EXHIBIT 10.2
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CREDIT AGREEMENT
by and among
XXXXXXXX XXXXXXX CORPORATION
and
BANK OF MONTREAL
individually and as Agent
and
the Banks
which are or may become parties hereto
Dated as of October 8, 1996
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
Section 1. Definitions; Interpretation of Agreement 1
Section 1.1. Definitions. 1
Section 1.2. Accounting Terms 13
Section 2. The Revolving Credit 14
Section 2.1. General Terms 14
Section 2.2. The Loans 14
Section 2.3. Letters of Credit 15
Section 2.4. Manner of Borrowing 19
Section 3. Interest 20
Section 3.1. Options 20
Section 3.2. Base Rate Portion 20
Section 3.3. LIBOR Portions 21
Section 3.4. Computation 21
Section 3.5. Minimum Amounts 21
Section 3.6. Manner of Rate Selection 21
Section 3.7. Funding Indemnity 22
Section 3.8. Change of Law 22
Section 3.9. Unavailability of Deposits or Inability to
Ascertain, or Inadequacy of, LIBOR Rate 23
Section 3.10. Increased Cost and Reduced Return 23
Section 3.11. Lending Offices 24
Section 3.12. Discretion of Banks as to Manner of Funding 24
Section 4. Fees, Payments, Reductions, Applications and
Notations 24
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Section 4.1. Commitment Fee 24
Section 4.2. Letter of Credit Fees 24
Section 4.3. Agent's Fees 25
Section 4.4. Prepayments 25
Section 4.5. Terminations 25
Section 4.6. Place and Application 25
Section 4.7. Notations and Requests 27
Section 4.8. Capital Adequacy 27
Section 4.9. Withholding Taxes 28
Section 5. The Collateral and Guaranties 29
Section 5.1. The Collateral 29
Section 5.2. Further Assurances 30
Section 5.3. Guaranty 30
Section 5.4. Agreement to Release Liens 31
Section 6. Representations and Warranties 31
Section 6.1. Organization and Power 31
Section 6.2. Subsidiaries 32
Section 6.3. Use of Proceeds; Regulation U 32
Section 6.4. Financial Statements 32
Section 6.5. Litigation and Taxes 34
Section 6.6. Burdensome Contracts with Affiliates 34
Section 6.7. ERISA 34
Section 6.8. Full Disclosure 34
Section 6.9. Compliance with Law 35
Section 6.10. Merger 35
Section 6.11. The Plan and Certain Litigation 36
Section 7. Conditions Precedent 36
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Section 7.1. All Advances 36
Section 7.2. Initial Advance 37
Section 7.3. Legal Matters 38
Section 8. Covenants 40
Section 8.1. Maintenance of Business 40
Section 8.2. Maintenance 40
Section 8.3. Taxes 40
Section 8.4. Insurance 40
Section 8.5. Financial Reports 40
Section 8.6. Compliance with Laws. 42
Section 8.7. Nature of Business 42
Section 8.8. Liens 42
Section 8.9. Indebtedness 44
Section 8.10. Consolidated Net Worth 45
Section 8.11. Consolidated Debt/Capital Ratio. 45
Section 8.12. Debt Service Coverage Ratio 45
Section 8.13. Acquisitions, Investments, Loans, Advances and
Guarantees 45
Section 8.14. Dividends and Certain Other Restricted Payments 47
Section 8.15. Mergers. 47
Section 8.16. Sale of Assets. 48
Section 8.17. Burdensome Contracts with Affiliates 48
Section 8.18. No Change in Fiscal Year 48
Section 8.19. Maintenance of Material Subsidiaries. 48
Section 8.20. Formation of Subsidiaries 49
Section 8.21. No Restriction on Subsidiary Dividends 49
Section 8.22. Interest Rate Protection 49
Section 8.23. Agreement to Release Lien Filings 49
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Section 8.24. The Plan 49
Section 9. Events of Default and Remedies 50
Section 10. The Agent and Issuing Banks 53
Section 10.1. Appointment and Authorization 53
Section 10.2. Rights as a Bank 53
Section 10.3. Standard of Care 53
Section 10.4. Costs and Expenses 54
Section 10.5. Indemnity 54
Section 11. Miscellaneous 55
Section 11.1. Waiver of Rights 55
Section 11.2. Non-Business Day 55
Section 11.3. Documentary Taxes 55
Section 11.4. Survival of Representations 55
Section 11.5. Set-off Sharing 55
Section 11.6. Notices 55
Section 11.7. Counterparts 56
Section 11.8. Successors and Assigns 56
Section 11.9. Participants 56
Section 11.10. Costs and Expenses 56
Section 11.11. Construction 57
Section 11.12. Assignment Agreements 57
Section 11.13. Waivers, Modifications and Amendments 58
Section 11.14. Entire Agreement 58
Section 11.15. Headings 59
Section 11.16. Confidentiality 59
Section 11.17. Extensions of the Commitments 59
Section 11.18. Currency 60
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Section 11.19. Exclusive Jurisdiction 60
Section 11.20. Waiver of Jury Trial 60
Section 11.21. Excess Interest 61
Section 11.22. Governing Law 61
Section 11.23. Single Bank 61
Exhibit A -- Revolving Credit Note
Schedule 1.1 -- Lines of Business
Schedule 5.1 -- Excluded Assets
Schedule 6.2 -- Subsidiaries
Schedule 8.8 -- Permitted Existing Liens
Schedule 8.9 -- Permitted Existing Indebtedness
Schedule 8.13(l) -- Existing Investments in, and loans,advances and
guaranties relating to, Unrestricted Subsidiaries
Schedule 8.13(m) -- Permitted Guaranties
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To each of
the Banks which are or
may become parties to
this Agreement
Gentlemen:
The undersigned, Xxxxxxxx Xxxxxxx Corporation, a Delaware corporation (the
"COMPANY") applies to you for your several commitments, subject to all of the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make a revolving credit (the "REVOLVING
CREDIT") facility available to the Company, all as more fully hereinafter set
forth.
SECTION 1. Definitions; Interpretation of Agreement
SECTION 1.1. DEFINITIONS. The following terms when used herein shall
have the following meanings, such terms to be equally applicable to both the
singular and the plural of the terms defined:
"ADJUSTED LIBOR RATE" shall mean a rate per annum determined in accordance
with the following formula:
Adjusted LIBOR Rate = LIBOR
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100% - Eurodollar Reserve Percentage
"LIBOR" shall mean, with respect to an Interest Period, the rate of
interest per annum determined by the Agent (rounded upwards, if necessary,
to the nearest 1/100 of 1%) at which deposits of United States Dollars in
immediately available and freely transferable funds are offered to the
Agent at 10:00 a.m. (Chicago time) two Business Days prior to the
commencement of such Interest Period by major banks in the London interbank
market upon request by the Agent for a period equal to such Interest Period
and in an amount equal to the Agent's share of the LIBOR Portion scheduled
to be outstanding during such Interest Period.
"EURODOLLAR RESERVE PERCENTAGE" shall mean, for any day during an
Interest Period, the rate at which reserves (including, without limitation,
any supplemental, marginal and emergency reserves) are imposed on such day
by the Board of Governors of the Federal
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Reserve System (or any successor) on "Eurocurrency liabilities", as defined
in such Board's Regulation D (or in respect of any other category of
liabilities that includes deposits by reference to which the interest rate
on LIBOR Portions is determined on any category of extension of credit or
other assets that includes loans by non-United States offices of any bank
to United States residents), 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
LIBOR Portions 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. The Adjusted LIBOR Rate shall automatically be
adjusted as of the date of any change in the Eurodollar Reserve Percentage.
"AFFILIATE" shall mean any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, another Person, (ii) which beneficially owns or holds 5% or more
of any class of the Voting Stock of another Person, or (iii) more than 5% of the
Voting Stock (or in the case of a Person which is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held by another
Person. The term "CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or otherwise.
"AGENT" shall mean Bank of Montreal, and its successors as agent hereunder.
"AGREEMENT" shall mean this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"APPLICABLE MARGIN" shall mean the rate per annum specified below for the
type of Portion for which the Applicable Margin is being determined or for
Letter of Credit fees or for the commitment fee (as applicable):
(a) At all times when the Company has a Xxxxx'x Rating of at least
Baa3 or a S&P Rating of at least BBB-, then the Applicable Margin shall be
determined as follows:
Applicable Margin Shall Be:
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For
For For For Financial Non-Financial For
LIBOR Base Letter of Credit Letter of Credit Commitment
Rating Level Portions Rate Portion Fee Fee Fee
Level I Status .25% Zero .25% .125% .085%
Level II Status .30%Zero .30% .15% .10%
Level III Status .40%Zero .40% .20% .15%
Level IV Status .50%Zero .50% .25% .20%
PROVIDED, HOWEVER, that the foregoing rates per annum described in this
clause (a) are subject to the following:
(x) changes in the Applicable Margin resulting from a change in
the S&P Rating or Xxxxx'x Rating shall become effective five (5)
Business Days after the date the Agent is notified of the relevant
change by the Company (the Company hereby agreeing to promptly notify
the Agent of any such change promptly upon the same becoming
effective); and
(y) if and so long as any Event of Default has occurred and is
continuing and notice of such Event of Default is delivered to the
Company by the Agent at the request of the Required Banks, the
Applicable Margins as otherwise computed hereunder shall be increased
by adding the rate of 2% per annum thereto.
(b) In the event the Company has no Xxxxx'x Rating or S&P Rating, or in
the event such rating does not fall within the guidelines of clause (a) above,
then the Applicable Margin shall be determined as follows:
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(i) At any time on or after November 30, 1996, and thereafter when
Consolidated Debt/EBITDA Ratio is less than 1:50 to 1:00, then:
Applicable Margin Shall Be:
For For For Financial For
LIBOR Base Letter of Credit For Non-Financial Commitment
Portions Rate Portion Fee Letter of Credit Fee Fee
.75% Zero .75% .375% .20%
(ii) At all times prior to November 30, 1996, and thereafter when
Consolidated Debt/EBITDA Ratio is greater than or equal to 1:50 to 1:00 but
less than 3.00 to 1.00, then:
Applicable Margin Shall Be:
For For For Financial For
LIBOR Base Letter of Credit For Non-Financial Commitment
Portions Rate Portion Fee Letter of Credit Fee Fee
.875% .125% .875% .4375% .25%
(iii) At any time on or after November 30, 1996, when Consolidated
Debt/EBITDA Ratio is greater than or equal to 3.00 to 1.00, then:
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Applicable Margin Shall Be:
For For For Financial For
LIBOR Base Letter of Credit For Non-Financial Commitment
Portions Rate Portion Fee Letter of Credit Fee Fee
1.125% .25% 1.125% .5625% .30%
PROVIDED, HOWEVER that the foregoing rates per annum described in this
clause (b) are subject to the following:
(x) the Consolidated Debt/EBITDA Ratio shall be determined
as of the last day of each fiscal quarter of the Company (i.e., the
last day of each February, May, August and November), with any
adjustment in the Applicable Margins resulting from a change in such
Consolidated Debt/EBITDA Ratio to be effective forty-five (45) days
after the last day of each fiscal quarter; and
(y) if and so long as any Event of Default has occurred and
is continuing and notice of such Event of Default is delivered to the
Company by the Agent at the request of the Required Banks, the
Applicable Margins as otherwise computed hereunder shall be increased
by adding the rate of 2% per annum thereto.
"APPLICATIONS" shall have the meaning set forth in Section 2.3(c) hereof.
"ASSIGNMENT AGREEMENT" shall have the meaning set forth in Section 11.12
hereof.
"AUTHORIZED REPRESENTATIVE" means those persons shown on the list of
officers provided by the Company pursuant to Section 7.2(a)(ii) hereof or on any
update of any such list provided by the Company to the Agent, or any further or
different officer of the Company so named by any Authorized Representative of
the Company in a written notice to the Agent.
"AVAILABLE FOREIGN CURRENCY" means any currency other than United States
Dollars, so long
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as such currency is freely transferable and convertible into United States
Dollars and is traded and readily available to the Agent in the London interbank
market.
"BANKS" shall mean the parties signing this Agreement as Banks and all
other lenders becoming parties hereto pursuant to Section 11.12 hereof.
"BASE RATE" means for any day the greater of:
(i) the rate of interest publicly announced by Bank of Montreal from
time to time as its prime commercial rate for United States dollar loans
made in the United States (it being understood that such rate may not be
Bank of Montreal's best or lowest rate), with any change in the Base 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; and
(ii) the sum of (x) the rates quoted to the Agent as the prevailing
rates per annum (rounded upward, if necessary, to the next higher 1/100 of
1%) bid at approximately 10:00 a.m. (Chicago time) (or as soon thereafter
as is practicable) on such day by two or more New York Federal funds
dealers of recognized standing selected by the Agent for the purchase at
face value of Federal funds in the secondary market in an amount comparable
to the principal amount owed to the Agent for which such rate is being
determined, or, if such rates are not quoted to the Agent, the rate for
that day set forth opposite the caption "FEDERAL FUND (EFFECTIVE)" in the
daily statistical release designated as "COMPOSITE 3:30 P.M. QUOTATIONS FOR
U.S. GOVERNMENT SECURITIES", or any successor publication, published by the
Federal Reserve Bank of New York PLUS (y) 1/2 of 1%, provided that this
clause (ii) shall be inapplicable to any Loan which is outstanding for 15
days or more (for the foregoing purpose repayments of Loans shall be deemed
applied to outstanding Loans in the same order in which they were made).
"BASE RATE PORTION" is defined in Section 3.1 hereof.
"BORROWING" shall mean the total of Loans of a single type made by all the
Banks on a single date and, if such Loans are to be part of a LIBOR Portion, for
a single Interest Period.
"BLUE DIAMOND" shall mean Blue Diamond Materials, Inc., a Nevada
corporation.
"BUSINESS DAY" shall mean any day other than a Saturday or Sunday on which
banks are open for business in Chicago, Illinois and, when used with reference
to LIBOR Portions, a day on which banks are also open for business and dealing
in United States Dollar deposits in London, England.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall mean all properties, rights, interests and privileges
from time to time subject to the liens and security interests granted to the
Agent for the benefit of the Banks by the Collateral Documents.
"COLLATERAL DOCUMENTS" shall mean all security agreements, pledge
agreements, financing statements and other documents as shall from time to time
secure the Notes and Applications and the other obligations of the Company
hereunder.
"COMMITMENTS" shall mean $200,000,000, as such amount may be reduced from
time to time pursuant hereto. The Commitment of each Bank shall be the amount
specified therefor on Exhibit A attached hereto and made part hereof (as the
same shall be deemed amended after giving effect to the Assignment Agreements
referred to in Section 11.12 hereof), as reduced from time to time pursuant
hereto.
"COMPANY" is defined in the introductory paragraph of this Agreement.
"CONFIRMATION ORDER" is defined in Section 6.11 hereof.
"CONSOLIDATED CAPITAL" shall mean, as of any time the same is to be
determined, the sum of (a) Consolidated Total Indebtedness minus the aggregate
amount of Letters of Credit then outstanding and (b) Consolidated Net Worth.
"CONSOLIDATED DEBT/EBITDA RATIO" shall mean, as of any time the same is to
be determined, the ratio of (a) the difference (but not below zero) of (i)
Consolidated Total Indebtedness at such time minus (ii) the amount by which the
sum of Eligible Cash and Eligible Securities at such time exceeds $5,000,000 to
(b) Earnings Before Interest, Taxes, Depreciation and Amortization for the most
recently completed four fiscal quarters of the Company then ended; PROVIDED,
HOWEVER, that during the initial twelve month period occurring after the Merger,
Earnings Before Interest, Taxes, Depreciation and Amortization shall be computed
by multiplying the actual amount thereof accruing after the date of the Merger
by a fraction, the numerator of which is 365 and the denominator of which is the
number of days elapsed since the date of the Merger.
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean and include (but without
duplication) all obligations of the Company and each of its Subsidiaries of the
following types, all determined on a consolidated basis for the Company and its
Subsidiaries determined in accordance with GAAP: (i) obligations (whether
recourse or nonrecourse) for borrowed money or for the deferred purchase price
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of, or which have been incurred in connection with the acquisition of, property
or assets other than current accounts payable, (ii) obligations of the type
described in clause (i) secured by any lien or other charge upon property or
assets owned by the Company or any Subsidiary, even though neither the Company
nor any Subsidiary has assumed or become liable for the payment of such
obligations, (iii) obligations payable over a period in excess of one year to
purchase any property or to obtain the services of another Person if the
contract requires that payment for such property or services be made regardless
of whether such property is delivered or such services are performed other than
employment agreements for management personnel, consulting agreements and
contracts for construction services or supplies entered into in the ordinary
course of business of the Company and its Subsidiaries, (iv) Long-term Rentals,
(v) obligations in respect of financial letters of credit, (vi) all liabilities
referred to in clauses (i), (ii), (iii), (iv) and (v) above which are directly
or indirectly guaranteed by the Company or any Subsidiary or which it has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which it has otherwise assured a creditor against loss. The amount of Long-term
Rentals payable on a lease to be included in Consolidated Total Indebtedness
shall be discounted at the imputed interest rate applicable to such lease, which
interest rate shall be deemed to be 9% per annum unless otherwise specified in
such lease.
"CONSOLIDATED NET INCOME" for any period shall mean the gross revenues from
any source of the Company and its Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined for the Company
and its Subsidiaries on a consolidated basis in accordance with GAAP, but
excluding in any event any gain arising from the acquisition of any equity
securities of the Company or any Subsidiary.
"CONSOLIDATED NET WORTH" shall mean, as of any date, consolidated net worth
as computed in accordance with GAAP for the Company and its Subsidiaries on a
consolidated basis.
"CONTROLLING PERSON" means any Person who directly or indirectly through
one or more intermediaries (i) controls another Person or (ii) beneficially owns
or holds 5% or more of the Voting Stock or other equity interest in another
Person. The term "control" shall have the same meaning herein as such term has
in the definition of "Affiliate".
"DEBT SERVICE COVERAGE RATIO" shall mean, as of any time the same is to be
determined, the ratio of (a) Consolidated Total Indebtedness minus, to the
extent included in Consolidated Total Indebtedness, the aggregate amount of all
letters of credit then outstanding (whether financial letters of credit,
performance letters of credit or commercial letters of credit) to (b) Earnings
Before Interest,
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Taxes, Depreciation and Amortization for the most recently completed four fiscal
quarters of the Company then ended; PROVIDED, HOWEVER, that during the initial
twelve month period occurring after the Merger, Earnings Before Interest, Taxes,
Depreciation and Amortization shall be computed by multiplying the actual amount
thereof accruing after the date of the Merger by a fraction, the numerator of
which is 365 and the denominator of which is the number of days elapsed since
the date of the Merger.
"DEFAULT" shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default.
"DISCLOSURE STATEMENT" shall mean the Second Amended Disclosure Statement
dated as of July 25, 1996, with respect to the plan of reorganization of Old MK
in the form heretofore delivered to the Banks.
"EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION" shall
mean, with reference to any period, Consolidated Net Income for such period plus
all amounts deducted in arriving at such Consolidated Net Income in respect of
(i) Interest Expense, (ii) taxes imposed on or measured by income or excess
profits, (iii) all charges for depreciation of fixed assets and amortization of
intangibles of the Company and its Subsidiaries, and (iv) all other noncash
charges of the Company and its Subsidiaries determined in accordance with GAAP.
"ELIGIBLE CASH" shall mean all cash and cash equivalents as defined in
accordance with GAAP which are unrestricted and freely available to the Company
or any Subsidiary (other than restrictions in the form of early withdrawal
penalties for time deposits and other similar instruments) and which are free
and clear of any lien, security interest, charge or encumbrance whatsoever other
than a lien or security interest granted in favor of the Agent and any
unasserted rights of offset of the relevant depositary financial institution.
"ELIGIBLE LINES OF BUSINESS" shall mean the general nature of the business
and activities engaged in by the Company and its Subsidiaries (which exist as
Subsidiaries of the Company on the date of this Agreement) on the date of this
Agreement, and shall, in any event, include businesses and activities consisting
of engineering and construction, earthmoving, mining, equipment leasing to
Affiliates of such Person, activities directly relating to the application of CF
Systems Corporation's extraction technologies to food processing environmental
remediation (exclusive of owning or operating a treatment, storage, or disposal
facility for solid, special, or hazardous waste (except, with
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respect to operating any such facility, to the extent of the Company's
operations and functions at such facility shall be substantially similar in
scope and nature as the operations and functions currently performed by the
Company at such facilities and described on Schedule 1.1 hereof)) industrial
maintenance, site and infrastructure development, and manufacturing construction
materials.
"ELIGIBLE SECURITIES" shall mean short-term investments owned by the
Company or any Subsidiary of the type described in Section 8.13(a)-(d) hereof
and is an asset of the Company or such Subsidiary to which it has good and
marketable title, is freely assignable, and is free and clear of any lien,
security interest, charge or encumbrance whatsoever other than a lien or
security interest granted in favor of the Agent for the benefit of the Banks,
but excluding in any event any item constituting Eligible Cash.
"EVENT OF DEFAULT" shall mean any of the events specified in Section 9.1
hereof.
"FEDERAL FUNDS RATE" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate.
"FINANCIAL LETTER OF CREDIT" means a letter of credit classified as a
financial letter of credit for regulatory reporting purposes by the Agent, which
classification shall be conclusive and binding on the Company and the Banks if
reasonably determined.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination and using the applicable
principles of purchase accounting to account for the Merger.
"GUARANTY" is defined in Section 5.3 hereof.
"ICC" means Industrial Construction Corp., a Montana corporation.
"INTEREST EXPENSE" shall mean with reference to any period all interest
charges (including amortization of debt discount and expense and imputed
interest on leases with an original term of one year or more) accrued for such
period, whether or not paid, all as computed on a consolidated basis for the
Company and its Subsidiaries in accordance with GAAP. Imputed interest on
leases shall be deemed to be 9% per annum, unless otherwise specified in the
lease.
"INTEREST PERIOD" shall mean with respect to any LIBOR Portion:
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(a) initially, the period commencing on, as the case may be, the
creation or conversion date with respect to such LIBOR Portion and ending
one, two, three or six months thereafter as selected by the Company in its
notice as provided herein, or such other period of not less than ten days
and not more than twelve months as agreed to at the time by the Company,
the Agent and each of the Banks; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Portion and ending one,
two, three or six months thereafter as selected by the Company in its
notice as provided herein, or such other period of not less than ten days
and not more than twelve months as agreed to at the time by the Company,
the Agent and each of the Banks;
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 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 Notes;
(iii) the interest rate to be applicable to each Portion 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 Company will be unable to make a principal payment scheduled to be made
during such Interest Period without paying part of a LIBOR Portion 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.
"ISSUING BANK" means the Agent; PROVIDED that, in the event a Letter of
Credit issued by the Agent is not acceptable to the beneficiary thereof, another
Bank party to this Agreement acceptable
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to such beneficiary may be the Issuing Bank with respect to such Letter of
Credit if agreed to by the Company and such Bank with prior notice to the Agent.
"LETTERS OF CREDIT" shall mean Financial Letters of Credit and
Non-Financial Letters of Credit issued for the account of the Company pursuant
to Section 2.3 hereof.
"LEVEL I STATUS" means the S&P Rating is at least A- or higher OR the
Xxxxx'x Rating is at least A3 or higher.
"LEVEL II STATUS" means Level I Status does not exist, but the S&P Rating
is at least BBB+ or higher OR the Xxxxx'x Rating is at least Baa1 or higher.
"LEVEL III STATUS" means neither Level I Status nor Level II Status exists,
but the S&P Rating is at least BBB or higher OR the Xxxxx'x Rating is at least
Baa2 or higher.
"LEVEL IV STATUS" means none of Level I Status, Level II Status, and Level
III Status exists, but the S&P Rating is at least BBB- or higher OR the Xxxxx'x
Rating is at least Baa3 or higher.
"LIBOR PORTION" is defined in Section 3.1 hereof.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Applications,
the Guaranty, the Collateral Documents, and each of the other instruments and
documents to be delivered hereunder or thereunder or otherwise in connection
therewith.
"LOANS" shall have the meaning set forth in Section 2.2 hereof.
"LONG-TERM 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 Company or
any Subsidiary, as lessee or sublessee under a lease of real or personal
property having an initial term (exclusive of renewal terms which are at the
option of the lessee) in excess of twelve months, but shall be exclusive of any
amounts required to be paid by the Company or any Subsidiary (whether or not
designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges, all computed for the Company and its
Subsidiaries on a consolidated basis. For purposes of any prospective
calculations, 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.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), or results of operations
of the Company and its Subsidiaries taken
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as a whole, (ii) the ability of the Company or any Material Subsidiary to
perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Agent or of the Banks thereunder.
"MATERIAL FOREIGN SUBSIDIARY" means each Unrestricted Subsidiary except to
the extent it has neither (a) assets with a book value at or in excess of 3% of
the Company's consolidated total assets nor (b) net income for the most recently
completed calendar year at or in excess of 3% of the Company's Consolidated Net
Income.
"MATERIAL SUBSIDIARY" means each Restricted Subsidiary designated as a
Material Subsidiary on Schedule 6.2 hereof, and any other Restricted Subsidiary
except to the extent such other Restricted Subsidiary has neither (a) assets
with a book value at or in excess of 3% of the Company's consolidated total
assets nor (b) net income for the most recently completed calendar year at or in
excess of 3% of the Company's Consolidated Net Income.
"MECHANIC'S LIENS" shall have the meaning set forth in Section 8.8(b)
hereof.
"MERGER" means the merger of Old MK with and into the Company, with the
Company surviving the merger and changing its name to Xxxxxxxx Xxxxxxx
Corporation.
"MERGER DOCUMENTS" means the Restructuring and Merger Agreement dated May
28, 1996, and all amendments thereto entered into prior to the date hereof and
furnished to the Banks under Section 7.2(c) hereof, and all other instruments
and documents executed and delivered in connection therewith or the consummation
of the Merger described therein.
"XXXXX'X RATING" means the rating assigned by Xxxxx'x Investors Service,
Inc. to the outstanding senior unsecured non-credit enhanced long-term
indebtedness of the Company. Any reference in this Agreement to any specific
rating is a reference to such rating as currently defined by Xxxxx'x Investors
Service, Inc. and shall be deemed to refer to the equivalent rating if such
rating system changes.
"NON-FINANCIAL LETTER OF CREDIT" means a letter of credit classified as a
performance letter of credit or as a commercial letter of credit for regulatory
reporting purposes by the Agent, which classification shall be conclusive and
binding on the Company and the Banks if reasonably determined.
"NOTES" shall have the meaning set forth in Section 2.2 hereof.
"OLD MK" means Xxxxxxxx Xxxxxxx Corporation, a Delaware corporation prior
to giving
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effect to the Merger.
"OVERNIGHT FOREIGN CURRENCY RATE" means, for any amount payable in a
currency other than U.S. Dollars, the rate of interest per annum as determined
by the Agent (rounded upwards, if necessary, to the nearest whole multiple of
one-sixteenth of one percent (1/16 of 1%)) at which overnight or weekend
deposits of the appropriate currency (or, if such amount due remains unpaid more
than three Business Days, then for such period of time not longer than six
months as the Agent may elect in its absolute discretion) for delivery in
immediately available and freely transferable funds would be offered by the
Agent to major banks in the interbank market upon request of such major banks
for the applicable period as determined above and in an amount comparable to the
unpaid principal amount of the related obligation (or, if the Agent is not
placing deposits in such currency in the interbank market, then the Agent's cost
of funds in such currency for such period).
"PERMITTED LIENS" is defined in Section 8.8 hereof.
"PERSONS" shall mean any individual, trust, partnership, firm, corporation,
limited liability company, association, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"PLAN" shall mean the First Amended Plan of Reorganization of Old MK dated
as of July 25, 1996, in the form heretofore submitted to the Banks, as the same
may from time to time be amended as permitted hereby.
"PORTION" is defined in Section 3.1 hereof.
"PRIOR CREDIT AGREEMENT" means that certain Credit Agreement dated as of
September 8, 1995, as amended, by and among the Company, Bank of Montreal,
individually and as agent, and the other lenders party thereto.
"PURCHASE MONEY LIENS" is defined in Section 8.8(c) hereof.
"REQUIRED BANKS" shall mean Banks holding 51% or more of the outstanding
principal amount of the Loans and the credit risks to the Letters of Credit, or,
if no Loans or Letters of Credit are outstanding, Banks granting 51% or more of
the Commitments.
"RESTRICTED SUBSIDIARY" shall mean each Subsidiary other than an
Unrestricted Subsidiary.
"REVOLVING CREDIT" is defined in the introductory paragraph of this
Agreement.
"S&P RATING" means the rating assigned by Standard & Poor's Ratings
Services Group, a
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division of The XxXxxx-Xxxx Companies, Inc., to the outstanding senior unsecured
non-credit enhanced long-term indebtedness of the Company. Any reference in
this Agreement to any specific rating is a reference to such rating as currently
defined by Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc., and shall be deemed to refer to the equivalent rating if such
rating system changes.
"SUBSIDIARY" means any corporation more than 50% of the outstanding Voting
Stock of which is at the time directly or indirectly owned by the Company, by
one or more of its Subsidiaries, or by the Company and one or more of its
Subsidiaries.
"TERMINATION DATE" shall mean October 8, 2001, or such later date to which
the same may be extended pursuant to Section 11.17 hereof, or such earlier date
on which the Commitments are terminated in whole pursuant to Section 4.5 or
Section 9 hereof.
"UNRESTRICTED SUBSIDIARY" shall mean Blue Diamond, ICC, and each other
Subsidiary which (i) is organized under the laws of a jurisdiction other than
the United States of America or any state thereof, (ii) conducts substantially
all of its business outside of the United States of America, and (iii) has
substantially all of its assets outside of the United States of America.
"U.S. DOLLARS" and "$" each means the lawful currency of the United States
of America.
"U.S. DOLLAR EQUIVALENT" means the amount of U.S. Dollars which would be
realized by converting the relevant Available Foreign Currency into U.S. Dollars
in the spot market at the exchange rate quoted by the Agent, at approximately
11:00 a.m. (London time) on the date on which a computation thereof is required
to be made, to major banks in the interbank foreign exchange market for the
purchase of U.S. Dollars with such foreign currency.
"VOTING STOCK" shall mean securities of any class or classes of a Person,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors of such Person (or Persons
performing similar functions).
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law) or other equity interests are owned by the Company and/or one
or more Wholly-Owned Subsidiaries within the meaning of this definition.
Capitalized terms defined in the provisions of this Agreement shall have
the meanings so ascribed to them in all provisions of this Agreement.
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SECTION 1.2. ACCOUNTING TERMS. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to such terms in conformity with GAAP. Financial statements and other
information furnished to the Agent pursuant to Section 8.5 shall be prepared in
accordance with GAAP (as in effect at the time of such preparation) on a
consistent basis. In the event any "Accounting Changes" (as defined below)
shall occur and such changes affect financial covenants, standards or terms in
this Agreement, then the Company, the Agent and the Banks agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of the Company and its
Subsidiaries shall be the same after such Accounting Changes as if such
Accounting Changes had not been made, and until such time as such an amendment
shall have been executed and delivered by the Company, the Agent and the
Required Banks, (A) all financial covenants, standards and terms in this
Agreement shall be calculated and/or construed as if such Accounting Changes had
not been made, and (B) the Company shall prepare footnotes to each compliance
certificate and the financial statements required to be delivered hereunder that
show the differences between the financial statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting Changes). "ACCOUNTING CHANGES"
means: (a) changes in accounting principles required by GAAP and implemented by
the Company and any of its Subsidiaries; (b) changes in accounting principles
recommended by certified public accountants of the Company or any of its
Subsidiaries; or (c) changes in carrying value of the Company's (or any of its
Subsidiaries') assets, liabilities or equity accounts resulting from the
application of purchase accounting principles.
SECTION 2. THE REVOLVING CREDIT.
SECTION 2.1. GENERAL TERMS. Subject to all of the terms and conditions
hereof, the Banks agree to extend a Revolving Credit to the Company which may be
availed of by the Company from time to time, be repaid and used again, during
the period from the date hereof to and including the Termination Date. The
Revolving Credit may be utilized by the Company in the form of Loans or Letters
of Credit, all as more fully hereinafter set forth, provided that (a) the
aggregate amount of Loans and Letters of Credit outstanding at any one time
shall not exceed the Commitments and (b) the aggregate amount of Loans
outstanding at any one time shall not exceed $125,000,000 or, if less, the
aggregate Commitments then in effect. The maximum amount of the Revolving
Credit which each Bank agrees to extend hereunder shall be as set forth opposite
its name on Exhibit A
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attached hereto and made a part hereof (as the same shall be deemed amended
after giving effect to the Assignment Agreements referred to in Section 11.12
hereof). The obligations of the Banks hereunder are several and not joint and
no Bank shall under any circumstance be obligated to extend credit under the
Revolving Credit in excess of its Commitment or its pro rata share of the credit
outstanding hereunder.
SECTION 2.2. THE LOANS. Subject to all of the terms and conditions
hereof, the Revolving Credit may be availed of by the Company in the form of
loans (individually a "LOAN" and collectively the "LOANS"). Each Borrowing
shall be in a minimum amount of $1,000,000 and thereafter in integral multiples
of $100,000 (with LIBOR Portions being in a minimum amount of $5,000,000 and
thereafter in integral multiples of $500,000) and shall be made pro rata from
the Banks in accordance with the amounts of their Commitments. All Loans made
by each Bank shall be made against and evidenced by a Revolving Credit Note
(individually a "NOTE" and collectively the "NOTES") in the form (with
appropriate insertions) annexed hereto as Exhibit B. Each Note shall be in the
amount of the Commitment of the Bank to which it is payable and shall mature on
the Termination Date. The initial Borrowing of Loans under the Revolving Credit
shall consist of the acquisition by the Banks, pro rata in accordance with the
respective amounts of their Commitments, of all loans owing by the Company under
the Prior Credit Agreement (the "ACQUIRED LOANS"). From and after the date of
their acquisition by the Banks, the Acquired Loans shall bear interest as
provided in this Agreement, shall mature on the Termination Date, and shall
otherwise be subject in all respects to the terms and conditions of this
Agreement. On the date of the acquisition of the Acquired Loans, the Company
shall cause to be paid to the lenders party to the Prior Credit Agreement all
accrued interest, commitment and letter of credit fees, and funding indemnity
payments due such lenders as if such Acquired Loans had been prepaid in full on
such date.
SECTION 2.3. LETTERS OF CREDIT.
(a) GENERAL TERMS. Subject to all of the terms and conditions
hereof, the Revolving Credit may be availed of by the Company in the form
of Letters of Credit issued to Persons other than Affiliates of the
Company, provided that the U.S. Dollar Equivalent of Letters of Credit
payable in an Available Foreign Currency outstanding at any one time shall
not exceed $150,000,000 in the aggregate (determined in accordance with
this Section 2.3). The amount of any Letter of Credit for all purposes of
this Agreement shall be the maximum amount which could be drawn thereunder
under any circumstances and over any period of
-23-
time plus all unreimbursed drawings then outstanding with respect thereto.
The Issuing Bank shall issue the Letters of Credit for the account of the
Banks and, accordingly, each Letter of Credit shall be deemed to utilize a
pro rata share of the Commitment of each Bank. Notwithstanding anything
herein to the contrary, all letters of credit issued by Bank of Montreal
pursuant to the Prior Credit Agreement shall constitute "Letters of Credit"
herein for all purposes of this Agreement and all applications and
reimbursement agreements with respect to such letters of credit shall
constitute "Applications" herein for all purposes of this Agreement, in
each case to the same extent, and with the same force and effect, as if
such Letters of Credit and Applications therefor had been issued at the
request of the Company under this Agreement.
(b) GENERAL CHARACTERISTICS. Each Letter of Credit issued hereunder
shall expire not later than the Termination Date then in effect. Each
Letter of Credit issued hereunder shall be payable in U.S. Dollars or in an
Available Foreign Currency, shall conform to the general requirements of
the Issuing Bank for the issuance of letters of credit as to form and
substance, and shall be a letter of credit which the Issuing Bank may
lawfully issue. If an Issuing Bank issues any Letter of Credit with an
expiration date that is automatically extended unless such Issuing Bank
gives notice that the expiration date will not so extend beyond its then
scheduled expiration date, such Issuing Bank will give notice of such
non-renewal before the time necessary to prevent such automatic extension
if before such required notice date (i) the expiration date of such Letter
of Credit if so extended would be after the Termination Date then in
effect, (ii) the Commitments have been terminated, or (iii) a Default or an
Event of Default exists and the Required Banks have given the Issuing Bank
instructions not to so permit the extension of the expiration date of such
Letter of Credit.
(c) APPLICATIONS AND AGREEMENTS. At the time the Company requests a
Letter of Credit to be issued (or prior to the first issuance of a Letter
of Credit, in the case of a continuing application), it shall execute and
deliver to the Issuing Bank an application for such Letter of Credit in the
form then prescribed by the Issuing Bank (the "APPLICATIONS"). Anything
contained in the Applications to the contrary notwithstanding (aa) the
Company shall pay fees in connection with Letters of Credit only as set
forth in Section 4 hereof, (ab) in the event that the Issuing Bank is not
promptly reimbursed for the amount of any draft drawn under a Letter of
Credit issued hereunder after notice to the Company that such draft
-24-
has been received, the obligation of the Company to reimburse the Issuing
Bank for the amount of such draft shall bear interest (which the Company
hereby promises to pay) from and after the date the draft is paid at a
fluctuating rate per annum equal to (x) in the case of a drawing under a
Letter of Credit denominated in U.S. Dollars or a Letter of Credit
denominated in an Available Foreign Currency as to which the Issuing Bank
has requested that the Company reimburse such drawing in U.S. Dollars, the
sum of 2 1/4% plus the Base Rate from time to time in effect, and (y) in
the case of a drawing under a Letter of Credit denominated in an Available
Foreign Currency as to which the Issuing Bank has requested that the
Company reimburse such drawing in the Available Foreign Currency in which
such Letter of Credit is denominated, the sum of 2 1/4% plus the Overnight
Foreign Currency Rate, (ac) so long as no Event of Default has occurred and
is continuing, the Issuing Bank will not call for additional collateral
security for the obligations of the Company under the Applications other
than the collateral security contemplated by this Agreement, and (ad) so
long as no Event of Default has occurred and is continuing, the Issuing
Bank will not call for the funding of a Letter of Credit prior to being
presented with a draft or demand for payment thereunder (or, in the event
the draft is a time draft, prior to its due date). The obligation of the
Company to reimburse the Issuing Bank for all drawings under a Letter of
Credit issued hereunder shall be governed by the Application related to
such Letter of Credit, except that (i) the reimbursement by the Company of
draws made under a Letter of Credit denominated in U.S. Dollars shall be
made in U.S. Dollars, (ii) the reimbursement by the Company of draws made
under a Letter of Credit denominated in an Available Foreign Currency shall
be made by payment in U.S. Dollars of the U.S. Dollar Equivalent,
calculated on the date the Issuing Bank paid such draw, of the amount paid
by the Issuing Bank pursuant to such draw, or, if the Issuing Bank shall
elect by notice to the Company and the Agent by payment in the Available
Foreign Currency which was paid by the Issuing Bank pursuant to such
drawing in an amount equal to such drawing, and (iii) reimbursement in U.S.
Dollars of a drawing paid shall be made to the Issuing Bank (with notice to
the Agent) by no later than 1:00 p.m. (Chicago time) on the date when such
drawing is paid and reimbursement in an Available Foreign Currency of a
drawing paid shall be made to the Issuing Bank (with notice to the Agent)
by no later than 1:00 p.m. local time at the place of payment or, if
earlier, such local time as is necessary for such funds to be received and
transferred to the Issuing Bank for same
-25-
day value on the day such obligation is due; and any payment of a
reimbursement obligation relating to a Letter of Credit received after such
time shall be deemed to have been received by the Issuing Bank on the next
Business Day.
(d) CHANGE IN LAWS. If the Issuing Bank or any Bank shall determine
in good faith that any applicable law, regulation or guideline (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) 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 the Issuing Bank or such Bank (whether or not having the
force of law) shall after the date hereof:
(aa) impose, modify or deem applicable any reserve, special
deposit or similar requirements against the Letters of Credit or the
Issuing Bank's or such Bank's or the Company's liability with respect
thereto; or
(bb) impose on the Issuing Bank or such Bank any penalty with
respect to the foregoing or any other condition regarding this
Agreement, the Applications or the Letters of Credit;
and the Issuing Bank or 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 the Issuing Bank or such Bank of
issuing, maintaining or participating in the Letters of Credit hereunder
(without benefit of, or credit for, any prorations, exemptions, credits or
other offsets available under any such laws, regulations, guidelines or
interpretations thereof), then the Company shall pay within five (5) days
following demand by the Issuing Bank or such Bank from time to time as
specified by the Issuing Bank or such Bank such additional amounts as the
Issuing Bank or such Bank shall in good faith determine are sufficient to
compensate and indemnify it for such increased cost. If the Issuing Bank
or any Bank makes such a claim for compensation, it shall provide to the
Company and the Agent a written explanation of the circumstances giving
rise to such claim and a certificate setting forth such increased costs as
a result of any event mentioned herein in reasonable detail and such
certificate shall be deemed PRIMA FACIE correct. Neither an Issuing Bank
nor a Bank shall be entitled to compensation under this Section 2.3(d) with
respect to any imposition for any period prior to the earlier of (i) the
date it notifies the Company of the imposition giving rise to the request
for compensation or (ii) the date which is thirty (30) days prior to the
date it
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becomes aware of the imposition giving rise to the request for compensation
if the Company is notified of the adoption or change prior to the lapse of
such 30-day period.
(e) PARTICIPATIONS IN LETTERS OF CREDIT. Each Bank shall participate
on a pro rata basis in the Letters of Credit issued by the Issuing Banks,
which participation shall automatically arise upon the issuance of each
such Letter of Credit (such participations to ratably count against the
Commitments of the Banks when the Letters of Credit are issued). Each Bank
unconditionally agrees that in the event an Issuing Bank is not immediately
reimbursed by the Company for the amount paid by such Issuing Bank on any
draft presented to it under a Letter of Credit issued by it, then such
Issuing Bank shall give prompt notice thereof to each Bank and in that
event each Bank shall thereafter pay to such Issuing Bank (i) in the case
of a reimbursement obligation payable in U.S. Dollars, an amount equal to
such Bank's pro rata share (based on the percentage which its Commitment
bears to the aggregate of the Commitments) of such unpaid reimbursement
obligation, such payment to be made in lawful money in the United States,
in immediately available funds at the Issuing Bank's lending office
designated on its signature page hereof (or on Assignment Agreements
delivered pursuant to Section 11.12 hereof), together with interest on such
amount accrued from the date the related payment was made by the Issuing
Bank to the date of such payment by such participating Bank at a rate per
annum equal to (x) from the date the related payment was made by the
Issuing Bank to the date two (2) Business Days after payment by such Bank
is due hereunder, the Federal Funds Rate for each such day and (y) from the
date two (2) Business Days after the date such payment is due from such
Bank to the date such payment is made by such Bank, the Base Rate in effect
for each such day and (ii) in the case of a reimbursement obligation
payable in an Available Foreign Currency, an amount equal to such Bank's
pro rata share (based on the percentage which its Commitment bears to the
aggregate of the Commitments) of such unpaid reimbursement obligation, such
payment to be made in such Available Foreign Currency in such funds which
are then customary for the settlement of international transactions in such
currency, together with interest on such amount accrued from the date the
related payment was made by the Issuing Bank to the date of such payment by
the participating Bank at a rate per annum equal to (x) from the date the
related payment was made by the Issuing Bank to the date two (2) Business
Days after payment by such Bank is due hereunder, the Overnight Foreign
Currency Rate for each such
-27-
day and (y) from the date two (2) Business Days after the date such payment
is due from such Bank to the date such payment is made by such Bank, the
sum of 1% PLUS the Overnight Foreign Currency Rate for each such day. Each
such participating Bank shall thereafter be entitled to receive its pro
rata share of each payment received in respect of the relevant
reimbursement obligation and of interest paid thereon, with the Issuing
Bank retaining its pro rata share as a Bank hereunder. In the event that
any Bank fails to honor its obligation to reimburse an Issuing Bank for its
pro rata share of the amount of any such draft, then in that event (i) each
other Bank shall pay to such Issuing Bank its pro rata share of the payment
due the Issuing Bank from the defaulting Bank; (ii) the defaulting Bank
shall have no right to participate in any recoveries from the Company in
respect of such draft, and (iii) all amounts to which the defaulting Bank
would otherwise be entitled under the terms of this Agreement shall first
be applied to reimbursing the Banks for their respective pro rata shares of
the defaulting Bank's portion of the draft, together with interest thereon
at the rate provided for herein. Upon reimbursement to the other Banks
(pursuant to clause (iii) above or otherwise) of the amount advanced by
them to the Issuing Bank in respect of the defaulting Bank's share of the
draft, together with interest thereon, the defaulting Bank shall thereupon
be entitled to its participation in such Issuing Bank's rights of recovery
against the Company in respect of the draft paid by the Issuing Bank.
(f) NOTICES. Prior to the issuance of, or amendment to, any Letter
of Credit, the relevant Issuing Bank shall give prompt telephone, telex or
telecopy notice to the Agent of the proposed Letter of Credit specifying
the effective date of such Letter of Credit or amendment, the amount, the
beneficiary, and the expiration date of the proposed Letter of Credit. The
Agent shall promptly thereafter notify the Issuing Bank by telephone, telex
or telecopy as to whether the amount of such Letter of Credit or expiry
date with respect thereto would exceed any restrictions in this Section 2.3
on the amount of Letters of Credit to be issued hereunder or the expiry
dates with respect thereto. Upon the issuance of, or amendment to, any
Letter of Credit hereunder, the relevant Issuing Bank shall promptly notify
the Agent and the Agent shall thereafter promptly give telephone, telex or
telecopy notice to each of the other Banks of the issuance of, or amendment
to, such Letters of Credit specifying the effective date of the Letter of
Credit or amendment, the amount, the beneficiary, and the expiration date
of the Letter of Credit, in each case as established originally or through
the
-28-
relevant amendment, as applicable, each Bank's pro rata participation in
such Letter of Credit, and whether the Agent has classified the Letter of
Credit as a Financial Letter of Credit or a Non-Financial Letter of Credit
for regulatory reporting purposes.
(g) CURRENCY DETERMINATIONS. The Agent shall determine the U.S.
Dollar Equivalent of each Letter of Credit and each obligation due with
respect thereto, and a determination thereof by the Agent shall be
conclusive and binding except in the case of manifest error. The U.S.
Dollar Equivalent of each reimbursement obligation with respect to a Letter
of Credit drawn upon shall be calculated on the date the Issuing Bank pays
on the drawing giving rise to such reimbursement obligation. The U.S.
Dollar Equivalent of each Letter of Credit shall be determined or
redetermined, as applicable, on the date of issuance, increase or extension
of such Letter of Credit and on the first day of each March, June,
September, and December thereafter. At the request of any Bank, the Agent
shall redetermine the U.S. Dollar Equivalent of any Letter of Credit at
such times, and from time to time, as may be requested.
SECTION 2.4. MANNER OF BORROWING. The Company shall give written or
telephonic notice to the Agent (which notice shall be irrevocable once given
and, if given by telephone, shall be promptly confirmed in writing) by no later
than 11:00 a.m. (Chicago time) on the date the Company requests that any
Borrowing of Loans be made to it under the Commitments, and the Agent shall
promptly notify each Bank of the Agent's receipt of each such notice. Each such
notice shall specify the date of the Borrowing of Loans requested (which must be
a Business Day, and which date shall be (x) at least two (2) Business Days
subsequent to the date of such notice in the case of any Borrowing of Loans
aggregating more than $25,000,000 (excluding any continuations or conversions of
such Borrowings) and (y) at least three (3) Business Days subsequent to the date
of such notice in the case of any Borrowing of Loans constituting a LIBOR
Portion) and the amount of such Borrowing. Each Borrowing of Loans shall
initially constitute part of the applicable Base Rate Portion except to the
extent the Company has otherwise timely elected that such Borrowing constitute
part of a LIBOR Portion as provided in Section 3 hereof. The Company agrees
that the Agent may rely upon any written or telephonic notice given by any
person the Agent in good faith believes is an Authorized Representative without
the necessity of independent investigation and, in the event any telephonic
notice conflicts with the written confirmation, such telephonic notice shall
govern if the Agent and the Banks have
-29-
acted in reliance thereon. The Banks undertake to endeavor in good faith to
honor on a same day basis Borrowing requests received later than 11:00 a.m.
(Chicago time) but shall incur no liability to the Company if it is not
reasonably practical for them to honor such requests on a same day basis. Not
later than 1:00 p.m. (Chicago time) on the date specified for any Borrowing of
Loans to be made hereunder, each Bank shall make the proceeds of its Loan
comprising part of such Borrowing available to the Agent in Chicago, Illinois in
immediately available funds. Subject to the provisions of Section 7 hereof, the
proceeds of each Loan shall be made available to the Company at the principal
office of the Agent in Chicago, Illinois, in immediately available funds, upon
receipt by the Agent from each Bank of its pro rata share of such Borrowing.
Unless the Agent shall have been notified by a Bank prior to 1:00 (Chicago time)
on the date a Borrowing is to be made hereunder that such Bank does not intend
to make its pro rata share of such Borrowing available to the Agent, the Agent
may assume that such Bank has made such share available to the Agent on such
date and the Agent may (but shall not be obligated to) in reliance upon such
assumption make available to the Company a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Bank and
the Agent has made such amount available to the Company, the Agent shall be
entitled to receive such amount from such Bank forthwith upon its demand,
together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Company and ending
on but excluding the date the Agent recovers such amount at a rate per annum
equal to (x) from the date the related payment was due to the Agent to the date
two (2) Business Days after the date such payment was due, the Federal Funds
Rate for such day (or in the case of a day which is not a Business Day, then for
the preceding day) and (y) thereafter until payment of such amount is received
by the Agent from such Bank, the Base Rate in effect for each such day.
SECTION 3. Interest.
SECTION 3.1. OPTIONS. Subject to all of the terms and conditions of this
Section 3, portions of the principal indebtedness evidenced by the Notes (all of
the indebtedness evidenced by the Notes bearing interest at the same rate for
the same period of time being hereinafter referred to as a "PORTION") shall, at
the option of the Company, bear interest with reference to the Base Rate (the
"BASE RATE PORTIONS") or with reference to the Adjusted LIBOR Rate ("LIBOR
PORTIONS"), and Portions shall be convertible from time to time from one basis
to the other. All of the indebtedness
-30-
evidenced by the Notes which is not part of a LIBOR Portion shall constitute a
single Base Rate Portion. All of the indebtedness evidenced by the Notes which
bears interest with reference to a particular Adjusted LIBOR Rate for a
particular Interest Period shall constitute a single LIBOR Portion. Anything
contained herein to the contrary notwithstanding, there shall not be more than
eight (8) LIBOR Portions applicable to any Note outstanding at any one time and
each Lender shall have a ratable interest in each Portion based on its
Commitment thereof. The Company promises to pay interest on each Portion at the
rates and times specified in this Section 3.
SECTION 3.2. BASE RATE PORTION. Each Base Rate Portion shall bear
interest (which the Company promises to pay at the times herein provided) at the
rate per annum determined by adding the Applicable Margin to the Base Rate as in
effect from time to time. Interest on the Base Rate Portions shall be payable
quarterly in arrears on the first day of each March, June, September and
December in each year and at maturity of the applicable Notes, and interest
after maturity shall be due and payable upon demand.
SECTION 3.3. LIBOR PORTIONS. Each LIBOR Portion shall bear interest
(which the Company promises to pay at the times herein provided) for each
Interest Period selected therefor at a rate per annum equal to the Adjusted
LIBOR Rate for such Interest Period plus the Applicable Margin. Interest on
each LIBOR Portion shall be due and payable on the last day of each Interest
Period applicable thereto and, if an Interest Period is longer than three (3)
months, then at the end of each three month period and at the end of such
Interest Period, and interest after maturity shall be due and payable upon
demand. The Company shall give written or telephonic notice to the Agent (which
notice shall be irrevocable once given and, if given by telephone, shall be
promptly confirmed in writing) on or before 11:00 a.m. (Chicago time) on the
third Business Day preceding the end of an Interest Period applicable to a LIBOR
Portion whether such LIBOR Portion is to continue as a LIBOR Portion, in which
event the Company shall notify the Agent of the new Interest Period selected
therefor, and in the event the Company shall fail to so notify the Agent, such
LIBOR Portion shall automatically be converted into and added to the Base Rate
Portion as of and on the last day of such Interest Period. The Agent shall
promptly notify each Bank of each notice received from the Company pursuant to
the foregoing provisions. Anything contained herein to the contrary
notwithstanding, the obligation of the Banks to create or continue any LIBOR
Portion or to convert any part of the Base Rate Portion into a LIBOR Portion
shall be conditioned upon the fact that at the time no Default or Event of
Default shall have occurred and be continuing, except that during the
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existence of a Default (but not an Event of Default) the Company may request the
continuation of any LIBOR Portion into another LIBOR Portion with an Interest
Period not in excess of one (1) month.
SECTION 3.4. COMPUTATION. All interest on the Notes and all fees,
charges and commissions due hereunder shall be computed on the basis of a year
of 360 days for the actual number of days elapsed, except that interest on the
Base Rate Portion shall be computed on the basis of a year of 365 or 366 days
(as the case may be) for the actual number of days elapsed.
SECTION 3.5. MINIMUM AMOUNTS. Each LIBOR Portion shall be in a minimum
amount of $5,000,000 and thereafter in integral multiples of $500,000.
SECTION 3.6. MANNER OF RATE SELECTION. The Company shall notify the
Agent by 11:00 a.m. (Chicago time) at least three (3) Business Days prior to the
date upon which it requests that any LIBOR Portion be created or that any part
of the Base Rate Portion be converted into a LIBOR Portion (such notice to
specify in each instance the amount thereof and the Interest Period selected
therefor) and the Agent shall promptly advise each Bank of each such notice. If
any request is made to convert a LIBOR Portion into the Base Rate Portion, such
conversion shall only be made so as to become effective as of the last day of
the Interest Period applicable thereto. All requests for the creation,
continuance or conversion of Portions under this Agreement shall be irrevocable.
Such requests may be written or telephonic (provided that if such notice is
given by telephone, the Company shall promptly confirm such notice to the Agent
in writing), and the Agent is hereby authorized to honor telephonic requests for
creations, continuances and conversions received by it from any person the Agent
reasonably believes to be an Authorized Representative, the Company hereby
indemnifying the Agent and the Banks from any liability or loss ensuing from so
acting.
SECTION 3.7. FUNDING INDEMNITY. In the event any Bank shall incur any
loss, cost or expense (including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by such Bank to fund or maintain any LIBOR Portion or the
relending or reinvesting of such deposits or amounts paid or prepaid to such
Lender, and any loss of profit) as a result of:
(a) any payment or prepayment of a LIBOR Portion on a date other than
the last day of its Interest Period for any reason, whether before or after
default, and whether or not such payment is required by any of the
provisions of this Agreement;
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(b) any failure (because of a failure to meet the conditions of
Section 7 hereof or otherwise) by the Company to create, borrow, continue
or affect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this Agreement hereof; or
(c) any failure by the Company to make any payment of principal on
any LIBOR Portion when due (whether by acceleration, mandatory prepayment
or otherwise),
then, upon the demand of such Bank, the Company shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Company a
certificate executed by an officer of such Bank setting forth the amount of such
loss, cost or expense in reasonable detail (including an explanation of the
basis for and the computation of such loss, cost or expense) and such
certificate shall be deemed PRIMA FACIE correct.
SECTION 3.8. CHANGE OF LAW. Notwithstanding any other provisions of this
Agreement or any Note, if at any time any change in applicable law or regulation
or in the official interpretation thereof makes it unlawful for any Bank to make
or continue to maintain LIBOR Portions or to give effect to its obligations to
make LIBOR Portions available as contemplated hereby, such Bank shall promptly
give notice thereof to the Company and the Agent and such Bank's obligations to
make or maintain LIBOR Portions under this Agreement shall terminate until it is
no longer unlawful for such Bank to make or maintain LIBOR Portions. To the
extent required to comply with any such law as changed, the Company shall prepay
on demand the outstanding principal amount of any such affected LIBOR Portions,
together with all interest accrued thereon and all other amounts then due and
payable to such Bank under this Agreement; PROVIDED, HOWEVER, subject to all of
the terms and conditions of this Agreement, the Company may then elect to
convert the principal amount of the affected LIBOR Portion from such Bank into
the Base Rate Portion from such Bank that shall not be made ratably by the Banks
but only from such affected Bank. During the period when it is unlawful for any
Bank to make LIBOR Portions, Loans shall continue to be made in such a manner so
that the percentage of each Bank's Commitment in use is identical, but the Banks
affected by such illegality shall make their share of each Borrowing which has
been requested in the form of a LIBOR Portion available in the form of a Base
Rate Portion. Each Bank agrees (to the extent consistent with internal
policies) to designate a different lending office if such designation would
avoid the illegality described in this Section 3.8; PROVIDED, HOWEVER, that such
designation need not be made if it would result in any additional costs,
expenses or risks to such Bank that are not reimbursed by the Company
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pursuant hereto or would, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.
SECTION 3.9. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR
INADEQUACY OF, LIBOR RATE. If on or prior to the first day of any Interest
Period for any LIBOR Portion the Agent determines that deposits in United States
Dollars (in the applicable amounts) are not being offered to it or to banks
generally in the offshore eurodollar market for such Interest Period, then the
Agent shall forthwith give notice thereof to the Company and the Banks,
whereupon until the Agent notifies the Company that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
any further LIBOR Portions available shall be suspended.
SECTION 3.10. INCREASED COST AND REDUCED RETURN. If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the official 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 (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(a) shall subject any Bank (or its lending office) to any charges of
any kind (other than Withholding Taxes covered by Section 4.9 hereof) with
respect to its interest in the LIBOR Portions, its Note or its obligation
to make LIBOR Portions available, or shall change the basis of taxation of
payments to any Bank (or its lending office) of the principal of or
interest on LIBOR Portions or any other amounts due under this Agreement in
respect of its LIBOR Portions or its obligation to make LIBOR Portions; or
(b) shall impose, modify or deem applicable any reserve, special
deposit or similar requirements (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its lending office) or
shall impose on any Bank (or its lending office) or the offshore interbank
market any other condition affecting LIBOR Portions, its Note or its
obligation to make LIBOR Portions available;
and the result of any of the foregoing is to increase the cost to such Bank (or
its lending office) of making or maintaining any LIBOR Portion, or to reduce the
amount of any sum received or
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receivable by such Bank (or its lending office) under this Agreement or under
its Note with respect thereto, by an amount deemed by such Bank to be material,
then, within fifteen (15) days after demand by such Bank (with a copy to the
Agent), the Company shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction. A certificate
of any Bank claiming compensation under this Section 3.10 and setting forth the
additional amount or amounts in reasonable detail (including an explanation of
the basis therefor and the computation of such amount) to be paid to it
hereunder shall be deemed PRIMA FACIE correct. In determining such amount, such
Bank may use reasonable averaging and attribution methods. A Bank shall not be
entitled to compensation under this Section 3.10 with respect to any adoption or
change for any period prior to the earlier of (i) the date it notifies the
Company of the adoption or change giving rise to the request for compensation or
(ii) the date which is thirty (30) days prior to the date it becomes aware of
the adoption or change giving rise to the request for compensation if the
Company is notified of the adoption or change prior to the lapse of such 30-day
period.
SECTION 3.11. LENDING OFFICES. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "LENDING OFFICE") or at such other of
its branches, offices or affiliates as it may from time to time elect and
designate in a notice to the Company and the Agent (but such funds shall in any
event be made available to the Company at the office of the Agent as herein
provided for).
SECTION 3.12. DISCRETION OF BANKS AS TO MANNER OF FUNDING. Notwithstanding
any other provision of this Agreement, 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 under this Agreement (including, without limitation, calculations
under Sections 3.7 and 3.10 hereof) shall be made as if each Bank had actually
funded and maintained its interest in each LIBOR Portion through the purchase of
deposits in the offshore interbank market having a maturity corresponding to
such LIBOR Portion's Interest Period and bearing an interest rate equal to LIBOR
for such Interest Period.
SECTION 4. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS
SECTION 4.1. COMMITMENT FEE. For the period from the date hereof to and
including the Termination Date, the Company shall pay to the Agent for the
ratable account of the Banks a commitment fee at the Applicable Margin on the
average daily unused amount of the Commitments hereunder, such fee to be payable
quarterly in arrears on the first day of each March, June, September
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and December in each year to and including, and on, the Termination Date.
SECTION 4.2. LETTER OF CREDIT FEES.
(a) SHARED FEES. The Company shall pay to the Agent for the ratable
account of the Banks a letter of credit fee computed at the Applicable Margin on
the maximum amount of the Letters of Credit from time to time outstanding, such
fee to be paid quarterly in arrears on the first day of each March, June,
September and December in each year to and including, and on, the Termination
Date.
(b) ISSUING BANK FRONTING FEES. On the date of issuance of each Letter of
Credit, and as a condition thereto, the Company shall pay to the relevant
Issuing Bank a non-refundable letter of credit issuance fee in the amount equal
to (a) with respect to any Financial Letter of Credit, .10% of the amount of the
relevant Letter of Credit to be issued and (b) with respect to any Non-Financial
Letter of Credit, .0625% of the amount of the relevant Letter of Credit to be
issued. In addition, the Company further agrees to pay each Issuing Bank for
its own account such amendment, processing and transaction fees and charges as
the Issuing Bank from time to time customarily imposes in connection with any
amendment, cancellation, negotiation and/or payment of Letters of Credit issued
by such Issuing Bank and draft drawn thereunder.
SECTION 4.3. AGENT'S FEES. On the date hereof, and on the date occurring
on each anniversary of the date hereof (excluding the Termination Date) when any
credit or commitment to extend credit is outstanding hereunder, the Company
shall pay to the Agent, for its own use and benefit, such fees as may be agreed
upon in writing by the Company and the Agent, as the same may be amended from
time to time.
SECTION 4.4. PREPAYMENTS. (A) OPTIONAL PREPAYMENTS. The Company shall
have the privilege of prepaying without premium or penalty and in whole or in
part (but, if in part, then in an amount not less than $1,000,000) (or such
lesser amount as will prepay the Loans in full) the Notes at any time, each such
prepayment to be made by the payment of the principal amount to be prepaid, any
amount due the Banks under Section 3.7 hereof (any failure of the Agent or the
Banks to require payment of any amount due under Section 3.7 not to preclude a
later demand that the amount so due be paid) and, in the case of a prepayment
which prepays the Notes in full after which the Commitments are no longer
outstanding, accrued interest thereon to the date fixed for prepayment.
(b) MANDATORY PREPAYMENT. In the event that the aggregate U.S. Dollar
Equivalent of
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Letters of Credit payable in Available Foreign Currencies exceeds the limit set
forth in Section 2.3(a) hereof as then determined and computed, the Company
shall immediately upon demand pay over the amount of the excess to the Agent to
be applied against, or held as collateral security for, as applicable, such
Letters of Credit and the obligations of the Company with respect thereto.
SECTION 4.5. TERMINATIONS. The Company shall have the privilege at any
time and from time to time upon three Business Days prior notice to the Agent
(which shall promptly notify the Banks) to ratably terminate the Commitments in
whole or in part (but, if in part, then in a minimum amount of $1,000,000),
provided that the Commitments may not be reduced to an amount less than the
aggregate principal amount of Loans and Letters of Credit then outstanding. No
termination of the Commitments may be reinstated unless otherwise agreed to in
writing by the Banks.
SECTION 4.6. PLACE AND APPLICATION. Except as otherwise provided in
Section 2.3 with respect to Letters of Credit issued by a Bank other than the
Agent, all payments of principal, interest and fees shall be made to the Agent
at its office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other
place as the Agent may specify) in immediately available and freely transferable
funds at the place of payment. All payments due from the Company hereunder
shall be made without set-off or counterclaim and without reduction for, and
free from, any and all present or future taxes, levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions or conditions of any nature
imposed by any government or political subdivision or taxing authority thereof.
Except as otherwise provided in Section 2.3 with respect to Letters of Credit,
payments received by the Agent after 1:00 p.m. (Chicago time) shall be deemed
received as of the opening of business on the next Business Day. Except as
otherwise provided in this Agreement, all payments shall be received by the
Agent for the ratable account of the Banks, and shall be promptly distributed by
the Agent ratably to the Banks except that payments which pursuant to the terms
hereof are for the use and benefit of the Agent shall be retained by it for its
own account and payments received to reimburse an Issuing Bank or a Bank for a
fee or cost peculiar to that Issuing Bank or Bank, as the case may be, shall be
remitted to it. Unless the Company otherwise directs, principal payments on the
Notes shall be first applied to the Base Rate Portion and then to the LIBOR
Portions in the order in which their Interest Periods expire. Reimbursements of
drawings under Letters of Credit shall be promptly remitted to the relevant
Issuing Bank except to the extent the Banks have previously reimbursed the
Issuing Bank for the drawing in question.
Anything contained herein to the contrary notwithstanding, all payments and
collections
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received in respect of the indebtedness evidenced by the Notes or the
Applications and all proceeds of the Collateral received, in each instance, by
the Agent or any of the Banks after the occurrence of an Event of Default shall
be distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent in monitoring, verifying, protecting, preserving or
enforcing the liens on the Collateral or in protecting, preserving or
enforcing rights under the Loan Documents and in any event including all
costs and expenses of a character which the Company has agreed to pay under
Section 11.10 hereof (such funds to be retained by the Agent for its own
account unless it has previously been reimbursed for such costs and
expenses by the Banks, in which event such amounts shall be remitted to the
Banks to reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or other fees
or amounts due under the Loan Documents other than for principal or in
reimbursement of the principal amount of drafts presented and paid under
Letters of Credit, ratably as among the Banks in accord with the amount of
such interest and other fees or amounts owing each;
(c) third, to the payment of the principal of the Notes and the
amounts of all drafts presented and paid under Letters of Credit, to be
applied ratably as among the Notes and Letter of Credit liabilities;
(d) fourth, to the Agent to be held as collateral security for the
Letters of Credit in an amount equal to the aggregate undrawn balance
thereof, with the funds so held to, if the Company so requests, be invested
in short-term high-grade debt securities, acceptable to and held by and
pledged to the Agent (it being understood that the balance of such
investments and any earnings attributable thereto shall, after the payment
and satisfaction in full of any and all obligations owing to the Agent and
the Banks hereunder and under the other Loan Documents and after the
expiration of all Letters of Credit, be returned to the Company or to
whoever may be lawfully entitled thereto); and
(e) fifth, to whoever may be lawfully entitled thereto.
SECTION 4.7. NOTATIONS AND REQUESTS. All advances made against the Notes
shall be recorded by the Banks on their books or, at their option in any
instance, endorsed on the reverse side of the Notes and the unpaid principal
balances so recorded or endorsed by the Banks shall be PRIMA
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FACIE evidence in any court or other proceeding brought to enforce the Notes of
the principal amount remaining unpaid thereon. Prior to any negotiation of any
Note, the Bank holding such Note shall endorse thereon the principal amount
remaining unpaid thereon.
SECTION 4.8. CAPITAL ADEQUACY. If any Bank shall determine that any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by such 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 as a consequence of its obligations hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Bank could have achieved but for such law, rule, regulation, 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 as specified by such Bank the Company shall pay such additional
amount or amounts as will compensate such Bank for such reduction in rate of
return. A certificate of any Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder in
reasonable detail shall be deemed PRIMA FACIE correct. In determining such
amount, such Bank may use any reasonable averaging and attribution methods. A
Bank shall not be entitled to compensation under this Section with respect to
any change, adoption or interpretation (a "CHANGE") for any period prior to the
earlier of (i) the date it notifies the Company of the Change or (ii) the date
which thirty (30) days prior to the date such Bank obtains actual knowledge of
the Change giving rise to the request for compensation if the Company is
notified of the Change prior to the lapse of such 30-day period. Each Bank and
the Agent shall use reasonable efforts to minimize the cost imposed on the
Company in respect of any such increased capital requirement and shall compute
the assessment of any such cost related to such increased capital on a
nondiscriminatory basis among the Company, on the one hand, and other borrowers
to which it applies, on the other hand, and neither such Bank nor any
corporation controlling such Bank nor the Agent shall be entitled to demand
compensation or be compensated for any increased capital requirement from the
Company hereunder in excess of the amount so computed.
SECTION 4.9. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING. Except
as otherwise required by law and subject to Section 4.9(b) hereof, each payment
by the Company under
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this Agreement or the other Loan Documents shall be made without withholding for
or on account of any present or future taxes (other than overall net income
taxes on the recipient) imposed by or within the jurisdiction in which the
Company is domiciled, any jurisdiction from which the Company makes any payment,
or (in each case) any political subdivision or taxing authority thereof or
therein (herein, "WITHHOLDING TAXES"). If any such Withholding Tax is so
required, the Company shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon, and forthwith pay such additional amount as may be necessary to
ensure that the net amount actually received by each Bank and the Agent free and
clear of such Withholding Taxes (including such taxes on such additional amount)
is equal to the amount which that Bank or the Agent (as the case may be) would
have received had such withholding not been made. If the Agent or any Bank pays
any amount in respect of any such Withholding Taxes, penalties or interest, the
Company shall reimburse the Agent or such Bank for that payment on demand in the
currency in which such payment was made. If the Company pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Bank or Agent on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) 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 Company and the Agent on or before the earlier of the date the
initial Borrowing is made hereunder and thirty (30) days after the date hereof,
two duly completed and signed copies of either Form 1001 (relating to such Bank
and entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Bank, including fees, pursuant to the Loan
Documents and the Loans) or Form 4224 (relating to all amounts to be received by
such Bank, including fees, pursuant to the Loan Documents and the Loans) of the
United States Internal Revenue Service. Thereafter and from time to time, each
Bank shall submit to the Company and the Agent such additional duly completed
and signed copies of one or the other 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) requested by the Company in a written notice,
directly or through the 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 the Loan Documents or the Loans.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Bank determines, as a
result of any change
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in applicable law, regulation or treaty, or in any official application or
interpretation thereof, that it is unable to submit to the Company or the Agent
any form or certificate that such Bank is obligated to submit pursuant to
subsection (b) of this Section 4.9 or that such Bank is required to withdraw or
cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Bank shall
promptly notify the Company 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.
(d) BANK REPLACEMENT. If the Company is required to make any reduction or
withholding with respect to any payment due any Bank under this Section 4.9 (in
any such case a "REPLACEABLE BANK"), the Company may, with the consent of the
Agent, propose that another bank (a "REPLACEMENT BANK"), which bank may be an
existing Bank, be substituted for and replace the Replaceable Bank for purposes
of this Agreement. If a Replacement Bank is so substituted for the Replaceable
Bank, the Replaceable Bank shall enter into an Assignment Agreement with the
Replacement Bank, the Company and the Agent to assign and transfer to the
Replacement Bank the Replaceable Bank's Commitment and Loans and credit risk
with respect to Letters of Credit hereunder pursuant to and in accordance with
the provisions and requirements of Section 11.12 hereof and, as a condition to
its execution thereof, the Replaceable Bank shall concurrently receive the full
amount of its Loans, interest thereon, and all accrued fees and other amounts to
which it is entitled under this Agreement.
SECTION 5. THE COLLATERAL AND GUARANTIES.
SECTION 5.1. THE COLLATERAL. The Notes and the other obligations of the
Company to the Agent and the Banks shall be secured by (a) valid, perfected and
enforceable liens in all right, title and interest of the Company and of each
Subsidiary in all capital stock of each Material Subsidiary, whether now owned
or hereafter acquired, and all proceeds thereof and (b) valid, perfected
(subject to the proviso appearing at the end of this sentence) and enforceable
liens in all right, title and interest of the Company and of each Material
Subsidiary in all cash and cash equivalents, accounts, chattel paper, general
intangibles, instruments, investment property, documents, inventory, equipment
and real property of every kind and description, whether now owned or hereafter
acquired, and all proceeds thereof, including, without limitation, all rights
under any leases of goods; PROVIDED, HOWEVER, that until a Default or an Event
of Default has occurred and is continuing and thereafter until otherwise
required by the Required Banks or the Agent, (i) liens on cash or deposit
accounts
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maintained with Persons other than the Banks need not be perfected, (ii) no
liens need be granted on the capital stock of any Unrestricted Subsidiary or
Restricted Subsidiary which fails to qualify as a Material Subsidiary, (iii) no
liens need be granted on real property, (iv) liens need not be perfected on note
receivables having a fair market value of less than $1,000,000 in any instance
and $5,000,000 in the aggregate, (v) liens on investment property (other than
the capital stock of each Material Subsidiary) which cannot be perfected by the
filing of a financing statement need not be perfected, (vi) liens on vehicles
which are subject to a certificate of title law need not be noted on the
certificate of title and (vii) liens on inventory and equipment located at job
sites outside of the United States of America in the ordinary course of business
which, in the aggregate, have a market value of less than $5,000,000 at any one
time need not be perfected. The liens in the Collateral shall be granted to the
Agent for the ratable account of the Banks and shall be valid and perfected
first liens subject, however, to the proviso appearing at the end of the
immediately preceding sentence, and the rights of lessors under leases and
Purchase Money Liens held by vendors providing purchase money financing.
Notwithstanding anything to the contrary contained herein, in no event will any
of the Collateral described above be deemed to include (i) property consisting
of the Cash Distribution (in the amount of $13,300,000), the MK Rail Note
Proceeds, and MK Rail Stock (all as such terms are defined in the Plan), and all
proceeds thereof, held for distribution pursuant to the terms of the Plan, (ii)
foreign tax credit refunds to the extent held in the foreign tax credit sinking
fund for the benefit of the holders of the Company's Series A Preferred Stock,
as provided for in the Company's certificate of incorporation in effect on the
date hereof, and in an amount of not more than $18,000,000 (the property
described in clause (i) and (ii) hereof being referred to herein as the
"SEGREGATED ASSETS FOR PLAN DISTRIBUTION"), (iii) the assets identified in
Schedule 5.1 hereto, (iv) any interests in equipment owned by the Company or any
Material Subsidiary which is subject to a Purchase Money Lien in favor of any
third party (other than the Company or any of its Affiliates) to the extent the
granting of a security interest or lien therein is prohibited by the
agreement(s) pursuant to which such equipment is financed and such prohibition
has not been or is not waived or the consent of the applicable party has not
been or is not obtained, (v) any interests in any leases or licenses to use real
or personal property under which the Company or any Material Subsidiary is
lessee or licensee and a Person other than the Company or an Affiliate of the
Company is lessor or licensor to the extent the granting of a security interest
or lien therein is prohibited by the agreement(s) pursuant to which such
property is leased and such prohibition has not been or is not waived or the
consent
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of the applicable party has not been or is not obtained, or (vi) any interest in
any joint venture or in any contract, contract right, or other similar general
intangible if the granting of a lien therein is prohibited by the terms of the
written agreement creating such joint venture or creating or evidencing such
contract, contract right, or similar general intangible; PROVIDED FURTHER, that
(x) notwithstanding anything set forth in clause (vi) above to the contrary, to
the extent not prohibited by law, the Agent has and shall at all times have a
security interest in all rights to payments of money due or to become due under
any joint venture, contract, contract right, or similar general intangible and
all other proceeds thereof and (y) if and when the prohibition which prevents
the granting of a security interest in any such property is removed, terminated
or otherwise becomes unenforceable as a matter of law, the Agent will be deemed
to have, and at all times to have had, a security interest in such property, and
the Collateral will be deemed to include, and at all times to have included,
such property.
SECTION 5.2. FURTHER ASSURANCES. The Company covenants and agrees that
it shall, and shall cause each Material Subsidiary to, comply with all terms and
conditions of each of the Collateral Documents and that the Company shall, and
shall cause each Material Subsidiary to, at any time and from time to time at
the request of the Agent or the Required Banks execute and deliver such
instruments and documents and do such acts and things as the Agent or the
Required Banks may reasonably request in order to provide for or protect or
perfect the lien of the Agent in the Collateral, subject to the terms of
Section 5.1 above.
SECTION 5.3. GUARANTY. Payment of the Notes and the other obligations of
the Company hereunder and under the other Loan Documents shall at all times be
jointly and severally guaranteed by each Material Subsidiary pursuant to a
Guaranty Agreement issued by such Material Subsidiaries in form and substance
satisfactory to the Agent and the Required Banks (the "GUARANTY"). In the event
any Subsidiary hereafter becomes a Material Subsidiary, whether such Subsidiary
currently exists or is hereafter formed or acquired, the Company shall cause
such Subsidiary to execute a supplement to the Guaranty pursuant to which such
Subsidiary joins in and becomes obligated as a guarantor thereunder, which
supplement shall be in form and substance satisfactory to the Agent, and the
Company shall also cause such Subsidiary to execute such Collateral Documents
(having terms and conditions substantially similar to those executed by the
Company and its existing Material Subsidiaries on the date hereof in connection
with this Agreement) as the Agent may then require granting the Agent for the
benefit of the Banks a security interest in and lien on the assets of such
Subsidiary as collateral security for the Notes, the Applications, and the other
obligations of the
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Company under the Loan Documents, together with such other instruments,
documents, certificates and opinions required by the Agent in connection
therewith.
SECTION 5.4. AGREEMENT TO RELEASE LIENS. In the event the Company has a
Xxxxx'x Rating of at least Baa3 or a S&P Rating of at least BBB-, at the request
and expense of the Company (a) the Banks agree that the lien of the Agent in the
Collateral shall be released and (b) the Agent shall execute such termination
statements and other lien releases as the Company may reasonably request.
Thereafter, in the event the Company neither has a Xxxxx'x Rating of at least
Baa3 nor a S&P Rating of at least BBB-, then all obligations of the Company
hereunder and under the other Loan Documents shall at all such times be, and the
Company shall at all such times cause such obligations to be, secured by all of
the Collateral described in, and subject to the terms and conditions of, Section
5.1. above. The Company shall, and shall cause the Material Subsidiaries to,
execute and deliver such documents and take such other actions as the Agent may
reasonably require to provide for and protect such liens and evidence the fact
that they have the priority called for by this Agreement, all such documents and
other acts and things to be consistent with the documents and acts and things
required in connection with the initial advance hereunder pursuant to Section
7.2 hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Banks as follows:
SECTION 6.1. ORGANIZATION AND POWER. The Company is duly organized and
existing under the laws of the state of its incorporation, and is duly licensed
or qualified to do business in each state where the nature of the assets owned
or leased by it or business conducted by it requires such licensing or
qualification and in which the failure to be so licensed or qualified would have
a Material Adverse Effect and has all necessary corporate power to carry on its
present business. The Company has full right, power and authority to enter into
this Agreement, to make the borrowings herein provided for, to issue the Notes
in evidence thereof, to execute and deliver the Applications and the other Loan
Documents executed and delivered or to be executed and delivered by it, and to
perform each and all of the matters and things herein and therein provided for.
Each Material Subsidiary has full right, power and authority to enter into the
Loan Documents executed by it and to perform each and all of the matters and
things therein provided for. The Loan Documents do not, nor will the
performance or observance by the Company or any Subsidiary of any of the matters
and things herein or therein provided for, contravene any provision of law or
any charter or by-law provision of the Company or any such Subsidiary or
constitutes a breach or default under any covenant, indenture
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or agreement of or affecting the Company or any such Subsidiary where such
breach or default would have a Material Adverse Effect.
SECTION 6.2. SUBSIDIARIES. Each Subsidiary is duly organized and
existing under the laws of the jurisdiction of its incorporation, and is duly
licensed or qualified to do business in each state or other jurisdiction where
the nature of the assets owned or leased by it or business conducted by it
requires such licensing or qualification and in which the failure to be so
licensed or qualified would have a Material Adverse Effect and has all necessary
corporate power to carry on its present business. Schedule 6.2 hereto
identifies each Subsidiary, the jurisdiction of its incorporation, the
percentage of issued and outstanding shares of each class of its capital stock
owned by the Company and the Subsidiaries and, if such percentage is not 100%
(excluding directors' qualifying shares as required by law), a description of
each class of its authorized capital stock and the number of shares of each
class issued and outstanding, together with a designation of those Subsidiaries
which are Restricted Subsidiaries (including a designation of those which are
Material Subsidiaries) and those which are Unrestricted Subsidiaries. All of
the outstanding shares of capital stock of each Subsidiary are validly issued
and outstanding and fully paid and nonassessable, and all shares of each
Subsidiary indicated on Schedule 6.2 as owned by the Company or a Subsidiary are
owned, beneficially and of record, by the Company or such Subsidiary free and
clear of all liens, security interests, charges and encumbrances, other than the
lien of the Agent on the shares of each Material Subsidiary. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock of any Subsidiary, except for options granted in the
ordinary course to officers and employees of non-Material Subsidiaries or of
Unrestricted Subsidiaries which, as to any Subsidiary, do not, if exercised,
aggregate 10% or more of the capital stock of any such Subsidiary.
SECTION 6.3. USE OF PROCEEDS; REGULATION U. The company shall use
proceeds of the Loans and other extensions of credit made available hereunder
solely for the purpose of refinancing the acquisition of Old MK pursuant to the
Merger Documents, refinancing existing debt of the Company and its Subsidiaries
(including refinancing debt of Old MK assumed by operation of law as a result of
the Merger and financing the payment of obligations required to be paid by the
Company under the Plan), and for its working capital and other general corporate
purposes. Neither the Company nor any Subsidiary is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stocks (within
the meaning of Regulation U of the Board of Governors
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of the Federal Reserve System), and no part of the proceeds of any loan or
extension of credit hereunder will be used to purchase or carry any margin stock
or extend credit to others for the purpose of purchasing or carrying any margin
stock if as a result thereof such loan or other extension of credit would
violate Regulation U or any interpretation thereof.
SECTION 6.4. FINANCIAL STATEMENTS. (a) The financial statements of the
Company and its Subsidiaries for the year ended November 30, 1995, including an
audited consolidated balance sheet as of November 30, 1995, and an audited
consolidated statement of profit and loss for the twelve months ended said date,
and the unaudited financial statements of the Company and its Subsidiaries for
the fiscal period ended May 31 1996, including the unaudited consolidated
balance sheet as of May 31, 1996, and unaudited consolidated statement of profit
and loss for the six (6) months ended said date, each prepared by the Company,
and heretofore furnished to the Banks, truly and accurately reflect the
financial condition of the Company and its Subsidiaries taken as a whole as at
said dates and the results of operations for the periods covered thereby. Except
with respect to the potential contingent liability associated with the
environmental matter for the Summitville, Colorado, site specifically disclosed
in the Disclosure Statement and the Final Proxy Statement to the shareholders of
Washington Construction Group, Inc. referred to in Section 7.2(c) hereof, the
Company and its Subsidiaries have no contingent liabilities which are material
to them other than as indicated on said financial statements and, since the date
of such financial statements, there have been no material adverse changes in the
condition, financial or otherwise, business or operations of the Company or its
Subsidiaries taken as a whole nor any changes to the Company and its
Subsidiaries taken as a whole except those occurring in the ordinary course of
business.
(b) The financial statements of Old MK and its subsidiaries set forth in
Old MK's annual report to the Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1995, and in its quarterly reports to the
Securities and Exchange Commission on Form 10-Q for the three months ended March
31, 1996, and the six months ended June 30, 1996, each in the form heretofore
submitted to the Banks, fairly present the consolidated financial condition of
Old MK and its subsidiaries and the consolidated results of their operations and
cash flows as of the dates of such statements in conformity with generally
accepted accounting principles applied on a consistent basis, subject to
year-end audit adjustments in the case of interim financial statements. Except
with respect to the potential contingent liability associated with the
environmental matter for the Summitville, Colorado, site specifically disclosed
in the Disclosure Statement, Old MK and its
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subsidiaries have no contingent liabilities which are material to them other
than as indicated on said financial statements, and, since the date of such
financial statements, there have been no material adverse changes in the
condition, financial or otherwise, business or operations of Old MK or its
subsidiaries taken as a whole nor any changes to Old MK and its subsidiaries
taken as a whole except those occurring in the ordinary course of business (it
being agreed for purposes of this Section 6.4(b) that the filing by Old MK on
June 25, 1996, of its petition for relief under Chapter 11 of the United States
Bankruptcy Code shall not be deemed a material adverse change).
(c) The unaudited pro forma combined, condensed, and consolidated balance
sheet and combined, condensed, and consolidated statements of operations for the
Company, Old MK and their respective subsidiaries heretofore delivered to the
Banks fairly present (subject to the qualifications and assumptions set forth in
the notes attached thereto) the combined financial condition of the Company, Old
MK and their subsidiaries as at the dates thereof and for the periods covered
thereby after giving effect to the Plan and the Merger based upon the best
information currently available to the Company with respect to such consummation
and the resolution of claims under the Plan.
SECTION 6.5. LITIGATION AND TAXES. Except as disclosed in the Company's
Form 10-K for the fiscal year ending November 30, 1995 and Form 10-Q for the
fiscal quarter ending May 31, 1996, there is no litigation or governmental
proceeding pending, nor to the knowledge of the Company threatened, against the
Company or any Subsidiary which if adversely determined would result in a
Material Adverse Effect. The income tax returns of the Company and its
Subsidiaries for the taxable year ended November 30, 1995 and for all taxable
years ended prior to said date, have been filed with the appropriate
governmental or taxing authorities, and any additional assessments in connection
with any such years have been paid or the applicable statute of limitations
therefor has expired. No objections to or controversies in respect of the
income tax returns of the Company or any Subsidiary are pending or threatened
which, if adversely determined, would result in a Material Adverse Effect. No
authorization, consent, license, or exemption from, 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 Company
or any Subsidiary of any Loan Document to be executed and delivered by it or to
the consummation of the Plan or the Merger, except for (a) filing of financing
statements and other documents evidencing the Agent's lien in the Collateral and
(b) such consents and approvals with respect to the Merger which have been
obtained and remain in full force and effect.
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SECTION 6.6. BURDENSOME CONTRACTS WITH AFFILIATES. Neither the Company
nor any Subsidiary is a party to any material contracts or agreements with any
of its Affiliates on terms and conditions which are materially less favorable to
the Company or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other.
SECTION 6.7. ERISA. The Company and each Subsidiary are each in
compliance in all material respects with the Employee Retirement Income Security
Act of 1974 ("ERISA") to the extent applicable to it and has received no notice
to the contrary from the Pension Benefit Guaranty Corporation ("PBGC"), and, in
the event of the Company's or any Subsidiary's partial or total withdrawal from
any pension plans, multi-employer pension plans or non-payment by other employer
participants therein, the liability of the Company and its Subsidiaries for any
unfunded vested benefits thereunder would not result in a Material Adverse
Effect.
SECTION 6.8. FULL DISCLOSURE. The statements and information furnished
to the Banks in connection with the negotiation of this Agreement and the
commitments by the Banks to provide all or part of the financing contemplated
hereby do not, taken as a whole, contain any untrue statement of a material fact
or omit a material fact necessary to make the material statements contained
therein or herein not misleading, except for such thereof as were corrected in
subsequent written statements furnished the Banks (the Banks acknowledging that
as to any projections furnished to the Banks, the Company only represents that
the same were prepared on the basis of information and estimates it believes to
be reasonable). There is no fact peculiar to the Company or any Subsidiary
which the Company has not disclosed to the Banks in writing which materially
adversely affects nor, so far as the Company now can reasonably foresee, is
reasonably likely to have a Material Adverse Effect.
SECTION 6.9. COMPLIANCE WITH LAW. (a) Except with respect to the
potential liability relating to the environmental matter for the Summitville,
Colorado, site identified in the disclosure materials referred to in the last
sentence of this Section 6.9, neither the Company nor any Subsidiary is (i) in
default with respect to any order, writ, injunction or decree of any court or
(ii) in default in any material respect under any law, ordinance, order,
regulation, license or demand (including ERISA, the Occupational Safety and
Health Act of 1970 and laws and regulations establishing quality criteria and
standards for air, water, land and toxic waste) of any federal, state, municipal
or other governmental agency, default with respect to or under which is
reasonably likely to result in a Material Adverse Effect; and (b) the Company
and each Subsidiary are each in compliance with all
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applicable state and federal environmental, health and safety statutes and
regulations, including, without limitation, regulations promulgated under the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ.,
except where failure to be in compliance is reasonably likely not to have a
Material Adverse Effect, and, to the Company's knowledge, neither the Company
nor any Subsidiary will have acquired, incurred or assumed, directly or
indirectly, any contingent liability in connection with the release of any toxic
or hazardous waste or substance into the environment which is reasonably likely
to have a Material Adverse Effect. Insofar as known to the responsible officers
of the Company, neither the Company nor any Subsidiary is liable, in whole or in
part, for, nor are any of the assets or property of the Company or any
Subsidiary subject to a lien in favor of any governmental entity for any
material liability arising from or in any way relating to, the costs of cleaning
up, remediating or responding to a release of hazardous substances (including,
without limitation, petroleum, its by-products or derivatives, or other
hydrocarbons) except as specifically disclosed in the 10-K Statement of the
Company dated November 30, 1995, the Disclosure Statement, or the Final Proxy
Statement to the shareholders of Washington Construction Group, Inc. referred to
in Section 7.2(c) hereof.
SECTION 6.10. MERGER. The Company and Old MK each had full right and
authority to enter into the Merger Documents executed by it and to perform its
obligations under, and consummate the transactions described in, the Merger
Documents executed by it. The Merger Documents were duly authorized, executed
and delivered by the Company and Old MK, each constituting the valid and binding
obligation of the Company and Old MK, as applicable, enforceable against it in
accordance with its respective terms; and the Merger Documents do not, nor will
the performance or observance by the Company of any of the matters or things
therein provided for contravene or constitute a default under any provision of
law or any judgment, injunction, order or decree binding upon the Company or any
provision of the charter, articles of incorporation, or by-laws of the Company
or any covenant, indenture, or agreement of or affecting the Company or any of
its assets or properties, or result in the imposition or creation of any lien or
charge on any of the assets or property of the Company. All conditions to the
Merger have been satisfied (including, without limitation, all necessary
shareholder, judicial and governmental consents), all filings and other matters
necessary to make the Merger effective have been done and performed, and the
Merger has become effective in accordance with the terms of the Merger
Documents.
SECTION 6.11. THE PLAN AND CERTAIN LITIGATION. The Plan has been
confirmed by the entry
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of an order of confirmation by the United States Bankruptcy Court for the
District of Delaware (the "CONFIRMATION ORDER") and a true copy of the
Confirmation Order has been delivered to the Banks. The time for filing a
notice of appeal from the Confirmation Order has expired without any such
notices of appeal being filed. All litigation described in the Disclosure
Statement under the heading "Pre-petition Legal Proceedings", other than the
case styled XXXXX XXXXXXXXX ET AL. X. XXXXXXXX XXXXXXX CORP. ET AL. pending
before the United States District Court for the Northern District of New York,
has been settled. Such settlements have been approved by the courts having
jurisdiction over such actions by orders which have become final and
non-appealable. The settlements are accurately described in the Disclosure
Statement and no other actions of the type described under such heading are
pending against Old MK or its subsidiaries. The description of the XXXXXXXXX
matter contained in the Disclosure Statement remains accurate as of the date
hereof. The Company has provided the Banks with its best estimates of (i) the
amount necessary to resolve any claims under the Plan which are payable in cash
or debt securities and which are not in a definite or ascertainable amount and
(ii) of its current plans for the resolution of claims where the Plan provides
the Company (as successor by merger to Old MK) options as to the method of
resolving the claims in question (it being acknowledged that the Company
reserves the right to vary from such estimates if it believes it in its best
interest to do so).
SECTION 7. CONDITIONS PRECEDENT.
SECTION 7.1. ALL ADVANCES. The obligation of the Banks to make any
Borrowing under the Revolving Credit (including the first advance) or of the
Agent to issue any Letter of Credit shall be subject to the provisions of
Sections 9.2 and 9.3 hereof and shall also be subject to the satisfaction of the
following conditions precedent at the time of the making of each Borrowing or
issuance of a Letter of Credit under the Revolving Credit:
(a) each of the representations and warranties set forth herein and
in the other Loan Documents shall be true and correct, as of the date of
such advance or issuance (except that the representations and warranties
made in Section 6.4 hereof shall be deemed to refer to the most recent
financial statements delivered to the Banks pursuant to Section 8.5
hereof);
(b) no material adverse change shall have occurred in the financial
condition, business or operations of the Company and its Subsidiaries taken
as a whole; and
(c) no Default or Event of Default shall have occurred and be
continuing.
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Any request made by the Company to the Agent for a Borrowing or Letter of Credit
hereunder shall be deemed to constitute a representation and warranty that the
foregoing statements are true and correct. In addition, in the case of the
issuance of a Letter of Credit, the Agent shall have received a properly
completed Application therefor.
SECTION 7.2. INITIAL ADVANCE. At or prior to the time of the initial
advance under the Revolving Credit or the issuance of the initial Letter of
Credit, the following conditions precedent shall also have been satisfied:
(a) The Agent shall have received the following for the account of
the Banks (each to be properly executed and completed) and the same shall
have been approved as to form and substance by the Banks:
(i) this Agreement and the Notes; (ii) copies (executed or
certified as may be appropriate) for each Bank of the Articles of
Incorporation and By-laws of the Company and each of its Material
Subsidiaries and of all legal documents or proceedings taken in
connection with the execution and delivery of the Loan Documents to
the extent the Agent or its counsel may reasonably request, including,
without limitation, certificates as to the incumbency and authority
of, and setting forth a specimen signature of, each officer who is to
sign any Loan Document;
(iii) the Guaranty;
(iv) the Collateral Documents and any documentation necessary to
perfect the liens thereby created (including, without limitation, all
certificates of capital stock of the Material Subsidiaries together
with executed blank stock powers therefor, together with all financing
statements requested by the Agent in connection with the Collateral
Documents) to the extent required by Section 5.1 hereof;
(v) evidence of the maintenance of insurance as required hereby
or by the Collateral Documents; and
(vi) a certificate from an authorized officer of the Company
stating whether the pro forma combined and consolidated balance sheet
of the Company, Old MK and their subsidiaries delivered to the Banks
pursuant to Section 6.4(c) hereof would be accurate in all material
respects as of the date the other conditions precedent to the
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initial advance under this Section 7.2 are satisfied or, if not,
setting forth the differences, with such statement to also indicate
whether there have been any changes in the Company's estimates and
assumptions delivered to the Banks pursuant to the last sentence of
Section 6.11 hereof.
(b) The liens and security interests granted to the Agent under the
Collateral Documents shall have been perfected to the extent required by
Section 5.1 hereof in a manner satisfactory to the Agent and the Required
Banks;
(c) The Agent shall have received for the account of the Banks
certified copies of (i) First Amended Plan of Reorganization of Old MK
dated as of July 25, 1996 and any amendments thereto, (ii) Restructuring
and Merger Agreement dated May 28, 1996 and any amendments thereto,
together with all Disclosure Statements of the sellers and purchasers
delivered thereunder, and all instruments and documents executed and
delivered in connection therewith, (iii) Resolutions of Old MK and
Washington Construction Group, Inc., authorizing the Merger, (iv) Final
Proxy Statement to the shareholder of Washington Construction Group, Inc.,
(v) Final US Bankruptcy Court Order confirming the Plan of Reorganization
and the Merger, together with a detailed summary of all appeals thereto now
pending (whether or not stayed), and (vi) Articles of Merger filed with the
Delaware Secretary of State.
(d) The Agent shall have received evidence satisfactory to the Banks
that (i) the "EFFECTIVE DATE" shall have occurred (as that term is defined
in each of the Plan and the Merger Documents) without waiver (other than
waivers approved by the Required Banks) of any of the conditions to such
effective dates occurring, (ii) after giving effect to the Merger, the
assets, liabilities (both absolute and contingent) and businesses of the
Company and its Subsidiaries are materially the same as contemplated by the
Plan, the June 24, 1996 bank compliance package, July 2, 1996 bank
presentation materials, and supplemental materials with respect thereto
submitted in writing to the Banks by the Company, and (iii) the sources and
uses of cash required to finance the Merger are consistent with the
information called for by clause (d)(ii) above;
(e) The Agent shall have received evidence that upon the initial
Borrowing hereunder the Acquired Loans will have been acquired by the Banks
hereunder and the Prior Credit Agreement will be terminated concurrently
therewith;
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(f) The Agent shall have received good standing certificates for the
Company and each of its Material Subsidiaries from the office of the
Secretary of the State in the state of its incorporation dated as of a date
no later than 45 days prior to the date hereof;
(g) The Agent shall have received for the account of itself the fees
referred to in Section 4.3 hereof; and
(h) The Agent shall have received for the account of the Banks such
other agreements, instruments, documents, certificates and opinions as the
Agent or the Required Banks make reasonably request.
SECTION 7.3. LEGAL MATTERS. Legal matters incident to the execution and
delivery of the Loan Documents and the other instruments and documents
contemplated hereby shall be satisfactory to the Agent and its counsel, and the
Banks shall have received the favorable written opinions of acceptable internal
and outside counsel for the Company and each Material Subsidiary party to the
Loan Documents, in form and substance satisfactory to the Agent and its counsel,
with respect to:
(a) the due organization and existence of the Company and each such
Material Subsidiary and the due licensing or qualification of the Company
and each such Material Subsidiary in all jurisdictions where the nature of
the assets owned or leased by them or business conducted by them requires
such licensing or qualification and in which the failure to be so licensed
or qualified would materially and adversely affect the business, properties
or operations of the Company and its Subsidiaries taken as a whole;
(b) the power and authority of the Company and each such Material
Subsidiary to enter into the Loan Documents and to perform and observe all
the matters and things herein and therein provided for and the fact that
the execution and delivery of the Loan Documents will not, nor will the
observance or performance of any of the matters or things therein or herein
provided for, contravene any provision of law or of the Charter or By-Laws
of the Company or any such Material Subsidiary or constitutes a material
breach of or default under any provision of any material covenant,
indenture or agreement binding upon the Company or any such Material
Subsidiary or affecting any of their properties or assets;
(c) the due organization and existence of Old MK and the power and
authority of Old MK and the Company to enter into the Merger Documents and
to perform and observe all of the matters and things therein provided for
and the fact that the execution and
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delivery of the Merger Documents do not, nor does the observance or
performance of any of the matters or things therein provided for,
contravene any provision of law or of the Charter or By-laws of Old MK or
of the Company or constitute a material breach of or default under any
provision of any material covenant, indenture, or agreement binding upon
the Company or affecting any of its properties or assets;
(d) the due authorization for and the validity and enforceability of
the Loan Documents and the due authorization for the Merger Documents;
(e) the fact that no governmental authorization or consent is
required with respect to the lawful execution, delivery and performance of
the Loan Documents or the Merger Documents or, if any such consent is
necessary, that the same been obtained and is in full force and effect;
(f) the lack, to the knowledge of such counsel, of any legal or
administrative proceedings pending or threatened against Old MK, the
Company or any Material Subsidiary which seeks to prevent the Merger or
which, if adversely determined, would result in a material adverse change
in the financial condition or properties, business or operations of the
Company and its Subsidiaries taken as a whole after giving effect to the
Merger;
(g) the fact that the Effective Date has occurred under each of the
Merger Documents and the Plan (in expressing such opinion counsel may rely
as to factual matters on certificates of appropriate officers of the
Company and/or Old MK), and that the Merger has become effective; and
(h) such other matters as the Agent or its counsel may reasonably
require.
SECTION 8. COVENANTS.
The Company agrees that, so long as any credit is available to or in use by
the Company hereunder, except to the extent compliance in any case or cases is
waived in writing by the Required Banks:
SECTION 8.1. MAINTENANCE OF BUSINESS. The Company will, and will cause
each Subsidiary to, preserve and keep in force and effect all licenses and
permits necessary to the proper conduct of their respective businesses expect
where the failure to do so would not result in a Material Adverse Effect.
SECTION 8.2. MAINTENANCE. The Company will, and will cause each
Subsidiary to,
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maintain, preserve and keep their plant, properties and equipment (other than
obsolete or worn out equipment held for sale or disposition) in good repair,
working order and condition (ordinary wear and tear excepted) and the Company
will, and will cause each Subsidiary to, from time to time make all needful and
proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the efficiency thereof shall be substantially preserved and
maintained, in each case where the failure to do so is reasonably likely to have
a Material Adverse Effect.
SECTION 8.3. TAXES. The Company will, and will cause each Subsidiary to,
duly pay and discharge all taxes, rates, assessments, fees and governmental
charges upon or against any of them or against their respective properties, in
each case before the same become delinquent and before penalties accrue thereon,
unless and to the extent that the same are being contested in good faith and by
appropriate proceedings, in each case where the failure to do so is reasonably
likely to have a Material Adverse Effect.
SECTION 8.4. INSURANCE. The Company will, and will cause each Subsidiary
to, insure and keep insured, in good and responsible insurance companies, all
insurable property owned by them which is of a character usually insured by
companies similarly situated and operating like properties; and the Company
will, and will cause each Subsidiary to, insure such other hazards and risks
(including employers' and public liability risks) in good and responsible
insurance companies as and to the extent usually insured by companies similarly
situated and conducting similar businesses. The Company will upon request of the
Agent furnish a certificate setting forth in summary form the nature and extent
of the insurance maintained pursuant to this Section.
SECTION 8.5. FINANCIAL REPORTS. The Company will, and will cause each
Subsidiary to, maintain a standard and modern system of accounting in accordance
with sound accounting practice and will furnish to the Banks and their duly
authorized representatives such information respecting the business and
financial condition of the Company and its Subsidiaries as the Agent may
reasonably request; and without any request, will furnish to the Banks:
(a) within 45 days after the close of each quarterly fiscal period of
the Company (except the last such period in each fiscal year), a copy of
the balance sheet, statement of earnings and statement of changes in cash
flow of the Company and its Subsidiaries for such period, prepared on a
consolidated and consolidating basis in accordance with GAAP, and the notes
thereto, and a schedule of material contracts in progress (with bonded
contracts
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specifically identified), all certified to by the chief financial officer
of the Company;
(b) within 90 days after the close of each fiscal year of the
Company, (i) a copy of the audit report for such year and accompanying
financial statements, including balance sheet, statement of earnings and
statement of cash flow on a consolidated and consolidating basis for the
Company and its Subsidiaries in accordance with GAAP, and the notes
thereto, with the consolidated statements certified by independent public
accountants of recognized standing selected by the Company and satisfactory
to the Required Banks and (ii) a schedule of material contracts in progress
(with bonded contracts specifically identified);
(c) within the periods provided in paragraphs (a) and (b) above, a
certificate of an authorized financial officer of the Company stating that
such officer has reviewed the provisions of this Agreement and setting
forth: (aa) the information and computations (in sufficient detail)
required in order to compute the Consolidated Debt/EBITDA Ratio and to
establish whether the Company was in compliance with the requirements of
Sections 8.10, 8.11 and 8.12 hereof at the end of the period covered by the
financial statements then being furnished, and (ab) to the best such
officer's knowledge, whether there exists on the date of the certificate or
existed at any time during the period covered by such financial statement
any Default or Event of Default and, if any such condition or event exists
on the date of the certificate or existed during such period, specifying
the nature and period of existence thereof and the action the Company is
taking, has taken or proposes to take with respect thereto;
(d) promptly upon the filing thereof, copies of all registration
statements, Form 10-K, Form 10-Q and Form 8-K reports and proxy statements
which the Company or any of its Subsidiaries file with the Securities and
Exchange Commission;
(e) prior written notice of any investment or acquisition by the
Company or any Subsidiary involving either a purchase price of $10,000,000
or more or the purchase of 5% or more of the Voting Stock of any Person;
and
(f) promptly after knowledge thereof shall have come to the attention
of any responsible officer of the Company, written notice of any threatened
or pending litigation or governmental proceeding or assessment against the
Company or any Subsidiary which if adversely determined would materially
adversely affect the business and properties of the Company and its
Subsidiaries taken as a whole or of any Event of Default.
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The Company will, and will cause each Subsidiary to, permit representatives
of any Bank, upon reasonable notice and during normal business hours, to examine
and make extracts from the books and records of the Company and its Subsidiaries
and to examine their assets and access thereto shall be permitted for such
purpose. The Agent and each Bank agree to maintain in confidence and not
disclose to any Person any material non-public information relating to the
Company or its Subsidiaries made available to the Agent or such Bank pursuant to
this Section 8.5; PROVIDED that the Agent and each Bank may make such
disclosures as are permitted by Section 11.20 or as shall be required by law or
to the Agent's or such Bank's auditors or legal counsel who, the Agent or such
Bank, as applicable, agrees will maintain the information so disclosed in
confidence. Upon notice from the Company, the Agent and the Banks shall take
such steps as may be reasonably requested by the Company to enable the Company
or any Subsidiary to comply with the Foreign Ownership Control or Influence
requirements of the United States Government imposed from time to time, provided
that (i) nothing herein shall obligate the Agent or any Bank to take any action
which would adversely affect the validity or enforceability of any lien granted,
or to be granted, to the Agent or the Banks hereunder or the validity or
enforceability of any of the Loan Documents or any rights or remedies of the
Agent or the Banks thereunder or of the Company's or any Material Subsidiary's
obligations thereunder and (ii) neither the Agent nor any Bank shall be liable
to the Company or any Subsidiary as a result of any act or failure to act
hereunder taken or omitted to be taken in good faith.
Section 8.6. COMPLIANCE WITH LAWS. The Company will, and will cause each
Subsidiary to, comply with all laws, ordinances or governmental rules and
regulations to which they are subject, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA, and all laws,
ordinances, governmental rules and regulations relating to environmental
protection in all applicable jurisdictions, the violation of which is reasonably
likely to have a Material Adverse Effect or would result in any lien or charge
upon any property of the Company or any Subsidiary which is not a Permitted
Lien.
SECTION 8.7. NATURE OF BUSINESS. The Company will not, nor will it
permit any Subsidiary to, engage in any business or activity if, as a result,
the general nature of the business which would then be engaged in by the Company
and its Subsidiaries taken as a whole would be substantially changed from
Eligible Lines of Business existing as of the date of this Agreement.
SECTION 8.8. LIENS. The Company will not, nor will it permit any
Restricted Subsidiary to, pledge, mortgage or otherwise encumber or subject to,
or permit to exist upon or be subjected
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to, any lien, security interest or charge upon, any assets or property of any
kind or character at any time owned by the Company or any Restricted Subsidiary;
PROVIDED, HOWEVER, that nothing in this Section contained shall operate to
prevent any of the following (collectively, "PERMITTED LIENS"):
(a) liens, pledges or deposits in connection with workmen's
compensation, unemployment insurance, social security obligations, taxes,
assessments, statutory obligations or other similar charges, good faith
deposits in connection with tenders, contracts or leases to which the
Company or any of its Restricted Subsidiaries is a party or other deposits
required to be made in the ordinary course of business and not in
connection with borrowing money or obtaining advances or credit; provided
in each case that the obligation or liability arises in the ordinary course
of business and is not overdue, or if overdue, is being contested in good
faith by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor to the
extent required by GAAP;
(b) inchoate statutory, construction, common carrier's,
materialmen's, landlord's, warehousemen's, mechanics, producers' or
operator's liens securing obligations not overdue, or if overdue, being
contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves have been
established therefor to the extent required by GAAP (collectively,
"MECHANIC'S LIENS");
(c) liens given to secure the payment of the purchase price or the
financing thereof incurred in connection with the acquisition of fixed
assets, including liens existing on such assets at the time of acquisition
thereof, provided that (i) the lien shall attach solely to the property
acquired or purchased and (ii) the indebtedness secured by such lien does
not exceed 100% of the lesser of the cost or fair value of the property
financed (collectively, "PURCHASE MONEY LIENS");
(d) the liens created by the Loan Documents;
(e) attachment or judgment liens individually or in the aggregate not
in excess of $1,000,000 (exclusive of (i) any amounts that are duly bonded
to the reasonable satisfaction of the Agent or (ii) any amount adequately
covered by insurance as to which the insurance company has not disclaimed
or disputed in writing its obligations for coverage or has not otherwise
failed to pay when due);
(f) liens for taxes, assessments or other governmental charges not
yet due and
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payable or which are being diligently contested in good faith by the
Company or its applicable Restricted Subsidiary by appropriate proceedings,
PROVIDED that in any such case an adequate reserve is being maintained by
the Company or such Restricted Subsidiary for the payment of same;
(g) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Company or any
Restricted Subsidiary;
(i) liens on assets other than the Collateral owned by newly acquired
Subsidiaries who become Restricted Subsidiaries hereunder existing at the
time of acquisition and not incurred in contemplation of such acquisition;
(j) liens described on Schedule 8.8 attached hereto, encumbering the
assets noted thereon opposite the description of the indebtedness or
obligation secured thereby; and
(k) extensions and renewals of the foregoing Permitted Liens,
PROVIDED that the aggregate amount of such liabilities secured by such
extended or renewed lien is not increased and such extended or renewed
liabilities secured by such lien are on terms and conditions no more
restrictive than the terms and conditions of the same being extended or
renewed.
SECTION 8.9. INDEBTEDNESS. The Company will not, nor will it permit any
Restricted Subsidiary to, issue, incur, assume, create, or have outstanding any
indebtedness for borrowed money (including as such for all purposes of this
Agreement any indebtedness representing the deferred purchase price of property
(accounts payable for the purchase of goods on ordinary trade terms shall not be
deemed indebtedness for the deferred purchase price of property for purposes of
this Agreement), any liability in respect to banker's acceptances, any
indebtedness, whether or not assumed, secured by liens on property acquired by
the Company or any Restricted Subsidiary existing at the time of the acquisition
thereof, and the liability of the Company or any Restricted Subsidiary under any
lease which should be capitalized under GAAP); PROVIDED, HOWEVER, that the
foregoing
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provisions shall not restrict nor operate to prevent:
(a) indebtedness owing to the Agent and the Banks under this
Agreement or any of the other Loan Documents;
(b) purchase money indebtedness;
(c) indebtedness of any Restricted Subsidiary owing to the Company or
any other Subsidiary arising in the ordinary course of business;
(d) indebtedness of any newly-acquired Restricted Subsidiary existing
at the time of the acquisition and not incurred in contemplation of such
acquisition;
(e) indebtedness described on Schedule 8.9 attached hereto; and
(f) indebtedness not otherwise permitted by this Section 8.9
aggregating not more than $2,000,000 at any one time outstanding.
SECTION 8.10. CONSOLIDATED NET WORTH. The Company will at all times
maintain Consolidated Net Worth of not less than the sum of (a) 80% of the
Company's Consolidated Net Worth determined as of the date hereof plus (b) 25%
of Consolidated Net Income for each fiscal quarter ending on or after November
30, 1996, for which Consolidated Net Income for such quarter then ended is a
positive amount; PROVIDED that for purposes of the foregoing clause (b), there
shall be no reduction to the amount of Consolidated Net Worth required to be
maintained hereunder for any fiscal quarter in which such Consolidated Net
Income is less than $0. On or before December 31, 1996, the Company shall
deliver to the Banks a certificate setting forth the Company's Consolidated Net
Worth determined in accordance with clause (a) above.
SECTION 8.11. CONSOLIDATED DEBT/CAPITAL RATIO. The Company will at all
times maintain the ratio of Consolidated Total Indebtedness minus the aggregate
amount of Letters of Credit then outstanding to Consolidated Capital at not more
than .5 to 1.
SECTION 8.12. DEBT SERVICE COVERAGE RATIO. The Company shall as of the
last day of each fiscal quarter have a Debt Service Coverage Ratio of not more
than 4.0 to 1.
SECTION 8.13. ACQUISITIONS, INVESTMENTS, LOANS, ADVANCES AND GUARANTEES.
The Company will not, nor will it permit any Restricted Subsidiary to, directly
or indirectly, make, retain or have outstanding any interest or investments
(whether through purchase of stock or obligations or otherwise) in, or loans or
advances to, any other Person, or acquire all or any substantial part of
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the assets or business of any other Person, or guarantee any indebtedness,
obligation or liability of any other Person or otherwise enter into any
arrangement designed to assure another Person against loss or subordinate any
claim or demand it may have to the claim or demand of any other Person;
PROVIDED, HOWEVER, that the foregoing provisions shall not apply to nor operate
to prevent:
(a) investments by the Company or any Restricted Subsidiary in direct
obligations of the United States of America or of any agency or
instrumentality thereof whose obligations constitute full faith and credit
obligations of the United States of America, provided that any such
obligations shall mature within fifteen months from the date the same are
acquired by the Company or such Restricted Subsidiary;
(b) investments by the Company or any Restricted Subsidiary in
certificates of deposit or time deposits issued by any Bank, or by any
United States commercial bank having capital and surplus of not less than
$100,000,000 and having a maturity of fifteen months or less;
(c) investments by the Company or any Restricted Subsidiary in
commercial paper maturing 270 days or less from the date of issuance which
at the time of acquisition is rated A-2 or better by Standard & Poor's
Corporation and P-2 or better by Xxxxx'x Investors Service, Inc.;
(d) investments by the Company or any Restricted Subsidiary in debt
securities issued by U.S. corporations or states of the United States
maturing within fifteen months from the date of acquisition thereof if at
the time of acquisition the investment in question has a rating of not less
than BBB from Standard & Poor's Ratings Services Group, a division of The
XxXxxx-Xxxx Companies, Inc. and/or Baa2 from Xxxxx'x Investors Services,
Inc.;
(e) investments by the Company or any Restricted Subsidiary in
preferred stock of any corporation organized under the laws of any state of
the United States which is subject to a remarketing undertaking at
intervals not exceeding fifteen months issued by any substantial broker and
which is rated BBB or better by Standard & Poor's Ratings Services Group, a
division of The XxXxxx-Xxxx Companies, Inc. and/or Baa2 or better by
Xxxxx'x Investors Services, Inc.;
(f) acquisitions by the Company or any Restricted Subsidiary of the
stock or assets of Persons primarily engaged in any Eligible Line of
Business if and only so long as
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prior to consummation of any such transaction the Company shall have
notified the Banks of the proposed transaction in reasonable detail as to
the terms thereof (including sources and uses of funds therefor) and the
Company shall have furnished the Banks with historic and pro forma
financial information and compliance calculations reasonably satisfactory
to the Required Banks demonstrating no Default or Event of Default exists
or, on a pro forma basis, would occur after giving effect to such
transaction;
(g) ordinary course of business investments in, directly or
indirectly, joint ventures with other Persons formed to provide services in
an Eligible Line of Business and loans and guaranties (made ratably with
the other venturers) to such joint ventures;
(h) loans and advances by the Company or any Restricted Subsidiary to
other Restricted Subsidiaries;
(i) one or more unsecured guaranties issued by the Company or any
Restricted Subsidiary guaranteeing indebtedness and obligations of Blue
Diamond outstanding from time to time in an aggregate principal not to
exceed $6,000,000 at any one time;
(j) the Guaranty made by the Material Subsidiaries in favor of the
Agent and the Banks;
(k) investments held by any Restricted Subsidiary acquired after the
date of this Agreement existing at the time of its acquisition by the
Company or other existing Restricted Subsidiary and not acquired by such
Restricted Subsidiary in contemplation of such acquisition;
(l) existing investments in, loans and advances to, and guaranties of
the obligations of, Unrestricted Subsidiaries disclosed on Schedule 8.13(l)
attached hereto and made a part hereof; together with additional
investments in, loans and advances to, and guaranties of the obligations
of, Unrestricted Subsidiaries not disclosed on Schedule 8.13(l) in an
aggregate account not to exceed $35,000,000 at any one time outstanding;
(m) guaranties existing on the date hereof described on, and
supporting the obligations set forth on, Schedule 8.13(m) hereof;
(n) performance guaranties supporting performance obligations of
Subsidiaries arising under contracts in Eligible Lines of Business;
(o) investments in, loans and advances to, and guaranties of the
obligations of,
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Persons (other than Subsidiaries), not otherwise permitted by this Section,
that are engaged in an Eligible Line of Business, and at no time
aggregating more than $10,000,000; and
(p) investments in, loans and advances to, and guaranties of the
obligations of Persons other than Subsidiaries not otherwise permitted by
this Section at no time aggregating more than $1,000,000.
In determining the amount of investments, loans and advances permitted under
this Section, investments shall always be taken at the original cost thereof,
regardless of any subsequent appreciation (including retained earnings) or
depreciation therein, and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.
SECTION 8.14. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS. The
Company will not declare or pay any dividends on any class of its capital stock
(other than (i) dividends payable solely in its capital stock and (ii)
redemptions and distributions in respect to the Company's Series A Preferred
Stock to the extent required by the Company's amended certificate of
incorporation as in effect on the date hereof and paid out of the proceeds of
foreign tax credit refunds up to $18,000,000, plus interest thereon) or directly
or indirectly purchase, redeem or otherwise acquire or retire any of its capital
stock (such declarations, payments, purchases, redemption's, acquisitions and
retirements being hereinafter referred to as "RESTRICTED PAYMENTS") if any
Default or Event of Default then exists or would arise after giving effect
thereto.
SECTION 8.15. MERGERS. The Company will not, nor will it permit any
Restricted Subsidiary to, consolidate or be a party to a merger with any other
Person, except that so long as no Default or Event of Default has occurred and
is continuing or would arise as a result thereof (i) any Restricted Subsidiary
of the Company may merge with and into the Company if the Company is the
surviving corporation and (ii) the Company or any Restricted Subsidiary may
engage in a merger with another Person if the Company or such Restricted
Subsidiary is the surviving corporation.
SECTION 8.16. SALE OF ASSETS. The Company will not, nor will it permit
any Restricted Subsidiary to, sell, lease or otherwise dispose of all or any
substantial part of its property or assets (including any disposition of
property as part of a sale and leaseback transaction, but excluding the leasing
of property by WCG Leasing, Inc., a Montana corporation, made in the ordinary
course of its business) or in any event sell or discount, with or without
recourse, any of its notes or accounts receivable; PROVIDED, that nothing
contained therein shall prohibit (i) sales of inventory in the ordinary
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course of business; (ii) sales or dispositions of obsolete or worn out property
disposed of in the ordinary course of business; and (iii) sales of individual
items of Collateral or other assets with a book value of less than (x)
$10,000,000 in the aggregate during the fiscal year ending on or about November
30, 1997, and (y) $15,000,000 in the aggregate during any other fiscal year. In
the event the Company sells CF Systems Corporation during the fiscal year ending
on or about November 30, 1997, such sale shall not count against the $10,000,000
permitted amount provided for in clause (iii)(x) above for purposes of this
Section 8.16 or Section 8.19 below. At the request of the Company, so long as
no Default or Event of Default then exists or would arise as a result of such
disposition, the Agent is hereby authorized and directed to release its lien on
any property sold pursuant to the forgoing provisions.
SECTION 8.17. BURDENSOME CONTRACTS WITH AFFILIATES. The Company will not,
nor will it permit any Restricted Subsidiary to, enter into or be a party to any
contract or agreement with an Affiliate on terms and conditions materially less
favorable to the Company or such Restricted Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
SECTION 8.18. NO CHANGE IN FISCAL YEAR. The Company will not, nor will it
permit any Restricted Subsidiary to, change its fiscal year, provided that the
Banks shall not unreasonably withhold their consent to such a change if in
connection therewith the provisions of this Agreement measuring covenant
compliance with reference to fiscal periods are renegotiated in a manner
reasonably acceptable to them.
SECTION 8.19. MAINTENANCE OF MATERIAL SUBSIDIARIES. The Company will not,
nor will it permit any Subsidiary to, directly or indirectly, sell, transfer, or
otherwise dispose of its equity interest in any Material Subsidiary, provided
that the Company or any Subsidiary may sell or otherwise dispose of 100% of its
equity interest in any one or more Material Subsidiaries if and only so long as
each of the following conditions are met: (i) such sale or disposition,
together with the sale and other disposition of assets of the Company and its
Subsidiaries made during such fiscal year, would be a permitted disposition of
assets under Section 8.16(iii) hereof, (ii) no Default or Event of Default
exists prior to or would arise immediately after giving effect to the
transaction, (iii) the Company has notified the Banks of the proposed
transaction in reasonable detail and has provided the Banks pro forma financial
information and compliance calculations reasonably satisfactory to the Required
Banks demonstrating no Default or Event of Default exists or would arise after
giving effect to such
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transaction, and (iv) no Material Adverse Effect shall occur as a result of such
transaction. In connection with the sale of the capital stock of a Material
Subsidiary permitted hereby, at the request of the Company and so long as no
Default or Event of Default then exists or would arise as a result thereof, the
Agent is hereby authorized and directed to release such Material Subsidiary from
the Guaranty and to release its lien on any stock or assets of such Material
Subsidiary.
SECTION 8.20. FORMATION OF SUBSIDIARIES. In the event any Restricted
Subsidiary is formed or acquired after the date hereof, unless with respect to
any newly formed or acquired Subsidiary such Subsidiary shall not be a Material
Subsidiary, the Company shall within thirty (30) Business Days thereof cause
such newly-form or acquired Subsidiary to become a party to the Guaranty and
execute such Collateral Documents to the extent required by Section 5 hereof (on
terms substantially similar to those executed in connection with this Agreement)
as the Agent may then require granting the Agent for the benefit of the Banks a
security interest in and lien on the personal property of such Subsidiary as
collateral security for the Notes, the Applications, and the other obligations
of the Company under the Loan Documents, together with such other instruments,
documents, certificates and opinions required by the Agent in connection
therewith. Thereafter, such Subsidiary shall be deemed a Material Subsidiary
hereunder and Schedule 6.2 of this Agreement shall be deemed amended to include
reference to such Subsidiary.
SECTION 8.21. NO RESTRICTION ON SUBSIDIARY DIVIDENDS. Neither the Company
nor any Subsidiary (excluding majority-owned joint ventures referred to in
Section 8.13(g) hereof) is a party to, nor will the Company or any Subsidiary
(excluding majority-owned joint ventures referred to in Section 8.13(g) hereof)
become a party to, any agreement prohibiting or otherwise restricting the
declaration or payment of any dividends by any such Subsidiary.
SECTION 8.22. INTEREST RATE PROTECTION. The Company hereby agrees that in
the event its Consolidated Total Indebtedness bearing interest at a floating
rate exceeds $100,000,000, the Company agrees to enter into good faith
discussions with the Banks pursuant to which the Company agrees to consider
entering into one or more interest rate hedging agreements mutually satisfactory
to the Company and the Agent.
SECTION 8.23. AGREEMENT TO RELEASE LIEN FILINGS. The Company represents
and warrants to the Banks that no UCC financing statements or other lien filings
are of record in any filing office other than (a) UCC financing statements and
other lien recording instruments perfecting Permitted Liens and (b) UCC
financing statements and other lien recording instruments securing obligations
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which have been discharged as a matter of law pursuant to the Plan. The Company
hereby agrees, at its cost and expense, to cause all UCC financing statements
and other lien recording instruments filed securing the obligations described in
clause (b) above to be released of record within thirty (30) days of the
Company's receipt of the Agent's post-filing financing statement searches and
the Company shall furnish the Agent evidence as to the release of all such liens
in form and substance satisfactory to the Agent.
SECTION 8.24. THE PLAN. The Company will comply with its obligations
under the Plan and Confirmation Order and consummate the Plan in accordance with
its terms. The Company will not consent to or acquiescence in any amendment or
modification to the Plan or Confirmation Order without the written consent of
the Required Banks; PROVIDED, HOWEVER, that the Company may consent or acquiesce
in any such amendment or modification which does not materially impair the
assets of the Company and its Subsidiaries, increase in any material respect the
consolidated liabilities of the Company and its Subsidiaries, or change in any
material respect the terms for repayment of obligations of the Company under the
Plan. The Company shall provide copies of all amendments or modifications to
the Plan or Confirmation Order to the Banks, whether or not the same are
material.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
SECTION 9.1. Any one or more of the following shall constitute an "EVENT
OF DEFAULT" hereunder:
(a) default in the payment of any installment of the principal of or
interest on any Note or Application when due, whether at the stated
maturity thereof or at any other time provided for in this Agreement and
the continuance of such default for two Business Days after notice thereof
to the Company from the Agent or any Bank, or default in the payment when
due of any fee, charge or other amount payable by the Company hereunder or
under any other Loan Document and the continuance of such default for five
Business Days after notice thereof to the Company from the Agent or any
Bank;
(b) default in the observance or performance of any covenant set
forth in Sections 8.13, 8.14, 8.15 or 8.16 hereof or of any Collateral
Document dealing with the use, disposition or remittance of the proceeds of
Collateral or the maintenance of insurance thereon;
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(c) default in the observance or performance of any other provision
hereof or any of the other Loan Documents which is not remedied within 30
days after written notice thereof to the Company by any Bank or by the
holder of any Note;
(d) default shall occur in the payment when due (whether by lapse of
time, acceleration or otherwise) of any indebtedness (including as such all
obligations included in Consolidated Total Indebtedness as such term is
defined herein) aggregating in excess of $10,000,000 issued, assumed or
guaranteed by the Company or any Subsidiary or any other event of default
shall occur with respect to any such indebtedness beyond any period of
grace provided therefor if the effect thereof is to permit the maturity of
such indebtedness to be accelerated or to permit the holders thereof to
elect a majority of the Board of Directors of the Company;
(e) any representation or warranty made herein or in any of the other
Loan Documents or in any statement or certificate furnished pursuant hereto
or thereto, or in connection with any advance or issuance made hereunder or
by any person in connection with the transactions contemplated hereby,
proves untrue in any material respect as of the date of the issuance or
making thereof, and shall not be made good within 30 days after notice
thereof to the Company by any Bank or by the holder of any Note;
(f) any judgment or judgments, writ or writs or warrant or warrants
or attachment, or any similar process or processes in an aggregate amount
in excess of $2,000,000 more than the amount, if any, covered by insurance
(as to which the insurer has not disclaimed or disputed in writing its
obligations for coverage or otherwise failed to pay when due) shall be
entered or filed against the Company or any Subsidiary or against any of
the property or assets of any of them and remains undischarged, unvacated,
unbonded or unstayed for a period of 30 days;
(g) any event occurs or condition exists which is specified as an
event of default under any of the other Loan Documents after the expiration
of any applicable notice or grace periods;
(h) any of the Loan Documents shall for any reason not be or shall
cease to be in full force and effect, or any of the Loan Documents is
declared to be null and void, or the Company or any Material Subsidiary
takes any action for the purpose of repudiating or
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rescinding any Loan Document executed by it or the obligations of such
Person thereunder;
(i) 50% or more of the issued and outstanding Voting Stock of the
Company is owned or controlled, either legally or beneficially, by any
Person or by any group of Persons affiliated with each other or acting in
concert (Persons shall not be deemed to have acted in concert merely as a
result of voting the same way or taking the same position if the decision
to vote or to take a position were made independently and without prior
consultation) other than Xxxxxx X. Xxxxxxxxxx and/or his wife and/or his
descendants and/or trusts or estates for the benefit of his wife and/or
descendants;
(j) the Company or any Material Subsidiary or any Material Foreign
Subsidiary becomes insolvent or bankrupt or bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings for
relief under any bankruptcy law or laws for the relief of debtors are
instituted against the Company or any Material Subsidiary or any Material
Foreign Subsidiary and are not dismissed within 60 days after such
institution or a decree or order of a court having jurisdiction in the
premises for the appointment of a trustee or receiver or custodian for the
Company or any Material Subsidiary or any Material Foreign Subsidiary or
for the major part of any of their property is entered and the trustee or
receiver or custodian appointed pursuant to such decree or order is not
discharged within 60 days after such appointment; or
(k) the Company or any Material Subsidiary or any Material Foreign
Subsidiary shall institute bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings for relief under
any bankruptcy law or laws for the relief of debtors or shall consent to
the institution of such proceedings against it by others or to the entry of
any decree or order adjudging it bankrupt or insolvent or approving as
filed any petition seeking reorganization under any bankruptcy or similar
law or shall apply for or shall consent to the appointment of a receiver or
trustee or custodian for it or for the major part of its property or shall
make an assignment for the benefit of creditors or shall admit in writing
its inability to pay its debts as they mature or shall take any corporate
action in contemplation or in furtherance of any of the foregoing purposes.
SECTION 9.2. When any Event of Default described in subsections 9.1(a) to
9.1(i), both inclusive, has occurred and is continuing, the Agent may (and
shall, upon request of the Required Banks), by notice to the Company, take any
or all of the following actions:
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(a) terminate the obligation of the Banks to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice (such termination shall be effective upon verbal notification, the
Agent hereby agreeing to provide written notification thereof to the
Company as soon as practical thereafter);
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both
principal and interest, and all fees, charges and commissions payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind;
(c) demand that the Company immediately provide to the Agent cash
collateral for the full amount of each Letter of Credit and the Company
agrees to immediately provide such cash collateral and acknowledges and
agrees that the Banks would not have an adequate remedy at law for failure
by the Company to honor any such demand and that the Banks shall have the
right to require the Company to specifically perform such undertaking
whether or not any draws have been made under the Letters of Credit, with
the funds so paid to, if the Company so requests, be invested in short-term
high-grade debt securities, acceptable and pledged to and held by the Agent
in accordance with Section 4.6(d) hereof; and
(d) enforce any and all rights and remedies available under the Loan
Documents or applicable law.
SECTION 9.3. When any Event of Default described in subsections 9.1(j) or
(k) has occurred and is continuing, then (a) the then unpaid balance of the
Notes, including both principal and interest, and all fees, charges and
commissions payable hereunder or under the Applications, shall immediately
become due and payable without presentment, demand, protest or notice of any
kind, (b) the obligation of the Banks to extend further credit pursuant to any
of the terms hereof shall immediately and automatically terminate, (c) the
Company shall immediately provide to the Agent cash collateral for the full
amount of all Letters of Credit, whether or not draws have been made thereon,
the Company acknowledging that the Banks would not have an adequate remedy at
law for failure by the Company to honor any such demand, and the Banks shall
have the right to require the Company to specifically perform such undertaking
whether or not any draws have been made under the Letters of Credit, and (d) the
Agent may exercise all remedies available to it under the Loan Documents or
applicable law.
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SECTION 10. THE AGENT AND ISSUING BANKS.
SECTION 10.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the Loan Documents as are designated to
the Agent by the terms hereof and thereof together with such powers as are
reasonably incidental thereto. The Agent may resign at any time by sending
twenty (20) days prior written notice to the Company and the Banks and may be
removed by the Required Banks upon twenty (20) days prior written notice to the
Company and the Banks. In the event of any such resignation or removal the
Required Banks may appoint a new agent, which shall succeed to all the rights,
powers and duties of the Agent hereunder and under the Loan Documents, such new
Agent to be subject to the reasonable consent of the Company unless a Default or
Event of Default has occurred and is continuing. Any resigning or removed Agent
shall be entitled to the benefit of all the protective provisions hereof with
respect to its acts as an agent hereunder, but no successor Agent shall in any
event be liable or responsible for any actions of its predecessor. If the Agent
resigns or is removed and no successor is appointed, the rights and obligations
of such Agent shall be automatically assumed by the Required Banks and (i) the
Company shall be directed to make all payments due each Bank hereunder directly
to such Bank and (ii) the Agent's rights in the Loan Documents shall be assigned
without representation, recourse or warranty to the Banks as their interests may
appear.
SECTION 10.2. RIGHTS AS A BANK. The Agent has and reserves all of the
rights, powers and duties hereunder and under the other Loan Documents as any
Bank may have and may exercise the same as though it were not the Agent and the
terms "BANK" or "BANKS" as used herein and in all of such documents shall,
unless the context otherwise expressly indicates, include the Agent in its
individual capacity as a Bank. The Agent reserves the right to engage in other
business transactions with the Company, the Subsidiaries and their Affiliates.
SECTION 10.3. STANDARD OF CARE. The Banks acknowledge that they have
received and approved copies of the Loan Documents, and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent makes no
representations or warranties of any kind or character to the Banks with respect
to the validity, enforceability, genuineness, perfection, value, worth or
collectibility hereof or of the other Loan Documents or of the liens provided
for thereby or of any other documents called for hereby or thereby or of the
Collateral. The Agent need not verify the worth or existence of the
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Collateral and may rely exclusively on reports provided by the Company. The
Banks agree that neither the Agent nor any director, officer employee, agent or
representative thereof (including any security trustee therefor) shall in any
event be liable for any clerical errors or errors in judgment, inadvertence or
oversight, or for action taken or omitted to be taken by it or them hereunder or
under the Loan Documents or in connection herewith or therewith except for its
or their own gross negligence or willful misconduct. The Agent shall incur no
liability under or in respect of this Agreement or the other Loan Documents by
acting upon any notice, certificate, warranty, instruction or statement (oral or
written) of anyone (including anyone in good faith believed by it to be
authorized to act on behalf of the Company), unless it has actual knowledge of
the untruthfulness of same. The Agent agrees to use the same care in protecting
the interests of the Banks in the Loans as it uses for similar loans held by it
solely for its own account. The Agent shall be entitled to assume that no
Default or Event of Default exists, absent actual knowledge thereof, unless
notified to the contrary by a Bank. The Agent shall in all events be fully
protected in acting or failing to act in accord with the instructions of the
Required Banks. Upon the occurrence of an Event of Default hereunder, the Agent
shall take such action with respect to the enforcement of its liens on the
Collateral and the preservation and protection thereof as it shall be directed
to take by the Required Banks (and shall consult with the Banks as to actions to
be taken) but unless and until the Required Banks have given such direction the
Agent shall take or refrain from taking such actions as it deems appropriate and
in the best of interest of all Banks. The Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its reasonable satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent may treat the owner of any Note as the holder
thereof until written notice of transfer shall have been filed with it as
provided in Section 11.12 hereof signed by such owner in form satisfactory to
the Agent. Each Bank acknowledges that it has independently and without
reliance on the Agent or any other Bank and based upon such information,
investigations and inquiries as it deems appropriate made its own credit
analysis and decision to extend credit to the Company. It shall be the
responsibility of each Bank to keep itself informed as to the creditworthiness
of the Company and each Subsidiary and the Agent shall have no liability to any
Bank with respect thereto.
SECTION 10.4. COSTS AND EXPENSES. Each Bank agrees to reimburse the Agent
and each Issuing Bank for all out-of-pocket costs and expenses suffered or
incurred by the Agent or any such
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Issuing Bank or any security trustee in performing its duties hereunder and
under the other Loan Documents or in the exercise of any right or power imposed
or conferred upon the Agent or any such Issuing Bank hereby or thereby, to the
extent that the Agent or such Issuing Bank is not promptly reimbursed for same
by the Company or out of the Collateral, all such costs and expenses to be borne
by the Banks ratably in accordance with the amounts of their respective
Commitments. If any Bank fails to reimburse the Agent or such Issuing Bank for
its share of any such costs and expenses, such costs and expenses shall be paid
pro rata by the remaining Banks, but without in any manner releasing the
defaulting Bank from its liability hereunder.
SECTION 10.5. INDEMNITY. The Banks shall ratably indemnify and hold the
Agent and each Issuing Bank, and each of their directors, officers, employees,
agents or representatives (including as such any security trustee therefor)
harmless from and against any liabilities, losses, costs or expenses suffered or
incurred by them under this Agreement or any of the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Company or out of the Collateral and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. If any Bank defaults in its
obligations hereunder, its share of the obligations shall be paid pro rata by
the remaining Banks, but without in any manner releasing the defaulting Bank
from its liability hereunder.
SECTION 11. MISCELLANEOUS..
SECTION 11.1. WAIVER OF RIGHTS. No delay or failure on the part of any
Bank or the holder or holders of any Note in the exercise of any power or right
shall operate as a waiver thereof or as an acquiescence in any default, nor
shall any single or partial exercise thereof, or the exercise of any other power
or right, preclude any other right or the further exercise of any other rights.
The rights and remedies hereunder of the Company, the Agent, the Banks and of
the holder or holders of any Note are cumulative to, and not exclusive of, any
rights or remedies which any of them would otherwise have.
SECTION 11.2. NON-BUSINESS DAY. If any payment of principal shall fall
due on a day which is not a Business Day, interest at the rate such principal
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.
SECTION 11.3. DOCUMENTARY TAXES. The Company agrees to pay any
documentary, stamp
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or similar taxes payable in respect to this Agreement or any other Loan
Document, 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 11.4. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made in the Loan Documents or pursuant thereto or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and of the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
SECTION 11.5. SET-OFF SHARING. Each Bank agrees with each other Bank a
party hereto that in the event such Bank shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise ("SET-OFF"),
on or in respect of any Note or other obligation outstanding under this
Agreement in excess of its ratable share of payments on all Notes and other
obligations 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 Notes or other 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.
SECTION 11.6. NOTICES. All communications provided for herein shall be in
writing or by telex or by telegraph, except as otherwise specifically provided
for hereinabove, addressed, if to the Company at 000 Xxxx Xxxxxxxxx, Xxxxx,
Xxxxx 00000, Attention: Chief Financial Officer or if to the Agent or Banks at
their respective addresses set forth opposite their respective signatures
hereto, 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 11.6. Any notice in
writing shall be deemed to have been given or made when served personally or
when received if sent by United States mail, and any notice given by telex or
telegraphic means shall be deemed given when transmitted (answer back
confirmed); provided that any notice to the Agent or any Bank under Sections 2
and 3 hereof shall only be effective upon receipt.
SECTION 11.7. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by the different parties on different counterparts, each of
which when executed shall
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be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 11.8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Company and its successors and assigns, and shall be binding upon and
inure to the benefit of the Agent and the Banks and their respective successors
and assigns permitted pursuant to Section 11.12, including any subsequent holder
of any Note. The Company may not assign its rights or obligations hereunder
without the prior written consent of the Banks.
SECTION 11.9. 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 by such Bank and credit risks
in Letters of Credit held by such Bank at any time and from time to time to one
or more other financial institutions, provided that no such participant shall
have any rights under this Agreement or any other Loan Document (the
participant's rights against the Bank granting its participation to be those set
forth in the participation agreement between the participant and such Bank);
PROVIDED, FURTHER, that no Bank shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other loan Document except to the extent such amendment or
waiver would extend the final scheduled maturity of any Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Termination
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Commitment or of a mandatory prepayment shall not constitute a change in the
terms of such participation, and that an increase in any Commitment or Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof. Each such Bank selling a
participation shall be entitled to the benefits of Sections 2.3(d), 3 and 4.8
hereof to the extent such Bank would have been so entitled had no such
participation been sold.
SECTION 11.10. COSTS AND EXPENSES. The Company agrees to pay within 10
days of demand therefor all reasonable out-of-pocket costs and expenses of the
Agent in connection with the negotiation, preparation, execution, delivery,
recording and/or filing and/or release of the Loan Documents and the other
instruments and documents to be delivered hereunder or thereunder or in
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connection with the transactions contemplated hereby or thereby or in connection
with any consents hereunder or thereunder or waivers or amendments hereto or
thereto, including the reasonable fees and out-of-pocket expenses of counsel for
the Agent with respect to all of the foregoing, and all recording, filing or
other fees, costs and taxes incident to perfecting a lien upon the collateral
security for the Notes and other obligations of the Company, and all reasonable
costs and expenses (including reasonable attorneys' fees), incurred by the
Agent, any security trustee for the Banks, the Banks or any other holders of a
Note in connection with a default or the enforcement of any of the Loan
Documents and the other instruments and documents to be delivered hereunder or
thereunder. The Company agrees to indemnify and save the Banks, the Agent and
any security trustee for the Banks harmless 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, security trustee or
any Bank by any person which arises out of the transactions contemplated or
financed hereby or by the other Loan Documents or out of any action or inaction
by the Agent, any security trustee or any Bank hereunder or thereunder, except
for such thereof as is caused by the gross negligence or willful misconduct of
the party indemnified. The provisions of this Section 11.10 and the protective
provisions of Section 3 hereof shall survive payment of the Notes and the other
obligations owing to the Banks hereunder.
SECTION 11.11. CONSTRUCTION. The parties hereto acknowledge and agree
that this Agreement shall not be construed more favorably in favor of one than
the other based upon which party drafted the same, it being acknowledged that
all parties hereto contributed substantially to the negotiation of this
Agreement.
SECTION 11.12. ASSIGNMENT AGREEMENTS. Each Bank may, from time to time,
with the consent of the Company and the Agent, which will not be unreasonably
withheld, assign to other financial institutions part of the indebtedness
evidenced by the Notes and credit risks with respect to Letters of Credit then
owned by it together with an equivalent proportion of its obligation to make
Loans and participate in Letters of Credit hereunder pursuant to written
agreements executed by the assignor, the assignees, the Company and the Agent,
which agreements shall specify in each instance the portion of the indebtedness
evidenced by the Notes and Applications which is to be assigned to each such
assignee and the portion of the Commitment of the assignor to be assumed by it
(the "ASSIGNMENT AGREEMENTS"); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of the assigning Bank's
rights and obligations under this Agreement
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and the assignment shall cover the same percentage of such Bank's Commitment,
Loans, Note, and credit risk with respect to Letters of Credit; (ii) unless each
of the Agent and the Company otherwise consents, the aggregate amount of the
Commitment, Loans, Note, and credit risk with respect to Letters of Credit of
the assigning Bank being assigned pursuant to each such Assignment Agreement
(determined as of the effective date of the relevant Assignment Agreement) shall
in no event be less than $20,000,000 (unless such assignment is to another Bank
party hereto in which event such minimum amount shall be $10,000,000) and shall
be an integral multiple of $1,000,000 and, unless the assigning Bank shall have
assigned all of its Commitment, Loans, Note, and credit risk with respect to
Letters of Credit, the aggregate amount of the Commitment, Loans, Note and
credit risk with respect to Letters of Credit retained by the assigning Lender
shall in no event be less than $20,000,000; and (iii) the assigning Bank must
pay to the Agent a processing and recordation fee of $2,000 and any
out-of-pocket attorney's fees and expenses incurred by the Agent in connection
with each such Assignment Agreement. Upon the execution of each Assignment
Agreement by the assignor, the assignee and the Company (i) such assignee shall
thereupon become a "BANK" for all purposes of this Agreement with a Commitment
in the amount set forth in such Assignment Agreement (and Exhibit A hereto shall
be deemed amended to reflect the aggregate Commitments of the Banks after giving
effect thereto) and with all the rights, powers and obligations afforded a Bank
hereunder, provided that the assigning Bank shall retain the benefit of all
indemnities of the Company with respect to matters arising prior to the
effective date of such Assignment Agreement, which shall survive and inure to
the benefit of the assigning Bank, (ii) such assigning Bank shall have no
further liability for funding the portion of its Commitment assumed by such
other Bank and (iii) the address for notices to such Bank shall be as specified
in the Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement by the assignor, the assignee, the Company
and the Agent, the Company shall execute and deliver a Note to the assignee Bank
in the amount of its Commitment and a new Note to such assigning Bank in the
amount of its Commitment after giving effect to the reduction occasioned by such
assignment, all such notes to constitute "NOTES" for all purposes of this
Agreement.
SECTION 11.13. WAIVERS, MODIFICATIONS AND AMENDMENTS. Any provision
hereof or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Banks; PROVIDED,
HOWEVER, that without the consent of all Banks no such amendment,
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modification or waiver shall increase the amount or extend the terms of any
Bank's Commitment or reduce the interest rate applicable to or extend the
maturity of any Loan, fee or other obligation owed to it or reduce the amount of
the fees to which it is entitled hereunder or release any Material Subsidiary
from its obligations under the Guaranty (except for releases expressly
contemplated by this Agreement) or release any substantial (in value) part of
the collateral security afforded by the Collateral Documents (except in
connection with a sale or other disposition required to be effected by the
provisions hereof or of the Collateral Documents and except for releases of the
Agent's lien thereon expressly contemplated by this Agreement), or change this
Section 11.13 or change the definition of "REQUIRED BANKS" or change the number
of Banks required to take any action hereunder or under any of the other Loan
Documents; it being understood (i) that waivers or modifications of covenants,
Defaults or Events of Default (other than those set forth in Section 9.1(j) and
(k) hereof) or of a mandatory reduction in the Commitments or of a mandatory
prepayment may be made at the discretion of the Required Banks and shall not
constitute an increase of the Commitment of any Bank, and that any resulting
increase in the available portion of any Commitment of any Bank shall not
constitute an increase in the Commitment of such Bank, and (ii) any waiver of
applicability of any post-default increase in interest rates may be made at the
discretion of the Required Banks. No amendment, modification or waiver of the
Agent's or an Issuing Bank's protective provisions shall be effective without
the prior written consent of the Agent or the relevant Issuing Bank. SECTION
11.14. ENTIRE AGREEMENT. This Agreement and the Loan Documents 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.
SECTION 11.15. HEADINGS. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
SECTION 11.16. CONFIDENTIALITY. (a) Any information disclosed by the
Company or any of its Subsidiaries to the Agent or any of the Banks shall be
used solely for purposes of this Agreement and for the purpose of determining
whether or not to extend other credit or financial accommodations to the Company
or its Subsidiaries and, if such information is not otherwise in the public
domain, shall not be disclosed by the Agent or such Bank to any other Person
except (i) to its independent accountants and legal counsel (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such information and instructed to keep such information
confidential), (ii) pursuant to statutory and regulatory requirements, (iii)
pursuant to any
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mandatory court order, subpoena or other legal process, (iv) to the Agent or any
other Bank, (v) pursuant to any agreement heretofore or hereafter made between
such Bank and the Company which permits such disclosure, (vi) in connection with
the exercise of any right or remedy under the Loan Documents, provided that such
Bank or the Agent, as applicable, shall give the Company prior written notice of
any such disclosure or (vii) subject to an agreement containing provisions
substantially the same as those of this Section, to any participant in or
assignee of, or prospective participant in or assignee of, any obligation or
Commitment.
(b) The Agent and the Banks acknowledge that the Company and its
Subsidiaries perform classified contracts funded by and/or for the benefit of
the United States Government and, accordingly, neither the Company nor any
Subsidiary will be obligated to release, disclose or otherwise make available to
the Agent or any Bank any classified or special nuclear material to any parties
not in possession of a valid security clearance and authorized by the
appropriate agency of the United States Government to receive such material.
The Agent and the Banks agree that in connection with any exercise of a right or
remedy the United States Government may remove classified information or
government-issued property prior to any remedial action implicating such
classified information or government-issued property. Upon notice from the
Company, the Agent and the Banks shall take such steps in accordance with this
Agreement as may be reasonably requested by the Company to enable the Company or
any Subsidiary to comply with the Foreign Ownership Control or Influence
requirements of the United States Government imposed from time to time.
SECTION 11.17. EXTENSIONS OF THE COMMITMENTS. Not less than 60 days or
more than 120 days prior to each anniversary of the date hereof, the Company may
advise the Agent in writing of its desire to extend the Termination Date for an
additional 12 months and the Agent shall promptly notify the Banks of each such
request; PROVIDED not more than one such request for the extension of the
Termination Date may be made in any one calendar year. In the event that the
Banks are agreeable to such extension (it being understood that any Bank may
accept or decline such a request in its sole discretion and on any terms such
Bank may elect), the Company, the Material Subsidiaries, the Banks and the Agent
shall enter into such documents as the Agent may reasonably deem necessary or
appropriate to reflect such extension and to assure that all extensions of
credit pursuant to the Commitments as so extended are secured by the Liens of
the Collateral Documents and guaranteed by the Guaranty, all costs and expenses
incurred by the Agent in connection therewith to
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be paid by the Company.
SECTION 11.18. CURRENCY. Each reference in this Agreement to U.S. Dollars
or to an Available Foreign Currency (the "RELEVANT CURRENCY") is of the essence.
To the fullest extent permitted by law, the obligation of the Company in respect
of any amount due in the relevant currency under this Agreement shall,
notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the Agent or Bank entitled to receive such payment may,
in accordance with normal banking procedures, purchase with the sum paid in such
other currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such party receives such payment. If the
amount in the relevant currency so purchased for any reason falls short of the
amount originally due in the relevant currency, the Company shall pay such
additional amounts, in the relevant currency, as may be necessary to compensate
for the shortfall. Any obligations of the Company not discharged by such
payment shall, to the fullest extent permitted by applicable law, be due as a
separate and independent obligation and, until discharged as provided herein,
shall continue in full force and effect.
SECTION 11.19. EXCLUSIVE JURISDICTION. (A) EXCEPT AS PROVIDED IN
SUBSECTION (B), THE COMPANY, THE BANKS AND THE AGENT AGREE THAT ALL DISPUTES
BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN XXXX
COUNTY, ILLINOIS, BUT EACH OF THE COMPANY, THE BANKS AND THE AGENT ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF XXXX COUNTY, ILLINOIS. THE COMPANY WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE COMPANY AGREES THAT THE AGENT AND THE BANKS
SHALL EACH HAVE THE RIGHT TO PROCEED AGAINST THE COMPANY OR ITS PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE THE AGENT OR ANY BANK TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
AGENT OR ANY BANK. THE COMPANY AGREES THAT IT SHALL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE
AGENT OR ANY BANK TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE AGENT OR ANY
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BANK. THE COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH THE AGENT OR ANY BANK HAS COMMENCED A PROCEEDING DESCRIBED IN
THIS SUBSECTION.
SECTION 11.20. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT AND THE BANKS
EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE AGENT OR ANY BANK
AND THE COMPANY ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
THEREWITH OR THE TRANSACTIONS RELATED THERETO. THE COMPANY, THE AGENT AND THE
BANKS EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
SECTION 11.21. 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 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 11.21 shall govern and control;
(b) neither the Company 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 Loans hereunder, accrued and
unpaid interest thereon (not to exceed the maximum amount permitted by
applicable law) and any other obligations, or all of the foregoing; (ii)
refunded to the Company, 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, 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 Company nor
any guarantor or endorser shall have any action against the Agent or any Bank
for any damages whatsoever arising out of the
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payment or collection of any Excess Interest.
SECTION 11.22. GOVERNING LAW. This Agreement and the Notes, and the rights
and duties of the parties hereto, shall be construed and determined in
accordance with the laws of the State of Illinois.
SECTION 11.23. SINGLE BANK. If and so long as Bank of Montreal is the only
Bank hereunder, Bank of Montreal shall have all rights, powers and privileges
afforded to the Agent, the Issuing Banks, the Banks, and the Required Banks
hereunder and under the other Loan Documents.
[SIGNATURE PAGE TO FOLLOW]
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set
forth.
Executed and delivered as of this 8th day of October, 1996.
XXXXXXXX XXXXXXX CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxxx
--------------------------
Its Assistant Secretary
--------------------------
Accepted and agreed to in Chicago, Illinois as of the day and year last
above written.
BANK OF MONTREAL
individually and as Agent
By /s/ X. X. Xxxxxx
--------------------------
Its Director
--------------------------
Mailing Address:
Los Angeles Representative Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Director
LENDING OFFICE:
Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Manager-Loan
Operations
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EXHIBIT A
AGGREGATE COMMITMENTS
BANK COMMITMENT
Bank of Montreal $200,000,000
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EXHIBIT B
XXXXXXXX XXXXXXX CORPORATION
REVOLVING CREDIT NOTE
Chicago, Illinois
$______________
_____________, 1996
For value received, the undersigned, Xxxxxxxx Xxxxxxx Corporation, a
Delaware corporation (the "COMPANY"), hereby promises to pay to the order of
_____________________________ (the "BANK"), at the principal office of Bank of
Montreal in Chicago, Illinois (i) the principal sum of
_________________________________ Dollars ($_________), or (ii) such lesser
amount as may at the time of the maturity hereof, whether by acceleration or
otherwise, be the aggregate unpaid principal amount of all Loans owing from the
Company to the Bank under the Revolving Credit provided for in the Credit
Agreement hereinafter mentioned on the Termination Date.
This Note evidences indebtedness constituting the "BASE RATE PORTION" and
"LIBOR PORTIONS" as such terms are defined in that certain Credit Agreement
dated as of October 8, 1996, by and among the Company, Bank of Montreal
individually and as Agent and certain lenders which are or may from time to time
become parties thereto (the "CREDIT AGREEMENT") made and to be made to the
Company by the Bank under the Revolving Credit provided for under the Credit
Agreement and the Company hereby promises to pay interest at the office
specified above on each loan evidenced hereby at the rates and times specified
therefor in the Credit Agreement. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Credit Agreement, and
this Note is subject to the terms of the Credit Agreement.
Each loan made under the Revolving Credit provided for in the Credit
Agreement by the Bank to the Company against this Note, any repayment of
principal hereon, the status of each such loan from time to time as part of the
Base Rate Portion or a LIBOR Portion and the interest rates and interest periods
applicable thereto shall be endorsed by the holder hereof on the reverse side of
this Note or recorded on the books and records of the holder hereof (provided
that such entries shall be endorsed on the reverse side hereof prior to any
negotiation hereof) and the Company agrees that in any action or proceeding
instituted to collect or enforce collection of this Note, the entries so
endorsed on the reverse side hereof or recorded on the books and records of the
Bank shall be PRIMA
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FACIE evidence of the unpaid balance of this Note and the status of each loan
from time to time as part of a Base Rate Portion or a LIBOR Portion and the
interest rates and interest periods applicable thereto.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement and is secured, inter alia, by certain security agreements and
other instruments and documents from the Company and certain of its
Subsidiaries, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, equally and
ratably with all other indebtedness thereby secured, to which reference is
hereby made for a statement thereof. This Note may be declared to be, or be and
become, due prior to its expressed maturity upon the occurrence of an Event of
Default specified in the Credit Agreement, voluntary prepayments may be made
hereon, and certain prepayments are required to be made hereon, all in the
events, on the terms and with the effects provided in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAW.
The Company hereby waives presentment for payment.
XXXXXXXX XXXXXXX CORPORATION
By
Its
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SCHEDULES
THE REGISTRANT AGREES TO PROVIDE THE SECURITIES AND EXCHANGE COMMISSION,
UPON REQUEST, WITH COPIES OF THE SCHEDULES HERETO.
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