Exhibit 10.16
Amended and Restated Secured Credit Agreement
among
Maverick Tube Corporation
and
▇▇▇▇▇▇ Trust And Savings Bank
as Agent
and
the Banks from time to time parties hereto
Dated as of December 28, 2000
Table of Contents
Maverick Tube Corporation
Amended and Restated Secured Credit Agreement
Section 1. The Credits.....................................1
Section 1.1. The Revolving Credit 1
Section 1.2. The Revolving Notes 3
Section 1.3. Interest Rates 4
Section 1.4. Letter of Credit 6
Section 1.5. Reimbursement Obligations 7
Section 1.6. Manner of Borrowing and Rate Selection 8
Section 1.7. Participation in the L/Cs 9
Section 1.8. The Collateral and Guarantees 9
Section 2. Fees, Prepayments and Terminations.............11
Section 2.1. Commitment Fees 11
Section 2.2. Other Fees 11
Section 2.3. Optional Prepayments 11
Section 2.4. Mandatory Prepayments-Borrowing Base 12
Section 2.5. Terminations 12
Section 2.6. Capital Adequacy 12
Section 3. Place and Application of Payments..............12
Section 4. Definitions....................................13
Section 4.1. Certain Terms Defined. 13
Section 4.2. Interpretation 24
Section 4.3. Change in Accounting Principles 24
Section 5. Representations and Warranties.................24
Section 5.1. Organization and Qualification 24
Section 5.2. Financial Reports 24
Section 5.3. Litigation; Tax Returns; Approvals 25
Section 5.4. Regulation U 25
Section 5.5. No Default 25
Section 5.6. ERISA 25
Section 5.7. Environmental Law 25
Section 5.8. Security Interests 26
Section 5.9. Subsidiaries 26
Section 5.10. Accurate Information 26
Section 5.11. Enforceability 27
Section 5.12 Trademarks, Franchises, and Licenses 27
Section 5.13. Governmental Authority and Licensing 27
Section 5.14. Good Title 27
Section 5.15. Affiliate Transactions 27
Section 5.16. Investment Company;
Public Utility Holding Company 27
Section 5.17. Other Agreements 28
Section 5.18. Solvency 28
Section 6. Conditions Precedent...........................28
Section 6.1. General 28
Section 6.2. Initial Extension of Credit 28
Section 6.3. Each Extension of Credit 30
Section 6.4. Legal Matters 30
Section 7. Covenants......................................30
Section 7.1. Maintenance of Property and Business 30
Section 7.2. Taxes 30
Section 7.3. Maintenance of Insurance 31
Section 7.4. Financial Reports 31
Section 7.5. Inspection 32
Section 7.6. Consolidation and Merger 32
Section 7.7. Transactions with Affiliates 33
Section 7.8. Maximum Total Funded Debt Ratios 33
Section 7.9. Minimum Adjusted EBITDA 33
Section 7.10. Minimum Consolidated Tangible Net Worth 33
Section 7.11. Maximum Leverage Ratio 33
Section 7.12. Minimum Interest Coverage Ratio 33
Section 7.13. Restricted Payments 33
Section 7.14. Liens 34
Section 7.15. Borrowings and Guaranties 35
Section 7.16. Investments, Loans, Advances and
Acquisitions 35
Section 7.17. Sale of Property 37
Section 7.18. Notice of Suit or Adverse Change
in Business or Default 37
Section 7.19. ERISA 38
Section 7.20. Supplemental Performance 38
Section 7.21. Use of Proceeds 38
Section 7.22. Compliance with Laws, etc 38
Section 7.23. Environmental Covenant 38
Section 7.24. Subsidiaries. 39
Section 7.25. No Changes in Fiscal Year 39
Section 7.26. Operating Leases 39
Section 7.27. Change in the Nature of Business 39
Section 7.28. Prudential Line of Credit 40
Section 8. Events of Default and Remedies.................40
Section 8.1. Definitions 40
Section 8.2. Remedies for Non-Bankruptcy Defaults 41
Section 8.3. Remedies for Bankruptcy Defaults 41
Section 8.4. L/Cs 42
Section 8.5. Expenses 42
Section 9. Change in Circumstances Regarding
Eurodollar Loans............................42
Section 9.1. Change of Law 42
Section 9.2. Unavailability of Deposits or Inability
to Ascertain the Adjusted Eurodollar
Rate 42
Section 9.3. Taxes and Increased Costs 42
Section 9.4. Funding Indemnity 43
Section 9.5. Lending Branch 44
Section 9.6. Discretion of Bank as to Manner
of Funding 44
Section 10. The Agent......................................44
Section 10.1. Appointment and Powers 44
Section 10.2. Powers 44
Section 10.3. General Immunity 44
Section 10.4. No Responsibility for Loans,
Recitals, etc 44
Section 10.5. Right to Indemnity 44
Section 10.6. Action Upon Instructions of Banks 45
Section 10.7. Employment of Agents and Counsel 45
Section 10.8. Reliance on Documents; Counsel 45
Section 10.9. May Treat Payee as Owner 45
Section 10.10. Agent's Reimbursement 45
Section 10.11. Rights as a Lender 45
Section 10.12. Bank Credit Decision 45
Section 10.13. Resignation of Agent 45
Section 10.14. Duration of Agency 46
Section 10.15. Letter of Credit Issuer 46
Section 10.16. Hedging Arrangements 46
Section 11. Miscellaneous..................................46
Section 11.1. Amendments and Waivers 46
Section 11.2. Waiver of Rights 47
Section 11.3. Several Obligations 47
Section 11.4. Non-Business Day 47
Section 11.5. Survival of Indemnities 47
Section 11.6. Documentary Taxes 47
Section 11.7. Representations 47
Section 11.8. Notices 48
Section 11.9. Costs and Expenses 48
Section 11.10. Counterparts 49
Section 11.11. Successors and Assigns; Governing
Law; Entire Agreement 49
Section 11.12. Banks' Obligations Several 49
Section 11.13. Severability 49
Section 11.14. Table of Contents and Headings 49
Section 11.15. Sharing of Payments 49
Section 11.16. Conflict Among Documents 49
Section 11.17. Confidentiality 50
Section 11.18. Participants 50
Section 11.19. Assignment Agreements and Register 50
Section 11.20. Excess Interest 51
Section 11.21. Construction 52
Section 11.22. Withholding Taxes 52
(a) U.S. Withholding Tax Exemptions 52
(b) Inability of Bank to Submit Forms 52
(c) Payment of Additional Amounts 52
Section 11.23. Submission to Jurisdiction; Waiver
of Jury Trial 53
Maverick Tube Corporation
Amended and Restated Secured Credit Agreement
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
The lenders from time to time parties hereto
Ladies and Gentlemen:
The undersigned, Maverick Tube Corporation, a Delaware corporation (the
"Borrower"), refers to the Secured Credit Agreement dated as of September 18,
1998, as amended and currently in effect among the Borrower and certain lenders
party thereto (such Secured Credit Agreement as so amended is referred to as the
"Previous Credit Agreement") pursuant to which such lenders agreed to make a
revolving credit available to the Borrower, all as more fully set forth therein.
Each of you is hereinafter referred to individually as "Bank" and collectively
as the "Banks." ▇▇▇▇▇▇ Trust and Savings Bank in its individual capacity is
sometimes referred to herein as "▇▇▇▇▇▇", and in its capacity as Agent for the
Banks is hereinafter in such capacity called the "Agent." The Borrower requests
you to (i) amend the Previous Credit Agreement to add a swingline credit
facility (the "Swingline") thereunder and (ii) make certain further amendments
to the Previous Credit Agreement and, for the sake of convenience and clarity,
to restate the Previous Credit Agreement in its entirety as so amended.
Accordingly, upon your acceptance hereof in the space provided for that purpose
below and upon satisfaction of the conditions precedent to effectiveness
hereinafter set forth, Sections 1 through 11 of the Previous Credit Agreement
and all of the Exhibits thereto shall be amended and as so amended shall be
restated in their entirety to read as follows:
Section 1. The Credits.
Section 1.1. The Revolving Credit.
a) Subject to all of the terms and conditions hereof, the Banks agree, severally
and not jointly, to extend a revolving credit (the "Revolving Credit") to the
Borrower which may be utilized in the form of loans (individually a "Revolving
Credit Loan" and collectively the "Revolving Credit Loans"), and L/Cs (as
hereinafter defined). The aggregate principal amount of all Revolving Credit
Loans under the Revolving Credit plus the amount available for drawing under the
L/Cs, the aggregate principal amount of all Swingline Loans (as hereinafter
defined) under the Swingline and the aggregate principal amount of all unpaid
Reimbursement Obligations (as hereinafter defined)(collectively, the "Revolving
Credit Obligations") at any time outstanding shall not exceed the lesser of
(i) the Banks' Revolving Credit Commitments (as hereinafter defined) in effect
from time to time during the term of this Agreement and (ii) the Borrowing Base
as determined on the basis of the most recent Borrowing Base Certificate. The
Revolving Credit shall be available to the Borrower, and may be availed of by
the Borrower from time to time, be repaid (subject to the restrictions on
prepayment set forth herein) and used again, during the period from the date
hereof to and including January 1, 2004 (the "Termination Date").
(b) The respective maximum aggregate principal amounts of the Revolving Credit
at any one time outstanding and the Commitment Percentage of each Bank, in each
case in effect on the date hereof, are, subject to any reductions, modifications
and increases thereof pursuant hereto, as follows (collectively, the "Revolving
Credit Commitments" and individually, a "Revolving Credit Commitment"):
▇▇▇▇▇▇ Trust and Savings Bank $30,000,000.00 37.50%
Firstar Bank, N.A. $25,000,000.00 31.25%
Bank of America, N.A. $25,000,000.00 31.25%
Total $80,000,000.00 100%
(c) Loans under the Revolving Credit may be Eurodollar Loans or Domestic Rate
Loans. All Loans under the Revolving Credit shall be made from each Bank in
proportion to its respective Revolving Credit Commitment as above set forth.
Each Domestic Rate Loan shall be in an amount not less than $250,000 or such
greater amount which is an integral multiple of $100,000 and each Eurodollar
Loan shall be in an amount not less than $1,000,000 or such greater amount which
is an integral multiple of $50,000.
(d) The initial borrowing under this Agreement shall be in an amount sufficient
to pay all amounts outstanding under the Previous Credit Agreement and certain
other working capital obligations of the Borrower. The Agent shall apply the
proceeds of the initial borrowing hereunder to pay all principal and interest
outstanding under the Previous Credit Agreement.
(e) Swingline Loans under the Revolving Credit (i) Swingline Commitment. Subject
to the terms and conditions hereof and in reliance on the obligations of the
Banks to ▇▇▇▇▇▇ under this Section 1.1, ▇▇▇▇▇▇ agrees to advance one or more
swingline loans (each a "Swingline Loan") to the Borrower from time to time
before the Termination Date on a revolving basis up to $5,000,000 in aggregate
principal amount at any time outstanding (the "Swingline Commitment"); provided
that ▇▇▇▇▇▇ shall have no obligation to advance any Swingline Loan if the
aggregate amount of the Revolving Credit Obligations would thereby exceed the
Revolving Credit Commitments then in effect. All Swingline Loans will be in an
amount not less than $100,000 or an integral multiple of $50,000 in excess
thereof. Swingline Loans may be repaid and their principal amount reborrowed
before the Termination Date, subject to the terms and conditions hereof. Each
Swingline Loan that bears interest based on the Domestic Rate shall mature no
later than five (5) Business Days after such Loan is made and each Offered Rate
Loan (as hereinafter defined) shall mature on the last day of the Interest
Period applicable thereto. No more than five (5) Swingline Loans may be
outstanding at any time.
All Swingline Loans made by ▇▇▇▇▇▇ under the Swingline shall be evidenced by a
Secured Swingline Note of the Borrower (the "Swingline Note") payable to the
order of ▇▇▇▇▇▇ in the amount of its Swingline Commitment, the Swingline Note to
be in the form attached hereto as Exhibit B. Without regard to the face
principal amount of the Swingline Note, the actual principal amount at any time
outstanding and owing by the Borrower on account thereof during the period
ending on the Termination Date shall be the sum of all advances then or
theretofore made thereon less all principal payments actually received thereon
during such period.
▇▇▇▇▇▇ may elect that each Swingline Loan requested by the Borrower shall bear
interest on the unpaid principal amount thereof from the date such Swingline
Loan is made until paid in full at either (a) the rate per annum (computed on
the basis of a year of 365/366 days and actual days elapsed) determined by
adding the Applicable Margin for Revolving Credit Loans to the Domestic Rate as
in effect from time to time, or (b) to the extent not greater than the rate per
annum based on the Domestic Rate as specified in the immediately preceding
subsection (a) of this paragraph, the rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) quoted to the Borrower by ▇▇▇▇▇▇ for
the Interest Period applicable thereto (each such Swingline Loan specified in
this subsection (b) is hereinafter referred to as an "Offered Rate Loan");
provided, however, that the Borrower understands and agrees that ▇▇▇▇▇▇ has no
obligation to quote rates or to make any such Offered Rate Loan and may refuse
to make any such Offered Rate Loan after receiving a request therefor from the
Borrower. The Borrower acknowledges and agrees that the interest rate quoted by
▇▇▇▇▇▇ for any Offered Rate Loan may not be the best or lowest rate offered to
other customers of ▇▇▇▇▇▇ and may not be the same rate offered to other
customers of ▇▇▇▇▇▇ for loans of similar amounts and maturities, but is the rate
at which ▇▇▇▇▇▇ in its sole and exclusive discretion is willing to make such
Offered Rate Loan to the Borrower for the specified amount and maturity.
Interest based on the Domestic Rate shall be payable on the last day of each
month in each year and interest on all Offered Rate Loans shall be payable on
the last day of the Interest Period applicable thereto. Upon the occurrence of
an Event of Default hereunder all Swingline Loans shall bear interest at a rate
per annum (computed on the basis of a year of 365/366 days and actual days
elapsed) determined by adding the Applicable Margin for Revolving Credit Loans
to the Domestic Rate as in effect from time to time plus 2%. Interest on all
Swingline Loans after default shall be due and payable upon demand.
The Borrower shall give ▇▇▇▇▇▇ notice (which may be written or oral, but which
must be given prior to 11:00 a.m. (Chicago time) of the date (which may, subject
to the immediately preceding parenthetical, be the date on which such notice is
given) upon which it requests that any Swingline Loan be made to it), which
notice shall specify the date on which such Swingline Loan is to be made, the
amount of such Swingline Loan and, if such Swingline Loan is elected by ▇▇▇▇▇▇
to be an Offered Rate Loan, the duration of the Interest Period applicable to
such Swingline Loan.
(ii) Refunding Loans. In its sole and absolute discretion, ▇▇▇▇▇▇ may at any
time, on behalf of the Borrower (which hereby irrevocably authorizes ▇▇▇▇▇▇ to
act on its behalf for such purpose), request each Bank by means of written or
telegraphic notices given no later than 5:00 p.m. (Chicago time) on any Business
Day to make a Domestic Rate Loan under the Revolving Credit in an amount equal
to such Bank's Commitment Percentage of the amount of the Swingline Loans
outstanding on the date such notice is given. Unless any of the conditions of
Section 6.3 are not fulfilled on such date, each Bank shall make the proceeds of
its requested Domestic Rate Loan available to ▇▇▇▇▇▇, in immediately available
funds, at the principal office of ▇▇▇▇▇▇ in Chicago, Illinois, before 3:00 p.m.
(Chicago time) on the Business Day following the day such notice is given. The
proceeds of such Domestic Rate Loans shall be immediately applied to repay the
outstanding Swingline Loans. The Borrower authorizes ▇▇▇▇▇▇ to charge the
Borrower's accounts with ▇▇▇▇▇▇ (up to the amount available in such accounts) to
pay the amount of any such outstanding Swingline Loans to the extent amounts
received from the Banks are not sufficient to repay in full such Swingline
Loans.
(iii) Participations. If any Bank refuses or otherwise fails to make a Revolving
Credit Loan when requested by ▇▇▇▇▇▇ pursuant to Section 1.1(e)(ii) above
(because the conditions in Section 6.3 are not satisfied or otherwise), such
Bank will, by the time and in the manner such Revolving Credit Loan was to have
been funded to ▇▇▇▇▇▇, purchase from ▇▇▇▇▇▇ an undivided participating interest
in the outstanding Swingline Loans in an amount equal to its Commitment
Percentage of the aggregate principal amount of Swingline Loans that were to
have been repaid with such Revolving Credit Loans. Each Bank that so purchases a
participation in a Swingline Loan shall thereafter be entitled to receive its
Commitment Percentage of each payment of principal received on the Swingline
Loan and of interest received thereon accruing from the date such Bank funded to
▇▇▇▇▇▇ its participation in such Loan; provided, however, in the event any such
payment (or portion thereof) received by ▇▇▇▇▇▇ is required to be returned to
the Borrower or to a trustee, receiver, liquidator, custodian or other Person,
such Bank will return to ▇▇▇▇▇▇ any portion thereof previously distributed to it
by ▇▇▇▇▇▇. The obligation of the Banks to ▇▇▇▇▇▇ shall be absolute and
unconditional and shall not be affected or impaired by any Event of Default or
Potential Default which may then be continuing hereunder.
Section 1.2. The Revolving Notes. All Revolving Credit Loans made by each Bank
under its Revolving Credit Commitment, shall be evidenced by a single Secured
Revolving Credit Note of the Borrower substantially in the form of Exhibit A
hereto (individually, a "Revolving Note" and together, the "Revolving Notes")
payable to the order of each Bank in the principal amount of such Bank's
Revolving Credit Commitment, but the aggregate principal amount of indebtedness
evidenced by such Revolving Note at any time shall be, and the same is to be
determined by, the aggregate principal amount of all Revolving Credit Loans made
by such Bank to the Borrower pursuant hereto on or prior to the date of
determination less the aggregate amount of principal repayments on such
Revolving Credit Loans received by or on behalf of such Bank on or prior to such
date of determination. Each Revolving Note shall be dated as of the execution
date of this Agreement, shall be delivered concurrently herewith, and shall be
expressed to mature on the Termination Date and to bear interest as provided in
Section 1.3 hereof. Each Bank shall record on its books or records or on a
schedule to its Revolving Note the amount of each Revolving Credit Loan made by
it hereunder, whether each Revolving Credit Loan is a Domestic Rate Loan or
Eurodollar Loan, and, with respect to Eurodollar Loans, the interest rate and
Interest Period applicable thereto, and all payments of principal and interest
and the principal balance from time to time outstanding, provided that prior to
any transfer of such Revolving Note all such amounts shall be recorded on the
schedule to such Revolving Note. The record thereof, whether shown on such books
or records or on the schedule to the Revolving Note, shall be prima facie
evidence as to all such amounts; provided, however, that the failure of any Bank
to record, or any mistake in recording, any of the foregoing shall not limit or
otherwise affect the obligation of the Borrower to repay all Revolving Credit
Loans made hereunder together with accrued interest thereon. Upon the request of
any Bank, the Borrower will furnish a new Revolving Note to such Bank to replace
its outstanding Revolving Note and at such time the first notation appearing on
the schedule on the reverse side of, or attached to, such Revolving Note shall
set forth the aggregate unpaid principal amount of Revolving Credit Loans then
outstanding from such Bank, and, with respect to each Eurodollar Loan, the
interest rate and Interest Period applicable thereto. Such Bank will cancel and
deliver to the Borrower the outstanding Revolving Credit Note upon receipt of
the new Revolving Credit Note.
Section 1.3. Interest Rates. (a) Domestic Rate. Each Domestic Rate Loan shall
bear interest (computed on the basis of a year of 360 days and actual days
elapsed) on the unpaid principal amount thereof from the date such Loan is made
until maturity (whether by acceleration, upon prepayment or otherwise) at a rate
per annum equal to the sum of the Applicable Margin plus the Domestic Rate from
time to time in effect, payable quarterly in arrears on the last day of each
calendar quarter, commencing on December 31, 2000 and at maturity (whether by
acceleration, upon prepayment or otherwise).
(b) Eurodollar Rate. Each Eurodollar Loan shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is made until the last day of the
Interest Period applicable thereto or, if earlier, until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted Eurodollar Rate, payable on the last day of
each Interest Period applicable thereto and at maturity (whether by acceleration
or otherwise), and, with respect to any Interest Period applicable to a
Eurodollar Loan in excess of three months, on the date occurring every three
months after the date such Interest Period began and at the end of such Interest
Period; provided that if on the last day of the Interest Period applicable to
any Eurodollar Loan the Borrower does not prepay such Loan, such Loan shall
become a Domestic Rate Loan as of the last day of the Interest Period applicable
thereto.
"Adjusted Eurodollar Rate" means a rate per annum determined pursuant to
the following formula: Eurodollar Rate Adjusted Eurodollar Rate
= 100% - Reserve Percentage
"Eurodollar Rate" means, for each Interest Period, (a) the LIBOR Index Rate
for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upward, if necessary, to the nearest 1/100th of
1%) at which deposits in U.S. Dollars in immediately available funds are
offered to the Agent at 11:00 a.m. (London, England time) two (2) Business
Days before the beginning of such Interest Period by three (3) or more
major banks in the interbank eurodollar market selected by the Bank for a
period equal to such Interest Period and in an amount equal or comparable
to the applicable Eurodollar Loan scheduled to be outstanding during such
Interest Period.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth
of a percentage point) for deposits in U.S. Dollars for a period equal to
such Interest Period, which appears on the Telerate Page 3750 as of
11:00 a.m. (London, England time) on the day two (2) Business Days before
the commencement of such Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
Each determination of the Eurodollar Rate made by the Agent shall be
conclusive and binding absent manifest error.
"Interest Period" means (a) with respect to any Eurodollar Loan, the period
commencing on, as the case may be, the creation, continuation or conversion
date with respect to such LIBOR Loan and ending one (1), two (2), three (3)
or six (6) months thereafter as selected by the Borrower in its notice as
provided herein and (b) with respect to any Offered Rate Loan, the period
used for the completion of interest commencing on the date the relevant
Offered Rate Loan is made and concluding on the date one (1) to five (5)
days thereafter as selected by the Borrower in its notice as provided
herein; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day, unless in the case of an Interest Period for a Eurodollar
Loan the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity date of the
relevant Notes;
(iii) the interest rate to be applicable to each Loan for each Interest
Period shall apply from and including the first day of such Interest Period
to but excluding the last day thereof; and
(iv) no Interest Period may be selected if after giving effect thereto the
Borrower will be unable to make a principal payment scheduled to be made
during such Interest Period without paying part of a Eurodollar Loan on a
date other than the last day of the Interest Period applicable thereto.
For purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month, provided, however, if an
Interest Period begins on the last day of a month or if there is no
numerically corresponding day in the month in which an Interest Period is
to end, then such Interest Period shall end on the last Business Day of
such month.
"Reserve Percentage" means the daily arithmetic average maximum rate at
which reserves (including, without limitation, any supplemental, marginal
and emergency reserves) are imposed on member banks of the Federal Reserve
System during the applicable Interest Period by the Board of Governors of
the Federal Reserve System (or any successor) under Regulation D on
"eurocurrency liabilities" (as such term is defined in Regulation D),
subject to any amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Eurodollar Loans shall be deemed to be
Eurocurrency liabilities as defined in Regulation D without benefit or
credit for any prorations, exemptions or offsets under Regulation D.
(c) Default Rate. If any payment of principal or interest on any Revolving
Credit Loan is not made when due (including any payment due upon
acceleration), such Loan shall bear interest (computed on the basis of a
year of 360 days and actual days elapsed) from the date such payment was
due until paid in full, payable on demand, at a rate per annum equal to:
(i) with respect to any Domestic Rate Loan, the sum of 2% plus the
Applicable Margin plus the Domestic Rate from time to time in effect; and
(ii) with respect to any Eurodollar Loan, the sum of 2% plus the rate of
interest in effect thereon at the time of such default until the end of the
Interest Period then applicable thereto, and, thereafter, at a rate per
annum equal to the sum of 2% plus the Applicable Margin plus the Domestic
Rate from time to time in effect.
(d) Interest Rate and Commitment Fee Margin Adjustments. The margins from
time to time applicable to the Revolving Credit Loans in accordance
herewith are hereinafter referred to as the "Applicable Margins".
--------------------------------------------------------------------------------------------------------------
Summary Pricing Matrix
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Level I Level II Level III Level IV Level V
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Adjusted Adjusted Total Adjusted Total Adjusted Total Adjusted Total
Total Funded Funded Debt Ratio Funded Debt Ratio Funded Debt Funded Debt
Debt Ratio >1.00x and less than >2.00x and less Ratio >2.50x Ratio >3.00x
<1.00x 2.0 than 2.50x and <3.0x
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Domestic Rate 0% 0% 0% 0% 0%
Margin
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Eurodollar Margin .75% 1.00% 1.25% 1.50% 1.75%
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Commitment Fee .20% .25% .25% .375% .375%
--------------------------------------------------------------------------------------------------------------
Not later than ten Business Days after receipt by the Agent of the
financial statements called for by Section 7.4 hereof for the applicable
quarter, the Agent shall determine the Adjusted Total Funded Debt Ratio for
the applicable period and shall promptly notify the Borrower and each Bank
of such determination and of any change in the Applicable Margins resulting
therefrom. Any such change in the Applicable Margins shall be effective as
of the date the Agent so notifies the Borrower with respect to all Loans
outstanding on such date, and such new Applicable Margins shall continue in
effect until the effective date of the next quarterly redetermination in
accordance with this Section 1.3(d). Each determination of the Adjusted
Total Funded Debt Ratio and Applicable Margins by the Agent in accordance
with this Section be conclusive and binding on the Borrower absent manifest
error or willful misconduct. The Applicable Margins shall first be adjusted
upon receipt of the financial statements for the fiscal quarter ending
March 31, 2001. Subject to subsection (c) hereof, from the date hereof
until the Applicable Margins are first adjusted pursuant hereto, the
Applicable Margin for Domestic Rate Loans shall be 0%, the Applicable
Margin for Eurodollar Loans shall be 1.50% and the Applicable Margin for
the Commitment Fee shall be 0.375%.
Section 1.4. Letter of Credit. (a) Subject to all the terms and conditions
hereof and satisfaction of all conditions precedent to borrowing under this
Agreement and so long as no Potential Default or Event of Default is in
existence, at the Borrower's request ▇▇▇▇▇▇ shall issue letters of credit
(individually, an "L/C" and collectively the "L/Cs") for the account of the
Borrower in an aggregate amount not to exceed $5,000,000, subject to
availability under the Revolving Credit, and the Banks hereby agree to
participate therein as more fully described in Section 1.7 hereof. Each L/C
shall be issued pursuant to an application and agreement for letter of
credit (individually, an "L/C Agreement" and collectively the "L/C
Agreements") in the form of Exhibit C hereto, shall consist of a standby or
trade letter of credit, shall be in form and substance acceptable to ▇▇▇▇▇▇
and the Banks, and shall have an expiry date not more than one year from
the date of issuance thereof, subject to annual renewals (but in no event
later than the Termination Date). The aggregate amount available to be
drawn under all L/Cs issued pursuant hereto shall be deducted from the
credit otherwise available under the Revolving Credit. In consideration of
the issuance of L/Cs the Borrower agrees to pay ▇▇▇▇▇▇ for the benefit of
the Banks a fee (the "L/C Participation Fee") in the amount per annum equal
to the Applicable Margin for Eurodollar Loans (computed on the basis of a
360-day year and actual days elapsed) of the face amount for each L/C
issued for the account of the Borrower hereunder. In addition, the Borrower
shall pay ▇▇▇▇▇▇ (x) a fee (the "L/C Issuance Fee") in the amount per annum
equal to (i) for standby L/Cs, one-eighth of one percent (0.125%) of the
stated amount of each standby L/C issued hereunder and (ii) for commercial
L/Cs, the customary issuance fee for commercial L/Cs as may be established
by ▇▇▇▇▇▇ from time to time, and (y) such drawing, negotiation, amendment
and other administrative fees in connection with each L/C as may be
established by ▇▇▇▇▇▇ from time to time (the "L/C Administrative Fee"). All
L/C Issuance Fees and L/C Participation Fees shall be payable quarterly in
arrears on the last day of each December, March, June and September
commencing December 31, 2000 and on the Termination Date, and all L/C
Administrative Fees shall be payable on the date of issuance of each L/C
hereunder and on the date required by ▇▇▇▇▇▇.
(b) The Agent shall give prompt telephone, telex, or telecopy notice to
each Bank of each issuance of, or amendment to, an L/C specifying the
effective date of the L/C or amendment, the amount, the beneficiary, and
the expiration date of the L/C, in each case as established originally or
through the relevant amendment, as applicable, the account party or parties
for the L/C, each Bank's pro rata participation in such L/C and whether the
Agent has classified the L/C as a commercial, performance, or financial
letter of credit for regulatory reporting purposes.
(c) Notwithstanding anything contained in any L/C Agreement to the
contrary: (i) the Borrower shall pay fees in connection with each L/C as
set forth in Section 1.4(a) hereof, (ii) before the occurrence of an Event
of Default, ▇▇▇▇▇▇ will not call for the funding by the Borrower of any
amount under an L/C issued for the Borrower's account, or for any other
form of collateral security for the Borrower's obligations in connection
with such L/C, before being presented with a drawing thereunder, and
(iii) if ▇▇▇▇▇▇ is not timely reimbursed for the amount of any drawing
under an L/C on the date such drawing is paid, the Borrower's obligation to
reimburse ▇▇▇▇▇▇ for the amount of such drawing shall bear interest as
specified in Section 1.5 hereof. If ▇▇▇▇▇▇ issues any L/C with an
expiration date that is automatically extended unless ▇▇▇▇▇▇ gives notice
that the expiration date will not so extend beyond its then scheduled
expiration date, ▇▇▇▇▇▇ will give such notice of non-renewal before the
time necessary to prevent such automatic extension if before such required
notice date (i) the expiration date of such L/C if so extended would be
after the Termination Date, (ii) the Revolving Credit Commitments have been
terminated, or (iii) an Event of Default exists and the Required Banks have
given ▇▇▇▇▇▇ instructions not to so permit the extension of the expiration
date of such L/C.
(d) The Banks shall, ratably in accordance with their respective Commitment
Percentages, indemnify ▇▇▇▇▇▇ (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from ▇▇▇▇▇▇'▇ gross negligence or willful misconduct) that ▇▇▇▇▇▇
may suffer or incur in connection with any L/C. The obligations of the
Banks under this Section 1.4(d) and all other parts of this Section 1.4
shall survive termination of this Agreement and of all L/C Agreements, and
all drafts or other documents presented in connection with drawings
thereunder.
Section 1.5. Reimbursement Obligations. The Borrower is obligated, and hereby
unconditionally agrees to pay in immediately available funds to the Agent for
the account of ▇▇▇▇▇▇ and the Banks who are participating in the L/Cs the face
amount of each draft drawn and presented under each L/C issued by ▇▇▇▇▇▇
hereunder (the obligation of the Borrower under this Section 1.5 is a
"Reimbursement Obligation"). If at any time the Borrower fails to pay any
Reimbursement Obligation when due, the Borrower shall be deemed to have
automatically requested a Domestic Rate Loan from the Banks hereunder, as of the
maturity date of such Reimbursement Obligation, the proceeds of which Loan shall
be used to repay such Reimbursement Obligation. Such Loan shall only be made if
no Potential Default or Event of Default shall exist and upon approval by all of
the Banks, and shall be subject to availability under the Revolving Credit. If
such Loan is not made by the Banks for any reason, the unpaid amount of such
Reimbursement Obligation shall be due and payable to the Agent for the pro rata
benefit of the Banks upon demand and shall bear interest at the rate of interest
specified in Section 1.3(c)(i) hereof.
Section 1.6. Manner of Borrowing and Rate Selection. (a) The Borrower (through
any one of its Authorized Representatives) shall give telephonic, telex or
telecopy notice to the Agent (which notice, if telephonic, shall be promptly
confirmed in writing) no later than (i) 11:00 a.m. (Chicago time) on the date
the Banks are requested to make each Domestic Rate Loan under the Revolving
Credit and (ii) 11:00 a.m. (Chicago time) on the date at least three
(3) Business Days prior to the date of each Eurodollar Loan under the Revolving
Credit which the Banks are requested to make. Each such notice shall specify the
date of the Loan requested (which shall be a Business Day), the amount of such
Loan, whether the Loan is to be made available by means of a Domestic Rate Loan
or Eurodollar Loan and, with respect to Eurodollar Loans, the Interest Period
applicable thereto; provided, that in no event shall the principal amount of any
requested Revolving Credit Loan plus the aggregate principal amount of all
Loans, the undrawn face amount of all L/Cs and unpaid Reimbursement Obligations
outstanding hereunder exceed the amounts specified in Section 1.1 hereof. The
Borrower agrees that the Agent may rely on any such telephonic, telex or
telecopy notice given by any person who the Agent believes is authorized to give
such notice without the necessity of independent investigation and in the event
any notice by such means conflicts with the written confirmation, such notice
shall govern if any Bank has acted in reliance thereon. The Agent shall, on the
day any such notice is received by it, give prompt telephonic, telex or telecopy
(if telephonic, to be confirmed in writing within one Business Day) notice of
the receipt of notice from the Borrower hereunder to each of the Banks (using
its best efforts to give such notice by no later than 1:00 p.m., Chicago time,
of the day such notice is received [if received at or before 11:00 a.m., Chicago
time] or by no later than the morning of the following Business Day [if not
received prior to 11:00 a.m., Chicago time]), and, if such notice requests the
Banks to make any Eurodollar Loans, the Agent shall confirm to the Borrower by
telephonic, telex or telecopy means, which confirmation shall be conclusive and
binding on the Borrower in the absence of manifest error or willful misconduct,
the Interest Period and the interest rate applicable thereto promptly after such
rate is determined by the Agent.
(b) Subject to the provisions of Section 6 hereof, the proceeds of each
Revolving Credit Loan shall be made available to the Borrower at the principal
office of the Agent in Chicago, Illinois, in immediately available funds, on the
date such Loan is requested to be made, except to the extent a Revolving Credit
Loan represents a refinancing of a Reimbursement Obligation, in which case the
proceeds of such Loan shall be applied to the payment of the relevant unpaid
Reimbursement Obligation. Not later than 3:00 p.m. Chicago time, on the date
specified for any Loan to be made hereunder, each Bank shall make its portion of
such Loan available to the Borrower in immediately available funds at the
principal office of the Agent, except as otherwise provided above with respect
to repaying any outstanding Reimbursement Obligations.
(c) Unless the Agent shall have been notified by a Bank prior to 2:00 p.m.
(Chicago time) on the date of a Loan to be made by such Bank (which notice shall
be effective upon receipt and may be made by telecopy) that such Bank does not
intend to make the proceeds of such Loan available to the Agent, the Agent may
assume that such Bank has made such proceeds available to the Agent on such date
and the Agent may in reliance upon such assumption (but shall not be required
to) make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank, the Agent shall
be entitled to receive such amount on demand from such Bank (or, if such Bank
fails to pay such amount forthwith upon such demand, to recover such amount,
together with interest thereon at the rate otherwise applicable thereto under
Section 1.3 hereof, from the Borrower) together with interest thereon in respect
of each day during the period commencing on the date such amount was made
available to the Borrower and ending on the date the Agent recovers such amount,
at a rate per annum equal to the effective rate charged to the Agent for
overnight Federal funds transactions with member banks of the Federal Reserve
System for each day, as determined by the Agent (or, in the case of a day which
is not a Business Day, then for the preceding Business Day) (the "Fed Funds
Rate"). Nothing in this Section 1.6(c) shall be deemed to permit any Bank to
breach its obligations to make Loans under the Revolving Credit or to limit the
Borrower's claims against any Bank for such breach.
Section 1.7. Participation in the L/Cs. Each of the Banks will acquire a risk
participation in each L/C upon the issuance thereof ratably in accordance with
its Commitment Percentage. In the event any Reimbursement Obligation is not
immediately paid by the Borrower pursuant to Section 1.5 hereof, each Bank will
pay to ▇▇▇▇▇▇ funds in an amount equal to such Bank's Commitment Percentage of
such Reimbursement Obligation. At the election of all of the Banks, such funding
by the Banks of an unpaid Reimbursement Obligations shall be treated as
additional Revolving Credit Loans to the Borrower hereunder rather than a
purchase of participations by the Banks in the L/C held by ▇▇▇▇▇▇. The
availability of funds to the Borrower under the Revolving Credit shall be
reduced in an amount equal to the undrawn face amount of the L/C. The obligation
of the Banks to ▇▇▇▇▇▇ under this Section 1.7 shall be absolute and
unconditional and shall not be affected or impaired by any Event of Default or
Potential Default which may then be continuing hereunder. ▇▇▇▇▇▇ shall notify
each Bank by telephone of its Commitment Percentage of such unpaid Reimbursement
Obligation. If such notice has been given to each Bank by 12:00 Noon, Chicago
time or if ▇▇▇▇▇▇ is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Bank agrees to pay ▇▇▇▇▇▇ in
immediately available and freely transferable funds on the same Business Day its
Commitment Percentage of such Reimbursement Obligation. Funds shall be so made
available at the account designated by ▇▇▇▇▇▇ in such notice to the Banks. Upon
the election by the Banks to treat such funding as additional Revolving Credit
Loans hereunder and payment by each Bank, such Loans shall bear interest in
accordance with Section 1.3(a) hereof. ▇▇▇▇▇▇ shall share with each Bank its
Commitment Percentage of each payment of a Reimbursement Obligation (whether of
principal or interest) and any L/C Participation Fee payable by the Borrower.
The L/C Issuance Fee and L/C Administration Fee shall be solely for ▇▇▇▇▇▇'
account and shall not be shared by the other Banks. Any such amount shall be
promptly remitted to the Banks when and as received by ▇▇▇▇▇▇ from the Borrower.
Section 1.8. The Collateral and Guarantees. (a) Collateral. The Notes, Hedging
Liability and the other obligations of the Collateral Parties hereunder and
under the other Loan Documents shall be secured by valid and perfected first
liens on, subject to subsection (c) of this Section 1.8, (i) all right, title
and interest of the Borrower and each Domestic Subsidiary in up to 65% of Voting
Equity and 100% of Non-Voting Equity of each First Tier Foreign Subsidiary,
whether now owned or hereafter formed or acquired, and all proceeds thereof and
(ii) all machinery, equipment, inventory, general intangibles (including,
without limitation, patents, trademarks, copyrights and other intellectual
property rights, but in any event excluding applications for trademarks based on
"intent to use") and accounts receivable of the Borrower and each Domestic
Subsidiary, in each instance whether now owned or existing or hereafter acquired
or arising, and all products and proceeds of the foregoing (collectively the
"Collateral") and the Borrower agrees that it will, and will cause each
Collateral Party to, from time to time at the request of the Agent or any Bank
execute and deliver such documents and do such acts and things as the Agent or
such Bank may reasonably request in order to provide for or perfect such liens.
(b) Guarantees. The Notes, Hedging Liability and the other obligations of the
Collateral Parties hereunder and under the other Loan Documents shall at all
times be guaranteed by each existing or hereafter acquired Domestic Subsidiary
(and First Tier Foreign Subsidiary in the event that the Agent does not receive
the evidence specified in subsection (c) of this Section 1.8 upon the occurrence
of the events contemplated therein) pursuant hereto and the Subsidiary Guaranty.
(c) Foreign Security. If following a request by the Agent or otherwise following
a change in the relevant sections of the Code or the regulations, rules,
rulings, notices or other official pronouncements issued or promulgated
thereunder, the Borrower or, if so requested by the Agent, counsel for the
Borrower reasonably acceptable to the Agent does not within thirty (30) Business
Days after a request (an "Evidence Request") from the Agent deliver evidence, in
form and substance mutually satisfactory to the Agent and the Borrower, with
respect to any First Tier Foreign Subsidiary which has not already had all of
its stock pledged pursuant to one of more of the Pledge Agreements, that (i) a
pledge of more than 66-2/3% of the total combined voting power of all classes of
capital stock or other equity interest of such First Tier Foreign Subsidiary
entitled to vote, (ii) the entering into by such First Tier Foreign Subsidiary
of a security agreement in substantially the form of the Security Agreement and
(iii) the entering into by such First Tier Foreign Subsidiary of a guaranty in
substantially the form of the Subsidiary Guaranty, in any such case would be the
sole cause for the undistributed earnings of such First Tier Foreign Subsidiary
as determined for Federal income tax purposes to be treated as a deemed dividend
to such First Tier Foreign Subsidiary's United States parent for Federal income
tax purposes, then (A) in the case of a failure as reasonably determined by the
Agent to deliver the evidence described in clause (i) above and to the extent
not otherwise waived by the Agent, that portion of such First Tier Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to a
Pledge Agreement shall be so pledged to the Agent for the benefit of the Agent,
the Banks and certain Affiliates of the Banks, (B) in the case of a failure as
reasonably determined by the Agent to deliver the evidence described in
clause (ii) above and to the extent not otherwise waived by the Agent, such
First Tier Foreign Subsidiary shall execute and deliver a security agreement
substantially in the form of the Security Agreement granting the Agent for the
benefit of the Agent, the Banks and certain Affiliates of the Banks a security
interest in all of such First Tier Foreign Subsidiary's machinery, equipment,
inventory, general intangibles (including, without limitation, patents,
trademarks, copyrights and other intellectual property rights) and accounts
receivable, in each case securing the Notes, Hedging Liability and all other
obligations of the Collateral Parties hereunder and under the other Loan
Documents and (C) in the case of a failure to deliver the evidence described in
clause (ii) above and to the extent not otherwise waived by the Agent, such
First Tier Foreign Subsidiary shall execute and deliver a Subsidiary Guaranty,
guaranteeing the Notes, Hedging Liability and the other obligations of the
Collateral Parties hereunder and under the other Loan Documents (x) promptly,
but in any event within thirty (30) Business Days after each such Evidence
Request and (y) to the extent that entering into such pledge, security agreement
or guaranty (1) is permitted by the laws of the applicable foreign jurisdiction
and (2) is not restricted by any contract or agreement to which such First Tier
Foreign Subsidiary is a party (to the extent such restriction pre-dates this
Agreement) and with all documents delivered pursuant hereto to be in form and
substance reasonably satisfactory to the Agent.
(d) Further Assurances re: Collateral. The Borrower agrees that it shall, and
shall cause each of its Subsidiaries to, from time to time at the request of the
Agent or the Required Banks, execute and deliver such documents and do such acts
and things as the Agent or the Required Banks may reasonably request in order to
provide for or perfect or protect the liens on the Collateral contemplated by
this Section 1.8. In the event the Borrower or any Domestic Subsidiary forms or
acquires any other Domestic Subsidiary or First Tier Foreign Subsidiary after
the date hereof, the Borrower shall, within ten (10) Business Days (or thirty
(30) Business Days in the case of a Foreign Subsidiary) of such formation or
acquisition, cause such newly formed or acquired Subsidiary (and any other
applicable Subsidiary in the case of Pledge Agreements), to execute such
Security Documents as the Agent may then require, and the Borrower shall also
deliver to the Agent, or cause such Subsidiary to deliver to the Agent, at the
Borrower's cost and expense, such other instruments, documents, certificates and
opinions reasonably required by the Agent in connection therewith, in each case
to the extent contemplated under this Section 1.8 had such newly formed or
acquired Subsidiary existed as of the date hereof.
(e) Further Assurances re: Guarantees. Within ten (10) Business Days (or thirty
(30) Business Days in the case of a Foreign Subsidiary) after establishing or
acquiring any Domestic Subsidiary or First Tier Foreign Subsidiary or any
Subsidiary of the Borrower becoming a Domestic Subsidiary or First Tier Foreign
Subsidiary, unless the Required Banks otherwise agree or the Borrower elects
otherwise as set forth in the immediately following sentence, the Borrower shall
(i) cause such Domestic Subsidiary (and such First Tier Foreign Subsidiary in
the event that the Agent does not receive the evidence specified in
subsection (c) above upon the occurrence of the events contemplated therein) to
execute a Subsidiary Guaranty and (ii) cause such Domestic Subsidiary or, if
applicable, First Tier Foreign Subsidiary to deliver documentation relating to
the authorization for, execution and delivery of, and validity of such
Subsidiary's obligations under the Loan Documents to which it is a party in form
and substance satisfactory to the Required Banks.
Section 2. Fees, Prepayments and Terminations.
Section 2.1. Commitment Fees. For the period from the date hereof to and
including the Termination Date, or such earlier date on which the Revolving
Credit is terminated in whole pursuant to Section 2.5 hereof, the Borrower shall
pay to the Agent for the account of the Banks a commitment fee with respect to
the Revolving Credit at the rate per annum (computed on the basis of a year of
360 days for the actual number of days elapsed) equal to the Applicable Margin,
of the average daily unused amount of the Banks' Revolving Credit Commitments
hereunder in effect from time to time, all such fees to be payable quarterly in
arrears on the last day of each calendar quarter commencing on December 31,
2000, unless the Revolving Credit is terminated in whole on an earlier date, in
which event the commitment fees for the final period shall be paid on the date
of such earlier termination in whole.
Section 2.2. Other Fees. (a) Agent's Fees. The Borrower shall pay to and for the
sole account of the Agent such fees as the Borrower and the Agent may agree upon
in writing from time to time. Such fees shall be in addition to any fees and
charges the Agent may be entitled to receive under the other Loan Documents.
(b) Closing Fee. The Borrower shall pay to the Agent for the ratable account of
the Banks a closing fee in an amount equal to 0.15% of the Banks' Revolving
Credit Commitments as in effect on the date hereof. All such closing fees
payable pursuant to this Section 2.2(b) shall be payable on the date of this
Agreement and shall be non-refundable.
Section 2.3. Optional Prepayments. (a) The Borrower shall have the privilege of
prepaying without premium or penalty and in whole or in part (but if in part,
then in a minimum principal amount of $500,000 or such greater amount which is
an integral multiple of $100,000) any Domestic Rate Loan under the Revolving
Credit at any time upon prior telex or telephonic notice to the Agent on or
before 12:00 Noon (Chicago time) on the same Business Day. Except as otherwise
provided in Section 2.3(b) hereof, the Borrower may not prepay any Eurodollar
Loan under the Revolving Credit.
(b) The Borrower may prepay any Eurodollar Loans upon telephonic notice (which
shall be promptly confirmed in writing by facsimile communication, telex or
telegraph) by no later than 11:00 a.m. (Chicago time) on the date of such
prepayment from the Borrower to the Agent, such prepayment to be made by the
payment of the principal amount to be prepaid and accrued interest thereon and
any compensation required by Section 9.4 hereof, if applicable; provided,
however, that any such prepayment shall be in a principal amount of no less than
$500,000 or such greater amount which is an integral multiple of $100,000, and
after giving effect to any such prepayment the outstanding principal amount of
such Eurodollar Loans prepaid in part shall not be less than $1,000,000 or such
greater amount which is an integral multiple of $50,000.
(c) Any amount prepaid under the Revolving Credit may, subject to the terms and
conditions of this Agreement, be borrowed, repaid and borrowed again.
Section 2.4. Mandatory Prepayments-Borrowing Base. The Borrower shall not permit
the Revolving Credit Obligations at any time outstanding to exceed the lesser of
(i) the Banks' Revolving Credit Commitments or (ii) the Borrowing Base as
determined on the basis of the most recent Borrowing Base Certificate. In
addition to the Borrower's obligations to pay any outstanding Reimbursement
Obligations as set forth in Section 1.5 hereof, the Borrower will make such
payments on any outstanding Loans and Reimbursement Obligations which are
necessary to cure any such excess within three Business Days after the
occurrence thereof without any notice or demand from the Agent or any of the
Banks, all of which are expressly waived by the Borrower. Any amount repaid
under the Revolving Credit may, subject to the terms and conditions of this
Agreement, be borrowed, repaid and borrowed again.
Section 2.5. Terminations. The Borrower shall have the right at any time upon 5
Business Days' prior notice to the Banks to terminate the Revolving Credit
Commitments in whole or in part (but if in part in a minimum amount of
$5,000,000 or any integral multiple thereof); provided, however, that the
Borrower may not terminate any portion of the Revolving Credit Commitments that
is in use in the form of Revolving Credit Loans, Swingline Loans, Reimbursement
Obligations or L/Cs. Each such termination in part shall automatically terminate
each Bank's Revolving Credit Commitment by an amount equal to its Commitment
Percentage of the amount of the termination of the Revolving Credit.
Section 2.6. Capital Adequacy. If, after the date of this Agreement, any Bank or
the Agent shall have determined in good faith that the adoption after such date
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein (including, without limitation, any revision in the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 CFR Part 208, Appendix A; ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇) or of the
Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any
other applicable capital rules heretofore adopted and issued by any governmental
authority), 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 any Bank (or its
Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital, or on the capital of any corporation controlling such
Bank, in each case as a consequence of its obligations hereunder, to a level
below that which such Bank would have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within thirty (30) days after demand by such Bank (with a copy to
the Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
Section 3. Place and Application of Payments.
All payments of principal and interest made by the Borrower in respect of the
Notes and Reimbursement Obligations and all fees payable by the Borrower
hereunder, shall be made to the Agent at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and in immediately available funds, prior to 12:00 noon
Chicago time on the date of such payment. All such payments shall be made
without setoff or counterclaim and without reduction for, and free from, any and
all present and future levies, imposts, duties, fees, charges, deductions
withholdings, restrictions or conditions of any nature imposed by any government
or any political subdivision or taxing authority thereof. Any payments received
after 12:00 noon Chicago time (or after the time the Banks may otherwise direct)
shall be deemed received upon the following Business Day. The Agent shall remit
to each Bank its proportionate share of each payment of principal, interest,
commitment fees and L/C fees received by the Agent by 12:00 noon Chicago time on
the same day of its receipt and its proportionate share of each such payment
received by the Agent after 12:00 noon Chicago time on the Business Day
following its receipt by the Agent. In the event the Agent does not remit any
amount to any Bank when required by the preceding sentence, the Agent shall pay
to such Bank interest on such amount until paid at a rate per annum equal to the
Fed Funds Rate. The Borrower hereby authorizes the Agent to automatically debit
its accounts with ▇▇▇▇▇▇ for any principal, interest and fees when due under any
of the Notes, the L/C Agreements or this Agreement and to transfer the amount so
debited from such account to the Agent for application as herein provided. All
proceeds of Collateral shall be applied in the manner specified in the
applicable Security Documents.
Section 4. Definitions.
Section 4.1. Certain Terms Defined. The terms hereinafter set forth when used
herein shall have the following meanings:
"Account Debtor" shall mean the person who is obligated on a
Receivable.
"Adjusted Consolidated Funded Debt" shall mean with respect to the
Borrower all Funded Debt of the Borrower and its Subsidiaries
(excluding in any event Maverick Tube (Canada) Inc., Prudential and
their respective Subsidiaries), on a consolidated basis eliminating
intercompany items.
"Adjusted EBITDA" shall mean, with reference to any period and without
duplication, the sum of (i) Consolidated EBITDA for such period, plus
(ii) but only to the extent of calculating Adjusted EBITDA for the
fiscal quarters of the Borrower occurring on or before the Borrower's
fiscal quarter ending June 30, 2001, EBITDA of Prudential and its
Subsidiaries for such period, plus (iii) but only to the extent of
calculating Adjusted EBITDA for the fiscal quarters of the Borrower
occurring on or before the Borrower's fiscal quarter ending June 30,
2001, the Fiscal Year 2000 Charges.
"Adjusted Funded Debt Ratio" shall mean, as of any date the same is to
be determined, the ratio of (a) the aggregate outstanding principal
amount of the Adjusted Consolidated Funded Debt as of such date, to
(b) Maverick EBITDA for the four consecutive fiscal quarters of the
Borrower then most recently ended.
"Adjusted Eurodollar Rate" shall have the meaning specified in
Section 1.3(b) hereof.
"Affiliate" shall mean any person, company or business entity under
common control or having shareholders owning at least ten percent
(10%) of each thereof, whether such common control be direct or
indirect. All of the Borrower's officers, directors, joint venturers,
Subsidiaries and partners shall be deemed to be the Borrower's
Affiliates for purposes of this Agreement.
"Agent" is defined in the first paragraph of this Agreement.
"Agreement" shall mean this Amended and Restated Secured Credit
Agreement as supplemented, modified, restated or amended from time to
time.
"Applicable Margin" shall have the meaning specified in Section 1.3(d)
hereof.
"Authorized Representatives" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, T. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and
▇▇▇▇▇▇ ▇▇▇▇.
"Bank" and "Banks" shall have the meanings specified in the first
paragraph of this Agreement.
"▇▇▇▇ and Hold" shall mean unpaid Receivables resulting from the sale
of Inventory which has not yet been delivered to, and is not yet in
the process of being delivered to, the Account Debtor on such
Receivables.
"Borrower" is defined in the first paragraph hereof.
"Borrowing Base", as determined on the basis of the information
contained in the most recent Borrowing Base Certificate, shall mean an
amount equal to:
(a) 85% of the amount of Eligible Receivables of the Borrower,
plus
(b) 50% of the amount of Eligible Inventory of the Borrower,
provided that in no event shall such amount (the "Gross Inventory
Amount") exceed an amount (the "Net Inventory Amount") equal to
60% of the sum of the amounts determined pursuant to clauses (a)
and (b) of this definition from time to time, plus
(c) the amount equal to the Gross Inventory Amount minus the Net
Inventory Amount, provided that in no event shall such amount
exceed (i) $10,000,000 from the date hereof up to and including
June 30, 2001, (ii) $5,000,000 from July 1, 2001 up to and
including September 30, 2001 and (iii) $0 at all times
thereafter, plus
(d) 50% of the net book value of Eligible Equipment, provided
that in no event shall such amount exceed (i) $25,000,000 from
the date hereof up to and including December 31, 2001,
(ii) $20,000,000 from January 1, 2002 up to and including
December 31, 2002 and (iii) $15,000,000 at all times thereafter.
"Borrowing Base Certificate" shall mean the certificate in the
form of Exhibit D hereto which is required to be delivered to the
Banks in accordance with Sections 1.6(a) and 7.4(c) hereof.
"Business Day" shall mean any day except Saturday or Sunday on
which banks are open for business in Chicago, Illinois, and, with
respect to Eurodollar Loans, dealing in United States Dollar
deposits in London, England and Nassau, Bahamas.
"Capital Expenditures" for any period means Capital Expenditures
of the Borrower and its Subsidiaries during such period as
defined and classified in accordance with GAAP consistently
applied.
"Capitalized Lease" shall mean any lease or obligation for
rentals which is required to be capitalized on a consolidated
balance sheet of the Borrower and its Subsidiaries in accordance
with GAAP.
"Capitalized Lease Obligation" shall mean the present discounted
value of the rental obligations under any Capitalized Lease
determined on a consolidated basis in accordance with GAAP.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to
time.
"Change in Law" shall have the meaning specified in Section 9.3
hereof.
"Change of Control Event" shall mean any of (a) the acquisition
by any "person" or "group" (as such terms are used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) at any time of beneficial ownership of 30% or more of
the outstanding capital stock of the Borrower on a fully diluted
basis or (b) the failure of individuals who are members of the
board of directors of the Borrower on the date hereof (together
with any new or replacement directors whose initial nomination
for election was approved by a majority of the directors who were
either directors on the date hereof or previously so approved) to
constitute a majority of the board of directors of the Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean the collateral security provided to the
Agent for the benefit of the Banks pursuant to the Security
Documents.
"Collateral Party" shall mean each of the Borrower, the
Guarantors, the Pledgors and each other party providing
Collateral from time to time.
"Commitment" shall mean a Revolving Credit Commitment or the
Swingline Commitment of any Bank, and "Commitments" shall mean
the Revolving Credit Commitment and Swingline Commitment of a
Bank or Banks.
"Commitment Percentage" shall mean, at any time and as to any
Bank, the percentage of the Revolving Credit Commitments then in
effect represented by such Bank's Revolving Credit Commitment as
then in effect or, if the Revolving Credit Commitments have been
terminated or expired, the percentage held by such Bank of the
aggregate principal amount of all Revolving Credit Loans then
outstanding.
"Consolidated EBITDA" shall mean, with reference to any period,
Consolidated Net Income for such period plus all amounts deducted
in arriving at such Consolidated Net Income amount in respect of
(a) Consolidated Interest Expense for such period, plus
(b) foreign, federal, state and local income taxes for such
period, plus (c) all amounts properly charged for depreciation of
fixed assets and amortization of intangible assets during such
period on the books of the Borrower and its Subsidiaries.
"Consolidated Interest Expense" shall mean, with reference to any
period, the sum of all interest charges (including imputed
interest charges with respect to Capitalized Lease Obligations,
all amortization of debt discount and expense), of the Borrower
and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP consistently applied.
"Consolidated Net Income" shall mean the net income of the
Borrower and its Subsidiaries, all as determined and computed on
a consolidated basis in accordance with GAAP consistently
applied.
"Consolidated Net Worth" shall mean the sum of all capital stock,
preferred stock, capital in excess of par value and retained
earnings, in each case of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP,
consistently applied.
"Consolidated Tangible Net Worth" shall mean the sum of all
capital stock, preferred stock, capital in excess of par value
and retained earnings, less the amount of goodwill and all other
Intangible Assets and Deferred Charges (other than Deferred
Charges for income taxes) of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP,
consistently applied.
"Debt" of any Person shall mean as of any time the same is to be
determined, the aggregate of (i) all liabilities, reserves and
any other items which would be classified as a liability on a
balance sheet in accordance with GAAP, (ii) all guaranties,
endorsements (other than any liability arising out of the
endorsement of items for deposit or collection in the ordinary
course of business) and other contingent obligations in respect
of, or any obligations to purchase or otherwise acquire,
indebtedness of others, (iii) all reimbursement and other
obligations with respect to letters of credit and banker's
acceptances, (iv) the aggregate amount of rentals or other
consideration payable under all leases and other agreements for
the use, acquisition or retention of real or personal property of
a nature such that payments due thereunder may under GAAP in
effect on the date hereof be included in a balance sheet of the
lessee, and (v) all indebtedness and liabilities secured by any
lien or any security interest on any Property or assets of such
person, whether or not the same would be classified as a
liability on a balance sheet, but excluding all general
contingency reserves and reserves for deferred income taxes and
investment credit, and with respect to Debt of the Borrower, all
computed and determined on a consolidated basis for the Borrower
and its Subsidiaries after the elimination of intercompany items
in accordance with GAAP consistent with those used in the
preparation of the audit report referred to in Section 5.2
hereof.
"Deferred Charges" shall mean all items which are classified as
deferred charges in accordance with GAAP consistently applied, on
a basis consistent with the principles reflected in the financial
statements referred to in Section 5.2 hereof.
"Domestic Rate" shall mean for any day the rate of interest
announced by ▇▇▇▇▇▇ from time to time as its prime commercial
rate in effect on such day, with any change in the Domestic Rate
resulting from a change in said prime commercial rate to be
effective as of the date of the relevant change in said prime
commercial rate (the "▇▇▇▇▇▇ Prime Rate"), provided that if the
rate per annum determined by adding 0.5% to the rate at which
▇▇▇▇▇▇ would offer to sell federal funds in the interbank market
on or about 10:00 a.m. (Chicago time) on any day (the "Adjusted
Fed Funds Rate") shall be higher than the ▇▇▇▇▇▇ Prime Rate on
such day, the Domestic Rate for such day and for any succeeding
day which is not a Business Day shall be such Adjusted Fed Funds
Rate. The determination of the Adjusted Fed Funds Rate by ▇▇▇▇▇▇
shall be final and conclusive provided ▇▇▇▇▇▇ has acted in good
faith in connection therewith.
"Domestic Rate Loan" shall mean a Revolving Credit Loan which
bears interest as provided in Section 1.3(a) hereof.
"Domestic Subsidiary" shall mean each Subsidiary which is
organized under the laws of the United States of America or any
State thereof.
"EBITDA" shall mean, with reference to any period, Net Income for
such period plus all amounts deducted in arriving at such Net
Income amount in respect of (i) Interest Expense for such period,
plus (ii) foreign, federal, state and local income taxes for such
period, plus (iii) all amounts properly charged for depreciation
of fixed assets and amortization of intangible assets during such
period.
"Eligible Equipment" shall mean any machinery and equipment of
the Borrower and the Guarantors in which the Agent has a first
priority perfected security interest and which the Banks in their
reasonable judgment deem to be acceptable for inclusion in the
Borrowing Base; provided that in no event shall any machinery or
equipment be deemed Eligible Equipment unless all representations
and warranties set forth in the Security Documents with respect
to such machinery or equipment are true and correct and such
machinery or equipment:
(a) is an asset of the applicable Collateral Party in each case
to which it has good and marketable title and is freely
assignable and is not subject to any lease or similar arrangement
permitting a third party's use or possession of such machinery or
equipment;
(b) when not in use or under repair in each case in the ordinary
course of business as presently conducted, is located at the
applicable Collateral Party's facilities set forth as of the date
hereof on Schedule A to the Security Agreement or such other
locations as are approved in writing by the Agent and, in the
case of facilities owned by such Collateral Party subject to a
mortgage or deed of trust or facilities not owned by such
Collateral Party, which are at times subject to mortgagee and/or
landlord waiver agreements in form and substance satisfactory to
the Collateral Party;
(c) is used or usable in the conduct of the business of the
Borrower and is not obsolete, and is in good repair, working
order and condition (ordinary wear and tear excepted) free from
any defects which might adversely affect the market value thereof
in any material respect;
(d) does not consist of office equipment, furniture, fixtures or
transportation equipment; and
(e) is not attached to real estate in such a manner that the
machinery or equipment may become a fixture.
"Eligible Inventory" shall mean any Inventory of the Borrower and
the Guarantors in which the Agent has a first priority perfected
security interest which the Banks in their reasonable judgment
deem to be acceptable for inclusion in the Borrowing Base, and
which complies with each of the following requirements:
(a) It consists of any material in the form of raw pipe or tube
and finished drawn over mandrill pipe or tube, which are in first
class condition and are suitable for sale in the ordinary course
of the Borrower's business or coil steel or couplings which are
in first-class condition, are in the form in which they were when
originally acquired by the Borrower or applicable Guarantor and
are suitable for use in the production of Borrower's or such
Guarantor's finished goods Inventory;
(b) It substantially conforms to the Borrower's or such
Guarantor's advertised or represented specifications, applicable
government standards and regulations and other quality standards
and has not been determined by the Banks to be unacceptable due
to age, type, variety, quality, quantity, or location;
(c) All warranties of the Borrower or applicable Guarantor in the
Loan Documents are true and correct with respect thereto;
(d) It is owned by the Borrower or applicable Guarantor;
(e) It has been identified to the Agent in the manner prescribed
by the Banks pursuant to the Security Documents;
(f) It is either (i) located at a location disclosed to and
approved by the Agent and the Banks, and if requested by the
Agent or any Bank, any Person (other than the Borrower) owning or
controlling such location shall have waived all right, title and
interest in and to such Inventory in a manner satisfactory to the
Agent and such Bank or (ii) in transit between any two such
locations and has not been in transit for more than (A) four days
if it has been shipped by truck, (B) fourteen days if it has been
shipped by rail or (C) 30 days if it has been shipped by barge;
(g) If it is evidenced by a negotiable warehouse receipt or other
negotiable document of title, such receipt or document of title
has been endorsed in blank or to the order of the Agent and has
been delivered to the Agent or its trustee or bailee; and
(h) It does not constitute Restricted Inventory.
"Eligible Receivables" shall mean any Receivable of the Borrower
or any Guarantor in which the Agent has a first priority
perfected security interest which the Banks in their reasonable
judgment deem to be acceptable for inclusion in the Borrowing
Base, and which complies with each of the following requirements:
(a) It arises out of a bona fide sale of Inventory which has been
delivered to, or is in the process of being delivered to the
Account Debtor on said Receivable in the ordinary course of
Borrower's or such Guarantor's business, in the case of payment
terms, and otherwise in the ordinary course of business on
ordinary trade terms;
(b) All warranties of the Borrower or such Guarantor in the Loan
Documents are true and correct with respect thereto;
(c) It has been identified to the Banks in the manner required by
the Banks; (d) It is evidenced by an invoice dated not later than
the date of shipment to the Account Debtor thereunder;
(e) It has not remained unpaid in whole or in part more than 60
days from and after its due date or more than 90 days from and
after its invoice date;
(f) It is net of (i) any credit or allowance given by the
Borrower or such Guarantor to such Account Debtor and (ii) any
rebate given by the Borrower or such Guarantor to any party when
the Borrower or such Guarantor has accrued such rebate;
(g) It is not owing by an Account Debtor who (i) has become
insolvent, (ii) is the subject of any bankruptcy, arrangement,
reorganization proceedings or other proceedings for relief of
debtors or (iii) has admitted its inability to pay its debts
generally or has stopped paying its debts generally;
(h) If, other than with respect to a Receivable arising out of
the sale of Restricted Inventory, the Account Debtor is also a
supplier to or creditor of the Borrower or a Guarantor, then
either (i) that Account Debtor shall have entered into an
agreement with or for the benefit of the Banks with respect to
the waiver of rights of setoff which is acceptable to the Banks
or (ii) 120% of the amount owed at such time by the Borrower or
the applicable Guarantor to that Account Debtor shall be
subtracted from the amount of the Receivable;
(i) The Account Debtor is not principally located outside the
continental United States unless (A) such Receivable is secured
by an irrevocable letter of credit issued by a commercial Bank
which is acceptable to the Banks or the Banks are satisfied that
all filings have been made and actions taken as are required by
the Banks in connection therewith as a result of the location of
such Account Debtor or (B) the Account Debtor thereon is
principally located in Canada and either (i) the Administrative
Agent shall have made such filings and taken such other action as
may be necessary for it to obtain a first priority security
interest therein under applicable Canadian law without regard to
any filings made in any State of the United States, or (ii) the
Administrative Agent shall have received an opinion of Canadian
counsel satisfactory in form and substance to the Administrative
Agent to the effect that the Administrative Agent's security
interest in such Receivables is perfected by filings made under
the applicable state's version of the Uniform Commercial Code;
(j) It is not owing by the United States of America or any
department, agency or instrumentality thereof unless the Banks
shall have received evidence satisfactory to the Banks of
compliance with the Assignment of Claims Act;
(k) Such Receivable is not subject to any dispute, counterclaim
or defense asserted by the Account Debtor thereunder;
(l) The Account Debtor has not failed to pay within the times
specified in subsection (e) above 50% or more in aggregate amount
of all its Receivables on which it is the Account Debtor;
(m) The Account Debtor is not an Affiliate of the Borrower or any
Guarantor;
(n) The Receivable does not arise from a "sale or return," or a
"sale on approval" of Inventory or a "▇▇▇▇ and Hold" sale of
Inventory; and
(o) If the Account Debtor is located in the State of New Jersey
or the State of Minnesota, Borrower or the applicable Guarantor
(i) has filed and has effective (A) in respect of Account Debtors
located in the State of New Jersey, a Notice of Business
Activities Report with the New Jersey Division of Taxation for
the then current year or (B) in respect of Account Debtors
located in the State of Minnesota, a Minnesota Business Activity
Report with the Minnesota Department of Revenue for the then
current year, as applicable, or (ii) is otherwise exempt from
such reporting requirements under the laws of such State(s).
"Environmental Laws" shall have the meaning specified in
Section 5.7(a) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Eurodollar Loan" means a Revolving Credit Loan which bears
interest as provided in Section 1.3(b) hereof.
"Eurodollar Rate" shall have the meaning specified in
Section 1.3(b) hereof.
"Event of Default" shall mean any event or condition identified
as such in Section 8.1 hereof.
"Executive Officer" shall mean, with respect to the Borrower or
any Subsidiary, any of the Chairman, Chief Executive Officer,
Chief Financial Officer or any Vice President of the Borrower or
such Subsidiary. "Exposure" shall mean, as to any Bank, the sum
(without duplication) of such Bank's (a) unused Revolving Credit
Commitment, if any, (b) outstanding Revolving Credit Loans, if
any, (c) Commitment Percentage of the outstanding Reimbursement
Obligations, if any, (d) outstanding L/Cs, if any, (e) Commitment
Percentage of the unused Swingline Commitment, if any, and
(f) Commitment Percentage of the outstanding Swingline Loans, if
any.
"Fed Funds Rate" shall have the meaning specified in
Section 1.6(c) hereof.
"First Tier Foreign Subsidiary" shall mean, at any date of
determination, each Foreign Subsidiary with respect to which any
one or more of the Borrower and its Domestic Subsidiaries owns
directly more than 50%, in the aggregate, of the Voting Equity of
such Foreign Subsidiary; provided that Maverick International
shall not be deemed to be a First Tier Foreign Subsidiary so long
as the representations contained in Section 5.9(b) hereof are
true and correct and the Borrower is in compliance with
Section 7.1(c) hereof.
"Fiscal Year 2000 Charges" shall mean non-recurring restructuring
charges incurred by the Borrower during the Borrower's fiscal
year ending December 31, 2000 in an aggregate amount not to
exceed (a) $13,000,000 for purposes of determining the Borrower's
Adjusted EBITDA, and (b) $7,200,000 for purposes of determining
the Maverick EBITDA.
"Foreign Subsidiary" shall mean each Subsidiary that is not a
Domestic Subsidiary.
"Funded Debt" of any Person shall mean all indebtedness for
borrowed money of such Person, whether classified as long-term or
short-term under GAAP.
"GAAP" shall mean generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the
circumstances as of the date of determination and consistent with
the audited consolidated financial statements described in
Section 5.2 hereof.
"Gross Inventory Amount" is defined in the definition of
Borrowing Base in this Section 4.1.
"Guarantors" shall mean (i) Maverick Tube L.P., a Delaware
limited partnership, and Maverick Investment Corporation, a
Delaware corporation and (ii) any other Subsidiary of the
Borrower that executes the Subsidiary Guaranty, and "Guarantor"
shall mean any of the Guarantors.
"▇▇▇▇▇▇" shall have the meaning specified in the first paragraph
of this Agreement.
"Hedging Liability" shall mean the liability of the Borrower or
any Subsidiary to any of the Banks, or any Affiliates of such
Banks, in respect of any interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, interest
rate floor agreements, interest rate exchange agreements, foreign
currency contracts, currency swap contracts, or other similar
interest rate or currency hedging arrangements as the Borrower or
such Subsidiary may from time to time enter into with any one or
more of the Banks party to this Agreement or their Affiliates.
"Intangible Assets" shall mean amortizable loan costs, business
acquisition costs, license agreements, trademarks, trade names,
patents, capitalized research and development, proprietary
products (the results of past research and development treated as
long term assets and excluded from Inventory), goodwill and all
other assets which would be classified as intangible assets (all
determined in accordance with GAAP consistently applied).
"Interest Coverage Ratio" shall mean, as of any date the same is
to be determined, the ratio of (a) Adjusted EBITDA for the four
consecutive fiscal quarters of the Borrower then most recently
ended less the amount of capital expenditures (as defined and
classified in accordance with GAAP consistently applied but in
any event including the liability of the Borrower and its
Subsidiaries in respect of Capitalized Leases) expended or
incurred by the Borrower and its Subsidiaries during the same
period, to (b) Consolidated Interest Expense paid or payable in
cash during such period.
"Interest Expense" shall mean, with reference to any period, the
sum of all interest charges (including imputed interest charges
with respect to Capitalized Lease Obligations and all
amortization of debt discount and expense) of any Person and its
Subsidiaries for such period determined in accordance with GAAP,
consistently applied.
"Interest Period" shall have the meaning specified in
Section 1.3(b) hereof.
"Inventory" shall mean all raw materials, work in process,
finished goods, and goods held for sale or lease or furnished or
to be furnished under contracts of service in which the Borrower
or any Subsidiary now has or hereafter acquires any right.
"L/C" shall have the meaning set forth in Section 1.4 hereof.
"L/C Agreement" shall have the meaning set forth in Section 1.4
hereof. "Loan" shall mean a Revolving Credit Loan or a Swingline
Loan, and the term "Loans" shall mean any two or more of the
foregoing.
"Loan Documents" shall mean this Agreement and any and all
exhibits hereto, the Notes, the L/C Agreements, the Subsidiary
Guaranty and, if applicable, the Security Documents.
"Maverick EBITDA" shall mean, with reference to any period and
without duplication, the sum of (i) EBITDA for the Borrower and
its Subsidiaries (excluding in any event Maverick Tube (Canada)
Inc., Prudential and their respective Subsidiaries) for such
period, plus (ii)but only to the extent of calculating Maverick
EBITDA for the fiscal quarters of the Borrower occurring on or
before the Borrower's fiscal quarter ending June 30, 2001, the
Fiscal Year 2000 Charges.
"Maverick International" shall mean Maverick Tube International,
Inc., a Subsidiary organized and existing under the laws of
Barbados.
"Net Income" shall mean, with reference to any period, the net
income (or net loss) of any Person and its Subsidiaries for such
period as computed on a consolidated basis in accordance with
GAAP, and, without limiting the foregoing, after deduction from
gross income of all expenses and reserves, including reserves for
all taxes on or measured by income, but excluding any
extraordinary profits and also excluding any taxes on such
profits.
"Net Inventory Amount" is defined in the definition of Borrowing
Base in this Section 4.1.
"Non-Voting Equity" shall mean issued and outstanding shares of
each class of capital stock or other ownership interest not
entitled to vote (within the meaning of Tres. Reg.,
Section 1.956-2(c)(2).
"Note" shall mean a Revolving Credit Note or the Swingline Note
and "Notes" shall mean any two or more of the foregoing.
"Offered Rate Loan" is defined in Section 1.1(e) hereof.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity,
party or government (whether national, federal, state, county,
city, municipal, or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Plan" shall mean any employee benefit plan covering any officers
or employees of the Borrower or any Subsidiary, any benefits of
which are, or are required to be, guaranteed by the PBGC.
"Pledge Agreements" shall mean (i) that certain Pledge Agreement
dated as of even date herewith and (ii) each other pledge
agreement (or analogous instrument), in each case among the
Borrower and certain of its Subsidiaries and the Agent, as each
of the same may be amended, modified, supplemented or restated
from time to time.
"Pledgor" shall mean each Person that pledges any equity interest
under any of the Pledge Agreements.
"Potential Default" shall mean any event or condition which, with
the lapse of time, or giving of notice, or both, would constitute
an Event of Default.
"Previous Credit Agreement" is defined in the introductory
paragraph hereof.
"Property" shall mean all assets and properties of any nature
whatsoever, whether real or personal, tangible or intangible,
including without limitation intellectual property.
"Prudential" shall mean Prudential Steel Ltd., a corporation
organized under the laws of the Province of Alberta, Canada, and
a Subsidiary of the Borrower.
"Receivables" shall mean all accounts, contract rights,
instruments, documents, chattel paper and general intangibles in
which the Borrower or any Subsidiary now has or hereafter
acquires any right.
"Reimbursement Obligation" has the meaning specified in
Section 1.5 hereof.
"Rentals" shall mean and include all fixed rents (including as
such all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property)
payable by the Borrower or a Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Borrower or a
Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum
rents, if any, required to be paid by the lessee regardless of
sales volume or gross revenues. Capitalized Lease Obligations
shall be excluded from the definition of Rentals for all purposes
hereunder other than the use of the term "rentals" in the
definitions of Capitalized Lease and Capitalized Lease
Obligations.
"Required Banks" shall mean any Bank or Banks which in the
aggregate hold 51% of the aggregate unpaid principal balance of
the Loans and Reimbursement Obligations or, if no Loans or
Reimbursement Obligations are outstanding hereunder, any Bank or
Banks in the aggregate having 51% of the Revolving Credit
Commitments.
"Reserve Percentage" shall have the meaning specified in
Section 1.3(b) hereof.
"Restricted Inventory" shall mean any Inventory sold by the
Borrower or any Subsidiary and for which sale the Borrower of
such Subsidiary has received payment but which Inventory has not
yet been delivered to, and is not yet in the process of being
delivered to, in each case as classified in deferred revenues in
accordance with GAAP, the customer who has purchased such
Inventory.
"Restricted Payments" shall have the meaning specified in
Section 7.15 hereof.
"Revolving Credit" shall have the meaning specified in
Section 1.1(a) hereof.
"Revolving Credit Commitment" and "Revolving Credit Commitments"
shall have the meanings specified in Section 1.1(b) hereof.
"Revolving Credit Loan" and "Revolving Credit Loans" shall have
the meanings specified in Section 1.1(a) hereof.
"Revolving Credit Obligations" shall have the meaning specified
in Section 1.1(a) hereof.
"Revolving Note" or "Revolving Notes" shall have the meanings
specified in Section 1.2 hereof.
"Security Agreement" shall mean the Amended and Restated Security
Agreement dated as of even date herewith from the Borrower,
certain of the Collateral Parties and the Agent, as the same may
be amended, modified, supplemented or restated from time to time.
"Security Documents" shall mean the Security Agreement, the
Pledge Agreements and any other agreements and financing
statements now or hereafter executed and delivered by the
Borrower or any other Collateral Party in respect of the
Collateral.
"Subsidiary" shall mean any corporation or other entity at least
a majority of the outstanding voting stock of which is at the
time owned directly or indirectly by the Borrower and/or its
Subsidiaries, unless any reference to "Subsidiary" specifically
refers to ownership by another Person.
"Subsidiary Guaranty" shall mean (i) that certain Amended and
Restated Guaranty Agreement dated as of even date herewith from
certain of the Guarantors to the Banks and (ii) each other
guaranty from one or more of the Guarantors, as each of the same
may be supplemented, modified, restated or amended from time to
time.
"Swingline" shall have the meaning specified in the first
paragraph hereof.
"Swingline Commitment" shall have the meaning specified in
Section 1.1(e) hereof.
"Swingline Loan" shall have the meaning specified in Section
1.1(e) hereof.
"Swingline Note" shall have the meaning specified in Section
1.1(e) hereof.
"Termination Date" shall have the meaning set forth in
Section 1.1(a) hereof.
"Total Capitalization" shall mean the sum of (a) the Consolidated
Net Worth, plus (b) Total Consolidated Funded Debt.
"Total Consolidated Funded Debt" shall mean with respect to the
Borrower all Funded Debt of the Borrower and its Subsidiaries, on
a consolidated basis eliminating intercompany items.
"Total Funded Debt Ratio" shall mean, as of any date the same is
to be determined, the ratio of (a) the aggregate outstanding
principal amount of the Total Consolidated Funded Debt as of such
date, to (b) Adjusted EBITDA for the four consecutive fiscal
quarters of the Borrower then most recently ended.
"Voting Equity" shall mean the issued and outstanding shares of
each class of capital stock or other ownership interests entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2).
Section 4.2. Interpretation. Capitalized terms defined elsewhere in this
Agreement shall, unless otherwise specified, have the meanings so ascribed to
them in all provisions of this Agreement. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. All
references to time of day herein are references to Chicago, Illinois time unless
otherwise specifically provided. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP except
where such principles are inconsistent with the specific provisions of this
Agreement.
Section 4.3. Change in Accounting Principles. If, after the date of this
Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 5.2 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrower or the Required Banks may by notice to the Banks and the Borrower,
respectively, require that the Banks and the Borrower negotiate in good faith to
amend such covenants, standards, and term so as equitably to reflect such change
in accounting principles, with the desired result being that the criteria for
evaluating the financial condition of the Borrower and its Subsidiaries shall be
the same as if such change had not been made. No delay by the Borrower or the
Required Banks in requiring such negotiation shall limit their right to so
require such a negotiation at any time after such a change in GAAP. Until any
such covenant, standard, or term is amended in accordance with this Section 4.3,
financial covenants shall be computed and determined in accordance with GAAP in
effect prior to such change in GAAP. Without limiting the generality of the
foregoing, the Borrower shall neither be deemed to be in compliance with any
financial covenant hereunder nor out of compliance with any financial covenant
hereunder if such state of compliance or noncompliance, as the case may be,
would not exist but for the occurrence of a change in accounting principles
after the date hereof.
Section 5. Representations and Warranties.
The Borrower represents and warrants to the Banks as follows:
Section 5.1. Organization and Qualification. The Borrower is duly organized and
validly existing under the laws of the State of Delaware, has full and adequate
corporate power to carry on its business as now conducted, is duly licensed or
qualified in all jurisdictions wherein the nature of its activities requires
such licensing or qualifying, except where the failure to be so licensed or
qualified would not have a material adverse effect on the condition, financial
or otherwise, of the Borrower, has full right, power and authority to enter into
this Agreement and the other Loan Documents to which it is a party, to make the
borrowings herein provided for and encumber its assets as collateral security
therefor, to execute and issue the Notes in evidence thereof, and to perform
each and all of the matters and things herein and therein provided for; and this
Agreement does not, nor does the performance or observance by the Borrower of
any of the matters or things provided for in this Agreement and the other Loan
Documents, contravene any provision of law or any charter or by-law provision or
any covenant, indenture or agreement of or judgment, order or decree applicable
to or affecting the Borrower or any of its Property.
Section 5.2. Financial Reports. The Borrower heretofore has delivered to each
Bank (a) a copy of the annual audit report of the Borrower and its Subsidiaries
as of September 30, 1999 and (b) a copy of the annual audit report of Prudential
and its Subsidiaries as of December 31, 1999. Such financial statements have
been prepared in accordance with GAAP (in the case of the annual audit report of
the Borrower and its Subsidiaries) and generally accepted accounting principles
as in effect in Canada (in the case of the annual audit report of Prudential and
its Subsidiaries), on a basis consistent, except as otherwise noted therein,
with that of the previous fiscal year or period and fairly reflect the financial
position of the Borrower and Prudential as of the applicable dates thereof, and
the results of their respective operations for the periods covered thereby. To
the best knowledge of the Executive Officers of the Borrower and each
Subsidiary, the Borrower and its Subsidiaries have no significant contingent
liabilities (determined in accordance with generally accepted accounting
principles consistently applied) other than as indicated on said financial
statements and since (i) September 30, 1999 (in the case of the Borrower and
each of its Subsidiaries other than Prudential) and (ii) December 31, 1999 (in
the case of Prudential), there has been no material adverse change in the
condition, financial or otherwise, of the Borrower or any Subsidiary, except
those disclosed in writing to the Banks prior to the date of this Agreement.
Section 5.3. Litigation; Tax Returns; Approvals. There is no litigation, labor
controversy or governmental proceeding pending, nor to the best knowledge of the
Executive Officers of the Borrower and each Subsidiary threatened, against the
Borrower or any Subsidiary which if adversely determined would result in any
material adverse change in the properties, business or operations of the
Borrower or any Subsidiary. All United States federal income tax returns for the
Borrower and its Subsidiaries required to be filed have been filed on a timely
basis, and all amounts required to be paid as shown by said returns have been
paid. Except for the Internal Revenue Service audits for the fiscal years of the
Borrower ended September 30, 1997, September 30, 1998 and September 30, 1999,
there are no pending or, to the best knowledge of the Executive Officers of the
Borrower and each Subsidiary, threatened objections to or controversies in
respect of the United States federal income tax returns of the Borrower and its
Subsidiaries for any fiscal year. No authorization, consent, license, exemption
or filing or registration with any court or governmental department, agency or
instrumentality, is or will be necessary to the valid execution, delivery or
performance by the Borrower of the Loan Documents to which it is a party.
Section 5.4. Regulation U. Neither the Borrower nor any Subsidiary is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) and no part of the proceeds of any Loan or other
extension of credit hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.
Section 5.5. No Default. The Borrower is in full compliance with all of the
terms and conditions of the Loan Documents, and no Potential Default or Event of
Default is existing under this Agreement.
Section 5.6. ERISA. The Borrower and its Subsidiaries are in compliance in all
material respects with ERISA to the extent applicable to it and neither the
Borrower nor any Subsidiary has received any notice to the contrary from the
PBGC or any other governmental entity or agency. No steps have been taken to
terminate any Plan, and no contribution failure has occurred with respect to any
Plan sufficient to give rise to a lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any Plan
which might result in the incurrence by the Borrower or any Subsidiary of any
material liability, fine or penalty. Neither the Borrower nor any Subsidiary has
any contingent liability with respect to any post-retirement benefit under a
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.
Section 5.7. Environmental Law. (a) Except as disclosed on Exhibit H, no
Executive Officer of the Borrower nor any Executive Officer of a Subsidiary has
received any notice to the effect, or has any knowledge, that its Property or
operations are not in compliance with any of the requirements of applicable
federal, state and local environmental, health and safety statutes and
regulations ("Environmental Laws") or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any hazardous substances as defined in the CERCLA or petroleum
products or crude oil or any fraction thereof (collectively "Hazardous
Substances") into the environment, which non-compliance or remedial action could
have a material adverse effect on the business, operations, Property, assets or
conditions (financial or otherwise) of the Borrower or any Subsidiary;
(b) there have been no releases of Hazardous Substances at, on or under any
Property now or previously owned or leased by the Borrower or any of its
Subsidiaries that, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business, Properties or prospects of the Borrower and
its Subsidiaries;
(c) there are no underground storage tanks, active or abandoned, including
petroleum storage tanks, on or under any Property now or previously owned
or leased by the Borrower or any of its Subsidiaries that, singly or in the
aggregate, have, or may reasonably be expected to have, a material adverse
effect on the financial condition, operations, assets, business, Properties
or prospects of the Borrower and its Subsidiaries;
(d) neither the Borrower nor any Subsidiary has directly transported, or
received any notice or has any knowledge that they have directly arranged
for the transportation of, any Hazardous Substances to any location which
is listed or proposed for listing on the National Priorities List pursuant
to CERCLA, on the CERCLIS or on any similar state list or which is the
subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrower or
such Subsidiary thereof for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA; and
(e) except as disclosed on ExhibitH no conditions exist at, on or under
any Property now owned or leased by the Borrower or any Subsidiary, and the
Borrower has no knowledge that any conditions exist at, on or under any
Property previously owned or leased by the Borrower or any Subsidiary,
which, with the passage of time, or the giving of notice or both, would
give rise to liability under any Environmental Law which may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business, Properties or prospects of the Borrower and
its Subsidiaries.
Section 5.8. Security Interests. There are no security interests, liens or
encumbrances on any of the assets or Property of the Borrower or any Subsidiary
except the security interests, liens and charges which are now existing and are
permitted by Section 7.14 of this Agreement.
Section 5.9. Subsidiaries. (a) As of the date hereof, the Borrower's only
Subsidiaries are identified on Exhibit E hereof. Each of said Subsidiaries is
duly organized and validly existing under the laws of the state or country of
its incorporation, has full and adequate corporate power to carry on its
business as now conducted, is duly licensed or qualified to do business in all
jurisdictions wherein the nature of its activities requires such licensing or
qualification except when the failure to be so licensed or qualified would not
have a material adverse effect on the condition, financial or otherwise, of such
Subsidiary. Each Guarantor has full right, power and authority to enter into the
Subsidiary Guaranty, to guaranty the payment of the Borrower's indebtedness,
obligations and liabilities to the Agent and the Banks, and to perform each and
all of the matters and things therein provided for; and the Subsidiary Guaranty
does not, nor does the performance or observance by any Guarantor of any of the
matters or things provided for therein, contravene any provision of law or any
charter, partnership agreement or by-law provision or any covenant, indenture or
agreement of or judgment, order or decree applicable to or affecting any
Guarantor or any of their respective Property.
(b) Maverick International does not (i) own any assets having an aggregate
net book value in excess of $1,000,000, (ii) have any liabilities in excess
of $1,000,000 and (iii) engage in any business or operations other than the
business and operations engaged in by Maverick International on the date
hereof (namely, acting as a foreign sales corporation and owning and
operating foreign sales corporations).
Section 5.10. Accurate Information. No information, exhibit or report furnished
by the Borrower or any Subsidiary to the Banks in connection with the
negotiation or performance of the Loan Documents contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made. The financial projections furnished by the Borrower
to the Banks contain reasonable projections as of the date hereof of future
results of operations and financial position of the Borrower and its
Subsidiaries.
Section 5.11. Enforceability. This Agreement, when executed and delivered by the
Borrower, will be a legal, valid and binding agreement of the Borrower,
enforceable against it in accordance with its terms, except as may be limited by
(i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws or judicial decisions for the relief of debtors or the
limitation of creditors' rights generally; and (ii) any equitable principles
relating to or limiting the rights of creditors generally or any equitable
remedy which may be granted to cure any defaults; and the Notes, the other Loan
Documents and any other instrument or agreement required hereunder has been so
authorized and, when executed and delivered, will be similarly valid, binding
and enforceable, except as may be limited by (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws or
judicial decisions for the relief of debtors or the limitation of creditors'
rights generally; and (ii) any equitable principles relating to or limiting the
rights of creditors generally or any equitable remedy which may be granted to
cure any defaults; and the Subsidiary Guaranty, when executed and delivered by
each Guarantor, will be a legal, valid and binding agreement of such Guarantor,
enforceable against it in accordance with its terms, except as may be limited by
(i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws or judicial decisions for the relief of debtors or the
limitation of creditors' rights generally; and (ii) any equitable principles
relating to or limiting the rights of creditors generally or any equitable
remedy which may be granted to cure any defaults.
Section 5.12. Trademarks, Franchises, and Licenses. The Borrower and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
Section 5.13. Governmental Authority and Licensing. The Borrower and its
Subsidiaries have received all material licenses, permits, and approvals of all
Federal, state, local, and foreign governmental authorities, if any, necessary
to conduct their businesses. No investigation or proceeding which, if adversely
determined, could reasonably be expected to result in revocation or denial of
any material license, permit, or approval is pending or, to the knowledge of the
Borrowers, threatened.
Section 5.14. Good Title. The Borrower and its Subsidiaries have good and
defensible title (or valid leasehold interests) to their assets as reflected on
the most recent consolidated balance sheet of the Borrower and its Subsidiaries
furnished to the Agent and the Banks (except for sales of assets in the ordinary
course of business), subject to no liens or security interests other than such
thereof as are permitted by Section 7.14 hereof.
Section 5.15. Affiliate Transactions. Neither the Borrower nor any Subsidiary is
a party to any contracts or agreements with any of its Affiliates on terms and
conditions which are less favorable to the Borrower or such Subsidiary than
would be usual and customary in similar contracts or agreements between Persons
not affiliated with each other.
Section 5.16. Investment Company; Public Utility Holding Company. Neither the
Borrower nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "public utility holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 5.17. Other Agreements. Neither the Borrower nor any Subsidiary is in
default under the terms of any material covenant, indenture or agreement of or
affecting such Person or any of its Property.
Section 5.18. Solvency. The Borrower and its Subsidiaries are solvent, able to
pay their debts as they become due, and have sufficient capital to carry on
their business and all businesses in which they are about to engage.
Section 6. Conditions Precedent.
The obligation of the Banks to make any Loan pursuant hereto or to issue any L/C
shall be subject to the following conditions precedent:
Section 6.1. General. The Agent shall have received the notice of borrowings and
request for any L/C hereinabove provided for.
Section 6.2. Initial Extension of Credit. Prior to the initial extension
hereunder, the following conditions precedent shall have been satisfied:
(a) the Borrower shall have delivered to the Agent for the benefit of the
Banks in sufficient counterparts for distribution to the Banks:
(i) the Notes;
(ii) the fully executed Subsidiary Guaranty requested by the Agent to
be delivered on the date hereof;
(iii) to the extent not otherwise waived in writing by the Agent, the
fully executed Pledge Agreements, Security Agreement and such legal
opinions, financing statements and other instruments and documents
relating thereto as the Agent may request together with (i) original
stock certificates or other similar instruments or securities
representing all of the issued and outstanding shares of capital stock
or other equity interests of each Domestic Subsidiary and First Tier
Foreign Subsidiary as of the date hereof and (ii) stock powers for the
Collateral consisting of the stock or other equity interest in each
such Subsidiary executed in blank and undated;
(iv) evidence of insurance required by Section 7.3 hereof and by the
Security Documents showing the Agent as loss payee thereunder pursuant
to an endorsement acceptable to the Agent;
(v) a good standing certificate or certificate of existence for the
Borrower and each Guarantor dated as of the date no earlier than
December 1, 2000 from the office of the secretary of state of the
states of their respective organization;
(vi) copies of the Certificate of Incorporation or Certificate of
Limited Partnership, and all amendments thereto, of the Borrower and
each Guarantor, certified by the office of the applicable secretary of
state as of the date no earlier than December 1, 2000;
(vii) copies of the By-Laws or Limited Partnership Agreement, and all
amendments thereto, of the Borrower and each Guarantor certified as
true, correct and complete on the date hereof by the Secretary of each
Guarantor;
(viii) copies, certified by the Secretary or Assistant Secretary of
the Borrower and each Guarantor, of resolutions regarding the
transactions contemplated by this Agreement, duly adopted by the Board
of Directors of the Borrower and each Guarantor, respectively, and
satisfactory in form and substance to the Agent;
(ix) the favorable written opinions of counsel for the Borrower and
the Guarantors in form and substance satisfactory to the Agent and its
legal counsel; and
(x) an incumbency signature certificate for the Borrower and each
Guarantor satisfactory in form and substance to the Agent.
(b) the Agent shall have received such evaluations and certifications
as it may reasonably require (including a Borrowing Base Certificate
on a consolidated and consolidating basis for the Borrower and its
Subsidiaries and compliance certificate in the forms attached hereto
as Exhibits D and F containing calculations of the Borrowing Base and
compliance calculations of the financial covenants as of the date of
this Agreement, a consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries and the Borrower's consolidated and
consolidating statement of projections for the following three fiscal
years in scope and substance acceptable to the Agent in order to
satisfy itself as to the value of the Collateral, the financial
condition of the Borrower and its Subsidiaries, and the lack of
material contingent liabilities of the Borrower and its Subsidiaries;
(c) the Agent shall have received financing statement, tax and
judgment lien search results against the Property of the Borrower and
each Subsidiary evidencing the absence of liens on its Property except
as permitted by Section 7.14 hereof;
(d) all indebtedness issued and outstanding under the Previous Credit
Agreement shall have been repaid in full and the Previous Credit
Agreement shall have been terminated and cancelled;
(e) except as previously disclosed to the Banks in the Borrower's
financial statements for the period ending September 30, 1999 and
Prudential's financial statements for the period ending December 31,
1999, no material adverse change shall have occurred in the financial
condition, operations or Properties of (i) the Borrower and its
Subsidiaries since September 30, 2000 and (ii) Prudential and its
Subsidiaries since December 31, 1999;
(f) the Agent shall have received and approved as to form and
substance copies certified by the Borrower of all of the instruments
and documents applicable to the line of credit currently available to
Prudential by Royal Bank of Canada and any other line of credit
available to Prudential on the date hereof;
(g) the Agent shall have received evidence satisfactory to it that
Adjusted EBITDA for the four fiscal quarter period ended September 30,
2000 is not less than $40,000,000; and
(h) the Agent shall have received such other agreements, instruments,
documents, certificates and opinions as the Agent may reasonably
request.
Section 6.3. Each Extension of Credit. As of the time of the making of each Loan
and the issuance of the L/C hereunder:
(a) each of the representations and warranties set forth in Section 5
hereof shall be and remain true and correct as of said time, except
that the representations and warranties made under Section 5.2 shall
be deemed to refer to the most recent financial statements furnished
to the Banks pursuant to Section 7.4 hereof;
(b) the Borrower shall be in full compliance with all of the terms and
conditions hereof, and no Potential Default or Event of Default shall
have occurred and be continuing; and
(c) after giving effect to the requested extension of credit and to
each Loan that has been made and each L/C issued hereunder, the
aggregate principal amount of all Revolving Credit Obligations then
outstanding shall not exceed the Banks' Revolving Credit Commitments
then in effect;
and the request by the Borrower for any Loan or L/C pursuant hereto
shall be and constitute a warranty to the foregoing effects.
Section 6.4. Legal Matters. All legal, tax and regulatory matters incident to
the execution and delivery of the Loan Documents shall be satisfactory to each
of the Banks and their legal counsel.
Section 7. Covenants.
It is understood and agreed that so long as credit is in use or
available under this Agreement or any amount remains unpaid on any
Note, Reimbursement Obligation or L/C remains outstanding, except to
the extent compliance in any case or cases is waived in writing by the
Required Banks:
Section 7.1. Maintenance of Property and Business. (a) The Borrower
will, and will cause each Subsidiary to, keep and maintain all of its
Properties necessary or useful in its business in good condition, and
make all necessary renewals, replacements, additions, betterments and
improvements thereto; provided, however, that nothing in this Section
shall prevent the Borrower or any Subsidiary from discontinuing the
operating and maintenance of any of its properties if such
discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business and not disadvantageous in any material
respect to the Banks as holders of the Revolving Notes.
(b) The Borrower will, and will cause each Subsidiary to, preserve and
maintain its existence, except as otherwise provided in Section 7.6
hereof. The Borrower shall, and shall cause each Subsidiary to,
preserve and keep in force and effect all material licenses, permits,
franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights and other proprietary rights necessary to the proper
conduct of its business.
(c) The Borrower will not permit Maverick International to (i) own any
assets having an aggregate net book value in excess of $1,000,000,
(ii) incur any liabilities in excess of $1,000,000 and (iii) engage in
any business or operations other than the business and operations
engaged in by Maverick International on the date hereof (namely,
acting as a foreign sales corporations and owning and operating
foreign sales corporations).
Section 7.2. Taxes. The Borrower will, and will cause each Subsidiary
to, duly pay and discharge all taxes, rates, assessments, fees and
governmental charges upon or against the Borrower or any Subsidiary or
against its Properties in each case before the same becomes delinquent
and before penalties accrue thereon unless and to the extent that the
same is being contested in good faith and by appropriate proceedings
which prevent enforcement of the matter under contest and adequate
reserves, determined in accordance with GAAP consistently applied,
have been established with respect thereto.
Section 7.3. Maintenance of Insurance. The Borrower will, and will
cause each Subsidiary to, maintain insurance with insurers recognized
as financially sound and reputable by prudent business persons in such
forms and amounts and against such risks as is usually carried by
companies engaged in similar business and owning similar properties in
the same general areas in which the Borrower or such Subsidiary
operates. The Agent shall be named as loss payee under any insurance
policies which relate to the Collateral. The Borrower shall, at the
Agent's or any Bank's request, provide copies to the Agent and each
Bank of all insurance policies and other materials related thereto
maintained by the Borrower and its Subsidiaries.
Section 7.4. Financial Reports. The Borrower will, and will cause each
Subsidiary to, maintain a system of accounting in accordance with
sound accounting practice and will furnish promptly to the Banks and
their duly authorized representatives such information respecting the
business and financial condition of the Borrower and its Subsidiaries
as may from time to time be requested and, without any request, will
furnish each Bank:
(a) as soon as available, and in any event within 45 days after the
close of each monthly period of the Borrower which is also the end of
a fiscal quarter of the Borrower and within 30 days after the close of
each other monthly fiscal period of the Borrower (i) a copy of
consolidated balance sheets and profit and loss statements for the
Borrower and its Subsidiaries (for such monthly period and the year to
date) for such period of such Borrower and for the corresponding
periods of the preceding fiscal year, and (ii) consolidating balance
sheets and profit and loss statements for the Borrower and each
Subsidiary for the year to date, and (iii) in respect of each month
which is also the end of a fiscal quarter of the Borrower, a copy of
the Borrower's 10-Q for such period, all in reasonable detail,
prepared by the Borrower and certified by the chief financial officer
of the Borrower;
(b) as soon as available, and in any event within 90 days after the
close of each fiscal year of the Borrower, a copy of the audit report
for such year and accompanying financial statements, including
consolidated balance sheets, reconciliations of change in
stockholders' equity, profit and loss statements and statements of
cash flows for the Borrower and its Subsidiaries showing in
comparative form the figures for the previous fiscal year of the
Borrower, all in reasonable detail, accompanied by the unqualified
opinion of Ernst & Young LLP or other independent public accountants
of nationally recognized standing selected by the Borrower and
satisfactory to each Bank;
(c) within 30 days after the last day of each month, a Borrowing Base
Certificate in the form of Exhibit D hereto, setting forth a
computation of the Borrowing Base on a consolidated and consolidating
basis for the Borrower and its Subsidiaries as of the last day of the
period covered thereby, certified as correct by the Borrower's chief
financial officer, and certifying that the signer thereof has
re-examined the terms and provisions of the Loan Documents and that to
the best of his knowledge and belief, no Potential Default or Event of
Default has occurred or, if any such Potential Default or Event of
Default has occurred, setting forth the description of such Potential
Default or Event of Default and specifying the action, if any, taken
by the Borrower to remedy the same;
(d) within 45 days after the last day of each month which is also the
end of a fiscal quarter of the Borrower and within 30 days after the
last day of each other month, an accounts receivable aging report in
the form of Exhibit G attached hereto;
(e) within 45 days after the last day of each month which is also the
end of a fiscal quarter of the Borrower and within 30 days after the
last day of each other month, a Compliance Certificate in the form of
Exhibit F attached hereto, prepared and signed by the chief financial
officer of the Borrower;
(f) (i) within 30 days prior to the last day of each fiscal year of
the Borrower, a copy of the Borrower's preliminary operating budget
for the immediately following fiscal year and (ii) upon the approval
by the Borrower's board of directors but in any event within 60 days
after the last day of each fiscal year of the Borrower, a copy of the
borrower's final operating budget for the immediately following fiscal
year;
(g) promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, which the Borrower
shall have filed with the Securities and Exchange Commission or any
governmental agency substituted therefor, or any national securities
exchange, including copies of the Borrower's form 10-K annual report,
including financial statements audited by Ernst & Young or other
independent public accountants of nationally recognized standing
selected by the Borrower and reasonably satisfactory to the Required
Banks, its form 10-Q quarterly report to the Securities and Exchange
Commission and any Form 8-K filed by the Borrower with the Securities
and Exchange Commission; and
(h) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed.
Section 7.5. Inspection. The Borrower shall, and shall cause each
Subsidiary to, permit the Banks, by their representatives and agents,
to inspect any of the Properties, corporate books and financial
records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the
Borrower and its Subsidiaries and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with, and to be advised
as to the same by, its officers at such times and intervals as the
Banks may request. So long as no Potential Default or Event of Default
shall have occurred and be continuing, the Borrower shall pay to the
Banks from time to time upon demand an amount sufficient to compensate
the Banks for their fees, charges and expenses in connection with two
field audits of the Collateral per year for the Borrower. During the
existence of any Event of Default or Potential Default, the Banks may
perform more than two field audits in each calendar year, with all
fees, charges and expenses of the Banks associated therewith to be
paid by the Borrower.
Section 7.6. Consolidation and Merger. The Borrower will not, and will
not permit any Subsidiary to, consolidate with or merge into any
Person, or permit any other Person to merge into it, or acquire (in a
transaction analogous in purpose or effect to a consolidation or
merger) all or substantially all of the Property or capital stock of
any other Person, unless:
(a) the Borrower or Subsidiary shall be the surviving entity of any
such merger;
(b) the Person merging into or being acquired by the Borrower or a
Subsidiary shall be in the same or a related line of business as the
Borrower or one or more of its Subsidiaries;
(c) no Potential Default or Event of Default shall exist before or
after giving effect to such merger; and
(d) the aggregate consideration paid by the Borrower and its
Subsidiaries in all such mergers and acquisitions and all investments
and acquisitions permitted by Sections 7.16(j) and (k) hereof in any
12-month period, shall not exceed $5,000,000.
Section 7.7. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, enter into any transaction,
including without limitation, the purchase, sale, lease or exchange of
any Property, or the rendering of any service, with any Affiliate of
the Borrower except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary
than would be obtained in a comparable arm's-length transaction with a
Person not an Affiliate of the Borrower.
Section 7.8. Funded Debt Ratios. (a) The Borrower will not at any time
permit its Total Funded Debt Ratio to exceed 3.25 to 1.
(b) The Borrower will not at any time permit its Adjusted Funded Debt
Ratio to exceed 3.35 to 1 at December 31, 2000 and 3.25 to 1
thereafter.
Section 7.9. Minimum Adjusted EBITDA. The Borrower will not permit its
Adjusted EBITDA for the four consecutive fiscal quarters of the
Borrower ending on the dates specified as follows to be less than
(i) $40,000,000 as of September 30, 2000 and (ii) $45,000,000 as of
December 31, 2000.
Section 7.10. Minimum Consolidated Tangible Net Worth. The Borrower
will maintain Consolidated Tangible Net Worth in an amount not less
than (a) $204,000,000 at all times from the date hereof through
December 31, 2000 and (b) at all times during each fiscal quarter of
the Borrower thereafter, in an amount not less than the Minimum
Required Amount. For the purposes hereof, the term "Minimum Required
Amount" shall mean an amount equal to the sum of (i) the Minimum
Required Amount required to be maintained by the Borrower during the
immediately preceding fiscal quarter, plus (ii) 75% of the Borrower's
Consolidated Net Income (but not less than zero) for such fiscal
quarter then ended.
Section 7.11. Maximum Leverage Ratio. The Borrower will not permit the
ratio of its Total Consolidated Funded Debt to its Total
Capitalization to exceed 0.5 to 1 at any time.
Section 7.12. Minimum Interest Coverage Ratio. The Borrower, as of the
close of each fiscal quarter of the Borrower specified below, will not
permit its Interest Coverage Ratio to be less than (i) 1.15 to 1 for
the Borrower's fiscal quarter ended December 31, 2000, (ii) 2.00 to 1
for the Borrower's fiscal quarter ended March 31, 2001 and (iii) 2.50
to 1 for each fiscal quarter of the Borrower ending thereafter.
Section 7.13. Restricted Payments. The Borrower will not (a) declare
or pay any dividends on any class of stock, (b) directly or indirectly
purchase, redeem or otherwise acquire or retire any of its capital
stock, or (c) make any distribution of any kind or character with
respect to its capital stock; provided, however, in each case no
Potential Default or Event of Default shall then exist or result
therefrom the Borrower may pay cash dividends on its common stock and
may purchase its capital stock in an aggregate amount for all such
dividends and purchases in each fiscal year of the Borrower not
exceeding the lesser of a (a) $6,000,000 and (b) 50% of Consolidated
Net Income for the most recently completed fiscal year.
Section 7.14. Liens. The Borrower will not, and will not permit any
Subsidiary to, pledge, mortgage or otherwise encumber or subject to or
permit to exist upon or be subjected to any lien, charge or security
interest of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), on any of
its Properties of any kind or character at any time owned by the
Borrower or any Subsidiary, other than:
(a) liens, pledges or deposits for worker's compensation, unemployment
insurance, old age benefits or social security obligations, taxes,
assessments, statutory obligations or other similar charges, good
faith deposits made in connection with tenders, contracts or leases to
which the Borrower or a Subsidiary is a party or other deposits
required to be made in the ordinary course of business, provided in
each case the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings and adequate
reserves have been provided therefor in accordance with GAAP and that
the obligation is not for borrowed money, customer advances, trade
payables, or obligations to agricultural producers;
(b) the pledge of assets for the purpose of securing an appeal or stay
or discharge in the course of any legal proceedings, provided that the
aggregate amount of liabilities of the Borrower and all Subsidiaries
so secured by a pledge of property permitted under this subsection (b)
including interest and penalties thereon, if any, shall not be in
excess of $2,500,000 at any one time outstanding;
(c) liens, pledges, mortgages, security interests, or other charges
granted to the Agent to secure the Notes, Hedging Liability,
Reimbursement Obligations, the L/Cs and other amounts payable under
the Loan Documents;
(d) liens, pledges, mortgages, security interests or other charges
existing on the date hereof and set forth on Exhibit I attached
hereto;
(e) liens, pledges, mortgages, security interests and other
encumbrances on Property which secure only indebtedness incurred to
finance the acquisition of such Property (but only to the extent of
the fair market value of such Property and not including purchase
money security interests in Inventory);
(f) liens for property taxes and assessments or governmental charges
or levies which are not yet due and payable;
(g) liens incidental to the conduct of business or the ownership of
Properties and assets (including warehousemen's liens, grower liens
and attorneys' liens and statutory landlords' liens) or other liens of
like general nature incurred in the ordinary course of business and
not in connection with the borrowing of money, provided in each case,
the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings and for
which adequate reserves, determined in accordance with GAAP, have been
established;
(h) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Borrower and its Subsidiaries or which customarily
exist on properties of corporations engaged in similar activities and
similarly situated and which do not in any event materially impair
their use in the operation of the business of the Borrower and its
Subsidiaries;
(i) mortgages, liens and encumbrances on the Borrower's real estate
and equipment securing only Funded Debt permitted by Section 7.15(f)
hereof; and
(j) purchase money security interests in Restricted Inventory so long
as the aggregate value of the Restricted Inventory so encumbered does
not at any time exceed $5,000,000.
Section 7.15. Borrowings and Guaranties. The Borrower will not, and
will not permit any Subsidiary to, issue, incur, assume, create or
have outstanding any indebtedness for borrowed money (including as
such all indebtedness representing the deferred purchase price of
Property and all indebtedness, obligations and liabilities relating to
bankers acceptances and letters of credit) or customer advances, nor
be or remain liable, whether as endorser, surety, guarantor or
otherwise, for or in respect of any liability or indebtedness of any
other Person, other than:
(a) indebtedness of the Borrower arising under or pursuant to this
Agreement or the other Loan Documents;
(b) the liability of the Borrower and its Subsidiaries arising out of
the endorsement for deposit or collection of commercial paper received
in the ordinary course of business;
(c) indebtedness of the Borrower and its Subsidiaries existing on the
date hereof and set forth on Exhibit J attached hereto, other than
indebtedness under the Previous Credit Agreement;
(d) trade payables of the Borrower and its Subsidiaries arising in the
ordinary course of the Borrower's and its Subsidiaries' business;
(e) indebtedness of the Subsidiaries to the Borrower;
(f) Funded Debt in an aggregate principal amount of up to $8,000,000
with respect to bonds or notes or other secured indebtedness to be
guaranteed by the Arkansas Development and Finance Authority and/or
the Arkansas Industrial Development Corporation and any refundings or
refinancings thereof;
(g) indebtedness of the Borrower and the Domestic Subsidiaries not
otherwise permitted by this Section 7.15, provided that the aggregate
principal amount of all such indebtedness outstanding at any time does
not exceed $3,000,000;
(h) indebtedness of the Guarantors to the Borrower and indebtedness of
the Guarantors to the Agent and the Banks under the Subsidiary
Guaranty;
(i) indebtedness in an aggregate principal amount not to exceed
Canadian $40,000,000 to the extent incurred by Prudential to finance
its working capital needs so long as the terms and conditions
applicable to such indebtedness are acceptable to the Agent and the
Required Banks; and
(j) guarantees by the Borrower or any of its Subsidiaries in an
aggregate principal amount not in excess of $5,000,000.
Section 7.16. Investments, Loans, Advances and Acquisitions. The
Borrower will not, and will not permit any Subsidiary to, make or
retain any investment (whether through the purchase of stock,
obligations, capital contributions or otherwise) in or make any loan
or advance to, any other Person, or acquire substantially as an
entirety the Property or business of any other Person, other than:
(a) investments in certificates of deposit having a maturity of two
years or less issued by any Bank and which are held by the Bank
issuing the same;
(b) investments in commercial paper rated P1 by ▇▇▇▇▇'▇ Investors
Services, Inc. or A1 by Standard and Poor's Corporation maturing
within 270 days of the date of issuance thereof;
(c) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on the business
of the Borrower or any Subsidiary of the Borrower;
(d) investments shown on the financial statements referred to in
Section 5.2 in existing Subsidiaries;
(e) advances to the Borrower's foreign sales corporations made in the
ordinary course of the Borrower's business in an aggregate principal
amount outstanding at any time of up to $100,000;
(f) marketable obligations issued, guarantied, or fully insured by the
United States of America, or those for which the full faith and credit
of the United States of America is pledged for the repayment of
principal and interest thereof; provided that such obligations have a
final maturity of no more than two years from the date acquired by the
Borrower;
(g) marketable obligations issued, guarantied or fully insured by any
agency, instrumentality, or corporation of the United States
established or to be established by the Congress, for the which the
credit of such agency, instrumentality, or corporation is pledged for
the repayment of the principal and interest thereof; provided that
such obligations have a final maturity of no more than one year from
the date acquired by the Borrower; and
(h) any investments listed from time to time on the "working list"
maintained by ▇▇▇▇▇▇ Trust and Savings Bank or ▇▇▇▇▇▇ Investment
Management, Inc., acting as a fiduciary agent;
(i) loans, advances and guaranties not otherwise permitted by this
Section 7.16, provided that the aggregate amount of all such loans,
advances and guaranties outstanding at any time does not exceed
$5,000,000;
(j) other investments in and acquisitions (other than by merger or
consolidation) substantially as an entirety of the Property or
business of any Person or a majority of the capital stock or other
equity interests of any other Person, provided that:
(i) such Person shall be in the same or a related line of business as
the Borrower or one or more Subsidiaries;
(ii) the board of directors (or equivalent governing body) of such
Person shall have given its prior effective written consent or
approval of such acquisition;
(iii) no Potential Default or Event of Default shall exist before or
after giving effect to such acquisition; and
(iv) the aggregate consideration paid in connection with all such
investments and acquisitions, all mergers permitted by Section 7.6
hereof and all investments and acquisitions permitted by
Section 7.16(k) hereof, does not exceed $5,000,000 in any 12-month
period;
(k) investments in and acquisitions of less than all or substantially
all of the Property or business of any Person or of less than a
majority of the capital stock or other equity interests of any other
Person, provided that:
(i) such Person shall be in the same or a related line of business as
the Borrower or one or more Subsidiaries;
(ii) the Board of Directors (or equivalent governing body) of such
Person shall have given its prior effective written consent or
approval of such acquisition;
(iii) no Potential Default or Event of Default shall exist before or
after giving effect to such acquisition; and
(iv) the aggregate consideration paid in connection with all such
investments and acquisitions, all mergers permitted by Section 7.6 and
all investments and acquisitions permitted by 7.16(j) hereof, does not
exceed $5,000,000 in any 12-month period;
(l) investments in and loans and advances to the Guarantors; and
(m) (i) investments existing on the date hereof in Prudential and
(ii) additional investments, loans and advances to Prudential in an
aggregate principal amount not in excess of $1,000,000 at any one time
outstanding.
Notwithstanding anything contained in this 7.16 to the contrary, other
than as specified in Section 7.16(m) above, the sum of (i) all
investments by the Borrower or any Guarantor in, (ii) all loans and
advances by the Borrower or any Guarantor to, and (iii) all guarantees
by the Borrower or any Guarantor of indebtedness of, any Subsidiary of
the Borrower which is not a Guarantor shall not aggregate an amount in
excess of $1,000,000 at any one time outstanding.
Section 7.17. Sale of Property. The Borrower will not and will not
permit any Subsidiary to, sell, lease, assign, transfer or otherwise
dispose of (whether in one transaction or in a series of related
transactions) all or a material part of its Property to any other
Person; provided, however, that so long as no Event of Default or
Potential Default has occurred and is continuing or would result after
giving effect thereto, the Borrower and its Subsidiaries may make:
(a) sales of its Inventory in the ordinary course of business; and
(b) sales or leases of its surplus, obsolete or worn-out machinery and
equipment.
For purposes of this Section, "material part" shall mean 5% or more of
the book value of all of the property of the Borrower and its
Subsidiaries.
Section 7.18. Notice of Suit or Adverse Change in Business or Default.
The Borrower shall, as soon as possible, and in any event within ten
(10) days after it learns of the following, give written notice to the
Agent and each Bank of (i) any material proceeding(s) being instituted
or threatened to be instituted by or against the Borrower or any
Subsidiary in any federal, state, local or foreign court or before any
commission or other regulatory body (federal, state, local or
foreign), (ii) any material adverse change in the business, Property
or condition, financial or otherwise (including, without limitation,
any material loss or depreciation in the value of the Collateral) of
the Borrower, and (iii) the occurrence of any Potential Default or
Event of Default.
Section 7.19. ERISA. The Borrower will, and will cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising
under ERISA of a character which if unpaid or unperformed is likely to
result in the imposition of a lien against any of its Property and
will promptly notify the Agent and each Bank of (i) the occurrence of
any reportable event (as defined in ERISA) which might result in the
termination by the PBGC of any Plan, (ii) receipt of any notice from
PBGC of its intention to seek termination of any such Plan or
appointment of a trustee therefor, and (iii) its intention to
terminate or withdraw from any Plan. The Borrower will not, and will
not permit any Subsidiary to, terminate any such Plan or withdraw
therefrom unless it shall be in compliance with all of the terms and
conditions of this Agreement after giving effect to any liability to
PBGC resulting from such termination or withdrawal.
Section 7.20. Supplemental Performance. The Borrower will, and will
cause each Subsidiary to, at any time and from time to time upon
request of any Bank take or cause to be taken any action and execute,
acknowledge, deliver or record any further documents, security
agreements or other instruments which such Bank in its discretion
deems necessary to carry out the purposes of the Loan Documents.
Section 7.21. Use of Proceeds. The Borrower shall use the proceeds of
each Loan and other extensions of credit hereunder only (a) to pay the
Borrower's indebtedness under the Previous Credit Agreement and (b) so
long as such use of proceeds is not otherwise prohibited by the terms
hereof and such use would not otherwise cause the occurrence of a
Potential Default or an Event of Default hereunder, for proper
corporate purposes of the Borrower.
Section 7.22. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects
with all applicable laws, rules, regulations and orders, such
compliance to include (without limitation) the maintenance and
preservation of its corporate existence and qualification as a foreign
corporation except where the failure to be so qualified would not have
a material adverse effect on the condition, financial or otherwise, of
Borrower or any Subsidiary.
Section 7.23. Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and Properties in compliance
with all Environmental Laws where the failure to do so could have a
material adverse effect on the condition, financial or otherwise, of
the Borrower or any of its Subsidiaries, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all hazardous materials in material compliance
with all applicable Environmental Laws;
(b) immediately notify the Agent and each Bank and provide copies upon
receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and Property or compliance
with Environmental Laws, and shall promptly, but in no event later
than 45 days (or, if such actions or proceedings are capable of being
cured but not within 45 days, then, in no event later than 105 days so
long as Borrower continues to diligently proceed to cure) after the
occurrence of such actions or proceedings, cure and have dismissed, to
the reasonable satisfaction of the Banks, any actions and proceedings
relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Agent or any
Bank may reasonably request from time to time to evidence compliance
with this Section 7.23.
Section 7.24. Subsidiaries.
(a) No Restriction. The Borrower shall not and shall not permit any
Subsidiary directly or indirectly to create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary (or the
Borrower, in the case of subsections (v) and (vii) of this Section)
to: (i) pay dividends or make any other distribution on any of such
Subsidiary's capital stock or other equity interests owned by the
Borrower or any Subsidiary of the Borrower; (ii) pay any indebtedness
owed to the Borrower or any other Subsidiary; (iii) make loans or
advances to the Borrower or any other Subsidiary; (iv) transfer any of
its Property or assets to the Borrower or any other Subsidiary;
(v) merge or consolidate with or into the Borrower or any other
Subsidiary of the Borrower; (vi) guaranty the payment when due of the
Borrower's indebtedness, obligations and liabilities to the Agent or
the Banks; or (vii) grant to the Agent for the benefit of the Banks
liens and security interests on such Subsidiary's or the Borrower's
assets to secure the payment of the Borrower's and the Guarantors'
indebtedness, obligations and liabilities under the Loan Documents;
provided that (1) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (2) the foregoing
shall not apply to restrictions and conditions existing on the date
hereof identified on Exhibit K (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of,
any such restriction or condition), (3) the foregoing shall not apply
to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (4) clause (vii) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured indebtedness permitted by this Agreement
if such restrictions or conditions apply only to the Property securing
such indebtedness and (5) clause (vii) of the foregoing shall not
apply to customary provisions in leases and other contracts
restricting the assignment thereof.
(b) Maintenance. The Borrower shall not assign, sell or transfer, nor
shall it permit any Subsidiary to issue, assign, sell or transfer, any
shares of capital stock of a Subsidiary; provided, however, that the
foregoing shall not operate to prevent (a) Liens on the capital stock
of Subsidiaries granted to the Agent pursuant to the Security
Documents, (b) the issuance, sale and transfer to any person of any
shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such
person as a director of such Subsidiary, and (c) any transaction
permitted by Section 7.6 above.
(c) Formation. Promptly upon the formation or acquisition of any
Subsidiary, the Borrower shall provide the Agent and the Banks notice
thereof and timely comply with the requirements of Section 1.8 hereof.
Section 7.25. No Changes in Fiscal Year. The Borrower shall not, nor
shall it permit any Subsidiary to, change its fiscal year from its
present basis.
Section 7.26. Operating Leases. The Borrower will not, and will not
permit any Subsidiary to, enter into any rental agreement or lease as
lessee of real or personal property, which is not a Capitalized Lease,
if the aggregate of annual Rentals payable under all such agreements
or leases would exceed $4,000,000 during any fiscal year of the
Borrower.
Section 7.27. Change in the Nature of Business. The Borrower shall
not, nor shall it permit any Subsidiary to, engage in any business or
activity if as a result the general nature of the business of the
Borrower or any Subsidiary would be changed in any material respect
from the general nature of the business engaged in by it as of the
date hereof.
Section 7.28. Prudential Line of Credit. Prudential shall, and the
Borrower shall cause Prudential to, maintain at all times an unsecured
demand line of credit (which may be availed by Prudential in the form
of loans and/or letters of credit) in an aggregate principal amount
not more than Canadian $40,000,000 and on terms and conditions
satisfactory to the Agent and the Required Banks.
Section 8. Events of Default and Remedies.
Section 8.1. Definitions. Any one or more of the following shall
constitute an Event of Default:
(a) Default in the payment when due of any principal of or interest on
any Note, whether at the stated maturity thereof or as required by
Section 2.4 hereof or at any other time provided in this Agreement, or
of any Reimbursement Obligation, or of any fee or other amount payable
by the Borrower pursuant to this Agreement, which default, in the case
of default in the payment when due of any interest on any Note,
continues for five days after the due date therefor;
(b) Default in the observance or performance of any covenant set forth
in Sections 7.3, 7.5, 7.6, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14,
7.15, 7.16, 7.17, 7.20, 7.24, 7.25, 7.26, 7.27 and 7.28 inclusive,
hereof, or of any provision of any Security Document requiring the
maintenance of insurance on the Collateral subject thereto or dealing
with the use or remittance of proceeds of such Collateral;
(c) Default in the observance or performance of any other covenant,
condition, agreement or provision hereof or any of the other Loan
Documents and such default shall continue for 30 days after the first
to occur of (i) the Borrower's knowledge thereof or (ii) written
notice thereof to the Borrower by the Agent or any Bank;
(d) Default shall occur under any evidence of indebtedness in a
principal amount exceeding $2,000,000 issued or assumed or guaranteed
by the Borrower or any Subsidiary, or under any mortgage, agreement or
other similar instrument under which the same may be issued or secured
and such default shall continue for a period of time sufficient to
permit the acceleration of maturity of any indebtedness evidenced
thereby or outstanding or secured thereunder;
(e) Any representation or warranty made by the Borrower herein or in
any Loan Document or in any statement or certificate furnished by it
pursuant hereto or thereto, proves untrue in any material respect as
of the date made or deemed made pursuant to the terms hereof;
(f) Any judgment or judgments, writ or writs, or warrant or warrants
of attachment, or any similar process or processes, other than those
fully covered by insurance in a manner acceptable to the Banks, in an
aggregate amount in excess of $2,000,000 shall be entered or filed
against the Borrower or any Subsidiary or against any of their
respective Property or assets and remain unstayed and undischarged for
a period of 60 days from the date of its entry;
(g) Any reportable event (as defined in ERISA) which constitutes
grounds for the termination of any Plan or for the appointment by the
appropriate United States District Court of a trustee to administer or
liquidate any such Plan, shall have occurred and be continuing thirty
(30) days after written notice to such effect shall have been given to
the Borrower by any Bank; or any such Plan shall be terminated; or a
trustee shall be appointed by the appropriate United States District
Court to administer any such Plan; or the Pension Benefit Guaranty
Corporation shall institute proceedings to administer or terminate any
such Plan;
(h) The Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the Bankruptcy Code
of 1978, as amended, (ii) admit in writing its inability to pay, or
not pay, its debts generally as they become due or suspend payment of
its obligations, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, conservator, liquidator
or similar official for it or any substantial part of its property,
(v) file a petition seeking relief or institute any proceeding seeking
to have entered against it an order for relief under the Bankruptcy
Code of 1978, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
marshalling of assets, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying
the material allegations of any such proceeding filed against it, or
(vi) fail to contest in good faith any appointment or proceeding
described in Section 8.1(i) hereof;
(i) A custodian, receiver, trustee, conservator, liquidator or similar
official shall be appointed for the Borrower or any Subsidiary or any
substantial part of its respective Property, or a proceeding described
in Section 8.1(h)(v) shall be instituted against any Borrower or any
Subsidiary and such appointment continues undischarged or any such
proceeding continues undismissed or unstayed for a period of 60 days;
(j) Any Guarantor shall breach, repudiate, disavow or purport to
terminate its obligations under the Subsidiary Guaranty or any part
thereof, or the Subsidiary Guaranty or any part thereof shall for any
reason not be the legal, valid and binding obligation of any Guarantor
Subsidiary;
(k) Royal Bank of Canada or any other applicable lender shall for any
reason suspend, terminate, cancel or otherwise cease to maintain in
full force and effect its unsecured demand line of credit to
Prudential in an aggregate principal amount not more than Canadian
$40,000,000 and on terms and conditions satisfactory to the Agent and
the Required Banks and such suspension, termination, cancellation or
cessation continues for 30 days after written notice thereof to
Prudential, the Borrower or any other Subsidiary; or
(l) a Change of Control Event shall occur.
Section 8.2. Remedies for Non-Bankruptcy Defaults. When any Event of
Default, other than an Event of Default described in subsections (h)
and (i) of Section 8.1 hereof, has occurred and is continuing, the
Agent, if directed by any of the Banks, shall give notice to the
Borrower and take any or all of the following actions: (i) terminate
the remaining Revolving Credit Commitments hereunder on the date
(which may be the date thereof) stated in such notice, (ii) declare
the principal of and the accrued interest on the Notes and unpaid
Reimbursement Obligations to be forthwith due and payable and
thereupon the Notes and unpaid Reimbursement Obligations including
both principal and interest, shall be and become immediately due and
payable without further demand, presentment, protest or notice of any
kind, and (iii) proceed to foreclose against any Collateral under any
of the Security Documents, take any action or exercise any remedy
under any of the Loan Documents or exercise any other action, right,
power or remedy permitted by law. Any Bank may exercise the right of
set off with regard to any deposit accounts or other accounts
maintained by the Borrower with any of the Banks.
Section 8.3. Remedies for Bankruptcy Defaults. When any Event of
Default described in subsections (h) or (i) of Section 8.1 hereof has
occurred and is continuing, then the Notes shall immediately become
due and payable without presentment, demand, protest or notice of any
kind, and the obligation of the Banks to extend further credit
pursuant to any of the terms hereof shall immediately terminate.
Section 8.4. L/Cs. Promptly following the acceleration of the maturity
of the Notes pursuant to Section 8.2 or 8.3 hereof, the Borrower shall
immediately pay to the Agent for the benefit of the Banks the full
undrawn face amount of all then outstanding L/Cs. The Agent shall hold
all such funds and proceeds thereof as additional collateral security
for the obligations of the Borrower to the Banks under the Loan
Documents. The amount paid under any L/C for which the Borrower has
not reimbursed the Banks shall bear interest from the date of such
payment at the default rate of interest specified in Section 1.3(c)(i)
hereof.
Section 8.5. Expenses. The Borrower agrees to pay to the Agent and
each Bank, and any other holder of any Note outstanding hereunder, all
expenses reasonably incurred or paid by the Agent and such Bank or any
such holder, including reasonable attorneys' fees and court costs, in
connection with any Potential Default or Event of Default hereunder or
in connection with the enforcement of any of the Loan Documents.
Section 9. Change in Circumstances Regarding Eurodollar Loans.
Section 9.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time after the date hereof with
respect to Eurodollar Loans, any Bank shall determine in good faith
that any change in applicable law or regulation or in the
interpretation thereof makes it unlawful for such Bank to make or
continue to maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby, such Bank shall promptly give
notice thereof to the Borrower to such effect, and such Bank's
obligation to make or relend any such affected Eurodollar Loans under
this Agreement shall terminate until it is no longer unlawful for such
Bank to make or maintain such affected Loan. The Borrower shall prepay
the outstanding principal amount of any such affected Eurodollar Loan
made to it, together with all interest accrued thereon and all other
amounts due and payable to the Banks under Section 9.4 of this
Agreement, on the earlier of the last day of the Interest Period
applicable thereto and the first day on which it is illegal for such
Bank to have such Loans outstanding; provided, however, the Borrower
may then elect to borrow the principal amount of such affected Loan by
means of another type of Revolving Credit Loan available hereunder,
subject to all of the terms and conditions of this Agreement.
Section 9.2. Unavailability of Deposits or Inability to Ascertain the
Adjusted Eurodollar Rate. Notwithstanding any other provision of this
Agreement or any Note to the contrary, if prior to the commencement of
any Interest Period any Bank shall determine (i) that deposits in the
amount of any Eurodollar Loan scheduled to be outstanding are not
available to it in the relevant market or (ii) by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Adjusted Eurodollar Rate, then
the Agent shall promptly give telephonic or telex notice thereof to
the Borrower and the Banks (such notice to be confirmed in writing),
and the obligation of the Banks to make any such Eurodollar Loan in
such amount and for such Interest Period shall terminate until
deposits in such amount and for the Interest Period selected by the
Borrower shall again be readily available in the relevant market and
adequate and reasonable means exist for ascertaining the Adjusted
Eurodollar Rate. Upon the giving of such notice, the Borrower may
elect to either (i) pay or prepay, as the case may be, such affected
Loan, subject to the provisions of Section 9.4 hereof or (ii) reborrow
such affected Loan as another type of Revolving Credit Loan available
hereunder, subject to all terms and conditions of this Agreement.
Section 9.3. Taxes and Increased Costs. With respect to any
outstanding Eurodollar Loans, if any Bank shall determine in good
faith that any change in any applicable law, treaty, regulation or
guideline (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) or any new law, treaty,
regulation or guideline, or any interpretation of any of the foregoing
by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority
having jurisdiction over such Bank or its lending branch or the
Eurodollar Loans contemplated by this Agreement (whether or not having
the force of law) ("Change in Law") shall:
(a) impose, modify or deem applicable any reserve, special deposit or
similar requirements against assets held by, or deposits in or for the
account of, or Loans by, or any other acquisition of funds or
disbursements by, such Bank (other than reserves included in the
determination of the Adjusted Eurodollar Rate);
(b) subject such Bank, any Eurodollar Loan, or any Note to any tax
(including, without limitation, any United States interest
equalization tax or similar tax however named applicable to the
acquisition or holding of debt obligations and any interest or
penalties with respect thereto), duty, charge, stamp tax, fee
deduction or withholding in respect of this Agreement, any Eurodollar
Loan, or any Note except such taxes as may be measured by the overall
net income of such Bank or its lending branch and imposed by the
jurisdiction, or any political subdivision or taxing authority
thereof, in which such Bank's principal executive office or its
lending branch is located or in which the Bank has nexus;
(c) change the basis of taxation of payments of principal and interest
due from the Borrower to such Bank hereunder or under any Note (other
than by a change in taxation of the overall net income of such Bank);
or
(d) impose on such Bank any penalty with respect to the foregoing or
any other condition regarding this Agreement, its disbursement, any
Eurodollar Loan, or any Note;
and such Bank shall determine in good faith that the result of any of
the foregoing is to increase the cost (whether by incurring a cost or
adding to a cost) to such Bank of making or maintaining any Eurodollar
Loan hereunder or to reduce the amount of principal or interest
received by such Bank, then the Borrower shall pay to such Bank from
time to time as specified by such Bank such additional amounts as such
Bank shall determine are sufficient to compensate and indemnify it for
such increased cost or reduced amount. If any Bank makes such a claim
for compensation, it shall provide to the Borrower a certificate
setting forth such increased cost or reduced amount as a result of any
event mentioned herein specifying such Change in Law, and such
certificate shall be conclusive and binding on the Borrower as to the
amount thereof except in the case of manifest error or willful
misconduct. Upon the imposition of any such cost, the Borrower may
prepay any affected Loan, subject to the provisions of Sections 2.3
and 9.4 hereof.
Section 9.4. Funding Indemnity. (a) In the event any Bank shall incur
any loss, cost, expense or premium (including, without limitation, any
loss of profit and any loss, cost, expense or premium incurred by
reason of the liquidation or re-employment of deposits or other funds
acquired by such Bank to fund or maintain any Eurodollar Loan or the
relending or reinvesting of such deposits or amounts paid such Bank)
as a result of:
(i) any payment or prepayment of a Eurodollar Loan on a date other
than the last day of the then applicable Interest Period;
(ii) any failure by the Borrower to borrow any Eurodollar Loan on the
date specified in the notice given pursuant to Section 1.6 hereof; or
(iii) the occurrence of any Event of Default;
then, upon the demand of such Bank, the Borrower shall pay to such
Bank such amount as will reimburse such Bank for such loss, cost or
expense.
(b) If any Bank makes a claim for compensation under this Section 9.4,
it shall provide to the Borrower a certificate setting forth the
amount of such loss, cost or expense in reasonable detail and such
certificate shall be conclusive and binding on the Borrower as to the
amount thereof except in the case of manifest error.
Section 9.5. Lending Branch. Each Bank may, at its option, elect to
make, fund or maintain its Eurodollar Loans hereunder at the branch or
office specified opposite its signature on the signature page hereof
or such other of its branches or offices as such Bank may from time to
time elect, subject to the provisions of Section 1.6(b) hereof.
Section 9.6. Discretion of Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each
Bank shall be entitled to fund and maintain its funding of all or any
part of its Loans in any manner it sees fit, it being understood
however, that for the purposes of this Agreement all determinations
hereunder (including determinations for the purposes of Section 9.4)
shall be made as if the Banks had actually funded and maintained each
Eurodollar Loan during each Interest Period for such Loan through the
purchase of deposits in the relevant interbank market having a
maturity corresponding to such Interest Period and bearing an interest
rate equal to the Adjusted Eurodollar Rate for such Interest Period.
Section 10. The Agent.
Section 10.1. Appointment and Powers. ▇▇▇▇▇▇ Trust and Savings Bank is
hereby appointed by the Banks as Agent under the Loan Documents,
including but not limited to the Security Documents, wherein the Agent
shall hold a security interest for the benefit of the Banks, solely as
the Agent of the Banks, and each of the Banks irrevocably authorizes
the Agent to act as the Agent of such Bank. The Agent agrees to act as
such upon the express conditions contained in this Agreement.
Section 10.2. Powers. The Agent shall have and may exercise such
powers hereunder as are specifically delegated to the Agent by the
terms of the Loan Documents, together with such powers as are
incidental thereto. The Agent shall have no implied duties to the
Banks, nor any obligation to the Banks to take any action under the
Loan Documents except any action specifically provided by the Loan
Documents to be taken by the Agent.
Section 10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks
or any Bank for any action taken or omitted to be taken by it or them
under the Loan Documents or in connection therewith except for its or
their own gross negligence or willful misconduct.
Section 10.4. No Responsibility for Loans, Recitals, etc. The Agent
shall not (i) be responsible to the Banks for any recitals, reports,
statements, warranties or representations contained in the Loan
Documents or furnished pursuant thereto, (ii) be responsible for the
value, worth, payment or collection of any Loans hereunder, (iii) be
bound to ascertain or inquire as to the performance or observance of
any of the terms of the Loan Documents, or (iv) be responsible to
determine or verify the existence, eligibility or value of any
Collateral, or the correctness of any Borrowing Base Certificate. In
addition, neither the Agent nor its counsel shall be responsible to
the Banks for the enforceability or validity of any of the Loan
Documents.
Section 10.5. Right to Indemnity. The Banks hereby indemnify the Agent
for any actions taken in accordance with this Section 10, and the
Agent shall be fully justified in failing or refusing to take any
action hereunder, unless it shall first be indemnified to its
satisfaction by the Banks pro rata against any and all liability and
expense which may be incurred by it by reason of taking or continuing
to take any such action, other than any liability which may arise out
of Agent's gross negligence or willful misconduct.
Section 10.6. Action Upon Instructions of Banks. The Agent agrees,
upon the written request of the Banks, to take any action of the type
specified in the Loan Documents as being within the Agent's rights,
duties, powers or discretion. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in
accordance with written instructions signed by the Banks, and such
instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and on all holders of any of the
Notes. In the absence of a request by the Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any action,
unless the Loan Documents specifically require the consent of all of
the Banks.
Section 10.7. Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent hereunder by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Banks, except
as to money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneys-in-fact
selected by it in good faith and with reasonable care. The Agent shall
be entitled to advice and opinion of legal counsel concerning all
matters pertaining to the duties of the agency hereby created.
Section 10.8. Reliance on Documents; Counsel. Absent gross negligence
or willful misconduct, the Agent shall be entitled to rely upon any
Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of legal counsel
selected by the Agent.
Section 10.9. May Treat Payee as Owner. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof
unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Agent. Any request, authority
or consent of any person, firm or corporation who at the time of
making such request or giving such authority or consent is the holder
of any such Note shall be conclusive and binding on any subsequent
holder, transferee or assignee of such Note or of any Note issued in
exchange therefor.
Section 10.10. Agent's Reimbursement. Each Bank agrees to reimburse
the Agent pro rata in accordance with its Commitment Percentage for
any reasonable out-of-pocket expenses (including fees and charges for
field audits) not reimbursed by the Borrower (a) for which the Agent
is entitled to reimbursement by the Borrower under the Loan Documents
and (b) for any other reasonable expenses incurred by the Agent on
behalf of the Banks, in connection with the preparation, execution,
delivery, administration and enforcement of the Loan Documents.
Section 10.11. Rights as a Lender. With respect to its commitment,
Loans made by it, the L/C issued by it and the Notes issued to it, the
Agent shall have the same rights and powers hereunder as any Bank and
may exercise the same as though it were not the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, and generally engage in any kind of
banking or trust business with the Borrower as if it were not the
Agent.
Section 10.12. Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other
Bank and based on the financial statements referred to in Section 5.2
and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into the Loan
Documents. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under the Loan Documents.
Section 10.13. Resignation of Agent. Subject to the appointment of a
successor Agent, the Agent may resign as Agent for the Banks under
this Agreement and the other Loan Documents at any time by sixty days'
notice in writing to the Banks. Such resignation shall take effect
upon appointment of such successor. The Banks shall have the right to
appoint a successor Agent who shall be entitled to all of the rights
of, and vested with the same powers as, the original Agent under the
Loan Documents. In the event a successor Agent shall not have been
appointed within the sixty day period following the giving of notice
by the Agent, the Agent may appoint its own successor. Resignation by
the Agent shall not affect or impair the rights of the Agent under
Sections 10.5 and 10.10 hereof with respect to all matters preceding
such resignation. Any successor Agent must be a national banking
association or a Bank chartered in any State of the United States.
Section 10.14. Duration of Agency. The agency established by
Section 10.1 hereof shall continue, and Sections 10.1 through and
including this Section 10.14 shall remain in full force and effect,
until the Notes and all other amounts due hereunder and thereunder,
including without limitation all Reimbursement Obligations, shall have
been paid in full and the Banks' commitments to extend credit to or
for the benefit of the Borrower shall have terminated or expired.
Section 10.15. Letter of Credit Issuer. ▇▇▇▇▇▇ shall act on behalf of
the Banks with respect to any L/C issued by it and the documents
associated therewith. ▇▇▇▇▇▇ shall have all of the benefits and
immunities (i) provided to the Agent in this Section 10 with respect
to any acts taken or omissions suffered by ▇▇▇▇▇▇ in connection with
L/Cs issued by it or proposed to be issued by it and the Applications
pertaining to such L/Cs as fully as if the term "Agent", as used in
this Section 10, included ▇▇▇▇▇▇ with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with
respect to ▇▇▇▇▇▇ in such capacity.
Section 10.16. Hedging Arrangements. By virtue of a Bank's execution
of this Agreement or an assignment agreement pursuant to Section 11.19
hereof, as the case may be, any Affiliate of such Bank with whom the
Borrower has entered into an agreement creating Hedging Liability
shall be deemed a Bank party hereto for purposes of any reference in a
Loan Document to the parties for whom the Agent is acting, it being
understood and agreed that the rights and benefits of such Affiliate
under the Loan Documents consist exclusively of such Affiliate's right
to share in payments and collections out of the Collateral and the
Loan Documents as more fully set forth in other provisions hereof.
Section 11. Miscellaneous.
Section 11.1. Amendments and Waivers. Any term, covenant, agreement or
condition of this Agreement may be amended only by a written amendment
executed by the Borrower, the Required Banks and, if the rights or
duties of the Agent are affected thereby, the Agent, or compliance
therewith only may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Borrower
shall have obtained the consent in writing of the Required Banks and,
if the rights or duties of the Agent are affected thereby, the Agent,
provided, however, that (1) without the consent in writing of the
holders of all outstanding Notes and unpaid Reimbursement Obligations
and the issuer of the L/Cs, or all Banks if no Note or L/C is
outstanding, no such amendment or waiver shall (a) change the amount
or postpone the date of payment of any scheduled payment or required
prepayment of principal of any of the Notes or reduce the rate or
extend the time of payment of interest on any of the Notes, or reduce
the amount of principal thereof, or modify any of the provisions of
any of the Notes with respect to the payment or prepayment thereof,
(b) give to any Note any preference over any other Notes, (c) amend
the definition of Required Banks, (d) alter, modify or amend the
provisions of this Section 11.1, (e) change the amount or term of any
of the Banks' Revolving Credit Commitments, Swingline Commitment or
the fees required under Section 2.1 hereof (it being understood that
waivers or modifications of covenants, conditions or Events of Default
shall not constitute a change in Commitments), (f) alter, modify or
amend the provisions of Section 6 of this Agreement, (g) alter, modify
or amend any Bank's right hereunder to consent to any action, make any
request or give any notice, (h) change the advance rates under the
Borrowing Base, or (i) release any Collateral under the Security
Documents, unless such release is permitted or contemplated by the
Loan Documents; (2) without the consent of the Agent no such amendment
or waiver shall affect the rights of the Agent under Section 10
hereof; and (3) without the consent of ▇▇▇▇▇▇ no such amendment or
waiver shall amend Sections 1.1, 1.2, 1.3, 1.4, 1.5, 1.6 or 1.7
hereof. Any such amendment or waiver shall apply equally to all Banks
and the holders of any of the Notes and Reimbursement Obligations and
shall be binding upon them, upon each future holder of any Note and
Reimbursement Obligation and upon the Borrower, whether or not such
Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived.
Section 11.2. Waiver of Rights. No delay or failure on the part of the
Agent or any Bank or on the part of the holder or holders of any Note
or Reimbursement Obligation in the exercise of any power or right
shall operate as a waiver thereof, nor as an acquiescence in any
Potential Default or Event of Default, nor shall any single or partial
exercise of any power or right preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights
and remedies hereunder of the Agent, the Banks and of the holder or
holders of any Notes are cumulative to, and not exclusive of, any
rights or remedies which any of them would otherwise have.
Section 11.3. Several Obligations. The commitments of each of the
Banks hereunder shall be the several obligations of each Bank and the
failure on the part of any one or more of the Banks to perform
hereunder shall not affect the obligation of the other Banks
hereunder, provided that nothing herein contained shall relieve any
Bank from any liability for its failure to so perform. In the event
that any one or more of the Banks shall fail to perform its commitment
hereunder, all payments thereafter received by the Agent on the
principal of Loans and Reimbursement Obligations hereunder, whether
from any Collateral or otherwise, shall be distributed by the Agent to
the Banks making such additional Loans ratably as among them in
accordance with the principal amount of additional Loans made by them
until such additional Loans shall have been fully paid and satisfied,
and all payments on account of interest shall be applied as among all
the Banks ratably in accordance with the amount of interest owing to
each of the Banks as of the date of the receipt of such interest
payment.
Section 11.4. Non-Business Day. (a) If any payment of principal or
interest on any Domestic Rate Loan shall fall due on a day which is
not a Business Day, interest at the rate such Loan bears for the
period prior to maturity shall continue to accrue on such principal
from the stated due date thereof to and including the next succeeding
Business Day on which the same is payable.
(b) If any payment of principal or interest on any Eurodollar Loan
shall fall due on a day which is not a Business Day, the payment date
thereof shall be extended to the next date which is a Business Day and
the Interest Period for such Loan shall be accordingly extended,
unless as a result thereof any payment date would fall in the next
calendar month, in which case such payment date shall be the next
preceding Business Day.
Section 11.5. Survival of Indemnities. All indemnities and all
provisions relative to reimbursement to the Banks of amounts
sufficient to protect the yield to the Banks with respect to
Eurodollar Loans, including, but not limited to, Sections 9.3 and 9.4
hereof, shall survive the termination of this Agreement and the
payment of the Notes.
Section 11.6. Documentary Taxes. Although the Borrower is of the
opinion that no documentary or similar taxes are payable in respect to
this Agreement or the Notes, Borrower agrees that it will pay such
taxes, including interest and penalties, in the event any such taxes
are assessed irrespective of when such assessment is made and whether
or not any credit is then in use or available hereunder.
Section 11.7. Representations. All representations and warranties made
herein or in certificates given pursuant hereto shall survive the
execution and delivery of this Agreement and of the Notes, and shall
continue in full force and effect with respect to the date as of which
they were made and as reaffirmed on the date of each borrowing,
request for L/C and as long as any credit is in use or available
hereunder.
Section 11.8. Notices. Unless otherwise expressly provided herein, all
communications provided for herein shall be in writing or by telex and
shall be deemed to have been given or made when served personally,
when an answer back is received in the case of notice by telex or 2
days after the date when deposited in the United States mail
(registered, if to Borrower) addressed if to Borrower to ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President Finance; if to the Agent or ▇▇▇▇▇▇ at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Emerging
Majors West; and if to any of the Banks, at the address for each Bank
set forth under its signature hereon; or at such other address as
shall be designated by any party hereto in a written notice to each
other party pursuant to this Section 11.8.
Section 11.9. Costs and Expenses. (a) The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Agent
and each Bank in connection with the negotiation, preparation,
execution and delivery of this Agreement, the Notes and the other
instruments and documents to be delivered hereunder or in connection
with the transactions contemplated hereby, including the fees and
expenses of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the Agent; all
reasonable out-of-pocket costs and expenses of the Agent and the
reasonable out-of-pocket costs and expenses of each Bank (including in
each case attorneys' fees and expenses) incurred in connection with
any consents or waivers hereunder or amendments hereto, and all
reasonable out-of-pocket costs and expenses (including attorneys' fees
and expenses), if any, incurred by the Agent, the Banks or any other
holders of a Note or any Reimbursement Obligation in connection with
the enforcement of this Agreement or the Notes and the other
instruments and documents to be delivered hereunder. The Borrower
agrees to indemnify and save harmless the Banks and the Agent from any
and all liabilities, losses, costs and expenses incurred by the Banks
or the Agent in connection with any action, suit or proceeding brought
against the Agent or any Bank by any Person which arises out of the
transactions contemplated or financed hereby or by the Notes, or out
of any action or inaction by the Agent or any Bank hereunder or
thereunder, except for such thereof as is caused by the gross
negligence or willful misconduct of the party indemnified.
(b) Without limiting the generality of the foregoing, the Borrower
unconditionally agrees to forever indemnify, defend and hold harmless,
the Agent and each Bank, and covenants not to ▇▇▇ for any claim for
contribution against, the Agent or any Bank for any damages, costs,
loss or expense, including without limitation, response, remedial or
removal costs, arising out of any of the following: (i) any presence,
release, threatened release or disposal of any hazardous or toxic
substance or petroleum by the Borrower or any Subsidiary or otherwise
occurring on or with respect to their respective Property, (ii) the
operation or violation of any Environmental Law, whether federal,
state, or local, and any regulations promulgated thereunder, by the
Borrower or any Subsidiary or otherwise occurring on or with respect
to their respective Property, (iii) any claim for personal injury or
property damage in connection with the Borrower or any Subsidiary or
otherwise occurring on or with respect to their respective Property,
and (iv) the inaccuracy or breach of any environmental representation,
warranty or covenant by the Borrower made herein or in any loan
agreement, promissory note, mortgage, deed of trust, security
agreement or any other instrument or document evidencing or securing
any indebtedness, obligations or liabilities of the Borrower owing to
the Agent or any Bank or setting forth terms and conditions applicable
thereto or otherwise relating thereto, except for damages arising from
the Agent's or such Bank's willful misconduct or gross negligence.
This indemnification shall survive the payment and satisfaction of all
indebtedness, obligations and liabilities of the Borrower owing to the
Agent and the Banks and the termination of this Agreement, and shall
remain in force beyond the expiration of any applicable statute of
limitations and payment or satisfaction in full of any single claim
under this indemnification. This indemnification shall be binding upon
the successors and assigns of the Borrower and shall inure to the
benefit of Agent and the Banks and their respective directors,
officers, employees, agents, and collateral trustees, and their
successors and assigns.
(c) The provisions of this Section 11.9 shall survive payment of the
Notes and Reimbursement Obligations and the termination of the Banks'
Commitments hereunder.
Section 11.10. Counterparts. This Agreement may be executed in any
number of counterparts and all such counterparts taken together shall
be deemed to constitute one and the same instrument. One or more of
the Banks may execute a separate counterpart of this Agreement which
has also been executed by the Borrower, and this Agreement shall
become effective as and when Borrower and all of the Banks have
executed this Agreement or a counterpart thereof and lodged the same
with the Agent.
Section 11.11. Successors and Assigns; Governing Law; Entire
Agreement. This Agreement shall be binding upon the Borrower and the
Banks and their respective successors and assigns, and shall inure to
the benefit of the Borrower and each of the Banks and the benefit of
their respective successors and assigns, including any subsequent
holder of any Note or Reimbursement Obligation. This Agreement and the
rights and duties of the parties hereto shall be construed and
determined in accordance with the laws of the State of Illinois,
except conflict of laws principles. This Agreement constitutes the
entire understanding of the parties with respect to the subject matter
hereof and any prior agreements, whether written or oral, with respect
thereto are superseded hereby. The Borrower may not assign any of its
rights or obligations hereunder without the written consent of all of
the Banks.
Section 11.12. Banks' Obligations Several. The obligations of the
Banks hereunder are several and not joint. Nothing contained in this
Agreement and no action taken by the Banks pursuant hereto shall be
deemed to constitute the Banks a partnership, association, joint
venture or other entity.
Section 11.13. Severability. In the event that any term or provision
hereof is determined to be unenforceable or illegal, it shall deemed
severed herefrom to the extent of the illegality and/or
unenforceability and all other provisions hereof shall remain in full
force and effect.
Section 11.14. Table of Contents and Headings. The table of contents
and section headings in this Agreement are for reference only and
shall not affect the construction of any provision hereof.
Section 11.15. Sharing of Payments. Each Bank agrees with each other
Bank that if such Bank shall receive and retain any payment, whether
by set-off or application of deposit balances or otherwise
("Set-Off"), on any Loan, Reimbursement Obligation or other amount
outstanding under this Agreement in excess of its ratable share of
payments on all Loans, Reimbursement Obligations and other amounts
then outstanding to the Banks, then such Bank shall purchase for cash
at face value, but without recourse, ratably from each of the other
Banks such amount of the Loans and Reimbursement Obligations held by
each such other Bank (or interest therein) as shall be necessary to
cause such Bank to share such excess payment ratably with all the
other Banks; provided, however, that if any such purchase is made by
any Bank, and if such excess payment or part thereof is thereafter
recovered from such purchasing Bank, the related purchases from the
other Banks shall be rescinded ratably and the purchase price restored
as to the portion of such excess payment so recovered, but without
interest. Each Bank's ratable share of any such Set-Off shall be
determined by the proportion that the aggregate principal amount of
Loans and Reimbursement Obligations then due and payable to such Bank
bears to the total aggregate principal amount of Loans and
Reimbursement Obligations then due and payable to all the Banks.
Section 11.16. Conflict Among Documents. In the event of any conflict
between the terms hereof and the terms of any Loan Document other than
the L/C Agreement, the terms of such other Loan Document shall govern
as to the provision in conflict and in the event of any conflict
between the terms hereof and the terms of the L/C Agreement, the terms
of this Agreement shall govern as to the provision in conflict.
Section 11.17. Confidentiality. Each Bank agrees (on behalf of itself
and its affiliates, directors, officers, employees, agents and
representatives) to use reasonable precautions to keep confidential,
in accordance with its customary procedures for handling confidential
information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to such Bank by
the Borrower or any of its Subsidiaries pursuant to this Agreement
which is identified to such Banks by any of such, as being
confidential at the time the same is delivered to such Bank; provided,
however, that nothing contained in this Section 11.17 shall prohibit
or limit the disclosure by any Bank of any such information (i) to the
extent required by any statute, rule, regulation, subpoena or judicial
process, (ii) to any governmental or regulatory agency having
jurisdiction over such Bank, (iii) to any professional advisors,
including counsel and accountants, for any Bank, (iv) to any bank
examiners or auditors, (v) in connection with any litigation to which
any Bank is a party, (vi) in connection with the enforcement of any
Bank's rights and remedies under this Agreement, any of the Notes or
any of the other Loan Documents or (vii) to any assignee or
participant of any Bank (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or
participant) first executes and delivers to such Bank a
confidentiality agreement in substantially the form of this
Section 11.17 and such Bank delivers to the Borrower a copy of such
executed confidentiality agreement; and provided further, that in no
event shall any Bank be obligated or required to return any materials
furnished to such Bank by the Borrower or any of its Subsidiaries,
hereunder. Notwithstanding the foregoing, no Bank shall have any
liability to the Borrower or to any of its Subsidiaries or to any of
their shareholders, partners, directors, officers, employees or agents
by reason of, or in any way claimed to be related to, any disclosure
by such Bank (or any of its affiliates, directors, officers,
employees, agents or representatives) of any information with respect
to the Borrower or any of its Subsidiaries except as the same results
from the gross negligence or willful misconduct of such Bank as
determined by a court of competent jurisdiction.
Section 11.18. Participants. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more
agreements or certificates of participation) in the Loans made and/or
Reimbursement Obligations, participations in L/Cs, Swingline Loans and
Commitment held by such Bank at any time and from time to time to one
or more other Persons; provided that (i) no such participation shall
relieve any Bank of any of its obligations under this Agreement,
(ii) no such participant shall have any direct rights under this
Agreement except as provided in this Section 11.18, and no Agent shall
have any obligation or responsibility to such participant. Any
agreement pursuant to which such participation is granted shall
provide that the granting Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower under this
Agreement and the other Loan Documents including, without limitation,
the right to approve any amendment, modification or waiver of any
provision of the Loan Documents, except that such agreement may
provide that such Bank will not agree to any modification, amendment
or waiver of the Loan Documents that would reduce the amount of or
postpone any fixed date for payment of any Obligation in which such
participant has an interest. Any party to which such a participation
has been granted shall have the benefits of Section 9.3 and
Section 9.4 hereof, up to an amount not exceeding the amount that
would otherwise have been payable to the Bank who sold the
participation interest to such party. The Borrower and each Guarantor
authorizes each Bank to disclose to any participant or prospective
participant under this Section 11.18 any financial or other
information pertaining to the Borrower or any Guarantor.
Section 11.19. Assignment Agreements and Register. (a) Each Bank shall
have the right at any time, with the prior consent of the Agent and,
so long as no Event of Default then exists, the Borrower (which
consent of the Borrower shall not be unreasonably withheld) to sell,
assign, transfer or negotiate all or any part of its rights and
obligations under the Loan Documents (including, without limitation,
the indebtedness evidenced by the Notes then held by such assigning
Bank, together with an equivalent percentage of its obligation to make
Loans and participate in L/Cs) to one or more commercial banks or
other financial institutions or investors, provided that, unless
otherwise agreed to by the Agent, such assignment shall be of a fixed
percentage (and not by its terms of varying percentage) of the
assigning Bank's rights and obligations under the Loan Documents;
provided, however, that in order to make any such assignment
(i) unless the assigning Bank is assigning all of its Exposure, the
assigning Bank shall retain at least $5,000,000 in its Exposure,
(ii) the assignee Bank shall have Exposure of at least $5,000,000,
(iii) each such assignment shall be evidenced by a written agreement
(in form and substance acceptable to the Agent) executed by such
assigning Bank, such assignee Bank or Banks, the Agent and, if
required as provided above, the Borrower, and (iv) the assigning Bank
shall pay to the Agent a processing fee of $3,500 and any
out-of-pocket attorneys' fees and expenses incurred by the Agent in
connection with any such assignment agreement. Any such assignee shall
become a Bank for all purposes hereunder to the extent of the rights
and obligations under the Loan Documents it assumes with an Exposure
in the amounts set forth in such assignment agreement and the
assigning Bank shall be released from its obligations, and will have
released its rights, under the Loan Documents to the extent of such
assignment. The address for notices to such assignee Bank shall be as
specified in the assignment agreement executed by it. Promptly upon
the effectiveness of any such assignment agreement, the Borrower shall
execute and deliver replacement Notes to the assignee Bank and the
assigning Bank in the respective amounts of their Commitments (or
assigned principal amounts, as applicable) after giving effect to the
reduction occasioned by such assignment (all such Notes to constitute
"Notes" for all purposes of the Loan Documents), and the assignee Bank
shall thereafter surrender to the Borrower its old Notes. The Borrower
authorizes each Bank to disclose to any purchaser or prospective
purchaser of an interest in the Loans and Reimbursement Obligations
owed to it or its applicable Commitment under this Section or any
financial or other information pertaining to the Borrower or any
Subsidiary.
(b) Any Bank may at any time pledge or grant a security interest in
all or any portion of its rights under this Agreement to secure
obligations of such Bank, including any such pledge or grant to a
Federal Reserve Bank, and this Section shall not apply to any such
pledge or grant of a security interest; provided that no such pledge
or grant of a security interest shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or secured party
for such Bank as a party hereto; provided further, however, the right
of any such pledgee or grantee (other than any Federal Reserve Bank)
to further transfer all or any portion of the rights pledged or
granted to it, whether by means of foreclosure or otherwise, shall be
at all times subject to the terms of this Agreement.
(c) The Agent, on behalf of the Borrower, shall maintain at its
address referred to in Section 11.8 a copy of each assignment
agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and each
Commitment of, and principal amount of the Loans owing to, each Bank
from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Banks may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an assignment and
acceptance executed by an assigning Bank and an assignee, the Agent
shall, if such assignment and acceptance has been completed and is
acceptable to the Agent in form and substance, (a) accept such
assignment and acceptance, (b) record the information contained
therein in the Register and (c) give prompt notice thereof to the
Borrower.
Section 11.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such
provision shall require the payment or permit the collection of any
amount of interest in excess of the maximum amount of interest
permitted by applicable law to be charged for the use or detention, or
the forbearance in the collection, of all or any portion of the Loans
or other obligations outstanding under this Agreement or any other
Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan
Document, then in such event (a) the provisions of this Section shall
govern and control, (b) neither the Borrower nor any guarantor or
endorser shall be obligated to pay any Excess Interest, (c) any Excess
Interest that the Agent or any Bank may have received hereunder shall,
at the option of the Agent, be (i) applied as a credit against the
then outstanding principal amount of the aggregate Exposure hereunder
and accrued and unpaid interest thereon (not to exceed the maximum
amount permitted by applicable law), (ii) refunded to the Borrower, or
(iii) any combination of the foregoing, (d) the interest rate payable
hereunder or under any other Loan Document shall be automatically
subject to reduction to the maximum lawful contract rate allowed under
applicable usury laws (the "Maximum Rate"), and this Agreement and the
other Loan Documents shall be deemed to have been, and shall be,
reformed and modified to reflect such reduction in the relevant
interest rate, and (e) neither the Borrower nor any guarantor or
endorser shall have any action against the Agent or any Bank for any
damages whatsoever arising out of the payment or collection of any
Excess Interest. Notwithstanding the foregoing, if for any period of
time interest on any component of the aggregate Exposure is calculated
at the Maximum Rate rather than the applicable rate under this
Agreement, and thereafter such applicable rate becomes less than the
maximum Rate, the rate of interest payable on the aggregate Exposure
shall remain at the Maximum Rate until the Banks have received the
amount of interest which such Banks would have received during such
period on the aggregate Exposure had the rate of interest not been
limited to the Maximum Rate during such period.
Section 11.21. Construction. Nothing contained herein shall be deemed
or construed to permit any act or omission which is prohibited by the
terms of any Security Document, the covenants and agreements contained
herein being in addition to and not in substitution for the covenants
and agreements contained in the Security Documents.
Section 11.22. Withholding Taxes.
(a) U.S. Withholding Tax Exemptions. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Agent on or before the date
the initial Loan is made hereunder or, if later, the date such Bank
becomes a Bank hereunder, two duly completed and signed copies of (i)
either Form W-8BEN (relating to such Bank and entitling it to a
complete exemption from withholding on all amounts to be received by
such Bank, including fees, pursuant to this Agreement and the Loans)
or Form W-8ECI (relating to all amounts to be received by such Bank,
including fees, pursuant to this Agreement and the Loans and
Reimbursement Obligations) of the United States Internal Revenue
Service or (ii) solely if such Bank is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8, and a
certificate representing that such Bank is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and
is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code) (or in the case
of any such form, such successor form as shall be adopted from time to
time by the Internal Revenue Service. Thereafter and from time to
time, each such Bank shall submit to the Borrower and the Agent such
additional duly completed and signed copies of one of such Forms (or
such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (i) notified by
the Borrower or Agent to such Bank and (ii) required under
then-current United States law or regulations to avoid or reduce
United States withholding taxes on payments in respect of all amounts
to be received by such Bank, including fees, pursuant to this
Agreement or the Loans and Reimbursement Obligations. Upon the request
of the Borrower or Agent, each Bank that is a United States person (as
such term is defined in Section 7701(a)(30) of the Code) shall submit
to the Borrower a certificate to the effect that it is such a United
States person.
(b) Inability of Bank to Submit Forms. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in
any official application or interpretation thereof, that it is unable
to submit to the Borrower any form or certificate that such Bank is
obligated to submit pursuant to subsection (a) of this Section 11.22,
or that such Bank is required to withdraw or cancel any such form or
certificate previously submitted or any such form or certificate
otherwise become ineffective or inaccurate, such Bank shall promptly
notify the Borrower and Agent of such fact and the Bank shall to that
extent not be obligated to provide any such form or certificate and
will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
(c) Payment of Additional Amounts. If, as a result of any change in
applicable law, regulation or treaty, or in any official application
or interpretation thereof after the date of this Agreement or, if
later, the date a Bank becomes a Bank hereunder, the Borrower is
required by law or regulation to make any deduction, withholding or
backup withholding of any taxes, levies, imposts, duties, fees,
liabilities or similar charges of the United States of America, any
possession or territory of the United States of America (including the
Commonwealth of Puerto Rico) or any area subject to the jurisdiction
of the United States of America ("U.S. Taxes") from any payments to a
Bank in respect of Loans or Reimbursement Obligations then or
thereafter outstanding, or other amounts owing hereunder, the amount
payable by the Borrower will be increased to the amount which, after
deduction from such increased amount of all U.S. Taxes required to be
withheld or deducted therefrom, will yield the amount required under
this Agreement to be payable with respect thereto; provided that the
Borrower shall not be required to pay any additional amount pursuant
to this subsection (c) to any Bank that (i) is not, on the date this
Agreement is executed by such Bank or, if later, the date such Bank
became a Bank hereunder, either (x) entitled to submit Form W-8BEN
relating to such Bank and entitling it to a complete exemption from
withholding on all amounts to be received by such Bank, including
fees, pursuant to this Agreement and the Loans and Reimbursement
Obligations, Form W-8ECI relating to all amounts to be received by
such Bank, including fees, pursuant to this Agreement and the Loans
and Reimbursement Obligations or Form W-8 relating to such Bank and
entitling it to a complete exemption from withholding on all amounts
to be received by such Bank, including fees, pursuant to this
Agreement and the Loans and Reimbursement Obligations (or, in any such
case, such successor forms as shall be adopted from time to time by
the Internal Revenue Service), or (y) a U.S. person (as such term is
defined in Section 7701(a)(30) of the Code), or (ii) has failed to
submit any form or certificate that it was required to file pursuant
to subsection (a) of this Section 12.18 and entitled to file under
applicable law, or (iii) is no longer entitled to submit Form W-8BEN,
Form W-8ECI or Form W-8 as a result of any change in circumstances
other than a change in applicable law, regulation or treaty or in any
official application or interpretation thereof. If the Borrower is
required to pay additional amounts to or for the account of any Bank
pursuant to the subsection (c), then such Bank will agree to use
reasonable efforts to change the jurisdiction of its applicable
lending office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of
such Bank, is not otherwise disadvantageous to such Bank. Within 30
days after the Borrower's payment of any such U.S. Taxes, the Borrower
shall deliver to the Agent, for the account of the relevant Bank(s),
originals or certified copies of official tax receipts evidencing such
payment. The obligations of the Borrower under this subsection (c)
shall survive the payment in full of the Loans and Reimbursement
Obligations and the termination of the Commitments. If any Bank or the
Agent determines it has received or been granted a credit against or
relief or remission for, or repayment of, any taxes paid or payable by
it because of any U.S. Taxes paid by the Borrower and evidenced by
such a tax receipt, such Bank or Agent shall, to the extent it can do
so without prejudice to the retention of the amount of such credit,
relief, remission or repayment, pay to the Borrower such amount as
such Bank or Agent determines is attributable to such deduction or
withholding and which will leave such Bank or Agent (after such
payment) in no better or worse position than it would have been in if
the Borrower had not been required to make such deduction or
withholding. Nothing in this Agreement shall interfere with the right
of each Bank and the Agent to arrange its tax affairs in whatever
manner it thinks fit nor oblige any Bank or the Agent to disclose any
information relating to its tax affairs or any computations in
connection with such taxes.
Section 11.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any
Illinois State court sitting in the City of Chicago for purposes of
all legal proceedings arising out of or relating to this Agreement,
the other Loan Documents or the transactions contemplated hereby or
thereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. The Borrower, the Agent and
each Bank hereby irrevocably waive any and all right to trial by jury
in any legal proceeding arising out of or relating to any Loan
Document or the transactions contemplated thereby.
[Signature Pages to Follow]
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove
set forth.
Dated as of December 28, 2000.
Maverick Tube Corporation
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its President and CEO
Accepted and Agreed to as of the day and year last above written.
▇▇▇▇▇▇ Trust and Savings Bank, individually and as Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Emerging Majors West
Firstar Bank, N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Its Vice President
Address: ___________________
___________________
Attention: ___________________
Bank of America, N.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
Its Vice President
Address: ___________________
___________________
Attention: ___________________
Exhibit A
Maverick Tube Corporation
Secured
Revolving Credit Note
December 28, 2000
For Value Received, the undersigned, Maverick Tube Corporation, a
Delaware corporation (the "Borrower") promises to pay to the order of
___________________________ (the "Lender") on the Termination Date (as
defined in the Credit Agreement referred to below), at the principal
office of ▇▇▇▇▇▇ Trust and Savings Bank in Chicago, Illinois, the
principal sum of _________________________________ or, if less, the
aggregate unpaid principal amount of all Revolving Credit Loans made
by the Lender to the Borrower under the Revolving Credit provided for
under the Credit Agreement hereinafter mentioned and remaining unpaid
on the Termination Date, together with interest on the principal
amount of each Revolving Credit Loan from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates
specified in said Credit Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of each
Revolving Credit Loan made under the Revolving Credit, all payments of
principal and interest and the principal balances from time to time
outstanding; provided that prior to the transfer of this Note all such
amounts shall be recorded on the schedule attached to this Note. The
record thereof, whether shown on such books or records or on the
schedule to this Note, shall be prima facie evidence as to all such
amounts absent manifest error or willful misconduct; provided,
however, that the failure of the Lender to record, or any mistake in
recording, any of the foregoing shall not limit or otherwise affect
the obligation of the Borrower to repay all Revolving Credit Loans
made under the Revolving Credit, together with accrued interest
thereon.
This Note is one of the Revolving Notes referred to in and issued
under that certain Amended and Restated Secured Credit Agreement dated
as of December 28, 2000, among the Borrower, ▇▇▇▇▇▇ Trust and Savings
Bank, as Agent, and the banks named therein, as amended from time to
time (the "Credit Agreement"), and this Note and the holder hereof are
entitled to all of the benefits and security provided for thereby or
referred to therein, including without limitation the collateral
security provided pursuant to the Security Documents (as defined in
the Credit Agreement), to which Credit Agreement and Security
Documents reference is hereby made for a statement thereof. All
defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit
Agreement.
Prepayments may be made on any Revolving Credit Loan evidenced hereby
and this Note (and the Revolving Credit Loans evidenced hereby) may be
declared due prior to the expressed maturity thereof, all in the
events, on the terms and in the manner as provided for in said Credit
Agreement and the Security Documents.
The undersigned hereby waives presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
Maverick Tube Corporation
By
Its___________________________________________________
Exhibit B
Maverick Tube Corporation
Secured Swingline Note
December 28, 2000
For Value Received, the undersigned, Maverick Tube Corporation, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of ▇▇▇▇▇▇
Trust and Savings Bank (the "Bank"), at the principal office of ▇▇▇▇▇▇ Trust and
Savings Bank in Chicago, Illinois, the aggregate unpaid principal amount of all
Swingline Loans made by the Bank to the Borrower under the Credit Agreement
hereinafter mentioned in the amounts and payable in the manner and on the dates
specified in said Credit Agreement, together with interest on the principal
amount of each Swingline Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates specified in said Credit
Agreement.
The Bank shall record on its books or records or on the schedule to this Note
which is a part hereof the principal amount of each Swingline Loan made by it to
the Borrower under the Credit Agreement, all payments of principal and interest
thereon and the principal balances from time to time outstanding; provided that
prior to the transfer of this Note all such amounts shall be recorded on a
schedule attached to this Note. The record thereof, whether shown on such books
or records or on the schedule to this Note, shall be prima facie evidence as to
all such amounts absent manifest error; provided, however, that the failure of
the Bank to record any of the foregoing shall not limit or otherwise affect the
obligation of the Borrower to repay all Swingline Loans made under the Credit
Agreement, together with accrued interest thereon.
This Note is the Swingline Note referred to in and issued under that certain
Amended and Restated Secured Credit Agreement dated as of December 28, 2000,
among the Borrower, ▇▇▇▇▇▇ Trust and Savings Bank, as Agent, and the Banks named
therein, as amended from time to time (the "Credit Agreement") and this Note and
the holder hereof are entitled to all of the benefits and security provided for
thereby or referred to therein, including without limitation the collateral
security provided to the Security Document (as defined in the Credit Agreement),
to which Credit Agreement and Security Documents reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as such terms have in said Credit
Agreement.
Prepayments may be made, and are sometimes required to be made, on any Swingline
Loan evidenced hereby and this Note (and the Swingline Loans evidenced hereby)
may be declared due prior to the expressed maturity thereof, all in the events,
on the terms and in the manner as provided for in said Credit Agreement and the
Security Documents.
The undersigned hereby waives presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the internal
laws of the State of Illinois.
Maverick Tube Corporation
By
Its___________________________________________________
Exhibit C
Application for Letter of Credit
See Attached
Exhibit D
Maverick Tube Corporation
Borrowing Base Certificate
as of _______________, 20___
($000's omitted)
To: ▇▇▇▇▇▇ Trust and Savings Bank
as Agent under the Amended and
Restated Secured Credit Agreement
hereinafter mentioned
Pursuant to the terms of that certain Amended and Restated Secured Credit
Agreement (the "Agreement") dated as of December 28, 2000, among the
undersigned, Maverick Tube Corporation (the "Borrower"), you, individually and
as Agent thereunder, and the other Banks signatories thereto, the Borrower
delivers to you the following computation of the Borrowing Base, as defined in
Section 4.1 of the Agreement, as of the computation date noted above. The
Borrower certifies that the following computation of the Borrowing Base was made
in accordance with Section 4.1 of the Agreement and that as of the last day of
the preceding computation period the Borrower has re-examined the terms and
provisions of the Agreement and the Security Documents (as defined in the
Agreement) and that to the best of its knowledge and belief, no Potential
Default or Event of Default has occurred or, if any such Potential Default or
Event of Default has occurred, a description of such Potential Default or Event
of Default and the action, if any, taken by the Borrower to remedy the same are
specified hereinbelow:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________.
Status of Accounts Receivable, Machinery, Equipment and Inventory
as of _______________
1. Total Accounts Receivable at $____________
__________________
Less Ineligibles
(Including over 90 days from invoice or
60 days from due date, contra offsets,
affiliate and subsidiary sales,
consignment sales, returned, rejected and
repossessed goods, ▇▇▇▇ and Hold and
other ineligibles as per definition of
Eligible Receivables.) $____________
2. Net Accounts Receivable $____________
3. 85% of Net Accounts Receivable $____________
4. Total Value of Eligible Inventory $____________
5. 50% of Value of Eligible Inventory* $____________
6. Gross Inventory Amount minus
Net Inventory Amount $____________
7. Line 6 cannot exceed** $____________
8. Total Value of Eligible Equipment $____________
9. 50% of Value of Eligible Equipment*** $____________
10. Total Borrowing Base (add lines
3, 5, 7 and 9) $____________
11. Loans and Reimbursement
Obligations outstanding as of
status report date $____________
12. Undrawn amount of L/Cs outstanding
as of status report date $____________
13. Total outstanding as of status
report date (add lines 11 and 12) $____________
14. Excess (shortfall) Collateral
(subtract line 13 from line 10) $____________
* Not to exceed an amount equal to 60% of the sum of lines 3, 5 and 7 at any
time.
** Not to exceed an amount equal to (i) $10,000,000 from December 28, 2000 to
June 30, 2001, (ii) $5,000,000 from July 1, 2001 to September 30, 2001 and
(iii) $0 at all times thereafter.
***Not to exceed an amount equal to (i) $25,000,000 from December 28, 2000
to December 30, 2001, (ii) $20,000,000 from January 1, 2002 to December 30,
2002 and (iii) $15,000,000 at all times
thereafter.
Maverick Tube Corporation
By
Its___________________________________________________
Exhibit E
Schedule of Subsidiaries
Name State of Organization Percentage of Ownership
Maverick Tube International, Inc. Barbados 100%
Maverick Investment Corporation Delaware 100%
Maverick Tube, L.P. Delaware 100%
Maverick Tube (Canada) Inc. Alberta 100%
Maverick Exchangeco Nova Scotia 100%
(Nova Scotia) ULC
Prudential Steel Ltd. Alberta 100%
Prudential Industries, Inc. Delaware 100%
Prudential Steel, Inc. Washington 100%
Longview Holding Corporation Washington 100%
* Maverick Tube, L.P. is a limited partnership in which Maverick Investment
Corporation, as sole limited partner, has a 95% ownership and the Borrower,
as sole general partner, has a 5% ownership interest.
** 100% owned by Maverick Tube (Canada) Inc.
*** 100% owned by Prudential Steel Ltd.
**** 100% owned by Prudential Industries, Inc.
Exhibit F
Maverick Tube Corporation
Compliance Certificate
This Compliance Certificate is furnished to ▇▇▇▇▇▇ Trust and Savings Bank and
the lenders from time to time party to the hereinafter defined Agreement
(collectively, the "Banks") and ▇▇▇▇▇▇ Trust and Savings Bank as agent (the
"Agent") for the Banks, pursuant to that certain Amended and Restated Secured
Credit Agreement dated as of December 28, 2000, by and among Maverick Tube
Corporation, a Delaware corporation (the "Borrower"), the Agent and the Banks
(the "Agreement"). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
The Undersigned Hereby Certifies That:
1. I am the duly elected chief financial officer of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of the Borrower during the accounting period covered by the attached
financial statements sufficient for me to provide this Certificate;
3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Potential Default or Event of Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. If attached financial statements are being furnished pursuant to
Section 7.4(a) of the Agreement, Schedule 1 attached hereto sets forth financial
data and computations evidencing the Borrower's compliance with certain
covenants of the Agreement, all of which data and computations are true,
complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking or proposes to
take with respect to each such condition or event:
____________________________________________________
____________________________________________________
The foregoing certifications, together with the computations set forth in
Schedule 1 hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ________ day of ____________,
20__.
__________________________________
Schedule 1
To Compliance Certificate
Maverick Tube Corporation
Compliance Calculations for
Amended and Restated Secured Credit Agreement Dated as of December 28, 2000
Calculations as of ___________, ______
Section 7.8(a). Maximum Total Funded Debt Ratio
(a) Total Consolidated Funded Debt $____________
(b) Adjusted EBITDA $____________
(c) Ratio of Line (a) to Line (b) __ to 1
(d) Total Funded Debt Ratio for such period shall not
be greater than 3.25 to 1
Compliance....................Yes ______ No _____
Section 7.8(b). Maximum Adjusted Funded Debt Ratio
(a) Adjusted Consolidated Funded Debt $____________
(b) Maverick EBITDA $____________
(c) Ratio of Line (a) to Line (b) ___ to 1
(d) Adjusted Funded Debt Ratio for such period shall
not be greater than 3.35 to 1 at December 31, 2000 and
thereafter 3.25 to 1
Compliance....................Yes ______ No _____
Section 7.9. Minimum Adjusted EBITDA
(a) Consolidated Net Income of Borrower $_______________
(b) Consolidated Interest Expense of Borrower $_______________
(c) Depreciation of Borrower $_______________
(d) Amortization of Borrower $_______________
(e) Net Income of Prudential $_______________
(f) Interest Expense of Prudential $_______________
(g) Depreciation of Prudential $_______________
(h) Amortization of Prudential $_______________
(i) Fiscal Year 2000 Charges (if applicable) $_______________
(j) Adjusted EBITDA for relevant period
(a) + (b) + (c) + (d) + (e) + (f) +
(g) + (h) + (i) $______________
(k) Adjusted EBITDA for such period shall
not be less than $_______________
Compliance....................Yes ______ No _____
Section 7.10. Minimum Consolidated Tangible Net Worth
(a) Capital Stock $_______________
(b) Preferred Stock $_______________
(c) Capital in Excess of Par Value $_______________
(d) Retained Earnings $_______________
(e) Intangible Assets $_______________
(f) Tangible Net Worth (a) +(b) +(c)+(d) -(e) $_____________
(g) Tangible Net Worth during such period shall
not be less than $_____________
Compliance....................Yes ______ No _____
Section 7.11. Maximum Leverage Ratio
(a) Total Consolidated Funded Debt $_______________
(b) Consolidated Stockholders Equity $_______________
(c) Total Capitalization (a) + (b) $_______________
(d) Leverage Ratio (a)/(c) _____ to 1
(e) Leverage Ratio for such period
shall not be greater than 0.5 to 1
Compliance...................Yes _____ No ______
Section 7.12. Minimum Interest Coverage Ratio
(a) Adjusted EBITDA
(period ended ________________) $____________
(b) Capital Expenditures $____________
(c) (a) - (b) $____________
(d) Cash Consolidated Interest Expense
(period ended _________)
$____________
(e) Interest Coverage Ratio
(period ended _________) (c)/(d) ___________
(f) Interest Coverage Ratio for such
period shall not be Less than _______ to 1
Compliance....................Yes ______ No _____
Section 7.26. Operating Leases
(a) Operating leases (beginning of
current fiscal year to date) $_______________
(b) Operating leases for such fiscal
year shall not be greater than $_______________
Compliance...................Yes _____ No ______
Exhibit G
Maverick Tube Corporation
Accounts Receivable Aging Report
as of ____________, 20__
($000's omitted)
To: ▇▇▇▇▇▇ Trust and Savings Bank as Agent
under the Amended and Restated Secured
Credit Agreement hereinafter mentioned
Pursuant to the terms of that certain Amended and Restated Secured Credit
Agreement (the "Agreement") dated as of December 28, 2000, among the undersigned
(the "Borrower"), you, individually and as Agent thereunder, and the other Banks
signatories thereto, the Borrower delivers to you the following accounts
receivable aging report, as of the computation date noted above. The Borrower
certifies that as of the last day of the preceding month the Borrower has
re-examined the terms and provisions of the Agreement and the Security Documents
(as defined in the Agreement) and that to the best of its knowledge and belief,
no Potential Default or Event of Default has occurred or, if any such Potential
Default or Event of Default has occurred, a description of such Potential
Default or Event of Default and the action, if any, taken by the Borrower to
remedy the same are specified hereinbelow:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________.
Receivable Aging As Of:
(By Invoice Date)
Current ____% $_________
1-30 ____ _________
31-60 ____ _________
61-90 ____ _________
Over 90 ____ _________
Total Receivables 100.0% _________
Current Prior
Ineligible Determination: Month Month
Over 90 Days Past Due.................$_________ $________
▇▇▇▇ and Hold......................... _________ ________
Credit Reasons........................ _________ ________
Contra................................ _________ ________
Dispute............................... _________ ________
Government............................ _________ ________
Foreign................................_________ ________
Related................................_________ ________
Tainted (Other Customers).............._________ ________
Other.................................._________ ________
Total Ineligibles......................$________ $________
The Borrower agrees to furnish such additional information as the Agent or Banks
shall require with respect to the Accounts. The Banks may additionally require
the Borrower to deliver to the Banks such lists, descriptions and designations
of Inventory of the Borrower as may be required to identify the nature, extent,
value and location of the Borrower's Inventory.
The information above, to the best of the Borrower's knowledge and belief, Does
Not contain any untrue statement of material fact or omit a material fact,
either individually or in aggregate, that would make the information or any
attached exhibits misleading.
Maverick Tube Corporation
By:
Its:________________________________________________
Exhibit H
Environmental Disclosure
1. Seller and the Pennsylvania Department of Environmental Protection entered
into a Consent Order and Agreement dated September 29, 1995 under which Seller
agreed to investigate environmental conditions at the entire Beaver Falls
facility. Seller compiled the results of its investigation into a Baseline
Environmental Report which it submitted to DEP in August 1997. Seller submitted
a Groundwater Environmental Baseline Report to DEP in May 1998. As of the date
of this Agreement, Seller and DEP are working on a revised consent order and
agreement which will incorporate the results of Seller's investigations and
define Seller's cleanup obligations, if any, which are necessary to obtain
liability protection under the Pennsylvania Land Recycling and Environmental
Remediation Standards Act.
2. Seller currently has NPDES Permit Number PA020583 to discharge stormwater and
treated processed wastewater to the Beaver River. Seller is currently
negotiating approval to discharge processed wastewater through conveyances in
the Borough of West ▇▇▇▇▇▇▇▇ and the City of Beaver Falls into the Beaver Falls
sewage treatment plants.
3. See also the audit report entitled "Environmental Compliance Audit, Main
Plant, PMAC, Ltd., Beaver Falls, Pennsylvania" prepared by SE Technologies,
Inc., performed in March and April, 1998 for Seller and listed on Schedule
5.6(a) to the Asset Purchase Agreement.
4. Asbestos or asbestos-containing materials are located in furnace and transite
panels in the facilities and asbestos or asbestos-containing materials are
potentially located in the roof of the south mill.
5. Letter dated April 14, 1998, from Solicitor of Borough of West ▇▇▇▇▇▇▇▇
notifying Seller of requirement that additional tap-ins be granted. By letter
dated July 28, 1998, the DEP approved the West ▇▇▇▇▇▇▇▇ sewage facility planning
module for discharge from the Facilities.
Exhibit I
7.14. Liens
No. Secured Party/Lessor
1. Forum Financial Group, Inc.
2. Associates Commercial Corporation
3. Hyster Credit Company
4. ICX Corporation
5. Texas Central Bank, N.A. as Assignee from Forum
Financial Group, Inc.
6. Mirex Corporation
7. IKON Office Solutions - ▇▇▇▇▇▇ Division
8. Computer Sales International, Inc.
9. Siemens Credit Corporation
10. C. ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Inc.
11. Texas Copy Systems, Inc.
12. Hoss Equipment
13. Safeco Credit Co., Inc.
14. Associates Leasing, Inc.
15. C.I.T. Leasing Corporation
The property subject to liens of the secured party/lessors above consists of
specific leased mechanical, electronic and computer equipment and, in the case
of C.I.T. Leasing Corporation a leased 1986 Beechcraft King Air Model 300
aircraft, serial number FA-111, Number N510WR.
Exhibit J
7.15. Indebtedness
Name Date Original Principal Collateral
Beaver County Corporation for June 2000 $250,000 Pickle House in
Economic Development BDF Term Loan Pennsylvania
Beaver County Corporation for June 2000 $250,000 Pickle House in
Economic Development EZ-BDF Term Loan Pennsylvania
Exhibit K
7.24. Special Restrictions
Under the Credit Facility Agreement dated December 27, 2000 between Royal Bank
of Canada and Prudential, Prudential is prohibited form declaring or paying
dividends to any entity, including the Borrower, if such payment would reduce
consolidated shareholders equity of Prudential to below Canadian $145,000,000.
