent pursuant to Section 5.1 of the
Original Agreement shall remain effective as of the date any such grant first
became effective, and (b) the indebtedness evidenced by the Original Agreement
shall be payable solely in accordance with the terms of this Agreement and any
Loan Documents delivered pursuant hereto. The Borrowers agree that the Lenders
and the Agent shall have no obligations under the Original Agreement, except to
the extent that any obligations thereunder may be restated in this Agreement or
the other Loan Documents. The Borrowers, the Lenders and the Agent agree that
the execution and delivery of this Agreement shall not effectuate a novation of
the indebtedness outstanding under the Original Agreement, but rather a
substitution of certain of the terms governing the payment and performance of
such indebtedness.
1.2 Definitions. As used herein:
"Accounts" means all of each Borrower's now owned or hereafter
acquired or arising accounts, and any other rights to payment for the sale or
lease of goods or rendition of services, whether or not they have been earned
by performance.
"Account Debtor" means each Person obligated in any way on or in
connection with an Account.
"Affiliate" means: (a) any Person which, directly or indirectly,
controls, is controlled by or is under common control with, any Borrower; (b)
any Person which beneficially owns or holds, directly or indirectly, five
percent (5.0%) or more of any class of Voting Stock of any Borrower; or (c) any
Person, five percent (5.0%) or more of any class of the Voting Stock (or if
such Person is not a corporation, five percent (5.0%) or more of the equity
interest) of which is beneficially owned or held, directly or indirectly, by
any Borrower. Control (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used herein, means the
possession, directly or indirectly, of the power in any form to direct or cause
the direction of the management and policies of the Person in question.
"Agent" means BankAmerica Business Credit, Inc., in its capacity as
agent for the Lenders, and shall include any successor Agent appointed pursuant
to Section 13.7.
"Agent Advances" has the meaning specified in Section 2.2(j).
"Agent's Liens" means the Liens granted to the Agent, for the ratable
benefit of the Secured Creditors, pursuant to this Agreement, the Original
Agreement and the other Loan Documents.
"Xxxxx Mortgage" means that certain Mortgage, Security Agreement,
Financing Statement and Assignment of Rents and Leases dated as of the
Restructuring Date and executed by the Parent in favor of the Agent, pursuant
to what the Parent has granted to the Agent, for the ratable benefit of the
Secured Creditors, a mortgage Lien on its Real Estate located in Alton,
Illinois and identified therein.
"Anniversary Date" means each anniversary of the Restructuring Date.
"Assigned Contracts" means, collectively, all of each Borrower's
rights and remedies under, and all moneys and claims for money due or to become
due to such Borrower under any material contracts and any and all amendments,
supplements, extensions, and renewals thereof including, without limitation,
all rights and claims of such Borrower now or hereafter existing: (i) under any
insurance, indemnities, warranties, and guarantees provided for or arising out
of or in connection with any of the foregoing agreements; (ii) for any damages
arising out of or for breach or default under or in connection with any of the
foregoing agreements; (iii) to all other amounts from time to time paid or
payable under or in connection with any of the foregoing agreements; or (iv) to
exercise or enforce any and all covenants, remedies, powers and privileges
thereunder.
"Assignment and Acceptance" has the meaning specified in Section
12.3(a).
"Availability" means, at any time, (a) the Maximum Revolver Amount
minus (b) the sum of (i) the unpaid balance of Revolving Loans at that time,
(ii) the aggregate amount of Pending Revolving Loans at such time, (iii) the
aggregate undrawn amount of all outstanding Letters of Credit, and (iv) the
aggregate amount of any unpaid reimbursement obligations in respect of the
Letters of Credit. In determining pursuant to Section 2.2(a), 2.2(g), 2.2(h)
or 2.2(j) whether Revolving Loans to be made on any date would exceed
Availability on such date, such proposed Revolving Loans shall be counted as
either Revolving Loans or Pending Revolving Loans for purposes of calculating
Availability on such date, but shall not be counted as both Revolving Loans and
Pending Revolving Loans.
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, or any successor entity thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Sec. 101 et seq.).
"Base LIBO Rate" means the rate of interest per annum determined by
the Agent to be the arithmetic mean (rounded upward to the next 1/16th of 1.0%)
of the rates of interest per annum notified to the Agent by each Lender as the
rate of interest at which Dollar deposits in the approximate amount of the
Loans to be made or continued as, or converted into, LIBO Rate Loans by such
Lender and having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
commencement of such Interest Period.
"Base Rate" means, for any day, the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America in San Francisco, California, as
its "reference rate." (The "reference rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.)
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change in the reference rate announced by Bank of America shall take effect
at the opening of business on the day specified in the public announcement of
such change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving Loans
and the Base Rate Term Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any period
in which it bears interest at the rate provided in Section 3.1(a)(i).
"Base Rate Revolving Margin" has the meaning specified in Section
3.1(a)(i).
"Base Rate Term Loan" means any portion of a Term Loan during any
period in which such portion bears interest at the rate provided in Section
3.1(a)(i).
"Base Rate Term Margin" has the meaning specified in Section
3.1(a)(i).
"Benefit Plan" means a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower or an ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrowing" means a borrowing consisting of Revolving Loans made on
the same day by the Lenders (or by BABC in the case of a Borrowing funded by
Settlement Loans) or by the Agent in the case of a Borrowing consisting of an
Agent Advance.
"Borrowing Base Certificate" means a certificate of the chief
financial officers of the Borrowers substantially in the form of Exhibit B (or
another form mutually acceptable to the Agent and the Borrowers) setting forth
calculations of Availability and Individual Availability with respect to each
Borrower, including a calculation of each component thereof, (a) with respect
to Accounts, as of the close of business on a day no more than five (5)
Business Days prior to the date of such certificate, and (b) with respect to
Inventory, (i) prior to the twentieth (20th) day of any month, as of the close
of business on the last Business Day of the second preceding month, and (ii) on
or after the twentieth (20th) day of any month, as of the close of business on
the last Business Day of the immediately preceding month, all in such detail as
shall be satisfactory to the Agent. All calculations of Availability and
Individual Availability in connection with the preparation of any Borrowing
Base Certificate shall originally be made by the Borrowers and certified to the
Agent; provided, that the Agent shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation (1) to
reflect its reasonable estimate of declines with respect to the Collateral
described therein, and (2) to the extent that such calculation is not in
accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or
a day on which banks in San Francisco, California are required or permitted to
be closed, and (b) with respect to all notices, determinations, fundings and
payments in connection with the LIBO Rate or LIBO Rate Loans, any day that is a
Business Day pursuant to clause (a) above and that is also a day on which
trading is carried on by and between banks in the London interbank market.
"Capital Expenditures" means, for any fiscal period, (a) the cost of
any fixed asset or improvement, or replacement, substitution, or addition
thereto, acquired during such period and having a useful life of more than one
year, including, without limitation, those costs arising in connection with the
direct or indirect acquisition of such assets by way of increased product or
service charges or offset items or in connection with a Capital Lease plus (b)
the amount of any cash expended during such period in consummating any Quasi
Asset Acquisition.
"Capital Lease" means any lease of property by the Parent or any of
its consolidated Subsidiaries which, in accordance with GAAP, is or should be
capitalized on the lessee's balance sheet or for which the amount of the asset
and liability thereunder, as if so capitalized should be disclosed in a
footnote to such balance sheet.
"Cash Available for Fixed Charges" means, with respect to any fiscal
period of the Parent and its consolidated Subsidiaries, net earnings for such
period, determined in accordance with GAAP (but excluding gain or loss arising
from extraordinary items, and any gains arising from the sale or other
disposition of any of the Borrower's Fixed Assets which were written off by the
Borrower during its Fiscal Year ending on December 31, 1995, in connection with
the Borrower's shut down of its Bloom Mill and Rod Mill facilities) and
reported on the Financial Statements for such fiscal period, plus, to the
extent deducted in computing net earnings, (a) interest expense, (b) any
provision for income taxes, (c) depreciation expense, and (d) amortization
expense, minus, to the extent included in computing net earnings, gain arising
from any other noncash non-recurring transaction.
"Clean Up Costs" means costs resulting from implementation of
Parent's modified closure plan for disposition of electric arc furnace dust at
its Alton, Illinois plant.
"Closing Date" means September 7, 1994.
"Closing Date Term Loan" and "Closing Date Term Loans" have the
meanings specified in Section 2.3(a).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute.
"Collateral" means, collectively, the Parent Collateral, the Laclede
Chain Collateral and the Laclede Mid America Collateral.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 12.3, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
12.3, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Consolidated Adjusted Net Worth" means, at any date, the amount at
which Consolidated Stockholder's Equity and minority interests would be shown
on a balance sheet of the Parent and its consolidated Subsidiaries at such date
prepared in accordance with GAAP; less (b) the amount at which goodwill and
other intangible assets would be shown on such balance sheet; and plus the
amount of minimum pension liability recorded on such balance sheet as a
reduction to Consolidated Stockholder's Equity.
"Consolidated Current Liabilities" means at any date the amount at
which the current liabilities of the Parent and its consolidated Subsidiaries
would be shown on a balance sheet of the Parent and its consolidated
Subsidiaries as at such date, prepared in accordance with GAAP, and shall
include the current portion of Funded Debt but shall not include the
outstanding balance of the Revolving Loans on such date.
"Consolidated Earnings" means, for any fiscal period of the Parent
and its consolidated Subsidiaries, Consolidated Net Earnings, plus to the
extent deducted in computing Consolidated Net Earnings, any provision for
income taxes, any provision for payment of the Restructuring Fee and any
provision for payment of the performance fee referred to in Section 3.10.
"Consolidated Earnings Conditions" means (i) Consolidated Earnings
for the Fiscal Year ending December 31, 1997 as determined by reference to the
Parent's audited consolidated Financial Statements for such period are equal to
or greater than $3,700,000, and (ii) no Default or Event of Default shall have
occurred and be continuing as of either December 31, 1997 or March 31, 1998.
"Consolidated Fixed Charge Coverage Ratio" means, for each period
described in Section 8.24 ending on the last day of a fiscal quarter of the
Parent and its consolidated Subsidiaries described in Section 8.24, the ratio
of (a) Cash Available for Fixed Charges for such period minus income taxes paid
in cash during any such period, to (b) the sum of (i) principal payments which
the Parent or any of its Subsidiaries was required to make with respect to
Funded Debt during such period (other than such principal payments made with
respect to the Revolving Loans), (ii) capital lease amortization, cash interest
expense and cash dividend payments for or made in such period (iii) Capital
Expenditures made during such period, (iv) the amount of cash applied to
funding for pension benefits in excess of the amount expensed therefor in the
Parent's consolidated income statement for such period, (v) the amount of cash
applied to funding for post-retirement medical benefits in excess of the amount
expensed therefor in the Parent's consolidated income statement for such
period, and (vi) Clean Up Costs during any such period.
"Consolidated Net Earnings" means, for any fiscal period of the
Parent and its consolidated Subsidiaries, the net earnings of the Parent and
its consolidated Subsidiaries for such period, determined in accordance with
GAAP (but excluding gain or loss arising from extraordinary items) and reported
on the Financial Statements for such fiscal period, less (a) gain arising from
any other noncash non-recurring transaction, and (b) any equity interest of the
Parent or any of its consolidated Subsidiaries in the earnings of any Person
which is not a Subsidiary to the extent not distributed to the Parent as a cash
dividend.
"Consolidated Stockholder's Equity" means, at any date, the amount at
which the total equity capitalization of the Parent and its consolidated
Subsidiaries would be shown on a balance sheet of the Parent and its
consolidated Subsidiaries at such date prepared in accordance with GAAP.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated
biphenyls ("PCBs"), or any constituent of any such substance or waste.
"Convertible Preferred Stock" means the Parent's six percent (6.0%)
convertible preferred capital stock, no par value per share, to be issued in
connection with the Recapitalization, a portion of which would be exchanged for
the Redeemable Preferred Stock.
"Dated Account" means an Account owing to Laclede Chain and
containing terms permitting payment to be made more than thirty (30) days after
the date of the original invoice issued by Laclede Chain with respect to the
sale giving rise thereto but requiring payment within two hundred ten (210)
days after such date.
"Debt" means all liabilities, obligations and indebtedness of the
Parent and its Subsidiaries to any Person, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, fixed or
otherwise, and including, without in any way limiting the generality of the
foregoing: (i) the Parent's or any Subsidiary's liabilities and obligations to
trade creditors; (ii) all of the Obligations; (iii) all of each Borrower's
obligations for borrowed money, including, but not limited to, the IRB Debt;
(iv) all obligations and liabilities of any Person secured by any Lien on the
Parent's or any Subsidiary's property, even though the Parent or such
Subsidiary shall not have assumed or become liable for the payment thereof;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of
the value of such property as shown on a balance sheet of the Parent and its
consolidated Subsidiaries prepared in accordance with GAAP; (v) all obligations
or liabilities created or arising under any Capital Lease or conditional sale
or other title retention agreement with respect to property used or acquired by
the Parent or any Subsidiary, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of
the value of such property as shown on a balance sheet of the Parent and its
consolidated Subsidiaries prepared in accordance with GAAP; (vi) all
obligations and liabilities under Guaranties; and (vii) the Parent's or any
Subsidiary's liabilities and obligations arising as a result of the issuance of
letters of credit.
"Default" means any event or condition which, with notice, the
passage of time, the happening of any other condition or event, or any
combination thereof, would constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all
times equal to the sum of (a) the otherwise applicable Interest Rate plus (b)
two percent (2.00%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate.
"Distribution" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of property in respect of
capital stock (or any options or warrants for such stock) of such corporation,
other than distributions in capital stock (or any options or warrants for such
stock) of the same class; or (b) the redemption or other acquisition of any
capital stock (or any options or warrants for such stock) of such corporation.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Eligible Accounts" means at any time, those Accounts which when
scheduled to the Lenders and at all times thereafter, do not violate the
negative covenants and other provisions of this Agreement and do satisfy the
affirmative covenants and other provisions of this Agreement and which the
Agent deems eligible (based on criteria which the Agent establishes), in the
exercise of its reasonable credit judgment, as the basis for Revolving Loans;
provided, however, upon the reasonable request of the applicable Borrower, the
Agent will notify such Borrower of the reason for deeming an Account not to be
an Eligible Account. Without limiting the foregoing, no Account shall be an
Eligible Account if:
(1) Such Account is (a) due or unpaid more than one hundred twenty
(120) days after the date of the original invoice issued by the applicable
Borrower with respect to the sale giving rise thereto, in the case of an
Account owing to the Parent or Laclede Mid America or an Account owing to
Laclede Chain other than a Dated Account, or (b) past due, in the case of a
Dated Account; or
(2) Such Account is owed by an Account Debtor which is obligated to
any Borrower on Accounts more than fifty percent (50.0%) of the aggregate
unpaid balance of which are (a) due or unpaid more than one hundred twenty
(120) days after the date of the original invoice issued by the applicable
Borrower with respect to the sale giving rise thereto, in the case of an
Account owing to the Parent or Laclede Mid America or an Account owing to
Laclede Chain other than a Dated Account, or (b) past due, in the case of a
Dated Account, unless in either case the Majority Lenders have approved the
continued eligibility thereof; or
(3) Such Account arises out of a sale not made in the ordinary
course of the applicable Borrower's business or out of a sale to a Person which
is an Affiliate of the applicable Borrower or controlled by an Affiliate of the
applicable Borrower, unless the Majority Lenders have approved the eligibility
of Accounts attributable to such sales, provided that no Account with respect
to which Ivaco or any of its affiliates is the Account Debtor shall be rendered
ineligible solely as a result of the terms of this clause (3), except to the
extent that the sum of the unpaid balances of all such Accounts with respect to
which Ivaco or any of its affiliates is the Account Debtor exceeds $250,000
(but any such Accounts owing from Ivaco or any of its affiliates may be
rendered ineligible as a result of the terms of the next succeeding clause (4)
or as a result of the application of any other ineligibility criteria provided
for herein); or
(4) Such Account is subject to any right of setoff by the Account
Debtor and such Account Debtor has not entered into an agreement with the Agent
which is acceptable to the Agent with respect to the waiver of rights of
setoff; or such Account Debtor has disputed liability or made any claim with
respect to any other Account due from such Account Debtor to the applicable
Borrower; or
(5) Such Account arises out of a sale to an Account Debtor which (i)
has filed or has had filed against it a petition for bankruptcy or any other
petition for relief under the Bankruptcy Code or any other bankruptcy or
insolvency law, has made an assignment for the benefit of creditors, has
suffered a receiver or trustee to be appointed with respect to its affairs or
with respect to all or any material portion of its assets, or, in the case of
an Account Debtor which is an individual, has been adjudicated mentally
incompetent, to the extent, in the case of any such event described in this
clause (i), that the relevant proceeding is continuing on the date of the
applicable eligibility determination, (ii) has suspended its business
operations or become insolvent, to the extent that such suspension or
insolvency is continuing on the date of the applicable eligibility
determination, or (iii) in the case of any Account Debtor which is an
individual, is deceased; or
(6) Such Account arises out of a sale to an Account Debtor having
its chief executive office or principal place of business outside the United
States or Canada, unless the sale is on letter of credit or acceptance terms
satisfactory to the Agent; or
(7) Such Account arises out of a sale to a customer on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase or return basis; or
(8) The Agent believes in good faith and in the exercise of its
reasonable judgment, that the prospect of collection of such Account is
materially impaired; or
(9) The Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable Borrower
assigns its right to payment of such Account to the Agent in accordance with
the terms of the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sec.
3727 et seq.); or
(10) The goods giving rise to such Account have not been shipped and
delivered to and accepted by the Account Debtor or the services giving rise to
such Account have not been performed by the applicable Borrower, and, if
applicable, accepted by the Account Debtor, or the Account Debtor revokes its
acceptance of such goods or services; or
(11) Such Account is owed by an Account Debtor which is obligated to
the applicable Borrower respecting Accounts the aggregate unpaid balance of
which exceeds five percent (5.0%) of the aggregate unpaid balance of all
Accounts owed to the Borrowers at such time by all of the Borrowers' Account
Debtors, to the extent that the Majority Lenders have not approved the
eligibility of such Accounts; or
(12) Such Account is an Account with respect to which the Account
Debtor is located in any state requiring the filing of a Notice of Business
Activities Report or similar report in order to permit the applicable Borrower
to seek judicial enforcement in such state of payment of such Account, unless
such Borrower has qualified to do business in such state or has filed a Notice
of Business Activities Report or similar report for the then current year; or
(13) Such Account is evidenced by chattel paper or instruments; or
(14) Such Account arises out of a contract or order which, by its
terms, forbids, restricts or makes void or unenforceable the granting of a Lien
by the applicable Borrower to the Agent with respect to such Account; or
(15) With respect to such Account, a check or other instrument for
the payment of money, tendered in full or partial satisfaction of such Account,
has been presented for payment and returned uncollected more than two (2) times
for any reason; or
(16) With respect to a Dated Account, the applicable Borrower has
extended the time for payment of such Account without the consent of the Agent;
or
(17) The perfection, enforceability or validity of the Agent's Lien
on such Account, or, except as set forth in clause (9) above, the Agent's or
the Lenders' ability to obtain direct payment of the proceeds of such Account,
is governed by any federal, state or local statutory requirements other than
those of the UCC; or
(18) The Account Debtor is any state, municipality or other
political subdivision of the United States of America or any department,
agency, public corporation or other instrumentality thereof and as to which the
Agent determines that its Lien therein is not or cannot be perfected; or
(19) Such Account is not subject to a first priority and perfected
security interest in favor of the Agent; or
(20) Such Account is owed by an Account Debtor which is an employee
of the applicable Borrower; or
(21) Any representation or warranty contained in this Agreement with
respect to such Account is at any time determined to have been false or
misleading in any material respect when made or deemed to have been made.
If any Account at any time ceases to be an Eligible Account by reason
of any of the foregoing exclusions or any failure to meet any other eligibility
criteria established by the Agent in the exercise of its reasonable credit
judgment upon notice to the applicable Borrower, such Account shall promptly be
excluded from the calculation of Eligible Accounts.
"Eligible Inventory" means Inventory, valued at the lower of cost or
market value, with cost determined under the weighted moving average cost
method, which the Agent deems eligible (based on criteria which the Agent
establishes), in the exercise of its reasonable credit judgment, as the basis
for Revolving Loans; provided, however, upon the reasonable request of the
applicable Borrower, the Agent will notify such Borrower of the reason for
deeming Inventory not to be Eligible Inventory. Without limiting the
foregoing, no Inventory shall be Eligible Inventory if: (a) it is obsolete or
unmerchantable; (b) it is located outside the United States; (c) it is located
at premises not owned by the applicable Borrower, unless the owner of such
premises, and any mortgagee with respect thereto, shall have executed and
delivered to the Agent such agreements, instruments and documents as the Agent,
in the exercise of its reasonable discretion, shall request in connection with
the maintenance by such Borrower of Inventory on such premises; (d) it is not
subject to a first priority and perfected security interest in favor of the
Agent; (e) it is material handling, packaging or shipping materials; (f) it is
xxxx-and-hold or defective Inventory or Inventory delivered to the applicable
Borrower on consignment; or (g) it is Inventory which in any way fails to meet
or violates any applicable representation, warranty or covenant contained in
this Agreement relating directly or indirectly to such Inventory.
If any Inventory at any time ceases to be Eligible Inventory by
reason of any of the foregoing exclusions or any failure to meet any other
eligibility criteria established by the Agent in the exercise of its reasonable
credit judgment upon notice to the applicable Borrower, such Inventory shall
promptly be excluded from the calculation of Eligible Inventory.
"Environmental Compliance Reserve" means any reserves which the Agent
from time to time establishes for amounts that are reasonably likely to be
expended in order for any Borrower and its operations and property (a) to
comply with any notice from a Public Authority asserting material
non-compliance with any Environmental Law, or (b) to correct any such material
non-compliance identified in a report delivered to the Agent and the Lenders
pursuant to Section 8.7.
"Environmental Laws" means all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidance, orders and consent
decrees or other binding determination of any Public Authority relating to
occupational health and safety, the handling, use, storage, discharge or
disposal of Contaminants and other environmental matters applicable to any
Borrower and/or its business and facilities (whether or not owned by such
Borrower). Such laws and regulations include but are not limited to the
Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq., as amended;
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sec. 9601 et seq., as amended; the Toxic Substances Control Act, 15
U.S.C. Sec. 2601 et seq., as amended; the Clean Water Act, 42 U.S.C. Sec. 466
et seq., as amended; the Clean Air Act, 46 U.S.C. Sec. 7401 et seq., as
amended; state and federal lien and environmental cleanup programs; the
Occupational Safety and Health Act, 29 U.S.C. Sec. 651 et seq.; and U.S.
Department of Transportation regulations, each as from time to time hereafter
in effect.
"Environmental Lien" means a Lien in favor of any Public Authority
for (1) any liability under any Environmental Laws, or (2) damages arising
from, or costs incurred by such Public Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable
requirement of law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any property or the
transfer, sale or lease of any property or deed or title for any property for
environmental reasons, including, but not limited to, any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible Property Transfer
Acts."
"Equipment" means all of each Borrower's now owned and hereafter
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory), other than motor vehicles with
respect to which a certificate of title has been issued, including, without
limitation, aircraft, dies, tools, jigs, and office equipment, as well as all
of such types of property leased by such Borrower and all of such Borrower's
rights and interests with respect thereto under such leases (including, without
limitation, options to purchase); together with all present and future
additions and accessions thereto, replacements therefor, component and
auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any of the
foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as any Borrower; (ii) a partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Code) with any Borrower; or (iii) a member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
any Borrower, any corporation described in clause (i) above or any partnership,
trade or business described in clause (ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Event of Default" has the meaning specified in Section 10.1.
"Fairless Hills Equipment" means that certain Equipment located in
the Parent's Fairless Hills, Pennsylvania production facility, which Equipment
was subject to a purchase option contained in the USX Agreement exercised by
the Parent on or prior to the Closing Date.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three (3) federal funds brokers of
recognized standing selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Financial Statements" means, according to the context in which it is
used, the financial statements attached hereto as Exhibit C, or any financial
statements required to be given to the Lenders pursuant to Sections 6.2(a) or
(b), or any combination thereof.
"Fiscal Year" means the fiscal years of the Parent and its
Subsidiaries for financial accounting purposes, which fiscal years are based
upon a calendar year.
"Fixed Asset Reserve" has the meaning specified in Section 8.9(b).
"Fixed Assets" means Equipment and Real Estate of any Borrower.
"Fixed Charge Coverage Ratio Conditions" means as of any date, (i)
the Consolidated Fixed Charge Coverage Ratio for the consecutive four quarter
fiscal period of the Parent ending on such date (or if no fiscal quarter ends
on such date, ending immediately prior to such date) is greater than 1.00 to
1.00, and (ii) no Default or Event of Default shall have occurred and be
continuing as of either such date or as of the date any Margin Reduction
becomes effective as a result of the conditions specified in clause (i) above
being satisfied.
"Fremont Mortgage" means that certain Mortgage, Security Agreement,
Financing Statement and Assignment of Rents and Leases dated as of the
Restructuring Date and executed by Laclede Mid America in favor of the Agent,
pursuant to which Laclede Mid America has granted to the Agent, for the ratable
benefit of the Secured Creditors a mortgage Lien on its Real Estate located in
Fremont, Indiana and identified therein.
"Funded Debt" means all Debt which would, in accordance with GAAP,
constitute long term Debt, including (a) Debt having a maturity of more than
one (1) year after the creation thereof, (b) Debt outstanding under a revolving
credit or similar agreement providing for borrowings (and renewals and
extensions thereof) which, pursuant to its terms, would constitute long term
Debt in accordance with GAAP, (c) all obligations or liabilities (determined in
accordance with GAAP) created or arising under any Capital Lease, and (d) any
Guaranty with respect to debt of any other Person of the type described in
clauses (a), (b) or (c) above. Funded Debt shall not be deemed to include the
current portion of Funded Debt included in Consolidated Current Liabilities.
"Funding Date" means the date any Revolving Loans (including
Settlement Loans and Agent Advances) are to be made hereunder.
"GAAP" means at any particular time with respect to the Parent and
its Subsidiaries, generally accepted accounting principles as in effect at such
time, consistently applied.
"General Intangibles" means all of each Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of such Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to such Borrower in connection
with the termination of any Plan or other employee benefit plan or any rights
thereto and any other amounts payable to such Borrower from any Plan or other
employee benefit plan, rights and claims against carriers and shippers, rights
to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which such
Borrower is beneficiary, and any letter of credit, guarantee, claim, security
interest or other security held by or granted to such Borrower to secure
payment by an account debtor of any of the Accounts.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligation of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity
Securities or other property or services.
"Individual Availability" means, at any time with respect to any
Borrower, (a) the Individual Maximum Revolver Amount with respect to such
Borrower minus (b) the sum of (i) the unpaid balance of Revolving Loans to such
Borrower at such time, (ii) the aggregate amount of Pending Revolving Loans to
such Borrower at such time, (iii) the aggregate undrawn amount of all
outstanding Letters of Credit issued for the account of such Borrower, and (iv)
the aggregate amount of any unpaid reimbursement obligations in respect of the
Letters of Credit issued for the account of such Borrower. In determining
pursuant to Section 2.2(a), 2.2(g), 2.2(h) or 2.2(j) whether Revolving Loans to
be made on any date would exceed Individual Availability on such date, such
proposed Revolving Loans shall be counted as either Revolving Loans or Pending
Revolving Loans for purposes of calculating Individual Availability on such
date, but shall not be counted as both Revolving Loans and Pending Revolving
Loans.
"Individual Maximum Revolver Amount" means
(1) at any time with respect to the Parent
(a) the lesser of
(i) the Revolver Facility; or
(ii) the sum of
(A) eighty-five percent (85.0%) of the Net Amount of
the Eligible Accounts of the Parent; plus (B) the lesser of (1) sixty-five
(65.0%) (as such percentage may be reduced pursuant to Section 5.10) of the
value of Eligible Inventory of the Parent; and (2) $55,000,000,
minus
(b) the sum of
(i) reserves for accrued interest on the Obligations owing by
the Parent;
(ii) any Fixed Asset Reserve with respect to the Parent; and
(iii) all other reserves which the Agent deems necessary in the
exercise of reasonable credit judgment to maintain with respect to the Parent's
account, and which are reasonably related to the preservation or protection of
the value of the Collateral or the business value of the Parent, including,
without limitation, any Environmental Compliance Reserve with respect to the
Parent and reserves for any amounts which the Agent or any Lender may be
obligated to pay in the future for the account of the Parent;
(2) at any time with respect to Laclede Chain,
(a) the lesser of
(i) the Revolver Facility; or
(ii) the sum of
(A) eighty-five percent (85.0%) of the Net Amount of
Eligible Accounts of Laclede Chain, plus (B) the lesser of (1) sixty-five
percent (65.0%) (as such percentage may be reduced pursuant to Section 5.10) of
the value of Eligible Inventory of Laclede Chain; and (2) $55,000,000,
minus
(b) the sum of
(i) reserves for accrued interest on the Obligations owing by
Laclede Chain;
(ii) any Fixed Asset Reserve with respect to Laclede Chain; and
(iii) all other reserves which the Agent deems necessary in the
exercise of reasonable credit judgment to maintain with respect to Laclede
Chain's account, and which are reasonably related to the preservation or
protection of the value of the Collateral or the business value of Laclede
Chain, including, without limitation, any Environmental Compliance Reserve with
respect to Laclede Chain and reserves for any amounts which the Agent or any
Lender may be obligated to pay in the future for the account of Laclede Chain;
and
(3) at any time with respect to Laclede Mid America,
(a) the lesser of
(i) the Revolver Facility; or
(ii) the sum of
(A) eighty-five percent (85.0%) of the Net Amount of
Eligible Accounts of Laclede Mid America, plus (B) the lesser of (1) sixty-five
percent (65.0%) (as such percentage may be reduced pursuant to Section 5.10) of
the value of Eligible Inventory of Laclede Mid America; and (2) $55,000,000
minus
(b) the sum of
(i) reserves for accrued interest on the Obligations owing by
Laclede Mid America;
(ii) any Fixed Asset Reserve with respect to Laclede Mid
America; and
(iii) all other reserves which the Agent deems necessary in the
exercise of reasonable credit judgment to maintain with respect to Laclede Mid
America's account, and which are reasonably related to the preservation or
protection of the value of the Collateral or the business value of Laclede Mid
America, including, without limitation, any Environmental Compliance Reserve
with respect to Laclede Mid America and reserves for any amounts which the
Agent or any Lender may be obligated to pay in the future for the account of
Laclede Mid America.
"Intercompany Notes" means, collectively, the Laclede Chain
Intercompany Note and the Laclede Mid America Intercompany Note.
"Interest Period" means, with respect to each LIBO Rate Loan, the
interest period applicable to such LIBO Rate Loan as determined pursuant to
Section 3.3(b).
"Interest Rate" means each or any of the interest rates, including
the Default Rate, set forth in Section 3.1.
"Inventory" means all of each Borrower's now owned and hereafter
acquired inventory, goods, merchandise, repair parts, and other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all returned goods, raw materials, other materials and
supplies of any kind, nature or description which are or might be consumed in
such Borrower's business or used in connection with the packing, shipping,
advertising, selling or finishing of such goods, merchandise and such other
personal property, and all documents of title or other documents representing
them.
"ID Note" means that certain $2,059,000 Promissory Note of Presidents
Island Steel & Wire, Inc., dated June 1, 1983, payable to the order of The
Industrial Development Board of the City of Memphis and County of Shelby,
Tennessee.
"IDR Bonds" means those certain Industrial Development Revenue Bonds
(Laclede Steel Company Project) Series 1976 issued pursuant to a certain
Indenture of Trust dated as of October 1, 1976, between the City of Alton,
Illinois, and St. Louis Union Trust Company, as Trustee.
"IRB Debt" means Debt of the Parent evidenced by the Solid Waste
Disposal Bonds, the Pollution Control Bonds, the IDR Bonds and the ID Note, or
any of them.
"IRB Debt Payment" means any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any of the IRB
Debt, or any payment of a claim, for the rescission of the purchase or sale of,
or for material damage arising from the purchase or sale of, any of the IRB
Debt or a claim for reimbursement, indemnification or contribution arising out
of or related to any such claim for damages or rescission.
"IRS" means the Internal Revenue Service or any successor agency.
"Ivaco" means Ivaco Inc., a corporation organized and existing under
the federal laws of Canada.
"Laclede Chain" has the meaning specified in the introductory
paragraph hereof.
"Laclede Chain Collateral" has the meaning specified in Section
5.1(b).
"Laclede Chain Intercompany Note" means that certain promissory note
dated the Closing Date in the maximum principal amount of $15,000,000, executed
by Laclede Chain, payable to the Parent and pledged and endorsed to the Agent,
in a manner satisfactory to the Agent, evidencing amounts outstanding from time
to time as a result of certain loans and other advances made by the Parent to
Laclede Chain.
"Laclede Consulting" means Laclede Consulting Services Limited, a
Missouri corporation which merged with and into the Parent on or prior to the
Closing Date.
"Laclede Mid America" has the meaning specified in the introductory
paragraph hereof.
"Laclede Mid America Collateral" has the meaning specified in Section
5.1(c).
"Laclede Mid America Intercompany Note" means that certain promissory
note dated the Closing Date in the maximum principal amount of $10,000,000,
executed by Laclede Mid America, payable to the Parent and pledged and endorsed
to the Agent, in a manner satisfactory to the Agent, evidencing amounts
outstanding from time to time as a result of certain loans and other advances
made by the Parent to Laclede Chain.
"Laclede Pipe" means Laclede Pipe Company, a West Virginia
corporation which merged with and into the Parent on or prior to the Closing
Date.
"Latest Projections" means: (a) on the Restructuring Date and
thereafter until the Lenders receive new projections pursuant to Section
6.2(e), the projections of the Parent's and its consolidated Subsidiaries'
combined financial condition, results of operations, and cash flow, for the
period commencing on July 1, 1997 and ending on June 30, 1998 and delivered to
the Lenders prior to the Restructuring Date; and (b) thereafter, the
projections most recently received by the Lenders pursuant to Section 6.2(e).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof.
"Letter of Credit" has the meaning specified in Section 2.4(a).
"Letter of Credit Fee" has the meaning specified in Section 3.8.
"LIBO Rate" means, for any Interest Period with respect to LIBO Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/16th of 1.0%) determined by the Agent as follows:
LIBO Rate = Base LIBO Rate
1.00 - Eurodollar Reserve Percentage
"LIBO Rate Loans" means, collectively, the LIBOR Revolving Loans and
the LIBOR Term Loans.
"LIBO Rate Taxes" has the meaning specified in Section 3.3(i).
"LIBOR Interest Rate Determination Date" means each date of
calculating the LIBO Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBO Rate Loan shall be the second Business Day prior to the first day of
the related Interest Period for such LIBO Rate Loan.
"LIBOR Reserve Percentage" means for any day for any Interest Period
the maximum reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1.0%) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the Federal Reserve Board
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency Liabilities having a term comparable to such Interest Period.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest at the rate provided in Section 3.1(a)(ii).
"LIBOR Revolving Margin" has the meaning specified in Section
3.1(a)(ii).
"LIBOR Term Loan" means any portion of a Term Loan during any period
in which such portion bears interest at the rate provided in Section
3.1(a)(ii).
"LIBOR Term Margin" has the meaning specified in Section 3.1(a)(ii).
"Lien" means: (a) any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute, or contract, and including
without limitation, a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; and (b) to
the extent not included under clause (a), any reservation, exception,
encroachment, easement, right-of-way, covenant, condition, restriction, lease
or other title exception or encumbrance affecting property.
"Loan Documents" means this Agreement, the Term Loan Notes, the
Patent and Trademark Agreements, the Mortgage and any other agreements,
instruments, and documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise relating to the Obligations, the Collateral, or any
other aspect of the transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided for in
Article 2.
"Majority Lenders" means, at such time as (a) the aggregate Pro Rata
Share of BABC and its affiliates shall be equal to or greater than forty-five
percent (45.0%), Lenders whose Pro Rata Shares aggregate at least seventy-five
percent (75.0%), and (b) the aggregate Pro Rata Share of BABC and its
affiliates shall be less than forty-five percent (45.0%), Lenders whose Pro
Rata Shares aggregate at least seventy-five percent (75.0%).
"Margin Reduction" means (i) effective April 1, 1998, only if the
Consolidated Earnings Conditions are fully satisfied, one half of one percent
(0.50%) per annum, and (ii) effective on the first day of the calendar month
occurring after the date on which the Agent has received satisfactory evidence
that the Fixed Charge Coverage Ratio Conditions have been satisfied and only
for so long as the Fixed Charge Coverage Ratio Conditions continue to be
satisfied, one-half of one percent (0.50%) per annum.
"Margins" means, collectively, the Base Rate Term Margin, the Base
Rate Revolving Margin, the LIBOR Term Margin and the LIBOR Revolving Margin.
"Maximum Revolver Amount" means, at any time,
(a) the lesser of
(i) the Revolver Facility; or
(ii) the sum of
(A) eighty-five percent (85.0%) of the Net Amount of
the Eligible Accounts; plus (B) the lesser of (1) sixty-five (65.0%) (as such
percentage may be reduced pursuant to Section 5.10) of the value of Eligible
Inventory; and (2) $55,000,000
minus
(b) the sum of
(i) reserves for accrued interest on the Obligations;
(ii) any Fixed Asset Reserve with respect to any Borrower; and
(ii) all other reserves which the Agent deems necessary in the
exercise of reasonable credit judgment to maintain with respect to any
Borrower's account, and which are reasonably related to the preservation or
protection of the value of the Collateral or the business value of such
Borrower, including, without limitation, any Environmental Compliance Reserve
and reserves for any amounts which the Agent or any Lender may be obligated to
pay in the future for the account of such Borrower.
"Memphis Mortgage" means that certain Deed of Trust, Security
Agreement, Financing Statement and Assignment of Rents and Leases dated as of
the Restructuring Date and executed by the Parent in favor of the Agent,
pursuant to which the Parent has granted to the Agent for the ratable benefit
of the Secured Creditors a mortgage Lien on its Real Estate located in Memphis,
Tennessee and identified therein.
"Mortgages" means the Alton Mortgage, the Vandalia Mortgage, the
Fremont Mortgage, the Memphis Mortgage and the Parent Fremont Mortgage.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower or
any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross
amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Net Proceeds" means, with respect to any sale or disposition of
Fixed Assets, the face amount of the sale or disposition price, whether paid in
cash or otherwise, minus the applicable Borrower's reasonable expenses of sale
or disposition and any sales or other conveyance taxes incurred by any Borrower
in connection therewith.
"Notice of Borrowing" has the meaning specified in Section 2.2(b).
"Notice of Conversion/Continuation" has the meaning specified in
Section 3.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by each Borrower
to the Agent and/or any Lender, arising under or pursuant to this Agreement or
any of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect (including, without limitation, those acquired by
assignment from others, and any participation by the Agent and/or any Lender in
such Borrower's debts owing to others), absolute or contingent, due or to
become due, primary or secondary, as principal or guarantor, and including,
without limitation, all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to such Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, all debts, liabilities, and obligations now or hereafter
owing from each Borrower to the Agent and/or any Lender under or in connection
with the Letters of Credit.
"OCC" means the Office of the Comptroller of the Currency.
"Parent" has the meaning specified in the introductory paragraph
hereof.
"Parent Collateral" has the meaning specified in Section 5.1(a).
"Parent Fremont Mortgage" means that certain Mortgage, Security
Agreement, Financing Statement and Assignment of Rents and Leases dated as of
the Restructuring Date and executed by Parent in favor of the Agent, pursuant
to which the Parent has granted to the Agent, for the ratable benefit of the
Secured Creditors a Mortgage Lien on its Real Estate located in Fremont,
Indiana and identified therein.
"Participating Lender" means any Person who shall have been granted
the right by any Lender to participate in the financing provided by such Lender
under this Agreement pursuant to Section 12.3(e), and who shall have entered
into a participation agreement in form and substance satisfactory to such
Lender.
"Patent and Trademark Agreements" means the Patent Security Agreement
and the Trademark Security Agreement, each dated as of the Closing Date,
executed and delivered by the Borrowers to the Agent pursuant to Section 5.2 to
evidence and perfect the Agent's security interest in each Borrower's present
and future patents, trademarks, and related licenses and rights, for the
benefit of the Secured Creditors, and with respect to (1) the Parent, the
additional Patent Security Agreement and Trademark Security Agreement, each
dated as of the Restructuring Date, executed and delivered by the Parent to the
Agent, and (2) Laclede Chain, the additional Trademark Security Agreement and
the Notice of Amendment to Patent Security Agreement, each dated as of the
Restructuring Date, executed and delivered by Laclede Chain to the Agent.
"Payment Account" means each blocked bank account established
pursuant to Section 5.9, to which the funds of any Borrower (including, without
limitation, proceeds of Accounts and other Collateral) are deposited or
credited, and which is maintained in the name of the Agent or such Borrower, as
the Agent may determine, on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice(s) of Borrowing received
by the Agent which have not yet been advanced.
"Permitted Acquisitions" means acquisitions by any Borrower of one
hundred percent (100.0%) of the capital stock of any Person.
"Permitted Liens" means:
(a) Liens for taxes not yet payable or statutory Liens for taxes in
an amount not to exceed $100,000, provided that the payment of such taxes which
are due and payable is being contested in good faith and by proper proceedings
diligently pursued, and that reserves or other appropriate provision, if any,
as shall be required by GAAP shall have been made therefor and that a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens upon Equipment granted in connection with the acquisition
of such Equipment by the applicable Borrower after the Closing Date (including,
without limitation, pursuant to Capital Leases), provided that (i) except with
respect to expenditures in connection with (A) the implementation of a new
ladle furnace and related melt shop and rolling mill Equipment for the Parent's
Xxxxx steel mill plant located in Alton, Illinois, and (B) the improvements
being undertaken by Laclede Mid America at its Fremont, Indiana plant to
facilitate the production of high tensile oil tempered wire for cold wound
suspension springs, the cost of each such acquisition constitutes a Capital
Expenditure permitted by Section 8.22, (ii) the Debt incurred to finance each
such acquisition is permitted by Section 8.13, and (iii) each such Lien
attaches only to the Equipment acquired with the Debt secured thereby;
(d) deposits under worker's compensation, unemployment insurance,
social security and other similar laws, or to secure the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure indemnity, performance or other similar bonds for the performance of
bids, tenders or contracts (other than for the repayment of borrowed money) or
to secure statutory obligations (other than liens arising under ERISA or
Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business;
(e) Liens which arise by operation of law under Article 2 of the
Uniform Commercial Code in favor of unpaid sellers of goods or prepaying buyers
of goods, or liens in items of any accompanying documents or proceeds of either
arising by operation of law under Article 4 of the Uniform Commercial Code in
favor of a collecting bank;
(f) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, provided that the
payment thereof is not at the time required by Section 8.1;
(g) Reservations, exceptions, encroachments, easements, rights of
way, covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the Real Estate or materially
interfere with its use in the ordinary conduct of the Parent's or any
Subsidiary's business;
(h) Liens in existence on the Closing Date and reflected on Schedule
7.2;
(i) Judgment and other similar Liens arising in connection with
court proceedings, provided that (A) the existence of such Liens is being
contested in good faith and by proper proceedings diligently pursued, (B)
reserves or other appropriate provision, if any, as are required by GAAP have
been made therefor, (C) a stay of enforcement of any such Liens is in effect,
(D) the priority of any such Liens is subordinate to that of the Agent's Liens,
and (E) the existence of any judgment or court proceedings upon which such
Liens are based does not otherwise constitute an Event of Default under this
Agreement; and
(j) Liens granted to the trustee for the holders of the Solid Waste
Disposal Bonds in the capital stock and Fixed Assets of Laclede Chain.
"Permitted Rentals" has the meaning specified in Section 8.23.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
Public Authority, or any other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which any Borrower or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Pollution Control Bonds" means those certain Pollution Control
Revenue Bonds (Laclede Steel Company Project) Series 1976 issued pursuant to a
certain Indenture of Trust dated as of October 1, 1976, between the City of
Alton, Illinois, and St. Louis Union Trust Company, as Trustee.
"Premises" means the land identified by addresses on Schedule 7.12,
together with all buildings, improvements, and fixtures thereon and all
tenements, hereditament, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the real property in which any Borrower
has any interests on the Closing Date.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments.
"Proprietary Rights" means all of each Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service xxxx applications, and all licenses and rights related to any of the
foregoing, including, without limitation, those patents, trademarks, service
marks and copyrights set forth on Schedule 7.13 hereto, and all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing, and all
rights to xxx for past, present and future infringement of any of the
foregoing.
"Public Authority" means the government of any country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or any department, agency, public corporation or other instrumentality
of any of the foregoing.
"Quasi Asset Acquisition" means any acquisition by any Borrower of
the Securities of any Person, which Securities are being acquired in lieu of
the assets of such Person.
"Real Estate" means all of the present and future interests of any
Borrower, as owner, lessee, or otherwise, in the Premises, including, without
limitation, any interest arising from an option to purchase or lease the
Premises or any portion thereof.
"Recapitalization" means a transaction pursuant to which the Parent
would (a) reduce the par value of the Parent's common stock to $0.01 per share
and authorize 20,000,000 additional shares of common stock, (b) issue the
Convertible Preferred Stock, (c) exchange the Redeemable Preferred Stock for a
portion of the Convertible Preferred Stock, and (d) receive equity
contributions from the sale of additional Convertible Preferred Stock, the sum
of which, when aggregated with the sum of the equity contributions received
from the sale of the Redeemable Preferred Stock, would be at least $7,500,000;
each of the foregoing transactions to be in accordance with all applicable laws
and pursuant to agreements, instruments and documents of which copies shall
have been delivered to the Agent and each Lender and which shall be acceptable
in form and substance to the Agent and each Lender.
"Redeemable Preferred Stock" means the Parent's six percent (6.0%)
redeemable preferred capital stock, no par value per share, 416,667 shares of
which were issued on August 1, 1996, and which was recapitalized on October 28,
1996.
"Register" has the meaning specified in Section 12.3(c).
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 8.23.
"Replacement Assets" means Fixed Assets acquired by any Borrower
after a sale or other disposition of Fixed Assets.
"Reportable Event" means any of the events described in Section 4043
of ERISA.
"Restricted Investment" means any acquisition of property by the
Parent or any of its Subsidiaries in exchange for cash or other property,
whether in the form of an acquisition of stock, debt Security, or other
indebtedness or obligation, or the purchase or acquisition of any other
property, or a loan, advance, capital contribution, or subscription, except
acquisitions of the following: (a) the Fairless Hills Equipment, on or prior
to the Closing Date; (b) a new ladle furnace and related melt shop and rolling
mill Equipment for the Parent's Xxxxx steel mill plant located in Alton,
Illinois, to the extent otherwise permitted hereunder; (c) Equipment associated
with the High Temperature Metals Recovery System Facility located at the
Parent's Xxxxx steel mill plant located in Alton, Illinois, to the extent
acquired with proceeds of the Solid Waste Disposal Bonds and otherwise
permitted hereunder; (d) Fixed Assets to be used in the business of the Parent
or such Subsidiary, so long as the acquisition costs thereof constitute Capital
Expenditures permitted hereunder; (e) goods held for sale or lease or to be
used in the provision of services by the Parent or such Subsidiary in the
ordinary course of business; (f) current assets arising from the sale or lease
of goods or the rendition of services in the ordinary course of business of the
Parent or such Subsidiary; (g) direct obligations of the United States of
America, or any agency thereof, or obligations guaranteed by the United States
of America, provided that such obligations mature within one year from the date
of acquisition thereof; (h) certificates of deposit maturing within one year
from the date of acquisition, bankers' acceptances, Eurodollar bank deposits,
or overnight bank deposits, in each case issued by, created by, or with a bank
or trust company organized under the laws of the United States or any state
thereof having capital and surplus aggregating at least $100,000,000; (i)
commercial paper given a rating of "A2" or better by Standard & Poor's
Corporation or "P2" or better by Xxxxx'x Investors Service, Inc. and maturing
not more than 90 days from the date of creation thereof; (j) money market
preferred capital stock given a rating of "A" or better by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.; (k) tax exempt floating rate
option tender bonds backed by a letter of credit issued by a bank given a
rating of "AA" or better by Standard & Poor's Corporation or "Aa" or better by
Xxxxx'x Investors Service, Inc. and having a maturity of one year or less; and
(l) investments in existence on the Closing Date and described on Schedule 8.10
and (m) a promissory note received by the Parent as partial consideration for
the sale by the Parent to SSC of the SSC Equipment, incident to consummation of
the SSC Transaction , and (n) a promissory note in the principal amount of
$1,653,000 received by the Parent as partial consideration for the sale on or
about February 10, 1997 by the Parent to Excaliber Tubular Corporation of the
Parent's Inventory and Fixed Assets located at the Parent's Benwood, West
Virginia tube mill facility.
"Restructuring Date" means August 21, 1997, the date of execution
and delivery of this Agreement.
"Restructuring Date Term Loan" and "Restructuring Date Term Loans"
have the meanings specified in Section 2.3(a).
"Restructuring Fee" has the meaning specified in Section 3.5.
"Revolver Facility" means $100,000,000 minus the then outstanding
aggregate unpaid principal balance of the Term Loans, or the agreement by the
Lenders and the Agent to provide Revolving Loans and Letters of Credit up to
such amount subject to the terms of this Agreement, as the context may require.
"Revolving Loans" has the meaning specified in Section 2.2.
"Secured Creditors" means the Agent and the Lenders.
"Security" has the meaning specified in Section 2(1) of the
Securities Act of 1933, as amended.
"Settlement Loan" and "Settlement Loans" have the meanings specified
in Section 2.2(h).
"Solid Waste Bond Loan Agreement" means that certain Loan Agreement
dated as of September 1, 0000 xxxxxxx Xxxxxxxxxxxx Xxxxxxxx Development
Authority and the Parent, together with all amendments thereto.
"Solid Waste Disposal Bonds" means those certain Solid Waste Disposal
Revenue Bonds (Laclede Steel Company Project) Series 1990 issued pursuant to a
certain Indenture of Trust dated as of September 1, 0000, xxxxxxx Xxxxxxxxxxxx
Xxxxxxxx Development Authority and Boatmen's Trust Company, as Trustee.
"Solvent" means when used with respect to any Person that (a) the
fair value of all its assets is in excess of the total amount of its debts
(including contingent liabilities); (b) it is able to pay its debts as they
mature; (c) it does not have unreasonably small capital for the business in
which it is engaged or for any business or transaction in which it is about to
engage; and (d) it is not "insolvent" as such term is defined in Section
101(32) of the Bankruptcy Code.
"SSC" means SSC, LLP, a Missouri limited liability partnership.
"SSC Equipment" means the ladle metallurgy facility purchased by the
Parent from EMC International, Inc., together with ancillary equipment, which
the Parent is (or will be) conveying to SSC incident to consummation of the SSC
Transaction.
"SSC Transaction" means the sale-leaseback transaction pursuant to
which the Parent is (or will be) conveying the SSC Equipment to SSC and
simultaneously leasing it back for a term of five (5) years, subject to the
terms and conditions of that certain Operating Lease dated as of June 26, 1996,
between and among the Parent, SSC, and to the limited extent provided therein,
Energy Capital Partners Limited Partnership, a Delaware limited partnership.
"Subsidiary" means any corporation of which more than fifty percent
(50.0%) of the outstanding Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions),
is at the time, directly or indirectly through one or more intermediaries,
owned by the applicable Borrower and/or one or more of its Subsidiaries.
"Supporting Letter of Credit" has the meaning specified in Section
2.4(j).
"Term Loan" means the Closing Date Term Loan and the Restructuring
Date Term Loan of a Lender.
"Term Loans" means the Closing Date Term Loans and Restructuring Date
Term Loans of all the Lenders.
"Term Loan Note" and "Term Loan Notes" have the meanings specified in
Section 2.3(c).
"Termination Date" means the earliest to occur of (i) September 6,
2002, (ii) the date the Revolver Facility is terminated either by the Borrowers
pursuant to Section 4.2 or by the Majority Lenders pursuant to Section 10.2,
and (iii) the date this Agreement is otherwise terminated for any reason
whatsoever.
"Termination Event" means: (1) a Reportable Event with respect to
any Benefit Plan ; (2) the withdrawal of any Borrower or any ERISA Affiliate
from a Benefit Plan during a plan year in which such Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (3) the imposition of an obligation on any Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA; (4) the institution by the PBGC of
proceedings to terminate a Benefit Plan; (5) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; (6) the partial or
complete withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (7) the cessation of operations which results in the termination of
employment of twenty percent (20.0%) of Benefit Plan participants who are
employees of any Borrower and its ERISA Affiliates.
"Total Facility" has the meaning specified in Section 2.1.
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Illinois or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests.
"Unused Letter of Credit Subfacility" means an amount equal to
$10,000,000 minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit plus (b) the aggregate unpaid reimbursement
obligations with respect to all Letters of Credit.
"USX Agreement" means that certain Agreement to Purchase Inventory
and Lease Real and Personal Property, dated October 15, 1991, between USX
Corporation, a Delaware corporation, and the Parent.
"Vandalia Mortgage" means that certain Mortgage, Security Agreement,
Financing Statement and Assignment of Rents and Leases dated as of the Closing
Date and executed by the Parent in favor of the Agent, pursuant to which the
Parent has granted to the Agent, for the ratable benefit of the Secured
Creditors, a mortgage Lien on its Real Estate located in Vandalia, Illinois and
identified therein, as modified by (i) that certain Mortgage Modification
Agreement dated as of February 15, 1995, and (ii) that certain Second Mortgage
Modification Agreement dated as of the Restructuring Date.
"Voting Stock" means Securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
1.3 Accounting Terms. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements.
1.4 Other Terms. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein.
Any references herein to exhibits, schedules, sections or articles are
references to exhibits, schedules, sections or articles of this Agreement,
unless otherwise specified. Wherever appropriate in the context, terms used
herein in the singular also include the plural, and vice versa, and each
masculine, feminine, or neuter pronoun shall also include the other genders.
1.5 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" shall mean "from and including" and the words "to" and "until"
shall each mean "to but excluding". Periods of days referred to in this
Agreement shall be counted in calendar days unless Business Days are expressly
prescribed and references in this Agreement to months and years shall be to
calendar months and calendar years unless otherwise specified.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Total Facility. Subject to all of the terms and conditions of
this Agreement, the Lenders severally agree to make available a total credit
facility of up to $100,000,000 (the "Total Facility") for the Borrowers' use
from time to time during the term of this Agreement. The Total Facility shall
be comprised of: (a) a revolving line of credit consisting of revolving loans
and letters of credit up to the Maximum Revolver Amount, as described in
Sections 2.2 and 2.4; and (b) the Term Loans described in Section 2.3.
2.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of
the conditions precedent set forth in Article 9, each Lender severally agrees,
upon any Borrower's request from time to time, to make revolving loans (the
"Revolving Loans") to such Borrower, in amounts not to exceed (except with
respect to Agent Advances) such Lender's Pro Rata Share of the lesser of
Individual Availability for such Borrower or Availability in the aggregate at
such time. The Lenders, however, in their discretion, may elect to make
Revolving Loans or participate (as provided for in Section 2.4(f)) in the
credit support or enhancement provided through the Agent to the issuers of
Letters of Credit in excess of the lesser of Individual Availability or
Availability on one or more occasions, but if they do so, neither the Agent nor
the Lenders shall be deemed thereby to have changed the limits of the Maximum
Revolver Amount or the Individual Maximum Revolver Amounts or to be obligated
to exceed such limits on any other occasion. If the sum of outstanding
Revolving Loans, the aggregate amount of Pending Revolving Loans, the undrawn
amount of outstanding Letters of Credit and any unpaid reimbursement
obligations in respect of Letters of Credit exceeds the Maximum Revolver
Amount, the Lenders, or any of them, may refuse to make or otherwise restrict
the making of Revolving Loans on such terms as the Lenders, or such Lender, may
determine until such excess has been eliminated. Similarly, if the sum of
outstanding Revolving Loans to any Borrower, the aggregate amount of Pending
Revolving Loans to such Borrower, the undrawn amount of outstanding Letters of
Credit issued for the account of such Borrower and any unpaid reimbursement
obligations in respect of Letters of Credit issued for the account of such
Borrower exceeds the Individual Maximum Revolver Amount with respect to such
Borrower, the Lenders, or any of them, may refuse to make or otherwise restrict
the making of Revolving Loans to such Borrower on such terms as the Lenders, or
such Lender, may determine until such excess has been eliminated.
(b) Notice of Borrowing. Whenever any Borrower desires to borrow
Revolving Loans under this Section 2.2, the Parent, for itself or on behalf of
either or both of the other Borrowers, shall deliver to the Agent a written
request substantially in the form of Exhibit E hereto (a "Notice of Borrowing")
signed by an authorized officer of the Parent, no later than (i) 11:00 a.m.
(San Francisco, California time) on the requested Funding Date, in the case of
requests for Base Rate Revolving Loans, or (ii) 11:00 a.m. (San Francisco,
California time) four (4) Business Days in advance of the requested Funding
Date, in the case of requests for LIBOR Revolving Loans. The Notice of
Borrowing shall, with respect to any Revolving Loans requested, specify (i) the
Borrower requesting the Revolving Loans, (ii) the requested Funding Date (which
shall be a Business Day), (iii) the aggregate amount of the requested Revolving
Loans, (iv) whether the Revolving Loans requested are to be Base Rate Revolving
Loans or LIBOR Revolving Loans, and (v) if the requested Revolving Loans are to
be LIBOR Revolving Loans, the requested Interest Period. With respect to any
request for Base Rate Revolving Loans, in lieu of delivering the
above-described Notice of Borrowing the Parent, for itself or on behalf of
either or both of the other Borrowers, may give the Agent telephonic notice of
such request by the required time; provided, however, that such telephonic
notice shall be confirmed in writing by delivery to the Agent (A) immediately
of a telecopy of a Notice of Borrowing which has been signed by an authorized
officer of the Parent, for itself or on behalf of either or both of the other
Borrowers, and (B) promptly of a Notice of Borrowing containing the original
signature of an authorized officer of the Parent mailed by the applicable
Borrower to the Agent via United States mail on the date such notice is given.
In the event that the terms of any confirmatory Notice of Borrowing referred to
in the proviso contained in the immediately preceding sentence shall conflict
with the telephonic notice with respect to which it was delivered, the terms of
such telephonic notice shall govern. Notwithstanding anything in this Section
2.2(b) to the contrary, any Revolving Loans to be made to any Borrower on the
Closing Date shall initially be Base Rate Revolving Loans.
(c) Reliance upon Authority. On or prior to the Closing Date and
thereafter prior to any change with respect to any of the information contained
in the following clauses (i) and (ii), each Borrower shall deliver to the Agent
a writing setting forth (i) the account of such Borrower to which the Agent is
authorized to transfer the proceeds of the Revolving Loans requested pursuant
to this Section 2.2, and (ii) the names of the officers authorized to request
Revolving Loans on behalf of such Borrower, and shall provide the Agent with a
specimen signature of each such officer. The Agent shall be entitled to rely
conclusively on such officer's authority to request Revolving Loans on behalf
of such Borrower, the proceeds of which are to be transferred to any of the
accounts specified by such Borrower pursuant to the immediately preceding
sentence, until the Agent receives written notice to the contrary. The Agent
shall have no duty to verify the identity of any individual representing
himself as one of the officers authorized by such Borrower to make such
requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to any
Borrower as a result of acting upon any notice referred to in Sections 2.2(b)
and (c), which notice the Agent believes in good faith to have been given by an
officer duly authorized by the applicable Borrower to request Revolving Loans
on its behalf or for otherwise acting in good faith under this Section 2.2, and
the crediting of Revolving Loans to the applicable Borrower's deposit account,
or transmittal to such Person as such Borrower shall direct, shall conclusively
establish the obligation of the applicable Borrower to repay such Revolving
Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.2(b) shall be irrevocable
and the applicable Borrower shall be bound to borrow the funds requested
therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(b), the Agent shall elect, in its discretion,
(i) to have the terms of Section 2.2(g) apply to such requested Borrowing, or
(ii) to request BABC to make a Settlement Loan pursuant to the terms of Section
2.2(h) in the amount of the requested Borrowing; provided, however, that if
BABC declines in its sole discretion to make a Settlement Loan pursuant to
Section 2.2(h), the Agent shall elect to have the terms of Section 2.2(g) apply
to such requested Borrowing.
(g) Making of Revolving Loans. (i) In the event that the Agent
shall elect to have the terms of Section 2.2(g) apply to a requested Borrowing
as described in Section 2.2(f), then promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(b), the Agent shall notify the Lenders, not
later than noon (San Francisco, California time) on the Funding Date applicable
thereto, by telecopy, telephone or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such Lender's Pro
Rata Share of the requested Borrowing available to the Agent in same day funds,
to such account of the Agent as the Agent may designate, not later than 1:00
p.m. (San Francisco, California time) on the Funding Date applicable thereto.
After the Agent's receipt of the proceeds of such Revolving Loans, upon
satisfaction of the applicable conditions precedent set forth in Article 9, the
Agent shall make the proceeds of such Revolving Loans available to the
applicable Borrower on the applicable Funding Date by transferring same day
funds equal to the proceeds of such Revolving Loans received by the Agent to
the account of such Borrower, designated in writing by such Borrower; provided,
however, that the amount of Revolving Loans so made on any date shall in no
event exceed the lesser of Availability or Individual Availability with respect
to such Borrower on such date.
(ii) On any Funding Date in respect of a Borrowing, the Agent shall
be entitled to assume that each Lender has made the amount of such Lender's
Revolving Loan available to the Agent on such Funding Date, unless such Lender
shall have notified the Agent to the contrary. The Agent, in its sole
discretion, based upon such assumption, may make available to the applicable
Borrower a corresponding amount on such Funding Date. If such corresponding
amount had not in fact been made available to the Agent by any Lender, such
Lender and the applicable Borrower severally agree to repay to the Agent
forthwith, on demand, such corresponding amount, together with interest thereon
for each day during the period commencing on the date such amount is made
available to the applicable Borrower and ending on the date such amount is
repaid to the Agent, at (1) in the case of such Borrower, the interest rate
applicable from time to time to such Borrowing, and (2) in the case of a
Lender, the Federal Funds Rate. If such Lender repays to the Agent such
corresponding amount, such amount so repaid shall constitute a Revolving Loan,
and if both such Lender and such Borrower shall have repaid such corresponding
amount, the Agent shall promptly return to such Borrower such corresponding
amount in same day funds. Nothing in this Section 2.2(g)(ii) shall be deemed
to relieve any Lender of its obligation, if any, hereunder to make a Revolving
Loan on any Funding Date.
(h) Making of Settlement Loans. In the event the Agent shall elect,
with the consent of BABC, to have the terms of this Section 2.2(h) apply to a
requested Borrowing as described in Section 2.2(f), BABC shall make a Revolving
Loan in the amount of such Borrowing (any such Revolving Loan made solely by
BABC pursuant to this Section 2.2(h) being referred to as a "Settlement Loan"
and such Revolving Loans being referred to collectively as "Settlement Loans")
available to the applicable Borrower on the Funding Date applicable thereto by
transferring same day funds to an account of such Borrower, designated in
writing by such Borrower; provided, that at no time shall the sum of the
principal amounts of all outstanding Settlement Loans exceed $5,000,000. Each
Settlement Loan is a Revolving Loan hereunder and shall be subject to all the
terms and conditions applicable to other Revolving Loans except that all
payments thereon shall be payable to BABC solely for its own account (and for
the account of the holder of any participation interest with respect to such
Revolving Loan created pursuant to subsection (ii) of Section 2.2(k)). The
Agent shall not request BABC to make any Settlement Loan if (i) the Agent shall
have received written notice from any Lender, or otherwise has actual
knowledge, that one or more of the applicable conditions precedent set forth in
Article 9 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (ii) the requested Borrowing would exceed the lesser
of Availability or Individual Availability with respect to the applicable
Borrower on such Funding Date. BABC shall not otherwise be required to
determine whether the applicable conditions precedent set forth in Article 9
have been satisfied or the requested Borrowing would exceed the lesser of
Availability or Individual Availability with respect to the applicable Borrower
on the Funding Date applicable thereto prior to making, in its sole discretion,
any Settlement Loan.
(i) [Intentionally left blank]
(j) Agent Advances. (i) Subject to the limitations set forth in the
provisos contained in this Section 2.2(j)(i), the Agent is hereby authorized by
the Borrowers and the Lenders, from time to time in the Agent's discretion, (1)
after the occurrence of a Default or an Event of Default, or (2) at any time
that any of the other applicable conditions precedent set forth in Article 9
have not been satisfied, to make Revolving Loans to the Borrowers on behalf of
the Lenders which the Agent, in its reasonable business judgment, deems
necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (C) to pay any other amount
chargeable to any Borrower pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 14.6 (any
of the advances described in this Section 2.2(j)(i) being hereinafter referred
to as "Agent Advances"); provided, that the Agent shall not make any Agent
Advance to any Borrower if the amount thereof would exceed the lesser of
Availability or Individual Availability with respect to such Borrower on the
Funding Date applicable thereto; and provided, further, that the Majority
Lenders may at any time revoke the Agent's authorization contained in this
Section 2.2(j)(i) to make Agent Advances, any such revocation to be in writing
and to become effective upon the Agent's receipt thereof.
(ii) The Agent Advances shall be repayable on demand and secured by
the Collateral, shall constitute Revolving Loans and Obligations hereunder, and
shall bear interest at the rate applicable to the Revolving Loans from time to
time. The Agent shall notify each Lender and the applicable Borrower in
writing of each such Agent Advance, which notice shall include a description of
the purpose of such Agent Advance.
(k) Settlement. The Agent and the Lenders hereby agree that, except
in the case of Settlement Loans and Agent Advances, each Lender's funded
portion of the Revolving Loans is intended to be equal at all times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. The Agent and the
Lenders agree (which agreement shall not be for the benefit of or enforceable
by any Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the
Revolving Loans, the Settlement Loans and the Agent Advances shall take place
on a periodic basis in accordance with the following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by the
Agent, with respect to (1) each outstanding Settlement Loan, (2) each
outstanding Agent Advance, and (3) collections received, by notifying the other
Lenders by telecopy, telephone or other similar form of transmission, of such
requested Settlement, no later than 11:00 a.m. (San Francisco, California time)
on the date of such requested Settlement (the "Settlement Date"). Each Lender
(other than BABC, in the case of Settlement Loans) shall make the amount of
such Lender's Pro Rata Share of the outstanding principal amount of the
Settlement Loans and Agent Advances with respect to which Settlement is
requested available to the Agent, for itself or for the account of BABC, in
same day funds, to such account of the Agent as the Agent may designate, not
later than 1:00 p.m. (San Francisco, California time), on the Settlement Date
applicable thereto, regardless of whether the applicable conditions precedent
set forth in Article 9 have then been satisfied. Such amounts made available
to the Agent shall be applied against the amounts of the applicable Settlement
Loan or Agent Advance and, together with the portion of such Settlement Loan or
Agent Advance representing BABC's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to
the Agent by any Lender on the Settlement Date applicable thereto, the Agent
shall be entitled to recover such amount on demand from such Lender together
with interest thereon at the Federal Funds Rate for the first three (3) days
from and after the Settlement Date and thereafter at the Interest Rate then
applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1) Business
Day after demand is made by the Agent (whether before or after the occurrence
of a Default or an Event of Default and regardless of whether the Agent has
requested a Settlement with respect to a Settlement Loan or Agent Advance),
each other Lender shall irrevocably and unconditionally purchase and receive
from BABC or the Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Settlement Loan or Agent Advance
to the extent of such Lender's Pro Rata Share thereof by paying to the Agent,
in same day funds, an amount equal to such Lender's Pro Rata Share of such
Settlement Loan or Agent Advance. If such amount is not in fact made available
to the Agent by any Lender, the Agent shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after such demand and thereafter at
the Interest Rate then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any Lender purchases
an undivided interest and participation in any Settlement Loan or Agent Advance
pursuant to subsection (ii) above, the Agent shall promptly distribute to such
Lender at such address as such Lender may request in writing, such Lender's Pro
Rata Share of all payments of principal and interest and all proceeds of
collateral received by the Agent in respect of such Settlement Loan or Agent
Advance.
(iv) If any payments are received by the Agent which, in accordance
with the terms of this Agreement would be applied to the reduction of the
Revolving Loans, and no Settlement Loans or Agent Advances are then
outstanding, the Agent may pay over such amounts to BABC for application to
BABC's Pro Rata Share of such Revolving Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have
been applied to BABC's Pro Rata Share of the Revolving Loans other than
Settlement Loans and Agent Advances, as provided for in the immediately
preceding sentence, BABC shall pay to the Agent, for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an
amount such that each Lender shall have outstanding, as of such Settlement
Date, after giving effect to such payments, its Pro Rata Share of such
Revolving Loans; provided, that the Agent may net payments due from BABC
pursuant to this sentence against payments due to BABC pursuant to Section
2.2(k)(i) on the applicable Settlement Date, and require either BABC or the
other Lenders, as applicable, to make only the amount of the payment due after
such netting. As of each Settlement Date, BABC with respect to Settlement
Loans, the Agent with respect to Agent Advances, and each Lender with respect
to the Revolving Loans other than Settlement Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by BABC, the
Agent and the other Lenders since the immediately preceding Settlement Date.
(l) Notation. The Agent shall record in the Register the principal
amount of the Revolving Loans owing to each Lender, including the Settlement
Loans owing to BABC, and the Agent Advances owing to the Agent, from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Revolving Loans in its books and records, including computer records, such
books and records constituting rebuttably presumptive evidence, absent manifest
error, of the accuracy of the information contained therein.
(m) Lenders' Failure to Perform. All Loans (other than Settlement
Loans and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (a) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Loans hereunder, nor shall any Commitment of any Lender
be increased or decreased as a result of any failure by any other Lender to
perform its obligation to make any Loans hereunder, and (b) no failure by any
Lender to perform its obligation to make any Loans hereunder shall excuse any
other Lender from its obligation to make any Loans hereunder.
2.3 Term Loans.
(a) Amounts of Term Loans. Each Lender made a term loan (any such
term loan being referred to as a "Closing Date Term Loan" and such term loans
being referred to collectively as the "Closing Date Term Loans") to the Parent
on the Closing Date, in an amount equal to such Lender's Pro Rata Share of
$10,000,000. As of the Restructuring Date, the outstanding principal balance
of each of the Closing Date Term Loans was as follows: $3,298,384.83 payable
to BABC, $1,268,620.68 payable to BNY, and $253,714.49 payable to NB. Each
Lender agrees to make a term loan (any such term loan being referred to as a
"Restructuring Date Term Loan", and such term loans being referred to
collectively as the "Restructuring Date Term Loans") to the Parent on the
Restructuring Date, upon the satisfaction of the conditions precedent set forth
in Article 9, in an amount equal to such Lender's Pro Rata Share of
$4,079,280.00.
(b) Making of Term Loans. Each Lender shall make the amount of such
Lender's Restructuring Date Term Loan available to the Agent in same day funds,
to such account of the Agent as the Agent may designate, not later than 1:00
p.m. (San Francisco, California time) on the Restructuring Date. After the
Agent's receipt of the proceeds of such Restructuring Date Term Loans, upon
satisfaction of the conditions precedent set forth in Article 9, the Agent
shall make the proceeds of such Restructuring Term Loans available to the
Parent on such date by transferring same day funds equal to the proceeds of
such Restructuring Term Loans received by the Agent to an account of the Parent
designated in writing by the Parent or as the Parent shall otherwise instruct
in writing.
(c) Amended and Restated Term Loan Notes. The Parent shall execute
and deliver to the Agent on behalf of each Lender, on the Restructuring Date, a
promissory note, substantially in the form of Exhibit A attached hereto and
made a part hereof (such promissory notes, together with any new notes issued
pursuant to Section 12.3(d) upon the assignment of any portion of any Lender's
Term Loan, being hereinafter referred to collectively as the "Term Loan Notes"
and each of such promissory notes being hereinafter referred to individually as
a "Term Loan Note"), to evidence such Lender's Term Loan, in a principal amount
equal to the amount of such Lender's Pro Rata Share of $8,900,000 and with
other appropriate insertions. The principal amount of the Term Loan Notes
delivered to the Agent on behalf of each Lender shall be dated the
Restructuring Date and stated to mature in sixty (60) monthly installments.
Each of the first fifty-nine (59) installments of principal shall be in an
amount equal to such Lender's Pro Rata Share of $105,952 and shall be payable
on the first day of each month, commencing on October 1, 1997 and ending on
August 1, 2002, and the final installment of principal shall be in an amount
equal to such Lender's Pro Rata Share of the then remaining principal balance
of the Term Loan Notes, and shall be payable on September 1, 2002. Each such
installment shall be payable to the Agent for the account of the applicable
Lender.
(d) Notation and Endorsement. The Agent shall record in the
Register the principal amount of the Term Loans owing to each Lender from time
to time. In addition, each Lender is authorized, at such Lender's option, to
note the date and amount of each payment or prepayment of principal of such
Lender's Term Loans in its books and records, such books and records
constituting rebuttably presumptive evidence, absent manifest error, of the
accuracy of the information contained therein. Prior to the transfer of a Term
Loan Note, the applicable Lender shall endorse on the reverse side thereof the
outstanding principal balance of the Term Loan evidenced thereby. Failure by
such Lender to make such notation or endorsement shall not affect the
obligations of the Parent under such Term Loan Note or any of the other Loan
Documents.
2.4 Letters of Credit.
(a) Agreement to Cause Issuance. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrowers herein set forth, the Agent agrees to take
reasonable steps to cause to be issued for the account of any Borrower one or
more stand-by or documentary letters of credit (each such letter of credit,
together with those letters of credit previously issued by NB and reflected on
Schedule 2.4, a "Letter of Credit" and such letters of credit, collectively,
the "Letters of Credit") in accordance with this Section 2.4 from time to time
during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to take steps to cause to be issued any Letter of Credit at any
time: (1) if the maximum undrawn amount of the requested Letter of Credit is
greater than the Unused Letter of Credit Subfacility at such time; (2) if the
maximum undrawn amount of the requested Letter of Credit and all commissions,
fees, and charges due from the applicable Borrower in connection with the
opening thereof, exceed the lesser of Availability or Individual Availability
applicable to such Borrower at such time; or (3) which has an expiration date
later than the fifth Anniversary Date or more than one (1) year from the date
of issuance.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article 9, the
obligation of the Agent to take reasonable steps to cause to be issued any
Letter of Credit is subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent:
(1) the applicable Borrower shall have delivered to the proposed
issuer of such Letter of Credit, at such times and in such manner as such
proposed issuer may prescribe, an application in form and substance
satisfactory to such proposed issuer for the issuance of the Letter of Credit
and such other documents as may be required pursuant to the terms thereof, and
the form and terms of the proposed Letter of Credit shall be satisfactory to
the Agent and such proposed issuer; and
(2) as of the date of issuance, no order of any court, arbitrator or
Public Authority shall purport by its terms to enjoin or restrain money center
banks generally from issuing letters of credit of the type and in the amount of
the proposed Letter of Credit, and no law, rule or regulation applicable to
money center banks generally and no request or directive (whether or not having
the force of law) from any Public Authority with jurisdiction over money center
banks generally shall prohibit, or request that the proposed issuer of such
Letter of Credit refrain from, the issuance of letters of credit generally or
the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Parent, for itself or on behalf of
either or both of the other Borrowers, shall give the Agent seven (7) Business
Days' prior written notice, containing the original signature of an authorized
officer of the Parent, of the applicable Borrower's request for the issuance of
a Letter of Credit. Such notice shall be irrevocable and shall specify the
Borrower requesting the Letter of Credit, the original face amount of the
Letter of Credit requested, the effective date (which date shall be a Business
Day) of issuance of such requested Letter of Credit, whether such Letter of
Credit may be drawn in a single or in partial draws, the date on which such
requested Letter of Credit is to expire (which date shall be a Business Day),
the purpose for which such Letter of Credit is to be issued, and the
beneficiary of the requested Letter of Credit. The Parent shall attach to such
notice the proposed form of the Letter of Credit that the Agent is requested to
cause to be issued.
(2) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the requested effective
date of issuance of the Letter of Credit set forth in the notice from the
Parent pursuant to Section 2.4(d)(1), (i) the amount of the applicable Unused
Letter of Credit Subfacility and (ii) the lesser of Availability and Individual
Availability with respect to the applicable Borrower as of such date. If (A)
(i) the undrawn amount of the requested Letter of Credit is not greater than
the applicable Unused Letter of Credit Subfacility and (ii) the issuance of
such requested Letter of Credit and all commissions, fees, and charges due from
the applicable Borrower in connection with the opening thereof would not exceed
the lesser of Availability or Individual Availability with respect to such
Borrower, and (B) the Agent has received a certificate from the Parent or such
Borrower stating that the applicable conditions set forth in Article 9 have
been satisfied, the Agent shall take reasonable steps to cause such issuer to
issue the requested Letter of Credit on such requested effective date of
issuance.
(3) Notice of Issuance. Promptly after the issuance of any Letter
of Credit, the Agent shall give each Lender written notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of such Letter
of Credit.
(4) No Extensions or Amendment. The Agent shall not cause any
Letter of Credit to be extended or amended unless the requirements of this
Section 2.4(d) are met as though a new Letter of Credit were being requested
and issued.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations. The Borrowers agree to
reimburse the issuer for any draw under any Letter of Credit immediately upon
demand, and to pay the issuer of the Letter of Credit the amount of all other
Obligations and other amounts payable to such issuer under or in connection
with any Letter of Credit immediately when due, irrespective of any claim,
setoff, defense or other right which any Borrower may have at any time against
such issuer or any other Person.
(2) Revolving Loans to Satisfy Reimbursement Obligations. In the
event that the issuer of any Letter of Credit honors a draw under such Letter
of Credit and the applicable Borrower shall not have repaid such amount to the
issuer of such Letter of Credit pursuant to Section 2.4(e)(1), the Agent shall,
upon receiving notice of such failure, notify each Lender of such failure, and
each Lender shall unconditionally pay to the Agent, for the account of such
issuer, as and when provided hereinbelow, an amount equal to such Lender's Pro
Rata Share of the amount of such payment in Dollars and in same day funds. If
the Agent so notifies the Lenders prior to 11:00 a.m. (San Francisco,
California time) on any Business Day, each Lender shall make available to the
Agent the amount of such payment, as provided in the immediately preceding
sentence, on such Business Day. Such amounts paid by the Lenders to the Agent
shall constitute Revolving Loans which shall be deemed to have been requested
by the applicable Borrower pursuant to Section 2.2 as set forth in Section 4.7.
(f) Participations.
(1) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with Section 2.4(d), and on the Closing Date for
the Letters of Credit reflected on Schedule 2.4, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received without recourse or
warranty, an undivided interest and participation in the credit support or
enhancement provided through the Agent to such issuer in connection with the
issuance of such Letter of Credit, equal to such Lender's Pro Rata Share of the
face amount of such Letter of Credit (including, without limitation, all
obligations of the applicable Borrower with respect thereto, and any security
therefor or guaranty pertaining thereto).
(2) Sharing of Reimbursement Obligation Payments. Whenever the
Agent receives a payment from a Borrower on account of reimbursement
obligations in respect of a Letter of Credit as to which the Agent has
previously received for the account of the issuer thereof payment from a Lender
pursuant to this Section 2.4(f)(2), the Agent shall promptly pay to such Lender
such Lender's Pro Rata Share of such payment from such Borrower in Dollars.
Each such payment shall be made by the Agent on the Business Day on which the
Agent receives immediately available funds paid to such Person pursuant to the
immediately preceding sentence, if received prior to 1:00 p.m. (San Francisco,
California time) on such Business Day and otherwise on the next succeeding
Business Day.
(3) Documentation. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit, reimbursement agreement
executed in connection therewith, application for any Letter of Credit and
credit support or enhancement provided through the Agent in connection with the
issuance of any Letter of Credit, and such other documentation as may
reasonably by requested by such Lender.
(4) Obligations Irrevocable. The obligations of each Lender to make
payments to the Agent with respect to any Letter of Credit or with respect to
any credit support or enhancement provided through the Agent with respect to a
Letter of Credit, and the obligations of the Borrowers to make payments to the
Agent, for the account of the Lenders, shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement (assuming, in the case of the
obligations of the Lenders to make such payments, that the Agent has caused
such Letter of Credit to be issued in accordance with Section 2.4(d)),
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which any Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, the Agent, the issuer of such
Letter of Credit, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between any
Borrower or any other Person and the beneficiary named in any Letter of
Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(g) Recovery or Avoidance of Payments. In the event any payment by
or on behalf of a Borrower received by the Agent with respect to any Letter of
Credit (or any guaranty by a Borrower or reimbursement obligation of a Borrower
relating thereto) and distributed by the Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent their respective Pro Rata Shares of such amount set aside, avoided or
recovered, together with interest at the rate required to be paid by the Agent
upon the amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(1) Letter of Credit Fee. The Borrowers agree to pay to the Agent
with respect to each Letter of Credit, for the account of the Lenders, the
Letter of Credit Fee specified in, and in accordance with the terms of, Section
3.8.
(2) Issuer Fees and Charges. The Borrowers shall pay to the issuer
of any Letter of Credit, or to the Agent, for the account of the issuer of any
such Letter of Credit, solely for such issuer's account, such fees and other
charges as are charged by such issuer for letters of credit issued by it,
including, without limitation, its standard fees for issuing, administering,
amending, renewing, paying and cancelling letters of credit and all other fees
associated with issuing or servicing letters of credit, as and when assessed.
(i) Indemnification; Exoneration.
(1) Indemnification. In addition to amounts payable as elsewhere
provided in this Section 2.4, each Borrower hereby agrees to protect,
indemnify, pay and save the Lenders and the Agent harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) which any Lender or the Agent
may incur or be subject to as a consequence, direct or indirect, of the
issuance of any Letter of Credit or the provision of any credit support or
enhancement in connection therewith.
(2) Assumption of Risk by the Borrowers. As among the Borrowers,
the Lenders and the Agent, the Borrowers assume all risks of the acts and
omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, subject to the provisions of the applications for the
issuance of Letters of Credit, the Lenders and the Agent shall not be
responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with respect to any
of the Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order make a drawing under any Letter of Credit or of the
proceeds thereof; (G) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (H) any
consequences arising from causes beyond the control of the Lenders or the
Agent, including, without limitation, any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Public Authority. None
of the foregoing shall affect, impair or prevent the vesting of any rights or
powers of the Agent or any Lender under this Section 2.4(i).
(3) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Agent or any Lender under or in connection with any of the
Letters of Credit or any related certificates, if taken or omitted in good
faith and without gross negligence, shall not put the Agent or any Lender under
any resulting liability to any Borrower or relieve any Borrower of any of its
obligations hereunder to any such Person.
(j) Supporting Letter of Credit; Cash Collateral.
(i) If, notwithstanding the provisions of Section 2.4(b) any Letter
of Credit is outstanding upon the termination of this Agreement, then upon such
termination the Borrowers shall deposit with the Agent, for the ratable benefit
of the Secured Creditors, with respect to each Letter of Credit then
outstanding, as the Agent shall specify, either (A) a standby letter of credit
(a "Supporting Letter of Credit") in form and substance satisfactory to the
Agent, issued by an issuer satisfactory to the Agent in an amount equal to the
greatest amount for which such Letter of Credit may be drawn, under which
Supporting Letter of Credit the Agent is entitled to draw amounts necessary to
reimburse the Agent and the Lenders for payments made by the Agent and the
Lenders under such Letter of Credit or under any credit support or enhancement
provided through the Agent with respect thereto, or (B) cash in amounts
necessary to reimburse the Agent and the Lenders for payments made by the Agent
or the Lenders under such Letter of Credit or under any credit support or
enhancement provided through the Agent with respect thereto. Such Supporting
Letter of Credit or deposit of cash shall be held by the Agent, for the ratable
benefit of the Secured Creditors, as security for, and to provide for the
payment of, the aggregate undrawn amount of such Letters of Credit remaining
outstanding.
(ii) The Borrowers shall, upon the request of the Agent, which may
be made at any time that (A) an Event of Default has occurred and is
continuing, or (B) Availability is less than zero, deliver to the Agent cash
collateral for any Letter of Credit outstanding.
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest
on the unpaid principal amount thereof (including, to the extent permitted by
law, on interest thereon not paid when due) from the date made until paid in
full in cash at a rate determined by reference to the Base Rate or the LIBO
Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to exceed the
Maximum Rate described in Section 3.4. Subject to the provisions of Section
3.2, any of the Loans may be converted into, or continued as, Base Rate Loans
or LIBO Rate Loans in the manner provided in Section 3.2. If at any time Loans
are outstanding with respect to which notice has not been delivered to the
Agent in accordance with the terms of this Agreement specifying the basis for
determining the interest rate applicable thereto, then those Loans shall be
Base Rate Loans and shall bear interest at a rate determined by reference to
the Base Rate until notice to the contrary has been given to the Agent and such
notice has become effective. Except as otherwise provided herein, the
outstanding Obligations shall bear interest as follows:
(i) For all Term Loans which are not LIBOR Term Loans, then at a
fluctuating per annum rate equal to two percent (2.0%) (the "Base Rate Term
Margin") plus the Base Rate, minus any applicable Margin Reduction and for all
Revolving Loans and other Obligations, other than Term Loans, which are not
LIBOR Revolving Loans, then at a fluctuating per annum rate equal to one and
one-half percent (1.50%) (the "Base Rate Revolving Margin") plus the Base Rate,
minus any applicable Margin Reduction.
(ii) For all Term Loans which are LIBOR Term Loans, then at a per
annum rate equal to three and three-quarters percent (3.75%) (the "LIBOR Term
Margin") plus the LIBO Rate determined for the applicable Interest Period,
minus any applicable Margin Reduction, and for all Revolving Loans and other
Obligations, other than Term Loans, which are LIBOR Revolving Loans, then at a
per annum rate equal to three and one-half percent (3.50%) (the "LIBOR
Revolving Margin") plus the LIBO Rate determined for the applicable Interest
Period, minus any applicable Margin Reduction.
Each change in the Base Rate shall be reflected in the interest rate described
in (i) above as of the effective date of such change. All interest charges
shall be computed on the basis of a year of 360 days and actual days elapsed.
Except as otherwise provided herein, (a) interest accrued on each LIBO Rate
Loan shall be payable in arrears on the first day of each month hereafter, and
(b) interest accrued on the Base Rate Loans will be payable in arrears on the
first day of each month hereafter.
(b) Default Rate. Without limiting any of the foregoing, (i) if any
of the Obligations owed hereunder are not paid when due (whether by
acceleration or otherwise), then all of the Obligations shall bear interest at
the Default Rate applicable thereto until so paid; and (ii) if any other
Default or Event of Default occurs and the Majority Lenders in their discretion
so elect, then, while any such Default or Event of Default is outstanding, all
of the Obligations shall bear interest at the Default Rate applicable thereto.
3.2 Conversion or Continuation. (a) Subject to the provisions of
Section 3.3, (i) the Parent shall have the option to convert all or any part of
the outstanding Term Loans, and each Borrower shall have the option to convert
all or any part of the outstanding Revolving Loans to such Borrower, in either
case in a minimum amount of $5,000,000 and integral multiples of $5,000,000 in
excess of that amount, from Base Rate Term Loans or Base Rate Revolving Loans
to LIBOR Term Loans or LIBOR Revolving Loans, as the case may be, at any time;
(ii) the Parent shall have the option to convert all or any part of the
outstanding Term Loans, and each Borrower shall have the option to convert all
or any part of the outstanding Revolving Loans to such Borrower, from LIBOR
Term Loans or LIBOR Revolving Loans to Base Rate Term Loans or Base Rate
Revolving Loans, as the case may be, on the expiration of the Interest Period
applicable thereto; and (iii) the Parent shall have the option, on the
expiration of the Interest Period applicable to any outstanding LIBOR Term
Loan, and each Borrower shall have the option, on the expiration of the
Interest Period applicable to any outstanding LIBOR Revolving Loan to such
Borrower, to continue all of such LIBOR Term Loan or all or any portion of such
LIBOR Revolving Loan equal to $5,000,000 and integral multiples of $5,000,000
in excess of that amount, as a LIBOR Term Loan or LIBOR Revolving Loan, as
applicable; provided, however, that no outstanding Loans may be converted into
or continued as LIBO Rate Loans when any Default or Event of Default has
occurred and is continuing. Any conversion or continuation made with respect
to less than the entire outstanding balance of the Revolving Loans or Term
Loans must be applied pro rata to the Revolving Loans or Term Loans, as
applicable, according to the outstanding principal balance of each Revolving
Loan or Term Loan.
(b) Whenever any Borrower elects to convert or continue Loans under
this Section 3.2, the Parent, for itself or as agent for either or both of the
other Borrowers, shall deliver to the Agent a written notice substantially in
the form of that attached hereto as Exhibit F (a "Notice of Conversion/
Continuation"), signed by an authorized officer of the Parent (i) no later than
11:00 a.m. (San Francisco, California time) two (2) Business Days in advance of
the requested conversion date, in the case of a conversion into Base Rate
Loans, and (ii) no later than 11:00 a.m (San Francisco, California time) four
(4) Business Days in advance of the requested conversion or continuation date,
in the case of a conversion into, or continuation of, LIBO Rate Loans. The
Notice of Conversion/Continuation shall specify (1) the applicable Borrower,
(2) the conversion or continuation date (which shall be a Business Day), (3)
the amount and type of the Loans to be converted or continued, (4) the nature
of the requested conversion or continuation, and (5) in the case of a
conversion into, or continuation of, LIBO Rate Loans, the requested Interest
Period. Promptly after receipt of a Notice of Conversion/Continuation pursuant
to this Section 3.2(b), the Agent shall notify the Lenders by telecopy,
telephone or other similar form of transmission, of the requested conversion or
continuation. In the event that the Parent should fail to provide a Notice of
Conversion/Continuation with respect to any LIBO Rate Loans as provided above,
such Loans shall, on the last day of the Interest Period with respect to such
Loans, convert to Base Rate Loans.
(c) The officers of the Parent authorized to request Revolving Loans
for the Parent or on behalf of either or both of the other Borrowers shall also
be authorized to request a conversion or continuation for the Parent or on
behalf of either or both of the other Borrowers. The Agent shall be entitled
to rely on such officers' authority until the Agent is notified to the contrary
in writing pursuant to Section 2.2(c). The Agent shall have no duty to verify
the identity of any individual representing himself as one of the officers
authorized to make such request on behalf of any Borrower. The Agent shall
incur no liability to any Borrower in acting upon any notice referred to in
this Section 3.2, which notice the Agent believes in good faith to have been
given by an officer authorized to make such requests on behalf of such
Borrower, or for otherwise acting in good faith under this Section 3.2 and,
upon such conversion or continuation by the Agent and the Lenders in accordance
with this Agreement, the applicable Borrower shall have effected the conversion
or continuation of the applicable Loans hereunder.
(d) Any Notice of Conversion/Continuation for conversion to, or
continuation of, Loans made pursuant to this Section 3.2 shall be irrevocable
and the applicable Borrower shall be bound to convert or continue in accordance
therewith.
3.3 Special Provisions Governing LIBO Rate Loans. Notwithstanding
any other provisions to the contrary contained in this Agreement, the following
provisions shall govern with respect to LIBO Rate Loans as to the matters
covered:
(a) Amount of LIBO Rate Loans. Each continuation of or conversion
to LIBOR Term Loans, and each election of, continuation of or conversion to
LIBOR Revolving Loans, shall be in a minimum amount of $5,000,000 and in
integral multiples of $5,000,000 in excess of that amount.
(b) Determination of Interest Period. By giving notice as set forth
in Section 3.2(b), the Parent, for itself or on behalf of either or both of the
other Borrowers, shall have the option, subject to the other provisions of this
Section 3.3, to specify whether the Interest Period for such LIBO Rate Loan
shall be a period of one, two, three or four months (or, if available, as
determined by all of the Lenders, six or twelve months). The determination of
Interest Periods shall be subject to the following provisions:
(i) In the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires.
(ii) If any Interest Period would otherwise expire on a day which is
not a Business Day, the Interest Period shall be extended to expire on the next
succeeding Business Day; provided, however, that if the next succeeding
Business Day occurs in the following calendar month, then such Interest Period
shall expire on the immediately preceding Business Day.
(iii) No Borrower may select an Interest Period for any LIBO Rate
Loan, which Interest Period expires later than the fifth Anniversary Date.
(iv) No Borrower may select an Interest Period with respect to any
portion of the Term Loans which extends beyond an installment payment date for
the Term Loans unless, after giving effect to such election, the portion of the
Term Loans not subject to Interest Periods ending after such installment
payment date is equal to or greater than the principal due on such installment
payment date.
(v) There shall be no more than five (5) Interest Periods in effect
at any one time.
(c) Determination of Interest Rate. As soon as practicable after
11:00 a.m. (San Francisco, California time) on the LIBOR Interest Rate
Determination Date, the Agent shall determine (which determination shall,
absent manifest error, be presumptively correct) the Interest Rate for the LIBO
Rate Loans for which an Interest Rate is then being determined and shall
promptly give notice thereof (in writing or by telephone confirmed in writing)
to the applicable Borrower. In the event that on any LIBOR Interest Rate
Determination Date the Agent shall have determined (which determination shall,
absent manifest error, be presumptively correct and binding upon all parties)
that:
(i) adequate and fair means do not exist for ascertaining the
applicable interest rates by reference to which the LIBO Rate then being
determined is to be fixed; or
(ii) the LIBO Rate for any Interest Period for such Loans will not
adequately reflect the cost to any Lender of making, funding or maintaining its
LIBO Rate Loan for such Interest Period, the Agent shall forthwith so notify
the Borrowers and the Lenders, whereupon:
(A) each LIBO Rate Loan will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Rate Loan; and
(B) the obligation of the Lenders to make, or to convert Loans into,
LIBO Rate Loans shall be suspended until the Agent shall notify the Borrowers
and the Lenders that the circumstances causing such suspension no longer exist.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other Public Authority asserts that it is unlawful, for
any Lender to perform its obligations hereunder to make LIBO Rate Loans or to
fund or maintain LIBO Rate Loans hereunder, (i) the obligation of the Lenders
to make, or to convert Loans into or to continue Loans as, LIBO Rate Loans
shall be suspended until the Agent shall notify the Borrowers and the Lenders
that the circumstances causing such suspension no longer exist and (ii) the
Borrowers shall on the termination of the Interest Period than applicable
thereto, or on such earlier date required by law, prepay in full all LIBO Rate
Loans then outstanding together with accrued interest thereon, or convert all
such LIBO Rate Loans into Base Rate Loans in accordance with Section 3.2.
(e) Increased Costs. If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of reserve
requirements included in the LIBOR Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Public Authority (whether
or not having the force of law), there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining LIBO Rate Loans,
then the Borrowers agree that they shall, from time to time, upon demand by
such Lender, pay to such Lender additional amounts sufficient to compensate
such Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrowers by such Lender, shall, absent
manifest error, be rebuttably presumptive evidence of the correctness of such
amount.
(f) Compensation. In addition to such amounts as are required to be
paid by the Borrowers pursuant to the other Sections of this Article 3, each
Borrower agrees to compensate any Lender for all losses, expenses and
liabilities, including, without limitation, any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Lender's LIBO Rate Loans to the
Borrowers, which such Lender may sustain (i) if for any reason a funding of any
LIBO Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion/Continuation, or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 3.2, (ii)
if any voluntary or mandatory prepayment of any LIBO Rate Loans occurs for any
reason on a date which is not the last scheduled day of an Interest Period,
(iii) as a consequence of any required conversion of LIBO Rate Loans to Base
Rate Loans as a result of any of the events indicated in Section 3.3(d), or
(iv) as a consequence of any other failure by any Borrower to repay LIBO Rate
Loans when required by the terms of this Agreement.
(g) Booking of LIBO Rate Loans. The Lenders may make, carry or
transfer LIBO Rate Loans at, to, or for the account of, any of their respective
branch offices or the office of any of their respective affiliates.
(h) LIBO Rate Loans After Event of Default. Unless the Majority
Lenders shall otherwise agree, after the occurrence of and during the
continuance of any Event of Default, no Borrower may borrow Revolving Loans as
LIBO Rate Loans or elect to have any Loans continued as, or converted to, LIBO
Rate Loans after the expiration of any Interest Period then in effect for such
Loans.
3.4 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate permissible for corporate
borrowers under applicable law for loans of the type provided for hereunder
(the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Obligations under this Agreement, the total amount of interest paid
or accrued under the terms of this Agreement is less than the total amount of
interest which would, but for this Section 3.4, have been paid or accrued if
the interest rates otherwise set forth in this Agreement had at all times been
in effect, then the Borrowers shall, to the extent permitted by applicable law,
pay the Agent, for the account of the Lenders, an amount equal to the
difference between (a) the lesser of (i) the amount of interest which would
have been charged if the Maximum Rate had, at all times, been in effect or (ii)
the amount of interest which would have accrued had the interest rates
otherwise set forth in this Agreement, at all times, been in effect and (b) the
amount of interest actually paid or accrued under this Agreement. In the event
that a court determines that the Agent and/or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such excess shall be
deemed received on account of, and shall automatically be applied to reduce,
the Obligations other than interest, in the inverse order of maturity, and if
there are no Obligations outstanding, the Agent and/or such Lender shall refund
to the Borrowers such excess.
3.5 Restructuring Fee. The Borrowers agree, on a joint and several
basis, to pay the Agent, for the ratable account of the Lenders, on the
Restructuring Date a restructuring fee (the "Restructuring Fee") in the amount
of $200,000, which Restructuring Fee shall be fully earned by the Lenders on
the Restructuring Date. The Agent, the Lenders and the Borrowers agree that
the Restructuring Fee shall be financed by the Lenders as Revolving Loans.
3.6 Facility Fee. The Borrowers agree, on a joint and several
basis, to pay to the Agent, for the ratable account of the Lenders, a facility
fee equal to one-half of one percent (0.50%) per annum on the average daily
amount by which the Revolver Facility exceeded the sum of outstanding Revolving
Loans and the undrawn amount of all outstanding Letters of Credit, payable on
the first day of each month for the immediately preceding month and on the
Termination Date for the period from the last date for which the facility fee
was paid to and including the Termination Date. The facility fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
As provided for in Section 5.9(c), all payments received by the Agent on
account of Accounts or as proceeds of other Collateral shall be deemed to be
credited to the applicable Borrower's loan account immediately upon receipt for
purposes of calculating the facility fee pursuant to this Section 3.6.
3.7 Servicing Fee. The Borrowers shall pay to the Agent, solely for
its own account, a servicing fee in accordance with that certain Fee Agreement
among the Agent and the Borrowers dated as of the Closing Date.
3.8 Letter of Credit Fee. The Borrowers agree, on a joint and
several basis, to pay to the Agent, for the ratable account of the Lenders, for
each Letter of Credit, a fee (the "Letter of Credit Fee") equal to two percent
(2.0%) per annum of the undrawn amount of each Letter of Credit issued for any
Borrower's account at such Borrower's request, plus all out-of-pocket costs,
fees and expenses incurred by the Agent in connection with the application for,
issuance of, or amendment to any Letter of Credit, which costs, fees and
expenses could include a "fronting fee" required to be paid by the Agent to
such issuer for the assumption of the settlement risk in connection with the
issuance of such Letter of Credit; provided, that the Borrowers shall not be
required to pay to the Agent the amount of any "fronting fee" charged with
respect to any trade or documentary Letter of Credit having an expiration date
less than ninety (90) days from the date of issuance. Solely by way of
information, the "fronting fee" charged by Bank of America as of the Closing
Date in connection with letters of credit issued by it at the request of BABC
is one-half of one percent (.50%) per annum of the undrawn amount of the
applicable letter of credit, and the amount of such "fronting fee" is subject
to change at any time. The Letter of Credit Fee shall be payable in advance
(1) upon the issuance of each Letter of Credit for the number of days remaining
in the month during which such Letter of Credit was issued and (2) thereafter,
monthly, on the first day of each month during which each such Letter of Credit
remains outstanding. The Letter of Credit Fee shall be computed on the basis
of a 360-day year for the actual number of days elapsed.
3.9 Audit Fees. The Borrowers agree, on a joint and several basis,
to pay to (a) BNY, solely for its own account, and (b) the Agent, solely for
its own account, all costs and fees reasonably incurred by BNY's and the
Agent's respective internal auditors in connection with audits of the Borrowers
performed by such auditors during the term of this Agreement; provided, that
prior to the occurrence of an Event of Default, neither BNY nor the Agent shall
be entitled to reimbursement for any such costs and fees incurred in connection
with audits in excess of four (4) per year, and BNY shall be entitled to
reimbursement for not more than one (1) auditor per day and only in the event
that such auditor accompanied the Agent on the applicable audit. Each auditor
of BNY and of the Agent shall be billed at a rate of $500 per day plus
reasonably incurred out-of-pocket expenses (including travel expenses).
3.10 Performance Fees. On or prior to March 31, 1998, the Borrowers
agree, on a joint and several basis, to pay the Agent, for the ratable account
of the Lenders, a performance fee determined in accordance with the following
table:
Consolidated Earnings
for Fiscal Year
Ending December 31, 1997 Performance Fee
Greater than or equal to
$2,700,000 $0
Greater than or equal to
$2,200,000 but less than
$2,700,000 $175,000
Less than $2,200,000 $550,000
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at
any time, and reborrow subject to the terms of this Agreement; provided,
however, that with respect to any LIBOR Revolving Loans prepaid by any Borrower
prior to the expiration date of the Interest Period applicable thereto, such
Borrower agrees to pay to the Lenders the amounts described in Section 3.3(f).
In addition, and without limiting the generality of the foregoing, the
Borrowers shall pay to the Agent, for the account of the Lenders, (a) the
amount by which the sum of outstanding Revolving Loans, the aggregate amount of
Pending Revolving Loans, the aggregate undrawn amounts of all outstanding
Letters of Credit and the amount of all unpaid reimbursement obligations with
respect to the Letters of Credit exceeds the Maximum Revolver Amount (but
without duplication), and (b) the amount by which the sum of outstanding
Revolving Loans to a Borrower, the aggregate amount of Pending Revolving Loans
to such Borrower, the aggregate undrawn amounts of all outstanding Letters of
Credit issued for the account of such Borrower and the amount of all unpaid
reimbursement obligations with respect to the Letters of Credit issued for the
account of such Borrower exceeds the Individual Maximum Revolver Amount with
respect to such Borrower, any such amount described in the foregoing clause (a)
or (b) to be payable upon demand.
4.2 Termination of Revolver Facility. The Borrowers may terminate
the Revolver Facility in whole, but not in part, upon at least five (5)
Business Days' notice to the Agent and the Lenders, upon (a) the payment in
full of all outstanding Revolving Loans, together with accrued interest
thereon, and the cancellation of all outstanding Letters of Credit, (b) the
prepayment in full of the Term Loans, together with accrued interest thereon,
(c) the payment of the early termination fee set forth in the next sentence,
and (d) with respect to any LIBO Rate Loans prepaid in connection with such
termination prior to the expiration date of the Interest Period applicable
thereto, the payment of the amounts described in Section 3.3(f). If the
Revolver Facility is terminated at any time prior to the fourth Anniversary
Date, whether pursuant to this Section or pursuant to Section 10.2, the
Borrowers shall pay to the Agent, for the account of the Lenders, an early
termination fee determined in accordance with the following table:
Period during which Early
early termination Termination
occurs Fee
On or prior to September 7, 1999 $950,000
After September 7, 1999
but on or prior to
September 7, 2001 $750,000
4.3 Repayment of the Term Loans. The Parent agrees to repay the
principal of the Term Loans to the Agent, for the account of the Lenders, in
accordance with the terms of the Term Loan Notes.
4.4 Voluntary Prepayments of the Term Loans. The Parent may prepay
the principal of the Term Loans in whole or in part, at any time and from time
to time upon (a) at least five (5) Business Days' prior written notice to the
Agent and the Lenders, and (b) payment of, with respect to any LIBOR Term Loans
to be prepaid prior to the expiration date of the Interest Period applicable
thereto, the amounts described in Section 3.3(f). All voluntary prepayments of
the principal of the Term Loans shall be accompanied by the payment of all
accrued but unpaid interest on the Term Loans to the date of prepayment. Any
voluntary prepayment under this Section 4.4 of less than all of the outstanding
principal of the Term Loans shall be applied to the installments of principal
of the Term Loans in the inverse order of maturity.
4.5 Mandatory Prepayments of the Term Loans. (a) The Parent shall
prepay the entire unpaid principal balance of the Term Loans, and all accrued
but unpaid interest thereon, upon the termination of this Agreement or the
Revolver Facility for any reason. Prepayments on the Term Loans shall also be
required to be made as provided in Sections 8.5 and 8.6.
(b) Any prepayment under this Section 4.5 of less than all of the
outstanding principal amount of the Term Loans shall be applied, based upon the
Pro Rata Shares of the Lenders, to the installments of principal of the Term
Loans in the inverse order of maturity. In connection with any such
prepayment, if any LIBOR Term Loans are prepaid prior to the expiration date of
the Interest Period applicable thereto, the Parent shall pay to the Lenders the
amounts described in Section 3.3(f).
4.6 Place and Form of Payments; Extension of Time. All payments of
principal, interest, premium, and other sums due to the Agent or the Lenders
shall be made at the Agent's address set forth in or specified pursuant to
Section 14.7. Except for proceeds received directly by the Agent, all such
payments shall be made in immediately available funds. If any payment of
principal, interest, premium, or other sum to be made hereunder becomes due and
payable on a day other than a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day and interest thereon shall be
payable at the applicable Interest Rate during such extension.
4.7 Payments as Revolving Loans. All payments of principal,
interest, reimbursement obligations in connection with Letters of Credit, fees,
premiums and other sums payable hereunder, including all reimbursement for
expenses pursuant to Section 14.6, may, at the option of the Agent, in its sole
discretion, subject only to the terms of this Section 4.7, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
a Borrower pursuant to Section 2.2 or a deemed request as provided in this
Section 4.7. Each Borrower hereby irrevocably authorizes the Lenders to make
Revolving Loans (including Settlement Loans by BABC or Agent Advances by the
Agent), upon notice from the Agent as described in the next succeeding
sentence, for the purpose of paying principal, interest, reimbursement
obligations in connection with Letters of Credit, fees, premiums and other sums
payable hereunder, including reimbursing expenses pursuant to Section 14.6, and
agrees that all such Revolving Loans so made shall be deemed to have been
requested by it pursuant to Section 2.2, as of the date of the aforementioned
notice. The Agent shall request Revolving Loans on behalf of any Borrower as
described in the immediately preceding sentence by notifying the Lenders (or
BABC, in the case of a Settlement Loan) and the Parent, by telecopy, telephone
or other similar form of transmission, of the amount and Funding Date of the
requested Borrowing and that such Borrowing is being requested on the
applicable Borrower's behalf pursuant to this Section 4.7. On the requested
Funding Date, as applicable, the Lenders will make the requested Revolving
Loans in accordance with the procedures and subject to the conditions specified
in Section 2.2.
4.8 Apportionment, Application and Reversal of Payments. Aggregate
principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders. All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of specific
Loans, or not constituting payment of specific fees, and all proceeds of
Accounts or other Collateral received by the Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees, expense
reimbursements or indemnities then due to the Agent or the Lenders from any
Borrower; second, to pay interest due in respect of all Revolving Loans,
including Settlement Loans and Agent Advances, and all unpaid reimbursement
obligations in respect of Letters of Credit; third, to pay or prepay principal
of the Settlement Loans and Agent Advances; fourth, to pay or prepay principal
of the Revolving Loans (other than Settlement Loans and Agent Advances), with
such payments to be applied first in satisfaction of any Revolving Loans which
bear interest at a rate determined by reference to subsection 3.1(a)(iii), and
to pay, prepay or provide cash collateral in respect of outstanding Letters of
Credit or any unpaid reimbursement obligations in respect thereof, as
applicable; fifth, to pay or prepay principal of the Term Loans; and sixth, to
the payment of any other Obligation due to the Agent or any Lender by any
Borrower. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by a Borrower, or unless an Event of Default is
outstanding, neither the Agent nor any Lender shall apply any payments which it
receives to any LIBOR Revolving Loan or LIBOR Term Loan, except (a) on the
expiration date of the Interest Period applicable to any such LIBO Rate Loan,
or (b) in the event, and only to the extent, that there are no outstanding Base
Rate Revolving Loans or Base Rate Term Loans. The Agent shall promptly
distribute to each Lender, pursuant to the applicable wire transfer
instructions set forth in Section 13.11, or pursuant to such other instructions
as such Lender may deliver to the Agent in writing, such funds as it may be
entitled to receive. The Agent and the Lenders shall have the continuing and
exclusive right to apply and reverse and reapply any and all such proceeds and
payments to any portion of the Obligations.
4.9 Indemnity for Returned Payments. If after receipt of any
payment of, or proceeds applied to the payment of, all or any part of the
Obligations, the Agent or any Lender is for any reason compelled to surrender
such payment or proceeds to any Person, because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended
to be satisfied shall be revived and continue and this Agreement shall continue
in full force as if such payment or proceeds had not been received by the Agent
or such Lender, and the Borrowers shall be liable to pay to the Agent, and
hereby does indemnify the Agent and the Lenders and hold the Agent and the
Lenders harmless for, the amount of such payment or proceeds surrendered. The
provisions of this Section 4.9 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable.
The provisions of this Section 4.9 shall survive the termination of this
Agreement.
4.10 Increased Capital. If any Lender determines that compliance by
such Lender with any guideline or request from any central bank or other Public
Authority (whether or not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by such Lender, or any
corporation controlling such Lender, and such Lender reasonably determines that
the amount of such capital is increased by or based upon its Commitment or its
making or maintaining Loans hereunder, or its commitment to participate (as
provided for in Section 2.4(f)) in any credit support or enhancement provided
through the Agent in connection with the issuance of any Letter of Credit or to
otherwise extend credit to the Borrowers hereunder, and other commitments of
this type, then, upon demand by such Lender, the Borrowers agree to immediately
pay to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to such Lender's commitment to participate
(as provided for in Section 2.4(f)) in any credit support or enhancement
provided through the Agent in connection with Letters of Credit or commitment
to make Loans hereunder. A certificate as to the amount of such increased
cost, submitted to the Borrowers by the applicable Lender shall, absent
manifest error, be conclusive and binding on the Borrowers for all purposes.
4.11 Register; Agent's and Lenders' Books and Records; Monthly
Statements. Each Borrower agrees that the Register and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall, absent manifest error, constitute rebuttably
presumptive proof thereof, irrespective of whether any Obligation is also
evidenced by a promissory note or other instrument. The Agent will provide to
the Borrowers a monthly statement of Loans, payments, and other transactions
pursuant to this Agreement. Such statement shall be deemed correct, accurate,
and binding on the Borrowers and an account stated (except for reversals and
reapplications of payments made as provided in Section 4.8 and corrections of
errors discovered by the Agent), unless the Borrowers notify the Agent in
writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrowers, only the items to which exception is expressly made will be
considered to be disputed by the Borrowers.
ARTICLE 5
COLLATERAL
5.1 Grant of Security Interest. (a) (1) As security for all
Obligations, the Parent hereby reaffirms its grant to the Agent, for the
ratable benefit of the Secured Creditors, a continuing security interest in,
lien on, and right of set-off against, all of the following property of the
Parent, whether now owned or existing (subject to the qualifications and
restrictions set forth below) or hereafter acquired or arising, regardless of
where located:
(i) Accounts;
(ii) Inventory;
(iii) to the extent acquired or arising after October 16, 1990,
all of the following property of the Parent and interests in property of the
Parent:
(A) contract rights, letters of credit, Assigned
Contracts, chattel paper, instruments, notes, documents, and documents of
title;
(B) General Intangibles;
(C) Equipment;
(D) money, Securities (other than the capital stock of
Laclede Chain) and other property of any kind of the Parent in the possession
or under the control of the Agent or any Lender, any assignee of or participant
in the Obligations, or a bailee of any such party or such party's affiliates;
(E) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its affiliates or any other
financial institution in which the Parent maintains deposits; and
(F) books, records and other property related to or
referring to any of the foregoing, including, without limitation, books,
records, account ledgers, data processing records, computer software and other
property and General Intangibles at any time evidencing or relating to any of
the foregoing; and
(iv) accessions to, substitutions for and replacements, products
and proceeds of any of the foregoing, including, but not limited to, proceeds
of any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.
(2) As security for all Obligations, the Parent hereby grants to the Agent, for
the ratable benefit of the Secured Creditors, a continuing security interest
in, lien on, and right of set-off against, all of the following property of the
Parent, whether now owned or existing (subject to the qualifications and
restrictions set forth below) or hereafter acquired or arising, regardless of
where located:
(i) to the extent acquired or arising on or prior to October 16,
1990, all of the following property of the Parent and interests in property of
the Parent:
(A) contract rights, letters of credit, Assigned Contracts,
chattel paper, instruments, notes, documents, and documents of title;
(B) General Intangibles;
(C) Equipment;
(D) money, Securities (other than the capital stock of Laclede
Chain) and other property of any kind of the Parent in the possession or under
the control of the Agent or any Lender, any assignee of or participant in the
Obligations, or a bailee of any such party or such party's affiliates;
(E) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its affiliates or any other
financial institution in which the Parent maintains deposits; and
(F) books, records and other property related to or referring
to any of the foregoing, including, without limitation, books, records, account
ledgers, data processing records, computer software and other property and
General Intangibles at any time evidencing or relating to any of the foregoing;
and
(ii) accessions to, substitutions for and replacements, products and
proceeds of any of the foregoing, including, but not limited to, proceeds of
any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.
All of the foregoing, together with the Real Estate covered by any mortgage
liens granted by the Parent to the Agent for the ratable benefit of the Secured
Creditors and all other property of the Parent in which the Agent or any Lender
may at any time be granted a Lien, is herein collectively referred to as the
"Parent Collateral".
(b) As security for all Obligations, Laclede Chain hereby reaffirms
its grant to the Agent, for the ratable benefit of the Secured Creditors, a
continuing security interest in, lien on, and right of set-off against, all of
the following property of Laclede Chain, whether now owned or existing or
hereafter acquired or arising, regardless of where located:
(i) Accounts;
(ii) Inventory;
(iii) contract rights, letters of credit, Assigned Contracts,
chattel paper, instruments, notes, documents, and documents of title;
(iv) General Intangibles;
(v) money, Securities and other property of any kind of Laclede
Chain in the possession or under the control of the Agent or any Lender, any
assignee of or participant in the Obligations, or a bailee of any such party or
such party's affiliates;
(vi) deposit accounts, credits and balances with and other claims
against the Agent or any Lender or any of its affiliates or any other financial
institution in which Laclede Chain maintains deposits;
(vii) books, records and other property related to or referring
to any of the foregoing, including, without limitation, books, records, account
ledgers, data processing records, computer software and other property and
General Intangibles at any time evidencing or relating to any of the foregoing;
and
(viii) accessions to, substitutions for and replacements, products
and proceeds of any of the foregoing, including, but not limited to, proceeds
of any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.
All of the foregoing, together with all other property of Laclede Chain in
which the Agent or any Lender may at any time be granted a Lien, is herein
collectively referred to as the "Laclede Chain Collateral".
(c) As security for all Obligations, Laclede Mid America hereby
reaffirms its grant to the Agent, for the ratable benefit of the Secured
Creditors, a continuing security interest in, lien on, and right of set-off
against, all of the following property of Laclede Mid America, whether now
owned or existing (subject to the qualifications and restrictions set forth
below) or hereafter acquired or arising, regardless of where located:
(i) Accounts;
(ii) Inventory;
(iii) contract rights, letters of credit, Assigned Contracts,
chattel paper, instruments, notes, documents, and documents of title;
(iv) General Intangibles;
(v) Equipment;
(vi) money, Securities and other property of any kind of Laclede
Mid America in the possession or under the control of the Agent or any Lender,
any assignee of or participant in the Obligations, or a bailee of any such
party or such party's affiliates;
(vii) deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its affiliates or any other
financial institution in which Laclede Mid America maintains deposits;
(viii) books, records and other property related to or referring
to any of the foregoing, including, without limitation, books, records, account
ledgers, data processing records, computer software and other property and
General Intangibles at any time evidencing or relating to any of the foregoing;
and
(ix) accessions to, substitutions for and replacements, products
and proceeds of any of the foregoing, including, but not limited to, proceeds
of any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.
All of the foregoing, together with all other property of Laclede Mid America
in which the Agent or any Lender may at any time be granted a Lien, is herein
collectively referred to as the "Laclede Mid America Collateral".
(d) As security for all Obligations, (i) the Parent executed and
delivered to the Agent the Vandalia Mortgage to grant to the Agent, for the
ratable benefit of the Secured Creditors, a continuing mortgage lien on the
Real Estate located in Vandalia, Illinois and identified therein, (ii) the
Parent shall execute and deliver to the Agent the Alton Mortgage, the Memphis
Mortgage and the Parent Fremont Mortgage to grant to the Agent for the ratable
benefit of the Secured Creditors, a continuing mortgage lien on its Real Estate
located in Alton, Illinois, Memphis, Tennessee and Fremont, Indiana
respectively, and identified in such Mortgages, and (iii) Laclede Mid America
shall execute and deliver to the Agent the Fremont Mortgage to grant to the
Agent for the ratable benefit of the Secured Creditors, a continuing mortgage
lien on the Real Estate located in Fremont, Indiana, and identified in such
Mortgage.
(e) The Agent and the Lenders agree that the Agent shall execute and
deliver such documentation as is required in order to effectuate the release of
its Lien on any Equipment or Real Estate (including, without limitation,
accessories to, substitutions or replacements for, and products or proceeds
thereof) acquired by the Parent, Laclede Chain or Laclede Mid America after the
Closing Date and (i) financed in whole with the proceeds of a substantially
concurrent sale of any class of capital stock of the Parent or Laclede Mid
America, provided, that any such sale of any capital stock of Laclede Mid
America shall be limited to an amount not to exceed 10% of all capital stock of
Laclede Mid America, as applicable; or (ii) financed by Debt secured by
purchase money Liens encumbering such Equipment or Real Estate, provided, that
such Debt is permitted by Section 8.13, the cost of the acquisition of such
Equipment or Real Estate constitutes a Capital Expenditure permitted by Section
8.22, and the principal amount of Debt incurred for any such purchase of
Equipment is not less than one hundred percent (100.0%) of the purchase price
of such Equipment.
(f) All of the Obligations shall be secured by all of the
Collateral. The Agent may, subject to the provisions of Articles 12 and 13, in
its sole discretion, (i) exchange, waive, or release any of the Collateral,
(ii) apply Collateral and direct the order or manner of sale thereof as the
Agent may determine, and (iii) settle, compromise, collect, or otherwise
liquidate any Collateral in any manner, all without affecting the Obligations
or the Agent's or any Lender's right to take any other action with respect to
any other Collateral.
5.2 Perfection and Protection of Security Interest. Each Borrower
shall, at its expense, perform all steps requested by the Agent at any time to
perfect, maintain, protect, and enforce the Agent's Liens, including, without
limitation: (a) executing and recording of the Mortgages and the Patent and
Trademark Agreements and executing and filing financing or continuation
statements, and amendments thereof, in form and substance satisfactory to the
Agent; (b) delivering to the Agent the originals of all instruments, documents,
and chattel paper, and all other Collateral of which the Agent determines it
should have physical possession in order to perfect and protect the Agent's
security interest therein, including the Intercompany Notes, duly pledged,
endorsed or assigned to the Agent without restriction; (c) delivering to the
Agent warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued; (d) when an Event of
Default exists, transferring Inventory to warehouses designated by the Agent;
(e) placing notations on such Borrower's books of account to disclose the
Agent's security interest; (f) delivering to the Agent all letters of credit on
which such Borrower is named beneficiary; and (g) taking such other steps as
are deemed necessary or desirable by the Agent to maintain and protect the
Agent's Liens. To the extent permitted by applicable law, the Agent may file,
without the applicable Borrower's signature, one or more financing statements
disclosing the Agent's Liens. Each Borrower agrees that a carbon,
photographic, photostatic, or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.
If any Collateral is at any time in the possession or control of any
warehouseman, bailee or any of a Borrower's agents or processors, then such
Borrower shall notify the Agent thereof and shall notify such Person of the
Agent's security interest in such Collateral and, upon the Agent's request,
instruct such Person to hold all such Collateral for the Agent's account
subject to the Agent's instructions. If at any time any Collateral is located
on any operating facility of a Borrower which is not owned by such Borrower,
then such Borrower shall obtain written waivers, in form and substance
satisfactory to the Agent, of all present and future Liens to which the owner
or lessor or any mortgagee of such premises may be entitled to assert against
the Collateral.
From time to time, each Borrower shall, upon the Agent's request,
execute and deliver confirmatory written instruments pledging to the Agent, for
the ratable benefit of the Secured Creditors, the Collateral with respect to
such Borrower, but any Borrower's failure to do so shall not affect or limit
the Agent's security interest or the Agent's other rights in and to the
Collateral with respect to such Borrower. So long as this Agreement is in
effect and until all Obligations have been fully satisfied, the Agent's Liens
shall continue in full force and effect in all Collateral (whether or not
deemed eligible for the purpose of calculating the Maximum Revolver Amount or
as the basis for any advance, loan, extension of credit, or other financial
accommodation).
5.3 Location of Collateral. Each Borrower represents and warrants
to the Agent and the Lenders that: (a) Schedule 5.3 is a correct and complete
list of such Borrower's chief executive office, the location of its books and
records, the locations of the Collateral with respect to such Borrower, and the
locations of all of its other places of business; and (b) Schedule 5.3
correctly identifies any of such facilities and locations that are not owned by
such Borrower and sets forth the names of the owners and lessors or sublessors
of, and, to the best of such Borrower's knowledge, the holders of any mortgages
on, such facilities and locations. Each Borrower covenants and agrees that it
will not (i) maintain any Collateral with respect to such Borrower at any
location other than those locations listed for such Borrower on Schedule 5.3,
(ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
5.3, unless it gives the Agent at least thirty (30) days' prior written notice
thereof and executes any and all financing statements and other documents that
the Agent requests in connection therewith. Without limiting the foregoing,
each Borrower represents that all of its Inventory is, and covenants that all
of its Inventory will be, located either (a) on premises owned by such
Borrower, (b) on premises leased by such Borrower, provided that the Agent has
received an executed landlord waiver from the landlord of such premises in form
and substance satisfactory to the Agent, or (c) in a public warehouse, provided
that the Agent has received an executed bailee letter from the applicable
public warehouseman in form and substance satisfactory to the Agent.
5.4 Title to, Liens on, and Sale and Use of Collateral. Each
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that: (a) all of the Collateral with respect to such
Borrower is and will continue to be owned by such Borrower free and clear of
all Liens whatsoever, except for Permitted Liens; (b) the Agent's Liens in the
Collateral with respect to such Borrower will not be subject to any prior Lien
except for those Permitted Liens, if any, specifically identified on Schedule
7.2; (c) such Borrower will use, store, and maintain the Collateral with
respect to such Borrower with all reasonable care and will use such Collateral
for lawful purposes only; and (d) such Borrower will not, without the Agent's
prior written approval, sell, or dispose of or permit the sale or disposition
of any of the Collateral with respect to such Borrower except for sales of
Inventory in the ordinary course of business and sales of Equipment as
permitted by Sections 5.11(c) or 8.9. The inclusion of proceeds in the
Collateral shall not be deemed to constitute the Agent's or any Lender's
consent to any sale or other disposition of the Collateral except as expressly
permitted herein.
5.5 Appraisals. Whenever a Default or Event of Default exists, and
at such other times not more frequently than once a year as the Agent requests,
each Borrower shall, at its expense and upon the Agent's request, provide the
Agent with appraisals or updates thereof of any or all of the Collateral with
respect to such Borrower from an appraiser, and prepared on a basis,
satisfactory to the Agent.
5.6 Access and Examination; Confidentiality. (a) The Agent,
accompanied by any Lender which so elects, may at all reasonable times (and at
any time when a Default or Event of Default exists) have access to, examine,
audit, make extracts from or copies of and inspect any or all of each
Borrower's records, files, and books of account and the Collateral, and discuss
each Borrower's affairs with such Borrower's officers and management. Each
Borrower will deliver to the Agent any instrument necessary for the Agent to
obtain records from any service bureau maintaining records for such Borrower.
The Agent may, and at the direction of the Majority Lenders shall, at any time
when a Default or Event of Default exists, and at the Borrowers' expense, make
copies of all of each Borrower's books and records, or require the Borrowers to
deliver such copies to the Agent. The Agent may, without expense to the Agent,
use such of the Borrowers' respective personnel, supplies, and premises as may
be reasonably necessary for maintaining or enforcing the Agent's Liens.
(b) The Agent and each Lender agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by any Borrower and
provided to the Agent or such Lender by or on behalf of such Borrower, under
this Agreement or any other Loan Document, and neither the Agent, nor such
Lender nor any of their respective affiliates shall use any such information
other than in connection with or in enforcement of this Agreement and the other
Loan Documents, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by the
Agent or such Lender, or (ii) was or becomes available on a nonconfidential
basis from a source other than such Borrower, provided that such source is not
bound by a confidentiality agreement with such Borrower known to the Agent or
such Lender; provided, however, that the Agent and any Lender may disclose such
information (A) at the request or pursuant to any requirement of any Public
Authority to which the Agent or such Lender is subject or in connection with an
examination of the Agent or such Lender by any such Public Authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable requirement of law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Agent, any Lender or their respective affiliates may be party; (E) to
the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to the Agent's or such Lender's
independent auditors, accountants, attorneys and other professional advisors;
(G) to any affiliate of the Agent or such Lender, or to any Participating
Lender or assignee under any Assignment and Acceptance, actual or potential,
provided that such affiliate, Participating Lender or assignee agrees to keep
such information confidential to the same extent required of the Agent and the
Lenders hereunder; and (H) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which such Borrower is party
or is deemed party with the Agent or such Lender.
5.7 Collateral Reporting. Each Borrower will provide the Agent with
the following documents at the following times in form satisfactory to the
Agent: (a) on a weekly basis, or more frequently if requested by the Agent, a
schedule of such Borrower's Accounts created since the last such schedule,
prepared as of a date no more than five (5) Business Days prior to the delivery
date of such schedule and accompanied by a current Borrowing Base Certificate;
(b) within two (2) Business Days following the receipt of remittances into such
Borrower's lock-box or Payment Account, sufficient information to enable the
Agent to properly apply remittances to the appropriate Borrower's account in
the correct amount; (c) on a monthly basis, by the fifteenth (15th) day of each
month for the immediately preceding calendar month, an aging of such Borrower's
Accounts, together with a reconciliation to the previous month's aging of such
Borrower's Accounts and to such Borrower's general ledger; (d) upon request, an
aging of such Borrower's accounts payable; (e) on a monthly basis by the
twentieth (20th) day of each month for the immediately preceding calendar month
(or more frequently if requested by the Agent), Inventory reports by category,
with additional detail showing additions to and deletions from the Inventory;
(f) upon request, copies of invoices in connection with such Borrower's
Accounts, customer statements, credit memos, remittance advices and reports,
deposit slips, shipping and delivery documents in connection with such
Borrower's Accounts and for Inventory and Equipment acquired by such Borrower,
purchase orders and invoices; (g) on a monthly basis, by the twenty-fifth
(25th) day of each month, a statement of the balance of each of the
Intercompany Notes as of the last day of the immediately preceding calendar
month; (h) such other reports as to the Collateral of such Borrower as the
Agent or any Lender shall reasonably request from time to time; and (i) with
the delivery of each of the foregoing, a certificate of an officer of such
Borrower certifying as to the accuracy and completeness of the foregoing. If
any of any Borrower's records or reports of the Collateral are prepared by an
accounting service or other agent, each Borrower hereby authorizes such service
or agent to deliver such records, reports, and related documents to the Agent,
for distribution to the Lenders.
5.8 Accounts. (a) Each Borrower hereby represents and warrants to
the Agent and the Lenders, with respect to such Borrower's Accounts, that: (i)
each existing Account represents, and each future Account will represent, a
bona fide sale or lease and delivery of goods by such Borrower, or rendition of
services by such Borrower, in the ordinary course of such Borrower's business;
(ii) each existing Account is, and each future Account will be, for a
liquidated amount payable by the Account Debtor thereon on the terms set forth
in the invoice therefor or in the schedule thereof delivered to the Agent,
without any offset, deduction, defense, or counterclaim except those known to
such Borrower and disclosed to the Agent and the Lenders pursuant to this
Agreement; (iii) no payment will be received with respect to any Account, and
no credit, discount, or extension, or agreement therefor will be granted on any
Account, except as reported to the Agent and the Lenders in accordance with
this Agreement; (iv) each copy of an invoice delivered to the Agent by a
Borrower will be a genuine copy of the original invoice sent to the Account
Debtor named therein; and (v) all goods described in each invoice will have
been delivered to the Account Debtor and all services of such Borrower
described in each invoice will have been performed.
(b) No Borrower shall re-date any invoice or sale or make sales on
extended dating beyond that customary in such Borrower's business or extend or
modify any Account. If any Borrower becomes aware of any matter which may
materially affect the collectibility of any Account, including information
regarding the Account Debtor's creditworthiness, such Borrower will promptly so
advise the Agent.
(c) No Borrower shall accept any note or other instrument (except a
check or other instrument for the immediate payment of money) with respect to
any Account without the Agent's written consent. If the Agent consents to the
acceptance of any such instrument, it shall be considered as evidence of the
Account and not payment thereof and the applicable Borrower will promptly
deliver such instrument to the Agent, endorsed by such Borrower to the Agent in
a manner satisfactory in form and substance to the Agent.
(d) Each Borrower shall notify the Agent promptly of any dispute or
claim with an Account Debtor respecting an Eligible Account as to which the
amount in dispute exceeds $250,000, and agrees to settle or adjust such dispute
or claim at no expense to the Agent or any Lender. No discount, credit or
allowance shall be granted to any such Account Debtor without the Agent's prior
written consent, except for discounts, credits and allowances made or given in
the ordinary course of such Borrower's business when no Event of Default exists
hereunder. Each Borrower shall send the Agent a copy of each credit memorandum
in excess of $50,000 as soon as issued. The Agent may, and at the direction of
the Majority Lenders shall, at all times when an Event of Default exists
hereunder, settle or adjust disputes and claims directly with Account Debtors
for amounts and upon terms which the Agent or the Majority Lenders, as
applicable, shall consider advisable and, in all cases, the Agent will credit
the applicable Borrower's loan account with only the net amounts received by
the Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to any Borrower, then
such Borrower shall promptly determine the reason for such return and shall
issue a credit memorandum to the Account Debtor in the appropriate amount.
Each Borrower shall immediately report to the Agent any return involving an
amount in excess of $50,000. Each such report shall indicate the reasons for
the returns and the locations and condition of the returned Inventory. In the
event any Account Debtor returns Inventory to any Borrower when an Event of
Default exists, such Borrower shall: (i) hold the returned Inventory in trust
for the Agent; (ii) segregate all returned Inventory from all of its other
property; (iii) dispose of the returned Inventory solely according to the
Agent's written instructions; and (iv) not issue any credits or allowances with
respect thereto without the Agent's prior written consent. All returned
Inventory shall be subject to the Agent's Liens thereon. Whenever any
Inventory is returned, the related Account shall be deemed ineligible to the
extent of the return and the Maximum Revolver Amount shall be adjusted
accordingly.
5.9 Collection of Accounts; Payments. (a) Each Borrower shall
establish a lock-box service for collections of Accounts at a bank or banks
mutually acceptable to the Agent and such Borrower and pursuant to
documentation satisfactory to the Agent. The applicable Borrower shall
instruct all Account Debtors to make all payments directly to the address or
addresses established for such service. If, notwithstanding such instructions,
the applicable Borrower receives any proceeds of Accounts, it shall receive
such payments as the Agent's and the Lenders' trustee, and shall immediately
deliver such payments to the Agent in their original form duly endorsed in
blank or deposit them into a Payment Account, as the Agent may direct. All
collections received in any such lock-box or Payment Account or directly by
such Borrower, the Agent or any Lender, and all funds in any Payment Account or
other account to which such collections are deposited, shall be the sole
property of the Agent and the Lenders and subject to the Agent's and the
Lenders' sole control. Laclede Mid America shall not be required to maintain a
lock-box service or Payment Account separate from that of the Parent, until
such time as the Agent may, in its discretion, so direct Laclede Mid America.
The Agent or the Agent's designee may, at any time, notify obligors that the
Accounts have been assigned to the Agent and of the Agent's security interest
therein, and may collect them directly and charge the collection costs and
expenses to the applicable Borrower's loan account as a Revolving Loan as
described in Section 4.7. At the Agent's request, each Borrower shall execute
and deliver to the Agent such documents as the Agent shall require to grant the
Agent access to any post office box in which collections of Accounts are
received.
(b) If sales of Inventory are made for cash, the applicable Borrower
shall immediately deliver to the Agent or deposit into a Payment Account of
such Borrower the identical checks, cash, or other forms of payment which such
Borrower receives.
(c) All payments received by the Agent on account of Accounts or as
proceeds of other Collateral will be the Agent's sole property and will be
credited to the applicable Borrower's loan account (conditional upon final
collection) after allowing one (1) Business Day for collection; provided,
however, that such payments shall be deemed to be credited to the applicable
Borrower's loan account immediately upon receipt for purposes of (i)
determining Availability and Individual Availability, (ii) calculating the
facility fee pursuant to Section 3.6, and (iii) calculating the amount of
interest accrued thereon solely for purposes of determining the amount of
interest to be distributed by the Agent to the Lenders.
5.10 Inventory. (a) Each Borrower represents and warrants to the
Agent and the Lenders and agrees with the Agent and the Lenders that all of the
Inventory owned by such Borrower is and will be held for sale or lease, or to
be furnished in connection with the rendition of services, in the ordinary
course of such Borrower's business, and is and will be fit for such purposes.
Each Borrower will keep its Inventory in good and marketable condition, at its
own expense. No Borrower will, without the prior written consent of the Agent,
acquire or accept any Inventory on consignment or approval. Each Borrower
agrees that all Inventory will be produced in accordance with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations, and orders
thereunder. No Borrower will sell any Inventory on a xxxx-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other repurchase or
return basis.
(b) Each Borrower will conduct a physical count of its Inventory
constituting pipe not less frequently than once every four (4) months, and
shall upon request promptly supply the Agent, in sufficient copies for
distribution by the Agent to each Lender, with a copy of such count accompanied
by a report of the value of such inventory (valued at the lower of cost or
market value). Each Borrower will maintain such perpetual inventory reporting
systems as are in place on the Closing Date.
5.11 Equipment. (a) The Parent represents and warrants to the
Agent and the Lenders that it has delivered to the Agent and the Lenders, prior
to the Restructuring Date, a complete and accurate list of the Parent's
Equipment owned by the Parent on the Restructuring Date. The Parent shall,
upon the Agent's request from time to time after the Closing Date, provide to
the Agent and the Lenders an update of such list, and each of the other
Borrowers shall, upon the Agent's request from time to time after the
Restructuring Date, provide to the Agent and the Lenders a list with respect to
its Equipment, in a similar format to that described in the immediately
preceding sentence. Each Borrower represents and warrants to the Agent and the
Lenders and agrees with the Agent and the Lenders that all of the Equipment
owned by such Borrower is and will be used or held for use in such Borrower's
business, and is and will be fit for such purposes. Each Borrower shall keep
and maintain its Equipment in good operating condition and repair (ordinary
wear and tear excepted) and shall make all necessary replacements thereof.
(b) Each Borrower shall promptly inform the Agent of any material
additions to or deletions from the Equipment. No Borrower shall permit any
Equipment (i) consisting of Collateral to become a fixture with respect to real
property or to become an accession with respect to other personal property with
respect to which real or personal property the Agent does not have a Lien, (ii)
not consisting of Collateral to become a fixture with respect to real property
or to become an accession with respect to other personal property with respect
to which real or personal property the Agent has a Lien. No Borrower will,
without the Agent's prior written consent, alter or remove any identifying
symbol or number on any of such Borrower's Equipment consisting of Collateral.
(c) No Borrower shall, without the Agent's prior written consent,
sell, lease as a lessor, or otherwise dispose of any of such Borrower's
Equipment, except as permitted in Section 8.9; provided, however, that the
Parent and its Subsidiaries may dispose of obsolete or unusable Equipment
having an orderly liquidation value no greater than $500,000 in the aggregate
in any Fiscal Year, or $1,500,000 in the aggregate during the term of this
Agreement, without the Agent's consent, subject to the conditions set forth in
the next sentence. In the event any of such Equipment is sold, transferred or
otherwise disposed pursuant to the proviso contained in the immediately
preceding sentence, (1) if such sale, transfer or disposition is effected
without replacement of such Equipment, or such Equipment is replaced by
Equipment leased by the applicable Borrower or by Equipment purchased by such
Borrower subject to a Lien, then such Borrower shall deliver all of the cash
proceeds of any such sale, transfer or disposition to the Agent, which proceeds
shall be applied, ratably, to the reduction of the Term Loans (applying such
proceeds ratably to the installments of the Term Loans in the inverse order of
maturity), or (2) if such sale, transfer or disposition is made in connection
with the purchase by the applicable Borrower of replacement Equipment (other
than Equipment subject to a Lien), then such Borrower shall use the proceeds of
such sale, transfer or disposition to finance the purchase by such Borrower of
such replacement Equipment and shall deliver to the Agent written evidence of
the use of the proceeds for such purchase. All replacement Equipment purchased
by the applicable Borrower shall be free and clear of all Liens, claims and
encumbrances.
5.12 Assigned Contracts. Each Borrower shall fully perform all of
its obligations under each of such Borrower's Assigned Contracts, and shall
enforce all of its rights and remedies thereunder as it deems appropriate in
its business judgment; provided, however, that no Borrower shall take any
action or fail to take any action with respect to its Assigned Contracts which
would result in a waiver or other loss of any material right or remedy of such
Borrower thereunder. Without limiting the generality of the foregoing, each
Borrower shall take all action necessary or appropriate to permit, and shall
not take any action which would have any materially adverse effect upon, the
full enforcement of all indemnification rights under its Assigned Contracts.
No Borrower shall, without the Agent's prior written consent, modify, amend,
supplement, compromise, satisfy, release, or discharge any of its Assigned
Contracts, any collateral securing the same, any Person liable directly or
indirectly with respect thereto, or any agreement relating to any of its
Assigned Contracts or the collateral therefor. Each Borrower shall notify the
Agent in writing, promptly after such Borrower becomes aware thereof, of any
event or fact which could give rise to a claim by it for indemnification under
any of its Assigned Contracts, and shall diligently pursue such right and
report to the Agent on all further developments with respect thereto. Each
Borrower shall remit directly to the Agent for application to the Obligations
in such order as the Majority Lenders shall determine, all amounts received by
such Borrower as indemnification or otherwise pursuant to its Assigned
Contracts. If any Borrower shall fail after the Agent's demand to pursue
diligently any right under its Assigned Contracts, or if an Event of Default
then exists, the Agent may, and at the direction of the Majority Lenders shall,
directly enforce such right in its own or such Borrower's name and may enter
into such settlements or other agreements with respect thereto as the Agent or
the Majority Lenders, as applicable, shall determine. In any suit, proceeding
or action brought by the Agent under any Assigned Contract for any sum owing
thereunder or to enforce any provision thereof, the Borrowers shall indemnify
and hold the Agent harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaims, recoupment, or
reduction of liability whatsoever of the obligor thereunder arising out of a
breach by the applicable Borrower of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing from such
Borrower to or in favor of such obligor or its successors. All such
obligations of the applicable Borrower shall be and remain enforceable only
against such Borrower and shall not be enforceable against the Agent.
Notwithstanding any provision hereof to the contrary, each Borrower shall at
all times remain liable to observe and perform all of its duties and
obligations under its Assigned Contracts, and the Agent's or any Lender's
exercise of any of their respective rights with respect to the Collateral shall
not release such Borrower from any of such duties and obligations. Neither the
Agent nor any Lender shall be obligated to perform or fulfill any of any
Borrower's duties or obligations under its Assigned Contracts or to make any
payment thereunder, or to make any inquiry as to the nature or sufficiency of
any payment or property received by it thereunder or the sufficiency of
performance by any party thereunder, or to present or file any claim, or to
take any action to collect or enforce any performance, any payment of any
amounts, or any delivery of any property.
5.13 Documents, Instruments, and Chattel Paper. Each Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that (a) all documents, instruments, and chattel paper
describing, evidencing, or constituting Collateral with respect to such
Borrower, and all signatures and endorsements thereon, are and will be
complete, valid, and genuine and (b) all goods evidenced by such documents,
instruments, and chattel paper are and will be owned by such Borrower free and
clear of all Liens other than Permitted Liens.
5.14 Right to Cure. The Agent may, in its discretion and at any
time, and shall, at the direction of the Majority Lenders, for the Borrowers'
account and at the Borrowers' expense, pay any amount or do any act required of
any Borrower hereunder or requested by the Agent to preserve, protect, maintain
or enforce the Obligations, the Collateral or the Agent's Liens therein, and
which such Borrower fails to pay or do, including, without limitation, payment
of any judgment against such Borrower, any insurance premium, any warehouse
charge, any finishing or processing charge, any landlord's claim, and any other
Lien upon or with respect to the Collateral. All payments that the Agent makes
under this Section 5.14 and all out-of-pocket costs and expenses that the Agent
pays or incurs in connection with any action taken by it hereunder shall be
charged to the applicable Borrower's loan account as a Revolving Loan as
described in Section 4.7. Any payment made or other action taken by the Agent
under this Section 5.14 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
5.15 Power of Attorney. Each Borrower hereby appoints the Agent and
the Agent's designees as such Borrower's attorney, with power: (a) to endorse
such Borrower's name on any checks, notes, acceptances, money orders, or other
forms of payment or security that come into the Agent's or any Lender's
possession; (b) to sign such Borrower's name on any invoice, xxxx of lading,
warehouse receipt or other document of title relating to any Collateral, on
drafts against customers, on assignments of Accounts, on notices of assignment,
financing statements and other public records; (c) to notify the post office
authorities, when an Event of Default exists, to change the address for
delivery of such Borrower's mail to an address designated by the Agent and to
receive, open and dispose of all mail addressed to the such Borrower; (d) to
send requests for verification of accounts to customers or account debtors; (e)
to clear Inventory, the purchase of which was financed with Letters of Credit,
through customs in such Borrower's name, the Agent's name or the name of the
Agent's designee, and to sign and deliver to customs officials powers of
attorney in such Borrower's name for such purpose; and (f) to do all things
necessary to carry out this Agreement. Each Borrower ratifies and approves all
acts of such attorney. None of the Lenders or the Agent nor the attorneys will
be liable for any acts or omissions or for any error of judgment or mistake of
fact or law. This power, being coupled with an interest, is irrevocable until
this Agreement has been terminated and the Obligations have been fully
satisfied.
5.16 The Agent's and Lenders' Rights, Duties and Liabilities. Each
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. Neither the Agent, nor
any Lender, nor any of their respective officers, directors, employees or
agents shall be liable or responsible in any way for the safekeeping of any of
the Collateral, or for any loss or damage thereto, or for any diminution in the
value thereof, or for any act of default of any warehouseman, carrier,
forwarding agency or other person whomsoever, all of which shall be at the
Borrowers' sole risk. The Obligations shall not be affected by any failure of
the Agent or any Lender to take any steps to perfect the Agent's Liens or to
collect or realize upon the Collateral, nor shall loss of or damage to the
Collateral release any Borrower from any of the Obligations. The Agent may,
and at the direction of the Majority Lenders shall, without notice to or
consent from any Borrower, xxx upon or otherwise collect, extend the time for
payment of, modify or amend the terms of, compromise or settle for cash,
credit, or otherwise upon any terms, grant other indulgences, extensions,
renewals, compositions, or releases, and take or omit to take any other action
with respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of any Borrower for the Obligations or under
this Agreement or any other agreement now or hereafter existing between the
Agent and/or any Lender and any Borrower.
ARTICLE 6
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
6.1 Books and Records. Each Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 6.2(a). Each Borrower shall, by means of appropriate
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation
and amortization of property and bad debts, all in accordance with GAAP. Each
Borrower shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Accounts;
(b) the return, rejections, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral.
6.2 Financial Information. The Borrowers shall promptly furnish to
the Agent, in sufficient copies for distribution by the Agent to each Lender,
all such financial information as the Agent or any Lender shall reasonably
request, and notify its auditors and accountants that the Agent, on behalf of
the Lenders, is authorized to obtain such information directly from them.
Without limiting the foregoing, the Borrowers will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety
(90) days after the close of each Fiscal Year, consolidated audited and
consolidating unaudited balance sheets, and statements of income and expense,
cash flow and of stockholders' equity for the Parent and its consolidated
Subsidiaries for such Fiscal Year, and the accompanying notes thereto, setting
forth in each case in comparative form figures for the previous Fiscal Year,
all in reasonable detail, fairly presenting the financial position and the
results of operations of the Parent and its consolidated Subsidiaries as at the
date thereof and for the Fiscal Year then ended, and prepared in accordance
with GAAP. Such statements shall be examined in accordance with generally
accepted auditing standards by and, in the case of such statements performed on
a consolidated basis, accompanied by a report thereon unqualified as to scope
of independent certified public accountants selected by the Borrowers and
reasonably satisfactory to the Agent. The Borrowers, simultaneously with
retaining such independent public accountants to conduct such annual audit,
shall send a letter to such accountants, with a copy to the Agent and the
Lenders, notifying such accountants that one of the primary purposes for
retaining such accountants' services and having audited financial statements
prepared by them is for use by the Agent and the Lenders.
(b) As soon as available, but in any event not later than forty-five
(45) days after the end of each month, consolidated and consolidating unaudited
balance sheets of the Parent and its consolidated Subsidiaries as at the end of
such month, and consolidated and consolidating unaudited statements of income
and expense and cash flow for the Parent and its consolidated Subsidiaries for
such month and for the period from the beginning of the Fiscal Year to the end
of such month, all in reasonable detail, fairly presenting the financial
position and results of operations of the Parent and its consolidated
Subsidiaries as at the date thereof and for such periods, and prepared in
accordance with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to Section 6.2(a). Such statements shall be
certified to be correct by the chief financial or accounting officer of the
Parent, subject to normal year-end adjustments.
(c) With each of the audited Financial Statements delivered pursuant
to Section 6.2(a), a certificate of the independent certified public
accountants that examined such statement to the effect that they have reviewed
and are familiar with this Agreement and that, in examining such Financial
Statements, they did not become aware of any fact or condition which then
constituted a Default or Event of Default, except for those, if any, described
in reasonable detail in such certificate.
(d) With each of the annual audited Financial Statements delivered
pursuant to Section 6.2(a), and within forty-five (45) days after the end of
each fiscal quarter, a certificate of the chief financial officer of the Parent
(i) setting forth in reasonable detail the calculations required to establish
that the Borrowers were in compliance with the covenants set forth in Sections
8.22 through 8.25 during the period covered in such Financial Statements and as
at the end thereof, and (ii) stating that, except as explained in reasonable
detail in such certificate, (A) all of the representations and warranties of
the Borrowers contained in this Agreement and the other Loan Documents are
correct and complete in all material respects as at the date of such
certificate as if made at such time, (B) the Borrowers are, at the date of such
certificate, in compliance in all material respects with all of their
respective covenants and agreements in this Agreement and the other Loan
Documents, and (C) no Default or Event of Default then exists or existed during
the period covered by such Financial Statements. If such certificate discloses
that a representation or warranty is not correct or complete in all material
respects, or that a covenant has not been complied with in all material
respects, or that a Default or Event of Default existed or exists, such
certificate shall set forth what action the applicable Borrower has taken or
proposes to take with respect thereto.
(e) Within forty-five (45) days after the end of each fiscal
quarter, consolidated and consolidating projected balance sheets, statements of
income and expense, and statements of cash flow for the Parent and its
consolidated Subsidiaries as at the end of and for the then current fiscal
quarter and as at the end of and for each of the succeeding three (3) fiscal
quarters.
(f) Within forty-five (45) days after the end of each fiscal
quarter, a report of the Capital Expenditures of the Parent and its
consolidated Subsidiaries for such quarter and a statement of cash flow for the
Parent and its consolidated Subsidiaries for the period from the beginning of
the then current Fiscal Year to the end of such quarter, prepared in accordance
with GAAP applied consistently with the audited Financial Statements required
to be delivered pursuant to Section 6.2(a).
(g) Promptly after their preparation, copies of any all proxy
statements, financial statements, and reports which any Borrower makes
available to its stockholders.
(h) Promptly after filing with the IRS, a copy of each tax return
filed by the Parent or by any of its Subsidiaries.
(i) As soon as available, and in any event at least thirty (30) days
prior to the consummation of any Permitted Acquisition, written notice, and a
description in reasonable detail, of such proposed Permitted Acquisition,
together with all drafts of purchase agreements and related agreements,
instruments and documents, and computations in form and substance satisfactory
to the Agent and the Lenders demonstrating compliance, on a pro forma basis as
if such Permitted Acquisition had been consummated as of the date one year
prior to the end of the fiscal quarter ending immediately preceding the
anticipated closing date for such Permitted Acquisition, with each financial
covenant set forth in Sections 8.22 through 8.25.
(j) Such additional information as the Agent and/or any Lender may
from time to time reasonably request regarding the financial and business
affairs of the Parent or any Subsidiary, including, without limitation,
projections of future operations on both a consolidated and consolidating
basis.
6.3 Notices to the Lenders. The Borrowers shall notify the Agent,
in writing, in sufficient copies for distribution by the Agent to each Lender,
of the following matters at the following times:
(a) Immediately after becoming aware thereof, any Default or Event
of Default.
(b) Immediately after becoming aware thereof, the assertion by the
holder of any capital stock of any Borrower or of any Debt in an outstanding
principal amount in excess of $100,000 that a default exists with respect
thereto or that such Borrower is not in compliance with the terms thereof, or
the threat or commencement by such holder of any enforcement action because of
such asserted default or non-compliance.
(c) Immediately after becoming aware thereof, any material adverse
change in the Parent's or any Subsidiary's property, business, operations, or
condition (financial or otherwise).
(d) Immediately after becoming aware thereof, any pending or
threatened action, suit, proceeding, or counterclaim by any Person, or any
pending or threatened investigation by a Public Authority, which action, suit,
proceeding, counterclaim or investigation seeks damages in excess of $500,000
(which amount shall not be fully covered by insurance), or which may otherwise
materially and adversely affect the Collateral, the repayment of the
Obligations, the Agent's or any Lender's rights under the Loan Documents, or
the Parent's or any Subsidiary's property, business, operations, or condition
(financial or otherwise).
(e) Immediately after becoming aware thereof, any pending or
threatened strike, work stoppage, material unfair labor practice claim, or
other material labor dispute affecting any Borrower.
(f) Immediately after receipt thereof, any written notice of any
violation by the Parent or any of its Subsidiaries of any Environmental Law, or
written notice that its compliance with any Environmental Law is being
investigated by a Public Authority, where such violation or alleged
non-compliance is reasonably likely to give rise to fines, penalties or
liability in excess of $100,000.
(g) Immediately after receipt thereof, any written notice that the
Parent or any of its Subsidiaries is or may be liable to any Person as a result
of the Release or threatened Release of any Contaminant or that the Parent or
any Subsidiary is subject to investigation by any Public Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, is reasonably likely to give
rise to liability in excess of $100,000.
(h) Immediately after receipt thereof, any written notice of the
imposition of any Environmental Lien against any property of the Parent or any
of its Subsidiaries.
(i) Any change in any Borrower's name, state of incorporation, or
form of organization, trade names or styles under which such Borrower will sell
Inventory or create Accounts, or to which instruments in payment of Accounts
may be made payable, in each case at least thirty (30) days prior thereto.
(j) Within ten (10) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know, that a Termination Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL
or the PBGC with respect thereto.
(k) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three
(3) Business Days after the filing thereof with the PBGC, the DOL or the IRS,
as applicable, copies of the following: (i) each annual report (form 5500
series), including Schedule B thereto, filed with the PBGC, the DOL or the IRS
with respect to each Benefit Plan, (ii) a copy of each funding waiver request
filed with the PBGC, the DOL or the IRS with respect to any Benefit Plan and
all communications received by any Borrower or any ERISA Affiliate from the
PBGC, the DOL or the IRS with respect to such request, and (iii) a copy of each
other filing or notice filed with the PBGC, the DOL or the IRS, with respect to
each Plan of either Borrower or any ERISA Affiliate.
(l) Upon request, copies of each actuarial report for any Benefit
Plan or Multiemployer Plan and annual report for any Multiemployer Plan; and
within three (3) Business Days after receipt thereof by any Borrower or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer such Benefit Plan; (ii) any favorable or unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section 401(a)
of the Code; or (iii) any notice from a Multiemployer Plan regarding the
imposition of withdrawal liability.
(m) Within three (3) Business Days upon the occurrence thereof: (i)
any changes in the benefits of any existing Plan which increase the Borrowers'
annual costs with respect thereto by an amount in excess of $250,000, or the
establishment of any new Plan or the commencement of contributions to any Plan
to which any Borrower or any ERISA Affiliate was not previously contributing;
or (ii) any failure by any Borrower or any ERISA Affiliate to make a required
installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment.
(n) Within three (3) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know that any of the following events has or
will occur: (i) a Multiemployer Plan has been or will be terminated; (ii) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan; or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of subsections (j) through (n) above, each Borrower and any ERISA
Affiliate shall be deemed to know all facts known by the Administrator of any
Plan of which such Borrower or any ERISA Affiliate is the plan sponsor.
Each notice given under this Section shall describe the subject
matter thereof in reasonable detail, and shall set forth the action that the
Parent, its Subsidiary or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
ARTICLE 7
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower warrants and represents to the Agent and the Lenders
that:
7.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents. Such Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant to the Agent Liens upon and security
interests in the Collateral with respect to such Borrower. Such Borrower has
taken all necessary corporate action to authorize its execution, delivery, and
performance of this Agreement and the other Loan Documents. No consent,
approval, or authorization of, or declaration or filing with, any Public
Authority, and no consent of any other Person, is required in connection with
such Borrower's execution, delivery and performance of this Agreement and the
other Loan Documents, except for those already duly obtained. Each of this
Agreement and the other Loan Documents to which such Borrower is a party has
been duly executed and delivered by such Borrower, and constitutes the legal,
valid and binding obligation of such Borrower, enforceable against it in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally. Such Borrower's execution, delivery, and
performance of this Agreement and the other Loan Documents do not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon the property of
such Borrower by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which such Borrower is a party or
which is binding upon it, (b) any judgment, law, statute, rule or governmental
regulation applicable to such Borrower, or (c) the Certificate or Articles of
Incorporation or By-laws of such Borrower.
7.2 Validity and Priority of Security Interest. The provisions of
this Agreement, the Mortgages, and the other Loan Documents create legal and
valid Liens on all the Collateral in favor of the Agent, for the ratable
benefit of the Secured Creditors, and such Liens constitute perfected and
continuing Liens on all the Collateral, having priority over all other Liens on
the Collateral except those Permitted Liens specifically identified on Schedule
7.2, securing all the Obligations, and enforceable against the applicable
Borrower and all third parties.
7.3 Organization and Qualification. Such Borrower (a) is duly
incorporated and organized and validly existing in good standing under the laws
of, in the case of the Parent or Laclede Chain, the State of Delaware, and, in
the case of Laclede Mid America, the State of Indiana, (b) is qualified to do
business as a foreign corporation and is in good standing in the States of, in
the case of the Parent, Illinois, Michigan, Missouri, Pennsylvania, Tennessee
and West Virginia, and, in the case of Laclede Chain, California, Colorado,
Missouri, New York, North Carolina and Oregon, and, in the case of Laclede Mid
America, Missouri, which are the only states in which qualification is
necessary in order for it to own or lease its property and conduct its
business, and (c) has all requisite power and authority to conduct its business
and to own its property.
7.4 Corporate Name; Prior Transactions. Such Borrower has not,
during the past five (5) years, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
property outside of the ordinary course of business, except as set forth on
Schedule 7.4.
7.5 Subsidiaries and Affiliates. Laclede Consulting and Laclede
Pipe have been merged with and into the Parent in accordance with applicable
laws. Schedule 7.5 is a correct and complete list of the name and relationship
to the Parent of each and all of the Parent's Subsidiaries and other
Affiliates. Each Subsidiary is (a) duly incorporated and organized and validly
existing in good standing under the laws of its state of incorporation set
forth on Schedule 7.5, and (b) qualified to do business as a foreign
corporation and in good standing in the states set forth opposite its name on
Schedule 7.5, which are the only states in which such qualification is
necessary in order for it to own or lease its property and conduct its
business.
7.6 Financial Statements and Projections. (a) The Borrowers have
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, changes in financial position, and
changes in stockholders equity for the Parent and its consolidated Subsidiaries
as of December 31, 1996, and for the Fiscal Year then ended, accompanied by the
report thereon of the Parent's independent certified public accountants,
Deloitte & Touche. The Borrowers have also delivered to the Agent and the
Lenders the unaudited balance sheet and related statements of income and
changes in financial position for the Parent and its consolidated Subsidiaries
as of June 30, 1997 and for the second quarter and six-month period then ended.
Such financial statements are attached hereto as Exhibit C. All such financial
statements have been prepared in accordance with GAAP and present accurately
and fairly the financial position of the Parent and its consolidated
Subsidiaries as at the dates thereof and their results of operations for the
periods then ended.
(b) The Latest Projections represent the Borrowers' best estimate of
the future financial performance of the Parent and its consolidated
Subsidiaries for the periods set forth therein. The Latest Projections have
been prepared on the basis of the assumptions set forth therein, which the
Borrowers believe are fair and reasonable in light of current and reasonably
foreseeable business conditions.
7.7 Capitalization. Prior to the Recapitalization, the Parent's
authorized capital stock consists of (a) 5,000,000 shares of common stock, par
value $13.33 per share, of which 4,056,140 shares are validly issued and
outstanding, fully paid and non-assessable, and (b) 2,000,000 shares of the
Redeemable Preferred Stock, of which 416,667 shares are validly issued and
outstanding, fully paid and non-assessable. From and after the
Recapitalization, the Parent's authorized capital stock shall consist of (1)
25,000,000 shares of common stock, par value $0.01 per share, and (2) the
shares of the Convertible Preferred Stock (i) exchanged for shares of the
Redeemable Preferred Stock and (ii) purchased pursuant to the Recapitalization.
Laclede Chain's authorized capital stock consists of 3000 shares of common
stock, par value $1.00 per share, of which 100 shares are validly issued and
outstanding, fully paid and non-assessable, and are owned beneficially and of
record by the Parent. Laclede Mid America's authorized capital stock consists
of 1000 shares of common stock, par value $1.00 per share, of which 100 shares
are validly issued and outstanding, fully paid and non-assessable, and are
owned beneficially and of record by the Parent.
7.8 Solvency. Each Borrower is Solvent prior to and after giving
effect to the making of the Term Loans and the Revolving Loans to be made on
each of the Closing Date and the Restructuring Date and the issuance of the
Letters of Credit to be issued on each of the Closing Date and the
Restructuring Date, if any, and shall remain Solvent during the term of this
Agreement.
7.9 Debt. After giving effect to the making of the Term Loans and
the Revolving Loans to be made on the Closing Date, the Parent and its
consolidated Subsidiaries have no Debt, except (a) the Obligations, (b) Debt
described on Schedule 7.9, and (c) trade payables and other contractual
obligations arising in the ordinary course of business since June 30, 1994.
7.10 Distributions. Since December 31, 1993, no Distribution has
been declared, paid, or made upon or in respect of any capital stock or other
Securities of the Parent or any of its Subsidiaries, except as expressly
permitted by Section 8.10.
7.11 Title to Property. With respect to those locations listed as
Premises owned by such Borrower on Schedule 7.12, such Borrower has good and
marketable title in fee simple to such Premises, and such Borrower has good,
indefeasible, and merchantable title to all of its other property (including,
without limitation, the assets reflected on the June 30, 1997 Financial
Statements delivered to the Agent and the Lenders, except as disposed of in the
ordinary course of business since the date thereof or as otherwise expressly
permitted hereby), free of all Liens except Permitted Liens.
7.12 Real Estate; Leases. Schedule 7.12 sets forth a correct and
complete list of all Real Estate owned by the Parent or any of its
Subsidiaries, all leases and subleases of real or personal property by the
Parent or its Subsidiaries as lessee or sublessee, and all leases and subleases
of real or personal property by the Parent or its Subsidiaries as lessor,
lessee, sublessor or sublessee. Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect, and
no default by any party to any such lease or sublease exists.
7.13 Proprietary Rights. Schedule 7.13 sets forth a correct and
complete list of all of the Proprietary Rights. None of the Proprietary Rights
is subject to any licensing agreement or similar arrangement except as set
forth on Schedule 7.13. To the best of such Borrower's knowledge, none of the
Proprietary Rights infringes on or conflicts with any other Person's property,
and no other Person's property infringes on or conflicts with the Proprietary
Rights. The Proprietary Rights described on Schedule 7.13 constitute all of
the property of such type necessary to the current and anticipated future
conduct of such Borrower's business.
7.14 Trade Names and Terms of Sale. All trade names or styles under
which the Parent or any of its Subsidiaries will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 7.4.
7.15 Litigation. Except as set forth on Schedule 7.15, there is no
pending or (to the best of such Borrower's knowledge) threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Public
Authority, or any basis for any of the foregoing, which may materially and
adversely affect the Collateral, the repayment of the Obligations, the Agent's
or any Lender's rights under the Loan Documents, or the property, business,
operations, or condition (financial or otherwise) of the Parent or any of its
Subsidiaries.
7.16 Restrictive Agreements. Neither the Parent nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charter
or other corporate restriction, which affects its ability to execute, deliver,
and perform the Loan Documents and repay the Obligations or which materially
and adversely affects or, insofar as any Borrower can reasonably foresee, could
materially and adversely affect, the property, business, operations, or
condition (financial or otherwise) of the Parent or such Subsidiary, or would
in any respect materially and adversely affect the Collateral, the repayment of
the Obligations, the Agent's or any Lender's rights under the Loan Documents,
or the property, business, operations, or condition (financial or otherwise) of
the Parent or such Subsidiary.
7.17 Labor Disputes. Except as set forth on Schedule 7.17, (a)
there is no collective bargaining agreement or other labor contract covering
employees of the Parent or any of its Subsidiaries, (b) no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement and (c) no union or other labor organization is seeking
to organize, or to be recognized as, a collective bargaining unit of employees
of the Parent or any of its Subsidiaries or for any similar purpose, and (d)
there is no pending or (to the best of such Borrower's knowledge) threatened,
strike, work stoppage, material unfair labor practice claim, or other material
labor dispute against or affecting the Parent or its Subsidiaries or their
employees.
7.18 Environmental Laws. Except as otherwise disclosed on Schedule
7.18:
(a) Each of the Parent and its Subsidiaries is currently in material
compliance with, and, to the best of its knowledge, has complied in all
material respects with, all Environmental Laws applicable to its Premises and
business, and neither the Parent nor any such Subsidiary nor any of its present
Premises or operations, or to the best of such Borrower's knowledge, its past
property or operations, are subject to any enforcement order from or liability
agreement with any Public Authority or private Person respecting (i) material
non-compliance with any Environmental Law or (ii) any material liabilities and
costs or remedial action arising from the Release or threatened Release of a
Contaminant.
(b) Each of the Parent and its Subsidiaries has obtained all permits
necessary for its current operation under Environmental Laws, and all such
permits are in good standing and the Parent is and such Subsidiaries are in
compliance in all material respects with all terms and conditions of such
permits.
(c) Neither the Parent nor any of its Subsidiaries, nor, to the best
of such Borrower's knowledge, any of its predecessors in interest, has stored,
treated or disposed of any hazardous waste on any Premises, as defined pursuant
to 40 CFR Part 261 or any equivalent Environmental Law, so as to require
issuance of a permit.
(d) Neither the Parent nor any of its Subsidiaries has any
contingent liability with respect to non-compliance with any Environmental Laws
or any Release or threatened Release of a Contaminant or the generation,
handling, use, storage, or disposal of any Contaminant, which contingent
liability is reasonably likely to give rise to a violation of either of the
covenants contained in Sections 8.24 or 8.25.
(e) Neither the Parent nor any of its Subsidiaries has received any
summons, complaint, order or similar written notice that it is not currently in
compliance with, or that any Public Authority is investigating its compliance
with, any Environmental Laws or that it is or may be liable to any other Person
as a result of a Release or threatened Release of a Contaminant.
(f) To the best of the Borrowers' knowledge, none of the present or
past operations of the Parent and its Subsidiaries is the subject of any
investigation by any Public Authority evaluating whether any material remedial
action is needed to respond to a Release or threatened Release of a
Contaminant.
(g) There is not now, nor to the best of such Borrower's knowledge
has there ever been on or in the Premises:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos containing material, or
(iii) any polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other equipment.
(h) Within the last six (6) years, neither the Parent nor any of its
Subsidiaries has filed any notice under any requirement of Environmental Law
reporting a spill or accidental and unpermitted release or discharge of a
Contaminant into the environment, which is reasonably likely to lead to
material liabilities and costs.
(i) Neither the Parent nor any of its Subsidiaries has entered into
any negotiations or settlement agreements with any Person (including, without
limitation, the prior owner of its property) imposing material obligations or
liabilities on the Parent or any of its Subsidiaries with respect to any
remedial action in response to the Release of a Contaminant or environmentally
related claim.
(j) None of the products manufactured, distributed or sold by the
Parent or any of its Subsidiaries contain asbestos containing material.
(k) No Environmental Lien has attached to any Premises of the Parent
or any of its Subsidiaries.
(l) For purposes of this Section 7.18 "material" shall mean costs or
liabilities which could reasonably exceed $750,000.
7.19 No Violation of Law. Neither the Parent nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation would in any
respect materially and adversely affect the Collateral, the repayment of the
Obligations, the Agent's or any Lender's rights under the Loan Documents, or
the property, business, operations, or condition (financial or otherwise) of
the Parent or any of its Subsidiaries.
7.20 No Default. Neither the Parent nor any of its Subsidiaries is
in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed, or other agreement to which the Parent or such Subsidiary is a
party or by which it is bound, which default would materially and adversely
affect the Collateral, the repayment of the Obligations, the Agent's or any
Lender's rights under the Loan Documents, or the property, business,
operations, or condition (financial or otherwise) of the Parent or any of its
Subsidiaries. The Parent is in compliance with the terms, covenants,
representations, warranties and conditions contained in Section 6.6 of the
Solid Waste Bond Loan Agreement, and none of the Agent's Liens are of the type
that would require, in accordance with clauses (vi) or (viii) of subsection (a)
of such Section 6.6, or any other provision contained in the Solid Waste Bond
Loan Agreement, that the Parent grant Liens on any of the Collateral on an
equal basis to the "Issuer" (as such term is defined therein).
7.21 ERISA. (a) Neither the Parent nor any of its Subsidiaries nor
any ERISA Affiliate maintains or contributes to any Plan other than those
listed on Schedule 7.21.
(b) No Plan has been terminated or partially terminated or is
insolvent or in reorganization, nor have any proceedings been instituted to
terminate or reorganize any Plan.
(c) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate has any withdrawal liability, including contingent withdrawal
liability, to any Benefit Plan pursuant to Title IV of ERISA.
(d) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which
have become due which are unpaid.
(e) No Benefit Plan has incurred any accumulated funding deficiency
(as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code), whether or
not waived.
(f) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate has breached any of the responsibilities, obligations or duties
imposed on it by ERISA or regulations promulgated thereunder with respect to
any Plan. Each Plan is in substantial compliance with ERISA, and neither the
Parent nor any Subsidiary nor any ERISA Affiliate has received any notice
asserting that a Plan is not in compliance with ERISA.
(g) Each Plan which is intended to be a qualified Plan has been
determined by the IRS to be qualified under Section 401(a) of the Code as
currently in effect and each trust related to such Plan has been determined to
be exempt from federal income tax under Section 501(a) of the Code.
(h) Except as provided on Schedule 7.21, neither the Parent nor any
of its Subsidiaries nor any ERISA Affiliate maintains or contributes to any
employer welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA.
(i) Schedule B to the most recent annual report filed with the IRS
with respect to each Benefit Plan and furnished to the Lenders is complete and
accurate. Since the date of each such Schedule B, there has been no adverse
change in funding status or financial condition of the Benefit Plan relating to
such Schedule B.
(j) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate has failed to make a required installment under subsection (m) of
Section 412 of the Code or any other payment required under Section 412 of the
Code on or before the due date for such installment or other payment.
(k) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate is required to provide security to a Plan under Section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in current
liability for the plan year.
(l) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate or fiduciary of any Plan which is not a Multiemployer Plan (i) has
engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the Code or (ii) has taken or failed to take any action which
would constitute or result in a Termination Event.
(m) Neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate has failed to make a required contribution or payment to a
Multiemployer Plan, nor has the Parent, any Subsidiary or any ERISA Affiliate
made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA from
a Multiemployer Plan.
(n) The Borrowers have given to the Agent and the Lenders copies of
all of the following: each Benefit Plan and related trust agreement (including
all amendments to such Plan and trust) in existence or committed to as of the
date hereof and the most recent summary plan description, actuarial report,
determination letter issued by the IRS and Form 5500 filed in respect of each
such Benefit Plan in existence; a listing of all of the Multiemployer Plans
with the aggregate amount of the most recent annual contributions required to
be made by the Parent or any of its Subsidiaries or any ERISA Affiliate to each
such Multiemployer Plan, any information which has been provided to either or
an ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan
and the collective bargaining agreement pursuant to which such contribution is
required to be made; each employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA, the most recent
summary plan description for such plan and the aggregate amount of the most
recent annual payments made to terminated employees under each such Plan.
(o) Neither the Parent, nor any of its Subsidiaries nor any ERISA
Affiliate has, or would reasonably be expected to have, any liability under
Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA.
7.22 Taxes. Each of the Parent and each of its Subsidiaries has
filed all tax returns and other reports which it was required by law to file on
or prior to the date hereof and has paid all taxes, assessments, fees, and
other governmental charges, and penalties and interest, if any, against it or
its property, income, or franchise, that are due and payable.
7.23 Investment Act, Etc. Neither the Parent nor any of its
Subsidiaries is an "investment company" nor an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
Sec. 80(a)(l), et seq.), nor is the Parent or any Subsidiary subject to any
other state or federal regulation limiting its ability to incur Debt. The
making of the Revolving Loans, the Term Loans, and other financial
accommodations hereunder by the Agent and the Lenders, the application of the
proceeds and repayment thereof by the Borrowers and the consummation of the
other transactions contemplated by this Agreement and the Loan Documents do not
violate any provisions of such laws or any rule, regulation or order issued by
the Securities and Exchange Commission or other Public Authority thereunder.
7.24 Public Utility Holding Company. Neither the Parent nor any of
its Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an affiliate of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
7.25 Margin Securities. Neither the Parent nor any of its
Subsidiaries owns any "margin security," as that term is defined in Regulations
G and U of the Federal Reserve Board, and the proceeds of the Revolving Loans,
the Term Loans, and the other financial accommodations made pursuant to this
Agreement will be used only for the purposes contemplated hereunder. None of
the Revolving Loans, the Term Loans, or the other financial accommodations
hereunder will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or retiring any
Debt or other Person's indebtedness which was originally incurred to purchase
or carry any margin security, or for any other purpose which might cause any
such loan or other financial accommodation to be considered a "purpose credit"
within the meaning of Regulation G, U or X of the Federal Reserve Board. Such
Borrower will neither take nor permit any agent acting on its behalf to take
any action which might cause any transaction, obligation or right created by
this Agreement, or any document or instrument delivered pursuant hereto, to
violate any regulation of the Federal Reserve Board.
7.26 Broker's Fees. No broker or finder is entitled to receive
compensation for services rendered with respect to the transactions described
in this Agreement, except a private placement fee in an amount not to exceed
$1,356,250 payable by the Borrowers to SPP Hambro & Co. with respect to the
transactions occurring on the Closing Date, which private placement fee has
been paid in full.
7.27 No Material Adverse Change. No material adverse change has
occurred in property, business operations, or conditions (financial or
otherwise) of the Parent or any of its Subsidiaries since December 31, 1993.
7.28 Disclosure. Neither this Agreement nor any document or
statement furnished to the Agent or any Lender by or on behalf of such Borrower
hereunder contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements contained herein or
therein not misleading.
7.29 Bank Accounts. Schedule 7.29 contains a complete and accurate
list of all bank accounts maintained by such Borrower with any bank or other
financial institution.
ARTICLE 8
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower covenants to the Agent and each Lender that, so long as
any of the Obligations remain outstanding or this Agreement is in effect:
8.1 Taxes and Other Obligations. Such Borrower shall, and shall
cause each of its Subsidiaries to, (a) file when due all tax returns and other
reports which it is required to file, (b) pay, or provide for the payment, when
due, of all taxes, fees, assessments and other governmental charges against it
or upon its property, income and franchises, make all required withholding and
other tax deposits, and establish adequate reserves for the payment of all such
items, and provide to the Agent and the Lenders, upon request, satisfactory
evidence of its timely compliance with the foregoing and (c) pay when due all
claims of materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons, and all other indebtedness owed by it and perform and discharge
in a timely manner all other obligations undertaken by it; provided, however,
that neither the Parent nor any of its Subsidiaries need pay any tax, fee,
assessment, governmental charge, or Debt, or discharge any other obligation,
that it is contesting in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves are maintained, so long as no Lien,
other than a Permitted Lien, results from such non-payment.
8.2 Corporate Existence and Good Standing. Such Borrower shall
maintain its corporate existence and its qualification and good standing in all
states necessary to conduct its business and own its property, and shall obtain
and maintain all licenses, permits, franchises and governmental authorizations
necessary to conduct its business and own its property.
8.3 Compliance with Law and Agreements. Such Borrower shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
each judgment, law, statute, rule, and governmental regulation applicable to it
and each contract, mortgage, lien, lease, indenture, order, instrument,
agreement, or document to which it is a party or by which it is bound.
8.4 Maintenance of Property. Such Borrower shall, and shall cause
each of its Subsidiaries to, maintain all of its property necessary and useful,
in the judgment of such Borrower, in the conduct of its business, in good
operating condition and repair, ordinary wear and tear excepted.
8.5 Insurance. (a) Such Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, with financially sound and reputable
insurers, insurance against loss or damage by fire with extended coverage;
theft, burglary, pilferage and loss in transit; public liability and third
party property damage; larceny, embezzlement or other criminal liability;
business interruption; public liability and third party property damage; and
such other hazards or of such other types as is customary for Persons engaged
in the same or similar business, as the Agent, in its discretion, or acting at
the direction of the Majority Lenders, shall specify, in amounts, and under
policies acceptable to the Agent and the Majority Lenders. Without limiting
the foregoing, such Borrower shall also maintain, and shall cause each of its
Subsidiaries to maintain, flood insurance, in the event of a designation of the
area in which any Real Estate is located as "flood prone" or a "flood risk
area," as defined by the Flood Disaster Protection Act of 1973, in an amount to
be reasonably determined by the Agent, and shall comply with the additional
requirements of the National Flood Insurance Program as set forth in said Act.
(b) Such Borrower shall cause the Agent, for the ratable benefit of
the Secured Creditors, to be named in each such policy as secured party or
mortgagee and loss payee or additional insured, in a manner acceptable to the
Agent. Each policy of insurance shall contain a clause or endorsement
requiring the insurer to give not less than thirty (30) days' prior written
notice to the Agent in the event of cancellation of the policy for any reason
whatsoever and a clause or endorsement stating that the interest of the Agent
shall not be impaired or invalidated by any act or neglect of the Parent or any
of its Subsidiaries or the owner of any premises for purposes more hazardous
than are permitted by such policy. All premiums for such insurance shall be
paid by the Borrowers when due, and certificates of insurance and, if requested
by the Agent or any Lender, photocopies of the policies, shall be delivered to
the Agent, in each case in sufficient quantity for distribution by the Agent to
each of the Lenders. If such Borrower fails to procure such insurance or to
pay the premiums therefor when due, the Agent may, and at the direction of the
Majority Lenders shall, do so from the proceeds of Revolving Loans as described
in Section 4.7.
(c) Such Borrower shall promptly notify the Agent and the Lenders of
any loss, damage, or destruction to the Collateral with respect to such
Borrower or arising from its use, whether or not covered by insurance. The
Agent is hereby authorized to collect all insurance proceeds directly, and to
apply or remit them as follows:
(i) With respect to insurance proceeds relating to property other
than Collateral, after deducting from such proceeds the reasonable expenses, if
any, incurred by the Agent in the collection or handling thereof, the Agent
shall promptly remit to such Borrower such proceeds.
(ii) With respect to insurance proceeds relating to Collateral other
than Fixed Assets, after deducting from such proceeds the reasonable expenses,
if any, incurred by the Agent in the collection or handling thereof, the Agent
shall apply such proceeds, ratably, to the reduction of the Obligations in the
order provided for in Section 4.8.
(iii) With respect to insurance proceeds relating to Collateral
consisting of Fixed Assets, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling thereof,
the Agent shall apply such proceeds, ratably, to the reduction of the Term
Loans (applying such proceeds ratably to the installments of the Term Loans in
the inverse order of maturity), or at the option of the Majority Lenders, may
permit or require the applicable Borrower to use such money, or any part
thereof, to replace, repair, restore or rebuild the relevant Fixed Assets in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the loss, damage or destruction; provided,
however, that so long as there does not then exist any Default or Event of
Default, such Borrower shall be permitted to use insurance proceeds relating to
Collateral consisting of Fixed Assets in an aggregate amount not to exceed
$500,000 with respect to any occurrence, to replace, repair, restore or rebuild
the relevant Fixed Assets, in the manner set forth in this sentence; and
provided, further, that plans and specifications for any such repair or
restoration shall be reasonably satisfactory to the Agent and the Majority
Lenders, and shall be submitted to the Agent, in sufficient quantity for
distribution by the Agent to the Lenders, prior to commencement of the work and
shall be subject to the reasonable approval of the Agent and the Majority
Lenders.
8.6 Condemnation. (a) Such Borrower shall, immediately upon
learning of the institution of any proceeding for the condemnation or other
taking of any of its property, notify the Agent and the Lenders of the pendency
of such proceeding, and agrees that the Agent may participate in any such
proceeding, and such Borrower from time to time will deliver to the Agent all
instruments reasonably requested by the Agent to permit such participation.
(b) The Agent is hereby authorized to collect the proceeds of any
condemnation claim or award directly, and to apply or remit them as follows:
(i) With respect to condemnation proceeds relating to property other
than Collateral, after deducting from such proceeds the reasonable expenses, if
any, incurred by the Agent in the collection or handling thereof, the Agent
shall remit to such Borrower such proceeds.
(ii) With respect to condemnation proceeds relating to Collateral
other than Fixed Assets, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling thereof,
the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.8.
(iii) With respect to condemnation proceeds relating to Collateral
consisting of Fixed Assets, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling thereof,
the Agent shall apply such proceeds, ratably, to the reduction of the Term
Loans (applying such proceeds ratably to the installments of the Term Loans in
the inverse order of maturity), or at the option of the Majority Lenders, may
permit or require the applicable Borrower to use such money, or any part
thereof, to replace, repair, restore or rebuild the relevant Fixed Assets in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the condemnation; provided, however, that so
long as there does not then exist any Default or Event of Default, such
Borrower shall be permitted to use proceeds relating to Collateral consisting
of Fixed Assets in an aggregate amount not to exceed $100,000 with respect to
any occurrence, to replace, repair, restore or rebuild the relevant Fixed
Assets, in the manner set forth in this sentence; and provided, further, that
plans and specifications for any such repair or restoration shall be reasonably
satisfactory to the Agent and the Majority Lenders, and shall be submitted to
the Agent, in sufficient quantity for distribution by the Agent to the Lenders,
prior to commencement of the work and shall be subject to the reasonable
approval of the Agent and the Majority Lenders.
8.7 Environmental Laws. (a) Such Borrower shall, and shall cause
each of its Subsidiaries to, conduct its business in material compliance with
all Environmental Laws applicable to it, including, without limitation, those
relating to the generation, handling, use, storage, and disposal of any
Contaminant. Such Borrower shall, and shall cause each of its Subsidiaries to,
take prompt and appropriate action to respond to any material non-compliance
with Environmental Laws and shall regularly report to the Agent on such
response.
(b) Without limiting the generality of the foregoing, each Borrower
shall submit to the Agent and the Lenders annually, commencing on the first
Anniversary Date, and on each Anniversary Date thereafter, an update of the
status of each environmental compliance or liability issue: (i) identified on
Schedule 7.18; and/or (ii) identified in any notification provided pursuant to
Sections 6.3(f) or (g). To the extent that any matter reported pursuant to
Sections 6.3(f) or (g) is reasonably likely to give rise to liabilities or
costs in excess of $500,000, the Agent or any Lender may request copies of
technical reports prepared by the applicable Borrower and its communications
with any Public Authority, subject to the confidentiality provisions contained
in Section 5.6, to determine whether such Borrower or any of its Subsidiaries
is proceeding reasonably to correct, cure or contest in good faith any alleged
non-compliance or environmental liability. If, in the reasonable determination
of the Agent or the Majority Lenders, the applicable Borrower or any of its
Subsidiaries is not proceeding reasonably, such Borrower shall, at the Agent's
or the Majority Lenders' request and at such Borrower's expense, subject to the
confidentiality provisions contained in Section 5.6: (a) cause such Borrower to
retain an independent environmental engineer acceptable to the Agent or the
Majority Lenders (which acceptance shall not be unreasonably withheld) to
evaluate the site, including tests if appropriate, where the non-compliance or
alleged non-compliance with Environmental Laws has occurred and prepare and
deliver to the Agent, in sufficient quantity for distribution by the Agent to
the Lenders, a report setting forth the results of such evaluation, a proposed
plan for responding to any environmental problems described therein, and an
estimate of the costs thereof, and (b) provide to the Agent and the Lenders a
supplemental report of such engineer whenever the scope of the environmental
problems, or the response thereto or the estimated costs thereof, shall change
in any material respect.
8.8 ERISA. (a) Such Borrower shall, and shall cause each of its
ERISA Affiliates to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Code, all regulations and
interpretations promulgated thereunder, and all other applicable laws and
regulations.
(b) Such Borrower shall not, and shall not permit any ERISA
Affiliate, to:
(i) Engage in any prohibited transaction described in Sections 406
of ERISA or 4975 of the Code for which a statutory or class exemption is not
available or a private exemption has not been previously been obtained from the
DOL;
(ii) Permit to exist any accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code) whether or not waived;
(iii) Fail to pay timely required contributions or annual
installments due with respect to any waived funding deficiency to any Benefit
Plan;
(iv) Terminate any Benefit Plan which would result in any liability
of such Borrower or an ERISA Affiliate under Title IV of ERISA;
(v) Fail to make any contribution or payment to any Multiemployer
Plan which such Borrower or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(vi) Fail to pay any required installment under section (m) of
Section 412 of the Code or any other payment required under Section 412 of the
Code on or before the due date for such installment or other payment; or
(vii) Amend a Plan resulting in an increase in current liability for
the plan year such that such Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the Code.
8.9 Mergers, Consolidations or Sales. (a) Neither the Parent nor
any of its Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, or transfer, sell, assign, lease, or
otherwise dispose of all or any part of its property, or wind up, liquidate or
dissolve, or agree to do any of the foregoing, except (i) for sales of
Inventory in the ordinary course of its business, (ii) for transfers, sales,
assignment or leases by any Subsidiary of the Parent, other than Laclede Chain
and Laclede Mid America, to any Borrower, of all or any part of its property,
consented to in writing by the Majority Lenders, (iii) for mergers by any
Subsidiary of the Parent with and into any Borrower, consented to in writing by
the Majority Lenders, (iv) for sales by the Parent of its capital stock, (v)
for sales by Laclede Mid America of its newly-issued capital stock in an amount
not to exceed ten percent (10.0%) of all capital stock of Laclede Mid America
outstanding after giving effect to such issuance, (vi) for sales by the Parent
or any of its Subsidiaries of Fixed Assets, subject to compliance with the
provisions of Section 8.9(b), and (vii) as otherwise expressly permitted under
this Agreement, and (viii) for a sale by the Parent to SSC of the SSC
Equipment, incident to consummation of the SSC Transaction, and (ix) for a sale
by the Parent to Excaliber Tubular Corporation of the Parent's Inventory and
Fixed Assets located at the Parent's Benwood, West Virginia tube mill facility.
(b) Other than as provided in the proviso in Section 5.11(c), no
sale or other disposition of Fixed Assets shall be permitted except a sale or
other disposition complying with the terms of this Section 8.9(b). In the
event that any Borrower intends to sell or otherwise dispose of any Fixed Asset
consisting of Collateral, such Borrower shall give the Agent and the Lenders at
least ten (10) Business Days' prior written notice of such sale. The Borrowers
shall make prepayments of the Loans upon any sale or disposition, as set forth
in this Section 8.9(b). Upon any such sale or other disposition, the entire
amount of Net Proceeds shall be applied on the date of such sale or disposition
to the repayment of Revolving Loans then outstanding. Upon such payment, a
reserve shall automatically be created against the Maximum Revolver Amount and
Individual Maximum Revolver Amount with respect to such Borrower (a "Fixed
Asset Reserve") in an amount equal to such Net Proceeds. On any date on which
the applicable Borrower shall have (i) acquired Replacement Assets, (ii)
granted the Agent a valid perfected and first priority Lien on such Replacement
Assets, and (iii) obtained an appraisal of the fair market value of such
Replacement Assets (such appraised fair market value being referred to as the
"Replacement Value") from an appraiser satisfactory to the Agent and the
Lenders, such Fixed Asset Reserve shall be reduced (but not to below zero) by
the Replacement Value of such Replacement Assets. On the first to occur of (A)
the reduction of such Fixed Asset Reserve to zero pursuant to the preceding
sentence, (B) the expiration of twelve (12) months from the date of the sale or
disposition of such Fixed Assets, and (C) such earlier date as the applicable
Borrower determines to terminate such Fixed Asset Reserve, the applicable
Borrower shall make a prepayment on the Term Loans to the extent of the then
existing Fixed Asset Reserve, to be applied to the principal installments of
the Term Loans in the inverse order of their maturity.
8.10 Distributions; Capital Change; Restricted Investments;
Permitted Acquisitions. (a) Neither the Parent nor any of its Subsidiaries
shall (A) directly or indirectly declare or make, or incur any liability to
make, any Distribution, except Distributions to the Parent by its Subsidiaries,
(B) make any change in its capital structure which could materially and
adversely affect the repayment of the Obligations, or (C) make any Restricted
Investment; provided, that the Parent and its Subsidiaries may make
Distributions and Restricted Investments constituting Permitted Acquisitions,
provided there does not then exist any Default or Event of Default, in an
amount not to exceed (i) fifty percent (50.0%) of the positive amount, if any,
of Consolidated Net Earnings for any fiscal quarter, commencing with the fiscal
quarter ending March 31, 1994, on a cumulative basis, minus one hundred percent
(100.0%) of the negative amount, if any, of Consolidated Net Earnings for any
fiscal quarter, commencing with the fiscal quarter ending March 31, 1994, on a
cumulative basis, plus (ii) the sum of amounts received by the Parent or any of
its Subsidiaries from and after the Closing Date, consisting of proceeds from
the sale of shares of its capital stock or otherwise as contributions to the
capital of the Parent or such Subsidiary, plus (iii) the sum of amounts
received by the Parent or any of its Subsidiaries, on a cumulative basis from
and after the Closing Date, consisting of proceeds arising from the maturation,
sale or disposition of investments consisting of Restricted Investments, minus
(iv) the sum of Distributions and Restricted Investments made by the Parent or
any of its Subsidiaries from and after the Closing Date pursuant to this
proviso. In addition to the foregoing, the Parent may declare and pay
dividends on the Convertible Preferred Stock to the extent dividends would have
been permitted to be paid under that certain Indenture of Trust dated as of
October 1, 1976, between the City of Alton, Illinois, and St. Louis Union Trust
Company, as Trustee, as in effect on July 30, 1996, with respect to the
Pollution Control Bonds. Nothing contained in this Section 8.10 or elsewhere
in this Agreement shall be construed to permit the redemption by the Parent of
any of the Redeemable Preferred Stock or Convertible Preferred Stock during the
term of this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, Permitted Acquisitions shall (i) not be hostile acquisitions, (ii) be
made in accordance with all applicable laws and pursuant to agreements,
instruments and documents of which copies shall have been delivered to the
Agent and each Lender prior to such acquisition and which shall be acceptable
in form and substance to the Agent and each Lender, and (iii) be of businesses
with product lines that are (1) complementary to those of the Borrowers, or (2)
sold through distribution channels similar to those through which the
Borrowers' product lines are distributed. In addition, the Borrowers shall be
in full compliance with all of the terms, conditions and covenants contained in
this Agreement, and no Default or Event of Default shall have occurred and be
continuing on the date of any proposed acquisition or would exist immediately
after giving effect thereto. The Agent shall be granted a Lien on all capital
stock acquired by any Borrower in connection with Permitted Acquisitions,
pursuant to a pledge agreement in form and substance satisfactory to the Agent
and the Lenders. In addition, any such Subsidiary of any Borrower acquired in
connection with a Permitted Acquisition of capital stock shall execute and
deliver to the Agent and the Lenders a guaranty and security agreement in form
and substance satisfactory to the Agent and the Lenders, pursuant to which such
Subsidiary shall guaranty the payment and performance of all of the Obligations
and grant Liens on all of its assets to secure such guaranty.
8.11 Transactions Affecting Collateral or Obligations. Neither the
Parent nor any of its Subsidiaries shall enter into any transaction which
materially and adversely affects the Collateral or any Borrower's ability to
repay the Obligations.
8.12 Guaranties. Neither the Parent nor any of its Subsidiaries
shall make, issue, or become liable on any Guaranty, except (a) Guaranties in
favor of the Agent, and (b) a Guaranty by the Parent, made on an unsecured
basis and pursuant to documentation in form and substance satisfactory to the
Agent and the Majority Lenders, of a loan in a principal amount not to exceed
$2,000,000, to be extended to Laclede Mid America by Nissho Iwai American
Corporation, or one of its affiliates, incident to improvements being
undertaken by Laclede Mid America at its Fremont, Indiana plant, to facilitate
the production of high tensile oil tempered wire for cold wound suspension
springs.
8.13 Debt. Neither the Parent nor any of its Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) trade payables
and contractual obligations to suppliers and customers, and non-interest
bearing current operating liabilities (as determined in accordance with GAAP),
in each case incurred in the ordinary course of business; (c) Debt in a
principal amount not to exceed $10,000,000 incurred to finance the purchase and
implementation by the Parent of Equipment consisting of a new ladle furnace and
related melt shop and rolling mill Equipment for the Parent's Xxxxx steel mill
plant located in Alton, Illinois, provided, that such Debt shall (i) have a
final maturity not less than that of the Term Loans, (ii) have an average life
of at least three years, (iii) contain covenants, including financial
covenants, no more restrictive than those contained in this Agreement, and (iv)
be incurred pursuant to documentation in form and substance otherwise
satisfactory to the Majority Lenders; (d) Debt incurred to finance the purchase
of additional Equipment or Real Estate constituting Capital Expenditures
permitted by Section 8.22, so long as the aggregate amount of scheduled
principal installments on such Debt in any Fiscal Year does not exceed fifty
percent (50.0%) of the Capital Expenditures for such Fiscal Year; (e) Debt
evidenced by the Intercompany Notes; (f) Debt subordinated, on terms
satisfactory in form and substance to the Agent and the Lenders, to the
Obligations; and (g) other Debt existing on the Closing Date and reflected in
the Financial Statements attached hereto as Exhibit C; and (h) Debt in a
principal amount not to exceed $2,000,000 incurred to Nissho Iwai American
Corporation, or one of its affiliates, incident to improvements being
undertaken by Laclede Mid America at its Fremont, Indiana plant to facilitate
the production of high tensile oil tempered wire for cold wound suspension
springs, provided, that such Debt shall (i) have a final maturity not less than
that of the Term Loans, (ii) have an average life of at least three years,
(iii) contain covenants, including financing covenants, no more restrictive
than those contained in this Agreement, and (iv) be incurred pursuant to
documentation in form and substance otherwise satisfactory to the Majority
Lenders.
8.14 Prepayment. Neither the Parent nor any of its Subsidiaries
shall voluntarily prepay any Debt, except the Obligations in accordance with
the terms hereof.
8.15 IRB Debt.
(a) The Parent shall not amend or otherwise change the terms
applicable to any IRB Debt in any manner adversely affecting the interests of
the Lenders without the prior written consent of the Majority Lenders. The
Parent shall not make any payment which would not have been made in the absence
of an amendment or change of terms applicable to any IRB Debt unless such
amendment or change has been approved by the Majority Lenders as provided in
the preceding sentence.
(b) The Parent shall deliver to the Lenders (i) a copy of each
notice or other communication delivered by it or on its behalf to any trustee
under any indenture for any IRB Debt, such delivery to be made at the same time
and by the same means as such notice or other communication is delivered to
such trustee, and (ii) a copy of each notice or other communication received by
the Parent from any such trustee, such delivery to be made promptly after such
notice or other communication is received by the Parent.
8.16 Transactions with Affiliates. Except as set forth below,
neither the Parent nor any of its Subsidiaries shall, sell, transfer,
distribute, or pay any money or property, including, but not limited to, any
fees or expenses of any nature (including, but not limited to, any fees or
expenses for management services), except actual expenses incurred and approved
in advance in writing by the Agent and the Majority Lenders, to any Affiliate,
or lend or advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, the Borrowers may pay reasonable compensation to
employees who are Affiliates, and, if no Event of Default has occurred and is
continuing, the Parent and its Subsidiaries may engage in transactions in the
ordinary course of business, in amounts and upon terms fully disclosed to the
Agent and the Lenders, and no less favorable to the Parent or such Subsidiary
than would obtain in a comparable arm's-length transaction with a third party
who is not an Affiliate; provided, that with respect to (i) sales of Inventory
by any Borrower to Ivaco or any of its affiliates, the amount owing with
respect to which sales does not exceed, in the aggregate at any time
outstanding, $250,000, or (ii) purchases of Inventory by any Borrower from
Ivaco or any of its affiliates, the amount owing with respect to which
purchases does not exceed, in the aggregate at any time outstanding, $100,000,
the Borrowers shall not be required so to disclose such amounts or terms, so
long as such transactions are engaged in the ordinary course of business and on
such arm's-length basis. In addition, (a) the Parent may make or maintain
outstanding certain loans or other advances to Laclede Chain and to Laclede Mid
America under the Intercompany Notes, and (b) the Borrowers may permit Ivaco or
any of its affiliates to obtain insurance on their respective behalf by virtue
of their relationship as Affiliates of Ivaco in order to obtain more favorable
rates and coverage from the relevant insurance carriers.
8.17 Investment Banking and Finder's Fees. Neither the Parent nor
any of its Subsidiaries shall pay or agree to pay, or reimburse any other party
with respect to, any investment banking or similar or related fee,
underwriter's fee, finder's fee, or broker's fee to any Person in connection
with this Agreement, except a private placement fee in an amount not to exceed
$1,356,250 payable by the Borrowers to SPP Hambro & Co. in connection with the
transactions occurring on the Closing Date, which private placement fee has
been paid in full. Each Borrower shall defend and indemnify the Agent and the
Lenders against and hold them harmless from all claims of any Person for any
such fees, and all costs and expenses (including without limitation, attorneys'
fees) incurred by the Agent and/or any Lender in connection therewith.
8.18 Business Conducted. Such Borrower shall not engage, directly
or indirectly, in any line of business other than the businesses in which such
Borrower is engaged on the Closing Date.
8.19 Liens. Neither the Parent nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
8.20 Sale and Leaseback Transactions. Except with respect to (i)
Fixed Assets which do not consist of Collateral, and (ii) a sale by the Parent
to SSC of the SSC Equipment, incident to consummation of the SSC Transaction,
neither the Parent nor any of its Subsidiaries shall, directly or indirectly,
enter into any arrangement with any Person providing for the Parent or such
Subsidiary to lease or rent property that the Parent or such Subsidiary has
sold or will sell or otherwise transfer to such Person.
8.21 New Subsidiaries. Such Borrower shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than those listed on Schedule 7.5, except as a result of a Permitted
Acquisition by such Borrower of one hundred percent (100.0%) of the capital
stock of any Person.
8.22 Capital Expenditures. Neither the Parent nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving
effect thereto, the aggregate amount of all Capital Expenditures by the Parent
and its Subsidiaries on a consolidated basis would exceed (a) with respect to
the Fiscal Year beginning January 1, 1995, $10,000,000, or (b) with respect to
any subsequent Fiscal Year, the sum of (i) $10,000,000, plus (ii) the amount by
which $10,000,000 exceeds all Capital Expenditures by the Parent and its
Subsidiaries during the then immediately preceding Fiscal Year.
8.23 Operating Lease Obligations. Except incident to consummation
of the SSC Transaction, neither the Parent nor any of its Subsidiaries shall
enter into any lease of real or personal property as lessee or sublessee (other
than a Capital Lease), if, after giving effect thereto, the aggregate amount of
Rentals (as hereinafter defined) payable by the Parent and its Subsidiaries on
a consolidated basis in any Fiscal Year in respect of such lease and all such
leases would exceed $4,000,000 (such amount being referred to herein as
"Permitted Rentals"). The term "Rentals" means all payments due from the
lessee or sublessee under a lease, including, without limitation, basic rent,
percentage rent, property taxes, utility or maintenance costs, and insurance
premiums.
8.24 Consolidated Fixed Charge Coverage Ratio. The Borrowers will
maintain a Consolidated Fixed Charge Coverage Ratio, determined as of the end
of each period listed below, for the period indicated of not less than the
ratio indicated opposite such period:
Period Ratio
01/01/97-06/30/97 0.80 to 1.00
01/01/97-09/30/97 0.70 to 1.00
01/01/97-12/31/97 0.80 to 1.00
01/01/98-03/31/98 0.80 to 1.00
01/01/98-06/30/98 0.80 to 1.00
01/01/98-09/30/98 0.70 to 1.00
01/01/98-12/31/98 0.80 to 1.00
01/01/99-03/31/99 0.90 to 1.00
01/01/99-06/30/99 0.90 to 1.00
01/01/99-09/30/99 0.80 to 1.00
01/01/99-12/31/99 0.90 to 1.00
01/01/00-03/31/00 0.95 to 1.00
01/01/00-06/30/00 0.95 to 1.00
01/01/00-09/31/00 0.85 to 1.00
01/01/00-12/31/00 0.95 to 1.00
and commencing on
03/31/01 and as of the
last day of each fiscal
quarter in each Fiscal
Year thereafter, for the
twelve-month period
ending on such date 0.95 to 1.00
For purposes of this Section 8.24, the Consolidated Fixed Charge Coverage Ratio
shall be calculated for fiscal periods of 1997 without giving effect to (i) the
$1,000,000 prepayment of principal of the Term Loans made in connection with
the sale on February 10, 1997 by the Parent of the Parent's Inventory and Fixed
Assets located at the Parent's Benwood, West Virginia tube mill facility, (ii)
$1,000,000 of year-to-date Clean Up Costs, (iii) the Restructuring Fee, or (iv)
the performance fee referred to in Section 3.10.
8.25 Consolidated Adjusted Net Worth. The Borrowers will maintain a
Consolidated Adjusted Net Worth, determined as of the last day of each fiscal
quarter in each Fiscal Year, in an amount which is not less than the sum of (a)
the aggregate amount of any contributions to the capital of the Parent made
after February 26, 1997 plus (b) the amount indicated opposite each of the
following dates:
Quarter Ending Date Amount
03/31/97 $31,000,000
06/30/97 $31,000,000
09/30/97 $31,500,000
12/31/97 $32,250,000
Beginning with the fiscal quarter ending March 31, 1998, the Borrowers will
maintain a Consolidated Adjusted Net Worth, calculated as of the last day of
each fiscal quarter in each Fiscal Year, of not less than the sum of (a) the
aggregate amount of any contributions to the capital of the Parent made after
February 26, 1997, plus (b) $32,250,000, plus (c) an amount (to the extent
greater than zero and without deduction for any losses) equal to fifty percent
(50.0%) of Consolidated Net Earnings for the Fiscal Year ending on December 31,
1997, and fifty percent (50.0%) of the Consolidated Net Earnings for each
Fiscal Year thereafter.
8.26 Fiscal Year. The Parent and its Subsidiaries will maintain a
Fiscal Year based upon a calendar year.
8.27 Title Policies. (a) The Parent will not later than sixty (60)
days following the Restructuring Date, provide the Agent with lender's title
policies in form and substance satisfactory to the Agent for the Real Property
subject to the Xxxxx Mortgage, the Memphis Mortgage and the Parent Fremont
Mortgage, which title policies shall reveal no Liens on such Real Property
other than Permitted Liens.
(b) Laclede Mid America will not later than sixty (60) days
following the Restructuring Date, provide the Agent with a lender's title
policy in form and substance satisfactory to the Agent for the Real Property
subject to the Fremont Mortgage, which title policy shall reveal no Liens on
such Real Property other than Permitted Liens.
8.28 Further Assurances. Such Borrower shall execute and deliver,
or cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent may, from time to time, request to carry out the terms and conditions
of this Agreement and the other Loan Documents.
ARTICLE 9
CONDITIONS OF LENDING
9.1 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the Revolving Loans on the Restructuring
Date and the Restructuring Date Term Loans, and the obligation of the Agent to
cause to be issued any Letter of Credit and the obligation of the Lenders to
participate in Letters of Credit, shall be subject to the further conditions
precedent that on the date of any such extension of credit:
(a) the following statements shall be true, and the acceptance by a
Borrower of any extension of credit shall be deemed to be a statement to the
effect set forth in clauses (i) and (ii), with the same effect as the delivery
to the Agent and the Lenders of a certificate signed by the president and chief
financial officer of such Borrower, dated the date of such extension of credit,
stating that:
(i) The representations and warranties contained in this
Agreement and the other Loan Documents are correct in all material respects on
and as of the date of such extension of credit as though made on and as of such
date, except to the extent the Agent and the Lenders have been notified by any
Borrower that any representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such representation
or warranty; and
(ii) No event has occurred and is continuing, or would result
from such extension of credit, which constitutes a Default or an Event of
Default;
(b) the Agent and the Lenders shall have received such other
approvals, opinions or documents as they may reasonably request;
(c) no order, judgment or decree of any Public Authority and no law,
rule or regulation applicable to Lender shall purport by its terms to enjoin,
restrain or otherwise prohibit the making of such Loan; and
(d) Since December 31, 1993, no material adverse change shall have
occurred with respect to the business, operations, assets or condition
(financial or otherwise) of the Parent or any of its Subsidiaries;
provided, however, that the foregoing conditions precedent are not conditions
to each Lender participating in or reimbursing BABC or the Agent for such
Lenders' Pro Rata Share of any Settlement Loan or Agent Advance as provided in
Sections 2.2(h), (j) and (k).
9.2 Conditions Precedent to Making of Loans on and after the
Restructuring Date. The obligation of the Lenders to make Revolving Loans on
and after the Restructuring Date and to make the Restructuring Date Term Loans,
and the obligation of the Agent to cause to be issued any Letter of Credit on
or after the Restructuring Date and the obligation of the Lenders to
participate in Letters of Credit issued on or after the Restructuring Date, are
subject to the following conditions precedent having been satisfied on or prior
to August 20, 1997 in a manner satisfactory to the Agent and the Lenders:
(a) Each Borrower shall have performed and complied with all
covenants, agreements and conditions contained herein which are required to be
performed or complied with by such Borrower before or on the Restructuring
Date.
(b) All representations and warranties made hereunder shall be true
and correct as of the Restructuring Date as if made on such date.
(c) No Default or Event of Default shall exist on the Restructuring
Date, or would exist after giving effect to the Loans to be made on such date.
(d) The Agent and the Lenders shall have received a certificate
dated the Restructuring Date and signed by the President or a Vice President of
each Borrower certifying that the conditions specified in Sections 9.2(a) - (c)
have been fulfilled.
(e) The Agent and the Lenders shall have received a favorable
opinion from Xxxxx Xxxx LLP, counsel to the Borrowers, in form and substance
satisfactory to the Agent and the Lenders.
(f) The Agent and the Lenders shall have received all items on the
List of Closing Documents attached hereto as Exhibit D which are not elsewhere
identified in this Article 9, such items to be in form and substance
satisfactory to the Agent and the Lenders, and to be executed by all parties
thereto when the nature of such items so requires.
(g) All proceedings taken in connection with the execution of this
Agreement, the Restructuring Date Term Loan Notes, all other Loan Documents and
all documents and papers relating thereto shall be satisfactory to the Agent
and the Lenders. The Agent and the Lenders shall have received copies of such
documents and papers as the Agent and the Lenders may reasonably request in
connection therewith, all in form and substance satisfactory to the Agent and
the Lenders.
(h) The Restructuring Fee shall have been paid in full.
(i) The Agent and the Lenders shall have received copies of an
appraisal of Parent's and Laclede Mid America's Equipment, in form and
substance satisfactory to the Lender and the Agent, which appraisal concludes
that the orderly liquidation value of such Equipment is at least $17,645,000.
(j) The holders of the Solid Waste Disposal Bonds and the
Southwestern Illinois Development Authority ("SIDA") shall have consented to an
amendment of Section 6.6 of that certain Loan Agreement dated as of September
1, 1990 between SIDA and Parent to eliminate any restriction on the ability of
Parent to xxxxx x Xxxx on any of its assets without the necessity of granting a
corresponding Lien in favor of the holders of the Solid Waste Disposal Bonds,
which amendment shall have become effective, as certified by an officer of the
Parent.
The acceptance by a Borrower of any Loans made on the Restructuring Date shall
be deemed to be a representation and warranty made by such Borrower to the
effect that all of the conditions to the making of such Loans set forth in
Sections 9.2(a) - (c) have been satisfied, with the same effect as delivery to
the Agent and the Lenders of a certificate signed by the president and chief
financial officer of such Borrower, dated the Restructuring Date, to such
effect.
ARTICLE 10
DEFAULT; REMEDIES
10.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a)
(i) any failure to pay the principal of or premium on any of the
Obligations when due, whether upon demand or otherwise, other than such
obligation arising under Section 4.1 as a result of the sum of outstanding
Revolving Loans, the aggregate amount of Pending Revolving Loans, the undrawn
amount of outstanding Letters of Credit and any unpaid reimbursement
obligations in respect of Letters of Credit exceeding the Maximum Revolver
Amount;
(ii) any failure to pay the principal of or premium on any of
the Obligations within ten (10) Business Days following the date such principal
is due, whether upon demand or otherwise, in the case of such obligation
arising under Section 4.1 as a result of the sum of outstanding Revolving
Loans, the aggregate amount of Pending Revolving Loans, the undrawn amount of
outstanding Letters of Credit and any unpaid reimbursement obligations in
respect of Letters of Credit exceeding the Maximum Revolver Amount; or
(iii) any failure to pay interest on any of the Obligations,
fees, expenses or any of the Obligations not otherwise specified in the
foregoing clauses (i) or (ii), within five (5) Business Days following the date
such interest or item is due, whether upon demand or otherwise;
(b) any representation or warranty made by any Borrower in this
Agreement or by the Parent or any of its Subsidiaries in any of the other Loan
Documents, any Financial Statement, or any certificate furnished by the Parent
or any of its Subsidiaries at any time to the Agent or any Lender shall prove
to be untrue in any material respect as of the date on which made;
(c)
(i) any failure by the Borrowers to comply with the covenant
contained in Section 8.24 as of the end of any fiscal quarter or the covenant
contained in Section 8.25 as of the end of any calendar month, to the extent
that the Borrowers shall not obtain from the Agent and the Majority Lenders,
within eighty-five (85) days following the last day of the period covered by
the Financial Statement which disclosed such failure, a waiver of their right
to deem such failure an Event of Default hereunder;
(ii) any failure by any Borrower to comply with any of the
covenants contained in Sections 8.9, 8.10, 8.11, 8.13, 8.14, 8.15, 8.17, 8.19,
8.20, 8.21, 8.22 and 8.23;
(iii) any failure by any Borrower to comply with any of the
other covenants and agreements contained in Article 8, for more than ten (10)
days after the earlier of (i) notice of such failure by the Agent to such
Borrower and (ii) the date that such Borrower discovers, or reasonably should
have discovered, such failure; provided, however, that no such grace period
shall apply, and an Event of Default shall exist promptly upon such failure to
comply, if such failure to comply may not, in the Majority Lenders' reasonable
determination, be cured by the applicable Borrower during such grace period; or
if any such agreement, instrument or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written consent of
the Majority Lenders) or become void or unenforceable without the written
consent of the Majority Lenders;
(d) any failure by any Borrower to comply with any of the other
covenants and agreements contained in this Agreement, the Term Loan Notes, the
Mortgages, the other Loan Documents, or any other agreement entered into at any
time to which any Borrower and the Agent and/or any Lender are party, for more
than thirty (30) days after the earlier of (i) notice of such failure by the
Agent to such Borrower and (ii) the date that such Borrower discovers, or
reasonably should have discovered, such failure; provided, however, that no
such grace period shall apply, and an Event of Default shall exist promptly
upon such failure to comply, if such failure to comply may not, in the Majority
Lenders' reasonable determination, be cured by the applicable Borrower during
such grace period; or if any such agreement, instrument or document shall
terminate (other than in accordance with its terms or the terms hereof or with
the written consent of the Majority Lenders) or become void or unenforceable
without the written consent of the Majority Lenders;
(e) default shall occur with respect to any Debt for borrowed money
(other than the Obligations) in an outstanding principal amount which exceeds,
in the aggregate for all such Debt with respect to which default shall have
occurred, $500,000, or under any agreement or instrument under or pursuant to
which any such Debt or indebtedness may have been issued, created, assumed, or
guaranteed by the Parent or any of its Subsidiaries, and such default shall
continue for more than the period of grace, if any, therein specified, if the
effect thereof (with or without the giving of notice or further lapse of time
or both) is to accelerate, or to permit the holders of any such Debt or
indebtedness to accelerate, the maturity of any such Debt; or any such Debt or
indebtedness shall be declared due and payable or be required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof;
(f) the Parent or any of its Subsidiaries shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an answer or otherwise
commence any action or proceeding seeking reorganization, arrangement or
readjustment of its debts or for any other relief under the federal Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing, or consent to, approve of, or acquiesce
in, any such petition, action or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
trustee or similar officer for it or for all or any part of its property; (iii)
make an assignment for the benefit of creditors; or (iv) be unable generally to
pay its debts as they become due;
(g) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement or
readjustment of the debts of the Parent or any of its Subsidiaries or for any
other relief under the federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter
existing and either (i) such petition, action or proceeding shall not have been
dismissed within a period of sixty (60) days after its commencement or (ii) an
order for relief against the Parent or such Subsidiary shall have been entered
in such proceeding;
(h) a receiver, assignee, liquidator, sequestrator, custodian,
trustee or similar officer for the Parent or any of its Subsidiaries or for all
or any part of its property shall be appointed; or a warrant of attachment,
execution or similar process shall be issued against any part of the property
of the Parent or any of its Subsidiaries;
(i) the Parent or any of its Subsidiaries shall file a certificate
of dissolution under applicable state law or shall be liquidated, dissolved or
wound-up or shall commence or have commenced against it any action or
proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(j) all or any material part of the property of the Parent or any of
its Subsidiaries shall be nationalized, expropriated or condemned, seized or
otherwise appropriated, or custody or control of such property or of the Parent
or such Subsidiary shall be assumed by any Public Authority or any court of
competent jurisdiction at the instance of any Public Authority, except where
contested in good faith by proper proceedings diligently pursued where a stay
of enforcement is in effect;
(k) any guaranty of the Obligations shall be terminated, revoked or
declared void or invalid;
(l) one or more judgments or orders for the payment of money
aggregating in excess of $500,000, which amount shall not be fully covered by
insurance, shall be rendered against the Parent or any of its Subsidiaries, and
either (i) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or order, or (ii) there shall be any period of 45
consecutive days during which such judgment remains unpaid or a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(m) any loss, theft, damage or destruction of any item or items of
Collateral occurs which (i) materially and adversely affects the operation of
the business of the Parent or any of its Subsidiaries, taken as a whole; or
(ii) is material in amount and is not adequately covered by insurance;
(n) there occurs any material adverse change in the property,
business, operation, or condition (financial or otherwise) of the Parent or any
of its Subsidiaries, taken as a whole;
(o) Any Termination Event occurs which the Agent believes could
subject any Borrower or any ERISA Affiliate to a liability in excess of
$500,000;
(p) The plan administrator of any Plan applies under Section 412(d)
of the Code for a waiver of the minimum funding standards of Section 412(a) of
the Code and the Agent believes that the substantial business hardship upon
which the application for such waiver is based could subject any Borrower or
any ERISA Affiliate to a liability in excess of $500,000;
(q) there is filed against the Parent or any of its Subsidiaries any
civil or criminal action, suit or proceeding under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is
not dismissed within one hundred twenty (120) days, and (2) could result in the
confiscation or forfeiture of any material portion of the Collateral;
(r) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens, pursuant to
the Loan Documents, any Loan Document ceases to be in full force and effect or
any Lien with respect to any material portion of the Collateral intended to be
secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void;
(s) the Parent shall cease to own (i) at least 90% of the capital
stock of Laclede Mid America, or (ii) 100% of the capital stock of Laclede
Chain or any Subsidiary of the Parent acquired as a result of a Permitted
Acquisition by the Parent of one hundred percent (100.0%) of the capital stock
of any Person; or
(t) The Recapitalization shall not have been consummated on or prior
to March 31, 1998, or any of the Redeemable Preferred Stock shall be redeemed.
10.2 Remedies. (a) If a Default or an Event of Default exists, the
Agent may, in its discretion, or, at the direction of the Majority Lenders,
shall, do one or more of the following at any time or times and in any order,
without notice to or demand on any Borrower: (i) reduce the Maximum Revolver
Amount, or the amount of the Revolver Facility, or the advance rates against
Eligible Accounts and/or Eligible Inventory used in computing the Maximum
Revolver Amount, or reduce or increase one or more of the other elements used
in computing the Maximum Revolver Amount; (ii) restrict the amount of or refuse
to make Revolving Loans; and (iii) restrict or refuse to arrange for Letters of
Credit. If an Event of Default exists, the Agent may, in its discretion, or
shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on any
Borrower: (i) terminate the Commitments and this Agreement; and (ii) declare
any or all Obligations to be immediately due and payable; provided, however,
that upon the occurrence of any Event of Default described in Sections 10.1(f),
10.1(g), 10.1(h), or 10.1(i), the Commitments shall automatically and
immediately expire and all Obligations shall automatically become immediately
due and payable without notice or demand of any kind.
(b) If an Event of Default exists: (i) the Agent shall have, in
addition to all other rights, the rights and remedies of a secured party under
the UCC; (ii) the Agent may, at any time, take possession of the Collateral and
keep it on the applicable Borrower's premises, at no cost to the Agent or any
Lender, or remove any part of it to such other place or places as the Agent may
desire, or each Borrower shall, upon the Agent's demand, at such Borrower's
cost, assemble the Collateral and make it available to the Agent at a place
reasonably convenient to the Agent; and (iii) the Agent may sell and deliver
any Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Agent deems advisable, in its sole
discretion, and may, if the Agent deems it reasonable, postpone or adjourn any
sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new notice of
sale. Without in any way requiring notice to be given in the following manner,
each Borrower agrees that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the
UCC or otherwise, shall constitute reasonable notice to such Borrower if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least five (5)
Business Days prior to such action to such Borrower's address specified in or
pursuant to Section 14.7. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the buyer
defaults in payment, the Agent may resell the Collateral without further notice
to any Borrower. In the event the Agent seeks to take possession of all or any
portion of the Collateral by judicial process, each Borrower irrevocably
waives: (a) the posting of any bond, surety or security with respect thereto
which might otherwise be required; (b) any demand for possession prior to the
commencement of any suit or action to recover the Collateral; and (c) any
requirement that the Agent retain possession and not dispose of any Collateral
until after trial or final judgment. The Borrowers agree that the Agent has no
obligation to preserve rights to the Collateral or marshal any Collateral for
the benefit of any Person. The Agent is hereby granted a license or other
right to use, without charge, each Borrower's labels, patents, copyrights,
name, trade secrets, trade names, trademarks, and advertising matter, or any
similar property, in completing production of, advertising or selling any
Collateral, and each Borrower's rights under all licenses and all franchise
agreements shall inure to the Agent's benefit. The proceeds of sale shall be
applied first to all expenses of sale, including attorneys' fees, and then, in
the case of a sale of Collateral consisting of Fixed Assets, ratably, to the
reduction of the Term Loans (applying such proceeds ratably to the installments
of the Term Loans in the inverse order of maturity), or, in the case of a sale
of Collateral other than Fixed Assets, ratably, to the reduction of the
Obligations in the order provided for in Section 4.8. The Agent will return
any excess to the applicable Borrower or such other Person as shall be legally
entitled thereto and such Borrower shall remain liable for any deficiency.
(c) If an Event of Default occurs, each Borrower hereby waives all
rights to notice and hearing prior to the exercise by the Agent of the Agent's
rights to repossess the Collateral without judicial process or to replevy,
attach or levy upon the Collateral without notice or hearing.
(d) If Agent, in its discretion or at the direction of the Majority
Lenders, terminates this Agreement upon an Event of Default, the Borrowers
shall pay the Agent, for the account of the Lenders, immediately upon
termination, an early termination penalty equal to the early termination fee
that would have been payable under Article 4 if this Agreement had been
terminated on that date pursuant to the Borrowers' election.
ARTICLE 11
TERM AND TERMINATION
11.1 Term and Termination. The term of this Agreement shall end on
September 6, 2002. The Majority Lenders may terminate this Agreement without
notice upon the occurrence of an Event of Default. Upon the effective date of
termination of this Agreement for any reason whatsoever, all Obligations
(including, without limitation, all unpaid principal of, accrued interest on
and prepayment penalties, if any, with respect to the Term Loans) shall become
immediately due and payable. Notwithstanding the termination of this
Agreement, until all Obligations are paid and performed in full in cash, each
Borrower shall remain bound by the terms of this Agreement and shall not be
relieved of any of its obligations hereunder, and the Agent and the Lenders
shall retain all their rights and remedies hereunder (including, without
limitation, the security interest of the Agent, for the ratable benefit of the
Secured Creditors, in and all rights and remedies with respect to all then
existing and after-arising Collateral).
ARTICLE 12
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
12.1 No Implied Waivers. No act, failure or delay by the Agent or
the Lenders shall constitute a waiver of any of their rights and remedies. No
single or partial waiver by the Agent or the Lenders of any provision of this
Agreement or any other Loan Document, or of breach or default hereunder or
thereunder, or of any right or remedy which the Agent or the Lenders may have,
shall operate as a waiver of any other provision, breach, default, right or
remedy or of the same provisions, breach, default, right or remedy on a future
occasion. No waiver by the Agent or the Lenders shall affect their rights to
require strict performance of this Agreement.
12.2 Amendments and Waivers. No amendment or modification of any
provision of this Agreement shall be effective without the written agreement of
the Majority Lenders and the Borrowers, and no termination or waiver of any
provision of this Agreement, or consent to any departure by any Borrower
therefrom, shall in any event be effective without the written concurrence of
the Majority Lenders, which concurrence the Majority Lenders shall have the
right to grant or withhold at their sole discretion. Notwithstanding the
immediately preceding sentence, any amendment, modification or waiver (i) of
any provision of Articles 2, 3 or 4, which amendment, modification or waiver
relates solely to any increase of the Commitments, any increase in the
principal amount of the Term Loans or in the average life or extension of the
maturity of any installment of the Term Loans, the reduction of the interest
rates applicable to any Loans and/or the amount of fees payable hereunder
(other than fees payable solely to the Agent or an issuing bank), (ii)
effectuating the discharge of any Guaranty of any of the Obligations, or (iii)
of the definitions of "Majority Lenders," "Pro Rata Share," "Maximum Revolver
Amount" or "Individual Maximum Revolver Amount" (or any term affecting the
calculation of the Maximum Revolver Amount or Individual Maximum Revolver
Amount in any material respect) and the provisions contained in this Section
12.2, shall be effective if, and only if, evidenced by a writing agreed to and
signed by all Lenders. No amendment, modification, termination, or waiver of
any provision of Article 13 or any other provision referring to the Agent shall
be effective without the written concurrence of the Agent. The Agent may, but
shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents as attorney-in-fact for
such Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on a Borrower in any case shall entitle such Borrower to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, waiver or consent effected in accordance with this Section 12.2
shall be binding on each Secured Creditor, each future Secured Creditor, and,
if signed by each Borrower, on the Borrowers.
12.3 Assignments; Participations.
(a) Each Lender shall have the right, with the Agent's consent, at
any time to assign to one or more commercial banks or other financial
institutions all, or portions in minimum amounts of $25,000,000, of its
Commitment, the Loans owing to it and Term Loan Notes held by it and its rights
and obligations with respect to Letters of Credit; provided, that BABC is
hereby granted a right of first refusal in connection with any such assignment;
and provided, further, that the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance entered into with respect to such assignment by the
assigning Lender and the assignee, and accepted by the Agent, in substantially
the form of Exhibit G ("Assignment and Acceptance"), together with the Term
Loan Notes subject to such assignment and with a processing and recordation fee
of $3,500. 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 two (2) Business Days after the execution
thereof, the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, (A) have the rights and obligations (including, but
not limited to, the obligation to participate in Letters of Credit pursuant to
Section 2.4(f)) of a Lender hereunder and (B) the assigning Lender thereunder
shall cease to be a party hereto.
(b) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address set forth in Section
14.7 a copy of each Assignment and Acceptance delivered to and accepted by it
and books and records, including computer records, in which it shall record the
names and addresses of the Lenders and the Commitment of, and principal amount
of the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall constitute rebuttably presumptive evidence,
absent manifest error, of the accuracy of the information contained therein,
and the Borrowers, the Agent and the Lenders may treat each Person the name of
which is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by any Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with the Term Loan Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit G, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt written notice thereof to the Borrowers.
Within five (5) Business Days after the Borrowers' receipt of such notice, the
Parent, at its own expense, will execute and deliver to the Agent in exchange
for the surrendered Term Loan Notes, new Term Loan Notes to the order of such
assignee in amounts corresponding to the interest in the assigning Lender's
rights and obligations under this Agreement acquired by such assignee pursuant
to such Assignment and Acceptance. Such new Term Loan Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Term Loan Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the forms of
Exhibit A. Upon delivery of such new Term Loan Notes, the surrendered Term
Loan Notes shall be cancelled by the Agent and returned to the applicable
Borrower.
(e) Each Lender may sell participations in all or any part of its
rights and obligations under this Agreement (including, without limitation, all
or any part of its Commitment, the Loans or its rights in connection with
Letters of Credit, as applicable) to one or more other Persons; provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of its Term Loan Note for all purposes under this Agreement,
and (iv) the Agent, the Borrowers and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. BABC agrees not to sell participations
in its rights and obligations under this Agreement to the extent that such
sales reduce that portion of its Commitment which is not subject to
participation interests below $25,000,000 unless, at the option of BNY, such
sales are made in conjunction with sales by BNY, on a pari passu basis, of
participations in BNY's rights and obligations under this Agreement.
Notwithstanding anything to the contrary contained in the first sentence of
this Section 12.3(e), any Participating Lender may be given the right to
require the Lender granting such Participating Lender's participation to vote
against (1) the release of all or substantially all of the Collateral, (2) any
amendment, modification or waiver of any provision of Articles 2, 3 or 4
relating to the principal amount of the Loans or Letters of Credit, the
maturity dates of the Loans, the interest rates borne by the Loans and the
amounts of any fees payable to such Lender under Sections 3.5, 3.6 and 3.8. No
Participating Lender shall be a "Lender" for any purpose under this Agreement;
provided, however, that each Participating Lender shall have the rights and
obligations of a Lender (including any right to receive payment) under Sections
3.3(f), 3.5, 3.6, 3.8, 4.2, 4.9, 4.10, 13.5, 14.8, 13.9 and 12.3(f); provided,
further, that all requests for any such payments shall be made by any
Participating Lender through the Lender granting such participation. The right
of each Participating Lender to receive payment pursuant to the immediately
preceding sentence shall be limited to the lesser of (i) the amounts actually
incurred by such Participating Lender for which payment is provided under such
Sections and (ii) the amounts that would have been payable under such Sections
to the Lender granting the participation had such participation not been
granted. It is expressly agreed that, in connection with any participation
pursuant to this Section 12.3(e), any Lender may provide, on a confidential
basis, to any prospective Participating Lender, such information pertaining to
any Borrower or any guarantor of any of the Obligations as such Lender may deem
appropriate.
(f) If a Participating Lender shall at any time with the Borrowers'
knowledge participate with any Lender in the Loans, each Borrower hereby grants
to such Participating Lender, and such Lender and such Participating Lender
shall have and are hereby given, a continuing Lien on and security interest in
any money, Securities and other property of such Borrower in the custody or
possession of the Participating Lender, including the right of setoff, to the
extent of the Participating Lender's participation in the Obligations, and such
Participating Lender shall be deemed to have the same right of setoff to the
extent of Participating Lender's participation in the Obligations under this
Agreement as it would have if it were a direct lender.
(g) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Term Loan
Note held by such Lender, in favor of any Federal Reserve Bank, in accordance
with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31
CFR Sec. 203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.
12.4 Binding Effect; Assignment. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective
representatives, successors and assigns of the parties hereto; provided,
however, that no interest herein may be assigned by any Borrower without the
prior written consent of the Agent and the Lenders. With respect to a
Borrower, successors and assigns shall include, without limitation, any
receiver, trustee or debtor-in-possession of or for such Borrower. The rights
and benefits of any Lender hereunder shall, if such Lender so agrees, inure to
any party acquiring any interest in the Obligations or any part thereof,
subject to the provisions of Section 12.3.
ARTICLE 13
THE AGENT
13.1 Appointment. Each Lender hereby designates and appoints
BankAmerica Business Credit, Inc. as its Agent under this Agreement and the
other Loan Documents, and each Lender hereby irrevocably authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto.
The Agent agrees to act as such on the express conditions contained in this
Article 13. The provisions of this Article 13 are solely for the benefit of
the Agent and the Lenders, and no Borrower shall have any rights as a third
party beneficiary of any of the provisions hereof (other than as expressly set
forth in Section 13.7). In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Borrower. The Agent may
perform any of its duties under this Agreement, or under the other Loan
Documents, by or through its agents or employees.
13.2 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. Except as expressly otherwise provided in this
Agreement, the Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Agent is expressly entitled to
take or assert under this Agreement and the other Loan Documents, including,
without limitation, (a) the determination of the applicability of ineligibility
criteria with respect to the calculation of the Maximum Revolver Amount, (b)
the making of Agent Advances pursuant to Section 2.2(j), and (c) the exercise
of remedies pursuant to Section 10.2, and any action so taken or not taken
shall be deemed consented to by the Lenders. The Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the other Loan Documents, express or
implied, is intended to or shall be construed to impose upon the Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein. Each Lender shall make its
own independent investigation of the financial condition and affairs of each
Borrower in connection with the making and the continuance of the Loans
hereunder, and shall make its own appraisal of the creditworthiness of each
Borrower, and the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
date of this Agreement or at any time or times thereafter; provided, that at
the request of any Lender, the Agent shall request information of any Borrower
on behalf of such Lender, to the extent that such Lender does not independently
have the right to make such request of the Borrower. If the Agent seeks the
consent or approval of the Majority Lenders to the taking or refraining from
taking any action hereunder, the Agent shall send notice thereof to each
Lender. The Agent shall promptly notify each Lender (i) any time that the
Agent becomes aware that an Event of Default has occurred and is continuing and
(ii) any time that the Majority Lenders have instructed the Agent to act or
refrain from acting pursuant hereto. The Agent may employ agents, co-agents
and attorneys-in-fact and shall not be responsible to the Lenders or any
Borrower, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
13.3 Rights, Exculpation, Etc. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by it or any of them under this Agreement or under any
of the other Loan Documents, or in connection herewith or therewith, except
that (i) the Agent shall be obligated on the terms set forth herein for
performance of its express obligations under this Agreement; (ii) the Agent
shall not be entitled to exercise any of the powers granted to it under this
Agreement or the other Loan Documents in any way inconsistent with its express
obligations to the Lenders under this Agreement; and (iii) no Person shall be
relieved of any liability imposed by law for willful misconduct, intentional
tort or gross (but not mere) negligence. The Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 4.8, and if any such apportionment or distribution is subsequently
determined to have been made in error, the sole recourse of any Secured
Creditor to whom payment was due but not made shall be to recover from other
Secured Creditors any payment in excess of the amount to which it is determined
to have been entitled. The Agent shall not be responsible to any Lender for
any recitals, statements, representations or warranties contained in this
Agreement or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of this Agreement or any of the
other Loan Documents or any of the transactions contemplated thereby, or for
the financial condition of any Borrower. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the other Loan
Documents or the financial condition of any Borrower, or the existence or
possible existence of any Default or Event of Default; provided, that at the
request of any Lender, the Agent shall make such inquiry of a Borrower on
behalf of such Lender, to the extent that such Lender does not independently
have the right to make such inquiry of such Borrower. The Agent may at any
time request instructions from the Lenders or Majority Lenders with respect to
any actions or approvals which by the terms of this Agreement or of any of the
other Loan Documents the Agent is permitted or required to take or to grant,
and if such instructions are promptly requested, the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for refraining from
any action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from the Lenders or Majority Lenders, as
applicable. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Lenders or Majority Lenders, as
applicable.
13.4 Reliance. The Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
13.5 Indemnification of the Agent by the Lenders. To the extent
that the Agent is not reimbursed and indemnified by any Borrower, the Lenders
will reimburse and indemnify the Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or any of the other Loan Documents or any
action taken or omitted by the Agent under this Agreement or any of the other
Loan Documents, in proportion to each Lender's Pro Rata Share, including,
without limitation, Agent Advances; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent's recklessness or willful misconduct.
The obligations of the Lenders under this Section 13.5 shall survive the
resignation of an Agent pursuant to Section 13.7, the payment in full of the
Loans and reimbursement obligations with respect to Letters of Credit, the
termination of all outstanding Letters of Credit and the termination of this
Agreement.
13.6 Agent in Individual Capacity. BABC and its affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Parent and any of
its Subsidiaries and Affiliates as though BABC were not the Agent hereunder,
and without notice to or the consent of the other Lenders. The Lenders
acknowledge that, pursuant to such activities, BABC or its affiliates may
receive information regarding the Parent or its Subsidiaries or Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or any such Subsidiary or Affiliate) and acknowledge that
the Agent shall be under no obligation to provide such information to them;
provided, that in the event that BABC receives any such information which is
not subject to such confidentiality obligations, and while BABC is the Agent
hereunder, and the Lenders are not otherwise provided with such information,
then the Agent shall provide such information to the Lenders. With respect to
its Commitment and the Loans made by it and the Letters of Credit in connection
with which it has purchased a participation interest, BABC shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Agent.
13.7 Successor Agent.
(a) The Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving thirty (30)
Business Days' prior written notice to each Borrower and each Lender. Such
resignation shall take effect upon the earlier of (i) the acceptance by a
successor Agent of its appointment pursuant to clause (b) or (c) below, and
(ii) thirty (30) Business Days following the date of written notice by the
Agent to each Borrower and each Lender pursuant to the immediately preceding
sentence.
(b) Upon any notice of resignation, the Majority Lenders shall
appoint from among the Lenders a successor Agent. If a successor Agent shall
not have been so appointed within such thirty (30) Business Day period, the
retiring Agent, with the consent of the Borrowers, shall then appoint a
successor Agent who shall serve as Agent until such time, if any, as the
Majority Lenders shall appoint a successor Agent as provided above. If the
Borrowers shall not have consented to the appointment by the retiring Agent of
a successor Agent pursuant to the immediately preceding sentence, the retiring
Agent's resignation shall nevertheless become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as
the Majority Banks shall appoint a successor Agent.
13.8 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its reasonable business judgment, to release any Agent's Lien
upon any Collateral (i) upon the termination of the Commitments, payment and
satisfaction of all Loans and reimbursement obligations in respect of Letters
of Credit, and the termination of all outstanding Letters of Credit (whether or
not any of such obligations are due) and all other Obligations which have
matured and which the Agent has been notified in writing are then due and
payable; (ii) constituting property being sold or disposed of if the applicable
Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 5.11 or 8.9 (and the Agent may rely conclusively on any
such certificate, without further inquiry); (iii) constituting property in
which the applicable Borrower owned no interest at the time the Lien was
granted or at any time thereafter; (iv) constituting property leased to the
applicable Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement or which will expire imminently and
which has not been, and is not intended by such Borrower to be, renewed or
extended; or (v) in accordance with the terms of Section 5.1(e). Except as
provided above, the Agent will not release any of the Agent's Liens without the
prior written authorization of the Majority Lenders; provided that the Agent
may not release the Agent's Liens on Collateral valued in the aggregate in
excess of $500,000 without the prior written authorization of all of the
Lenders. Upon request by the Agent or a Borrower at any time, the Lenders will
confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 13.8(a).
(b) Upon receipt by the Agent of any authorization required pursuant
to Section 13.8(a) from the Majority Lenders or Lenders, as applicable, of the
Agent's authority to release any Agent's Liens upon particular types or items
of Collateral, and upon at least five (5) Business Days' prior written request
by a Borrower, and provided that no Event of Default has occurred and is then
continuing, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent's Liens upon such Collateral; provided, however, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of any Borrower in respect of) all interests retained by
such Borrower, including (without limitation) the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by the applicable
Borrower or is cared for, protected or insured or has been encumbered, or,
other than a duty to act without recklessness, willful misconduct or gross (but
not mere) negligence, that the Agent's Liens have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the pursuant to this
Section 13.8 or pursuant to any of the Loan Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its
reasonable business judgment, given the Agent's own interest in the Collateral
in its capacity as one of the Lenders and that the Agent shall have no other
duty or liability whatsoever to any Secured Creditor as to any of the
foregoing.
13.9 Restrictions on Actions by Lenders; Sharing of Payments. (a)
Each of the Lenders agrees that it shall not, without the express consent of
the Agent, and that it shall, to the extent it is lawfully entitled to do so,
upon the request of the Agent, set off against the Obligations, any amounts
owing by such Lender to any Borrower or any accounts of any Borrower now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action, including, without limitation, the commencement
of any legal or equitable proceedings, to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral, the purpose of which
is, or could be, to give such Lender any preference or priority against the
other Lenders with respect to the Collateral.
(b) Subject to Section 4.8, if, at any time or times any Lender
shall receive (i) by payment, foreclosure, setoff or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations of any Borrower to
such Lender arising under, or relating to, this Agreement or the other Loan
Documents, except for any such proceeds or payments received by such Lender
from the Agent pursuant to the terms of this Agreement, or (ii) payments from
the Agent in excess of such Lender's ratable portion of all such distributions
by the Agent, such Lender shall promptly (1) turn the same over to the Agent,
in kind, and with such endorsements as may be required to negotiate the same to
the Agent, or in same day funds, as applicable, for the account of all of the
Secured Creditors and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party,
but without interest except to the extent that such purchasing party is
required to pay interest in connection with the recovery of the excess payment.
13.10 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent.
13.11 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders on or in respect of the Term Loan Notes or otherwise under
this Agreement shall be made by bank wire transfer or internal transfer of
immediately available funds to:
if to BABC: BankAmerica Business Credit, Inc.
ABA #000000000
To: Bank of America, San Francisco
BankAmerica Business Credit, Inc.
Account No. 1257503561, reference
Laclede
if to BNY: BNY Financial Corporation
ABA #000000000, Account No.
8090653114, reference Laclede Steel
if to NB: NationsBank of Texas Business Credit
ABA #111 0000 12
Account No. 018 00 19471, reference: Laclede
Steel
or pursuant to such other wire transfer instructions as each party may
designate for itself by written notice to the Agent. Concurrently with each
such payment, the Agent shall identify whether such payment (or any portion
thereof) represents principal, premium or interest on the Revolving Loans, Term
Loans or otherwise.
13.12 Concerning the Collateral and the Related Loan Documents.
Each Lender authorizes and directs the Agent to enter into this Agreement and
the other Loan Documents relating to the Collateral, for the ratable benefit of
the Secured Creditors. Each Lender agrees that any action taken by the Agent
or Majority Lenders in accordance with the terms of this Agreement or the other
Loan Documents relating to the Collateral, and the exercise by the Agent or the
Majority Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall
be binding upon all of the Lenders.
ARTICLE 14
MISCELLANEOUS
14.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of
one right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation,
proceed directly against any Borrower to collect the Obligations without any
prior recourse to the Collateral.
14.2 Severability. If any provision of this Agreement shall be
prohibited or invalid, under applicable law, it shall be ineffective only to
such extent, without invalidating the remainder of this Agreement.
14.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
(b) SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE, THE
BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL COURT OF THE SOUTHERN DISTRICT OF ILLINOIS AND THE
STATE COURTS OF ILLINOIS LOCATED IN MADISON COUNTY, ILLINOIS AND WAIVE ANY
OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE
LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR
THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL, REAL ESTATE, OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF
THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(c) EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO SUCH BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 14.7 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS, OR, AT THE AGENT'S AND/OR THE LENDERS' OPTION, BY SERVICE UPON THE
CORPORATION TRUST COMPANY, 000 XXXXX XXXXXXX XXXXXX, XXXXXXX, XXXXXXXX 00000,
WHICH SUCH BORROWER IRREVOCABLY APPOINTS AS SUCH BORROWER'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS. IN
ADDITION, THE AGENT AND THE LENDERS AGREE TO PROMPTLY FORWARD BY REGISTERED
MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO THE APPLICABLE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 14.7. EACH BORROWER HEREBY CONSENTS TO SERVICE OF
PROCESS AS AFORESAID.
(d) THE BORROWERS, THE AGENT AND THE LENDERS HEREBY WAIVE ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING
UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR (ii) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM IN
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED, IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE BORROWERS, THE AGENT AND THE
LENDERS HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(e) NOTHING IN THIS SECTION 14.3 SHALL AFFECT THE RIGHT OF THE AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
(f) EACH BORROWER AGREES THAT IT WILL NOT ASSERT AGAINST AGENT OR
ANY LENDER ANY CLAIM FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.4 Survival of Representations and Warranties. All of each
Borrower's representations, and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
14.5 Other Security and Guaranties. The Agent, in its sole
discretion, subject to the other terms and provisions contained in this
Agreement, may, without notice or demand and without affecting any Borrower's
obligations hereunder, from time to time: (a) take from any Person and hold
collateral (other than the Collateral) for the payment of all or any part of
the Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
14.6 Fees and Expenses. The Borrowers agree, on a joint and several
basis, to pay to BNY and to NB, on demand, the lesser of (a) in the case of
BNY, $3,000.00, and in the case of NB, $1,500.00, and (b) the amount of
attorneys' and paralegals' fees (including allocated in-house counsel fees) and
disbursements of counsel to such Lender in connection with the negotiation,
preparation and consummation of this Agreement and the other Loan Documents.
Each Borrower shall pay to the Agent, on demand, all costs and expenses that
the Agent pays or incurs in connection with the negotiation, preparation,
consummation, administration, enforcement, and termination of this Agreement
and the other Loan Documents, including, without limitation: (a) attorneys'
and paralegals' fees (including allocated in-house counsel fees) and
disbursements of counsel to the Agent; (b) costs and expenses (including
attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes, fees and other charges
for recording the Mortgage, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's Liens; (e) sums
paid or incurred to pay any amount or take any action required of any Borrower
under the Loan Documents that such Borrower fails to pay or take; (f) costs of
appraisals, inspections, and verifications of the Collateral, including,
without limitation, travel, lodging, and meals for inspections of the
Collateral and each Borrower's operations by the Agent's agents up to four (4)
times per year and whenever an Event of Default exists; (g) costs and expenses
of forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Payment Accounts; (h) costs and expenses of
preserving and protecting the Collateral; and (i) costs and expenses (including
attorneys' and paralegals' fees and disbursements) paid or incurred to obtain
payment of the Obligations, enforce the Agent's Liens, sell or otherwise
realize upon the Collateral, and otherwise enforce the provisions of the Loan
Documents, or to defend any claims made or threatened against the Agent or any
Lender arising out of the transactions contemplated hereby (including without
limitation, preparations for and consultations concerning any such matters).
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by any Borrower. All of the
foregoing costs and expenses shall be charged to the applicable Borrower's loan
account as Revolving Loans as described in Section 4.7.
14.7 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to BABC:
BankAmerica Business Credit, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No. (000) 000-0000
with copies to:
BankAmerica Business Credit, Inc.
00000 Xxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No. (000) 000-0000
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No. (000) 000-0000
If to BNY:
BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Love
Telecopy No. (000) 000-0000
If to NB:
NationsBank, N.A.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Look
Telecopy No. (000) 000-0000
If to any Borrower:
Laclede Steel Company
or
Laclede Chain Manufacturing Company
c/o Laclede Steel Company
or
Laclede Mid America Inc.
c/o Laclede Steel Company
One Metropolitan Square
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Telecopy No. (000) 000-0000
with a copy to:
Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Xx.
Telecopy No. (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
14.8 Indemnity of the Agent and the Lenders by the Borrowers. Each
Borrower agrees to (i) reimburse the Agent and the Lenders for any costs and
expenses (including, without limitation, attorneys' and paralegals' fees and
expenses, including allocated in-house counsel fees) incurred by the Agent or
any Lender in defending any suit brought against it by any Borrower or any
other Person in connection with the transactions contemplated by this
Agreement, and (ii) indemnify and hold the Agent and the Lenders and their
respective officers, directors, employees, attorneys and agents (collectively,
the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever incurred by the
Indemnitees, whether direct, indirect or consequential, as a result of or
arising from or relating to any proceeding by any Person, whether threatened or
initiated, asserting any claim for legal or equitable remedy against any Person
under any statute or regulation (including, without limitation, any federal or
state securities or commercial laws or under any common law or equitable cause
or otherwise, including any liability and costs under Environmental Laws or
common law principles arising from or in connection with the past, present or
future operations of any Borrower or its predecessors in interest, or the past,
present or future environmental condition of any Borrower's property, the
presence of asbestos-containing materials at or on such property, or the
Release or threatened Release of any Contaminant from such property), in any
way arising from or in connection with the negotiation, preparation, execution,
delivery, enforcement, performance and administration of this Agreement or any
other document executed in connection herewith, provided that no Borrower shall
have any obligation hereunder with respect to indemnified liabilities arising
from the gross negligence or willful misconduct of any Indemnitee seeking such
indemnification. To the extent that the indemnity set forth in this Section
may be unenforceable because it is violative of any law or public policy, each
Borrower shall pay the maximum portion which it is permitted to pay under
applicable law. Any Indemnitee will promptly notify each Borrower of the
commencement of any legal proceeding which may give rise to any indemnified
liability under the foregoing indemnity and shall permit such Borrower to
participate in the defense of such Indemnitee in any such proceeding. The
foregoing indemnity shall survive the resignation of an Agent pursuant to
Section 13.7, the payment of the Obligations and the termination of this
Agreement. All of the foregoing fees, costs and expenses shall be part of the
Obligations, payable upon demand, and secured by the Collateral.
14.9 Waiver of Notices. Unless otherwise expressly provided herein,
each Borrower waives presentment, protest and notice of demand or dishonor and
protest as to any instrument, as well as any and all other notices to which it
might otherwise be entitled. No notice to or demand on any Borrower which the
Agent or any Lender may elect to give shall entitle such Borrower to any or
further notice or demand in the same, similar or other circumstances.
14.10 Final Agreement. This Agreement is intended by the Borrowers,
the Agent and the Lenders to be the final, complete, and exclusive expression
of the agreement between them. This Agreement supersedes any and all prior
oral or written agreements relating to the subject matter hereof.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and each Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
14.12 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not
be construed to modify, enlarge, or restrict any provision.
14.13 Right of Setoff. Whenever an Event of Default exists, the
Agent and each Lender are hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Agent or such Lender or
any affiliate of the Agent or such Lender to or for the credit or the account
of any Borrower against any and all of the Obligations, whether or not then due
and payable. The Agent and each Lender agree promptly to notify the applicable
Borrower after any such setoff and application made by the Agent or such
Lender, as applicable, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
14.14 Taxes.
(a) Any and all payments by the Borrowers hereunder shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 14.14) such Lender or the Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
(c) The Borrowers will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 14.14) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. This indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes written demand
therefor. Each Lender shall, at the time of any written demand for
indemnification under this subsection (c), provide to the Borrowers a receipt
for, or other evidence of the payment of, the Taxes or Other Taxes for which
indemnification is sought.
(d) Within 30 days after the date of any payment of Taxes, the
Borrowers will furnish to the Agent, at its address referred to in Section
14.7, the original or a certified copy of a receipt evidencing payment thereof.
If no Taxes are payable in respect of any payment hereunder with respect to
which a claim for indemnity has been made hereunder, the Borrowers will furnish
to the Agent, at such address, a certificate from each appropriate taxing
authority, or an opinion of counsel acceptable to the Agent, in either case
stating that such payment is exempt from or not subject to Taxes.
(e) Without prejudice to the survival of any other agreement of any
Borrower hereunder, the agreements and obligations of the Borrowers contained
in this Section 14.14 shall survive the payment in full of principal and
interest hereunder.
14.15 Joint and Several Liability. Each Borrower shall be liable,
on a joint and several basis, for all amounts due to the Agent and/or any
Lender under this Agreement, regardless of which Borrower actually receives
Loans or other extensions of credit hereunder or the amount of such Loans
received or the manner in which the Agent and/or such Lender accounts for such
Loans or other extensions of credit on its books and records. Each Borrower's
Obligations with respect to Loans made to it, and each Borrower's Obligations
arising as a result of the joint and several liability of the Borrowers
hereunder, with respect to Loans made to the other Borrowers hereunder, shall
be separate and distinct obligations, but all such Obligations shall be primary
obligations of each Borrower.
Each Borrower's Obligations arising as a result of the joint and
several liability of the Borrowers hereunder with respect to Loans or other
extensions of credit made to the other Borrowers hereunder shall, to the
fullest extent permitted by law, be unconditional irrespective of (i) the
validity or enforceability, avoidance or subordination of the Obligations of
the other Borrowers or of any promissory note or other document evidencing all
or any part of the Obligations of the other Borrowers, (ii) the absence of any
attempt to collect the Obligations from the other Borrowers, any other
guarantor, or any other security therefor, or the absence of any other action
to enforce the same, (iii) the waiver, consent, extension, forbearance or
granting of any indulgence by the Agent and/or any Lender with respect to any
provision of any instrument evidencing the Obligations of the other Borrowers,
or any part thereof, or any other agreement now or hereafter executed by the
other Borrowers and delivered to the Agent and/or any Lender, (iv) the failure
by the Agent and/or any Lender to take any steps to perfect and maintain its
security interest in, or to preserve its rights to, any security or collateral
for the Obligations of the other Borrowers, (v) the Agent's and/or any Lender's
election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or
grant of a security interest by the other Borrowers, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any
portion of the Agent's and/or any Lender's claim(s) for the repayment of the
Obligations of the other Borrowers under Section 502 of the Bankruptcy Code, or
(viii) any other circumstances which might constitute a legal or equitable
discharge or defense of a guarantor or of the other Borrowers. With respect to
each Borrower's Obligations arising as a result of the joint and several
liability of the Borrowers hereunder with respect to Loans or other extensions
of credit made to either of the other Borrowers hereunder, such Borrower
waives, until the Obligations shall have been paid in full and the Loan
Agreement shall have been terminated, any right to enforce any right of
subrogation or any remedy which the Agent and/or any Lender now has or may
hereafter have against any Borrower, any endorser or any guarantor of all or
any part of the Obligations, and any benefit of, and any right to participate
in, any security or collateral given to the Agent and/or any Lender to secure
payment of the Obligations or any other liability of the Borrowers to the Agent
and/or any Lender.
Upon the occurrence and during the continuance of any Event of
Default, the Agent and the Lenders may proceed directly and at once, without
notice, against any Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against the other
Borrowers or any other Person, or against any security or collateral for the
Obligations. Each Borrower consents and agrees that the Agent and the Lenders
shall be under no obligation to marshal any assets in favor of such Borrower or
against or in payment of any or all of the Obligations.
14.16 Contribution and Indemnification among the Borrowers. Each
Borrower is obligated to repay the Obligations as joint and several obligors
under this Agreement. To the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an "Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be
entitled to contribution and indemnification from, and be reimbursed by, each
of the other Borrowers in an amount, for each of such other Borrowers, equal to
a fraction of such Accommodation Payment, the numerator of which fraction is
such other Borrower's "Allocable Amount" (as defined below) and the denominator
of which is the sum of the Allocable Amounts of all of the Borrowers. As of
any date of determination, the "Allocable Amount" of each Borrower shall be
equal to the maximum amount of liability for Accommodation Payments which could
be asserted against such Borrower hereunder without (a) rendering such Borrower
"insolvent" within the meaning of Section 101(31) of the Bankruptcy Code ,
Section 2 of the Uniform Fraudulent Transfer Act (the "UFTA") or Section 2 of
the Uniform Fraudulent Conveyance Act (the "UFCA"), (ii) leaving such Borrower
with unreasonably small capital or assets, within the meaning of Section 548 of
the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (iii)
leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or
Section 5 of the UFCA. All rights and claims of contribution, indemnification
and reimbursement under this section shall be subordinate in right of payment
to the prior payment in full of the Obligations. The provisions of this
section shall, to the extent expressly inconsistent with any provision in any
Loan Document, supersede such inconsistent provision.
14.17 Agency of the Parent for each other Borrower. Each of the
other Borrowers appoints the Parent as its agent for all purposes relevant to
this Agreement, including (without limitation) the giving and receipt of
notices and the execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by all of the Borrowers
or by Laclede Chain or Laclede Mid America, acting singly, shall be valid and
effective if given or taken only by the Parent, whether or not either of the
other Borrowers joins therein.
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
LACLEDE STEEL COMPANY
By:________________________________
Title:
LACLEDE CHAIN MANUFACTURING
COMPANY
By:________________________________
Title:
LACLEDE MID AMERICA INC.
By:________________________________
Title:
BANKAMERICA BUSINESS CREDIT, INC.,
as the Agent
By:________________________________
Vice President
Commitment: $70,000,000 BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:________________________________
Vice President
Commitment: $25,000,000 BNY FINANCIAL CORPORATION, as a Lender
and as successor to THE BANK OF NEW YORK
COMMERCIAL CORPORATION
By:________________________________
Vice President
Commitment: $5,000,000 NATIONSBANK, N.A. as a Lender
By:________________________________
Vice President
F:\123CA\XXXXX.TXT November 3, 1997 (2:15p)
