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EXHIBIT 10.32
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CREDIT AGREEMENT
dated as of March 13, 2000
among
GS TECHNOLOGIES OPERATING CO., INC.,
GEORGETOWN STEEL CORPORATION,
ME INTERNATIONAL, INC.,
and
ME-WEST CASTINGS, INC.,
AS BORROWERS,
-------------
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS,
-----------
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT
$130,000,000
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TABLE OF CONTENTS
SECTION TITLE PAGE
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ARTICLE I DEFINITIONS; CONSTRUCTION...............................................................1
1.01. Certain Definitions.........................................................................1
1.02. Construction...............................................................................21
1.03. Accounting Principles......................................................................22
ARTICLE II THE CREDITS............................................................................22
2.01. Loans......................................................................................22
2.02. Notes; Repayment of Loans..................................................................23
2.03. Notice of Borrowing; Making of Loans.......................................................23
2.04. Reduction of Commitments; Prepayment; Termination Fee......................................26
2.05. Interest...................................................................................28
2.06. Interest Payment Dates.....................................................................29
2.07. Amortization...............................................................................29
2.08. Payments; Periodic Statements; Fees........................................................29
2.09. Use of Proceeds............................................................................32
2.10. Eurodollar Rate Not Determinable; Illegality or Impropriety................................32
2.11. Reserve Requirements; Capital Adequacy Circumstances.......................................33
2.12. Indemnity..................................................................................34
2.13. Sharing of Setoffs.........................................................................35
2.14. Continuation and Conversion of Loans.......................................................35
2.15. Taxes......................................................................................36
2.16. Joint and Several Liability of the Borrowers...............................................38
ARTICLE III LETTERS OF CREDIT.....................................................................40
3.01. Letters of Credit..........................................................................40
3.02. Participations.............................................................................44
ARTICLE IV BORROWING BASE.........................................................................45
4.01. Condition of Lending and Assisting in Establishing or Opening Letters of Credit............45
4.02. Mandatory Prepayment.......................................................................45
4.03. Rights and Obligations Unconditional.......................................................45
4.04 Borrowing Base Certificate.................................................................45
4.05. General Provisions.........................................................................46
ARTICLE V CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT ISSUANCE AND LENDING......................46
5.01. Conditions Precedent to Effectiveness......................................................46
5.02. Conditions Precedent to Loans and Letters of Credit........................................50
ARTICLE VI REPRESENTATIONS AND WARRANTIES.........................................................51
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SECTION TITLE PAGE
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6.01. Organization, Good Standing, Etc...........................................................51
6.02. Authorization, Etc.........................................................................52
6.03. Governmental Approvals.....................................................................52
6.04. Enforceability of Loan Documents...........................................................52
6.05. Subsidiaries...............................................................................52
6.06. Litigation.................................................................................52
6.07. Financial Condition........................................................................53
6.08. Compliance with Law, Etc...................................................................53
6.09. ERISA......................................................................................53
6.10. Taxes, Etc.................................................................................54
6.11. Regulation T, U or X.......................................................................54
6.12. Nature of Business.........................................................................54
6.13. Adverse Agreements, Etc....................................................................54
6.14. Holding Company and Investment Company Acts................................................54
6.15. Permits, Etc...............................................................................55
6.16. Priority; Title............................................................................55
6.17. Full Disclosure............................................................................55
6.18. Environmental Matters......................................................................55
6.19. Insurance..................................................................................56
6.20. Financial Accounting Practices, Etc........................................................56
6.21. No Material Adverse Effect.................................................................56
6.22. Real Property; Leases......................................................................57
6.23. Location of Bank Accounts..................................................................58
6.24. No Event of Default........................................................................58
6.25. Tradenames.................................................................................58
6.26. Solvency...................................................................................58
6.27. Inventory..................................................................................58
6.28. Intellectual Property......................................................................58
6.29. Material Contracts.........................................................................58
6.30. Labor Relations; Collective Bargaining Agreements..........................................59
ARTICLE VII AFFIRMATIVE COVENANTS.................................................................59
7.01. Reporting Requirements.....................................................................59
7.02. Compliance with Laws, Etc..................................................................63
7.03. Preservation of Existence, Etc.............................................................64
7.04. Keeping of Records and Books of Account....................................................64
7.05. Inspection Rights..........................................................................64
7.06. Maintenance of Properties, Etc.............................................................64
7.07. Maintenance of Insurance...................................................................65
7.08. Environmental Matters......................................................................65
7.09. Further Assurances.........................................................................66
7.10. Borrowing Base.............................................................................66
7.11. Change in Collateral; Collateral Records...................................................66
7.12. Financial Accounting Practices, Etc........................................................66
7.13. Cash Management System.....................................................................67
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SECTION TITLE PAGE
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7.14. Landlord and Warehouse Waivers.............................................................68
7.15. Additional Subsidiaries....................................................................68
ARTICLE VIII NEGATIVE COVENANTS...................................................................68
8.01. Liens, Etc.................................................................................68
8.02. Indebtedness...............................................................................70
8.03. Guarantees, Etc............................................................................70
8.04. Merger, Consolidation, Sale of Assets, Etc.................................................71
8.05. Change in Nature of Business...............................................................71
8.06. Loans, Advances and Investments, Etc.......................................................72
8.07. Dividends, Prepayments, Etc................................................................72
8.08. Federal Reserve Regulations................................................................73
8.09. Transactions with Affiliates...............................................................73
8.10. ERISA......................................................................................74
8.11. Capital Expenditures.......................................................................74
8.12. Sales of Notes, Etc........................................................................74
8.13. Compromise of Receivables..................................................................74
8.14. Amendment of Indentures, Tax Sharing Agreement and Management
Services Agreement.........................................................................74
8.15. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries...............................................................................74
8.16. Limitation on Issuance of Additional Stock.................................................75
8.17. Availability...............................................................................75
ARTICLE IX MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL..........75
9.01. Management of Collateral...................................................................75
9.02. Accounts Receivable Documentation..........................................................77
9.03. Status of Accounts Receivable and Other Collateral.........................................77
9.04. Collateral Custodian.......................................................................78
ARTICLE X DEFAULTS................................................................................78
10.01. Events of Default.........................................................................78
10.02. Consequences of an Event of Default.......................................................81
10.03. Deposit for Letters of Credit.............................................................82
10.04. Certain Remedies..........................................................................82
ARTICLE XI MISCELLANEOUS..........................................................................83
11.01. Holidays..................................................................................83
11.02. Records...................................................................................83
11.03. Amendments and Waivers....................................................................83
11.04. No Implied Waiver; Cumulative Remedies....................................................84
11.05. Notices...................................................................................84
11.06. Expenses; Taxes; Attorneys' Fees; Indemnification.........................................85
11.07. Application...............................................................................86
11.08. Severability..............................................................................86
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SECTION TITLE PAGE
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11.09. Governing Law.............................................................................86
11.10. Prior Understandings......................................................................86
11.11. Duration; Survival........................................................................86
11.12. Counterparts..............................................................................87
11.13. Assignments; Participations...............................................................87
11.14. Successors and Assigns....................................................................89
11.15. Confidentiality...........................................................................89
11.16. Waiver of Jury Trial......................................................................90
11.17. Right of Setoff...........................................................................90
11.18. Headings..................................................................................90
11.19. Forum Selection and Consent to Jurisdiction...............................................90
11.20. The Administrative Borrower as Agent for Borrowers........................................91
ARTICLE XII THE AGENT.............................................................................91
12.01. Appointment...............................................................................91
12.02. Nature of Duties..........................................................................92
12.03. Rights, Exculpation, Etc..................................................................92
12.04. Reliance..................................................................................93
12.05. Indemnification...........................................................................93
12.06. Successor Agent...........................................................................94
12.07. Collateral Matters........................................................................94
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Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Guaranty
Exhibit C-1 - Form of Security Agreement [Current Assets]
Exhibit C-2 - Form of Security Agreement [Equipment]
Exhibit D - Form of Borrowing Base Certificate
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Letter of Credit Application
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Depository Account Agreement
Exhibit I - Form of Contribution Agreement
Exhibit J - Form of Exemption Certificate
Schedule 1.01(A) - Locations of Eligible Inventory
Schedule 1.01(B) - Commitments
Schedule 6.05 - Subsidiaries
Schedule 6.06 - Litigation
Schedule 6.09 - Employee Plans
Schedule 6.10 - Tax Assessments
Schedule 6.18 - Environmental Matters
Schedule 6.19 - Insurance
Schedule 6.22 - Real Property; Leases
Schedule 6.23 - Bank Accounts
Schedule 6.25 - Tradenames
Schedule 6.29 - Material Contracts
Schedule 6.30 - Collective Bargaining Agreements
Schedule 8.01 - Existing Liens
Schedule 8.02 - Indebtedness
Schedule 8.03 - Guaranties
Schedule 8.06 - Investments
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 13, 2000, among GS
TECHNOLOGIES OPERATING CO., INC., a Delaware corporation ("GSTOC"), GEORGETOWN
STEEL CORPORATION, a Delaware corporation ("GSC"), ME INTERNATIONAL, INC., a
Michigan corporation ("MEI"), and ME-WEST CASTINGS, INC., an Arizona
corporation ("ME-West" and together with GSTOC, GSC and MEI, each a "Borrower"
and collectively the "Borrowers"), the financial institutions from time to time
party hereto (collectively, the "Lenders" and individually, a "Lender"), and
THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"), as agent for the Lenders (in such
capacity, the "Agent").
BACKGROUND
The Borrowers have requested the Lenders to extend credit to
the Borrowers consisting of (a) a term loan facility in the principal amount of
$10,000,000 and (b) a revolving credit facility in an aggregate principal
amount not to exceed $120,000,000 at any time outstanding, including a $25
million subfacility for the issuance of letters of credit. Subject to the terms
and conditions set forth herein, the Lenders have agreed to provide such
facilities.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain Definitions. In addition to other terms defined
elsewhere in this Agreement, as used herein the following terms shall have the
following respective meanings:
"Account Debtor" shall mean any Person that is in any way
obligated to any Borrower on or in connection with any Account Receivable.
"Accountant's Opinion" shall have the meaning given that term
in Section 7.01(a).
"Accounts Receivable" shall mean any and all rights of a
Borrower to payment for goods sold or services rendered, including accounts,
contract rights, general intangibles and any and all such rights evidenced by
chattel paper, instruments or documents, whether due or to become due and
whether or not earned by performance, and whether now or hereafter acquired or
arising in the future and any proceeds arising therefrom or relating thereto.
"Adjusted Consolidated Debt Service Coverage Ratio" shall
mean for any period, the ratio of (i) the sum of (A) Consolidated EBITDA for
such period and(B) the amount of all capital contributions made by GS
Technologies to GSTOC during such period less the aggregate amount of any such
capital contributions the proceeds of which were used, directly or indirectly,
to pay dividends or make loans or other payments by GSTOC or any of its
Subsidiaries to GS
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Technologies or GSI with respect to such period, to (ii) the sum of (A)
Consolidated Interest Expense for such period and (B) the aggregate amount of
all principal of Indebtedness of any of GSTOC and its Subsidiaries payable
(whether by mandatory prepayment, at maturity, by acceleration or otherwise) or
paid during such period.
"Adjusted Consolidated Fixed Charge Coverage Ratio" shall
mean for any period, the ratio of (i) the sum of (A) Consolidated EBITDA for
such period and (B) the amount of all capital contributions made by GS
Technologies to GSTOC during such period less the aggregate amount of any such
capital contributions the proceeds of which were used, directly or indirectly,
to pay dividends or make loans or other payments by GSTOC or any of its
Subsidiaries to GS Technologies or GSI with respect to such period, to (ii) the
sum of (A) Consolidated Interest Expense for such period, (B) the aggregate
amount of all principal of Indebtedness of any of GSTOC and its Subsidiaries
payable (whether by mandatory prepayment, at maturity, by acceleration or
otherwise) or paid during such period, and (C) Capital Expenditures of GSTOC
and its Subsidiaries made or committed to be made during such period.
"Administrative Borrower" shall have the meaning given that
term in Section 11.20.
"Affiliate" of a Person shall mean any other Person (other
than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise; provided, however, that none of the Agent and the Lenders shall be
deemed to be an Affiliate of any Obligor.
"Agent" shall have the meaning specified therefor in the
preamble hereto.
"Agent Account" shall mean an account in the name of the
Agent designated to the Borrowers from time to time into which the Borrowers
shall make all payments to the Agent, for the account of the Agent or the
Lenders, as the case may be, under this Agreement.
"Agent Advances" shall have the meaning given that term in
Section 12.08.
"Agreement" shall mean this Credit Agreement.
"AIR" shall mean American Iron Reduction, LLC, a Delaware
limited liability company.
"Applicable Eurodollar Rate" shall mean, for any Interest
Period with respect to any Eurodollar Loan, the Eurodollar Rate plus 3.00%;
provided, however, that (i) in the event that as of the Test Date for the
Applicable Margin Period (A) the Adjusted Consolidated Debt Service Coverage
Ratio for the Test Period ended on such Test Date is at least 1.50 to 1, such
percentage shall be .25% less than the Applicable Eurodollar Rate that would
otherwise be in effect after giving effect to the provisions of this definition
other than this clause, and (B) the Adjusted Consolidated Debt Service Coverage
Ratio for the Test Period ended on such Test Date
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is at least 1.75 to 1, such percentage shall be .25% less than the Applicable
Eurodollar Rate that would otherwise be in effect after giving effect to the
provisions of this definition other than this clause, and (ii) in the event
that as of the first day of such Interest Period, the Permitted Term Loan
Facility is in full force and effect, such percentage shall be .25% less than
the Applicable Eurodollar Rate that would otherwise be in effect after giving
effect to the provisions of this definition other than this clause. Only one
(if any) rate reduction under clause (i)(A) or clause (i)(B) or clause (ii)
above shall be taken into account in determining any rate reduction under any
other such clause.
"Applicable Margin Period" shall mean each period commencing
on a date, on or after April 1, 2000, on which the financial statements are
delivered pursuant to Section 7.01(c) and ending on the earlier of (i) the date
of the actual delivery of the next financial statements pursuant to such
Section 7.01(c) and (ii) the latest date on which the next financial statements
are required to be delivered pursuant to such Section 7.01(c).
"Applicable Regular Rate" shall mean, for any day with
respect to any Prime Loan, the Prime Rate plus 0.75%; provided, however, that
(i) in the event that as of the Test Date for the Applicable Margin Period, (A)
the Adjusted Consolidated Debt Service Coverage Ratio for the Test Period ended
on such Test Date is at least 1.50 to 1, such percentage shall be .25% less
than the Applicable Regular Rate that would otherwise be in effect after giving
effect to the provisions of this definition other than this clause, and (B) the
Adjusted Consolidated Debt Service Coverage Ratio for the Test Period ended on
such Test Date is at least 1.75 to 1, such percentage shall be .25% less than
the Applicable Regular Rate that would otherwise be in effect after giving
effect to the provisions of this definition other than this clause, and (ii) in
the event that the Permitted Term Loan Facility is in full force and effect on
such day, such percentage shall be .25% less than the Applicable Regular Rate
that would otherwise be in effect after giving effect to the provisions of this
definition other than this clause. Only one (if any) rate reduction under
clause (i)(A) or clause (i)(B) or clause (ii) above shall be taken into account
in determining any rate reduction under any other such clause.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the Agent,
substantially in the form of Exhibit G hereto.
"Availability" shall mean, at any time, the difference
between (i) the lesser of (A) the Current Revolving Commitment and (B) the
Borrowing Base and (ii) the sum of (A) the aggregate outstanding principal
amount of all Loans and (B) the Letter of Credit Exposure.
"Availability Reserve" shall mean, on any date of
determination, (i) $25,000,000 or (ii) if the Adjusted Consolidated Fixed
Charge Coverage Ratio for the Test Period ended on the Test Date for such date,
is at least 1.5 to 1, $15,000,000.
"Bain Entities" shall mean ▇▇▇▇ Capital, Inc. and any funds
controlled or managed by ▇▇▇▇ Capital, Inc.
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"Bank" shall mean The Chase Manhattan Bank its successors or
any other bank designated by the Agent to the Borrowers from time to time that
is reasonably acceptable to the Borrowers.
"Benefit Plan" shall mean a defined benefit plan as defined
in Section 3(35) of ERISA that is subject to Title IV of ERISA (other than a
Multiemployer Plan) and in respect of which a Borrower or any ERISA Affiliate
is or within the immediately preceding six (6) years was an "employer" as
defined in Section 3(5) of ERISA.
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Book Value" shall mean, as to any Inventory with respect to
which such amount is to be determined, the lower of (i) cost (as reflected in
the general ledgers of the applicable Borrower) or (ii) market value (both cost
and market value being determined in accordance with GAAP calculated on the
first in first out basis).
"Borrower" and "Borrowers" shall have the respective meanings
given those terms in the preamble hereto.
"Borrowing Base" shall mean an amount equal to the difference
between (i) the sum of (A) 65% of the Book Value of Eligible Inventory other
than supplies and equipment spares, (B) 30% of the Book Value of Eligible
Inventory consisting of supplies and equipment spares, up to a maximum amount
of $7,000,000 and (C) 85% of the Net Amount of Eligible Accounts Receivable and
(ii) the Availability Reserve and such other reserves as the Agent, in its sole
discretion exercised reasonably, may deem appropriate; provided, however, that
(y) in the event that any Inventory appraisal conducted pursuant to Section
7.05 indicates that the net orderly liquidation value of aggregate Inventory,
as reasonably determined by the Agent, is less than the sum of (1) 75% of the
Book Value of the portion of such Inventory other than supplies and equipment
spares and (2) 40% of the Book Value of the portion of such Inventory
consisting of supplies and equipment spares, in each case determined pursuant
to clause (i) of the definition of the term Book Value, the Agent may reduce
the percentage in clause (i)(A) to such a percentage as the Agent may determine
to be appropriate and (z) in the event that any Eligible Accounts Receivable
are covered by credit insurance in amount and having terms acceptable to the
Agent in all respects (including the assignment of such insurance to the Agent
upon terms acceptable to the Agent), the Agent may, but shall have no
obligation to, increase the percentage in clause (i)(D) to such percentage as
the Agent may determine to be appropriate.
"Borrowing Base Certificate" shall have the meaning given
that term in Section 4.04(a).
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banking institutions are authorized or obligated
to close in New York, New York or North Carolina, provided, that with respect
to the borrowing, payment, conversion to or continuation of Eurodollar Loans,
Business Day shall also mean a day on which dealings in Dollars are carried
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on in the interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of the Bank's eurodollar loans are then
being conducted.
"Capital Expenditures" shall mean, for any period, the sum,
without duplication, of the aggregate amount of all expenditures during such
period which, in accordance with GAAP, is required to be included in property,
plant or equipment or similar fixed asset accounts and the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease" shall mean any lease which is required
under GAAP to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" shall mean the aggregate
amount which is required under GAAP to be reported as a liability on the
balance sheet of a Person as lessee under a Capitalized Lease.
"Cash Concentration Account" shall mean the deposit account
maintained by the Agent at the Cash Concentration Account Bank, which deposit
account shall be under the sole dominion and control of the Agent.
"Cash Concentration Account Agreement" shall mean an
agreement, in form and substance reasonably satisfactory to the Agent, among
the Cash Concentration Account Bank, the Borrowers and the Agent delivered to
the Agent pursuant to Section 7.13.
"Cash Concentration Account Bank" shall mean The Chase
Manhattan Bank or such other bank as the Borrowers may select with the written
approval of the Agent not to be unreasonably withheld.
"Change of Control" shall (i) prior to a Public Offering,
mean that the ▇▇▇▇ Entities shall cease to have the ability, direct or
indirect, to elect a majority of the members of the Board of Directors of GSI,
or that the ▇▇▇▇ Entities shall cease to own at least fifty-one percent (51%)
of the shares of capital stock of GSI owned by them on the date hereof, and
(ii) subsequent to a Public Offering, have the meaning given that term in the
Indentures, as in effect on the date hereof.
"CIT" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"Closing Date" shall mean the date on which the conditions
set forth in Section 5.01 shall be satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
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"Collateral" shall mean all of the property (tangible and
intangible) of any Person purported to be subject to the Lien purported to be
created by any Security Document heretofore or hereafter executed by such
Person as security for all or any part of the Obligations.
"Commitment" shall mean, with respect to any Lender, such
Lender's Revolving Credit Commitment or Term Loan Commitment.
"Consolidated EBITDA" shall mean, for any period, (i)
Consolidated Net Income for such period, plus (ii) the sum of each of the
following expenses to the extent they have been deducted in determining
Consolidated Net Income for such period: (A) Consolidated Interest Expense for
such period, (B) all income tax expense (whether federal, state, local, foreign
or otherwise) of GSTOC and its Consolidated Subsidiaries for such period, (C)
all depreciation expense of GSTOC and its Consolidated Subsidiaries for such
period, and (D) all amortization expense of GSTOC and its Consolidated
Subsidiaries for such period, in each case determined in accordance with GAAP
for such period; provided, however, that with respect to any such period a
portion of which precedes the date hereof, Consolidated EBITDA for such portion
shall be determined in accordance with GAAP on a combined basis for GSTOC and
its Consolidated Subsidiaries and the MEI Entities.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of GSTOC and its Consolidated
Subsidiaries for such period, calculated without regard to any limitations as
to payment thereof and determined in accordance with GAAP for such period,
plus, without duplication, that portion of Capitalized Lease Obligations of
GSTOC and its Consolidated Subsidiaries representing the interest factor for
such period, in each case net of the total consolidated cash interest income of
GSTOC and its Consolidated Subsidiaries for such period; provided, however,
that with respect to any such period a portion of which precedes the date
hereof, Consolidated Interest Expense for such portion shall be determined in
accordance with GAAP on a combined basis for GSTOC and its Consolidated
Subsidiaries and the MEI Entities.
"Consolidated Net Income" shall mean, for any period, the net
after tax income (or net loss) of GSTOC and its Consolidated Subsidiaries for
such period, determined in accordance with GAAP for such period; provided,
however, that with respect to any such period a portion of which precedes the
date hereof, net after tax income for such portion shall be determined in
accordance with GAAP on a combined basis for GSTOC and its Consolidated
Subsidiaries and the MEI Entities.
"Consolidated Subsidiary" of a Person at any time shall mean
those Subsidiaries or Affiliates of such Person whose accounts are or should in
accordance with GAAP be consolidated with those of such Person.
"Contribution Agreement" shall mean the Contribution
Agreement, substantially in the form of Exhibit I hereto, among the Borrowers.
"Credit Extension" shall mean (i) the making of any Loan by a
Lender or the Agent on behalf of the Lenders or (ii) the issuance, increase in
the Stated Amount, or extension
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of the expiration date, of any Letter of Credit which CIT or any Lender assists
any Borrower in opening or establishing.
"Current Revolving Commitment" shall have the meaning
assigned to that term in Section 2.01.
"Depository Account Agreement" shall mean an agreement,
substantially in the form of Exhibit H hereto, among a Depository Bank, a
Borrower and the Agent delivered to the Agent pursuant to Section 7.13.
"Depository Account" shall mean the lock-box or blocked
depository account maintained by a Borrower for the collection of the cash of
such Borrower and the proceeds from the sale of the Inventory or payment of
Accounts Receivable of such Borrower.
"Depository Bank" shall mean each financial institution at
which a Depository Account is maintained.
"Designated Borrowing Officer" shall mean such officer as
shall be designated from time to time in writing by the Administrative Borrower
to the Agent.
"Designated Financial Officer" of a Person shall mean the
individual designated from time to time by the Board of Directors or governing
body performing like functions of such Person to be the chief financial
officer, Treasurer or Assistant Treasurer of such Person (and individuals
designated from time to time by the Board of Directors or governing body
performing like functions of such Person to act in lieu of the chief financial
officer or the Treasurer of such Person).
"Disbursement Account" shall mean the deposit account in the
name of the Administrative Borrower maintained at a bank in the United States
designated by the Administrative Borrower to the Agent into which there shall
be deposited proceeds of Loans and funds disbursed to the Administrative
Borrower by the Agent.
"Dollar," "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Eligible Accounts Receivable" shall mean, with respect to
any Borrower, the Accounts Receivable of such Borrower which are, and at all
times continue to be, reasonably acceptable to the Agent in all respects.
Criteria for eligibility may be established and revised from time to time
solely by the Agent in its exclusive judgment exercised reasonably. In general,
Accounts Receivable of a Borrower will not be deemed to be eligible unless: (i)
(A) delivery of the merchandise or the rendition of the services has been
completed or (B) the merchandise has been shipped, but not yet delivered to the
Account Debtor, provided that no Borrower has any knowledge that any such
shipped merchandise has been damaged, lost or stolen or is subject to any claim
or dispute by the Account Debtor; (ii) no return, rejection, repossession or
dispute has occurred with respect to such Account Receivable; (iii) the Account
Debtor has not asserted any setoff, defense or counterclaim with respect to
such Account Receivable but only to the extent of such setoff, dispute, defense
or counterclaim; (iv) such Account Receivable is lawfully owned by
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such Borrower free and clear of any Lien (other than the Lien in favor of the
Agent that secures the Obligations) and is in full conformity with all
representations and warranties made by such Borrower with respect thereto in
the Loan Documents; (v) such Account Receivable is not evidenced by a
promissory note, chattel paper or any other instrument or document; (vi) such
Account Receivable is unconditionally payable in Dollars within 90 days from
the invoice date, and no more than 60 days have elapsed from the invoice due
date and no more than 90 days have elapsed from the invoice date, provided that
Accounts Receivable in an aggregate amount of not more than $20 million at any
one time may have payment terms extended by the Borrowers in the ordinary
course of business of up to 120 days from the invoice date; (vii) the Account
Debtor with respect thereto is not an Affiliate of any Obligor unless the
Accounts Receivable is supported by a letter of credit satisfactory to the
Agent; (viii) such Account Receivable does not constitute an obligation of the
United States or any other Governmental Authority (unless all steps required by
the Agent in connection therewith, including notice to the United States
Government under the Federal Assignment of Claims Act have been duly taken);
(ix) the Account Debtor (or the applicable office of the Account Debtor) with
respect thereto is located in the continental United States, Canada or Puerto
Rico unless the Account Receivable is supported by a letter of credit or other
similar obligation satisfactory to the Agent; (x) the Account Debtor with
respect thereto is not also a supplier to or creditor of any Obligor, provided
that the Account Receivable may be due from such a supplier or creditor (A) to
the extent that it is not subject to any dispute or claim or (B) if such
supplier or creditor has executed a no-offset letter satisfactory to the Agent;
(xi) not more than 50% of the aggregate amount of all Accounts Receivable of
the Account Debtor with respect to such Account Receivable have remained unpaid
60 days past the invoice due date; and (xii) unless otherwise agreed by the
Agent in reliance upon a court order acceptable to the Agent, the Account
Debtor with respect to such Account Receivable (A) has not filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors, made
an assignment for the benefit of creditors, had filed against it any petition
or other application for relief under the Bankruptcy Code or any such other
law, (B) has not failed, suspended business operations, become insolvent,
called a meeting of its creditors for the purpose of obtaining any financial
concession or accommodation, or (C) has not had or suffered to be appointed a
receiver or a trustee for all or a significant portion of its assets or
affairs.
"Eligible Inventory" shall mean Inventory of a Borrower which
at the time of determination meets all the following qualifications:
(i) it is lawfully owned by such Borrower free
and clear any Lien (other than the Lien in favor of the Agent that
secures the payment of the Obligations) and is in full conformity with
all representations and warranties made by such Borrower with respect
thereto in the Loan Documents;
(ii) it may be lawfully sold;
(iii) it is not held on consignment;
(iv) it is (A) located at one of the locations
of business of a Borrower listed in Schedule 1.01 (A) hereto; (B)
located in other locations in the
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continental United States as the Agent shall have approved in writing
from time to time, which approval shall be given upon a Borrower
providing the Agent with evidence, reasonably satisfactory to the
Agent, of (1) the Agent's perfected, first priority Lien on all
Inventory of such Borrower located in such locations, (2) the absence
of any other Liens on any Inventory of such Borrower located in such
locations, which evidence may include the results of Uniform
Commercial Code, tax and judgment lien searches in such locations and
acknowledgment copies of Uniform Commercial Code financing statements
naming such Borrower, as debtor, and the Agent, as secured party,
filed in such locations and (3) in the case of Inventory located at a
location which is listed in such Schedule and which is not owned by a
Borrower (as indicated in such Schedule), the aggregate annual rent,
fees and other amounts payable by the Borrowers with respect to such
location shall not exceed $500,000; or (C) it is in transit for a
period of not more than seven days between facilities owned by the
Borrowers, during which time it is subject to a valid, perfected,
first priority security interest in favor of the Agent;
(v) it does not consist of packaging materials;
(vi) it does not consist of work in process other
than billets, blooms or bars; and
(vii) it is Inventory that has been valued after
deducting rejected, damaged, aged or otherwise unsalable Inventory,
and other reserves required by the Agent in the exercise of its
reasonable business judgment.
"Environmental Actions" shall mean any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation,
proceeding, judgment, letter or other written communication from any
Governmental Authority or any third party involving a Release (i) from or onto
any of the properties presently or formerly owned or leased by a Borrower or
its Subsidiaries or (ii) from or onto any facilities which received Hazardous
Materials from a Borrower or its Subsidiaries, or involving any violation of
any applicable Environmental Law.
"Environmental Law" shall mean all federal, state and local
laws, statutes, ordinances and regulations, now or hereafter in effect relating
to the regulation and protection of human health, safety, the environment and
natural resources. Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. ss. 180 et seq.); the Resource
Conservation and Recovery Act, as amended (42 U.S.C. ss. 6901 et seq.)
("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C. ss. 2601 et
seq.); the Clean Air Act, as amended (42 U.S.C. ss. 7401 et seq.); the Federal
Water Pollution Control Act, as amended (33 U.S.C. ss. 1251 et seq.); the
Occupational Safety and Health Act, as amended (29 U.S.C. s.651, et seq.)
("OSHA") and their state and local counterparts or equivalents.
"Environmental Liabilities and Costs" shall mean all
liabilities, monetary obligations, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all reasonable fees, disbursements and expenses of
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16
counsel, expert and consulting and reasonable costs of investigation and
feasibility studies), fines and penalties, incurred as a result of any
Environmental Action arising out of any environmental condition, violation of
Environmental Law, Remedial Actions or a Release of Hazardous Materials from or
onto (i) any property presently or formerly owned by a Borrower or any of its
Subsidiaries or (ii) any facility which received Hazardous Materials generated
by a Borrower or any of its Subsidiaries.
"Environmental Lien" shall mean any Lien securing
Environmental Liabilities and Costs incurred by a Governmental Authority.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed also to refer to any successor
sections.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as a Borrower, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with a Borrower, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
a Borrower, any corporation described in clause (i) above or any partnership or
trade or business described in clause (ii) above.
"Eurodollar Base Rate" shall mean, with respect to a
Eurodollar Loan for the relevant Interest Period, the rate determined by the
Agent to be the rate at which deposits in Dollars are offered by the Bank to
first-class banks in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its eurodollar loans are
then being conducted at approximately 11:00 a.m., New York City time, two
Business Days prior to the first day of such Interest Period, in the
approximate amount of the relevant Eurodollar Loan and having a maturity equal
to such Interest Period.
"Eurodollar Loan" shall mean a Loan bearing interest at the
Eurodollar Rate.
"Eurodollar Rate" means with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined
for such day in accordance with the following formula (rounded upward to the
nearest 1/100 of 1%):
Eurodollar Base Rate
---------------------------
1.00 - Reserve Requirements
"Event of Default" shall mean any of the Events of Default
described in Section 9.01.
"Fee Letter" shall mean the letter agreement, dated as of the
date hereof, between the Borrowers and the Agent obligating the Borrowers
jointly and severally to pay certain fees to the Agent in connection with this
Agreement.
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"GAAP" shall mean generally accepted accounting principles as
such principles shall be in effect in the United States at the relevant date.
"GECC Loan Agreement" shall mean the Loan Agreement, dated as
of October 5, 1995, among GSTOC and certain of its Subsidiaries, the lenders
named therein, Mellon Bank, N.A., as Documentation Agent, and General Electric
Capital Corporation, as Agent.
"Governmental Authority" shall mean any nation or government,
any federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of government.
"GSC" shall have the meaning specified therefor in the
preamble hereto.
"GSI" shall mean GS Industries, Inc., a Delaware corporation.
"GSTOC" shall have the meaning specified therefor in the
preamble hereto.
"GS Technologies" shall mean GS Technologies Corporation, a
Delaware corporation.
"Guarantee" of or by any Person shall mean any obligation of
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor"), directly or indirectly through an agreement (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness against
loss, or (iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness; provided, however, that the term
Guarantee shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"Guaranty" shall mean the guaranty, substantially in the form
of Exhibit B hereto, made by GS Technologies in favor of the Agent and the
Lenders guaranteeing the Obligations.
"Hazardous Materials" shall mean (i) any element, compound or
chemical that is defined, listed or otherwise classified as a solid waste,
contaminant, pollutant, toxic pollutant, hazardous substance, extremely
hazardous substance, toxic substance, hazardous waste, or special waste under
any Environmental Law; (ii) petroleum and its refined fractions, (iii) any
polychlorinated biphenyls, (iv) any flammable, explosive or radioactive
materials; and (v) any other raw materials used or stored by a Borrower,
building components (including but not limited to asbestos-containing
materials) and manufactured products containing Hazardous Materials.
"Indebtedness" shall mean as to any Person (i) indebtedness
for borrowed money; (ii) indebtedness for the deferred purchase price of
property or services (other than current trade payables incurred in the
ordinary course of business and payable in accordance with customary
practices); (iii) indebtedness evidenced by bonds, debentures, notes or other
similar instruments
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(other than performance, surety and appeal or other similar bonds arising in
the ordinary course of business); (iv) obligations and liabilities secured by a
Lien upon property owned by such Person, whether or not owing by such Person
and even though such Person has not assumed or become liable for the payment
thereof; (v) obligations and liabilities directly or indirectly Guaranteed by
such Person; (vi) obligations or liabilities created or arising under any
conditional sales contract or other title retention agreement with respect to
property used and/or acquired by such Person, even though the rights and
remedies of the lessor, seller and/or lender thereunder are limited to
repossession of such property; (vii) Capitalized Lease Obligations; (viii) all
liabilities in respect of letters of credit, acceptances and similar
obligations created for the account of such Person, and (ix) net liabilities of
such Person under interest rate cap agreements, interest rate swap agreements,
foreign currency exchange agreements and other hedging agreements or
arrangements calculated on a basis reasonably satisfactory to the Agent and in
accordance with accepted practice.
"Indemnified Parties" shall have the meaning given that term
in Section 11.06.
"Indentures" shall mean the 1994 Indenture and the 1995
Indenture.
"Insteel" shall mean Insteel Industries, Inc., a North
Carolina corporation.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, the period commencing on the borrowing date for, or the date of any
continuation of or conversion for such Eurodollar Loan, as the case may be, and
ending one, two, three or six months thereafter as the Administrative Borrower
may elect in the applicable notice given to the Agent pursuant to Section 2.03
or Section 2.14, as appropriate; 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 applicable calendar month; (iii) no
Interest Period for any Eurodollar Loan shall end after the Termination Date.
Interest shall accrue from and include the first date of an Interest Period,
but exclude the last day of such Interest Period.
"Inventory" shall mean all goods and merchandise of a
Borrower including, but not limited to, all raw materials, work in process,
finished goods, materials and supplies of every nature used or usable in
connection with the shipping, storing, advertising or sale of such goods and
merchandise, whether now owned or hereafter acquired and all such property, the
sale or disposition of which would give rise to Accounts Receivable or cash.
"L&P" shall mean ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated, a Missouri
corporation.
"L/C Notice" shall have the meaning given to that term in
Section 3.01(b).
"Lease" shall mean any lease of real property to which a
Borrower is a party as lessee or lessor.
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"Lenders" shall have the meaning given that term in the
preamble hereto.
"Letter of Credit" shall have the meaning given to that term
in Section 3.01(a).
"Letter of Credit Application" shall have the meaning given
to that term in Section 3.01(a).
"Letter of Credit Cash Collateral Account" shall mean the
deposit account maintained at the Bank or such other bank as the Agent may
select, which deposit account shall be under the sole dominion and control of
the Agent.
"Letter of Credit Exposure" shall mean, at any time, the sum
at such time of (i) the aggregate amount of all Unreimbursed Draws under
Letters of Credit (whether or not such Letters of Credit are then outstanding)
and (ii) the aggregate Undrawn Letter of Credit Availability under all
outstanding Letters of Credit.
"Letter of Credit Fee" shall have the meaning given to that
term in Section 2.08(f).
"Letter of Credit Guaranty" shall mean the guaranty delivered
by CIT to the Letter of Credit Issuer, guaranteeing the Borrowers'
reimbursement obligations under a reimbursement agreement, Letter of Credit
Application or other like document.
"Letter of Credit Issuer" shall mean The Chase Manhattan Bank
or such Lender or other Person as the Agent may appoint with notice to the
Administrative Borrower as substitute Letter of Credit Issuer if such
substitute issuer and CIT agree upon the terms and documentation with respect
to such substitution.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security.
"Loan" or "Loans" shall mean any Term Loan or Revolving
Credit Loan.
"Loan Account" shall have the meaning given that term in
Section 2.08(a).
"Loan Documents" shall mean this Agreement, the Notes, each
Letter of Credit Application, the Letter of Credit Guaranty, the Fee Letter,
the Depository Account Agreements, the Cash Concentration Account Agreement,
the Security Documents, the Guaranty, each notice letter delivered to a
Depository Bank or other financial institution pursuant to Section 7.13 and all
other instruments, agreements and other documents from time to time delivered
in connection with or otherwise relating to any Loan Document.
"Majority Lenders" shall mean, at any time, one or more
Lenders whose Pro Rata Shares aggregate at least sixty-six and two-thirds
percent (66-2/3%); provided, that if at such time there are two or more
Lenders, Majority Lenders shall include at least two Lenders.
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"Management Services Agreement" shall mean the Amended and
Restated Management Services Agreement, dated as of August 14, 1996 among GSI,
the Obligors and certain Affiliates of such Persons.
"Material Adverse Effect" shall mean a material adverse
effect upon (i) the business, operations, condition (financial or otherwise),
or properties of the Borrowers, taken as a whole, (ii) the collective ability
of the Borrowers to perform their obligations under the Loan Documents, (iii)
the Lien arising under any Loan Document on any Collateral, (iv) the legality,
validity or enforceability of this Agreement or any other Loan Document or the
Lien arising under any Loan Document, or (v) the value of the property included
in the calculation of the Borrowing Base.
"Material Contracts" shall mean the Indentures, the GECC Loan
Agreement, the MEI Loan Agreement, the Management Services Agreement, the Tax
Sharing Agreement, the Offtake Agreement, the collective bargaining agreements
listed in Schedule 6.29 hereto and any other agreement (other than an agreement
which relates to the purchase or sale of equipment or inventory in the ordinary
course of business of each Borrower party thereto) that would be a "material
contract" (as defined in Item 601(b)(10) of Regulation S-K under the federal
securities laws.
"ME-West" shall have the meaning specified therefor in the
preamble hereto.
"MEI" shall have the meaning specified therefor in the
preamble hereto.
"MEI Entities" shall mean MEI and ME-West, collectively.
"MEI Loan Agreement" shall mean the Second Amended and
Restated Revolving Credit and Term Loan Agreement, dated May 31, 1994, by and
between MEI and First Bank National Association.
"Minority Lenders" shall have the meaning given to that term
in Section 11.03(b).
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA which
is, or within the immediately preceding six (6) years was, contributed to by a
Borrower or any ERISA Affiliate.
"Net Amount of Eligible Accounts Receivable" shall mean the
aggregate unpaid invoice amount of Eligible Accounts Receivable less, without
duplication, sales, excise or similar taxes, returns, discounts (including
accrued discounts with respect to the sale price of goods sold by the Borrowers
to L&P or a Subsidiary of L&P), chargebacks, claims, advance payments, credits
(including unissued credits with respect to unprocessed claims) and allowances
of any nature at any time issued, owing, granted, outstanding, available or
claimed.
"Net Proceeds" shall mean:
(i) with respect to any sale of assets, the amount of cash
and other payments received (directly or indirectly) by a Borrower and/or its
Subsidiaries net of the sum of (A) the
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principal amount of any Indebtedness secured by any Permitted Lien on such
assets (other than Indebtedness assumed by the purchaser of such assets) which
is required to be, and is, repaid in connection with the sale or other
disposition thereof (other than Indebtedness under this Agreement), (B)
reasonable costs and expenses incurred by such Borrower and/or its Subsidiaries
in connection with such sale, (C) taxes paid or payable by GSI's consolidated
group as a result of such sale, and (D) any amount provided by such Borrower or
any of its Subsidiaries as a reserve, in accordance with GAAP, against any
post-closing purchase price adjustments with respect to such sale; and
(ii) in the case of any loss of or damage to, or any taking
of any Collateral of any Borrower for which any of the Obligors and their
Subsidiaries receives insurance proceeds or other compensation, the aggregate
amount of such proceeds of insurance and other compensation received by the
Obligors and their Subsidiaries in respect of such event.
"1994 Indenture" shall mean the Indenture, dated as of August
30, 1994, between GSTOC as issuer, the GS Technologies as guarantor and State
Street Bank and Trust Company, as successor trustee.
"1995 Indenture" shall mean the Indenture, dated as of
October 5, 1995, between GSTOC as issuer, GS Technologies as guarantor and
State Street Bank and Trust Company, as successor trustee.
"Notes" shall mean the Revolving Credit Notes and the Term
Notes.
"Notice of Borrowing" shall have the meaning given to that
term in Section 2.03(a).
"Obligations" shall mean all indebtedness, obligations and
liabilities of each Borrower to any Lender or the Agent incurred under or
related to this Agreement, the Notes, or any other Loan Document, whether such
indebtedness, obligations or liabilities are direct or indirect, secured or
unsecured, joint or several, absolute or contingent, due or to become due,
whether for payment or performance, now existing or hereafter arising,
including, without limitation, those which are described in either of the
following clauses (i) or (ii):
(i) All indebtedness, obligations (including
Reimbursement Obligations) and liabilities of any nature whatsoever,
including amounts due under Section 11.06 and similar agreements
contained in the other Loan Documents, from time to time arising under
or in connection with or evidenced or secured by this Agreement, the
Notes, the Letters of Credit or any other Loan Document, including but
not limited to the principal amount of Loans outstanding, together
with interest thereon (including, without limitation, all interest
that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of a
Borrower), the amount of the Letter of Credit Exposure, together with
interest thereon and all expenses, fees and indemnities hereunder or
under any other Loan Document. Without limitation, such amounts
include all Loans and interest thereon and the amount of all Letter of
Credit Exposure whether or not such Loans were made or any Letters of
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Credit to which such Letter of Credit Exposure relates were issued in
compliance with the terms and conditions hereof or in excess of any
Lender's obligation to lend and arrange for the issuance of Letters of
Credit hereunder or any Lender's obligation to participate therein. If
and to the extent any amounts in any account (including, without
limitation, the Agent Account, the Letter of Credit Cash Collateral
Account, the Depository Accounts, and the Cash Concentration Accounts)
constituting Collateral are applied to Obligations hereunder, and any
Lender or the Agent is subsequently obligated to return or repay any
such amounts to any Person for any reason, the amount so returned or
repaid shall be deemed a Loan hereunder and shall constitute an
Obligation; and
(ii) All indebtedness, obligations and liabilities
from time to time arising under or in connection with any account from
time to time maintained by a Borrower or by any Lender or the Agent
pursuant to the terms of this Agreement or any Loan Document,
including, without limitation, all reimbursement obligations, service
charges and interest in connection with any overdrafts or returned
items from time to time arising in connection with any such account,
or arising under or in connection with any cash management services or
other services from time to time performed by any Lender or the Agent
pursuant to or in connection with this Agreement or any other Loan
Document.
"Obligor" means any of the Borrowers and GS Technologies.
"Office" when used in connection with the Agent shall mean
its office located at 1211 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
at such other office or offices of the Agent as may be designated in writing
from time to time by the Agent to the Administrative Borrower and when used in
connection with the Bank or the Letter of Credit Issuer shall mean the office
of such entity designated in writing from time to time by the Agent to the
Administrative Borrower.
"Offtake Agreement" shall mean the DRI Purchase Agreement
dated as of August 30, 1996, between GSTOC and AIR, as amended and restated as
of May 30, 1997.
"Other Taxes" shall have the meaning given to that term in
Section 2.15.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Investments" shall mean (i) direct obligations of
the United States of America or of any agency thereof or obligations guaranteed
as to principal and interest by the United States of America or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof by such Person; (ii) deposit accounts with or certificates
of deposit and bankers' acceptances issued by any bank or trust company
organized under the laws of the United States of America or any state thereof
and having capital, surplus and undivided profits of at least $500,000,000,
maturing not more than 90 days from the date of acquisition thereof by such
Person; (iii) commercial paper rated A-1 or better or P-1 or better by Standard
& Poor's Corporation ("S&P") or ▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's"),
respectively,
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maturing not more than 90 days from the date of acquisition thereof by such
Person; (iv) Investments in money market funds rated AAAm or AAAm-G by S&P and
Aaa by Moody's and; and (v) repurchase agreements having maturities of not more
than 90 days from the date of acquisition which are entered into with a bank or
trust company described in clause (ii) above and which are secured by readily
available direct obligations of the United States of America or any agency
thereof.
"Permitted Liens" shall have the meaning given that term in
Section 8.01.
"Permitted Term Loan Facility" shall mean a credit facility
between GSTOC and one or more financial institutions (i) providing for term
loans to GSTOC in an aggregate principal amount not to exceed $50 million at
any time secured only by equipment and other personal property and real
property of GSTOC not constituting Collateral or current assets, (ii) having
amortization with a weighted average life to maturity at least equal to the
weighted average life to maturity of the amortization set forth in the draft
Term Loan Agreement delivered to the Agent prior to the Closing Date and
otherwise having interest, covenant, default and other provisions customary for
transactions of such type, and (iii) subject to an Intercreditor Agreement, in
form and substance reasonably satisfactory to the Agent and the Majority
Lenders, among the Agent and the Lenders, such financial institutions and any
agent acting on their behalf and the Borrowers.
"Person" shall mean an individual, corporation, partnership,
limited liability company, limited liability partnership, trust, unincorporated
association, joint venture, joint-stock company, government (including
political subdivisions), Governmental Authority or agency, or any other entity.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA in respect of which a Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Potential Default" shall mean any event or condition which,
with notice or passage of time, or any combination of the foregoing, would
constitute an Event of Default.
"Prime Loan" shall mean a Loan bearing interest at the
Applicable Regular Rate.
"Prime Rate" shall mean the interest rate per annum publicly
announced from time to time by The Chase Manhattan Bank in New York, New York
as its prime rate, such interest rate to change automatically from time to time
effective as of the announced effective date of each change in the prime rate.
Such rate is not intended to be the lowest rate of interest charged by The
Chase Manhattan Bank to its borrowers.
"Pro Rata Share" shall mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be the sum
of such Lender's outstanding Term Loans (or Term Loan Commitment, if prior to
the Closing Date) and such Lender's Revolving Credit Commitment (or the sum of
such Lender's outstanding Revolving Loans and such Lender's interest in the
Letter of Credit Exposure, if such Lender's Revolving Commitment has been
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terminated) and the denominator of which shall be the sum of all outstanding
Term Loans (or the aggregate Term Loan Commitments, if prior to the Closing
Date) and the aggregate Revolving Credit Commitments (or the aggregate amount
of all unpaid Revolving Credit Loans and the Letter of Credit Exposure, if the
Revolving Credit Commitments have been terminated).
"Public Offering" shall mean a firm underwritten offering or
offerings of voting stock of the Parent under one of more effective
registration statements under the Securities Act such that, after giving effect
thereto, (i) at least 15% of the total number of shares of voting common stock
of the Parent outstanding on a fully diluted basis has been publicly
distributed and sold pursuant to such offerings, and (ii) such offerings result
in aggregate cash proceeds of at least $40,000,000, exclusive of underwriter's
discounts and other expenses.
"Register" shall have the meaning given that term in Section
10.13(c).
"Regular Rate" shall mean, for any day, the Prime Rate for
each day.
"Reimbursement Obligation" shall mean the aggregate joint and
several obligations of the Borrowers to reimburse CIT or the Lenders for
amounts payable by CIT or the Lenders under a Letter of Credit Guaranty in
respect of any payment made under any Letter of Credit issued by the Letter of
Credit Issuer, together with interest thereon and all fees and expenses related
thereto.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, injection, discharging, injecting, escaping, leaching,
dumping or disposing (including abandonment or discarding of barrels,
containers and other closed receptacles containing any hazardous substance,
pollutant or contaminant) of a Hazardous Material into the indoor or outdoor
environment or onto or from any property presently or formerly owned or
operated by a Borrower or any of its Subsidiaries, or at any disposal facility
that received Hazardous Materials generated by such Borrower or any of its
Subsidiaries.
"Remedial Action" shall mean all reasonable actions required
by applicable Environmental Law taken to (i) monitor, assess, evaluate,
investigate, clean up, remove, remediate, treat, contain or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so that the
Release or threatened Release does not migrate or endanger or threaten to
endanger public health or welfare or the environment; or (iii) perform
pre-remedial studies and investigations and post-remedial operation and
maintenance activities, or any other actions authorized by 42 U.S.C. 9601.
"Reportable Event" shall mean any of the events described in
Section 4043(b) of ERISA (other than events for which the notice requirements
have been waived).
"Reserve Requirements" shall mean, for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
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having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Lender or the Affiliate of any Lender under
Regulation D.
"Revolving Credit Commitment" shall mean, with respect to
each Lender, the amount set forth in Schedule 1.01(B) hereto or assigned to
such Lender in accordance with Section 10.13, as such amount may be reduced
from time to time pursuant to the terms of this Agreement, and "Revolving
Credit Commitments" shall, collectively, mean the aggregate amount of the
Revolving Credit Commitments of all the Lenders, the maximum amount of which
shall not exceed $120,000,000.
"Revolving Credit Loan" shall mean a loan by a Lender to the
Borrowers pursuant to Section 2.01(a)(i) or by the Agent on behalf of the
Lender to the Borrowers or made as a result of charges made to the Loan
Account, in each case pursuant to the terms of this Agreement.
"Revolving Credit Note" shall mean a joint and several
promissory note of the Borrowers, substantially in the form of Exhibit A-1
hereto, made payable to the order of a Lender and evidencing the Indebtedness
resulting from the making by such Lender of Revolving Credit Loans and
delivered to the Agent, as such promissory note may be modified or extended
from time to time, and any promissory note or notes issued in exchange or
replacement therefor.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Security Agreements" shall mean (i) the Security Agreement,
substantially in the form of Exhibit C-1 hereto, made by the Borrowers in favor
of the Agent, for the benefit of the Lenders and (ii) the Security Agreement,
substantially in the form of Exhibit C-2 hereto, made by the Borrowers in favor
of the Agent, for the benefit of the Lenders.
"Security Documents" shall mean, collectively, the Security
Agreements and all Uniform Commercial Code financing statements required by
this Agreement and the Security Agreement to be filed with respect to the
security interests in personal property created pursuant to such agreements,
and all other instruments, agreements or other documents executed and delivered
by any Borrower and/or its Subsidiaries in connection with any of such
agreements.
"Senior Notes" shall mean the 12 1/4% Senior Notes and the
12% Senior Notes.
"Settlement Period" shall have the meaning set forth in
Section 2.03.
"Solvent" means, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person is
not less than the total amount of its liabilities, (ii) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its existing
debts as they become
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absolute and matured, (iii) such Person is able to realize upon its assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature and (v) such Person is not engaged in business or a transaction, and, is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Stated Amount" shall mean, with respect to a Letter of
Credit, the face amount thereof, drawn or undrawn, regardless of the existence
or satisfaction of any conditions or limitations on drawing.
"Subsidiary" shall mean, with respect to any Person, any
corporation, limited or general partnership, limited liability company, limited
liability partnership, trust, association or other business entity of which an
aggregate of more than 50% or more of the outstanding stock or other interests
entitled to vote in the election of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency), managers, trustees or other controlling persons,
or an equivalent controlling interest therein, of such Person is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement,
dated as of October 5, 1995, among GSI, GS Technologies and certain Borrowers.
"Taxes" shall have the meaning given to that term in Section
2.15.
"Term Loan" shall mean a loan by a Lender to the Borrowers
pursuant to Section 2.01(a)(ii).
"Term Loan Commitment" shall mean, with respect to each
Lender, the term commitment of such Lender as set forth in Schedule 1.01B
hereto or assigned to such Lender in accordance with Section 10.13, as such
amount may be reduced from time to time pursuant to the terms of this
Agreement, and "Term Loan Commitments" shall, collectively, mean the aggregate
amount of the Term Loan Commitments of all of the Lenders, the maximum amount
of which shall not exceed $10,000,000.
"Term Note" shall mean a joint and several promissory note of
the Borrowers, substantially in the form of Exhibit A-2 hereto, made payable to
the order of a Lender and evidencing the Indebtedness resulting from the making
by such Lender of such Lender's Term Loan and delivered to the Agent, as such
promissory note may be modified or extended from time to time, and any
promissory note or notes issued in exchange or replacement therefor.
"Termination Date" shall mean March 10, 2005 or such earlier
or later date on which the Revolving Credit Commitments are terminated
hereunder in accordance with Section 2.01 or 10.02.
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"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan; (ii) the withdrawal of a Borrower or any ERISA Affiliate from
a Benefit Plan during a plan year in which such Borrower or any ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii)
the imposition of an obligation on a Borrower or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c)
of ERISA; or (iv) the institution by the PBGC of proceedings to terminate a
Benefit Plan.
"Test Date" shall mean, with respect to any Applicable Margin Period
or the date of any determination hereunder of the Adjusted Consolidated Fixed
Charge Coverage Ratio, the last day of the most recent fiscal month of GSTOC
ended immediately prior to the first day of such Applicable Margin Period or
such date of determination, respectively.
"Test Period" shall mean a period of twelve consecutive months (taken
as one accounting period) ending on a Test Date.
"Total Commitment" shall mean the sum of the amounts of the Lenders'
Commitments.
"Total Revolving Credit Commitment" shall mean the sum of the Lenders'
Revolving Credit Commitments, as adjusted from time to time in accordance with
the provision of Section 11.13.
"Total Term Loan Commitment" shall mean the sum of the Lenders' Term
Loan Commitments.
"12% Senior Notes" shall mean GSTOC's 12% Senior Notes due 2004 issued
pursuant to the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"12 1/4% Senior Notes" shall mean GSTOC's 12 1/4% Senior Notes due
2005 issued pursuant to the 1995 Indenture.
"Undrawn Letter of Credit Availability" shall mean with respect to a
Letter of Credit, at any time, the maximum amount available to be drawn under
such Letter of Credit at such time, regardless of the existence or satisfaction
of any conditions or limitations on drawing.
"Unreimbursed Draws" shall mean with respect to a Letter of Credit, at
any time, the aggregate amount at such time of all payments made by the Letter
of Credit Issuer or payments made by CIT or the Lenders under a Letter of
Credit Guaranty in respect of such payments under such Letter of Credit, to the
extent not repaid by the Borrowers, provided that Unreimbursed Draws shall not
include any such payments that have been charged to the Loan Account and
constitute a Loan pursuant to the terms of this Agreement.
"Unused Line Fee" shall have the meaning given to that term in Section
2.08(e).
1.02. Construction. Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, the singular
the plural and the part the
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whole and "or" has the inclusive meaning represented by the phrase "and/or."
References in this Agreement to "determination" by the Agent include reasonable
good faith estimates by the Agent (in the case of quantitative determinations)
and reasonable good faith beliefs by the Agent (in the case of qualitative
determinations). Unless the context requires otherwise, (i) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, and (iv)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement.
1.03. Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP. Notwithstanding the
definition of GAAP contained in this Agreement, no change in GAAP that would
affect the method or calculation of any of the financial covenants,
restrictions or standards or definitions of terms used herein shall be given
effect in such calculations until such financial covenants, restrictions or
standards or definitions are amended in a manner satisfactory to the Borrowers
and the Majority Lenders so as to reflect such change in GAAP.
ARTICLE II
THE CREDITS
2.01. Loans.
(a) Subject to the terms and conditions and relying upon
the representations and warranties herein set forth:
(i) each Lender severally agrees to make Revolving Credit
Loans at any time and from time to time on or after the date hereof and to, but
not including, the Termination Date, in an aggregate principal amount not
exceeding at any one time its Pro Rata Share of the Current Revolving Commitment
at such time. The "Current Revolving Commitment" at any time shall be equal to
the lesser of (A) $120,000,000, as such amount may have been reduced pursuant to
the terms of this Agreement at such time and (B) the Borrowing Base. No Lender
shall have an obligation to make Revolving Credit Loans hereunder or arrange for
the issuance of Letters of Credit on or after the Termination Date or which,
when added to the aggregate amount of all outstanding and contemporaneous
Revolving Credit Loans and the Letter of Credit Exposure at such time, would
cause the aggregate amount of all Revolving Credit Loans and the Letter of
Credit Exposure at any time to exceed the Current Revolving
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Commitment at such time. Within the limits of time and
amount set forth in this Section 2.01(a)(i), and subject to the provisions of
this Agreement, the Borrowers may borrow, repay and reborrow Revolving Credit
Loans hereunder; and
(ii) each Lender severally agrees to make a Term Loan on the
Closing Date in a principal amount not to exceed such Lender's Term Loan
Commitment. Any principal of a Term Loan which is repaid or prepaid may not be
reborrowed.
(b) The Revolving Credit Commitments and the Termination
Date shall be automatically renewed for an additional one year period on the
initial Termination Date and on each subsequent Termination Date unless
terminated by the Borrowers at any time or by the Lenders as of the initial
Termination Date or as of any subsequent Termination Date, in each case upon
not less than sixty (60) days prior written notice.
2.02. Notes; Repayment of Loans. (a) All Revolving Credit Loans
made by a Lender shall be evidenced by a single Revolving Credit Note, duly
executed by the Borrowers and delivered to and made jointly and severally
payable to the order of such Lender in a principal amount equal to such
Lender's Revolving Credit Commitment on such date. The Term Loan made by a
Lender shall be evidenced by a Term Note, duly executed by the Borrowers and
delivered to and made payable to the order of such Lender in a principal amount
equal to such Lender's Term Loan Commitment. The Notes shall be dated the
Closing Date or the effective date of the relevant Assignment and Acceptance in
the principal amount of such Lender's Term Loan Commitment or Revolving Credit
Commitment, as the case may be, with the blanks appropriately filled in.
(b) The outstanding principal balance of each Revolving
Credit Loan shall be due and payable on the Termination Date.
2.03. Notice of Borrowing; Making of Loans.
(a) Whenever a Borrower desires to borrow, the
Administrative Borrower shall provide notice to the Agent of such proposed
borrowing (a "Notice of Borrowing"), each such notice, to be given not later
than 12:00 noon (New York City time) on the date of such proposed borrowing, in
the case of a borrowing consisting of Prime Loans, or not later than 12:00 noon
(New York City time) on the third Business Day before the date of such
borrowing, in the case of a borrowing consisting of Eurodollar Loans, setting
forth: (i) the date, which shall be a Business Day, on which such borrowing is
to occur, (ii) whether such Loan is a Term Loan or a Revolving Credit Loan and
whether such Loan is requested to be a Prime Loan or a Eurodollar Loan and, if
a Eurodollar Loan, the Interest Period requested with respect thereto, (iii)
the principal amount of the Loan being borrowed, and (iv) which of GSTOC, GSC
or the MEI Entities will receive the proceeds of such Loan. Such notice shall
be given by telephone or in writing by a Designated Borrowing Officer,
provided, that, if requested by the Agent, any such telephonic notice shall be
confirmed in writing by delivery to the Agent, on or before the date on which
such Loan is to be made, of a written notice substantially in the form of
Exhibit E hereto containing the original or facsimile signature of a Designated
Borrowing Officer. Except for a Notice of Borrowing when the Agent will fund
the related Loan pursuant to Section 2.03(e), the
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Agent shall provide each Lender with prompt notice of each Notice of Borrowing.
Except as otherwise provided in Section 2.03(e), on the date specified in such
notice, each Lender shall, subject to the terms and conditions of this
Agreement, make its Pro Rata Share of such Loan in immediately available funds
by wire transfer to the Agent at its Office not later than 1:30 p.m. (New York
City time). Unless the Agent determines that any applicable conditions in
Section 5.02 have not been satisfied, the Agent shall make the funds so
received from the Lenders available to the applicable Borrower not later than
2:30 p.m. (New York City time), on the date specified in such notice in
immediately available funds by depositing such proceeds in the Disbursement
Account of such Borrower if such Disbursement Account is located at the Bank or
initiating a wire transfer of same day funds to the Disbursement Account if
such Disbursement Account is not located at the Bank.
(b) The Agent and each Lender shall be entitled to rely
conclusively on each Designated Borrowing Officer's authority to request a Loan
on behalf of the Borrowers until the Agent receives written notice to the
contrary. The Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing and,
with respect to an oral request for a Loan, the Agent and the Lenders shall
have no duty to verify the identity of any Person representing himself as a
Designated Borrowing Officer.
(c) The Agent and the Lenders shall not incur any
liability to the Borrowers in acting upon any telephonic notice referred to
above which the Agent and the Lenders believe in good faith to have been given
by a Designated Borrowing Officer or for otherwise acting in good faith under
this Section 2.03 and, upon the funding of a Loan by the Lenders (or by the
Agent on behalf of the Lenders) in accordance with this Agreement pursuant to
any such telephonic notice, a Borrower shall have effected a Loan hereunder.
(d) Each Notice of Borrowing pursuant to this Section
2.03 shall be irrevocable and the Borrowers shall be bound to make a borrowing
in accordance therewith. Each borrowing of Prime Loans shall be in a minimum
amount of $100,000 and in multiples of $100,000 (or, in the case of Revolving
Credit Loans, the amount of the remaining Availability if less than $100,000)
if in excess thereof, and each borrowing of Eurodollar Loans shall be in a
minimum amount of $1,000,000 and in multiples of $500,000 (or, in the case of
Revolving Credit Loans, the amount of the remaining Availability if less than
$500,000) if in excess thereof, provided that the Borrowers shall not be
entitled to request any Loan that, if made, would result in an aggregate of
more than four separate Eurodollar Loans of any Lender being outstanding
hereunder at any one time.
(e) (i) Except as otherwise provided in this
subsection 2.03(e), all Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares of the Total Term
Loan Commitment or the Total Revolving Credit Commitment, as the case may be,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall any Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder.
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(ii) Notwithstanding any other provision of this
Agreement, and in order to reduce the number of fund transfers among the
Borrowers, the Lenders and the Agent, the Borrowers, the Lenders and the Agent
agree that the Agent may (but shall not be obligated to), and the Borrowers and
the Lenders hereby irrevocably authorize the Agent to, fund, on behalf of the
Lenders, Revolving Credit Loans pursuant to Section 2.01, subject to the
procedures for settlement set forth in subsection 2.03(f); provided, however,
that (A) the Agent shall in no event fund such Revolving Credit Loans if the
Agent shall have received written notice from the Majority Lenders on the
Business Day prior to the day of the proposed Revolving Credit Loan that one or
more of the conditions precedent contained in Section 5.02 will not be
satisfied on the day of the proposed Revolving Credit Loan, and (B) the Agent
shall not otherwise be required to determine that, or take notice whether, the
conditions precedent in Section 5.02 have been satisfied.
(iii) Unless (A) the Agent has notified the
Lenders that the Agent, on behalf of the Lenders, will fund a particular
Revolving Credit Loan pursuant to subsection 2.03(e)(ii), or (B) the Agent
shall have been notified by any Lender on the Business Day prior to the day of
a proposed Revolving Credit Loan that such Lender does not intend to make
available to the Agent such Lender's Pro Rata Share of the Revolving Credit
Loan requested on such day, the Agent may assume that such Lender has made such
amount available to the Agent on such day and the Agent, in its sole
discretion, may, but shall not be obligated to, cause a corresponding amount to
be made available to the applicable Borrower on such day. If the Agent makes
such corresponding amount available to such Borrower and such corresponding
amount is not in fact made available to the Agent by such Lender, the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three Business
Days and thereafter at the Regular Rate. During the period in which such Lender
has not paid such corresponding amount to the Agent, notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, the
amount so advanced by the Agent to a Borrower shall, for all purposes hereof,
be a Loan made by the Agent for its own account. Upon any such failure by a
Lender to pay the Agent, the Agent shall promptly thereafter notify the
Administrative Borrower of such failure and the Borrowers shall immediately pay
such corresponding amount to the Agent for its own account.
(iv) Nothing in this subsection 2.03(e) shall be
deemed to relieve any Lender from its obligation to fulfill its Revolving
Credit Commitment hereunder or to prejudice any rights that the Agent or the
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.
(f) (i) With respect to all periods for which the
Agent has funded Revolving Credit Loans pursuant to subsection 2.03(e), within
15 days after the last day of each calendar month, or such shorter period as it
may from time to time select (any such month or shorter period being herein
called a "Settlement Period"), the Agent shall notify each Lender of the
average daily unpaid principal amount of the Revolving Credit Loans outstanding
during such Settlement Period. In the event that such amount is greater than
the average daily unpaid principal amount of the Revolving Credit Loans
outstanding during the Settlement Period
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immediately preceding such Settlement Period (or, if there has been no
preceding Settlement Period, the amount of the Revolving Credit Loans made on
the date of such Lender's initial funding), each Lender shall promptly make
available to the Agent its Pro Rata Share of the difference in immediately
available funds. In the event that such amount is less than such average daily
unpaid principal amount, the Agent shall promptly pay over to each other Lender
its Pro Rata Share of the difference in immediately available funds. In
addition, if the Agent shall so request at any time when a Potential Default or
an Event of Default shall have occurred and be continuing, or any other event
shall have occurred as a result of which the Agent shall determine that it is
desirable to present claims against the Borrowers for repayment, each Lender
shall promptly remit to the Agent or, as the case may be, the Agent shall
promptly remit to each Lender, sufficient funds to adjust the interests of the
Lenders in the then outstanding Loans to such an extent that, after giving
effect to such adjustment, each Lender's interest in the then outstanding
Revolving Credit Loans will be equal to its Pro Rata Share thereof. The
obligations of each Lender under this subsection 2.03(f) shall be absolute and
unconditional. Each Lender shall only be entitled to receive interest on its
Pro Rata Share of the Revolving Credit Loans which have been funded by such
Lender.
(ii) In the event that any Lender fails to make
any payment required to be made by it pursuant to subsection 2.03(f)(i), the
Agent shall be entitled to recover such corresponding amount on demand from
such Lender together with interest thereon, for each day from the date such
payment was due until the date such amount is paid to the Agent, at the
customary rate set by the Agent for the correction of errors among banks for
three Business Days and thereafter at the Regular Rate. During the period in
which such Lender has not paid such corresponding amount to the Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Agent to a Borrower shall,
for all purposes hereof, be a Loan made by the Agent for its own account. Upon
any such failure by a Lender to pay the Agent, the Agent shall promptly
thereafter notify the Administrative Borrower of such failure and the Borrowers
shall immediately pay such corresponding amount to the Agent for its own
account. Nothing in this subsection 2.03(f)(ii) shall be deemed to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitment hereunder
or to prejudice any rights that the Borrowers or the Agent may have against any
Lender as a result of any default by such Lender hereunder.
2.04. Reduction of Commitments; Prepayment; Termination Fee.
(a) Reduction of the Commitment.
(i) The Total Term Loan Commitment shall
automatically terminate on the Closing Date if the Term Loans are not
borrowed on the Closing Date.
(ii) Subject to Section 2.04(e), the Borrowers
may at any time or from time to time and without penalty or premium reduce
the Total Revolving Credit Commitment of the Lenders to an amount (which
may be zero) not less than the sum of the unpaid principal amount of all
Revolving Credit Loans then outstanding plus the principal amount of all
Revolving Credit Loans not yet made as to which notice has been given by
the Administrative Borrower under Section 2.03 plus the Letter of Credit
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Exposure at such time plus the Stated Amount of all Letters of Credit not
yet issued as to which a request has been made unless the request is
withdrawn and the Letter of Credit is not issued by the Letter of Credit
Issuer under Section 3.01. Any reduction shall be in an amount which is an
integral multiple of $5,000,000 or such lesser amount that would reduce
the Current Revolving Commitment to zero. Reduction of the Total Revolving
Credit Commitment of the Lenders shall be made by providing not less than
two Business Days' written notice (which notice shall be irrevocable) to
such effect to the Agent (which notice the Agent shall promptly transmit
to each Lender). Reductions of the Total Revolving Credit Commitment of
the Lenders are irrevocable and may not be reinstated. Each such reduction
shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share.
(b) Mandatory Prepayment.
(i) If at any time the Current
Revolving Commitment is less than the aggregate unpaid principal amount of
the Loans then outstanding plus the Letter of Credit Exposure at such
time, the Borrowers shall prepay an amount of the Revolving Credit Loans
not less than the amount of such difference or, if the Revolving Credit
Loans then outstanding are less than the amount of such difference,
provide cash collateral, or other collateral acceptable to the Agent in
its sole discretion, to the Agent in an amount equal to 105% of such
excess, which cash collateral shall be deposited and held in the Letter of
Credit Cash Collateral Account until such time as such excess no longer
exists. Any such prepayment will not otherwise reduce the Revolving Credit
Commitments of the Lenders. Concurrently with any notice of reduction of
the Revolving Credit Commitments of the Lenders, the Administrative
Borrower shall give notice to the Agent of any mandatory prepayment which
notice shall specify a prepayment date no later than the effective date of
such reduction of the Revolving Credit Commitments of the Lenders.
(ii) The Agent shall on each Business
Day apply funds deposited in the Agent Account to the payment, in whole or in
part, of the Obligations outstanding.
(iii) The Borrowers shall immediately
prepay the aggregate outstanding principal amount of the Term Loans in full in
the event that the Total Revolving Credit Commitment is reduced to zero for any
reason.
(iv) The Borrowers shall prepay in full
the aggregate outstanding principal amount of the Term Loans immediately upon
the effectiveness of a Permitted Term Loan Facility.
(v) In the event of any loss of or
damage to, or taking of any Collateral of any Borrower for which any of the
Obligors and their Subsidiaries receives insurance proceeds or other
compensation, the Borrower shall prepay the Term Loans in an aggregate amount
equal to 100% of the Net Proceeds of such casualty event. Nothing in this
paragraph shall be deemed to limit any obligation of the Obligors or any of
their Subsidiaries
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pursuant to any of the Security Documents to remit to a collateral or similar
account maintained by the Agent pursuant to any of the Security Documents the
proceeds of insurance or other compensation received in respect of any such
casualty event. In the event that the Borrowers have not closed a Permitted
Term Loan Facility on or before June 30, 2000, the Borrowers, the Agent and the
Lenders shall negotiate in good faith to amend this Agreement to provide
customary and reasonable provisions for the restoration to the Borrowers of
insurance proceeds payable as a result of casualty loss to the Equipment.
(c) Optional Prepayment. The Borrowers may at any time
or from time to time prepay, in whole or in part, the Revolving Credit Loans
then outstanding. Any partial prepayment of a Eurodollar Loan shall not reduce
the aggregate principal amount of such Eurodollar Loan to less than $5,000,000
unless such prepayment reduces the aggregate principal amount of such
Eurodollar Loan to zero.
(d) Prepayments Generally. All prepayments of Loans
under this Section 2.04 shall be without premium or penalty, except that any
prepayment of Eurodollar Loans shall be subject to the provisions of Section
2.12. Any prepayment made pursuant to this Section 2.04 shall be accompanied by
the payment of accrued interest on the principal amount being prepaid to the
date of prepayment.
(e) Termination Fee. Notwithstanding the foregoing
provisions of this Section 2.04, the Borrowers jointly and severally agree that
if the Total Revolving Credit Commitment is reduced to zero (whether such
reduction is optional or mandatory, including after the occurrence of an Event
of Default) at any time prior to the Termination Date, the Borrowers will pay
to the Agent, for the account of each Lender, on the date of such termination
(together with any payments of principal, interest, fees or other amounts
payable hereunder or under the Fee Letter on such date), a fee determined by
multiplying (i) the average daily balance of the Revolving Credit Loans
outstanding during the term of this Agreement by (ii) (A) 2.00% per annum if
the Agreement is terminated on or prior to the first anniversary of the Closing
Date, (B) 1.00% per annum if the Agreement is terminated after the first
anniversary and on or prior to the second anniversary of the Closing Date or
(C) 0.50% per annum if the Agreement is terminated after the second anniversary
and on or prior to the third anniversary and (iii) a fraction (A) the numerator
of which is the number of days remaining until the next anniversary of the
Closing Date following the effective date of such reduction and (B) the
denominator of which is 360.
2.05. Interest.
(a) Except as provided in subsection (b) below, (i) each
Prime Loan shall bear interest at a rate per annum for each day during which
such Prime Loan is outstanding equal to the Applicable Regular Rate for such
day and (ii) each Eurodollar Loan shall bear interest at a rate per annum for
each Interest Period during which such Eurodollar Loan is outstanding equal to
the Applicable Eurodollar Rate for such Interest Period. All Eurodollar Loans
constituting part of the same borrowing shall have the same Interest Period.
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(b) To the extent permitted by law, after there shall
have occurred and so long as there is continuing an Event of Default, all
principal, interest, fees, indemnities or any other Obligations (including
interest accrued under this Section 2.05(b)) shall compound on a daily basis
and shall bear interest for each day until paid (before and after judgment) at
a rate per annum equal to 2.00% above the highest rate that would otherwise be
in effect from any Prime Loans outstanding on such day.
2.06. Interest Payment Dates. The Borrowers shall jointly and
severally pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount shall be paid in full, which
interest shall be payable (i) if such Loan is a Prime Loan, monthly in arrears
on the first day of each month, commencing April 1, 2000, and (ii) if such Loan
is a Eurodollar Loan, on the last day of the Interest Period of such Eurodollar
Loan and, in the case of an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest
Period. All interest payable pursuant to Section 2.05(b) shall be payable on
demand.
2.07. Amortization. To the extent not due and payable earlier
pursuant to the terms of this Agreement, the entire unpaid principal amount of
each of the Loans shall be due and payable on the Termination Date.
2.08. Payments; Periodic Statements; Fees.
(a) Time, Place and Manner. All payments and prepayments
to be made in respect of principal, interest, fees or other amounts due jointly
and severally from the Borrowers hereunder, under the Fee Letter, the Notes or
any other Loan Document shall be payable at or before 12:00 Noon, New York City
time, on the day when due without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived. Such payments shall be made to
the Agent for the account of the Agent, CIT or the Lenders, as the case may be,
at the Agent Account in Dollars in funds immediately available at the Bank's
Office without setoff, counterclaim or other deduction of any nature. The Agent
shall maintain a loan account (the "Loan Account") on its books in the joint
name of the Borrowers in which the Borrowers will be charged with Loans made by
the Agent or the Lenders to any Borrower hereunder and with any other
Obligations. The Borrowers and the Lenders hereby authorize the Agent to, and
the Agent may, from time to time charge the Loan Account with any interest,
fees, expenses and other Obligations that are due and payable under this
Agreement or any Loan Document. The Borrower and the Lenders confirm that any
charges which the Agent may so make to the Loan Account as herein provided will
be made as an accommodation to the Borrowers and solely at the Agent's
discretion and shall constitute a Revolving Loan to the Borrowers funded by the
Agent on behalf of the Lenders and subject to subsections 2.03(e) and 2.03(f)
of this Agreement. Each of the Lenders and each of the Borrowers agrees that
the Agent shall have the right to make such charges regardless of whether any
Event of Default or Potential Default shall have occurred and be continuing or
whether any of the conditions precedent in Section 5.02 have been satisfied.
The Loan Account will be credited upon receipt of "good funds" in the Agent
Account with all amounts actually received by the Agent from the Borrowers or
others for the account of the Borrowers. Interest on all Loans and all fees
that accrue on a per annum basis shall be computed
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on the basis of the actual number of days elapsed in the period during which
interest or such fee accrues and a year of 360 days. In computing interest on
any Loan, the date of the making of such Loan shall be included and the date of
payment shall be excluded; provided, however, that if a Loan is repaid on the
same day in which it is made, one day's interest shall be paid on such Loan. It
is expressly understood and agreed by the Borrowers that the Agent and the
Lenders shall have no responsibility to inquire into the correctness of the
apportionment, allocation or disposition of Loans, Agent Advances or Letters of
Credit made to the Borrowers or any fees, costs or expenses for which the
Borrowers are jointly and severally obligated under this Agreement.
(b) Periodic Statements. The Agent shall provide the
Lenders and the Borrowers promptly after the end of each calendar month a
summary statement (in the form from time to time used by the Agent) of (A) the
opening and closing daily balances in the Loan Account during such month, (B)
the amounts and dates of all Loans made during such month, (C) the amounts and
dates of all payments on account of the Loans made during such month and each
Lender's interest in the Loans, (D) the amount of interest accrued on the Loans
during such month, (E) any Letters of Credit issued by the Letter of Credit
Issuer during such month, specifying the Stated Amount thereof, (F) the amount
of charges to the Loan Account or Revolving Loans to be made during such month
to reimburse CIT, the Lenders or the Letter of Credit Issuer for drawings made
under Letters of Credit or payments made by CIT or the Lenders under the Letter
of Credit Guaranty, and (G) the amount and nature of any charges to the Loan
Account made during such month on account of interest, fees and expenses and
other Obligations. All entries on any such statement shall, thirty (30) days
after the same is sent, be presumed to be correct and shall constitute prima
facie evidence of the information contained in such statement, subject to the
Borrowers' and each Lender's express right to rebut such presumption by
conclusively demonstrating the existence of any error on the part of the Agent.
(c) Apportionment of Payments. Except as otherwise
provided in this subsection, aggregate principal and interest payments shall be
apportioned among all outstanding Loans to which such payments relate and
payments of the fees required to be jointly and severally paid by the Borrowers
to the Lenders under subsections 2.04(e), 2.08(e) and 2.08(f) shall, as
applicable, be apportioned ratably among the Lenders, in each case according to
their Pro Rata Shares. All payments shall be remitted to the Agent and all such
payments and any other amounts, including, without limitation, proceeds of
Collateral received by the Agent from or as to the Borrowers shall be applied
subject to the provisions of this Agreement first, to pay principal of and
interest on any Loans funded by the Agent on behalf of the Lenders and any
fees, expense reimbursements or indemnities then due to the Agent from the
Borrowers; second, to pay any fees, expense reimbursements or indemnities then
due to the Lenders or the Letter of Credit Issuer hereunder; third, to pay
interest due in respect of Loans and Unreimbursed Draws under Letters of
Credit; and fourth, to pay, prepay or provide cash collateral, if then
required, in respect of principal of Loans and Letter of Credit Exposure. The
Agent shall promptly distribute to each Lender at its primary address set forth
on the appropriate signature page hereof, or at such other address as such
Lender may designate in writing, such funds as it may be entitled to receive.
The foregoing apportionment of payments is solely for the purpose of
determining the obligations of the Borrowers hereunder and, notwithstanding
such apportionment, any Lender may on its books and records allocate payments
received by it in a manner different from that
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contemplated hereby. No such different allocation shall alter the rights and
obligations of the Borrowers under this Agreement determined in accordance with
the apportionments contemplated by this Section 2.08(c). To the extent that the
Borrowers make a payment or payments to the Agent or the Agent receives any
payment or other amount, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause then,
to the extent of such payment or proceeds received, the Obligations or part
thereof intended to be satisfied shall be revived and continue in full force
and effect, as if such payment or proceeds had not been received by the Agent.
(d) Unused Line Fee. From and after the Closing Date
until the Termination Date, the Borrowers shall jointly and severally pay to
the Agent, for the ratable account of the Lenders in accordance with the
Lenders' Pro Rata Shares, an unused line fee (the "Unused Line Fee") accruing
at the rate of three-eighths of one percent (3/8%) per annum, on the excess, if
any, of (i) the aggregate Revolving Credit Commitments over (ii) the sum of (A)
the average daily aggregate outstanding principal of the Revolving Credit Loans
plus (B) the average daily outstanding amount of the Letters of Credit. All
Unused Line Fees shall be payable monthly in arrears on the first day of each
month commencing April 1, 2000.
(e) Letter of Credit Fees and Commissions. From and
after the Closing Date until the Termination Date, the Borrowers shall jointly
and severally pay to the Agent, for the ratable account of the Lenders in
accordance with the Lenders' Pro Rata Shares, (i) a letter of credit fee equal
to 2.0% of the face amount of each documentary Letter of Credit, payable on the
date of issuance, and (ii) a letter of credit commission equal to 2.0% per
annum on the face amount of each standby letter of credit, payable monthly in
arrears on the first day of each month during which such Letter of Credit is
outstanding, commencing April 1, 2000. The Borrowers shall also jointly and
severally pay the customary letter of credit fees and charges of CIT and the
Letter of Credit Issuer for the administration, issuance, amendment and
processing of any Letters of Credit issued by the Letter of Credit Issuer.
Promptly following the Agent's receipt of any letter of credit fees and
commissions described above, the Agent shall pay to each Lender such Lender's
Pro Rata Share of the amount of such letter of credit fees or commissions
received by the Agent.
(f) Administrative Management Fee. The Borrowers shall
jointly and severally pay to the Agent on the Closing Date, and on each
anniversary of the Closing Date on which this Agreement is in effect, an
administrative management fee of $100,000.
(g) Eurodollar Loan Processing Fee. The Borrowers shall
jointly and severally pay to the Agent $500 for the Agent's own account a
processing fee which fee shall be paid on the date of any Borrower's request
for a Loan at the Eurodollar Rate.
(h) Fee Letter. The Borrowers shall jointly and
severally pay to the Agent the fees set forth in the Fee Letter at the times
set forth in the Fee Letter. All fees required to be paid to the Agent pursuant
to the Fee Letter, this Agreement and any other Related Document
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shall be paid to the Agent for its own account as required therein. All fees
under this Agreement, the Fee Letter and the other Related Documents are
non-refundable under all circumstances.
(i) Fees Non-Refundable. All fees under this Agreement,
the Fee Letter and the other Loan Documents are non-refundable under all
circumstances.
2.09. Use of Proceeds. The Borrowers hereby covenant, represent
and warrant that the proceeds of the Loans on the Closing Date shall be used to
pay in full all outstanding principal of, interest on and other amounts due
under the GECC Loan Agreement and the MEI Loan Agreement and the related loan
and collateral documents and that the proceeds of all subsequent Loans and the
Letters of Credit will be used for working capital purposes and general
corporate purposes of the Borrowers not prohibited by this Agreement.
Notwithstanding the immediately preceding sentence, no proceeds of the Loans
may be used to redeem, defease, purchase or otherwise acquire or retire any
Senior Notes, provided, that the Borrowers may use proceeds of the Loans to
purchase Senior Notes in the open market or in one or more private sales so
long as (i) at the time of any such purchase and immediately after giving
effect thereto, (A) no Event of Default shall have occurred and be continuing,
(B) Availability shall be at least $35,000,000, (C) all Term Loans have been
repaid in full, and (D) the Permitted Term Loan Facility is in effect and (ii)
the amount of such proceeds used for such purchase does not exceed the
difference between (A) $50,000,000 and (B) the maximum amount of proceeds of
borrowings under the Permitted Term Loan Facility used or permitted to be used
by the Borrowers under the provisions thereof to repurchase Senior Notes.
2.10. Eurodollar Rate Not Determinable; Illegality or Impropriety.
(a) In the event, and on each occasion, that on or
before the day on which the Eurodollar Rate is to be determined for a borrowing
that is to include Eurodollar Loans, the Agent has determined in good faith
that, or has been advised by the Bank that, the Eurodollar Rate cannot be
determined for any reason or the Eurodollar Rate will not adequately and fairly
reflect the cost of maintaining Eurodollar Loans or Dollar deposits in the
principal amount of the applicable Eurodollar Loans are not available in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of the Bank's eurodollar loans are then being
conducted, the Agent shall, as soon as practicable thereafter, give written
notice of such determination to the Administrative Borrower and the other
Lenders. In the event of any such determination, any request by the
Administrative Borrower for a Eurodollar Loan pursuant to Section 2.03 shall,
until the Agent shall have advised the Administrative Borrower and the other
Lenders that the circumstances giving rise to such notice no longer exist, be
deemed to be a request for a Prime Loan. Each determination by the Agent
hereunder shall be conclusive and binding absent manifest error.
(b) In the event that it shall be unlawful or improper
for any Lender to make, maintain or fund any Eurodollar Loan as contemplated by
this Agreement, then such Lender shall forthwith give notice thereof to the
Agent and the Administrative Borrower describing such illegality or impropriety
in reasonable detail. Effective immediately upon the giving of such notice, the
obligation of such Lender to make Eurodollar Loans shall be suspended for the
duration of such illegality or impropriety and, if and when such illegality or
impropriety
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ceases to exist, such suspension shall cease, and such Lender shall
notify the Agent and the Administrative Borrower. If any such change shall make
it unlawful or improper for any Lender to maintain any outstanding Eurodollar
Loan as a Eurodollar Loan, such Lender shall, upon the happening of such event,
notify the Agent and the Administrative Borrower, and the Administrative
Borrower shall immediately, or if permitted by applicable law, rule,
regulation, order, decree, interpretation, request or directive, no later than
the date permitted thereby, convert each such Eurodollar Loan into a Prime
Loan.
2.11. Reserve Requirements; Capital Adequacy Circumstances.
(a) Notwithstanding any other provision herein, if any
change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall impose any tax on or change the basis of taxation of payments to the
Letter of Credit Issuer or any Lender or any Affiliate of a Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or of any
amounts payable hereunder (other than taxes imposed on the overall net income
of the Letter of Credit Issuer or such Lender or such Affiliate by the
jurisdiction in which the Letter of Credit Issuer or such Lender or such
Affiliate has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by the Letter of Credit Issuer or such Lender
or Affiliate of such Lender (except any such reserve requirement that is
reflected in Reserve Requirements) or shall impose on the Letter of Credit
Issuer or such Lender or such Affiliate any other condition affecting this
Agreement or any Eurodollar Loans made by such Lender or any Letter of Credit
Issuer, and the result of any of the foregoing shall be to increase the cost to
the Letter of Credit Issuer or such Lender of making or maintaining any
Eurodollar Loan or issuing any Letter of Credit or to reduce the amount of any
sum received or receivable by the Letter of Credit Issuer or such Lender
hereunder (whether of principal, interest or otherwise) in respect thereof by
an amount deemed by the Letter of Credit Issuer or such Lender to be material,
then the Borrowers shall jointly and severally pay to the Letter of Credit
Issuer or such Lender such additional amount or amounts as will compensate the
Letter of Credit Issuer or such Lender for such additional costs incurred or
reduction suffered. Any amount or amounts jointly and severally payable by the
Borrowers to the Letter of Credit Issuer or any Lender in accordance with the
provisions of this Section 2.11(a) shall be paid by the Borrowers to the Letter
of Credit Issuer or such Lender within ten (10) Business Days after receipt by
the Administrative Borrower from the Letter of Credit Issuer or such Lender of
a statement setting forth in reasonable detail the amount or amounts due and
the basis for the determination from time to time of such amount or amounts,
which statement shall be conclusive and binding absent manifest error.
(b) If the Letter of Credit Issuer or any Lender shall
have reasonably determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Letter of Credit Issuer or by such
Lender (or any lending office of such Lender) or by any Affiliate of such
Lender, as the case may be, with any request or directive regarding capital
adequacy (whether or not having the force of law) of any
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such authority, central bank or comparable agency, has the effect of reducing
the rate of return on the Letter of Credit Issuer's or such Lender's capital or
on the capital of such Lender's Affiliate, as the case may be, as a consequence
of the Letter of Credit Issuer's obligations or such Lender's obligations under
this Agreement and the Loan Documents to a level below that which the Letter of
Credit Issuer or such Lender or such Lender's Affiliate, as the case may be,
could have achieved but for such adoption, change or compliance (taking into
consideration the Letter of Credit Issuer's or such Lender's policies or such
Lender's Affiliate's policies, as the case may be, with respect to capital
adequacy) by an amount reasonably deemed by the Letter of Credit Issuer or such
Lender to be material, then, from time to time, the Borrowers shall jointly and
severally reimburse the Letter of Credit Issuer or such Lender for such
reduction. Any amount or amounts payable by the Borrowers to the Letter of
Credit Issuer or any Lender in accordance with the provisions of this Section
2.11(b) shall be paid by the Borrowers to the Letter of Credit Issuer or such
Lender within ten (10) Business Days after receipt by the Administrative
Borrower from the Letter of Credit Issuer or such Lender of a statement setting
forth (i) in reasonable detail the amount or amounts due, (ii) the basis for
the determination from time to time of such amount or amounts and (iii) that
such amount(s) have been determined in good faith, which statement shall be
conclusive and binding absent manifest error.
(c) The Letter of Credit Issuer or any Lender may demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period;
provided that the Letter of Credit Issuer or such Lender shall provide to the
Administrative Borrower a certificate setting forth in reasonable detail the
basis on which such demand is made. The protection of this Section 2.11 shall
be available to the Letter of Credit Issuer or any Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
2.12. Indemnity. The Borrowers shall jointly and severally
indemnify each Lender against any loss or expense that such Lender actually
sustains or incurs as a consequence of (i) any failure by a Borrower to fulfill
on the date of any borrowing hereunder the applicable conditions set forth in
Article V, (ii) any failure by a Borrower to borrow any Eurodollar Loan
hereunder or to convert any Prime Loan into a Eurodollar Loan after notice of
such borrowing or conversion has been given pursuant to Section 2.03 or Section
2.14, as the case may be, (iii) any payment, prepayment (mandatory or optional)
or conversion of a Eurodollar Loan required by any provision of this Agreement
or otherwise made on a date other than the last day of the Interest Period
applicable thereto, (iv) any default in payment or prepayment of the principal
amount of any Eurodollar Loan or any part thereof or interest accrued thereon,
as and when due and payable (at the due date thereof, by notice of prepayment
or otherwise), or (v) the occurrence of any Event of Default, including, in
each such case, any loss (including, without limitation, loss of margin) or
reasonable expense sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall include but not be
limited to an amount equal to the excess, if any, as reasonably determined by
such Lender, of (y) its cost of obtaining the funds for the Loan being paid,
prepaid or converted or not borrowed or converted (based on the Eurodollar Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow or convert on the last day of the Interest
Period for such Loan (or, in the case of
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a failure to borrow or convert, the last day of the Interest Period for such
Loan that would have commenced on the date of such failure to borrow or
convert) over (z) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in re-employing the funds so
paid, prepaid or converted or not borrowed or converted for such Interest
Period. A certificate of any Lender setting forth in reasonable detail any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.12 and the basis for the determination of such amount or amounts
shall be delivered to the Borrowers and shall be conclusive and binding absent
manifest error.
2.13. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim
against a Borrower or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Obligation as a result of
which the aggregate unpaid amount of the Obligations owing to it shall be
proportionately less than the aggregate unpaid amount of the Obligations owing
to any other Lender, it shall simultaneously purchase from such other Lender at
face value a participation in the Obligations owing to such other Lender, so
that the aggregate unpaid amount of the Obligations and participations in
Obligations held by each Lender shall be in the same proportion to the
aggregate unpaid amount of all Obligations owing to such Lender prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
aggregate unpaid amount of all Obligations outstanding prior to such exercise
of banker's lien, setoff or counterclaim or other event; provided that if any
such purchase or purchases or adjustments shall be made pursuant to this
Section 2.13 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustments restored without
interest. Each Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in an Obligation deemed to have
been so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys jointly and severally owing by
the Borrowers to such Lender by reason thereof as fully as if such Lender had
made a loan directly to the Borrowers in the amount of such participation.
2.14. Continuation and Conversion of Loans. Subject to Section 2.03
and Section 2.10, the Administrative Borrower shall have the right, at any
time, (i) on three Business Days' prior irrevocable written or telecopy notice
to the Agent, to continue any Eurodollar Loan or any portion thereof into a
subsequent Interest Period, or (ii) on one (1) Business Day's prior irrevocable
written or telecopy notice to the Agent, to convert any Eurodollar Loan or
portion thereof into a Prime Loan, subject to the following:
(A) in the case of a continuation of a Eurodollar Loan
or portion thereof as such or a conversion of a Prime Loan or portion
thereof into a Eurodollar Loan, (1) no Event of Default or Potential
Default shall have occurred and be continuing at the time of such
continuation or conversion and (2) Eurodollar Loans resulting from
this Section 2.14 shall be limited in number as provided in Section
2.03(d);
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(B) in the case of a continuation or conversion of less
than all Loans, the aggregate principal amount of
any Eurodollar Loan continued or converted shall not be less than
$1,000,000 and in multiples of $500,000 (or the remaining Availability
if less than $500,000) if in excess thereof;
(C) each conversion shall be effected by the Lenders by
applying the proceeds of the new Loan to the Loan (or portion thereof)
being converted; and, in the case of a conversion from a Eurodollar
Loan to a Prime Loan, accrued interest on the Eurodollar Loan (or
portion thereof) being converted shall be jointly and severally paid
by the Borrowers at the time of conversion;
(D) if the new Loan made in respect of a conversion
shall be a Eurodollar Loan, the first Interest Period with respect
thereto shall commence on the date of conversion;
(E) no portion of any Loan shall be continued or
converted to a Eurodollar Loan with an Interest Period ending later
than the Termination Date; and
(F) if any conversion of a Eurodollar Loan shall be
effected on a day other than the last day of an Interest Period, the
Borrowers shall jointly and severally reimburse each Lender on demand
for any loss incurred or to be incurred by it in the reemployment of
the funds released by such conversion as provided in Section 2.12.
In the event that the Administrative Borrower shall not give notice to continue
any Eurodollar Loan into a subsequent Interest Period, such Loan (unless
repaid) shall automatically become a Prime Loan at the expiration of the then
current Interest Period.
2.15. Taxes.
(a) All payments made by each Borrower hereunder, under
the Notes or under any Loan Document will be made without setoff, counterclaim,
deduction or other defense. All such payments shall be made free and clear of
and without deduction for any present or future income, franchise, sales, use,
excise, stamp or other taxes, levies, imposts, deductions, charges, fees,
withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding taxes on the overall net income of
the Lenders (such nonexcluded taxes are hereinafter collectively referred to as
the "Taxes"). If any Borrower shall be required by law to deduct or to withhold
any Taxes from or in respect of any amount payable hereunder, (i) the amount so
payable shall be increased to the extent necessary so that after making all
required deductions and withholdings (including Taxes on amounts payable to the
Lenders pursuant to this sentence) the Lenders receive an amount equal to the
sum they would have received had no such deductions or withholdings been made,
(ii) such Borrower shall make such deductions or withholdings, and (iii) such
Borrower shall pay
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the full amount deducted or withheld to the relevant taxation authority in
accordance with applicable law. Whenever any Taxes are payable by any Borrower,
as promptly as possible thereafter, such Borrower shall send the Lenders and
the Agent an official receipt showing payment. In addition, the Borrowers agree
to pay any present or future taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery, performance,
recordation or filing of, or otherwise with respect to, this Agreement, the
Notes, the Letters of Credit or any other Loan Document (hereinafter referred
to as "Other Taxes").
(b) Each Borrower hereby agrees to jointly and severally
indemnify the Lenders for the amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by any Lender and any liability (including
penalties, interest and expenses for nonpayment, late payment or otherwise)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be paid
within thirty (30) days from the date on which such Lender makes written demand
therefor.
(c) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes (each, a "Non-U.S. Lender") agrees to deliver to the
Administrative Borrower and the Agent on or prior to the Closing Date or, in
the case of a Non-U.S. Lender that is an assignee or transferee of, or
purchaser of a participation in, an interest under this Agreement pursuant to
Section 11.13 (unless such Non-U.S. Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Non-U.S. Lender, (i) two (2) accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI or Form
W-8BEN (or successor forms) certifying that such Non-U.S. Lender is entitled as
of such date to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement, or (ii) if such Non-U.S.
Lender is not a "Bank" within the meaning of Section 881(c)(3)(A) of the Code
and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) (or any
successor forms) pursuant to clause (i) above, (x) a certificate substantially
in the form of Exhibit J (any such certificate, a "Section 2.15(c)
Certificate"), and (y) two (2) accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (with respect to the portfolio interest
exemption) (or successor form) certifying that such Non-U.S. Lender is entitled
as of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement. In addition,
each Non-U.S. Lender agrees that from time to time after the Closing Date, when
the passage of time or a change in facts or circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Non-U.S.
Lender will deliver to the Administrative Borrower and the Agent two (2) new
accurate and complete original signed copies of Internal Revenue Service Form
W-8ECI, Form W-8BEN (with respect to a complete exemption under an income tax
treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and
a Section 2.15(c) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish that such Non-U.S. Lender is
entitled to a continued exemption from United States withholding tax with
respect to payments under this Agreement, or such Non-U.S. Lender shall
promptly notify the Administrative Borrower and the Agent of its inability to
deliver any such
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form or Section 2.15(c) Certificate, in which case such Non-U.S. Lender shall
not be required to deliver any such form or Section 2.15(c) Certificate.
Notwithstanding anything to the contrary contained in Section 2.15(a), but
subject to the immediately succeeding sentence, (x) the Borrowers shall be
entitled, to the extent they are required to do so by law, to deduct or
withhold income taxes imposed by the United States from interest payable
hereunder for the account of any Non-U.S. Lender to the extent that such
Non-U.S. Lender has not provided to the Administrative Borrower and the Agent
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding, and (y) the Borrowers shall not be obligated to make
increased payments pursuant to Section 2.15(a) to a Non-U.S. Lender in respect
of income taxes imposed by the United States if such Non-U.S. Lender has not
provided to the Administrative Borrower and the Agent the Internal Revenue
Service Forms required to be provided pursuant to this Section 2.15(c).
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.15, each Borrower agrees to pay any additional
amounts and to indemnify each Non-U.S. Lender in the manner set forth in
Sections 2.15(a) and (b) in respect of any United States income Taxes deducted
or withheld by them if such Taxes would not have been deducted or withheld but
for any change after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof.
(d) If a Borrower fails to perform its obligations under
this Section 2.15, the Borrowers shall jointly and severally indemnify the
Lenders for any incremental taxes, interest or penalties that may become
payable as a result of any such failure.
2.16. Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability with the other Borrowers hereunder and under the other Loan Documents
in consideration of the financial accommodations to be provided by the Lenders
under this Agreement, for the mutual benefit, direct and indirect, of each of
the Borrowers and in consideration of the undertakings of the other Borrowers
to accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect
to the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.16), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
among them.
(c) If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event the other Borrowers will make such payment with respect to,
or perform, such Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this Section 2.16 constitute the absolute and unconditional, full
recourse obligations of each of the Borrowers enforceable against each such
Borrower to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever.
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(e) Except as otherwise expressly provided in this
Agreement, each of the Borrowers hereby waives notice of acceptance of its
joint and several liability, notice of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the Agent under
or in respect of any of the Obligations, any requirement of diligence or to
mitigate damages and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement. Each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Agent or the Lenders at any time or times with respect
to any Default and the taking, addition, substitution or release, in whole or
in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any of the
Borrowers. Without limiting the generality of the foregoing, each of the
Borrowers assents to any other action or delay in acting or failure to act on
the part of the Agent or the Lenders with respect to the failure by any of the
Borrowers to comply with any of its Obligations, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might,
but for the provisions of this Section 2.16 afford grounds for terminating,
discharging or relieving any of the Borrowers, in whole or in part, from any of
its Obligations under this Section 2.16, it being the intention of each of the
Borrowers that, so long as any of the Obligations hereunder remain unsatisfied,
the Obligations of the Borrowers under this Section 2.16 shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each of the Borrowers under this Section 2.16
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any of the Borrowers, the Lenders or the Agent.
(f) The provisions of this Section 2.16 are made for the
benefit of the Agent, the Lenders, and their respective successors and assigns,
and may be enforced by it or them from time to time against any of the
Borrowers as often as occasion therefor may arise and without requirement on
the part of the Agent, any Lender or such successor or assign first to ▇▇▇▇▇▇▇▇
any of its or their claims or to exercise any of its or their rights against
any of the other Borrowers or to exhaust any remedies available to it or them
against any of the other Borrowers or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this Section 2.16 shall remain in effect until all of
the Obligations shall have been paid in full or otherwise fully satisfied. If
at any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by the
Lenders upon the insolvency, bankruptcy or reorganization of any of the
Borrowers, or otherwise, the provisions of this Section 2.16 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against any of the
other Borrowers with respect to any liability incurred by it hereunder or under
any of the other Loan Documents, any payments made by it to the Agent for the
benefit of the Lenders with respect to any of the Obligations or any collateral
security therefor. Any claim which any Borrower may have against any other
Borrower with respect to any payments to the Agent or any Lender hereunder or
under any other Loan
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Documents is hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
any other Borrower therefor.
(h) Each of the Borrowers hereby agrees that, after the
occurrence and during the continuance of any Potential Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Potential Default or
Event of Default, such Borrower will not demand, ▇▇▇ for or otherwise attempt
to collect any indebtedness of the other Borrower owing to such Borrower until
the Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced and
received by such Borrower as trustee for the Lenders and promptly paid over to
the Agent for application to the Obligations.
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit.
(a) General.
(i) In order to assist the Borrowers in
establishing or opening with the Letter of Credit Issuer documentary and
standby letters of credit (the "Letters of Credit"), the Borrowers have
requested CIT to join in the applications for such Letters of Credit, and/or
guarantee payment or performance of such Letters of Credit and any drafts or
acceptances thereunder through the issuance of a Letter of Credit Guaranty,
thereby lending CIT's credit to that of the Borrowers, and CIT has agreed to do
so. These arrangements shall be handled by CIT subject to the terms and
conditions set forth below. CIT shall have no obligation to arrange for the
issuance of Letters of Credit on or after the Termination Date or which, when
added to the aggregate amount of all outstanding and contemporaneous Revolving
Credit Loans and the Letter of Credit Exposure at such time, would cause the
amount of all Revolving Credit Loans and the Letter of Credit Exposure at any
time to exceed the Current Revolving Commitment at such time. In addition, CIT
shall not be required to be the issuer of any Letter of Credit. The Borrowers
will be, jointly and severally, the account party for any application for a
Letter of Credit, which shall be substantially in the form of Exhibit F hereto
or on a computer transmission system approved by CIT and the Letter of Credit
Issuer or such other written form or computer transmission system or such other
form as may from time to time be approved by the Letter of Credit Issuer and
CIT, and shall be duly completed in a manner acceptable to CIT, together with
such other
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certificates, agreements, documents and other papers and information as the
Letter of Credit Issuer or CIT may request (the "Letter of Credit
Application"). In the event of any conflict between the terms of the Letter of
Credit Application and this Agreement, for purposes of this Agreement the terms
of this Agreement shall control.
(ii) The aggregate Letter of Credit Exposure
shall not exceed $25 million. In addition, without the prior written consent of
CIT and the Agent (A) no [l]▇▇▇▇▇ of [c]redit shall have an expiration date
later than the date that is one year after the date of issuance thereof, (B) no
Letter of Credit may be amended or otherwise modified or waived, (C) the expiry
date of each Letter of Credit shall be no later than 15 days prior to the
Termination Date unless on or prior to 15 days prior to the Termination Date
such Letter of Credit shall be cash collateralized in an amount equal to at
least 105% of the Stated Amount thereof, (D) each Letter of Credit and all
documentation in connection therewith shall be in form and substance
satisfactory to CIT and the Letter of Credit Issuer, and (E) no Letter of
Credit shall be issued for the benefit of domestic trade creditors in
connection with the purchase of Inventory by a Borrower.
(iii) The Agent shall have the right, without
notice to the Borrowers, to charge the Loan Account with the amount of any and
all indebtedness, liabilities and obligations (including indemnification for
breakage costs, capital adequacy and reserve requirement charges) incurred by
the Agent or the Lenders hereunder or by CIT under the Letter of Credit
Guaranty (A) on the date of payment by the Agent, the Lenders or CIT, as the
case may be, of such indebtedness, liability or obligation, and (B) with
respect to any Letter of Credit which is not cash collateralized as provided in
this Agreement, at any time after the occurrence and during the continuance of
an Event of Default. Any amount charged to the Loan Account shall be deemed a
Revolving Credit Loan hereunder made by the Lenders to the Borrowers on the
date of such charge, funded by the Agent on behalf of the Lenders and subject
to Sections 2.03(e) and (f). Any charges, fees, commissions, costs and expenses
charged to CIT for the account of the Borrowers by the Letter of Credit Issuer
in connection with or arising out of Letters of Credit issued pursuant to this
Agreement or out of transactions relating thereto will be charged to the Loan
Account in full when charged to or paid by CIT, and any such charges by CIT to
the Loan Account shall be conclusive and binding on the Borrowers and the
Lenders absent manifest error. Each of the Lenders and the Borrowers agree that
the Agent shall have the right to make such charges regardless of whether any
Event of Default or Potential Default shall have occurred and be continuing or
whether any of the conditions precedent in Section 5.02 have been satisfied.
(iv) The Borrowers agree to unconditionally and
jointly and severally indemnify each of the Agent, CIT and each Lender and to
hold each of the Agent, CIT and each Lender harmless from any and all loss,
claim or liability incurred by such Person arising from any transactions or
occurrences relating to Letters of Credit established or opened for the
Borrowers' account and any drafts or acceptances thereunder, and all
Obligations thereunder, including any such loss or claim due to any action
taken by the Letter of Credit Issuer, other than for any such loss, claim or
liability arising out of the gross negligence or willful misconduct of such
indemnified Person as determined by a final judgment of a court of competent
jurisdiction. The Borrowers further agree to jointly and severally hold the
Agent, CIT and each Lender harmless from any error or omission, negligence or
misconduct by the Letter of Credit Issuer
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unless such error, omission, negligence or misconduct is a result of such
indemnified Person's gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction. The Borrowers agree that
any charges incurred by CIT for the Borrowers' account by the Letter of Credit
Issuer shall be conclusive and binding on the Borrowers absent manifest error
and may be charged to the Loan Account.
(v) None of the Agent, CIT, the Letter of
Credit Issuer or any of the Lenders shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of the
goods purporting to be represented by any documents; any difference or
variation in the character, quality, quantity, condition, packing, value or
delivery of the goods from that expressed in the documents; the validity,
sufficiency or genuineness of any documents or of any endorsements thereof even
if such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; the time, place, manner or order in which
shipment is made; partial or incomplete shipments, or failure or omission to
ship any or all of the goods referred to in the Letters of Credit or documents;
any deviation from instructions; delay, default, or fraud by the shipper and/or
anyone else in connection with any such goods or the shipping thereof; or any
breach of contract between the shipper or vendors and the Borrowers.
Furthermore, without being limited by the foregoing, none of the Agent, CIT,
the Letter of Credit Issuer or any of the Lenders shall be responsible for any
act or omission with respect to or in connection with any goods covered by
Letters of Credit.
(vi) The Borrowers jointly and severally agree
that any action taken by the Agent, CIT, the Letter of Credit Issuer or any
Lender, if taken in good faith, under or in connection with the Letters of
Credit, the guarantees, the drafts or acceptances, or the goods purported to be
represented by any documents, shall be binding on the Borrowers (with respect
to the Letter of Credit Issuer, the Agent, CIT and the Lenders) and shall not
put the Agent, CIT or the Lenders in any resulting liability to the Borrowers.
In furtherance thereof, CIT shall have the full right and authority to clear
and resolve any questions of non-compliance of documents; to give any
instructions as to acceptance or rejection of any documents or goods; to
execute any and all steamship or airways guaranties (and applications
therefore), indemnities or delivery orders; to grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances, or documents; and to agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or
acceptances; all in CIT's sole name, and the Letter of Credit Issuer shall be
entitled to comply with and honor any and all such documents or instruments
executed by or received solely from CIT, all without any notice to or any
consent from the Borrowers, provided that, notwithstanding the foregoing,
unless a Potential Default or an Event of Default shall have occurred and be
continuing, CIT shall not take any of the foregoing actions that result in a
departure in any material respect from the terms of the relevant Letter of
Credit or Letter of Credit Application.
(vii) Without CIT's express consent in writing or
through a computer transmission, the Borrowers jointly and severally agree: (A)
not to execute any applications for steamship or airway guaranties, indemnities
or delivery orders; to grant any extensions of the maturity of, time of payment
for, or time of presentation of, any drafts, acceptances or documents; or to
agree to any amendments, renewals, extensions, modifications,
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changes or cancellations of any of the terms or conditions of any of the
applications, Letters of Credit, drafts or acceptances; and (B) after the
occurrence and during the continuance of an Event of Default, to (1) clear and
resolve any questions of non-compliance of documents, or (2) give any
instructions as to acceptances or rejection of any documents or goods.
(viii) The Borrowers jointly and severally agree
that any necessary and material import, export or other license or certificates
for the import or handling of Inventory required to be obtained by any Borrower
will have been promptly procured; all foreign and domestic governmental laws
and regulations applicable to any Borrower in regard to the shipment and
importation of Inventory or the financing thereof will have been timely and
fully complied with, and any certificates in that regard that CIT may at any
time reasonably request will be promptly furnished. In this connection, the
Borrowers represent and warrant that all shipments made under any such Letters
of Credit are in compliance with the laws and regulations of the countries in
which the shipments originate and terminate except where all instances of such
non-compliance taken together will not have a Material Adverse Effect. As
between the Borrowers, on the one hand, and the Agent, CIT, the Lenders and the
Letter of Credit Issuer, on the other hand, the Borrowers jointly and severally
assume all risk, liability and responsibility for, and agree to pay and
discharge, all present and future local, state, federal or foreign taxes,
duties, or levies. As between the Borrowers, on the one hand, and the Agent,
CIT, the Lenders and the Letter of Credit Issuer, on the other hand, any
embargo, restriction, laws, customs or regulations of any country, state, city,
or other political subdivision, where such Inventory is or may be located, or
wherein payments are to be made, or wherein drafts may be drawn, negotiated,
accepted, or paid, shall be solely the Borrowers' joint and several risk,
liability and responsibility.
(ix) Upon any payments made to the Letter of
Credit Issuer under the Letter of Credit Guaranty, CIT or the Lenders, as the
case may be, shall, without prejudice to its rights under this Agreement
(including that such unreimbursed amounts shall constitute Loans hereunder),
acquire by subrogation, any rights, remedies, duties or obligations granted or
undertaken by the Borrowers to the Letter of Credit Issuer in any Letter of
Credit Application, any standing agreement relating to Letters of Credit or
otherwise, all of which shall be deemed to have been granted to the Agent and
apply in all respects to the Agent and shall be in addition to any rights,
remedies, duties or obligations contained herein.
(x) In the event that the Borrowers are
required to provide cash collateral for any Letter of Credit, the Borrowers
shall deposit such cash collateral in the Letter of Credit Cash Collateral
Account, which cash collateral shall be held in the Letter of Credit Cash
Collateral Account until either all Obligations have been paid in full in cash
or cash collateral is no longer required under the terms of this Agreement;
provided, that, when the Borrowers elect, and are not required, to provide cash
collateral for a Letter of Credit, the cash collateral for such Letter of
Credit shall be returned to the Borrowers if at such time (A) no Event of
Default or Potential Default has occurred and is continuing and (B) no amounts
are available to be drawn on such Letter of Credit and all Unreimbursed Draws
have been paid in full.
(b) Request for Issuance. The Administrative Borrower
may from time to time, upon notice (an "L/C Notice") not later than 12:00 noon,
New York City time, at
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least three Business Days in advance, request CIT to assist a Borrower in
establishing or opening a Letter of Credit by delivering to the Agent, with a
copy to the Letter of Credit Issuer, a Letter of Credit Application, together
with any necessary related documents. CIT shall not provide support, pursuant
to the Letter of Credit Guaranty, if the Agent shall have received written
notice from the Majority Lenders on the Business Day immediately preceding the
proposed issuance day for such Letter of Credit that one or more of the
conditions precedent in Section 5.02 will not have been satisfied on such date,
and neither CIT nor the Agent shall otherwise be required to determine that, or
take notice whether, the conditions precedent set forth in Section 5.02 have
been satisfied.
3.02. Participations.
(a) Purchase of Participations. Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit in accordance
with the procedures set forth in Section 3.01, each Lender (other than CIT)
shall be deemed to have irrevocably and unconditionally purchased and received
from CIT, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Pro Rata Share, in all
obligations of CIT with respect to such Letter of Credit (including, without
limitation, all Undrawn Letter of Credit Availability and Reimbursement
Obligations of the Borrowers with respect thereto pursuant to the Letter of
Credit Guaranty or otherwise).
(b) Sharing of Letter of Credit Payments. In the event
that CIT makes any payment in respect of the Letter of Credit Guaranty and the
Borrowers shall not have repaid such amount to the Agent for the account of
CIT, the Agent shall charge the Loan Account in the amount of the Reimbursement
Obligation, in accordance with Section 3.01(a)(iii).
(c) Obligations Irrevocable. The obligations of a Lender
to make payments to the Agent for the account of the Agent or CIT with respect
to a Letter of Credit shall be irrevocable, not subject to any qualification or
exception whatsoever and shall be made in accordance with, but not subject to,
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense
or other right which any Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, Letter of Credit Issuer, any Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between any Borrower or any other party and the
beneficiary named in any Letter of Credit);
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(iii) any draft, certificate or any other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Loan
Documents;
(v) any failure by the Agent to provide any
notices required pursuant to this Agreement relating to Letters of Credit;
or
(vi) the occurrence of any Event of Default or
Potential Default.
ARTICLE IV
BORROWING BASE
4.01. Condition of Lending and Assisting in Establishing or Opening
Letters of Credit. CIT and the other Lenders shall have no obligation to make a
Revolving Credit Loan or assist in establishing or opening a Letter of Credit
to the extent that the aggregate unpaid principal amount of the Revolving
Credit Loans plus the Letter of Credit Exposure exceeds, or after giving effect
to a requested Credit Extension would exceed, the Current Revolving Commitment
at such time.
4.02. Mandatory Prepayment. Concurrently with the delivery of any
Borrowing Base Certificate, the Administrative Borrower shall give notice to
the Agent of any mandatory prepayment pursuant to Section 2.04(b)(i), which
notice shall specify a prepayment date no later than the earlier of the date on
which such Borrowing Base Certificate is given and the date on which such
Borrowing Base Certificate is required to be provided to the Lenders.
4.03. Rights and Obligations Unconditional. Without limitation of
any other provision of this Agreement, the rights of the Agent, CIT and the
Lenders and the obligations of the Borrowers under this Article IV are
absolute, unconditional and joint and several and the Agent, CIT and the
Lenders shall not be deemed to have waived the condition set forth in Section
4.01 or their right to payment in accordance with Section 4.02 in any
circumstance whatever, including but not limited to circumstances wherein, the
Agent or the Lenders (knowingly or otherwise) make an advance hereunder in
excess of the Borrowing Base.
4.04 Borrowing Base Certificate.
(a) By 12:00 noon, New York City time three Business
Days after the last day of each week (and on any other date on which the Agent
reasonably requests), the Administrative Borrower shall furnish to the Agent a
certificate, substantially in the form of Exhibit D hereto ("Borrowing Base
Certificate"), certified as true and correct by a Designated Financial Officer,
setting forth the Borrowing Base and the other information required therein as
of each Borrower's close of business on the last day of such week, together
with such other information with respect to the Inventory and Accounts
Receivable of the Borrowers as the
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Agent may reasonably request; provided, however, that in the event that
Availability is at least $50,000,000 for each day during a period of eight
consecutive weeks, the Borrowers may thereafter, upon notice to the Agent,
elect to submit Borrowing Base Certificates on a monthly basis, in which event
the Administrative Borrower shall submit to the Agent by 12:00 noon New York
City time, fifteen (15) Business Days after the last day of each month a
Borrowing Base Certificate, certified as described above setting forth the
Borrowing Base and other information required therein as of each Borrower's
close of business on the last day of such month, together with such other
information as the Agent may reasonably request.
(b) In the event of any dispute about the eligibility of
any asset for inclusion in the Borrowing Base or the valuation thereof, the
Agent's good faith judgment shall control.
(c) The Borrowing Base set forth in a Borrowing Base
Certificate shall be effective from and including the date such Borrowing Base
Certificate is duly received by the Agent to but not including the date on
which a subsequent Borrowing Base Certificate is duly received by the Agent,
unless the Agent disputes the eligibility of any asset for inclusion in the
Borrowing Base or the valuation thereof by notice of such dispute to the
Borrowers, in which case the value of such asset shall, at the discretion of
the Borrowers, either not be included in the Borrowing Base or be included in
the Borrowing Base with a value reasonably acceptable to the Agent.
(d) Each Borrowing Base Certificate shall be accompanied
by backup schedules showing the derivation thereof and containing such detail
and such other and further information as the Agent may reasonably request from
time to time.
4.05. General Provisions. Notwithstanding anything to the contrary
in this Article IV, in no event shall any single element of value or asset be
counted twice in determining the Borrowing Base.
ARTICLE V
CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT
ISSUANCE AND LENDING
5.01. Conditions Precedent to Effectiveness. This Agreement shall
become effective as of the Business Day when each of the following conditions
precedent shall have been satisfied or shall have been waived by the Agent, and
the obligation of any Lender to make its Pro Rata Share of the initial Loan
hereunder or the obligation of CIT or any Lender to assist a Borrower in
obtaining the issuance of the initial Letter of Credit hereunder shall be
subject to the satisfaction of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have paid
all fees, costs, expenses and taxes then payable by the Borrowers including,
without limitation, those due
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and payable pursuant to Sections 2.08 and 11.06. The Borrowers shall have paid
to counsel to the Agent all fees and other client charges due to such counsel
on the Closing Date.
(b) Representations and Warranties; No Event of Default.
The representations and warranties contained in Article VI and in each other
Loan Document and certificate or other writing delivered to the Agent, the
Lenders or the Letter of Credit Issuer pursuant hereto or thereto or prior to
the Closing Date shall be correct in all material respects on and as of the
Closing Date as though made on and as of such date; and no Potential Default or
Event of Default shall have occurred and be continuing on the Closing Date or
would result from this Agreement becoming effective in accordance with its
terms.
(c) Legality. The making of the initial Loans and the
issuance of the initial Letter of Credit, as applicable, shall not contravene
any law, rule or regulation of any Governmental Authority applicable to CIT,
the Lenders or the Letter of Credit Issuer.
(d) Delivery of Documents. The Agent shall have received
on or before the Closing Date the following, each in form and substance
satisfactory to the Agent and, unless indicated otherwise, dated the Closing
Date:
(i) a Term Note jointly and severally payable
to the order of each Lender, duly executed by the Borrowers;
(ii) a Revolving Credit Note jointly and
severally payable to the order of each Lender, duly executed by the
Borrowers;
(iii) the Security Agreements, duly executed by
the Borrowers;
(iv) the Guaranty, duly executed by GS
Technologies;
(v) appropriate financing statements on Form
UCC-1, duly executed by each Borrower, to be duly filed in such office or
offices as may be necessary or, in the opinion of the Agent, desirable to
perfect the security interests purported to be created by the Security
Documents;
(vi) certified copies of requests for copies or
information on Form UCC-11, listing all effective financing statements
which name as debtor any Obligor, and the results of searches with respect
to tax liens and judgment liens against any Obligor, which are filed in
the offices referred to in paragraph (v) above or any other filing or
recording offices specified by the Agent, together with copies of such
financing statements and notices of such liens, none of which, except as
otherwise agreed to in writing by the Agent, shall cover any of the
Collateral;
(vii) a copy of the resolutions adopted by the
Board of Directors of each Obligor, certified as of the Closing Date by an
authorized officer thereof, authorizing (A) in the case of each Borrower,
the borrowings hereunder and the transactions contemplated by the Loan
Documents to which such Obligor is or will be a party, and (B) the
execution, delivery and performance by such Obligor of each Loan
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Document and the execution and delivery of the other documents to be
delivered by such Obligor in connection therewith;
(viii) a certificate of an authorized
officer of each Obligor, certifying the names and true signatures of the
officers of such Obligor authorized to sign each Loan Document to which
such Obligor is or will be a party and the other documents to be executed
and delivered by such Obligor in connection therewith, together with
evidence of the incumbency of such authorized officer;
(ix) a certificate, dated as of a date not
more than ten Business Days prior to the Closing Date, of the appropriate
official(s) of the states of incorporation and each state of foreign
qualification of each Obligor, certifying as to the subsistence in good
standing of, and, if available, the payment of taxes by, such Obligor in
such states and listing all charter documents of such Obligor on file with
such official(s);
(x) a copy of the charter of each Obligor
certified as of a date not more than ten (10) days prior to the Closing
Date by the appropriate official(s) of the state of incorporation of such
Obligor and as of the Closing Date by an authorized officer of such
Obligor;
(xi) a copy of the by-laws of each Obligor,
certified as of the Closing Date by an authorized officer of such Obligor;
(xii) a favorable written opinion of Parker, Poe,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P. in form and substance satisfactory to the Agent
and covering such matters as the Agent may reasonably request;
(xiii) a certificate of the Designated Financial
Officer of the Administrative Borrower, certifying as to the matters set
forth in Section 5.01(b);
(xiv) a copy of the consolidated financial
statements and consolidated projections of GSTOC and its Subsidiaries
referred to in Section 6.07, together with a copy of each management
letter, exception report or similar letter or report received by any
Borrower from its independent certified public accountants with respect to
any period covered thereby and a certificate of the Designated Financial
Officer of the Administrative Borrower setting forth all pending and, to
the knowledge of each Borrower, threatened litigation or claims and all
guarantees and other contingent liabilities of each Borrower and its
Subsidiaries in an amount in excess of $10,000,000;
(xv) a Borrowing Base Certificate current as of
the close of business on a date not earlier than February 29, 2000,
certified by the Designated Financial Officer of the Administrative
Borrower;
(xvi) a certificate of an authorized officer of
the Administrative Borrower certifying the names and true signatures of
those officers of the Administrative Borrower that are authorized to
provide Notices of Borrowing and all other notices under this Agreement
and the Loan Documents;
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(xvii) a copy of each Material Contract in
existence on the Closing Date, certified as a true and correct copy
thereof by the Designated Financial Officer of the Administrative
Borrower, and the Majority Lenders shall be satisfied with the terms
thereof;
(xviii) a certificate of insurance evidencing
insurance on the property of each Borrower as required by Section 7.07,
and, in the case of insurance covering any Collateral, confirming that the
Agent is named as an additional insured and loss payee with respect
thereto, using a long form loss payee endorsement;
(xix) a termination and release agreement in form
and substance satisfactory to the Agent, duly executed on behalf of the
agent and the lenders under the GECC Loan Agreement and the MEI Loan
Agreement, agreeing that upon the payment of an amount to be funded by the
Borrowers hereunder on or prior to the Closing Date that all Indebtedness
and other obligations due thereunder and all Liens securing any such
Indebtedness of other obligations shall have been discharged and released;
(xx) copies of all documents relating to MEI
becoming a direct, wholly-owned Subsidiary of GSTOC, certified as true and
correct copies thereof by a Designated Financial Officer of the
Administrative Borrower; and
(xxi) such other agreements, instruments,
approvals, opinions and other documents as the Agent may reasonably
request.
(e) Proceedings; Receipt of Documents. All proceedings
in connection with the transactions contemplated by this Agreement and the Loan
Documents and all documents incidental thereto, shall be satisfactory to the
Agent and its special counsel, and the Agent and such special counsel shall
have received all such information and such counterpart originals or certified
or other copies of such documents, in form and substance reasonably
satisfactory to the Agent, as the Agent or such special counsel may reasonably
request.
(f) Cash Management System. The cash management system
of the Borrowers shall be satisfactory to the Agent.
(g) Audit. The Agent shall have completed and shall be
satisfied (in its sole discretion) with the results of an audit of the Accounts
Receivable, Inventory, assets and liabilities and books and records of the
Borrowers, and the Borrowers shall have paid all fees and expenses payable in
connection with such audit.
(h) Lien Priority. The Lien in favor of the Agent
pursuant to the Loan Documents shall be a valid and perfected first priority
Lien on the Collateral, which shall be subject to no other Liens except for
Permitted Liens.
(i) Compliance. The Agent shall have received evidence
reasonably satisfactory to the Agent of each Borrower's compliance with all
requirements herein concerning Environmental Laws, ERISA, tax and labor
matters.
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(j) Legal Restraints/Litigation. On the Closing Date,
there shall be no (i) suit, action, investigation or proceeding (judicial or
administrative) pending or, to the knowledge of a Borrower, overtly threatened
against a Borrower or any of its Subsidiaries, or their assets, by any
Governmental Authority with respect to, or any injunction, writ or restraining
order restraining or prohibiting, the transactions contemplated by the Loan
Documents, or (ii) except as disclosed in Schedule 6.06 hereto, suit, action,
investigation or proceeding (judicial or administrative) pending or, to the
knowledge of a Borrower, overtly threatened against a Borrower or any of its
Subsidiaries, or their assets, which, could have a Material Adverse Effect.
(k) MEI Entities. MEI shall have become a wholly-owned,
direct Subsidiary of GSTOC and ME-West shall be a wholly-owned indirect
Subsidiary of GSTOC and a wholly-owned, direct Subsidiary of MEI, in each case,
pursuant to financial, tax and other terms and documentation satisfactory to
the Agent and in accordance with all applicable law and contractual provisions.
(l) Additional Availability. After giving effect to all
the Loans made and Letters of Credit issued on the Closing Date, (i) the
Availability shall be at least $25,000,000 in the aggregate on the Closing Date
and (ii) all obligations of the Borrowers shall be current. The Borrowers shall
deliver to the Agent a certificate of the Designated Financial Officer of the
Administrative Borrower certifying as to the matters set forth in clauses (i)
and (ii) above and containing the calculations thereof.
5.02. Conditions Precedent to Loans and Letters of Credit. In
addition to the requirements of Section 5.01, the obligation of each Lender to
make any Loan and the obligation of CIT or any Lender to assist the
Administrative Borrower in obtaining the issuance of any Letter of Credit is
subject to the fulfillment, in a manner satisfactory to the Agent, of each of
the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have paid
all fees, costs, expenses and taxes then payable by the Borrowers pursuant to
Sections 2.08 and 10.06.
(b) Representations and Warranties; No Event of Default.
The following statements shall be true, and the submission by the
Administrative Borrower to the Agent of a Notice of Borrowing with respect to a
Loan and a Borrower's acceptance of the proceeds of such Loan, or the
submission by the Administrative Borrower to the Agent and the Letter of Credit
Issuer of an L/C Notice with respect to a Letter of Credit and the issuance of
such Letter of Credit shall be deemed to be a representation and warranty by
each Borrower on the date of such Loan and the date of the issuance of such
Letter of Credit that, (i) the representations and warranties contained in
Article VI and in each other Loan Document and certificate or other writing
delivered to the Agent, the Lenders and the Letter of Credit Issuer pursuant
hereto on or prior to the date of such Loan or Letter of Credit are correct in
all material respects on and as of such date as though made on and as of such
date (except for representations and warranties which relate to a specific
date) and; (ii) no Potential Default or Event of Default has occurred and is
continuing or would result from the making of the Loan to be made on such date
or the issuance of the Letter of Credit to be issued on such date.
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(c) Legality. The making of such Loan or the issuance of
such Letter of Credit shall not contravene any law, rule or regulation of any
Governmental Authority applicable to CIT, the Lenders or the Letter of Credit
Issuer.
(d) Borrowing Notice. The Agent shall have received (i)
a Notice of Borrowing pursuant to Section 2.03 no later than 12:00 noon (New
York City time) three Business Days prior to the date of the proposed borrowing
with respect to a Eurodollar Loan or on the date of a proposed borrowing of a
Prime Loan or (ii) an L/C Notice and a Letter of Credit Application pursuant to
Section 3.01 not later than 12:00 noon (New York City time) three Business Days
prior to the proposed date of issuance of a Letter of Credit.
(e) Delivery of Documents. The Agent shall have received
such other agreements, instruments, approvals and other documents, each in form
and substance satisfactory to the Agent, as the Agent may reasonably request.
(f) Proceedings; Receipt of Documents. All proceedings
in connection with the making of such Loan or the issuance of such Letter of
Credit and the other transactions contemplated by this Agreement, and all
documents incidental thereto, shall be satisfactory to the Agent and its
special counsel, and the Agent and such special counsel shall have received all
such information and such counterpart originals or certified or other copies of
such document, in form and substance satisfactory to the Agent, as the Agent or
such special counsel may reasonably request.
(g) Revolving Commitment. The aggregate unpaid principal
amount of the Loans and the Letter of Credit Exposure shall not exceed, and
after giving effect to the requested Credit Extension will not exceed, the
Current Revolving Commitment.
Any oral or written request by the Administrative Borrower for any Credit
Extension hereunder shall constitute a representation and warranty by the
Borrowers that the conditions set forth in this Section 5.02 have been
satisfied (unless waived by the Agent) as of the date of such request. Failure
of the Agent to receive notice from the Administrative Borrower to the contrary
before such Credit Extension is made shall constitute a further representation
and warranty by the Borrowers that the conditions set forth in this Section
5.02 have been satisfied as of the date of such Credit Extension.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to the Agent and the
Lenders as follows:
6.01. Organization, Good Standing, Etc. Each Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its organization, (ii) has all
requisite power and authority to conduct its business as now conducted and as
presently contemplated and, in the case of each Borrower, to make the
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borrowings hereunder and to consummate the transactions contemplated hereby,
and (iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except, with respect to this clause (iii), where all instances of such failure
to qualify taken together will not have a Material Adverse Effect.
6.02. Authorization, Etc. The execution, delivery and
performance by each Borrower of the Loan Documents to which it is a party, (i)
have been duly authorized by all necessary corporate action, (ii) do not and
will not contravene its charter or by-laws, any other applicable law or any
contractual restriction binding on or otherwise affecting it or any of its
properties or result in a default under any agreement or instrument to which a
Borrower is a party or by which such Borrower or its properties may be subject
[other than any noncompliance with the GECC Loan Agreement resulting solely
from the initial borrowing hereunder prior to the application of the use of
proceeds thereof on the Closing Date], (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any such Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.
6.03. Governmental Approvals. No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Governmental
Authority is or will be necessary in connection with the execution and delivery
by any Borrower of the Loan Documents to which it is a party, consummation of
the transactions therein contemplated, performance of or compliance with the
terms and conditions thereof or to ensure the legality, validity,
enforceability and admissibility in evidence thereof, except for the filings
and recordings in respect of the Liens created pursuant to the Security
Documents.
6.04. Enforceability of Loan Documents. This Agreement and
the other Loan Documents to which any Borrower is or will be a party are, and
when delivered hereunder, will be, a legal, valid and binding obligation of
such Borrower, enforceable against such Borrower in accordance with its terms.
6.05. Subsidiaries. Schedule 6.05 hereto is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding capital stock of each Subsidiary of each Borrower in existence
on the Closing Date. All shares of such stock owned by each Borrower or one or
more of its Subsidiaries, as indicated in such Schedule, are owned free and
clear of all Liens except for the security interest in favor of the trustee
under the 1994 Indenture in the outstanding capital stock of GSTOC and MEI.
There are no options, warrants or other rights to acquire shares of capital
stock of any Subsidiary of a Borrower.
6.06. Litigation. Except as disclosed in Schedule 6.06
hereto, there is no pending or, to the knowledge of any Borrower, overtly
threatened in writing, any action, suit or proceeding affecting any Borrower or
any of its Subsidiaries before any court or other Governmental Authority or any
arbitrator which questions the validity of any Loan Document or
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which, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect.
6.07. Financial Condition.
(a) Historical Statements. The Borrowers have
heretofore furnished to the Lenders draft consolidated unaudited financial
statements of GSTOC and its Consolidated Subsidiaries as at December 31, 1999,
which are to be reviewed by PricewaterhouseCoopers, L.L.P., and draft
consolidated financial statements of MEI and its Consolidated Subsidiaries as
at December 31, 1999, as to be examined and reported on by
PricewaterhouseCoopers, L.L.P. Such financial statements present fairly the
financial condition of GSTOC and its Consolidated Subsidiaries and the MEI
Entities, respectively, as at the respective dates thereof and the results of
operations and the cash flows of GSTOC and its Subsidiaries and the MEI
Entities, respectively, for such fiscal periods, all in conformity with GAAP.
Except as disclosed in the Schedules hereto, GSTOC and its Consolidated
Subsidiaries and the MEI Entities do not have any material contingent
liabilities (including liabilities for taxes), unusual forward or long term
commitments or unrealized or anticipated losses from unfavorable commitments.
(b) Projections. The Borrowers have heretofore
furnished to the Lenders quarterly projections of GSTOC and its Consolidated
Subsidiaries and the MEI Entities for the fiscal twelve-month period ending
December 31, 2000. Such projections have been prepared in accordance with the
standard set forth in the second sentence of Section 6.17.
6.08. Compliance with Law, Etc. Each Borrower and its
Subsidiaries is not in violation of any provision of its charter or by-laws,
any law or any term of any material agreement or instrument binding on or
otherwise affecting it or any of its properties, except, in the case of
violations of law, where all such violations taken together will not have a
Material Adverse Effect.
6.09. ERISA. (i) Each Plan is in substantial compliance with
the applicable provisions of ERISA and the Code, (ii) no Termination Event has
occurred nor is reasonably expected to occur with respect to any Benefit Plan,
(iii) the most recent annual report (Form 5500 Series) with respect to each
Plan, including Schedule B (Actuarial Information) thereto, copies of which
have been filed with the Internal Revenue Service, is complete and correct in
all material respects and fairly presents the funding status of such Benefit
Plan, and since the date of such report there has been no material adverse
change in such funding status, (iv) no Benefit Plan had an accumulated or
waived funding deficiency or permitted decreases which would create a
deficiency in its funding standard account within the meaning of Section 412 of
the Code at any time during the previous 60 months, and (v) no Lien imposed
under the Code or ERISA exists or is likely to arise on account of any Benefit
Plan within the meaning of Section 412 of the Code. None of the Borrowers and
their respective ERISA Affiliates has incurred any withdrawal liability under
ERISA with respect to any Multiemployer Plan, and no Borrower is aware of any
facts indicating that such Borrower or any of its ERISA Affiliates may in the
future incur any such withdrawal liability. Except as required by Section 4980B
of the Code or as disclosed on Schedule 6.09, the Borrowers do not maintain a
welfare plan (as defined in Section 3(1) of ERISA) which provides benefits or
coverage after a participant's termination of employment.
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None of the Borrowers and their respective ERISA Affiliates
has incurred any liability under the Worker Adjustment and Retraining
Notification Act. All Plans for which any of the Borrowers and their respective
ERISA Affiliates must file an annual report are identified in Schedule 6.09
hereto.
6.10. Taxes, Etc. All tax returns required to be filed by the
Borrowers and any of their respective Subsidiaries have been properly prepared,
executed and filed. All taxes, assessments, fees and other governmental charges
upon the Borrowers and their respective Subsidiaries or upon any of their
respective properties, income, sales or franchises which are shown thereon as
due and payable have been paid, unless payment thereof is being contested in
good faith by appropriate proceedings which stay the imposition of any penalty,
fine or Lien resulting from the non-payment thereof or for which an extension
for the time of payment has been obtained and with respect to which, adequate
reserves therefor are being maintained. The reserves and provisions for taxes,
if any, on the books of the Borrowers are adequate for all open years and for
its current fiscal period. Except as set forth in Schedule 6.10 hereto, the
Borrowers do not know of any proposed additional assessment or basis for any
material assessment for additional taxes (whether or not reserved against). The
federal income tax liabilities of the Borrowers and their respective
Subsidiaries have been finally determined by the Internal Revenue Service, or
the time for audit has expired, for all fiscal periods ending on or prior to
December 31, 1993 and all such liabilities (including all deficiencies assessed
following audit) have been satisfied.
6.11. Regulation T, U or X. The Borrowers are not and will
not be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U or X
issued by the Board), and no proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
6.12. Nature of Business. Except as otherwise permitted by
Section 8.05, none of the Borrowers and their Subsidiaries is engaged in any
business other than the production of high carbon and special grade wire rod,
grinding media and mill liners and certain other high quality wire products.
6.13. Adverse Agreements, Etc. Except for the Offtake
Agreement, none of the Borrowers and their Subsidiaries is a party to any
agreement or instrument, or subject to any charter or other corporate
restriction or any judgment, order, regulation, ruling or other requirement of
a court or other Governmental Authority, which has, or could reasonably be
expected to have, a Material Adverse Effect.
6.14. Holding Company and Investment Company Acts. None of
the Borrowers and their Subsidiaries is a (i) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended, or (ii) an "investment company" or an "affiliated person"
or "promoter" of, or "principal underwriter" of or for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended.
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6.15. Permits, Etc. The Borrowers and their respective
Subsidiaries have all permits, licenses, authorizations and approvals required
for them lawfully to own and operate their business except where the absence of
such permit, license, authorization or approval does not have, or could not
reasonably be expected to have, a Material Adverse Effect.
6.16. Priority; Title. Except for Permitted Liens, the Liens
granted under the Security Documents constitute and shall at all times
constitute legal, valid, perfected, first priority Liens on the Collateral,
subject to no other Liens other than Permitted Liens, and each Borrower is the
sole and absolute owner of its Collateral with full right to pledge, sell,
consign, transfer and create Liens therein. No Person has any right of first
refusal, option or other preferential right to purchase any Collateral. The
Borrowers jointly and severally will at their expense forever warrant and, at
the Agent's request, defend the same from any and all claims and demands of any
other Person other than the Permitted Liens; and no Borrower will grant, create
or permit to exist, any Lien upon the Collateral, or any proceeds thereof, in
favor or any other Person other than Permitted Liens. The Borrowers and their
respective Subsidiaries have good and marketable title to all of their
properties and assets, free and clear of all Liens except Permitted Liens,
6.17. Full Disclosure. No information contained in this
Agreement, any other Loan Document or certificate or other written statement
furnished by or on behalf of any Borrower or its Subsidiaries pursuant to this
Agreement or any other Loan Documents contains any material misstatement of
fact or omits to state a material fact or any fact necessary to make the
statements contained herein or therein not misleading. To the extent the
Borrowers furnish any projections of the financial position and results of
operations of the Borrowers for, or as at the end of, future periods, the
Borrowers represent only that such information was or will be prepared in good
faith and on the basis of assumptions believed by the Borrowers to be
reasonable at the time made and upon the best information then reasonably
available to the Borrowers.
6.18. Environmental Matters. Except as disclosed in Schedule
6.18 hereto, (i) none of the operations of the Borrowers is the subject of any
federal, state or local investigation to determine whether any Remedial Action
is needed to address the presence, disposal, Release or threatened Release of
Hazardous Materials, which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (ii) the operations of the
Borrowers and their respective Subsidiaries are in compliance with all
applicable Environmental Laws, except where such non-compliance could not
reasonably be expected to have a Material Adverse Effect; (iii) there has been
no Release at any of the properties owned or operated by the Borrowers, their
respective Subsidiaries or, to the knowledge of the Borrowers and their
respective Subsidiaries, any predecessor in interest or title, or, to the
knowledge of the Borrowers and their respective Subsidiaries, at any disposal
or treatment facility which received Hazardous Materials generated by any of
the Borrowers and their respective Subsidiaries or, to the knowledge of the
Borrowers and their respective Subsidiaries, any predecessor in interest or
title which is reasonably likely to result in Environmental Liabilities and
Costs of $2,000,000 or more in the aggregate for all such Releases; (iv) no
Environmental Actions have been asserted against any of the Borrowers and their
respective Subsidiaries or, to the knowledge of the Borrowers and their
respective Subsidiaries, any predecessor in interest or title nor do the
Borrowers or their
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respective Subsidiaries have knowledge or notice of any pending or overtly
threatened Environmental Action against the Borrowers, their respective
Subsidiaries or, to the knowledge of the Borrowers and their respective
Subsidiaries, any predecessor in interest or title which, if adversely
determined, is reasonably likely to result in Environmental Liabilities and
Costs of $2,000,000 or more in the aggregate for all such Environmental
Actions; (v) the Borrowers and their respective Subsidiaries have obtained all
permits, approvals, authorizations and licenses required by Environmental Laws
necessary for their operations, and all such permits, approvals, authorizations
and licenses are in effect and the Borrowers and their respective Subsidiaries
are in compliance with all terms and conditions of such permits, approvals,
authorizations and licenses, except to the extent that any such non-compliance
could not reasonably be expected to have a Material Adverse Effect; (vi) to the
knowledge of each Borrower, no Environmental Actions have been asserted against
any facilities that may have received Hazardous Materials generated by any of
the Borrowers and their respective Subsidiaries or any predecessor in interest
or title which, if adversely determined, is reasonably likely to result in
Environmental Liabilities and Costs of $2,000,000 or more in the aggregate for
all such Environmental Actions.
6.19. Insurance. The Borrowers and their respective
Subsidiaries keep their properties adequately insured and maintain (i)
insurance to such extent and against such risks, including fire, as is
customary with companies in the same or similar businesses, (ii) workers
compensation insurance in the amount required by applicable law, (iii) public
liability insurance in the amount customary with companies in the same or
similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, and (iv) such other insurance as may be
required by law or by the Loan Documents. Schedule 6.19 hereto sets forth a
list of all insurance maintained by the Borrowers and their respective
Subsidiaries on the Closing Date.
6.20. Financial Accounting Practices, Etc.
(a) The Borrowers and their respective
Subsidiaries make and keep books, records and accounts which, in reasonable
detail, accurately and fairly reflect their respective transactions and
dispositions of their respective assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with GAAP except as
previously disclosed to the Agent and (B) to maintain accountability for
assets, and (iii) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(b) The Borrowers and their respective
Subsidiaries maintain a system of internal procedures and controls sufficient
to provide reasonable assurance that the information required to be set forth
in each Borrowing Base Certificate (including, without limitation, information
relating to the identification of assets which are Inventory and the valuation
thereof) is accurate.
6.21. No Material Adverse Effect. Since December 31, 1999,
there has not occurred any Material Adverse Effect or any event which could
reasonably be expected to have a
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Material Adverse Effect. Any determination hereunder of whether any such
Material Adverse Effect or event has occurred under clause (i) or (ii) of the
definition of such term shall be measured against the condition of the
Borrowers reflected in the draft financial statements dated as of such date and
described in Section 6.07.
6.22. Real Property; Leases.
(a) Schedule 6.22 hereto sets forth a complete
and accurate description and list as of the Closing Date of the location, by
state and street address, of all real property owned and leased by the
Borrowers, together with, in the case of real property that is owned, a
statement as to whether such real property is the subject of a contract of sale
(and, if so, a statement as to the status of such sale).
(b) As of the Closing Date, the Borrowers have
valid leasehold interests in the Leases described in Schedule 6.22 hereto.
Schedule 6.22 hereto sets forth with respect to each Lease, the commencement
date, termination date, renewal options (if any) and annual base rents. Each
such Lease is valid and enforceable in accordance with its terms in all
material respects and is in full force and effect. No consent or approval of
any landlord or other third party in connection with the Leases is necessary
for the Borrowers to enter into and execute the Loan Documents, except as set
forth on Schedule 6.22 hereto. No Borrower or, to the knowledge of the
Borrowers, any other party to any Lease is in default of its obligations
thereunder and neither the Borrowers has at any time delivered or received any
notice of default which remains uncured under any such Lease and, as of the
Closing Date, no event has occurred which, with the giving of notice or the
passage of time, or both, would constitute a default under any such Lease,
except for defaults the consequence of which in the aggregate would have no
Material Adverse Effect.
(c) All permits required to have been issued to
the Borrowers with respect to the real property owned or leased by the
Borrowers to enable such property to be lawfully occupied and used for all of
the purposes for which it is currently occupied and used (separate and apart
from any other properties), have been lawfully issued and are in full force and
effect, other than such permits which, if not obtained, would not have a
Material Adverse Effect, and all such real property complies in all material
respects with all applicable legal and insurance requirements except where such
noncompliance does not have, and could not be reasonably expected to have, a
Material Adverse Effect.
(d) The Borrowers have not received any notice,
nor do the Borrowers have any knowledge, of any pending, overtly threatened in
writing or contemplated condemnation proceeding affecting any real property
owned or leased by the Borrowers or any Subsidiary.
(e) Except as disclosed in Schedule 6.22 hereto,
no portion of any real property owned or leased by the Borrowers or any of
their respective Subsidiaries has suffered any damage by fire or other casualty
loss which has not heretofore been completely repaired and restored to its
condition existing prior to such casualty or which if not repaired or restored
could not reasonably be expected to result in a Material Adverse Effect.
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6.23. Location of Bank Accounts. Schedule 6.23 hereto sets
forth a complete and accurate list as of the Closing Date of all deposit and
other accounts, including the Cash Concentration Account and all Depository
Accounts, maintained by the Borrowers and their respective Subsidiaries
together with a description thereof, including the bank at which such deposit
or other account is maintained and the account number and the purpose thereof.
6.24. No Event of Default. No event has occurred and is
continuing and no condition exists which constitutes an Event of Default or
Potential Default.
6.25. Tradenames. Schedule 6.25 hereto sets forth a complete
and accurate list as of the Closing Date of all tradenames used by each
Borrower and its Subsidiaries.
6.26. Solvency. After giving effect to the transactions
contemplated by this Agreement and each Credit Extension, each Borrower is, and
the Borrowers taken as a whole are, Solvent.
6.27. Inventory. There is no location at which a Borrower has
any Inventory (except for Inventory in transit) other than (i) those locations
listed on Schedule 1.01(A) hereto and (ii) any other locations approved in
writing from time to time by the Agent pursuant to the definition of "Eligible
Inventory". Schedule 1.01(A) hereto contains a true, correct and complete list,
as of the Closing Date, of the legal names and addresses of warehouse or other
location at which Inventory of each Borrower is stored. None of the receipts
received by a Borrower from any warehouse states that the goods covered thereby
are to be delivered to bearer or to the order of a named Person or to a named
Person and such named Person's assigns.
6.28. Intellectual Property. The Borrowers and their
respective Subsidiaries own or license or otherwise have the right to use all
material licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights that are
necessary for the operations of their businesses and, to the knowledge of the
Borrowers or such Subsidiary, without infringement upon or conflict with the
rights of any other Person with respect thereto, except for such infringements
and conflicts which, individually or in the aggregate, could not have a
Material Adverse Effect. To the best knowledge of the Borrowers and their
respective Subsidiaries, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrowers or any of their respective
Subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened, except for such infringements and conflicts which could not have,
individually or in the aggregate, a Material Adverse Effect. To the knowledge
of the Borrowers and their respective Subsidiaries, no patent, invention,
device, application, principle or any statute, law, rule, regulation, standard
or code is pending or proposed, which, individually or in the aggregate, could
have a Material Adverse Effect.
6.29. Material Contracts. Set forth in Schedule 6.29 hereto
is a complete and accurate list as of the Closing Date of all Material
Contracts of each Borrower and its Subsidiaries, showing the parties and
subject matter thereof and amendments and modifications
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thereto. Each such Material Contract (i) is in full force and effect and is
binding upon and enforceable against such Borrower or its Subsidiaries, as the
case may be, and, to each Borrower's knowledge, all other parties thereto in
accordance with its terms, and (ii) has not been otherwise amended or modified
in any material respect. There exists no default under any Material Contract by
the Borrowers or any of their respective Subsidiaries or, to each Borrower's
knowledge, any other party thereto which has not been cured or waived.
6.30 Labor Relations; Collective Bargaining Agreements.
(a) Set forth in Schedule 6.30 hereto is a list
(including dates of termination) of all collective bargaining agreements
between or applicable to a Borrower or any of its Subsidiaries and any union,
labor organization or other bargaining agent in respect of the employees of
such Borrower or any of its Subsidiaries.
(b) None of the Borrowers and their respective
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. Except as disclosed in Schedule
6.30 hereto, there is (i) no significant unfair labor practice complaint
pending against a Borrower or any of its Subsidiaries or, to the best knowledge
of a Borrower or any of its Subsidiaries, threatened against any of them,
before the National Labor Relations Board, and no significant grievance or
significant arbitration proceeding arising out of or under any Collective
Bargaining Agreement is now pending against a Borrower or any of its
Subsidiaries or, to the best knowledge of a Borrower or any of its
Subsidiaries, threatened against any of them, (ii) no significant strike, labor
dispute, slowdown or stoppage is pending against a Borrower or any of its
Subsidiaries or, to the best knowledge of a Borrower or any of its
Subsidiaries, threatened against such Borrower or any of its Subsidiaries, and
(iii) to the best knowledge of a Borrower or any of its Subsidiaries, no union
representation question existing with respect to the employees of such Borrower
or any of its Subsidiaries, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, either individually or in the aggregate) such
as is not reasonably likely to have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any principal of or interest on any Loans or any
Reimbursement Obligation or any other Obligation (whether or not due) shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrowers
will, unless the Majority Lenders shall otherwise consent in writing:
7.01. Reporting Requirements. Furnish to the Lenders:
(a) Within fifteen (15) days after the date
hereof, the final consolidated unaudited financial statements of GSTOC and its
Consolidated Subsidiaries and the final consolidated audited financial
statements of MEI and its Consolidated Subsidiaries, drafts of each of which
were delivered pursuant to Section 5.01(d)(xiv), each of which shall be
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substantially the same in form and content as such corresponding draft
statements, and, beginning with the fiscal year of GSTOC ending December 31,
2000, within ninety (90) days after the close of each fiscal year of GSTOC,
consolidated and consolidating balance sheets of GSTOC and its Consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated and
consolidating statements of income and cash flows of GSTOC and its Consolidated
Subsidiaries for such fiscal year, all in reasonable detail, setting forth in
comparative form the corresponding figures for the immediately preceding fiscal
year (as to such consolidated statements), audited and accompanied by an
opinion of PricewaterhouseCoopers, L.L.P. or other independent certified public
accountants of recognized national standing selected by GSTOC and reasonably
satisfactory to the Agent. The opinion of such accountants (the "Accountant's
Opinion") shall be without a "going concern" qualification or like qualification
or exception or qualification arising out of the scope of the audit with
respect to such consolidated balance sheets and statements being prepared in
compliance with GAAP and shall in any event state that such balance sheets and
statements present fairly the financial position of GSTOC and its Consolidated
Subsidiaries as of the end of such fiscal year and the results of operations
and cash flows of GSTOC and its Consolidated Subsidiaries for such fiscal year,
in conformity with GAAP applied on a basis consistent with that of the
immediately preceding fiscal year (except for changes in application in which
such accountants concur). Each set of balance sheets and statements delivered
pursuant to this Section 7.01(a) shall be accompanied by (1) a certificate or
report by such accountants stating in substance that they have reviewed this
Agreement and that in making the examination necessary for their certification
of such statements and balance sheets and statements they did not become aware
of any Event of Default or Potential Default, or if they did become so aware,
such certificate or report shall state the nature and period of existence
thereof, if determinable, and (2) a certificate of the Designated Financial
Officer of the Administrative Borrower stating that such officer has reviewed
this Agreement and the other Loan Documents and that in making such review,
such officer did not become aware of any Event of Default or Potential Default,
or if such officer did become so aware, such certificate shall state the nature
and period of existence thereof, if determinable, in form and substance
satisfactory to the Agent.
(b) Within forth-five (45) days after the close of
each of the first three fiscal quarters of each fiscal year of GSTOC,
consolidated and consolidating balance sheets of GSTOC and its Consolidated
Subsidiaries as at the end of such quarter and the related consolidated and
consolidating statements of income and cash flows of GSTOC and its Consolidated
Subsidiaries for such quarter and for the period from the beginning of such
fiscal year to the end of such fiscal quarter, all in reasonable detail and,
except in the case of consolidating financial statements with respect to any
such fiscal quarter ending prior to April 1, 2001, setting forth in comparative
form the corresponding figures for the corresponding periods for the
immediately preceding fiscal year, certified by a Designated Financial Officer
of the Administrative Borrower as presenting fairly the financial position of
GSTOC and its Consolidated Subsidiaries as of the end of such quarter and
fiscal period and the results of operations and cash flows of GSTOC and its
Consolidated Subsidiaries for such quarter and fiscal period, in conformity
with GAAP applied on a basis consistent, except as otherwise disclosed therein,
with that of the most recent audited financial statements furnished to the
Lenders, subject to year-end adjustments. Each set of balance sheets and
statements delivered
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pursuant to this Section 7.01(b) shall be accompanied by a certificate of a
Designated Financial Officer of the Administrative Borrower stating that such
officer has reviewed this Agreement and the other Loan Documents and that in
making such review such officer did not become aware of any Event of Default or
Potential Default, or if such officer did become so aware, such certificate
shall state the nature and period of existence thereof, if determinable, in
form and substance satisfactory to the Agent.
(c) Within forty-five (45) days after the end of
each fiscal month of GSTOC consolidated and consolidating balance sheets of
GSTOC and its Consolidated Subsidiaries as at the last day of such month and
consolidated and consolidating statements of income and cash flows for GSTOC
and its Consolidated Subsidiaries for such fiscal month and for the period from
the beginning of such fiscal year to the end of such fiscal month, all in
reasonable detail and setting forth in comparative form the corresponding
figures for the corresponding periods during the preceding fiscal year, and
accompanied by a certificate of a Designated Financial Officer of the
Administrative Borrower stating that (1) such statements presenting fairly the
financial condition of GSTOC and its Consolidated Subsidiaries as of the end of
such fiscal month and the results of operations and cash flows of GSTOC for
such fiscal month and fiscal period in conformity with GAAP applied on a basis
consistent with prior practice, subject to year-end adjustments, and (2) such
officer has reviewed this Agreement and that in making such review such officer
did not become aware of any Event of Default or Potential Default, or if such
officer did become so aware, such certificate shall state the nature and period
of existence thereof, if determinable, in form and substance satisfactory to
the Agent.
(d) As soon as practicable and in any event within
fifteen (15) Business Days after the end of each fiscal month (including the
fiscal month in which this Agreement is executed), a monthly inventory report
in form and substance reasonably satisfactory to the Agent and certified by a
Designated Financial Officer of the Administrative Borrower, which shall be
accompanied by a reconciliation from the monthly inventory report as of the
Borrowers' close of business on the last day of the preceding month delivered
by the Borrower to the Lenders pursuant to this Section 7.01(d).
(e) As soon as practicable and in any event
within the applicable time period specified in Section 4.04, commencing March
10, 2000, a Borrowing Base Certificate.
(f) As soon as practicable and in any event within
fifteen (15) Business Days after the end of each fiscal month, a report showing
separately those Accounts Receivable which are more than one month, two months,
three months and four months old, and a description of all Liens, set-offs,
defenses and counter claims with respect thereto, in form and substance
reasonably satisfactory to the Agent and certified by a Designated Financial
Officer of the Administrative Borrower.
(g) As soon as practicable and in any event within
five (5) Business Days after an executive officer of any Borrower has actual
knowledge of any Potential Default, Event of Default or any other event that
has had, or is reasonably likely to have, a Material Adverse Effect, the
written statement of the Designated Financial Officer of the Administrative
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Borrower, setting forth the details of such Potential Default, Event of Default
or event and the action which the Borrowers propose to take with respect
thereto.
(h) Promptly upon distribution, filing, issuance
or their becoming available, a copy of (i) all reports, proxy statements,
financial statements and other information distributed by any Obligor or GSI to
its creditors or the financial community in general or filed by any Obligor or
GSI with the Securities and Exchange Commission or any national securities
exchange or the National Association of Securities Dealers, Inc., (ii) all
press releases issued by any Obligor or GSI, (iii) all other statements
concerning material changes or developments in the business of any Obligor made
available by such Obligor to the public and (iv) any accountant's management
letters and any audit or other reports submitted to any Obligor by independent
accountants.
(i) As soon as possible and in any event
(A) within thirty (30) days after a Borrower or any of its ERISA Affiliates
knows or has reason to know that any Termination Event described in clause (i)
of the definition of Termination Event with respect to any Benefit Plan has
occurred, and (B) within twenty (20) days after a Borrower or any of its ERISA
Affiliates knows or has reason to know that any other Termination Event with
respect to any Benefit Plan has occurred, or that a Borrower or any of its
ERISA Affiliates has failed to make a required installment to a Benefit Plan
within the meaning of Section 412(m) of the Code, a statement of the Designated
Financial Officer of such Borrower describing such Termination Event and the
action, if any, which such Borrower or such ERISA Affiliate proposes to take
with respect thereto, (ii) promptly and in any event within five (5) Business
Days after receipt thereof by a Borrower or any of its ERISA Affiliates from
the PBGC, copies of each notice received by such Borrower or any of its ERISA
Affiliates of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan, (iii) promptly and in any event within thirty
(30) days after the filing thereof with the Internal Revenue Service, copies of
each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Benefit Plan, (iv) promptly and in any event within thirty
(30) Business Days after request therefor by the Agent, a copy of each notice
received by such Borrower or any of its ERISA Affiliates from a sponsor of a
Multiemployer Plan or from the PBGC concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA,
(v) promptly, and in any event within ten (10) days after a Borrower or any of
their respective ERISA affiliates is required to send a notice of a plant
closing or mass layoff (as defined in the Worker Adjustment and Retraining
Notification Act), and (vi) promptly and in any event within thirty (30) days
after a Borrower or any ERISA Affiliate takes action to establish a new Benefit
Plan or contribute to a new Multiemployer Plan, a statement of the Designated
Financial Officer of such Borrower describing such Benefit Plan or
Multiemployer Plan.
(j) Within fifteen (15) days prior to the
beginning of each fiscal year of GSTOC: (i) projected consolidated and
consolidating balance sheets of GSTOC and its operating units and Subsidiaries
on a monthly basis for such fiscal year; (ii) projected consolidated cash flow
statements of GSTOC and its operating units and Subsidiaries for such Fiscal
Year; (iii) a capital budget by Borrower and by month for such fiscal year; (iv)
projected consolidated and consolidating income statements of GSTOC and
Subsidiaries for such fiscal
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year on a monthly basis; and (v) the business plan of GSTOC and Subsidiaries
for such fiscal year, including all assumptions upon which such business plan
is based; together with appropriate supporting details as reasonably requested
by the Agent or any Lender.
(k) Promptly after, and in any event within ten
(10) Business Days after, an officer of a Borrower learns of any of the
following, notice thereof:
(i) the receipt by such Borrower or any
of its Subsidiaries of notification that any real or personal property
of such Borrower or such Subsidiary is subject to any Environmental
Lien;
(ii) notice of violation of any
Environmental Law which could reasonably be expected to subject such
Borrower or any of its Subsidiaries to Environmental Liabilities and
Costs of $2,000,000 or more;
(iii) notice of the commencement of any
Environmental Action by a Borrower or any of its Subsidiaries of any
Environmental Law, which if adversely determined, could reasonably be
expected to subject such Borrower or any of its Subsidiaries to
Environmental Liabilities and Costs of $2,000,000 or more;
(l) Promptly after the commencement thereof but
in any event not later than five (5) Business Days after service of process
with respect thereto on a Borrower or any of its Subsidiaries, notice of each
action, suit or proceeding involving such Borrower or any of its Subsidiaries
before any court or other Governmental Authority or any arbitrator which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
(m) Promptly after submission to any
Governmental Authority all documents and information furnished to such
Governmental Authority in connection with any investigation of a Borrower or
any of its Subsidiaries other than routine inquiries by such Governmental
Authority.
(n) Promptly after the occurrence thereof or the
request therefor, copies of (i) any amendment, waiver or other modification of
any of the terms of any Material Contract or any written notice of default or
other noncompliance thereunder, and (ii) any Material Contract entered into
after the Closing Date, including, without limitation, all agreements and
instruments relating to a Permitted Term Loan Facility.
(o) Promptly upon request, such other
information concerning the condition or operations, financial or otherwise, of
any Obligor or any of its Subsidiaries as the Agent or any Lender from time to
time may reasonably request.
7.02. Compliance with Laws, Etc. Comply, and cause each of
their respective Subsidiaries to comply, with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation, (i)
paying before the same become delinquent all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any of its properties, and (ii) paying before delinquency all lawful
claims of any Governmental Authority which if unpaid might become a Lien or
charge upon any of its
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properties, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves in accordance
with GAAP have been set aside for the payment thereof, except, in each case
other than non-compliance in the payment of federal, state and local taxes
which, if unpaid, could result in a Lien on any Collateral or any other
non-compliance that may result in a Lien on Collateral, where such instance of
non-compliance could not reasonably be expected to have Material Adverse Effect.
7.03. Preservation of Existence, Etc. Maintain and preserve,
and cause each of their respective Subsidiaries to maintain and preserve, their
respective existence, rights and privileges, and become or remain and cause
each of their respective Subsidiaries to become and remain, duly qualified and
in good standing in each jurisdiction in which the character of the properties
owned or leased by them or in which the transaction of their business makes
such qualification necessary except where such failure to qualify or remain in
good standing could not reasonably be expected to have a Material Adverse
Effect.
7.04. Keeping of Records and Books of Account. Keep, and
cause each of their respective Subsidiaries to keep, adequate records and books
of account, with complete entries made in accordance with generally accepted
accounting principles consistently applied.
7.05. Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the Agent or any Lender, or any agents or
representatives thereof or such professionals or other Persons as the Agent may
designate at reasonable times, and during normal business hours and upon
reasonable prior notice (except that during the continuation of an Event of
Default no such notice shall be required) to: (i) examine and inspect the books
and records of the Borrowers and take copies and extracts therefrom; (ii)
verify materials, leases, notes, receivables, deposit accounts and other assets
of the Borrowers from time to time; (iii) conduct Inventory appraisals of the
Borrowers from time to time, all of which shall be at the expense of the
Borrowers, provided that so long as no Event of Default shall have occurred and
be continuing no more than two such appraisals in any fiscal year of GSTOC
shall be at the expense of the Borrowers; (iv) visit the properties of the
Borrowers; (v) discuss the affairs, finances and accounts of the Borrowers with
any of their respective officers or directors; and (vi) communicate directly
with the Borrowers' independent certified public accountants. The Borrowers
shall authorize their independent certified public accountants to disclose to
the Agent or any Lender any and all financial statements and other information
of any kind relating to the Loan Documents and the Obligations, as the Agent of
any Lender reasonably requests from the Borrowers and which such accountants
may have with respect to the business, financial condition, results of
operations or other affairs of the Borrowers or any of their Subsidiaries.
7.06. Maintenance of Properties, Etc. Maintain and preserve,
and cause each of their respective Subsidiaries to maintain and preserve, all
of their properties (including all real properties leased or owned by them)
which are necessary or useful in the proper conduct of their business in good
working order and condition, ordinary wear and tear excepted or loss by
casualty or taking by any Governmental Authority, and comply, and cause each of
their respective Subsidiaries to comply, at all times with the provisions of
all Leases to which each of
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them is a party as lessee or under which each of them occupies property, so as
to prevent any loss or forfeiture thereof or thereunder.
7.07. Maintenance of Insurance. Maintain, and cause each of
their respective Subsidiaries to maintain, with responsible and reputable
insurance companies or associations, insurance (including, without limitation,
comprehensive general liability, hazard, rent and business interruption
insurance) with respect to their properties (including all real properties
leased or owned by them) and business, in such amounts and covering such risks,
as is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and in any event in
amount, adequacy and scope reasonably satisfactory to the Agent. All policies
covering the Collateral are to be made payable to the Agent, in case of loss,
under a standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Agent may require to fully protect the
Agent's interest in the Collateral and to any payments to be made under such
policies. All original policies or true copies thereof are to be delivered to
the Agent, premium prepaid, with the loss payable and additional insured
endorsement in the Agent's favor, and shall provide for not less than thirty
(30) days prior written notice to the Agent of the exercise of any right of
cancellation. At a Borrower's request, or if a Borrower fails to maintain such
insurance, the Agent may arrange for such insurance, but at the Borrowers'
joint and several expense and without any responsibility on the Agent's part
for: obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. Upon the occurrence and
during the continuance of an Event of Default, the Agent shall have the sole
right, in the name of the Agent and the Borrowers, to file claims under any
insurance policies, to receive, receipt and give acquittance for any payments
that may be payable thereunder, and to execute any and all endorsements,
receipts, releases, assignments, reassignments or other documents that may be
necessary to effect the collection, compromise or settlement of any claims
under any such insurance policies.
7.08. Environmental Matters. Comply, and cause each of their
respective Subsidiaries to comply in all material respects, with the
requirements of all Environmental Laws and provide to the Agent all
documentation in connection with such compliance that the Agent may reasonably
request; not cause or permit the Collateral or any property or facility owned,
operated or occupied by the Borrowers or any of their respective Subsidiaries
to be used for any activities involving, directly or indirectly, the use,
generation, treatment, storage, release or disposal of any Hazardous Materials
except in compliance with applicable laws; and immediately notify the Agent of
any Release of Hazardous Materials in excess of any reportable quantity and
take any Remedial Actions required pursuant to Environmental Law to ▇▇▇▇▇ such
Release. On behalf of the Borrowers and their respective Subsidiaries, the
Borrowers hereby jointly and severally agree to defend, indemnify, and hold
harmless the Agent, the Lenders and the Letter of Credit Issuer, their
employees, agents, officers, and directors, from and against any claims,
demands, penalties, fines, liabilities (including strict liability),
settlements, damages, costs, or expenses (including, without limitation,
attorney and consultant fees, investigation and laboratory fees, court costs,
and litigation expenses) and Environmental Liabilities and Costs arising out of
(i) any Release, or threatened Release on any property presently or formerly
owned or occupied by the Borrowers or any of their respective Subsidiaries (or
their predecessors in interest or title) or at any disposal facility which
received Hazardous Materials generated by the Borrowers or any
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of their respective Subsidiaries; (ii) any violation of Environmental Laws,
(iii) any Environmental Actions, (iv) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to
exposure to Hazardous Materials used, handled, generated, transported or
deposited by the Borrowers or any of their respective Subsidiaries (or any
predecessor in interest or title); and/or (v) the breach of any representation
or warranty made by the Borrowers in Section 6.18 or the breach of any covenant
made by any of the Borrowers in this Section 7.08. This environmental indemnity
shall survive the repayment of the Obligations and discharge or release of any
security interest granted under the Loan Documents.
7.09. Further Assurances. Do, execute, acknowledge and
deliver, and cause each of their respective Subsidiaries to do, execute,
acknowledge and deliver, at the sole cost and expense of the Borrowers all such
further acts, deeds, conveyances, mortgages, assignments, estoppel
certificates, financing statements, notices of assignment, transfers and
assurances as the Agent may reasonably require from time to time in order (i)
to carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject to valid and perfected first priority Liens all of
the Collateral, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Loan Documents and the Lien intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm
unto the Agent, the Lenders and the Letter of Credit Issuer the rights now or
hereafter intended to be granted to the Agent, the Lenders and the Letter of
Credit Issuer under this Agreement, any Loan Document or any other instrument
under which a Borrower or any Subsidiary may be or may hereafter become bound
to convey, mortgage or assign to the Agent, the Lenders and the Letter of
Credit Issuer.
7.10. Borrowing Base. Maintain all Revolving Credit Loans
and Letters of Credit in compliance with the then current Borrowing Base.
7.11. Change in Collateral; Collateral Records. Give the
Agent not less than thirty (30) days' prior written notice of any change in the
location of any Collateral, other than to locations, that as of the date
hereof, are known to the Agent and with respect to which the Agent has filed
financing statements and otherwise fully perfected its Liens thereon. The
Borrowers shall also advise the Agent promptly, in sufficient detail, of any
material adverse change relating to the type, quantity or quality of the
Collateral or the security interests granted therein. The Borrowers agree to
execute and deliver to the Agent for the benefit of the Agent from time to
time, solely for the Agent's convenience in maintaining a record of the
Collateral, such written statements and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral. The Borrowers'
failure, however, to promptly give the Agent such statements or schedules shall
not affect, diminish, modify or otherwise limit the Agent's security interest
in the Collateral.
7.12. Financial Accounting Practices, Etc.
(a) Make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets of each Borrower and its Subsidiaries and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are recorded as necessary
(A) to permit preparation of
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financial statements in conformity with GAAP and (B) to maintain accountability
for assets, and (iii) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(b) Maintain a system of internal procedures
and controls sufficient to provide reasonable assurance that the information
required to be set forth in each Borrowing Base Certificate (including, without
limitation, information relating to the identification of assets which are
Eligible Accounts Receivable or Eligible Inventory as provided herein and the
valuation thereof) is accurate in all material respects.
7.13. Cash Management System.
(a) Commencing on the Closing Date and for so
long as any Obligations (other than contingent indemnification obligations) are
outstanding, each Borrower shall deposit on the date of receipt thereof or
cause to be deposited directly under lock-box arrangements reasonably
satisfactory to the Agent all cash, checks, notes, drafts or other similar
items of payment relating to or constituting payments made by any of such
Borrower's Account Debtors in respect of any and all of such Borrower's
Accounts Receivable, and any and all funds received from any other source into
the Depository Accounts; provided, however, that all funds in the Depository
Accounts shall at all times after the date that is five Business Days after the
Closing Date be pledged to the Agent, pursuant to appropriate blocked account
arrangements established in the Depository Account Agreements. The Borrowers
may open Depository Accounts with any Depository Banks in lieu of or in
addition to those listed in Schedule 6.23 hereto; provided, however, that (i)
the Agent shall have consented to the opening of such Depository Account with
such Depository Bank prior thereto and (ii) at the time of the opening of such
Depository Account such Borrower shall deliver to the Agent a Depository
Account Agreement duly executed by such Borrower and such Depository Bank. The
Depository Accounts shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Obligations, and in which such Borrower shall have granted, and the Depository
Bank shall have acknowledged, a valid, perfected first priority Lien in favor
of the Agent.
(b) In the event that (i) an Event of Default
has occurred and is continuing, or (ii) Availability is less than the
Availability required by Section 8.17, upon notice by the Agent, given in the
Agent's sole discretion or at the direction of the Majority Lenders, all
amounts deposited in the Depository Accounts shall, on the same day as such
funds shall have been cleared by the Depository Banks at which the Depository
Accounts are located, be deposited via wire transfer, in immediately available
funds, into the Cash Concentration Account. The Agent shall give GSTOC at least
five (5) Business Days' notice prior to changing the Cash Concentration Account
Bank in which the Cash Concentration Account is maintained. All amounts
deposited in and credited to the Cash Concentration Account in immediately
available funds by 1:00 P.M. (Eastern time) on any Business Day shall be
applied by the Agent on such Business Day against any then due and payable
interest and fees hereunder and then against the outstanding balance of the
Obligations. In no event shall any amount be applied by the Agent against such
interest and fees and the outstanding balance of the Obligations unless and
until such amount shall have been credited in immediately available funds to
the Cash Concentration
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Account. Any funds deposited in the Cash Concentration Account in excess of the
amount applied to such interest and fees and the outstanding balance of the
Obligations shall be credited against any future Obligations (other than
obligations arising under Letters of Credit) owed by the Borrowers and shall be
held as collateral security securing the payment of the Obligations (other than
obligations arising under Letters of Credit) and the Borrowers shall have
granted to the Agent a Lien on all cash, checks and other similar items of
payment.
(c) Each Borrower shall, on or before March 17,
2000, (A) deliver to the Agent a revised Schedule 6.23 hereto amending Schedule
6.23 hereto existing on the Closing Date in a manner reasonably acceptable to
the Agent, (B) deliver to the Agent one or more Depository Account Agreements
duly executed by the Borrowers and each Depository Bank, (C) deliver to the
Agent a Cash Concentration Account Agreement executed by the Borrowers and the
Cash Concentration Account Bank and (D) take such actions as the Agent deems
necessary or advisable to grant to the Agent dominion and control over the
funds in each Depository Account and the Cash Concentration Account in
accordance with Section 7.13(b).
7.14 Landlord and Warehouse Waivers. As soon as practicable
and in any event within 30 days of the Closing Date, the Borrowers shall use
their reasonable best efforts (but not requiring any payment by a Borrower) to
deliver to the Agent (i) a landlord waiver, in form and substance satisfactory
to the Agent, with respect to each of the Borrowers' leased premises identified
in Schedule 1.01(A) hereto and (ii) a warehouse waiver, in form and substance
satisfactory to the Agent, with respect to each of the Borrowers' warehouses
listed in Schedule 1.01(A) hereto.
7.15 Additional Subsidiaries. (a) If a Person shall become a
Subsidiary of a Borrower after the Closing Date, such Borrower shall (i) notify
the Agent promptly after such Person becomes a Subsidiary of the Borrower and
(ii) if such Person then or at any time thereafter has assets with a fair
market value in excess of $500,000, promptly, and in any event within ten (10)
Business Days of such Person becoming a Subsidiary, cause such Subsidiary to
execute and deliver a guaranty and a security agreement, each in form and
substance satisfactory to the Agent, in respect of the Obligations and to
deliver such opinions of counsel and other documents as the Agent may
reasonably request in connection therewith.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any principal of or interest on any Loan or any
Reimbursement Obligation or any other Obligation (whether or not due) shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrowers
will not, without the prior written consent of the Majority Lenders:
8.01. Liens, Etc. Create or suffer to exist, or permit any of
their respective Subsidiaries to create or suffer to exist, any Lien upon or
with respect to any of their properties, rights or other assets, whether now
owned or hereafter acquired, or assign or otherwise transfer,
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or permit any of its Subsidiaries to assign or otherwise transfer, any right to
receive income, other than the following ("Permitted Liens"):
(a) Liens created pursuant to the Loan
Documents;
(b) Liens existing on the date hereof, as set
forth in Schedule 8.01 hereto, provided that (i) no such Lien shall
apply to any other property or asset of any Borrower or any of its
Subsidiaries and (ii) such Lien shall secure only those obligations
which it secures on the date hereof;
(c) Liens created pursuant to the Permitted Term
Loan Facility;
(d) Liens for taxes, assessments or governmental
charges or levies to the extent that the payment thereof shall not be
required by Section 7.02;
(e) Liens created by operation of law (other
than Environmental Liens), such as materialmen's liens, mechanics'
liens and other similar liens, arising in the ordinary course of
business which secure amounts not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(f) deposits, pledges or Liens (other than Liens
arising under ERISA) securing (i) obligations incurred in respect of
workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and
statutory obligations, or (iii) obligations on surety or appeal bonds,
but only to the extent such deposits, pledges or Liens are incurred or
otherwise arise in the ordinary course of business and secure
obligations which are not past due;
(g) restrictions on the use of real property and
exceptions to the title thereto which do not (i) secure obligations
for the payment of money or (ii) materially impair the value of such
property or its use by a Borrower or any of its Subsidiaries in the
normal conduct of such Person's business;
(h) Liens to secure the payment of all or a part
of the purchase price of assets or property (other than assets or
property constituting or which will constitute Collateral) acquired
after the Closing Date, provided that (i) the aggregate principal
amount of Indebtedness secured by such Liens shall not exceed the fair
market value (or, if less, the cost) of the assets or property so
acquired; (ii) the Indebtedness secured by such Liens shall have
otherwise been permitted to be incurred under this Agreement, and
(iii) such Liens shall not encumber any other assets or property of
any Borrower (other than additions thereof) and shall attach to such
assets or property within sixty (60) days of the acquisition of such
assets or property;
(i) Liens on the assets or property of a
Subsidiary of a Borrower existing at the time such Subsidiary became a
Subsidiary of a Borrower and not incurred as a result (or in
connection with or in anticipation of) such Subsidiary becoming a
Subsidiary of a Borrower, provided such Liens do not extend to or
cover any property or
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assets of a Borrower or any of its Subsidiaries (other than the
property or assets so acquired and additions, improvements and
accessories thereto and replacements thereof);
(j) Liens arising from precautionary UCC
financing statement filings regarding operating leases permitted
hereunder; and
(k) Liens securing Indebtedness which is
incurred to refinance Indebtedness which has been secured by a Lien
permitted under this Agreement and is permitted to be refinanced under
this Agreement, provided that such Liens do not extend to or cover any
property or assets of the Borrower or any of its Subsidiaries not
securing the Indebtedness so refinanced.
8.02. Indebtedness. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist,
any Indebtedness, other than:
(a) Indebtedness created hereunder or under the
Notes or any Letter of Credit;
(b) Indebtedness existing on the date hereof, as
set forth in Schedule 8.02 hereto, but not any extension, renewal or
replacement of such Indebtedness except to the extent set forth in
such Schedule 8.02, provided that the aggregate principal amount of
Indebtedness to be extended, renewed or refinanced does not increase
from the amount stated in such Schedule 8.02;
(c) Indebtedness incurred pursuant to the
Permitted Term Loan Facility;
(d) Indebtedness of any Borrower or one of its
Subsidiaries to any other Borrower or one of its Subsidiaries;
(e) Indebtedness permitted under Section 8.03;
and
(f) Indebtedness not to exceed $5,000,000 in
aggregate principal amount at any one time outstanding, the proceeds
of which are applied solely to expenditures made for the acquisition,
construction or improvement of assets, in each case which are useful
in the type of business of the Borrowers conducted on the Closing
Date, and all replacements, renewals, refinancing and extensions or
such indebtedness.
8.03. Guarantees, Etc. Become liable, or permit any of its
Subsidiaries to become liable, under any Guarantee in connection with any
Indebtedness of any other Person, other than:
(a) guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business; and
(b) guaranties existing on the date hereof, as
set forth in Schedule 8.03 hereto, but not any extension, renewal or
replacement thereof.
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8.04. Merger, Consolidation, Sale of Assets, Etc.
(a) Merge or consolidate with any Person, or
permit any of their respective Subsidiaries to merge or consolidate
with any Person; provided, however, that any Subsidiary of a Borrower
may be merged into such Borrower or another such Subsidiary, or may
consolidate with another such Subsidiary, so long as (i) no other
provision of this Agreement would be violated thereby, and (ii) such
Borrower gives the Agent at least thirty (30) days' prior written
notice of such merger or consolidation.
(b) Sell, assign, lease or otherwise transfer or
dispose of, or permit any of their respective Subsidiaries to sell,
assign, lease or otherwise transfer or dispose of, whether in one
transaction or in a series of related transactions, any of their
properties, rights or other assets, whether now owned or hereafter
acquired to any Person, or enter into any sale-leaseback transaction,
provided that:
(i) a Borrower may sell or dispose of assets
not constituting Collateral, provided that (A) the
consideration received in connection with any such sale
shall be at least equal to the fair market value of such
assets (as determined by such Borrower in good faith), and
at least 75% of such consideration shall be received in
cash, (B) the Net Proceeds received in connection with any
such sale shall be used for working capital purposes or
general corporate purposes not otherwise prohibited by the
terms of this Agreement, including the repayment of
Indebtedness and (C) any Net Proceeds not so applied by the
Borrowers shall be applied to the payment of the
Obligations if an Event of Default has occurred and is
continuing;
(ii) a Borrower may sell Inventory in the
ordinary course of business, provided that the proceeds of
such sales of Inventory shall be deposited in a Depository
Account or the Cash Concentration Account pursuant to the
terms of Section 7.13;
(iii) a Borrower and its Subsidiaries may
dispose of obsolete, unnecessary or worn-out equipment in
the ordinary course of business;
(iv) a Borrower and its Subsidiaries may lease
real property not constituting a sale-leaseback transaction
to the extent not otherwise prohibited by this Agreement;
and
(v) a Borrower may license to another Borrower
on a non-exclusive basis and in the ordinary course of
business of such Borrower and such other Borrower, such
Borrower's rights in intellectual property relating to the
business of such Borrower and such other Borrower.
8.05. Change in Nature of Business. Engage, or permit any of
their respective Subsidiaries to engage, directly or indirectly, in any
business other than the business in which it is engaged on the date hereof and
reasonable extensions thereof.
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8.06. Loans, Advances and Investments, Etc. Make, or permit
any of their respective Subsidiaries to make, any loan or advance to any Person
or purchase or otherwise acquire, or permit any of their respective
Subsidiaries to purchase or otherwise acquire, any capital stock, properties,
assets or obligations of, or any interest in, any Person, other than:
(a) Permitted Investments;
(b) investments existing on the date hereof, as
set forth in Schedule 8.06 hereto;
(c) the acquisition by GSTOC of all of the
capital stock of MEI in accordance with documents, copies of which
have been delivered to the Agent pursuant to Section 5.01(d)(xix);
(d) loans and advances to employees in the
ordinary course of business in an aggregate principal amount not to
exceed $2,000,000 at any time outstanding;
(e) purchases of equipment, materials and
inventory in the ordinary course of business;
(f) non-cash consideration received in
connection with asset sales and dispositions permitted by Section
8.04(b);
(g) investments, not exceeding $4,000,000 in the
aggregate [at any one time outstanding], in Persons, other than the
Borrowers, that are engaged in business related to any business
engaged in by the Borrowers as permitted by Section 8.05; and
(h) unsecured loans made by a Borrower to
another Borrower so long as: (i) the Depository Account(s) of each
recipient of such a loan shall have been established, and such
recipient shall have delivered to Agent a Depository Account Agreement
pursuant to Section 7.13; (ii) after giving effect to each such loan,
the Borrower making such loan shall be Solvent; (iii) each recipient
of such a loan shall use the proceeds thereof solely for working
capital and general corporate purposes; and (iv) the Borrowers shall
have delivered to the Agent a current list of intercompany loans
outstanding.
8.07. Dividends, Prepayments, Etc. Declare or pay any
dividends, purchase or otherwise acquire for value any of their capital stock
now or hereafter outstanding, return any capital to their stockholders as such,
or make any other payment or distribution of assets to its stockholders as
such, or permit any of their Subsidiaries to do any of the foregoing or to
purchase or otherwise acquire for value any stock of a Borrower or make any
payment or prepayment of principal of, premium, if any, or interest on, or
redeem, defease or otherwise retire, any Indebtedness of a Borrower which is
subordinated in right of payment to any other Indebtedness of such Borrower
before its scheduled due date; provided, however, that (i) the Indebtedness
under the GECC Loan Agreement and the MEI Loan Agreement may be paid in full on
or before the Closing Date, (ii) Subsidiaries of GSTOC may pay dividends to
GSTOC and (iii) GSTOC may pay dividends to GS Technologies.
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8.08. Federal Reserve Regulations. Permit any proceeds of any
Loan to be used for any purpose which violates or is inconsistent with the
provisions of Regulation T, U or X of the Board.
8.09. Transactions with Affiliates. (a) Enter into or be a
party to, or permit any of their Subsidiaries to enter into or be a party to,
any transaction or series of transactions with or for the benefit of any
Affiliate of a Borrower except in good faith and on terms no less favorable to
such Borrower or such Subsidiary than those that could have been obtained in a
comparable transaction on an arms' length basis from an unaffiliated third
party.
(b) For any transaction (or series of related
transactions) with an Affiliate of a Borrower or any Subsidiary of a
Borrower involving aggregate payments or other market value in excess
of $1,000,000, GSTOC shall deliver to Agent a certificate signed by an
executive officer of GSTOC evidencing that such transaction (or series
of related transactions) satisfies the above criteria. In addition,
for any transaction (or series of related transactions) with an
Affiliate of a Borrower or any Subsidiary of a Borrower involving in
excess of $2,500,000, a majority of the Board of Directors of GSTOC
that are disinterested with respect to such transaction (or series of
related transactions) shall determine that such transaction (or series
of related transactions) satisfies the above criteria and shall
evidence such determination by means of a copy of resolutions of the
Board of Directors of GSTOC certified by the Secretary or Assistant
Secretary of GSTOC as having been duly adopted and in full force and
effect and filed with the Agent.
(c) The requirements of Section 8.09(a) and (b)
above shall not apply to the following transactions:
(i) reasonable compensation,
indemnification and other benefits paid or made available to
full-time officers and employees of a Borrower or any
Subsidiary of a Borrower for services rendered in such
person's capacity as an officer, director or employee
(including provision of directors' and officers' liability
insurance);
(ii) any payments, awards or grants, in
cash or otherwise, pursuant to, or the funding of, an
employment agreement or plan approved by the Board of
Directors of GSTOC or the Board of Directors of any
Subsidiary of GSTOC;
(iii) payroll, travel and other advances in
the ordinary course of business to full-time officers and
employees of any Borrower or any Subsidiary of any Borrower;
(iv) the Management Services Agreement
and the Tax Sharing Agreement;
(v) the Offtake Agreement;
(vi) transactions between one Borrower and
another Borrower in the ordinary course of business
consistent with past practice.
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8.10. ERISA.
(a) Engage, or permit any ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available or a
private exemption has not previously been obtained from the Department of Labor
and that would have a Material Adverse Effect;
(b) permit, or permit any ERISA Affiliate to
permit, any enforceable Lien from arising under Section 412(n) of the Code;
(c) amend or permit any ERISA Affiliate to amend any
Benefit Plan in a manner that would require security under Section 307 of
ERISA; or
(d) request or permit any ERISA Affiliate to
request a waiver of the minimum funding requirements under Section 412 of the
Code in respect of any Benefit Plan.
8.11. Capital Expenditures. Make, or be committed to make, or
permit any Capital Expenditures that exceed in the aggregate $32,000,000 in any
fiscal year of GSTOC. In addition to the foregoing, to the extent that the
amount of Capital Expenditures made by the Borrowers during any fiscal year of
GSTOC (exclusive, however, of Capital Expenditures constituting the investment
in assets replacing assets that have been sold or destroyed or otherwise
dispensed of) is less than the amount applicable to the respective fiscal year
as set forth in this Section 8.11 (and without increasing any such amount by
the amount of any additional amounts permitted to be spent in such fiscal year
pursuant to this sentence), such amount may be carried forward and utilized to
make Capital Expenditures in excess of the amount permitted in the immediately
preceding sentence in the following fiscal year; provided that the aggregate
amount expended on Capital Expenditures in any fiscal year shall not exceed
125% of the amount permitted to be made in such fiscal year as set forth in
this Section 8.11.
8.12. Sales of Notes, Etc. Sell, discount or otherwise
dispose of notes, Accounts Receivable or other obligations owing to any
Borrower or permit any of its Subsidiaries to do so.
8.13. Compromise of Receivables. Compromise or adjust any of
the Accounts Receivable (or extend the time for payment thereof) or grant any
discounts, allowances or credits thereon or permit any of their Subsidiaries to
do so, except, in each case, in the ordinary course of business consistent with
the past practice, as set forth in the most recent Borrowing Base Certificate
or an amendment or supplement thereto delivered hereunder.
8.14. Amendment of Indentures, Tax Sharing Agreement and
Management Services Agreement. Consent to or permit any amendment (whether by
means of a supplemental indenture or otherwise) of either Indenture or consent
to or permit any amendment of the Tax Sharing Agreement or the Management
Services Agreement except to the extent that any such amendment does not
materially adversely affect the rights or materially increase the obligations
of any Borrower thereunder.
8.15. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause or suffer to exist or become
effective or enter into any
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agreement with any Person that would cause, any consensual encumbrance or
restriction of any kind on the ability of any Borrower or any of its
Subsidiaries to (i) pay dividends, in cash or otherwise, or make any other
distributions on its capital stock or any other interest or participation in,
or measured by, its profits owed by, or pay any Indebtedness owed to, any
Borrower or any of its Restricted Subsidiaries, (ii) make any loans or advances
to any Borrower or any of its Subsidiaries, or (iii) transfer any of its
properties or assets to any Borrower or to any of its Subsidiaries, except, in
each case, for such encumbrances or restrictions existing under or contemplated
by or by reason of (w) this Agreement and the Security Documents, (x) any
restrictions existing under or contemplated by agreements in effect on the
Closing Date, (y) any restrictions with respect to a Subsidiary of a Borrower
that is not a Subsidiary of a Borrower on the Closing Date, in existence at the
time such Person becomes a Subsidiary of the Borrower (but not created in
contemplation of such Person becoming a Subsidiary), or (z) any restrictions
existing under any agreement that refinances or replaces an agreement
containing a restriction permitted by clause (w), (x) or (y) above; provided,
however, that the terms and conditions of any such restrictions under this
clause (z) are not materially less favorable to the Lenders than those under or
pursuant to the agreement being replaced or the agreement evidencing the
Indebtedness refinanced.
8.16. Limitation on Issuance of Additional Stock. Issue, or
permit any of its Subsidiaries to issue, any shares of its capital stock or any
warrants, rights or options to acquire shares of its capital stock, except to
the Borrower that owns all of its shares on the Closing Date or any later date
on which such Person is created or acquired.
8.17. Availability. Permit Availability to be less than
zero at any time.
ARTICLE IX
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
9.01. Management of Collateral. (a) After the occurrence and
during the continuance of an Event of Default, the Agent may for the benefit of
the Lenders send a notice of assignment and/or notice of the Agent's security
interest to any and all Account Debtors or any third party holding or otherwise
concerned with any of the Collateral, and thereafter the Agent shall have the
sole right to collect the Accounts Receivable and/or take possession of the
Collateral and the books and records relating thereto. The Borrowers shall not
and shall not permit their Subsidiaries to without prior written consent of the
Agent, grant any extension of time of payment of any Account Receivable,
compromise or settle any Account Receivable for less than the full amount
thereof, release, in whole or in part, any Person or property liable for the
payment thereof, or allow any credit or discount whatsoever thereon, except,
unless an Event of Default shall have occurred and be continuing, in the
ordinary course of business.
(b) (i) The Borrowers hereby appoint the
Agent or its designee on behalf of the Agent as the Borrowers' attorney-in-fact
with power to endorse a Borrower's name upon any notes, acceptances, checks,
drafts, money orders or other evidences of payment or Collateral that may come
into its possession, to sign a Borrower's name on any invoice or ▇▇▇▇ of
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lading relating to any of the Accounts Receivable, drafts against Account
Debtors, assignments and verifications of Accounts Receivable and notices to
Account Debtors, to send verification of Accounts Receivable, and upon the
acceleration of the Loans and any other Obligations under the Loan Documents
following an Event of Default, to notify the Postal Service authorities to
change the address for delivery of mail addressed to the Borrowers to such
address as they may designate and to do all other acts and things necessary to
carry out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designate shall not be liable for
any acts of omission or commission (other than acts or omissions constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), nor for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until all
of the Loans and any other Obligations under the Loan Documents are paid in
full and the Revolving Credit Commitment is terminated.
(ii) The Agent without notice to or
consent of any Borrower upon the occurrence and during the continuance of an
Event of Default (A) may ▇▇▇ upon or otherwise collect, extend the time of
payment of, or compromise or settle for cash, credit or otherwise upon any
terms, any of the Accounts Receivable or any securities, instruments or
insurance applicable thereto and/or release the Account Debtor thereon; (B) is
authorized and empowered to accept the return of the goods represented by any
of the Accounts Receivable, and (C) shall have the right to receive, endorse,
assign and/or deliver in its name or the name of any Borrower any and all
checks, drafts, and other instruments for the payment of money relating to the
Accounts Receivable. Each Borrower hereby waives notice of presentment, protest
and non-payment of any instrument so endorsed, all in a commercially reasonable
manner and without discharging or in any way affecting liability hereunder.
(c) Nothing herein contained shall be construed
to constitute Borrower as agent of the Agent or the Lenders for any purpose
whatsoever, and the Agent and the Lenders shall not be responsible or liable
for any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause thereof
(other than from acts or omissions of the Agent and the Lenders constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agent and the Lenders shall not, under
any circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Accounts Receivable or any instrument received in payment
thereof or for any damage resulting therefrom (other than acts or omissions of
the Agent or the Lenders constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The Agent
and the Lenders, by anything herein or in any assignment or otherwise, do not
assume any of the Borrowers' obligations under any contract or agreement
assigned to the Agent or any Lender and shall not be responsible in any way for
the performance by such Borrower of any of the terms and conditions thereof.
(d) If any of the Accounts Receivable includes a
harge for any tax payable to any Governmental Authority, the Agent is hereby
authorized (but in no event obligated) in its discretion to pay the amount
thereof to the proper taxing authority for the any Borrower's account and to
charge such Borrower therefor. Such Borrower shall notify the Agent if any
Accounts Receivable include any taxes due to any such authority and, in the
absence of
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such notice, the Agent shall have the right to retain the full proceeds of such
Accounts Receivable and shall not be liable for any taxes that may be due from
such Borrower by reason of the sale and delivery creating such Accounts
Receivable.
9.02. Accounts Receivable Documentation. Each Borrower will
at such intervals as the Agent may reasonably require, execute and deliver
confirmatory written assignments of the Accounts Receivable to the Agent and
furnish such further schedules and/or information as the Agent may require
relating to the Accounts Receivable, including, without limitation, sales
invoices or the equivalent, credit memos issued, remittance advises, reports
and copies of deposit slips and copies of original shipping or delivery
receipts for all merchandise sold. In addition, each Borrower shall notify the
Agent of any non-compliance in respect of the representations, warranties and
covenants contained in Section 9.03 below. The items to be provided under this
Section 9.02 are to be in form reasonably satisfactory to the Agent and are to
be executed and delivered to the Agent from time to time solely for its
convenience in maintaining records of the Collateral. Any Borrower's failure to
give any of such items to the Agent shall not affect, terminate, modify or
otherwise limit the Agent's Lien or security interest in the Collateral. No
Borrower shall re-date any invoice or sale or make sales on extended dating
beyond that customary in such Borrower's industry, and shall not re-▇▇▇▇ any
Accounts Receivable without promptly disclosing the same to the Agent and
providing the Agent with copy of such re-billing, identifying the same as such.
If any Borrower becomes aware of anything materially detrimental to any of the
Borrowers' customers' credit, such Borrower will promptly advise the Agent
thereof.
9.03. Status of Accounts Receivable and Other Collateral.
With respect to Collateral of the Borrowers at the time the Collateral becomes
subject to the Agent's security interests, the Borrowers covenant, represent
and warrant: (a) the Borrowers shall be the sole owners, free and clear of all
Liens, except in the favor of the Agent for the benefit of the Lenders or
otherwise permitted hereunder, of and fully authorized to sell, transfer,
pledge and/or grant a security interest in each and every item of said
Collateral; (b) each Account Receivable shall be a good and valid account
representing an undisputed bona fide indebtedness incurred or an amount
indisputably owed by the Account Debtor therein named, for a fixed sum as set
forth in the invoice relating thereto with respect to any absolute sale and
delivery upon the specified terms of goods sold by a Borrower; (c) no Account
Receivable is subject to any defense, offset, counterclaim, discount or
allowance except as may be stated in the invoice relating thereto or otherwise
disclosed in writing to the Agent and not included in the Borrowing Base and
such discounts and allowances as may be customary in the Borrowers' business,
and each of such Accounts Receivable will be paid when due; (d) none of the
transactions underlying or giving rise to any Accounts Receivable shall, to the
best of the Borrowers' knowledge, violate any applicable state or federal laws
or regulations, and all documents relating thereto shall be legally enforceable
in accordance with their terms; (e) no agreement under which any deduction or
offset of any kind, other than normal trade discounts, may be granted or shall
have been made by any Borrower at or before the time such Accounts Receivable
is created; (f) all documents created by or on behalf of any Borrower with
respect to any Accounts Receivable shall be what they purport to be and all
information therein shall be true and correct, and all documents created by or
on behalf of any Person other than a Borrower with respect to any Accounts
Receivable shall be, to the best of the Borrowers' knowledge, what they purport
to be and all information therein shall,
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to the best of the Borrowers' knowledge, be true and correct; (g) to the best
of the Borrowers' knowledge, all signatures and endorsements that appear on all
documents and agreements relating to Accounts Receivable shall be genuine and
all signatories and endorsers shall have full capacity to contract; (h) the
Borrowers shall maintain books and records pertaining to said Collateral in
such detail, form and scope as the Agent shall reasonably require; (i) the
Borrowers will immediately notify the Agent if any of their accounts arise out
of contracts with the United States or any department, agency, or
instrumentality thereof and will execute any instruments and take any steps
required by the Agent in order that all monies due or to become due under any
such contract shall be assigned to the Agent for the benefit of the Lenders and
notice thereof given to the United States Government under the Federal
Assignment of Claims Act; (j) the Borrowers will, promptly upon learning
thereof, report to the Agent any material loss or destruction of, or
substantial damage to, any of the Collateral, and any other matters materially
and adversely affecting the value, enforceability or collectibility of any of
the Collateral; (k) if any amount payable under or in connection with any
Account Receivable is evidenced by a promissory note or other instrument, as
such term is defined in the Uniform Commercial Code, such promissory note or
instrument shall be immediately pledged, endorsed, assigned and delivered to
the Agent as additional Collateral; (l) the Borrowers shall not redate any
invoice or sale or make sales on extended dating beyond that which is customary
in the ordinary course of their business and in the industry; (m) the Borrowers
shall conduct a physical count of their Inventory at such intervals as the
Agent may reasonably request and the Borrowers shall promptly supply the Agent
with a copy of such count accompanied by a report of the value (based on the
lower of cost (on a FIFO basis) or market value) of such Inventory; and (n) the
Borrowers are not and shall not be entitled to pledge the Agent's or the
Lender's credit on any purchases for or any purpose whatsoever.
9.04. Collateral Custodian. Upon the occurrence and during
the continuance of an Event of Default or Default, the Agent may at any time
and from time to time employ and maintain in the premises of the Borrowers a
custodian selected by the Agent who shall have full authority to do all acts
necessary to protect the Agent and the Lenders' interests. The Borrowers hereby
agree to cooperate with any such custodian and to do whatever the Agent may
reasonably request to preserve the Collateral. All costs and expenses incurred
by the Agent, by reason of the employment of the custodian shall be charged to
the Loan Account.
ARTICLE X
DEFAULTS
10.01. Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of law):
(a) The Borrowers shall fail to make any payment
of principal of any Loan or any Reimbursement Obligation when due; or
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(b) The Borrowers shall fail to make any payment
of interest on any Loan when due and such failure shall continue for
more than three (3) days;
(c) The Borrowers shall fail to pay when due any
fee or other amount payable under this Agreement or any other Loan
Document (including but not limited to the making of deposits in the
Depository Accounts, the Cash Concentration Account or the Letter of
Credit Cash Collateral Account), and such failure shall continue
unremedied for more than five (5) days; or
(d) Any representation or warranty made by an
Obligor under any Loan Document or any statement made by a Borrower in
any financial statement, certificate, report or document furnished to
the Agent or the Lenders pursuant to or in connection with this
Agreement or any other Loan Document, shall prove to have been false
or misleading in any material respect as of the time when made
(including by omission of material information necessary to make such
representation, warranty or statement, in light of the circumstances
under which it was made, not misleading); or
(e) The Borrowers shall default in the
performance or observance of the covenants contained in Section 2.09,
7.01(g), 7.03, or 7.10 or Article VIII, or any Borrower shall default
in the performance or observance of the provisions contained in
Section 5(e) of either Security Agreement or GS Technologies shall
default in the performance or observance of the provisions contained
in the Guaranty; or
(f) An Obligor shall default in the performance
or observance of any other covenant, agreement or duty under any Loan
Document (to the extent not otherwise set forth in this Section 10.01)
and such default shall have continued unremedied for a period of
thirty (30) days after the earlier of the date on which (A) a
Designated Financial Officer or other senior or executive officer of a
Borrower becomes aware of such failure or (B) written notice thereof
shall have been given to the Administrative Borrower by the Agent or
any Lender; provided, however, that if a default under this subsection
cannot by its nature be cured within such thirty (30) day period, the
Borrowers shall have an additional thirty (30) days as long as the
cure is commenced during the initial thirty (30) day period and the
Borrowers are proceeding diligently to cure such failure; or
(g) The Borrowers or any Subsidiary shall have
entered into any consent or settlement decree or agreement or similar
arrangement with a Governmental Authority or any judgment, order,
decree or similar action shall have been entered against any such
Person based on or arising from the violation of or pursuant to any
Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Hazardous Material and, in
connection with any of the foregoing, any such Person shall incur
Environmental Liabilities and Costs which are unstayed, due and owing
in an amount in excess of $2,000,000; or
(h) An Obligor shall fail to pay any principal
or interest on any of its Indebtedness (excluding Indebtedness
evidenced by the Notes) having a principal amount of $2,000,000 or
more in the aggregate, or any interest or premium thereon, when due
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(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or any other default under
any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such
Indebtedness in excess of such amount shall be declared to be due and
payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
or
(i) An Obligor (i) shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for an Obligor or for any
substantial part of its property, (ii) shall be generally not paying
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general
assignment for the benefit of creditors, or (iv) shall take any action
to authorize or effect any of the actions set forth above in this
subsection (h); or
(j) Any proceeding shall be instituted against
an Obligor seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for such Obligor or for
any substantial part of its property, and either such proceeding shall
remain undismissed or unstayed for a period of forty-five (45) days or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall
occur; or
(k) Any material provision of any Loan Document
shall at any time for any reason be declared by a court of competent
jurisdiction in an action to which an Obligor is a party to be null
and void, or unenforceable against any Obligor, or an Obligor shall
deny in writing that such Obligor has any liability or obligation
purported to be created under any Loan Document; or
(l) The Security Agreements or any other
Security Document, after delivery thereof pursuant hereto and the
filing of the applicable financing statements delivered pursuant to
Section 5.01(d) or Section 7.15, shall for any reason fail or cease to
create a valid and perfected and, except to the extent permitted by
the terms hereof or thereof, first priority Lien on or security
interest in any Collateral purported to be covered thereby; or
(m) One or more judgments or orders (other than
a judgment described in subsections (h) or (i) of this Section 10.01)
for the payment of money exceeding any
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applicable insurance or bond coverage by more than $1,500,000 in the
aggregate, to the extent not covered by insurance, shall be rendered
against an Obligor unless enforcement of such judgment shall have been
stayed by reason of a pending appeal or otherwise; or
(n) A Borrower or any of its ERISA Affiliates
shall have made a complete or partial withdrawal from a Multiemployer
Plan, and, as a result of such complete or partial withdrawal, such
Borrower or such ERISA Affiliate incurs a withdrawal liability in an
annual amount exceeding $1,000,000; or a Multiemployer Plan enters
reorganization status under Section 4241 of ERISA, and, as a result
thereof, such Borrower's or such ERISA Affiliate's annual contribution
requirement with respect to such Multiemployer Plan increases in an
annual amount exceeding $1,000,000; or
(o) Any Termination Event with respect to any
Benefit Plan shall have occurred, and, thirty (30) days after notice
thereof shall have been given to a Borrower by the Agent, (i) such
Termination Event (if correctable) shall not have been corrected, and
(ii) the then current value of such Benefit Plan's vested benefits
exceeds the then current value of assets allocable to such benefits in
such Benefit Plan by more than $1,000,000 (or in the case of a
Termination Event involving liability under Section 515, 4062, 4063,
4064, 4069, 4201 or 4204 of ERISA, the liability is in excess of such
amount); or
(p) A Change of Control shall occur; or
(q) (i) GSI shall cease to directly own and
control, of record and beneficially, 100% of the outstanding common
stock of GS Technologies, free and clear of all Liens; or (ii) GS
Technologies shall cease to directly own and control, of record and
beneficially, 100% of the outstanding common stock of GSTOC free and
clear of all Liens except for the Lien thereon created under the 1994
Indenture in favor of the trustee thereunder; or
(r) The trustee under the 1994 Indenture or any
holders of the 12% Senior Notes shall give any notice of default or
notice of acceleration with respect thereto, or to any security
documents executed in connection therewith or otherwise commence the
exercise of any remedies with respect to any collateral therefor.
10.02. Consequences of an Event of Default. If an Event of
Default shall occur and be continuing or shall exist the Agent may, and upon
the direction of the Majority Lenders, shall by notice to the Borrowers:
(a) declare the Revolving Credit Commitment of
each Lender and the Current Commitment terminated, whereupon the
Revolving Credit Commitment of each Lender and the Current Commitment
will terminate immediately without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue; or
(b) declare the unpaid principal amount of the
Notes, interest accrued thereon, the total amount of the Letter of
Credit Exposure that is not cash collateralized in
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accordance with this Agreement, any fees due hereunder and all other
amounts owing by the Borrowers hereunder or under the Notes to be
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue; or
(c) give notice to the Borrowers of the
occurrence and continuance of an Event of Default; or
(d) at any time when there are no Loans
outstanding, maintain cash collateral (to the extent a Borrower has or
receives cash) equal to 105% of all outstanding Letters of Credit; or
(e) apply all funds deposited in the Cash
Concentration Account, and in the Letter of Credit Cash Collateral
Account to the payment, in whole or in part, of the Obligations; or
(f) set-off amounts in the Cash Concentration
Account, the Letter of Credit Cash Collateral Account, or any other
account under the dominion and control of the Agent and apply such
amounts to the Obligations of the Borrowers hereunder and under the
Loan Documents.
provided, however, that upon the occurrence of any Event of Default described
in subsection (i) or (j) of Section 10.01, the Loans and all Reimbursement
Obligations, all interest thereon, all fees hereunder and all other amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by the
Borrowers.
10.03. Deposit for Letters of Credit. Upon demand by the
Letter of Credit Issuer after the occurrence and during the continuance of any
Event of Default, the Borrowers shall deposit with the Agent for the benefit of
the Letter of Credit Issuer with respect to each Letter of Credit then
outstanding cash in an amount equal to the greatest amount for which such
Letter of Credit may be drawn. During the continuance of such Event of Default,
such deposits shall be held by the Agent for the benefit of the Letter of
Credit Issuer in the Letter of Credit Cash Collateral Account as security for,
and to provide for the payment of, the Letter of Credit Exposure.
10.04. Certain Remedies. If an Event of Default has occurred
and is continuing, each of the Agent and the Lenders may exercise all rights
and remedies which it may have hereunder or under any other Loan Document or at
law or in equity or otherwise. All such remedies shall be cumulative and not
exclusive.
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ARTICLE XI
MISCELLANEOUS
11.01. Holidays. Except as otherwise provided herein, whenever any
payment or action to be made or taken hereunder or under the Notes shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection
with such payment or action.
11.02. Records. The unpaid principal amount of the Notes, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, the Current Commitment,
the Stated Amount of each Letter of Credit, the principal amount of all
Reimbursement Obligations, the Letter of Credit Exposure, and the accrued and
unpaid Administrative Management Fee, Unused Line Fee and Letter of Credit Fees
shall at all times be ascertained from the records of the Agent, and, subject
to Section 2.08(b), shall be conclusive and binding absent manifest error.
11.03. Amendments and Waivers.
(a) No amendment or modification of any provision of this Agreement
or of any of the Notes or of any other Loan Document shall be effective without
the written agreement of the Majority Lenders and the Borrowers and no
termination or waiver of any provision of this Agreement or of any of the
Notes, or consent to any departure by the Borrowers therefrom, shall in any
event be effective without the written concurrence of the Majority Lenders,
which the Majority Lenders shall have the right to grant or withhold at their
sole discretion; except that any amendment, modification, or waiver (i) of any
provision of Article II or III which amendment, modification or waiver
increases the Revolving Credit Commitment of any Lender, reduces the principal
of, or interest on, the Loans or the Reimbursement Obligations payable to any
Lender, reduces the amount of any fee payable for the account of any Lender, or
postpones or extends any date fixed for any payment of principal of, or
interest or fees on, the Loans or Letter of Credit Exposure payable to any
Lender, (ii) that increases the aggregate amount of the Revolving Credit
Commitments, of the Lenders, (iii) of the definitions of "Termination Date,"
"Majority Lenders" or "Pro Rata Shares," (iv) of the definitions of "Eligible
Inventory," "Eligible Accounts Receivable" or "Borrowing Base" if the effect of
such amendment, modification or waiver is to increase the Availability of the
Borrowers, (v) of any provision of this Agreement or any Loan Document that
would permit Liens on the Collateral or release all or a substantial portion of
Collateral (except as set forth in Section 12.08 hereof or except as otherwise
permitted herein) or release the Guarantor from its Obligations under the
Guaranty, (vi) of the provisions contained in this Section 11.03, shall be
effective only if evidenced by a writing signed by or on behalf of (A) any
Lender affected thereby in the case of the amendments, modifications or waivers
described in clause (i) above or (B) all Lenders in the case of the amendments,
definitions or waivers described in clauses (ii) through (vi) above. No
amendment, modification, termination, or waiver of any provision of Article XII
or any other provision referring to the Agent shall be effective without the
written concurrence of the Agent. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given.
No notice to or
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demand on the Borrowers in any case shall entitle the Borrowers to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, waiver or consent effected in accordance with this Section 11.03
shall be binding on each Lender, each future Lender, and, if signed by the
Borrowers, on the Borrowers.
(b) Notwithstanding anything to the contrary contained in
subsection 11.03(a), in the event that the Borrowers request that this Agreement
or any other Loan Document be amended or otherwise modified in a manner which
would require the unanimous consent of all of the Lenders and such amendment or
other modification is agreed to by the Majority Lenders, then, with the consent
of the Borrowers and the Majority Lenders, the Borrowers and the Majority
Lenders may amend this Agreement without the consent of the Lender or Lenders
which did not agree to such amendment or other modification (collectively the
"Minority Lenders") to provide for (w) the termination of the Revolving Credit
Commitment of each of the Minority Lenders, (x) the addition to this Agreement
of one or more other Lenders, or an increase in the Revolving Credit Commitment
of one or more of the Majority Lenders, so that the Revolving Credit Commitments
after giving effect to such amendment shall be in the same aggregate amount as
the Revolving Credit Commitments immediately before giving effect to such
amendment, (y) if any Loans are outstanding at the time of such amendment, the
making of such additional Loans by such new Lenders or Majority Lenders, as the
case may be, as may be necessary to repay in full the outstanding Loans of the
Minority Lenders immediately before giving effect to such amendment and (z) the
payment of all interest, fees and other Obligations payable or accrued in favor
of the Minority Lenders and such other modifications to this Agreement as the
Borrowers and the Majority Lenders may determine to be appropriate.
11.04. No Implied Waiver; Cumulative Remedies. No course of dealing
and no delay or failure of the Lenders or the Agent in exercising any right,
power or privilege under this Agreement, the Notes or any other Loan Document
shall affect any other or future exercise thereof or exercise of any other
right, power or privilege; nor shall any single or partial exercise of any such
right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the
Lenders or the Agent under this Agreement, the Notes and the other Loan
Documents are cumulative and not exclusive of any rights or remedies which the
Lenders or the Agent have thereunder or at law or in equity or otherwise. The
Lenders or the Agent may exercise their rights and remedies against the
Borrowers and the Collateral as the Lenders and the Agent may elect, and
regardless of the existence or adequacy of any other right or remedy.
11.05. Notices.
(a) All notices, requests, demands, directions and other
communications (collectively "Notices") under the provisions of this Agreement
or the Notes shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), telecopied, or delivered by
recognized overnight courier and shall be effective (i) if mailed, three (3)
days after being deposited in the mails, (ii) if telecopied, when sent,
confirmation received and (iii) if delivered, upon delivery with a receipt
therefor. All notices shall be sent to the applicable party at the address
stated on the signature page hereof together
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with, in the case of a letter of credit request and Letter of Credit
Application sent pursuant to Section 3.01(a), a copy to the Agent at the
address for the Agent provided on the signature page hereof, or in accordance
with the last unrevoked written direction from such party to the other parties
hereto.
(b) The Lenders and the Agent may rely, and shall be fully
protected in relying, on any notice purportedly made by or on behalf of the
Borrowers and the Lenders and the Agent shall have no duty to verify the
identity or authority of any Person giving such notice. The preceding sentence
shall apply to all notices whether or not made in a manner authorized or
required by this Agreement or any other Loan Document.
11.06. Expenses; Taxes; Attorneys' Fees; Indemnification. (a) Each
Borrower jointly and severally agrees to pay or cause to be paid, on demand, to
the Agent, all reasonable out-of-pocket expenses, regardless of whether the
transactions contemplated hereby are consummated, including but not limited to
reasonable fees and expenses of counsel for the Agent, accounting, due
diligence, periodic field audits, appraisals, investigations, monitoring of
assets, syndication, miscellaneous disbursements, examination, travel, lodging
and meals, incurred by the Agent from time to time arising from or relating to:
(a) the negotiation, preparation, execution, delivery, performance and
administration of this Agreement and the other Loan Documents, (b) any
requested amendments, waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (c) the
preservation and protection of any of the Agent's and the Lenders' rights under
this Agreement or the other Loan Documents, (d) the commencement or defense of,
or intervention in, any court proceeding arising from or related to this
Agreement or any other Loan Document, (e) the filing of any petition,
complaint, answer, motion or other pleading by the Agent, or the taking of any
action in respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (f) the protection, collection, lease,
sale, taking possession of or liquidation of, any Collateral or other security
in connection with this Agreement or any other Loan Document, (g) any attempt
to enforce any Lien in any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to collect from a
Borrower, and (i) the receipt of any advice with respect to any of the
foregoing. If a Borrower either fails to perform any covenant or agreement
contained herein or in any other Loan Document, the Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of the Agent
incurred in connection therewith shall be reimbursed on demand by the
Borrowers.
(b) The Borrowers jointly and severally agree to indemnify
and defend the Agent and the Lenders and their directors, officers, agents,
employees and affiliates (collectively, the "Indemnified Parties") from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements or expenses of any nature whatsoever (including reasonable
attorneys' fees and amounts paid in settlement) incurred by, imposed upon or
asserted against any of them arising out of or by reason of any investigation,
litigation or other proceeding or claim brought or threatened relating to, or
otherwise arising out of or relating to, the execution of this Agreement or any
other Loan Document, any Obligation, act, event or transaction contemplated
hereby or thereby or any Loan or proposed Loan or Letter of Credit or proposed
Letter of Credit hereunder
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(including, but without limitation, any use made or proposed to be made by a
Borrower or any of its Affiliates of the proceeds of any thereof, or the
delivery or use or transfer of or the payment or failure to pay under any Loan
or Letter of Credit) (the "Indemnified Matters"), but excluding any such
losses, liabilities, claims, damages, costs or expenses to the extent finally
judicially determined to have resulted from the gross negligence or willful
misconduct of the Indemnified Party. Without limitation of the foregoing,
Indemnified Matters shall include: (i) all Environmental Liabilities and Costs
arising from or in connection with the past, present or future operations of a
Borrower or any of its Subsidiaries involving any damage to real or personal
property or natural resources or harm or injury alleged to have resulted from
any Release of Hazardous Materials on, upon or into such property, (ii) any
costs or liabilities incurred in connection with the investigation, removal,
cleanup and/or remediation of any Hazardous Materials present or arising out of
the operations of any facility of a Borrower or any of its Subsidiaries
required under Environmental Law, or (iii) any costs or liabilities incurred in
connection with any Environmental Lien.
11.07. Application. Except to the extent, if any, expressly set forth
in this Agreement or in the Loan Documents, the Agent and the Lenders shall
have the right to apply any payment received or applied by it in connection
with the Obligations to such of the Obligations then due and payable as it may
elect.
11.08. Severability. The provisions of this Agreement are intended to
be severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
11.09. Governing Law. This Agreement and the Notes shall be deemed to
be contracts under the laws of the State of New York, without regard to choice
of law principles, and for all purposes shall be governed by and construed and
enforced in accordance with the laws of said State.
11.10. Prior Understandings. This Agreement supersedes all prior
understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein other than the Fee
Letter.
11.11. Duration; Survival. All representations and warranties of the
Borrowers contained herein or made in connection herewith shall survive the
making of the Loans and the issuance of any Letter of Credit and shall not be
waived by the execution and delivery of this Agreement, the Notes or any other
Loan Document, any investigation by or knowledge of the Agent or the Lenders,
the making of any Loan or the issuance of any Letter of Credit hereunder, or
any other event whatsoever. All covenants and agreements of the Borrowers
contained herein shall continue in full force and effect from and after the
date hereof so long as the Borrowers may borrow hereunder and until the
Obligations (other than contingent indemnification rights as to unknown
matters) have been paid in full and no Letters of Credit remain outstanding.
Without limitation, it is understood that all obligations of the Borrowers to
make payments to or
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indemnify the Agent and the Lenders (including, without limitation, obligations
arising under Section 11.06 hereof) shall survive the payment in full of the
Notes and all Reimbursement Obligations and of all other obligations of the
Borrowers thereunder and hereunder, termination of this Agreement and all other
events whatsoever and whether or not any Loans are made or Letters of Credit
issued hereunder.
11.12. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
11.13. Assignments; Participations.
(a) Each Lender may with the written consent of
the Agent, which consent shall not be unreasonably withheld, assign to one or
more commercial banks or other financial institutions a portion of its rights
and obligations under this Agreement (including, without limitation, a portion
of its Revolving Credit Commitment, the Loans owing to it and its rights and
obligations as a Lender with respect to Letters of Credit) and the other Loan
Documents; provided, however, that (i) each such assignment shall be in a
principal amount of not less than $10,000,000 and in multiples of $1,000,000 in
excess thereof (or the remainder of such Lender's Revolving Credit Commitment),
(ii) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as hereinafter
defined), an Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto
and to the other Loan Documents and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations (including, without limitation, the obligation
to participate in Letters of Credit) of a Lender hereunder and thereunder and
(B) the assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the assignor and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, the assigning lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of a Borrower or any of its Subsidiaries or the performance or observance by a
Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance
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upon the assigning Lender, the Agent or any Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
the other Loan Documents; (v) such assignee appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to on the
signature page hereto, a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitment of, and principal
amount of the Loans owing to and the participation interest in the Letters of
Credit of, each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers and
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, an assignee Lender, together with the Note subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit G hereto, (i) accept such
Assignment and Acceptance, (ii) give prompt notice thereof to the Borrowers and
(iii) record the information contained therein in the Register. Within five
Business Days after its receipt of such notice, the Borrowers, at their own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note a new Note to the order of such assignee Lender in an aggregate principal
amount equal to the Revolving Credit Commitment assumed by it pursuant to such
Assignment and Acceptance, and a new Note to the order of the assigning Lender
in an aggregate principal amount equal to the Revolving Credit Commitment
retained by it hereunder, in each case prepared by the Agent. Such new Note
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note, shall be dated the date of the Agent's
acceptance of such assignment and acceptance and shall otherwise be in
substantially the form of Exhibit A-1 or Exhibit A-2 hereto, as the case may
be.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Revolving Credit Commitment and the Loans owing to it and
its participation in Letters of Credit); provided that (i) such Lender's
obligations under this Agreement (including, without limitation, its Revolving
Credit Commitment hereunder) and the other Loan Documents shall remain
unchanged; (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and the Borrowers, the
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
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Agreement and the other Loan Documents; and (iii) such Lender agrees with the
participant that it will not, without the consent of the participant, agree to
(A) extend the maturity dates or decrease in the principal amount of the Loans
or Reimbursement Obligations, or (B) extend the due dates of or a decrease the
rate of interest payable on the Loans or the fees payable under this Agreement,
or (C) release all or a substantial portion of the Collateral (except as set
forth in Section 11.08 of this Agreement or any Loan Document).
(f) Notwithstanding the foregoing provisions of this Section
11.13, each Lender may at any time sell, assign, transfer, or negotiate
all or any part of its rights and obligations under this Agreement and the Loan
Documents to any Affiliate of such Lender.
11.14. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns except that the Borrowers may not
assign or transfer any of its rights hereunder or thereunder without the prior
written consent of all of the Lenders.
11.15. Confidentiality. Upon delivering to any Lender or the Agent, or
permitting any Lender or the Agent to inspect, any written information pursuant
to this Agreement or the other Loan Documents, each Lender and the Agent shall
treat such information as confidential to the extent such information is
conspicuously marked confidential. Each Lender and the Agent agrees to hold
such information in confidence from the date of disclosure thereof. Subject to
the other provisions of this Section 11.15, each Lender and the Agent may
disclose confidential information to its officers, directors, employees,
attorneys, accountants or other professionals engaged by any Lender or the
Agent only after determining that such third party has been instructed to hold
such information in confidence to the same extent as if it were a Lender.
Notwithstanding the foregoing, the provisions of this Section 11.15 shall not
apply to information within any one of the following categories or any
combination thereof: (i) information which any Lender or the Agent had in its
possession prior to receipt thereof from the disclosing party, or (ii)
information received by any Lender or the Agent from a third party having no
obligations of nondisclosure with respect thereto. Nothing contained in this
Section 11.15 shall prevent any disclosure: (x) believed in good faith by any
Lender or the Agent to be required by any law or guideline or interpretation or
application thereof by any Governmental Authority, arbitrator or grand jury
charged with the interpretation or administration thereof or compliance with
any request or directive of any Governmental Authority, arbitrator or grand
jury (whether or not having the force of law), (y) reasonably determined by
counsel for any Lender or the Agent to be necessary or advisable in connection
with enforcement or preservation of rights under or in connection with this
Agreement or any other Loan Document or (z) of any information which has been
made public by a Person other than any Lender or the Agent. The Lenders and the
Agent shall have the right to disclose any confidential information described
in this Section 11.15 to the Letter of Credit Issuer and to an assignee or
prospective assignee or to a participant or prospective participant in Loans
hereunder, provided that the assigning or selling Lender shall have obtained
from such assignee or prospective assignee or participant or prospective
participant an agreement to hold such information in confidence to the same
extent as if it were a Lender.
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11.16. Waiver of Jury Trial. BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE AGENT, EACH LENDER AND EACH BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY OTHER RELATED DOCUMENT, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENT, THE LENDERS, OR THE BORROWERS IN CONNECTION HEREWITH OR THEREWITH. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO
THIS AGREEMENT.
11.17. Right of Setoff. Upon the occurrence and during the continuance
of any Event of Default any Lender, the Agent and the Letter of Credit Issuer
may, and is hereby authorized to, at any time from time to time, without notice
to the Borrowers (any such notice being expressly waived by the Borrowers) and
to the fullest extent permitted by law, set off and apply any and all deposits
(general or special, time or demand, provision or final) at any time held and
other indebtedness at any time owing by such Lender, the Agent or the Letter of
Credit Issuer to or for the credit or the account of the Borrowers against any
and all Obligations of the Borrowers now or hereafter existing under the Loan
Documents, irrespective of whether or not any Lender, the Agent and the Letter
of Credit Issuer shall have made any demand hereunder or thereunder and
although such Obligations may be contingent or unmatured. Each Lender, the
Agent and the Letter of Credit Issuer agrees promptly to notify a Borrower
after any such setoff and application made by such Lender, the Agent or the
Letter of Credit Issuer; provided, however, that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of each Lender, the Agent and the Letter of Credit Issuer under this Section
11.17 are in addition to the other rights and remedies (including, without
limitation, other rights of setoff under applicable law or otherwise) which
such Lender, the Agent or the Letter of Credit Issuer may have.
11.18. Headings. Section headings herein are included for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.
11.19. Forum Selection and Consent to Jurisdiction. Any litigation
based hereon, or arising out of, under or in connection with, this Agreement or
any other Loan Document, or any course of conduct, course of dealing, statement
(whether verbal or written) or action of the Agent, any Lender, the Agent, the
Letter of Credit Issuer or the Borrowers may be brought and maintained
exclusively in the courts of the State of New York or the United States
District Court for the Southern District of New York; provided, however, that
any suit seeking enforcement against any Collateral or other property may be
brought, at the Agent's option, in the courts of any jurisdiction where such
Collateral or other property may be found. The Borrowers hereby expressly and
irrevocably submit to the jurisdiction of the courts of the State of New York
and of the United States District Court for the Southern District of New York
for the purpose of any such litigation and irrevocably agree to be bound by any
judgment rendered thereby in connection with such litigation. The Borrowers
further irrevocably consent to the service of process (i) by registered or
certified mail, postage prepaid, to the Administrative Borrower at its address
for
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notices contained in Section 11.05 hereof, such service to become effective
five (5) days after such mailing, or (ii) by personal service within or without
the State of New York. Nothing herein shall affect the right of the Agent, any
Lender or the Letter of Credit Issuer to service of process in any other manner
permitted by law. The Borrowers hereby expressly and irrevocably waive, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any such litigation brought in any such court
referred to above and any claim that any such litigation has been brought in an
inconvenient forum.
11.20. The Administrative Borrower as Agent for Borrowers. Each
Borrower hereby irrevocably appoints GSTOC as the Administrative Borrower,
agent and attorney-in-fact for the Borrowers which appointment shall remain in
full force and effect unless and until the Agent shall have received prior
written notice signed by all of the Borrowers that such appointment has been
revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide the Agent with all notices with respect to Loans
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action as the Administrative
Borrower deems appropriate on its behalf to obtain Loans and to exercise such
other powers as are reasonably incidental thereto to carry out the purposes of
this Agreement. Each Borrower hereby irrevocably appoints and authorizes the
Administrative Borrower to provide the Agent with all notices and to take all
action as the Administrative Borrower deems appropriate with respect to all
Letters of Credit under this Agreement. It is understood that the handling of
the Loan Account and Collateral of the Borrowers in a combined fashion, as more
fully set forth herein, is done solely as an accommodation to the Borrowers in
order to utilize the collective borrowing powers of the Borrowers in the most
efficient and economical manner and at their request, and that neither the
Agent, the Letter of Credit Issuer nor the Lenders shall incur liability to the
Borrowers as a result hereof. Each of the Borrowers expects to derive benefit,
directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group. To induce the Agent, the Letter of Credit Issuer and the Lenders to do
so, and in consideration thereof, each of the Borrowers hereby jointly and
severally agrees to indemnify the Indemnified Parties and hold the Indemnified
Parties harmless against any and all liability, expense or loss made against
such Indemnified Parties by either of the Borrowers or by any third party
whosoever, arising from or incurred by reason of (a) the handling of the Loan
Account and Collateral of the Borrowers as herein provided or (b) the Agent,
the Lenders and the Letter of Credit Issuer relying on any instructions of the
Administrative Borrower.
ARTICLE XII
THE AGENT
12.01. Appointment. Each Lender (and each subsequent holder of any
Note by its acceptance thereof) hereby irrevocably appoints and authorizes CIT,
in its capacity as Agent (i) to receive on behalf of each Lender any payment of
principal of or interest on the Notes outstanding hereunder and all other
amounts accrued hereunder for the account of the Lenders and paid to the
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Agent, and, subject to Section 2.03 of this Agreement, to distribute promptly
to each Lender its Pro Rata Share of all payments so received, (ii) to
distribute to each Lender copies of all material notices and agreements
received by the Agent and not required to be delivered to each Lender pursuant
to the terms of this Agreement, provided that the Agent shall not have any
liability to the Lenders for the Agent's inadvertent failure to distribute any
such notice or agreements to the Lenders, and (iii) subject to Section 11.03 of
this Agreement, to take such action as the Agent deems appropriate on its
behalf to administer the Loans, Letters of Credit and the Loan Documents and to
exercise such other powers delegated to the Agent by the terms hereof or the
Loan Documents (including, without limitation, the power to give or to refuse
to give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations) together with such
powers as are reasonably incidental thereto to carry out the purposes hereof
and thereof. As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions of the
Majority Lenders shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Letter of Credit Issuer shall not be required to
refuse to honor a drawing under any Letter of Credit and the Agent shall not be
required to take any action which, in the reasonable opinion of the Agent,
exposes the Agent to liability or which is contrary to this Agreement or any
Loan Document or applicable law.
12.02. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement or any Loan
Document a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to or
shall be construed to impose upon the Agent any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Borrowers in connection with the making
and the continuance of the Loans hereunder and with the issuance of the Letters
of Credit and shall make its own appraisal of the creditworthiness of the
Borrowers and the value of the Collateral, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the initial Credit Extension hereunder or at
any time or times thereafter, provided that, upon the reasonable request of a
Lender, the Agent shall provide to such Lender any documents or reports
delivered to the Agent by the Borrowers pursuant to the terms of this Agreement
or any Loan Document. If the Agent seeks the consent or approval of the
Majority Lenders to the taking or refraining from taking any action hereunder,
the Agent shall send notice thereof to each Lender. The Agent shall promptly
notify each Lender any time that the Majority Lenders have instructed the Agent
to act or refrain from acting pursuant hereto.
12.03. Rights, Exculpation, Etc. The Agent and its directors, officers,
agents or employees shall not be liable for any action taken or omitted to be
taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for their own gross negligence or willful misconduct as
determined by a final judgment of a court of competent
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jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of any Note as the holder thereof until the Agent receives
written notice of the assignment or transfer thereof, pursuant to Section 11.13
hereof, signed by such payee and in form satisfactory to the Agent; (ii) may
consult with legal counsel (including, without limitation, counsel to the Agent
or counsel to the Borrowers), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Potential Default or Event
of Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Agent's Lien thereon, or the Borrowing Base or
any certificate prepared by a Borrower in connection therewith, nor shall the
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain the Borrowing Base or any portion of the Collateral. The Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith pursuant to Section 2.08(c), and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to
recover from other Lenders any payment in excess of the amount which they are
determined to be entitled. The Agent may at any time request instructions from
the Lenders with respect to any actions or approvals which by the terms of this
Agreement or of any of the Loan Documents the Agent is permitted or required to
take or to grant, and if such instructions are promptly requested, the Agent
shall be absolutely entitled to refrain from taking any action or to withhold
any approval under any of the Loan Documents until it shall have received such
instructions from the Majority Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement, the Notes,
or any of the other Loan Documents in accordance with the instructions of the
Majority Lenders.
12.04. Reliance. The Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
12.05. Indemnification. To the extent that the Agent is not reimbursed
and indemnified by the Borrowers, the Lenders will reimburse and indemnify the
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising
out of this
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Agreement or any of the Loan Documents or any action taken or omitted by the
Agent under this Agreement or any of the Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 12.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from the Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including
reasonable attorneys' fees) incurred by the 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
and each other Loan Document, to the extent that the Agent is not reimbursed
for such expenses by Borrowers. The obligations of the Lenders under this
Section 12.05 shall survive the payment in full of the Loans and Reimbursement
Obligations and the termination of this Agreement.
12.06. Successor Agent.
(a) The Agent may resign from the performance of all its
functions and duties hereunder and under the other Loan Documents at any time
by giving at least thirty (30) Business Days' prior written notice to the
Borrowers and each Lender. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Majority Lenders
shall appoint a successor Agent who shall be reasonably satisfactory to the
Borrowers. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
Agent's resignation hereunder as the Agent, the provisions of this Article XII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed within
said thirty (30) Business Day period, the retiring Agent, with the consent of
the Borrowers, shall then appoint a successor Agent who shall serve as Agent
until such time, if any, as the Majority Lenders, with the consent of the
Borrowers, appoint a successor Agent as provided above.
12.07. Collateral Matters.
(a) The Agent may from time to time, during the occurrence and
continuance of an Event of Default, make such disbursements and advances
("Agent Advances") which the Agent, in its sole discretion, deems necessary or
desirable to preserve or protect the Collateral or any portion thereof, to
enhance the likelihood or maximize the amount of repayment by the Borrowers of
the Loans and other Obligations or to pay any other amount chargeable to
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the Borrowers pursuant to the terms of this Agreement, including, without
limitation, costs, fees and expenses as described in Section 11.06. The Agent
Advances shall be repayable on demand and be secured by the Collateral. The
Agent Advances shall not constitute Loans but shall otherwise constitute
Obligations hereunder. The Agent shall notify each Lender and the
Administrative Borrower in writing of each such Agent Advance, which notice
shall include a description of the purpose of such Agent Advance. Without
limitation to its obligations pursuant to Section 12.05, each Lender agrees
that it shall make available to the Agent, upon the Agent's demand, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata
Share of each such Agent Advance. If such funds are not made available to the
Agent by such Lender the Agent shall be entitled to recover such funds, on
demand from such Lender together with interest thereon, for each day from the
date such payment was due until the date such amount is paid to the Agent, at
the customary rate set by the Agent for the correction of errors among banks
for three Business Days and thereafter at the Regular Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral upon termination of the Revolving Credit Commitments
and payment and satisfaction of all Loans, Reimbursement Obligations, other
Letter of Credit Exposure (whether or not due) and all other Obligations which
have matured and which the Agent has been notified in writing are then due and
payable; or constituting property being sold or disposed of if a Borrower
certifies to the Agent that the sale or disposition is made in compliance with
Section 8.04 (b) hereof (and the Agent may rely conclusively on any such
certificate, without further inquiry); or constituting property in which a
Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the Majority
Lenders. Upon request by the Agent at any time, the Lenders will confirm in
writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 12.07(b).
(c) Without in any manner limiting the Agent's authority to
act without any specific or further authorization or consent by the Majority
Lenders (as set forth in Section 12.08(b)), each Lender agrees to confirm in
writing, upon request by the Agent, the authority to release Collateral
conferred upon the Agent under Section 12.07(b). So long as no Event of Default
is then continuing, upon receipt by the Agent of confirmation from the Majority
Lenders of its authority to release any particular item or types of Collateral,
and upon at least five (5) Business Days' prior written request by the
Administrative Borrower, the Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Agent for the benefit of the Lenders upon
such Collateral; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligations or entail any consequence
other than the release of such Liens without recourse or warranty, and (ii)
such release shall not in any manner discharge, affect or impair the
Obligations or any Lien upon (or obligations of the Borrowers in respect of)
all interests in the Collateral retained by the Borrowers.
(d) The Agent shall have no obligation whatsoever to any
Lenders to assure that the Collateral exists or is owned by the Borrowers or is
cared for, protected or insured or has been encumbered or that the Lien granted
to the Agent pursuant to the Security Documents
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has been properly or sufficiently or lawfully created, perfected, protected or
enforced or is entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 12.07 or in any of the Loan Documents,
it being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to any other Lender.
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
BORROWERS:
GS TECHNOLOGIES OPERATING CO., INC.
By:
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Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
Attention: L.-▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
GEORGETOWN STEEL CORPORATION
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
Attention: L.-▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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ME INTERNATIONAL, INC.
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
Attention: L.-▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
ME-WEST CASTINGS, INC.
By:
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Name:
-------------------------------------
Title:
------------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
Attention: L.-▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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AGENT AND LENDER:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
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Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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