EXHIBIT 10.1
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CREDIT AGREEMENT
Dated as of May 30, 2003
among
SCHNITZER STEEL INDUSTRIES, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
an L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
BANK OF AMERICA LOGO
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TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.......................................................................................1
1.01 Defined Terms........................................................................................1
1.02 Other Interpretive Provisions.......................................................................19
1.03 Accounting Terms....................................................................................20
1.04 Rounding............................................................................................21
1.05 References to Agreements and Laws...................................................................21
1.06 Times of Day........................................................................................21
1.07 Letter of Credit Amounts............................................................................21
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS................................................................................21
2.01 Committed Loans.....................................................................................21
2.02 Borrowings, Conversions and Continuations of Committed Loans........................................21
2.03 Letters of Credit...................................................................................23
2.04 Swing Line Loans....................................................................................30
2.05 Prepayments.........................................................................................33
2.06 Termination or Reduction of Commitments.............................................................34
2.07 Repayment of Loans..................................................................................34
2.08 Interest............................................................................................34
2.09 Fees................................................................................................35
2.10 Computation of Interest and Fees....................................................................35
2.11 Evidence of Debt....................................................................................36
2.12 Payments Generally..................................................................................36
2.13 Sharing of Payments.................................................................................38
2.14 Extension of Maturity Date..........................................................................39
2.15 Increase in Commitments.............................................................................39
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY..............................................................................40
3.01 Taxes...............................................................................................40
3.02 Illegality..........................................................................................41
3.03 Inability to Determine Rates........................................................................42
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans..............42
3.05 Funding Losses......................................................................................43
3.06 Matters Applicable to all Requests for Compensation.................................................43
3.07 Survival............................................................................................44
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS............................................................................44
4.01 Conditions of Initial Credit Extension..............................................................44
4.02 Conditions to all Credit Extensions.................................................................45
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................................46
5.01 Existence, Qualification and Power; Compliance with Laws............................................46
5.02 Authorization; No Contravention.....................................................................46
5.03 Governmental Authorization; Other Consents..........................................................46
5.04 Binding Effect......................................................................................46
5.05 Financial Statements; No Material Adverse Effect....................................................47
5.06 Litigation..........................................................................................47
5.07 No Default..........................................................................................47
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5.08 Ownership of Property; Liens........................................................................47
5.09 Environmental Compliance............................................................................48
5.10 Insurance...........................................................................................48
5.11 Taxes...............................................................................................48
5.12 ERISA Compliance....................................................................................48
5.13 Subsidiaries........................................................................................49
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act......................49
5.15 Solvency............................................................................................49
5.16 Disclosure..........................................................................................49
5.17 Compliance with Laws................................................................................50
5.18 Tax Shelter Regulations.............................................................................50
5.19 Intellectual Property; Licenses, Etc................................................................50
ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................................50
6.01 Financial Statements................................................................................50
6.02 Certificates; Other Information.....................................................................51
6.03 Notices.............................................................................................52
6.04 Payment of Obligations..............................................................................53
6.05 Preservation of Existence, Etc......................................................................53
6.06 Maintenance of Properties...........................................................................53
6.07 Maintenance of Insurance............................................................................53
6.08 Compliance with Laws................................................................................53
6.09 Books and Records...................................................................................54
6.10 Inspection Rights...................................................................................54
6.11 Use of Proceeds.....................................................................................54
6.12 Additional Guarantors...............................................................................54
ARTICLE VII. NEGATIVE COVENANTS..................................................................................................55
7.01 Liens...............................................................................................55
7.02 Investments.........................................................................................56
7.03 Indebtedness........................................................................................57
7.04 Fundamental Changes.................................................................................57
7.05 Dispositions........................................................................................58
7.06 Restricted Payments.................................................................................59
7.07 Change in Nature of Business........................................................................59
7.08 Transactions with Affiliates........................................................................59
7.09 Burdensome Agreements...............................................................................60
7.10 Use of Proceeds.....................................................................................60
7.11 Financial Covenants.................................................................................60
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.....................................................................................60
8.01 Events of Default...................................................................................60
8.02 Remedies Upon Event of Default......................................................................62
8.03 Application of Funds................................................................................63
ARTICLE IX. ADMINISTRATIVE AGENT.................................................................................................64
9.01 Appointment and Authorization of Administrative Agent...............................................64
9.02 Delegation of Duties................................................................................65
9.03 Liability of Administrative Agent...................................................................65
9.04 Reliance by Administrative Agent....................................................................65
9.05 Notice of Default...................................................................................66
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9.06 Credit Decision; Disclosure of Information by Administrative Agent..................................66
9.07 Indemnification of Administrative Agent.............................................................66
9.08 Administrative Agent in its Individual Capacity.....................................................67
9.09 Successor Administrative Agent......................................................................67
9.10 Administrative Agent May File Proofs of Claim.......................................................68
9.11 Guaranty Matters....................................................................................69
9.12 Other Agents; Arrangers and Managers................................................................69
ARTICLE X. MISCELLANEOUS.........................................................................................................69
10.01 Amendments, Etc.....................................................................................69
10.02 Notices and Other Communications; Facsimile Copies..................................................70
10.03 No Waiver; Cumulative Remedies......................................................................71
10.04 Attorney Costs, Expenses and Taxes..................................................................72
10.05 Indemnification by the Borrower.....................................................................72
10.06 Payments Set Aside..................................................................................73
10.07 Successors and Assigns..............................................................................73
10.08 Confidentiality.....................................................................................76
10.09 Set-off.............................................................................................77
10.10 Interest Rate Limitation............................................................................77
10.11 Counterparts........................................................................................77
10.12 Integration.........................................................................................78
10.13 Survival of Representations and Warranties..........................................................78
10.14 Severability........................................................................................78
10.15 Tax Forms...........................................................................................78
10.16 Governing Law.......................................................................................80
10.17 Waiver of Right to Trial by Jury....................................................................80
10.18 Oral Agreements.....................................................................................81
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SCHEDULES
2.01 Commitments and Pro Rata Shares
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
5.19 Intellectual Property Matters
7.01 Existing Liens
7.03 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for
Notices
EXHIBITS
FORM OF
A Committed Loan Notice
B Swing Line Loan Notice
C Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
G Legal Opinion
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of May 30,
2003, among SCHNITZER STEEL INDUSTRIES, INC., an Oregon corporation (the
"Borrower"), each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and as an L/C Issuer.
The Borrower has requested that the Lenders provide a revolving
credit facility, and the Lenders are willing to do so on the terms and
conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent. Notwithstanding the foregoing,
"Affiliate" shall not mean or include Persons that are a party to the Voting
Trust Agreement, except for such Persons who are actively engaged in the senior
management of the Borrower.
"Agent-Related Persons" means the Administrative Agent, together
with its Affiliates (including, in the case of Bank of America in its capacity
as the Administrative Agent, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
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"Agreement" means this Credit Agreement.
"Applicable Rate" means the following percentages per annum, based
upon the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(a):
APPLICABLE RATE
Eurodollar Rate +
Standby Letters of
Pricing Level Consolidated Leverage Ratio Commitment Fee Credit Base Rate +
------------------- ------------------------------------ ----------------------------- ----------------------- ---------------------
1 <0.15:1 0.200% 1.00% 0.00%
2 =>0.15:1 but <0.25:1 0.250% 1.25% 0.00%
3 =>0.25:1 but <0.35:1 0.300% 1.50% 0.00%
4 =>0.35:1 0.350% 1.75% 0.25%
Any increase or decrease in the Applicable Rate resulting from a
change in the Consolidated Adjusted Leverage Ratio shall become effective as of
the first Business Day of the month immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.02(a); provided, however, that if
a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 4 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered.
The Applicable Rate in effect from the Closing Date through August 31, 2003
shall be determined based upon Pricing Level 3.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Attorney Costs" means and includes all reasonable fees, expenses
and disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of
any capital lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated
balance sheet of the Borrower and its Subsidiaries for the fiscal year ended
August 31, 2002, and the related
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consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year of the Borrower and its Subsidiaries, including the
notes thereto.
"Availability Period" means the period from and including the
Closing Date to the earliest of (a) the Maturity Date, (b) the date of
termination of the Aggregate Commitments pursuant to Section 2.06, and (c) the
date of termination of the commitment of each Lender to make Loans and of the
obligation of each L/C Issuer to make L/C Credit Extensions pursuant to Section
8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime 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. Any change in such 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.
"Base Rate Committed Loan" means a Committed Loan that is a Base
Rate Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a Committed Borrowing or a Swing Line Borrowing,
as the context may require.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Capital Expenditure" means, with respect to any Person, any
liability incurred or expenditure made (net of any casualty insurance proceeds
or condemnation awards used to replace fixed assets following a casualty event
or condemnation with respect thereto) by such Person in respect of the purchase
or other acquisition of any fixed or capital asset.
"Cascade" means Cascade Steel Rolling Xxxxx, Inc., an Oregon
corporation.
"Cascade Mini-Mill" means the mini-mill facility for the manufacture
of steel reinforcing rod, hot rolled rounds, squares and strip flats owned by
Cascade and located in McMinnville, Oregon.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
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"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such
plan), other than Persons a party to the Voting Trust Agreement,
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have "beneficial ownership" of all
securities that such person or group has the right to acquire (such
right, an "option right"), whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of 25% or more of the equity securities of such Person
entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such person or group has the
right to acquire pursuant to any option right); or
(b) during any period of 24 consecutive months, a
majority of the members of the board of directors or other
equivalent governing body of such Person cease to be composed of
individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting
at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in
the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that
board or equivalent governing body occurs as a result of an actual
or threatened solicitation of proxies or consents for the election
or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or
on behalf of the board of directors).
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b)), waived by the Person entitled to receive the
applicable payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
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"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to Section
2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing,
(b) a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit D.
"Consolidated Capitalization" means, as of any date of
determination, the sum of (a) Consolidated Funded Indebtedness as of such date
plus (b) Consolidated Net Worth as of such date.
"Consolidated EBITDA" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net
Income for such period plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Charges for
such period, (ii) the provision for federal, state, local and foreign income
taxes payable by the Borrower and its Subsidiaries for such period, (iii) the
amount of depreciation and amortization expense deducted in determining such
Consolidated Net Income and (iv) other expenses of the Borrower and its
Subsidiaries reducing such Consolidated Net Income which do not represent a cash
item in such period and minus (b) sum of (i) all non-cash items increasing
Consolidated Net Income for such period and (ii) the amount of Joint Venture Net
Income for all Joint Ventures plus (c) for each Joint Venture, the lesser of (i)
65% of the amount of the Joint Venture Net Income of such Joint Venture or (ii)
that portion of the Joint Venture Net Income of such Joint Venture that was or
could have been paid or otherwise distributed in cash to the Borrower or a
Subsidiary during such period and not result in a breach of, or a default under,
a Contractual Obligation of such Joint Venture.
"Consolidated Fixed Charge Coverage Ratio" means, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated EBITDA minus (ii)
the amount of Capital Expenditures made in respect of the normal replacements
and maintenance which are properly charged to current operations in accordance
with GAAP, which, for purposes of this definition, shall be deemed to be
$2,500,000 per quarter to (b) the sum of (i) Consolidated Interest Charges plus
(ii) the provision for federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries plus (iii) regularly scheduled principal
payments required to be made by the Borrower and its Subsidiaries on
Consolidated Funded Indebtedness plus (iv) dividends or other distributions paid
in cash with respect to any capital stock or other equity interest of the
Borrower and payments (including any sinking fund or similar deposit) paid in
cash on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest,
in all cases for the period of the four fiscal quarters most recently ended for
which the Borrower has delivered financial statements pursuant to Section
6.01(a) or (b); provided, however, that for purposes of calculating the
constituent elements of the ratio set forth in this definition as of the
Borrower's fiscal quarters ending
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May 31, 2003, August 31, 2003 and November 30, 2003, such constituent elements
shall be calculated as follows (1) for the fiscal quarter ending May 31, 2003,
the amount of such constituent elements for the fiscal quarter then ended times
four, (2) for the fiscal quarter ending August 31, 2003, the amount of such
constituent elements for the two consecutive fiscal quarters then ended times
two and (3) for the fiscal quarter ending November 30, 2003, the amount of such
constituent elements for the three consecutive fiscal quarters then ended times
one and thirty four one hundredths.
"Consolidated Funded Indebtedness" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
without duplication, the sum of (a) the outstanding principal amount of all
obligations, whether current or long-term, for borrowed money (including
Obligations hereunder) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (b) all purchase money
Indebtedness, (c) all direct obligations arising under standby letters of
credit, bankers' acceptances and bank guaranties, (d) all obligations in respect
of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) Attributable
Indebtedness in respect of capital leases and Synthetic Lease Obligations, and
(f) without duplication, all Guarantees with respect to outstanding Indebtedness
of the types specified in clauses (a) through (e) above of Persons other than
the Borrower or any Subsidiary. For the avoidance of doubt, "Consolidated Funded
Indebtedness shall not mean or include the Indebtedness of any Joint Venture.
"Consolidated Interest Charges" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses of
the Borrower and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of the Borrower and its Subsidiaries with
respect to such period under capital leases that is treated as interest in
accordance with GAAP.
"Consolidated Leverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated Funded Indebtedness as of such date
to (b) Consolidated Capitalization as of such date.
"Consolidated Net Income" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the net income of the Borrower and
its Subsidiaries (excluding both extraordinary gains and extraordinary losses)
for that period.
"Consolidated Net Worth" means, as of any date of determination, for
the Borrower and its Subsidiaries on a consolidated basis, Shareholders' Equity
of the Borrower and its Subsidiaries on that date.
"Contractual Obligation" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of
"Affiliate."
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"Credit Extension" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate
plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2%
per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease
or other disposition (including any sale and leaseback transaction) of any
property by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under
the laws of any political subdivision of the United States.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly
7
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing. "ERISA" means the
Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate that appears on the
page of the Telerate screen (or any successor thereto) that displays
an average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined
as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a)
does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate on
such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
8
(c) if the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurodollar Rate Loan
being made, continued or converted by Bank of America and with a
term equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such
Interest Period.
"Eurodollar Rate Loan" means a Committed Loan that bears interest at
a rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Existing Credit Agreement" means that certain Credit Agreement
dated as of June 2, 1997 among the Borrower, The First National Bank of Chicago,
as agent, and a syndicate of lenders.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated April 18, 2003, among
the Borrower, the Administrative Agent and the Arranger.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
9
"Government Debt" means, for any Person, Indebtedness of such Person
payable to the United States or any state or other political subdivision
thereof, or any agency, authority, instrumentality or regulatory body exercising
regulatory or administrative powers or functions of the United States or any
state or other political subdivision thereof, which Indebtedness is incurred for
the purpose of financing the cost of acquiring, constructing or improving real
or personal property used in by such Person in a line of business substantially
similar to the types of business conducted by the Borrower and its Subsidiaries
as of the Closing Date.
"Guarantors" means, collectively, Manufacturing Management, Inc., an
Oregon corporation, General Metals of Tacoma, Inc., a Washington corporation,
Cascade, Norprop, Inc., an Oregon corporation, Joint Venture Operations, Inc., a
Delaware corporation, Proleride Transport Systems, Inc., a Delaware corporation,
Proler Steel, Inc., a Delaware corporation, Proler International Corp., a
Delaware corporation, and the other Domestic Subsidiaries which from time to
time become a Guarantor pursuant to Section 6.12.
"Guaranty" means the Continuing Guaranty made by the Guarantors from
time to time a party thereto in favor of the Administrative Agent on behalf of
the Lenders, substantially in the form of Exhibit F.
"Guarantee" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
10
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations of such Person under any Swap
Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of
the foregoing.
For all purposes hereof, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which such
Person is a general partner or a joint venturer, unless such Indebtedness is
expressly made non-recourse to such Person. The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date. The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section
10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Intangible Assets" means assets that are considered to be
intangible assets under GAAP, including customer lists, goodwill, computer
software, copyrights, trade names, trademarks, patents, franchises, licenses,
unamortized deferred charges, unamortized debt discount and capitalized research
and development costs.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
11
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the first Business day after the end of each March, June, September and December
and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Committed Loan Notice
or such other period that is twelve months or less requested by the Borrower and
consented to by all the Lenders; provided that:
(i) any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the
next preceding Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the
Maturity Date.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP Rights" has the meaning set forth in Section 5.19.
"IRS" means the United States Internal Revenue Service.
---
"Joint Venture" means the Persons listed in Part(c) of Schedule
5.13, and each other corporation, partnership, joint venture, limited liability
company or other business entity in which the Borrower has an equity investment,
directly, or indirectly through one or more intermediaries, or both, which is
accounted for by the Borrower using the equity method of accounting.
"Joint Venture Net Income" means, for any period, for each Joint
Venture, the amount of net income of such Joint Venture included in calculating
Consolidated Net Income for such period, excluding the effects, if any, on such
net income resulting from such Joint Venture's use of LIFO (Last-In, First Out)
inventory accounting.
"Laws" means, collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial
12
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's
funding of its participation in any L/C Borrowing in accordance with its Pro
Rata Share.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed on the date
when made or refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuers" means, collectively, Bank of America in its capacity
as an issuer of Letters of Credit hereunder, each other Lender which, with the
written consent of the Borrower and written notice to the Administrative Agent,
is the issuer of one or more Letters of Credit, and any successor issuers of
Letters of Credit permitted hereunder.
"L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes each L/C Issuer and the Swing Line
Lender.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder. A
Letter of Credit may be a commercial letter of credit or a standby letter of
credit.
"Letter of Credit Application" means an application and agreement
for the issuance or amendment of a Letter of Credit in the form from time to
time in use by the applicable L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $50,000,000.
The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing).
13
"Loan" means an extension of credit by a Lender to the Borrower
under Article II in the form of a Committed Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, each Note, the Fee Letter,
and the Guaranty.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
liabilities (whether an actual liability or a contingent liability that could
reasonably be expected to become an actual liability), condition (whether
financial or otherwise) of the Borrower and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Borrower or any other Loan Party
that is a Material Subsidiary to perform its obligations under any Loan Document
to which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.
"Material Subsidiary" means, as of any date of determination, any
Subsidiary (a) whose total revenues comprise, or are reasonably expected to
comprise, 5% or more of the total revenues of the Borrower and its Subsidiaries
on a consolidated basis for the then current fiscal year of the Borrower (on a
pro forma basis) or for either of the two most recently ended fiscal years of
the Borrower and/or (b) whose total assets comprise 5% or more of the total
assets of the Borrower and its Subsidiaries on a consolidated basis as of the
end of the most recently completed fiscal quarter of the Borrower.
"Maturity Date" means the later of (a) May 30, 2006 and (b) if
maturity is extended pursuant to Section 2.14, such extended maturity date as
determined pursuant to such Section.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit C.
"Obligations" means (a) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and (b) all
debts, liabilities, obligations, covenants and duties of the Borrower owing to
any Lender or any Affiliate of any Lender and arising under any Swap Contract
permitted by Section 7.03(d), whether absolute or contingent, due or to become
due, now existing or hereafter arising, and, in each case, including interest
and fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
14
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means (i) with respect to Committed Loans and
Swing Line Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any borrowings and prepayments or repayments of Committed
Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii)
with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Pension Plan" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that
is subject to Title IV of ERISA and is sponsored or maintained by the Borrower
or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.
"Permitted Acquisition" means any non-hostile acquisition, whether
by purchase, merger or otherwise, of all or substantially all of the assets of,
or 50% or more of the voting capital stock of, or a business line or a division
of, any Person; provided that:
(i) all Persons, assets, business lines or divisions
acquired shall be in a line of business substantially similar to the
types of business conducted by the Borrower and its Subsidiaries on
the date hereof or such other lines of business as may be consented
to by Required Lenders;
(ii) no Default or Event of Default shall then exist or
would exist after giving effect to such acquisition;
15
(iii) as of the closing of any acquisition, such
acquisition shall have been approved by the board of directors or
equivalent governing body of the Person to be acquired or from which
such assets, business line or division is to be acquired;
(iv) not less than 10 Business Days prior to the
consummation of any acquisition for cash consideration (including
assumed liabilities, earnout payments and any other deferred
payment) in excess of $25,000,000, the Borrower shall have delivered
to the Administrative Agent (A) a written description of the Person,
assets, business line or division to be acquired and its operations
and (B) a certificate of a Responsible Officer demonstrating to the
reasonable satisfaction of the Administrative Agent that, after
giving effect to such acquisition, the Borrower will be in pro forma
compliance with all of the terms and provisions of the financial
covenants set forth in Section 7.11;
(v) if such acquisition is structured as a merger, the
Borrower (or if such merger is with any Subsidiary, then such
Subsidiary) shall be the surviving Person after giving effect to
such merger; and
(vi) if the total cash consideration (including assumed
liabilities, earnout payments and any other deferred payment) paid
for all of the Persons, assets, business lines or divisions acquired
exceeds the greater of (A) an amount equal to 25% times the amount
of the Consolidated Capitalization as of the end of the most
recently completed fiscal quarter of the Borrower and (B)
$90,000,000, the Required Lenders shall have approved such
acquisition.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Pick-N-Pull Subsidiaries" means, collectively, Pick-N-Pull Auto
Dismantlers LLC, a California limited liability company, Pick-N-Pull Auto
Dismantlers, Oakland (General Partnership), a California general partnership,
Pick-N-Pull Auto Dismantlers, Nevada LLC, a Nevada limited liability company,
Pick-N-Pull Auto Dismantlers, San Xxxx (General Partnership), a California
general partnership, Pick-N-Pull Auto Dismantlers, Chicago L.L.C., an Illinois
limited liability company, and Xxxxxx Auto Wrecking LLC, a Nevada limited
liability company.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of each L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of
16
each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has been
waived.
"Request for Credit Extension" means (a) with respect to a
Borrowing, conversion or continuation of Committed Loans, a Committed Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans and the obligation of each L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed "held" by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any capital
stock or other equity interest of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
equity interest or of any option, warrant or other right to acquire any such
capital stock or other equity interest.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP.
"Solvent" means, as to any Person at a particular time, if, at such
time both (a) (i) the then fair saleable value of the property of such Person on
a going concern basis is (A) greater than the total amount of liabilities
(including contingent liabilities) of such Person as they mature
17
in the ordinary course and (B) not less than the amount that will be required to
pay the probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (b) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability in the ordinary course.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
18
"Swing Line" means the revolving credit facility made available by
the Swing Line Lender pursuant to Section 2.04.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan
pursuant to Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as
provider of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$10,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"Threshold Amount" means (a) in the case of Section 8.01(f), the
amount of $5,000,000 and (b) in all other cases, the amount of $10,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Type" means, with respect to a Committed Loan, its character as a
Base Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section
2.03(c)(i).
"Voting Trust Agreement" means Schintzer Steel Industries, Inc. 2001
Restated Voting Trust and Buy-Sell Agreement dated as of March 26, 2001, as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
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(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and
"hereunder" and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule references
are to the Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not
limitation.
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced, whether
in physical or electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) For purposes of computing the financial covenants set forth in
Section 7.11 for any applicable test period, any Permitted Acquisition or
permitted sale of assets (including a stock sale) shall have been deemed to have
taken place as of the first day of such applicable test period.
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1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein
to times of day shall be references to Pacific time (daylight or standard, as
applicable).
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 COMMITTED LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Committed
Loan") to the Borrower from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Committed Borrowing, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this Section
2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Each Committed Borrowing, each conversion of Committed Loans
from one Type to the other, and each continuation of Eurodollar Rate Loans shall
be made upon the Borrower's irrevocable notice to the Administrative Agent,
which may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate
Committed Loans. Each telephonic notice by the Borrower pursuant to this Section
2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a
written Committed Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of
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Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c)
and 2.04(c), each Borrowing of or conversion to Base Rate Committed Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If the Borrower fails to specify a Type of Committed Loan
in a Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Pro Rata Share of
the applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Committed Borrowing,
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Committed Loan Notice with respect to such
Borrowing is given by the Borrower, there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings, second, to the payment in full of
any such Swing Line Loans, and third, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may
be continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
22
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions
of Committed Loans from one Type to the other, and all continuations of
Committed Loans as the same Type, there shall not be more than ten Interest
Periods in effect with respect to Committed Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth
herein, (A) each L/C Issuer severally agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue
Letters of Credit for the account of the Borrower, and to amend or
renew Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower; provided
that no L/C Issuer shall be obligated to make any L/C Credit
Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in any Letter of Credit if as of the
date of such L/C Credit Extension, (x) the Total Outstandings would
exceed the Aggregate Commitments, (y) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender's Pro
Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender's Pro Rata Share of the Outstanding Amount of all Swing
Line Loans would exceed such Lender's Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the Letter of
Credit Sublimit. Within the foregoing limits, and subject to the
terms and conditions hereof, the Borrower's ability to obtain
Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit
to replace Letters of Credit that have expired or that have been
drawn upon and reimbursed.
(ii) No L/C Issuer shall be under any obligation to
issue any Letter of Credit if:
(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain such L/C Issuer from
issuing such Letter of Credit, or any Law applicable to
such L/C Issuer or any request or directive (whether or
not having the force of law) from any Governmental
Authority with jurisdiction over such L/C Issuer shall
prohibit, or request that such L/C Issuer refrain from,
the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such
L/C Issuer with respect to such Letter of Credit any
23
restriction, reserve or capital requirement (for which
such L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon
such L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which
such L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the
expiry date of such requested Letter of Credit would
occur more than twelve months after the date of issuance
or last renewal, unless the Required Lenders have
approved such expiry date;
(C) the expiry date of such requested Letter
of Credit would occur after the Letter of Credit
Expiration Date, unless all the Lenders have approved
such expiry date;
(D) the issuance of such Letter of Credit
would violate one or more policies of such L/C Issuer;
or
(E) such Letter of Credit is in an initial
amount less than $100,000, or is to be denominated in a
currency other than Dollars.
(iii) No L/C Issuer shall be under any obligation to
amend any Letter of Credit if (A) such L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such
Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as
the case may be, upon the request of the Borrower delivered to the
applicable L/C Issuer (with a copy to the Administrative Agent) in
the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of the Borrower. Such Letter of
Credit Application must be received by the applicable L/C Issuer and
the Administrative Agent not later than 11:00 a.m. at least three
Business Days (or such later date and time as the applicable L/C
Issuer may agree in a particular instance in its sole discretion)
prior to the proposed issuance date or date of amendment, as the
case may be. In the case of a request for an initial issuance of a
Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the applicable L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and
(G) such other matters as the applicable L/C Issuer may require. In
the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the applicable L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as such L/C Issuer may
require.
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(ii) Promptly after receipt of any Letter of Credit
Application, the applicable L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit
Application from the Borrower and, if not, the applicable L/C Issuer
will provide the Administrative Agent with a copy thereof. Upon
receipt by the applicable L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, such L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each
case in accordance with such L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the applicable L/C Issuer a
risk participation in such Letter of Credit in an amount equal to
the product of such Lender's Pro Rata Share times the amount of such
Letter of Credit.
(iii) If the Borrower so requests in any applicable
Letter of Credit Application, the applicable L/C Issuer may, in its
sole and absolute discretion, agree to issue a Letter of Credit that
has automatic renewal provisions (each, an "Auto-Renewal Letter of
Credit"); provided that any such Auto-Renewal Letter of Credit must
permit such L/C Issuer to prevent any such renewal at least once in
each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the "Nonrenewal Notice Date") in each
such twelve-month period to be agreed upon at the time such Letter
of Credit is issued. Unless otherwise directed by the applicable L/C
Issuer, the Borrower shall not be required to make a specific
request to such L/C Issuer for any such renewal. Once an
Auto-Renewal Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the applicable L/C
Issuer to permit the renewal of such Letter of Credit at any time to
an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the applicable L/C Issuer shall not permit
any such renewal if (A) such L/C Issuer has determined that it would
have no obligation at such time to issue such Letter of Credit in
its renewed form under the terms hereof (by reason of the provisions
of Section 2.03(a)(ii) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day that
is two Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from the Administrative Agent, any Lender
or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit
or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the applicable L/C
Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or
amendment.
25
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under such Letter of Credit, the
applicable L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 11:00 a.m. on the date
of any payment by the applicable L/C Issuer under a Letter of Credit
(each such date, an "Honor Date"), the Borrower shall reimburse the
applicable L/C Issuer through the Administrative Agent in an amount
equal to the amount of such drawing. If the Borrower fails to so
reimburse the applicable L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the "Unreimbursed Amount"), and
the amount of such Lender's Pro Rata Share thereof. In such event,
the Borrower shall be deemed to have requested a Committed Borrowing
of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of
the Aggregate Commitments and the conditions set forth in Section
4.02 (other than the delivery of a Committed Loan Notice). Any
notice given by the applicable L/C Issuer or the Administrative
Agent pursuant to this Section 2.03(c)(i) may be given by telephone
if immediately confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C
Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the
applicable L/C Issuer at the Administrative Agent's Office in an
amount equal to its Pro Rata Share of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount. The Administrative Agent shall remit the
funds so received to the applicable L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is
not fully refinanced by a Committed Borrowing of Base Rate Loans
because the conditions set forth in Section 4.02 cannot be satisfied
or for any other reason, the Borrower shall be deemed to have
incurred from the applicable L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which
L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the Default Rate. In such
event, each Lender's payment to the Administrative Agent for the
account of the applicable L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section
2.03.
(iv) Until each Lender funds its Committed Loan or L/C
Advance pursuant to this Section 2.03(c) to reimburse the applicable
L/C Issuer for any amount drawn under any Letter of Credit, interest
in respect of such Lender's Pro Rata Share of such amount shall be
solely for the account of such L/C Issuer.
26
(v) Each Lender's obligation to make Committed Loans or
L/C Advances to reimburse the applicable L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section
2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender
may have against such L/C Issuer, the Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Lender's obligation to make Committed Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 4.02
(other than delivery by the Borrower of a Committed Loan Notice). No
such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the applicable L/C Issuer
for the amount of any payment made by such L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the applicable L/C Issuer
any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time specified
in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is
immediately available to such L/C Issuer at a rate per annum equal
to the Federal Funds Rate from time to time in effect. A certificate
of the applicable L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after an L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such
Lender's L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the
account of such L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the
Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of
time during which such Lender's L/C Advance was outstanding) in the
same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent
for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by
such L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of such L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect.
27
(e) Obligations Absolute. The obligation of the Borrower to
reimburse an L/C Issuer for each drawing under each Letter of Credit issued by
such L/C Issuer and to repay each L/C Borrowing shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time
against any beneficiary or any transferee of such Letter of Credit
(or any Person for whom any such beneficiary or any such transferee
may be acting), the applicable L/C Issuer or any other Person,
whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such 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; or any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under such Letter of Credit;
(iv) any payment by the applicable L/C Issuer under such
Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit; or
any payment made by such L/C Issuer under such Letter of Credit to
any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including
any arising in connection with any proceeding under any Debtor
Relief Law; or
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to,
or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will immediately notify the applicable L/C Issuer. The Borrower
shall be conclusively deemed to have waived any such claim against the
applicable L/C Issuer and its correspondents unless such notice is given as
aforesaid.
(f) Role of L/C Issuers. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the applicable L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
applicable L/C Issuer, any Agent-Related Person nor any of the respective
correspondents, participants or assignees of the applicable L/C Issuer shall be
liable to any Lender for (i) any
28
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Letter of Credit
Application. The Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. None of the
applicable L/C Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the applicable L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the applicable
L/C Issuer, and such L/C Issuer may be liable to the Borrower, to the extent,
but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by such
L/C Issuer's willful misconduct or gross negligence or such L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the applicable L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and such L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a 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.
(g) Cash Collateral. Upon the request of the Administrative Agent,
(i) if an L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the applicable
L/C Issuers and the Lenders, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the applicable L/C Issuers (which
documents are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Administrative Agent,
for the benefit of the applicable L/C Issuers and the Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing. Cash collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly
agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is
issued, (i) the rules of the "International Standby Practices 1998" published by
the Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) shall apply to each standby
Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for
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Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share (i) a Letter of Credit fee for each commercial Letter of Credit equal
to 1% per annum times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit), and (ii) a Letter of Credit fee for each standby Letter
of Credit equal to the Applicable Rate times the daily maximum amount available
to be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each standby Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuers. The Borrower shall pay directly to the applicable L/C Issuer for
its own account a fronting fee with respect to each Letter of Credit equal to
one-eighth of 1% times the maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears. Such letter of credit fees shall be due and payable
on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. In addition, the Borrower shall pay directly to the applicable L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing
Line Loan") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate
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Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment, and provided,
further, that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.04, prepay under Section 2.05, and reborrow under this Section
2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the
making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender's Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made
upon the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at its
office by crediting the account of the Borrower on the books of the Swing Line
Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on
its behalf), that each Lender make a Base Rate Committed Loan in an
amount equal to such Lender's Pro Rata Share of the amount of Swing
Line Loans then outstanding. Such request shall be made in writing
(which written request shall be deemed to be a Committed Loan Notice
for purposes hereof) and in accordance with the requirements of
Section 2.02, without regard to the minimum and multiples specified
therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Aggregate Commitments and the
conditions set forth in Section 4.02. The Swing Line Lender shall
furnish the Borrower with a copy of the applicable Committed Loan
Notice promptly after delivering such notice to the Administrative
Agent. Each Lender shall make an amount equal to its Pro Rata Share
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of the amount specified in such Committed Loan Notice available to
the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent's
Office not later than 1:00 p.m. on the day specified in such
Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii),
each Lender that so makes funds available shall be deemed to have
made a Base Rate Committed Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing
Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Committed Borrowing in accordance with Section
2.04(c) (i), the request for Base Rate Committed Loans submitted by
the Swing Line Lender as set forth herein shall be deemed to be a
request by the Swing Line Lender that each of the Lenders fund its
risk participation in the relevant Swing Line Loan and each Lender's
payment to the Administrative Agent for the account of the Swing
Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment
in respect of such participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any
amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in Section
2.04(c)(i), the Swing Line Lender shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the Swing Line Lender at a rate per annum equal to the
Federal Funds Rate from time to time in effect. A certificate of the
Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or
to purchase and fund risk participations in Swing Line Loans
pursuant to this Section 2.04(c) shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided,
however, that each Lender's obligation to make Committed Loans
pursuant to this Section 2.04(c) is subject to the conditions set
forth in Section 4.02. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay
Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and
funded a risk participation in a Swing Line Loan, if the Swing Line
Lender receives any payment on account of such Swing Line Loan, the
Swing Line Lender will distribute to such Lender its Pro Rata Share
of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's
risk participation was funded) in the same funds as those received
by the Swing Line Lender.
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(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required
to be returned by the Swing Line Lender under any of the
circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion),
each Lender shall pay to the Swing Line Lender its Pro Rata Share
thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at
a rate per annum equal to the Federal Funds Rate. The Administrative
Agent will make such demand upon the request of the Swing Line
Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.05 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay Committed Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender's Pro Rata Share of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Pro Rata Shares.
(b) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(ii) any such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.
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(c) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless
after the prepayment in full of the Committed Loans and Swing Line Loans the
Total Outstandings exceed the Aggregate Commitments then in effect.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 11:00
a.m. five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Pro Rata Share. All
commitment fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans outstanding on such date.
(b) The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) the date five Business Days after such Loan is made and (ii) the
Maturity Date.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate
Committed Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to (A) the Base Rate plus the Applicable Rate or (B) such
other rate per annum as may be agreed to in writing by the Borrower and the
Swing Line Lender from time to time.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate
34
per annum at all times equal to the Default Rate to the fullest extent permitted
by applicable Laws. Furthermore, upon the request of the Required Lenders, while
any Event of Default exists, the Borrower shall pay interest on the principal
amount of all outstanding Obligations hereunder at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent permitted
by applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in subsections (i)
and (j) of Section 2.03:
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of
Committed Loans and (ii) the Outstanding Amount of L/C Obligations. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date. The commitment fee shall be calculated quarterly in arrears, and
if there is any change in the Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day.
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2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 1:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 1:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) On each date when the payment of any principal, interest or fees
are due hereunder or under any Note, the Borrower agrees to maintain on deposit
in an ordinary checking account maintained by Borrower with Agent (as such
account shall be designated by the Borrower in a written notice to the
Administrative Agent from time to time, the "Borrower Account") an amount
sufficient to pay such principal, interest or fees in full. The Borrower hereby
authorizes the Administrative Agent (i) to deduct automatically all principal,
interest or fees when due hereunder, or under the Notes form the Borrower
Account, and (ii) if and to the extent any payment under this Agreement or any
other Loan Document is not made when due, to
36
deduct automatically any such amount from any or all of the accounts of the
Borrower maintained with Bank of America. The Administrative Agent agrees to
provide timely notice to the Borrower of any automatic deduction made pursuant
to this subsection (b).
(c) If any payment to be made by the Borrower shall come due on a
day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.
(d) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Administrative Agent
the portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent in
immediately available funds at the Federal Funds Rate from time to
time in effect; and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Administrative Agent the
amount thereof in immediately available funds, together with
interest thereon for the period from the date such amount was made
available by the Administrative Agent to the Borrower to the date
such amount is recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such
amount to the Administrative Agent, then such amount shall
constitute such Lender's Committed Loan included in the applicable
Borrowing. If such Lender does not pay such amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent
may make a demand therefor upon the Borrower, and the Borrower shall
pay such amount to the Administrative Agent, together with interest
thereon for the Compensation Period at a rate per annum equal to the
rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as
a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this subsection (d) shall be conclusive,
absent manifest error.
(e) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to
37
the applicable Credit Extension set forth in Article IV are not satisfied or
waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.
(f) The obligations of the Lenders hereunder to make Committed Loans
and to fund participations in Letters of Credit and Swing Line Loans are several
and not joint. The failure of any Lender to make any Committed Loan or to fund
any such participation on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Committed Loan or purchase its participation.
(g) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Committed Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by
it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Committed Loans made by them and/or such subparticipations
in the participations in L/C Obligations or Swing Line Loans held by them, as
the case may be, as shall be necessary to cause such purchasing Lender to share
the excess payment in respect of such Committed Loans or such participations, as
the case may be, pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender's ratable share (according
to the proportion of (i) the amount of such paying Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
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2.14 EXTENSION OF MATURITY DATE.
(a) Not earlier than 90 days prior to, nor later than 30 days prior
to, the first two anniversaries of the Closing Date, the Borrower may, upon
notice to the Administrative Agent (which shall promptly notify the Lenders),
request a one-year extension of the Maturity Date then in effect. Within 30 days
of delivery of such notice, each Lender shall notify the Administrative Agent
whether or not it consents to such extension (which consent may be given or
withheld in such Lender's sole and absolute discretion). Any Lender not
responding within the above time period shall be deemed not to have consented to
such extension. The Administrative Agent shall promptly notify the Borrower and
the Lenders of the Lenders' responses. Nothing in this Section shall be deemed
to restrict the ability of any Lender that declines, or is deemed to have
declined, to consent to a requested extension from offering to assign its
Commitment pursuant to Section 10.07(b) to one or more other Lenders or Eligible
Assignees procured by the Borrower.
(b) The Maturity Date shall be extended only if all Lenders have
consented thereto. If so extended, the Maturity Date shall be extended to the
same date in the following year, effective as of the Maturity Date then in
effect (such existing Maturity Date being the "Extension Effective Date"). The
Administrative Agent and the Borrower shall promptly confirm to the Lenders such
extension and the Extension Effective Date. As a condition precedent to such
extension, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Extension Effective Date (in sufficient
copies for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such extension and (ii) in the case of the Borrower, certifying
that, before and after giving effect to such extension, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Extension Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that
for purposes of this Section 2.14, the representations and warranties contained
in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default exists.
(c) This Section shall supersede any provisions in Section 2.13 or
10.01 to the contrary.
2.15 INCREASE IN COMMITMENTS.
(a) Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
from time to time prior to the second anniversary of the Closing Date, request
an increase in the Aggregate Commitments; provided that (i) the amount of any
single request is $10,000,000 or a whole multiple of $1,000,000 in excess
thereof and (ii) the amount of all such requests may not exceed $35,000,000 in
the aggregate. At the time of sending such notice, the Borrower (in consultation
with the Administrative Agent) shall specify the time period within which each
Lender is requested to respond (which shall in no event be less than ten
Business Days from the date of delivery of such notice to the Lenders). Each
Lender shall notify the Administrative Agent within such time
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period whether or not it agrees to increase its Commitment and, if so, whether
by an amount equal to, greater than, or less than its Pro Rata Share of such
requested increase. Any Lender not responding within such time period shall be
deemed to have declined to increase its Commitment. The Administrative Agent
shall notify the Borrower and each Lender of the Lenders' responses to each
request made hereunder. To achieve the full amount of a requested increase, the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.
(b) If the Aggregate Commitments are increased in accordance with
this Section, the Administrative Agent and the Borrower shall determine the
effective date (the "Increase Effective Date") and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrower and the
Lenders of the final allocation of such increase and the Increase Effective
Date. As a condition precedent to such increase, the Borrower shall deliver to
the Administrative Agent a certificate of each Loan Party dated as of the
Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of such Loan Party (i) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such increase,
and (ii) in the case of the Borrower, certifying that, before and after giving
effect to such increase, (A) the representations and warranties contained in
Article V and the other Loan Documents are true and correct on and as of the
Extension Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.15, the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to subsections (a) and (b), respectively, of Section 6.01,
and (B) no Default exists. The Borrower shall prepay any Committed Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Pro Rata Shares arising
from any nonratable increase in the Commitments under this Section.
(c) This Section shall supersede any provisions in Sections 2.13 or
10.01 to the contrary.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of
the Administrative Agent or any Lender under any Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
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and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by the Administrative Agent and such Lender, (ii)
amounts payable under Section 3.01(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
the Lender or the Administrative Agent makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to
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maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.
Each Lender agrees to designate a different Lending Office if such designation
will avoid the need for such notice and will not, in the good faith judgment of
such Lender, otherwise be materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES
ON EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of the introduction of
or any change in or in the interpretation of any Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as
the case may be) issuing or participating in Letters of Credit, or a reduction
in the amount received or receivable by such Lender in connection with any of
the foregoing (excluding for purposes of this subsection a) any such increased
costs or reduction in amount resulting from (i) taxes or Other Taxes (as to
which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements contemplated by Section 3.04(c)), then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
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(c) The Borrower shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.
(d) Notwithstanding any provision in subsections (a) and (b) of this
Section 3.04 to the contrary, this Section shall not impose any payment
obligation upon the Borrower if the increase in the cost to or the reduction in
the amount received or receivable by the Lender making a claim for compensation
under subsections (a) and (b) of this Section 3.04 resulted not from the general
application of an introduction of or a change in or in the interpretation of a
Law, but instead resulted from specific requirements or directives imposed by a
Governmental Authority only upon the Lender making a claim for compensation
under subsections (a) and (b) of this Section 3.04.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A
certificate of the Administrative Agent or any Lender claiming compensation
under this Article III and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the
43
absence of manifest error. In determining such amount, the Administrative Agent
or such Lender may use any reasonable averaging and attribution methods.
3.07 SURVIVAL. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and its legal
counsel:
(i) executed counterparts of this Agreement and the
Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each
Lender requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence that each
Loan Party is duly organized or formed, and that each of the
Borrower and the Guarantors is validly existing, in good standing
and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its
business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(v) a favorable opinion of Stoel Rives LLP, counsel to
the Loan Parties, addressed to the Administrative Agent and each
Lender, as to the matters set forth in Exhibit G and such other
matters concerning the Loan Parties and the Loan Documents as the
Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of each Loan
Party either (A) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan
Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect,
or (B) stating that no such consents, licenses or approvals are so
required;
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(vii) a certificate signed by a Responsible Officer of
the Borrower certifying (A) that the conditions specified in
Sections 4.02(a) and (b) have been satisfied, (B) that there has
been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse
Effect; and (C) a calculation of the Consolidated Leverage Ratio as
of the last day of the fiscal quarter of the Borrower most recently
ended prior to the Closing Date;
(viii) evidence that the Existing Credit Agreement has
been or concurrently with the Closing Date is being terminated and
all Liens securing obligations under the Existing Credit Agreement
have been or concurrently with the Closing Date are being released;
and
(ix) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent, the applicable L/C
Issuers, the Swing Line Lender or the Required Lenders reasonably
may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall
have paid all Attorney Costs of the Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of Attorney Costs
as shall constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
(d) The Closing Date shall have occurred on or before June 2, 2003.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section
4.02, the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed
Credit Extension.
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(c) The Administrative Agent and, if applicable, the applicable L/C
Issuers or the Swing Line Lender shall have received a Request for Credit
Extension in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Loan Party (a) is a corporation duly organized or formed, validly existing and
in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, (i) any
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
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5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited condensed and consolidated financial statements of
the Borrower and its Subsidiaries dated February 28, 2003, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.05 sets forth all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date of such financial statements, including liabilities
for taxes, material commitments and Indebtedness.
(c) Since the date of the Audited Financial Statements, there has
been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.
5.06 LITIGATION. Except as specifically disclosed in Schedule 5.06,
there are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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No Default has occurred and is continuing or would result from the consummation
of the transactions contemplated by this Agreement or any other Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Borrower and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that, except as specifically disclosed in Schedule 5.09, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts (after giving effect to any
self-insurance compatible with the following standards), with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the
Borrower or the applicable Subsidiary operates.
5.11 TAXES. The Borrower and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur, except with respect to any Multiemployer Plan (A) the Borrower has no
knowledge of the occurrence of any ERISA Event and (B) no ERISA Event of the
types described in clauses (b) or (c) of the
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definition of ERISA Event has occurred or is reasonably expected to occur; (ii)
no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.
5.13 SUBSIDIARIES. The Borrower has no Material Subsidiaries other
than those specifically disclosed in Part (a) of Schedule 5.13 and has no equity
investments in any other corporation or business entity in excess of $5,000,000
other than those specifically disclosed in Part (b) of Schedule 5.13. Each
corporation or other business entity in which the Borrower has an equity
investment, which investment is accounted for by the Borrower using the equity
method of accounting is listed in Part (c) of Schedule 5.13
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or
as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
5.15 SOLVENCY. The Borrower and each other Loan Party is Solvent and
each shall be Solvent immediately after the consummation of the transactions
contemplated by this Agreement.
5.16 DISCLOSURE. The Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
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5.17 COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary
is in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.18 TAX SHELTER REGULATIONS. The Borrower does not intend to treat
the Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent thereof.
If the Borrower so notifies the Administrative Agent, the Borrower acknowledges
that one or more of the Lenders may treat its Committed Loans and/or its
interest in Swing Line Loans and/or Letters of Credit as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and such Lender or
Lenders, as applicable, will maintain the lists and other records required by
such Treasury Regulation.
5.19 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person. Except as specifically disclosed in Schedule 5.19, no claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter
of Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause
each Material Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 100 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations,
50
shareholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Required Lenders,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the scope of
such audit; and
(b) as soon as available, but in any event within 50 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a condensed and consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related condensed and
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal quarter and for the portion of the Borrower's fiscal year
then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations, shareholders' equity and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower;
(b) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower by independent accountants in connection
with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them;
(c) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which the Borrower may file or
be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(d) promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans and/or Letters of
Credit and related transactions as
51
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), a duly completed copy of IRS Form 8886 or any successor form;
(e) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), notice of any material change in
accounting policies or financial reporting practices implemented by the Borrower
or any Subsidiary since the date of the most recent financial statements
furnished pursuant to Sections 6.01(a) and (b); and
(f) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or
(b) or Section 6.02(c) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Borrower shall notify (which
may be by facsimile or electronic mail) the Administrative Agent and each Lender
of the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(a) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
6.03 NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default, provided, however, that the
Borrower shall not be required to provide notice of any Default that is
reasonably susceptible to cure by the Borrower and is cured by the Borrower
within 15 days after the occurrence of such Default;
(b) of any matter that has resulted or could reasonably be expected
to result in a Material Adverse Effect, including (i) breach or non-performance
of, or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws; and
52
(c) of the occurrence of any ERISA Event.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts (after giving effect to any self-insurance
compatible with the following standards) as are customarily carried under
similar circumstances by such other Persons and providing for not less than 30
days' prior notice to the Administrative Agent of termination, lapse or
cancellation of such insurance.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, write,
53
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Borrower or such Subsidiary, as the case may
be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions (a)
to refinance Indebtedness arising under the Existing Credit Agreement and (b)
for working capital and other general corporate purposes, including Permitted
Acquisitions, in each case not in contravention of any Law or of any Loan
Document.
6.12 ADDITIONAL GUARANTORS.
(a) Material Subsidiaries. Notify the Administrative Agent at the
time that any Domestic Subsidiary becomes a Material Subsidiary (each, a "New
Material Subsidiary"), and promptly thereafter (and in any event within 30
days), cause such New Material Subsidiary to (i) become a Guarantor by executing
and delivering to the Administrative Agent a Supplement to the Guaranty or such
other document as the Administrative Agent shall deem appropriate for such
purpose, and (ii) deliver to the Administrative Agent documents of the types
referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions
of in-house counsel to such New Material Subsidiary (which shall cover, among
other things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (i) above), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
(b) Designated Subsidiaries. Notify the Administrative Agent at the
time that Domestic Subsidiaries which are not parties to the Guaranty (each, a
"Non-Party Subsidiary") shall in the aggregate (i) comprise, or are reasonably
expected to comprise, 10% or more of the total revenues of the Borrower and its
Subsidiaries on a consolidated basis for the then current fiscal year of the
Borrower (on a pro forma basis) or for either of the two most recently ended
fiscal years of the Borrower and/or (ii) comprise 10% or more of the total
assets of the Borrower and its Subsidiaries on a consolidated basis as of the
end of the most recently completed fiscal quarter of the Borrower, and promptly
thereafter (and in any event within 30 days), designate
54
one or more of such Non-Party Subsidiaries which, if such Non-Party Subsidiaries
were a party to the Guaranty would cause the remaining Non-Party Subsidiaries to
account for, in the aggregate, not more than the foregoing maximum percentages
of the consolidated revenue and/or assets of the Borrower (each, a "Designated
Subsidiary") and cause each such Designated Subsidiary to (A) become a Guarantor
by executing and delivering to the Administrative Agent a Supplement to the
Guaranty or such other document as the Administrative Agent shall deem
appropriate for such purpose, and (B) deliver to the Administrative Agent
documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a)
and favorable opinions of in-house counsel to each such Designated Subsidiary
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (A) above), all in
form, content and scope reasonably satisfactory to the Administrative Agent.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter
of Credit shall remain outstanding, the Borrower shall not, nor shall it permit
any Material Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01
and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations secured
or benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
55
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(i) or securing appeal or
other surety bonds related to such judgments;
(i) Liens securing Indebtedness permitted under Sections 7.03(e) and
(f); provided that (i) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness and (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition;
(j) Liens existing on any property or assets acquired pursuant to a
Permitted Acquisition prior to the acquisition thereof by the Borrower or any
Subsidiary or existing on any property or asset of any Person that merges with
or into or consolidates with the Borrower or any Subsidiary or becomes a
Subsidiary pursuant to a Permitted Acquisition prior to such merger or
consolidation or the time such Person becomes a Subsidiary, as the case may be;
provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition, merger, consolidation or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall not encumber (A) in the
case of a Lien existing on any property or assets acquired pursuant to a
Permitted Acquisition prior to the acquisition thereto, any other or different
property or assets of the Borrower or any Subsidiary and (B) in the case of a
Lien existing on any property or asset of any Person that merges with or into or
consolidates with the Borrower or any Subsidiary or becomes a Subsidiary after
the date hereof prior to such merger or consolidation or the time such Person
becomes a Subsidiary, any property or assets of any other Person other than the
Borrower or such Subsidiary, as the case may be, (iii) such Lien shall secure
only those obligations which it secured on the date of such acquisition, merger
or consolidation or the date such Person becomes a Subsidiary, as the case may
be, and extensions, renewals and replacements thereof and (iv) the aggregate
amount of Indebtedness (other than Government Indebtedness) secured by all such
Liens shall not exceed $15,000,000 at any one time outstanding; and
(k) other Liens securing Indebtedness permitted hereunder in an
aggregate principal amount not to exceed $25,000,000 at any one time
outstanding.
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the form
of cash equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of the Borrower
and Subsidiaries in an aggregate amount not to exceed $1,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of the Borrower in any Guarantor or Joint Venture
and Investments of any Material Subsidiary in the Borrower or in a Guarantor;
(d) Permitted Acquisitions made by the Borrower or any Subsidiary;
56
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(f) Guarantees permitted by Section 7.03; and
(g) other Investments not exceeding $20,000,000 in the aggregate in
any fiscal year of the Borrower.
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof;
provided that the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) Guarantees of the Borrower or any Subsidiary in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any wholly-owned
Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Government Indebtedness of the Borrower or any Subsidiary in an
aggregate principal amount not to exceed $20,000,000 at any time outstanding;
(f) Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets within
the limitations set forth in Section 7.01(i); provided, however, that the
aggregate amount of all such Indebtedness shall not exceed $20,000,000 at any
one time outstanding; and
(g) unsecured Indebtedness of the Borrower or any Subsidiary in an
aggregate principal amount not to exceed $60,000,000 at any one time
outstanding; provided, however, that the aggregate principal amount of the
unsecured Indebtedness of the Subsidiaries shall not exceed $15,000,000 at any
one time outstanding.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or
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substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that
the Borrower shall be the continuing or surviving Person, or (ii) any one or
more other Subsidiaries, provided that when any Guarantor is merging with
another Subsidiary, the Guarantor shall be the continuing or surviving Person;
(b) the Borrower or any Subsidiary may merge with any Person as part
of a Permitted Acquisition; and
(c) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement
to make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to the Borrower or to
a wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;
(e) Dispositions permitted by Section 7.04;
(f) the sale by the Borrower or any Subsidiary of all or any portion
of any Joint Venture in which Xxxx Xxx Corporation, a New York corporation, owns
30% or more of the equity securities of such Joint Venture;
(g) the sale by the Borrower of all or substantially all of the
capital stock of Cascade and/or the sale by Cascade of all or substantially all
of the assets that comprise the Cascade Mini-Mill; and
(h) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition and
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (h) in any fiscal year shall not exceed an amount equal to 20% times an
amount equal to (i) the amount of the total assets of the Borrower and its
Subsidiaries on a
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consolidated basis as of the end of the most recently completed fiscal year of
the Borrower minus (ii) the amount of Intangible Assets of the Borrower and its
Subsidiaries on that date;
provided, however, that any Disposition pursuant to clauses (a)
through (h) shall be for fair market value.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and
to wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other equity interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);
(b) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common equity interests of such Person;
(c) the Borrower and each Subsidiary may purchase, redeem or
otherwise acquire shares of its common stock or other common equity interests or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock or other
common equity interests;
(d) the Borrower may declare or pay cash dividends to its
stockholders;
(e) any Pick-N-Pull Subsidiary may declare and make any cash
dividend or other distribution with respect to any its capital stock or other
equity interest; and
(f) the Borrower may purchase, redeem or otherwise acquire shares of
its capital stock or warrants, rights or options to acquire any such shares for
cash in an amount for all such purchases, redemptions or other acquisitions
after the Closing Date equal to 15% times the amount of the Consolidated Net
Worth as of the end of the most recently completed fiscal year of the Borrower;
provided that immediately after giving effect to such proposed action, no
Default would exist.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate, provided that the foregoing restriction shall
not apply to transactions between or among the Borrower and any of its
wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries.
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7.09 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.
7.10 USE OF PROCEEDS. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.
7.11 FINANCIAL COVENANTS.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio to be greater than 0.45 to 1.00 as of the end of any fiscal quarter of the
Borrower.
(b) Consolidated Net Worth. Permit Consolidated Net Worth at any
time to be less than (i) the sum of (A) $236,000,000, (B) an amount equal to 50%
of the Consolidated Net Income earned in each full fiscal quarter ending after
February 28, 2003 (with no deduction for a net loss in any such fiscal quarter)
plus (C) an amount equal to 100% of the aggregate increases in Shareholders'
Equity of the Borrower and its Subsidiaries after the date hereof by reason of
the issuance and sale of capital stock or other equity interests of the Borrower
or any Subsidiary (other than issuances to the Borrower or a wholly-owned
Subsidiary), including upon any conversion of debt securities of the Borrower
into such capital stock or other equity interests minus (ii) an amount equal to
the lesser of (A) the after-tax loss, if any, recognized by the Borrower in
connection with the sale by the Borrower of all or substantially all of the
capital stock of Cascade and/or the sale by Cascade of all or substantially all
of the assets that comprise the Cascade Mini-Mill and (B) $40,000,000.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed
Charge Coverage Ratio to be less than 1.50 to 1.00 as of the end of any fiscal
quarter of the Borrower.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan
or any L/C Obligation, or (ii) within three days after the same becomes due, any
interest on any Loan or on any L/C
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Obligation, or any facility or other fee due hereunder, or (iii) within five
days after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.03, 6.05, 6.10, 6.11
or 6.12 or Article VII; or
(c) Financial Statements. The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Section 6.01 or 6.02 and
such failure continues for three days; or
(d) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a), (b) or (c) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier of (i) the date upon which
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender or (ii) the date upon which a Responsible
Officer of the Borrower or any Loan Party knew or reasonably should have known
of such failure; or
(e) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(f) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or
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(g) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(h) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(i) Judgments. There is entered against the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 15 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(k) Invalidity of Loan Documents. Any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or satisfaction in full of all the Obligations, ceases to be
in full force and effect; or any Loan Party or any other Person contests in any
manner the validity or enforceability of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or
(l) Change of Control. There occurs any Change of Control with
respect to the Borrower.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
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(a) declare the commitment of each Lender to make Loans and any
obligation of an L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (including Attorney Costs and
amounts payable under Article III) payable to the Administrative Agent in its
capacity as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
(i) accrued and unpaid interest on the Loans and L/C Borrowings and (ii) with
respect to any Swap Contract between the Borrower and any Lender or any
Affiliate of any Lender, to the extent such Swap Contract is permitted by
Section 7.03(d), any fees, premiums and scheduled periodic payments due under
such Swap Contract and any interest accrued thereon, ratably among the Lenders
in proportion to the respective amounts described in this clause Third payable
to them;
Fourth, to payment of that portion of the Obligations constituting
(i) unpaid principal of the Loans and L/C Borrowings and (ii) with respect to
any Swap Contract between any Lender or
63
any Affiliate of any Lender, to the extent such Swap Contract is permitted by
Section 7.03(d), any breakage, termination or other payments due under such Swap
Contract and any interest accrued thereon, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the applicable
L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) Each L/C Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith,
and each L/C Issuer shall have all of the benefits and immunities (i) provided
to the Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term "Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included such L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to such L/C
Issuer.
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9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to,
65
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without
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limiting the obligation of any Loan Party to do so), pro rata, and hold harmless
each Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of
America 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 each of the Loan Parties and their respective Affiliates as though
Bank of America were not the Administrative Agent or an L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or an L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders; provided
that any such resignation by Bank of America shall also constitute its
resignation as an L/C Issuer and the Swing Line Lender. If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders, which
successor administrative agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default (which consent of
the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent, L/C Issuer and Swing Line Lender and the
respective terms "Administrative Agent," "L/C Issuer" and "Swing Line Lender"
shall mean such successor administrative agent, Letter of Credit issuer and
swing line lender, and
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the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated and the retiring L/C Issuer's and Swing
Line Lender's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring L/C Issuer or Swing
Line Lender or any other Lender, other than the obligation of the successor L/C
Issuer to issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts
due the Lenders and the Administrative Agent under Sections 2.03(i)
and (j), 2.09 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization,
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arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize the Administrative Agent to vote in respect of the
claim of any Lender in any such proceeding.
9.11 GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder. Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent's authority to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 9.11.
9.12 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "book manager,"
"lead manager," "arranger," "lead arranger" or "co-arranger" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than, in the case of such Lenders, those applicable to all Lenders as
such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02) without the written consent
of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second
proviso to this Section 10.01) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive
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any obligation of the Borrower to pay interest at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to reduce the rate of interest on any
Loan or L/C Borrowing or to reduce any fee payable hereunder;
(e) change Section 2.13 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; or
(g) release all or substantially all of the Guarantors from the
Guaranty without the written consent of each Lender;
and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the applicable L/C Issuers in addition to the Lenders
required above, affect the rights or duties of the such L/C Issuers under this
Agreement or any Letter of Credit Application relating to any Letter of Credit
issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, any
L/C Issuers or the Swing Line Lender, to the address, facsimile
number, electronic mail address or telephone number specified for
such Person on Schedule 10.02 or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in its
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Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the
Administrative Agent, the other L/C Issuers and the Swing Line
Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent, the applicable L/C Issuer and the Swing Line Lender
pursuant to Article II shall not be effective until actually received by such
Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
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10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Administrative Agent and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent
and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
Section 10.04 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Aggregate
Commitments and repayment of all other Obligations.
10.05 INDEMNIFICATION BY THE BORROWER. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) any Commitment,
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the applicable L/C Issuer to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit), (c)
any actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower, any Subsidiary
or any other Loan Party, or any Environmental Liability related in any way to
the Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others
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of any information or other materials obtained through IntraLinks or other
similar information transmission systems in connection with this Agreement, nor
shall any Indemnitee have any liability for any indirect or consequential
damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 10.05 shall be payable within
ten Business Days after demand therefor. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection
(g) of this Section) with respect to a
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Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall not
apply to rights in respect of Swing Line Loans; (iii) any assignment of a
Commitment must be approved by the Administrative Agent, each L/C Issuer that
has issued an outstanding Letters of Credit and the Swing Line Lender unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Notwithstanding anything to the contrary herein, no Eligible
Assignee shall be deemed an L/C Issuer without the prior written consent of the
Borrower and the Administrative Agent. Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a
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portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender's participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided 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 and (iii) the Borrower,
the Administrative Agent 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. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 10.01 that directly affects such
Participant. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.09
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Note, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate
of a Lender; (c) an Approved Fund; and (d) any other Person (other
than a natural person) approved by (i) the Administrative Agent, the
applicable L/C Issuers and the Swing Line Lender, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, "Eligible Assignee" shall not
include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.
"Fund" means any Person (other than a natural person)
that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.
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"Approved Fund" means any Fund that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a
Lender.
(h) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days'
notice to the Borrower, resign as the Swing Line Lender. In the event of any
such resignation as an L/C Issuer or Swing Line Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by the Borrower to appoint
any such successor shall affect the resignation of Bank of America as an L/C
Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as
an L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as an L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)). If Bank of America resigns as the Swing Line Lender, it shall retain
all the rights of the Swing Line Lender provided for hereunder with respect to
Swing Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate
Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For purposes of this Section, "Information" means all
information received from any Loan Party relating to any Loan Party or any of
their respective businesses, other than any such information that is available
to the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party, provided that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied
77
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Notwithstanding anything herein to
the contrary, "Information" shall not include, and the Administrative Agent and
each Lender may disclose without limitation of any kind, any information with
respect to the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent or such Lender
relating to such tax treatment and tax structure; provided that with respect to
any document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of the Loans,
Letters of Credit and transactions contemplated hereby.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 TAX FORMS. (a) (i) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be
78
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W 8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS Form
W-8IMY pursuant to this Section 10.15(a) or (B) if such Lender shall have failed
to satisfy the foregoing provisions of this Section 10.15(a); provided that if
such Lender shall have satisfied the requirement of this Section 10.15(a) on the
date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this Section
10.15(a) shall relieve the Borrower of its obligation to pay any amounts
pursuant to Section 3.01 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
(iv)The Ad ministrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this Section 10.15(a).
(a) Upon the request of the Administrative Agent, each Lender that
is a "United States person" within the meaning of Section 7701(a)(30) of the
Code shall deliver to the Administrative Agent two duly signed completed copies
of IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
79
(b) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Aggregate
Commitments, repayment of all other Obligations hereunder and the resignation of
the Administrative Agent.
10.16 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF WASHINGTON APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF WASHINGTON
SITTING IN XXX XXXX XX XXXXXXX XX XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO
80
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 ORAL AGREEMENTS. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
SCHNITZER STEEL INDUSTRIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BANK OF AMERICA, N.A., as
Administrative Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BANK OF AMERICA, N.A., as a Lender, an L/C
Issuer and Swing Line Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
81
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as a
Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD., as a
Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
WASHINGTON MUTUAL BANK, as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
82
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
--------------------------------------------------------------------------------
Bank of America, N.A. $ 40,000,000 26.666666667%
Xxxxx Fargo Bank, National Association $ 35,000,000 23.333333333%
U.S. Bank National Association $ 35,000,000 23.333333333%
Washington Mutual Bank $ 25,000,000 16.666666667%
The Bank of Tokyo - Mitsubishi, Ltd. $ 15,000,000 10.000000000%
-------------- --------------
Total $ 150,000,000 100.000000000%
1
SCHEDULE 5.05
SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS
MATERIAL INDEBTEDNESS
(as of February 28, 2003)
ENTITY TYPE REF. AMOUNT BENEFICIARY
------------------------------------ ------------------------------ --------- -------------------- --------------------
Bank One Bank Loan $95,000,000.00
Xxxxx Fargo Bank Bank Loan $7,400,000.00
Xxxxx Fargo Bank Standby Letter of Credit $5,000.00 Xxx Xxxxx and Assoc.
Xxxxx Fargo Bank Standby Letter of Credit $2,000,000.00 City of Los Angeles
Xxxxx Fargo Bank Standby Letter of Credit $1,817,985.00 Travelers Casualty
Xxxxx Fargo Bank Standby Letter of Credit 1 $7,806,861.24 BNY Western Trust
State of Oregon IDR Bond $7,700,000.00
US Government Current Income Taxes Payable $2,649,808.97
US Government Deferred Income Taxes $30,859,348.68
Reserves for Potential Future Environmental Liabilities
Manufacturing Management, Inc. 2 $16,598,915.79
Proler International Corp. $3,789,658.46
Norprop Inc. $2,200,000.00
1. Supports State of Oregon IDR Bond of $7,700,000.00.
2. Includes $14,850,000.00 guarantee to the U.S. Environmental
Protection Agency for Hylebos Waterway cleanup.
1
SCHEDULE 5.06
LITIGATION
None.
1
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
1. Portland Harbor, Portland, Oregon.
In December 2000, the United States Environmental Protection Agency (EPA) named
the Portland Harbor, a 5.5 mile stretch of the Willamette River in Portland,
Oregon, as a Superfund site (Superfund Site). The Borrower's metals recycling
and deep water terminal facility in Portland, Oregon is located adjacent to the
Portland Harbor. Xxxxxxxx Street Corporation, a wholly owned subsidiary of
Manufacturing Management, Inc. (MMI), a Material Subsidiary, also owns property
adjacent to the Portland Harbor. The EPA has identified 69 potentially
responsible parties, including the Borrower and Xxxxxxxx Street Corporation,
which own or operate sites adjacent to the Superfund Site. The precise nature
and extent of any clean-up of the Portland Harbor, the parties to be involved,
and the process to be followed for such a clean-up have not yet been determined.
It is unclear whether or to what extent the Borrower or Xxxxxxxx Street
Corporation will be liable for environmental costs or damages associated with
the Superfund Site. It is also unclear whether natural resource damage claims or
third party contribution or damages claims will be asserted against the Borrower
or Xxxxxxxx Street Corporation.
2. Hylebos Waterway, Tacoma, Washington.
General Metals of Tacoma (GMT), a Material Subsidiary and a wholly owned
subsidiary of MMI, owns and operates a metals recycling facility located in the
State of Washington on the Hylebos Waterway, a part of Commencement Bay, which
is the subject of an ongoing environmental investigation and remediation project
by the United States Environmental Protection Agency (EPA) under the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
GMT and more than 60 other parties were named potentially responsible parties
(PRPs) for the investigation and clean-up of contaminated sediment along the
Hylebos Waterway. On March 25, 2002, EPA issued Unilateral Administrative Orders
(UAOs) to GMT and another party to proceed with Remedial Design and Remedial
Action (RD/RA) for the head of the Hylebos and to two other parties to proceed
with the RD/RA for the balance of the waterway. Significant uncertainties
continue to exist regarding the total cost to remediate this site, as well as
GMT's share of those costs. The Natural Resource Damage Trustees for
Commencement Bay have asserted claims against GMT and other PRPs within the
Hylebos Waterway area for alleged damage to natural resources. It is unknown at
this time whether, or to what extent, GMT will be liable for natural resource
damages. The Washington State Department of Ecology named GMT, along with a
number of other parties, as Potentially Liable Parties (PLPs) for a site
referred to as Tacoma Metals. GMT operated on this site under a lease prior to
1982.
1
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
MATERIAL SUBSIDIARIES
(as of February 28, 2003)
PART (A)
--------
Manufacturing Management, Inc., an Oregon corporation
General Metals of Tacoma, Inc., a Washington corporation
Cascade Steel Rolling Xxxxx, Inc., an Oregon corporation
Norprop, Inc., an Oregon corporation
Joint Venture Operations, Inc., a Delaware corporation
Proleride Transport Systems, Inc., a Delaware corporation
Proler Steel, Inc., a Delaware corporation
Proler International Corp., a Delaware corporation
PART (B)
--------
Xxxxx Corp., an Oregon corporation
HNS Global Trade, LLC, a Delaware limited liability company
PERCENT
PART (C) OWNERSHIP
-------- ---------
HNS Global Trade, LLC, a Delaware limited liability company 50%
Mormil Corp., an Oregon corporation 100%
X. Xxxxx Industries, a California general partnership 50%
Oregon Rail Marketing Co., an Oregon corporation 100%
American Rail Marketing, an Illinois limited liability company 50%
Proler International Corp., a Delaware corporation 100%
Proler Industries, Inc., a Delaware corporation 100%
M R I Corporation, a Delaware corporation 100%
Proler Environmental Services, Inc., a Delaware corporation 100%
Proler Properties, Inc., a Delaware corporation 100%
Proler Recycling, Inc., a Delaware corporation 100%
Proler Steel, Inc., a Delaware corporation 100%
Joint Venture Operations, Inc., a Delaware corporation 100%
Xxxx Xxx Schnitzer East, a New York partnership 50%
Xxxx Xxx Proler Co., a California partnership 50%
Alameda Street Metals Corp., a California corporation 50%
Dover Barge Company, a Delaware corporation 50%
Pacific Bulkloading, Inc., a California corporation 50%
Proleride Transport Systems, Inc., a Delaware corporation 100%
Prolerized New England Company, a New York partnership 50%
Metals Recycling, LLC., a Rhode Island limited liability company 60%
(held by PNE)
X. Xxxxxxxxx, Inc., a Maine corporation 50%
Worcester Recycling, Inc., a Massachusetts corporation 50%
1
Scrap Financial Services, LLC, an Oregon limited liability company 100%
Cherry City Metals, LLC, an Oregon limited liability company 50%
SFS II, LLC, an Oregon limited liability company 100%
United Metals, LLC, an Idaho limited liability company 50%
SSP Reclamation Company, an Oregon corporation 100%
SSP Industrial Reclamation Company, a California joint venture 50%
2
SCHEDULE 5.19
INTELLECTUAL PROPERTY MATTERS
None.
1
SCHEDULE 7.01
EXISTING LIENS
(as of February 28, 2003)
ENTITY TYPE SECURITY AMOUNT
-------------------------------- ------------------------- ---------------------------- -----------
City of Tacoma, WA Loan General Assets $274,000.00
Caterpillar Financial Services Extended term financing Caterpillar 345B Excavator $398,118.74
1
SCHEDULE 7.03
EXISTING INDEBTEDNESS
ENTITY TYPE REF. AMOUNT BENEFICIARY
----------------- ------------------------- ---- ---------------- --------------------
Bank One Bank Loan 1 $75,000,000.00
Xxxxx Fargo Bank Bank Loan $20,000,000.00
Xxxxx Fargo Bank Standby Letter of Credit $5,000.00 Xxx Xxxxx and Assoc.
Xxxxx Fargo Bank Standby Letter of Credit $2,000,000.00 City of Los Angeles
Xxxxx Fargo Bank Standby Letter of Credit $1,874,240.00 Travelers Casualty
Xxxxx Fargo Bank Standby Letter of Credit 2 $7,806,861.24 BNY Western Trust
State of Oregon IDR Bond $7,700,000.00
1. Loans under Existing Credit Agreement (as defined herein) to be paid at
closing. 2. Supports State of Oregon IDR Bond of $7,700,000.00.
1
SCHEDULE 10.02
ADMINISTRATIVE AGENT'S OFFICE,
CERTAIN ADDRESSES FOR NOTICES
SCHNITZER STEEL INDUSTRIES, INC.:
Schnitzer Steel Industries, Inc.
0000 XX Xxxx Xxxxxx
P.O. Box 10047 Xxxxxxxx, Xxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxx@xxxx.xxx
Website Address: xxx.xxxxxxxxxxxxxx.xxx
ADMINISTRATIVE AGENT:
ADMINISTRATIVE AGENT'S OFFICE
(FOR PAYMENTS AND REQUESTS FOR CREDIT EXTENSIONS):
Bank of America, N.A.
Credit Services
Mail Code: CA4-706-05-09
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx XX 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx
WIRE INSTRUCTIONS:
Bank: Bank of America, Dallas TX
ABA # 000000000
Account Name: Corporate FTA
Account Number: 3750836479
Attention: Xxxxxxx Xxxxx
Reference: Schnitzer Steel Industries, Inc.
1
OTHER NOTICES AS ADMINISTRATIVE AGENT:
Bank of America, N.A.
Commercial Agency Management
Mail Code: WA1-501-37-20
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxx.x.xxxxx@xxxxxxxxxxxxx.xxx
BANK OF AMERICA, N.A.
(NOTICES AS AN L/C ISSUER):
Bank of America, N.A.
Trade Operations-Los Angeles #22621
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA9-703-19-23
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx.xxxx@xxxxxxxxxxxxx.xxx
SWING LINE LENDER:
Bank of America, N.A.
Credit Services
Mail Code: CA4-706-05-09
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx XX 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx
WIRE INSTRUCTIONS:
Bank: Bank of America, Dallas TX
ABA # 000000000
Account Name: Corporate FTA
Account Number: 3750836479
Attention: Xxxxxxx Xxxxx
Reference: Schnitzer Steel Industries, Inc.
2
BANK OF AMERICA, N.A.
(NOTICES AS A LENDER):
Bank of America, N.A.
Commercial Banking
Mail Code: WA1-501-35-01
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxx.xxxxxxxxx@xxxxxxxxxxx.xxx
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Xxxxx Fargo Bank, National Association
Portland Regional Commercial Banking Office
0000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxxx 00000
Attention: Xxxxx X Xxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx@xxxxxxxxxx.xxx
U.S. BANK NATIONAL ASSOCIATION
U.S. Bank National Association
Northwest Corporate Banking Division
000 XX Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxx.xxxx@xxxxxx.xxx
3
THE BANK OF TOKYO-MITSUBISHI, LTD.
The Bank of Tokyo-Mitsubishi, Ltd.
0000 Xxxxxxx Xxxxxx
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Vice President & Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxxxx@xxxxx.xxx
WASHINGTON MUTUAL BANK
Washington Mutual Bank
Mail Code: WMT 1445
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: Xxxxxxx.xxxxx@xxxx.xxx
4
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: __________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of May
[__], 2003 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the "Agreement;" the terms defined therein being
used herein as therein defined), among Schnitzer Steel Industries, Inc., an
Oregon corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, an L/C Issuer and
Swing Line Lender.
The undersigned hereby requests (select one):
[ ] A Borrowing of Committed Loans [ ] A conversion or continuation of Loans
1. On ____________________________ (a Business Day).
2. In the amount of $_____________________.
3. Comprised of __________________________________.
[Type of Committed Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of ______
months.
The Committed Borrowing requested herein complies with the proviso
to the first sentence of Section 2.01 of the Agreement.
SCHNITZER STEEL INDUSTRIES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
A-1
EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of May
[__], 2003 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the "Agreement;" the terms defined therein being
used herein as therein defined), among Schnitzer Steel Industries, Inc., an
Oregon corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, an L/C Issuer and
Swing Line Lender.
The undersigned hereby requests a Swing Line Loan:
1. On ______________________________ (a Business Day).
2. In the amount of $____________________________.
The Swing Line Borrowing requested herein complies with the
requirements of the provisos to the first sentence of Section 2.04(a) of the
Agreement.
SCHNITZER STEEL INDUSTRIES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
B-1
EXHIBIT C
FORM OF NOTE
May 30, 2003
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby
promises to pay to [_____________________] or registered assigns (the "Lender"),
in accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of each Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of May 30, 2003 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement;" the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, an L/C Issuer and
Swing Line Lender.
The Borrower promises to pay interest on the unpaid principal amount
of each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement.
Except as otherwise provided in Section 2.04(f) of the Agreement with respect to
Swing Line Loans, all payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is
entitled to the benefits thereof and may be prepaid in whole or in part subject
to the terms and conditions provided therein. This Note is also entitled to the
benefits of the Guaranty. Upon the occurrence and continuation of one or more of
the Events of Default specified in the Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
C-1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF WASHINGTON.
SCHNITZER STEEL INDUSTRIES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
C-2
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OR
INTEREST PAID OUTSTANDING PRINCIPAL
DATE TYPE OF LOAN MADE AMOUNT OF LOAN MADE END OF INTEREST PERIOD THIS DATE BALANCE THIS DATE NOTATION MADE BY
-------- ----------------- ------------------- ---------------------- ------------- --------------------- ----------------
C-3
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: _________, 20__
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of May
30, 2003 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Schnitzer Steel Industries, Inc., an Oregon
corporation (the "Borrower"), the Lenders from time to time party thereto, and
Bank of America, N.A., as Administrative Agent, an L/C Issuer and Swing Line
Lender.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _____________________________ of the Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and that:
[USE FOLLOWING PARAGRAPH 1 FOR FISCAL YEAR-END FINANCIAL STATEMENTS]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[USE FOLLOWING PARAGRAPH 1 FOR FISCAL QUARTER-END FINANCIAL STATEMENTS]
1. Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.
2. The undersigned has reviewed and is familiar with the terms of
the Agreement and has made, or has caused to be made under his/her supervision,
a detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
[SELECT ONE:]
D-1
[TO THE BEST KNOWLEDGE OF THE UNDERSIGNED DURING SUCH FISCAL PERIOD,
THE BORROWER PERFORMED AND OBSERVED EACH COVENANT AND CONDITION OF THE LOAN
DOCUMENTS APPLICABLE TO IT.]
--OR--
[THE FOLLOWING COVENANTS OR CONDITIONS HAVE NOT BEEN PERFORMED OR
OBSERVED AND THE FOLLOWING IS A LIST OF EACH SUCH DEFAULT AND ITS NATURE AND
STATUS:]
4. The representations and warranties of the Borrower contained in
Article V of the Agreement, or which are contained in any document furnished at
any time under or in connection with the Loan Documents, are true and correct on
and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 6.01 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements in
connection with which this Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ____________, 20__.
SCHNITZER STEEL INDUSTRIES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
D-2
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. SECTION 7.11 (A) - CONSOLIDATED LEVERAGE RATIO.
A. Consolidated Funded Indebtedness at Statement Date: $_______________
B. Consolidated Capitalization at Statement Date:
1. Consolidated Net Worth: $____________(+)
2. Consolidated Funded Indebtedness: $____________(+)
3. Consolidated Capitalization
(Line I.B1 plus Line I.B.2): $_______________
C. Consolidated Leverage Ratio (Line I.A / Line I.B): ____________to 1
MAXIMUM PERMITTED: 0.45 to 1.00
II. SECTION 7.11 (B) - CONSOLIDATED NET WORTH.
A. Consolidated Net Worth at Statement Date: $____________(+)
B. 50% of Consolidated Net Income for each
full fiscal quarter ending after February 28,
2003 (no reduction for losses): $____________(+)
C. 100% of increases in Shareholders' Equity
after date of Agreement from issuance and
sale of capital stock or other equity
interests (including from conversion of
debt securities): $_____________(+)
D. Lesser of (i) the after-tax loss, if any,
recognized by the Borrower in connection
with the sale of the capital stock of
Cascade and/or the assets that comprise the
Cascade Mini-Mill and (ii) $40,000,000: $____________(-)
E. Minimum required Consolidated Net Worth
(Lines II.B + II.C - II.D plus $236,000,000): $_______________
F. Excess (deficient) for covenant compliance
(Line II.A - II.E): $_______________
D-3
III. SECTION 7.11 (C) - CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
A. Consolidated EBITDA for four consecutive fiscal quarters
ending on above date ("Subject Period"):
1. Consolidated Net Income for Subject Period: $____________(+)
2. Consolidated Interest Charges for
Subject Period: $____________(+)
3. Provision for income taxes for Subject
Period: $____________(+)
4. Depreciation expenses for Subject Period: $____________(+)
5. Amortization expenses for intangibles
for Subject Period: $____________(+)
6. Net income of the Joint Ventures for
Subject Period: $____________(-)
7. Lesser of (i) 65% of the net income of the
Joint Ventures for Subject Period and (ii)
that portion of the net income of the Joint
Ventures that was or could have been
distributed in cash during Subject Period
and not result in a breach of, or a default
under a Contractual Obligation: $____________(+)
8. Consolidated EBITDA (Lines III.A.1 + 2 +
3 + 4 + 5 - 6 + 7): $_______________
B. Capital Expenditures made in respect of
the normal replacements and maintenance
(deemed to be $2,500,000 per quarter) for
Subject Period: $ 10,000,000
C. Fixed Charges for Subject Period:
1. Consolidated Interest Charges for
Subject Period: $____________(+)
2. Provision for income taxes for
Subject Period: $____________(+)
3. Principal payments required to be made
on Consolidated Funded Indebtedness for
Subject Period: $____________(+)
4. Dividends and other distributions and
payments paid in cash with respect to any
capital stock or other equity interest of
the Borrower for Subject Period: $____________(+)
5. Fixed Charges (Lines III.C.1 + 2 + 3 + 4): $_______________
D. Consolidated Fixed Charge Coverage Ratio
(Lines III.A8 - III.B / Line III.C): ____________to 1
MINIMUM REQUIRED: 1.50 to 1.00
D-4
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME OF ASSIGNEE]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells
and assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit, Guarantees and Swing Line
Loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the "Assigned Interest").
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee:
______________________________ [and is an Affiliate/Approved Fund of
[IDENTIFY LENDER]1]
3. Borrower(s): _____________________________
______________________
1 Select as applicable.
E-1
4. Administrative Agent: ______________________, as the administrative agent
under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of May [__], 2003, among
Schnitzer Steel Industries, Inc., an Oregon corporation, the Lenders
parties thereto, and Bank of America, N.A., as Administrative Agent
6. Assigned Interest:2
------------------- -------------------- --------------------- -----------------
Aggregate
Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders* Assigned* Commitment/Loans3
----------------- --------------- -------- -----------------
------------------- -------------------- --------------------- -----------------
_____________4 $________________ $________________ ______________%
------------------- -------------------- --------------------- -----------------
_____________4 $________________ $________________ ______________%
------------------- -------------------- --------------------- -----------------
_____________4 $________________ $________________ ______________%
------------------- -------------------- --------------------- -----------------
[7. Trade Date: __________________]5
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
--------
[NAME OF ASSIGNOR]
By: _____________________________
Title:
ASSIGNEE
--------
[NAME OF ASSIGNEE]
By: _____________________________
Title:
_______________________
* Amount to be adjusted by the counterparties to take into account
any payments or prepayments made between the Trade Date and the Effective Date.
2 The reference to "Loans" in the table should be used only if the
Credit Agreement provides for Term Loans.
3 Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
4 Fill in the appropriate terminology for the types of facilities
under the Credit Agreement that are being assigned under this Assignment (e.g.
"Revolving Credit Commitment", "Term Loan Commitment", etc.).
5 To be completed if the Assignor and the Assignee intend that the
minimum assignment amount is to be determined as of the Trade Date.
E-2
Title:
[Consented to and]6 Accepted:
BANK OF AMERICA, N.A., as
Administrative Agent
By: _________________________________
Title:
[Consented to:]7
By: _________________________________
Title:
_____________________
6 To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
7 To be added only if the consent of the Borrower and/or other
parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of the
Credit Agreement.
E-3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
Credit Agreement, dated as of May 30, 2003,
among Schnitzer Steel Industries, Inc., an Oregon
corporation, the Lenders parties thereto, and
Bank of America, N.A., as Administrative Agent
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and
to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under
the Credit Agreement (subject to receipt of such consents as may be required
under the Credit Agreement), (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and,
to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
6.01 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor 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 the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
E-4
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned interest (including
payments of principal, interest, fees and other amounts) to the Assignee whether
such amounts have accrued prior to or on or after the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Washington.
E-5
EXHIBIT F
FORM OF GUARANTY
F-1
EXHIBIT G
FORM OF LEGAL OPINION
G-1
