EXHIBIT 10.1
CREDIT AGREEMENT
Dated as of March 12, 2003
among
MINERAL HOLDINGS INC.,
WORLD MINERALS INC.,
THE DESIGNATED SUBSIDIARY BORROWERS
THE BANKS NAMED HEREIN,
and
UNION BANK OF CALIFORNIA, N.A.,
as Sole Lead Arranger, Administrative Agent and
Collateral Agent
TABLE OF CONTENTS
Page
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Article I DEFINITIONS......................................................................................................... 1
1.1 Defined Terms...................................................................................................... 1
1.2 Terms Generally.................................................................................................... 18
1.3 Accounting Terms, GAAP............................................................................................. 19
Article II THE LOANS.......................................................................................................... 19
2.1 Making of Loans.................................................................................................... 19
2.2 Repayment of Loans, Evidence of Debt............................................................................... 21
2.3 Notice of Loans.................................................................................................... 21
2.4 Interest........................................................................................................... 22
2.5 Alternative Rate of Interest....................................................................................... 23
2.6 Interest on Overdue Amounts........................................................................................ 23
2.7 Reduction of Commitment............................................................................................ 24
2.8 Redeployment Cost.................................................................................................. 25
2.9 Conversion and Continuation of Borrowings.......................................................................... 25
2.10 Increased Costs.................................................................................................... 26
2.11 Change in Legality................................................................................................. 28
2.12 Pro Rata Treatment................................................................................................. 28
2.13 Sharing of Setoffs................................................................................................. 29
2.14 Payments........................................................................................................... 29
2.15 Taxes.............................................................................................................. 30
2.16 Commitment Fees.................................................................................................... 32
2.17 Removal of Banks................................................................................................... 32
2.18 US Borrower as Agent for Other Borrowers........................................................................... 33
Article III LETTERS OF CREDIT................................................................................................. 33
3.1 Issuance of Letters of Credit...................................................................................... 33
3.2 Notice............................................................................................................. 34
3.3 Reimbursement; Repayment with Loans................................................................................ 35
3.4 Increased Costs.................................................................................................... 37
3.5 Letter of Credit Fees.............................................................................................. 39
Article IV REPRESENTATIONS AND WARRANTIES..................................................................................... 39
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4.1 Organization....................................................................................................... 39
4.2 Corporate Power and Authority; No Required Consents or Approvals................................................... 39
4.3 Enforceability..................................................................................................... 40
4.4 Financial Statements; No Undisclosed Liabilities................................................................... 40
4.5 No Material Adverse Change......................................................................................... 41
4.6 Litigation......................................................................................................... 41
4.7 Compliance with Laws............................................................................................... 41
4.8 Employee Benefit Plans............................................................................................. 41
4.9 Taxes.............................................................................................................. 42
4.10 Title to Properties................................................................................................ 42
4.11 Business........................................................................................................... 42
4.12 Agreements......................................................................................................... 43
4.13 No Material Misstatements.......................................................................................... 43
4.14 Related Party Transactions......................................................................................... 43
4.15 Labor Matters and Acts of God...................................................................................... 43
4.16 Outstanding Debt................................................................................................... 43
4.17 Federal Reserve Regulations........................................................................................ 43
4.18 Investment Company Act and Public Utility Holding Company Act...................................................... 44
4.19 Security Interests................................................................................................. 44
4.20 Capital Stock; Subsidiaries........................................................................................ 44
4.21 Environmental Matters.............................................................................................. 45
4.22 Insolvency......................................................................................................... 46
Article V CONDITIONS TO LENDING............................................................................................... 46
5.1 Loans on the Closing Date.......................................................................................... 46
5.2 Loans Made After Closing Date...................................................................................... 48
5.3 Letters of Credit Issued After the Closing Date.................................................................... 48
5.4 Conditions of the Initial Loan to a Designated Subsidiary Borrower................................................. 49
5.5 Certain Deliveries After Closing Date.............................................................................. 50
Article VI AFFIRMATIVE COVENANTS.............................................................................................. 50
6.1 Corporate Existence................................................................................................ 50
6.2 Obligations and Taxes.............................................................................................. 51
6.3 Performance Under Agreements....................................................................................... 51
6.4 Access to Properties and Inspections............................................................................... 51
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6.5 Defense of Claims.................................................................................................. 52
6.6 Notices of Litigation or Claims.................................................................................... 52
6.7 Notice of Certain Actions.......................................................................................... 52
6.8 Compliance......................................................................................................... 53
6.9 Further Assurances................................................................................................. 53
6.10 Business and Properties............................................................................................ 53
6.11 Financial Statements and Reports................................................................................... 54
6.12 Insurance.......................................................................................................... 55
6.13 Mining Plan........................................................................................................ 55
6.14 ERISA.............................................................................................................. 56
6.15 Proceeds........................................................................................................... 56
6.16 Additional Subsidiaries............................................................................................ 56
6.17 Bank Accounts...................................................................................................... 57
Article VII NEGATIVE COVENANTS................................................................................................ 57
7.1 Indebtedness....................................................................................................... 57
7.2 Negative Pledge.................................................................................................... 58
7.3 Restricted Payments................................................................................................ 59
7.4 Investments........................................................................................................ 60
7.5 Nature of Business................................................................................................. 61
7.6 Asset Sales........................................................................................................ 61
7.7 Acquisitions....................................................................................................... 62
7.8 Transactions With Affiliates....................................................................................... 63
7.9 Sale and Leaseback Transactions.................................................................................... 64
7.10 Merger or Consolidation............................................................................................ 64
7.11 Interest Coverage.................................................................................................. 64
7.12 Debt to Worth...................................................................................................... 64
7.13 Net Worth.......................................................................................................... 65
7.14 Fiscal Year........................................................................................................ 65
7.15 Restrictive Agreements............................................................................................. 65
Article VIII EVENTS OF DEFAULT................................................................................................ 65
8.1 Defaults........................................................................................................... 65
Article IX THE ADMINISTRATIVE AGENT........................................................................................... 69
Article X HOLDINGS GUARANTY; US BORROWER GUARANTY............................................................................. 72
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10.1 Guaranty by Holdings and the US Borrower........................................................................... 72
10.2 Guarantors' Waivers................................................................................................ 73
10.3 Bankruptcy......................................................................................................... 75
10.4 Payment............................................................................................................ 76
Article XI MISCELLANEOUS...................................................................................................... 76
11.1 Notices............................................................................................................ 76
11.2 Survival of Agreement.............................................................................................. 77
11.3 Successors and Assigns; Syndications; Loan Sales; Participations................................................... 78
11.4 Expenses of the Lender Parties..................................................................................... 81
11.5 Indemnification.................................................................................................... 82
11.6 Governing Law...................................................................................................... 83
11.7 Waiver of Jury Trial............................................................................................... 84
11.8 Waivers; Amendments................................................................................................ 84
11.9 Severability....................................................................................................... 85
11.10 Counterparts....................................................................................................... 85
11.11 Headings........................................................................................................... 86
11.12 Obligations of Lender Parties Several.............................................................................. 86
11.13 Entire Agreement................................................................................................... 86
11.14 Confidentiality.................................................................................................... 86
11.15 Interest Rate Limitation........................................................................................... 87
11.16 Conversion of Currencies........................................................................................... 87
EXHIBITS
EXHIBIT A. - Form of Alleghany Subordination Agreement
EXHIBIT B. - Form of Assignment and Acceptance
EXHIBIT C. - Form of US Borrower Pledge Agreement
EXHIBIT D. - Form of Holdings Pledge Agreement
EXHIBIT E. - Form of Subsidiary Guaranty Agreement
EXHIBIT F. - Form of Subsidiary Pledge Agreement
EXHIBIT G. - Form of Notice of Borrowing
EXHIBIT H. - Form of Designated Subsidiary Joinder Agreement
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ANNEXES
ANNEX I - The Banks
ANNEX II - Financing Documents
ANNEX III Funding Offices and Times; Payment Offices and Times
SCHEDULES
Schedule 1.1 - Designated Subsidiary Borrowers
Schedule 4.4(a) - Financial Statements
Schedule 4.4(b) - Certain Obligations
Schedule 4.6 - Litigation
Schedule 4.8 - Employee Benefit Plans
Schedule 4.10 - Intellectual Property
Schedule 4.11 - Business
Schedule 4.20 - Owners of Capital Stock
Schedule 5.1 Foreign Subsidiaries to be Subject to Foreign Pledges
at Closing
Schedule 7.2 - Liens
Schedule 7.15 - Restrictive Agreements
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CREDIT AGREEMENT dated as of March 12, 2003, among (1) MINERAL HOLDINGS
INC., a Delaware corporation ("Holdings"), (2) WORLD MINERALS INC., a Delaware
corporation (the "US Borrower"), (3) each DESIGNATED SUBSIDIARY BORROWER (as
hereinafter defined) from time to time party hereto (together with the US
Borrower, the "Borrowers"), (4) the BANKS (as hereinafter defined) and (5) UNION
BANK OF
CALIFORNIA, N.A. ("UBOC"), as Administrative Agent and Collateral Agent
for the Banks and as Issuing Bank.
PREAMBLE
The Borrowers, Holdings, the Banks, and UBOC wish to enter into a credit
facility in order to, among other things, provide for a senior secured revolving
loan facility in a principal amount of $100,000,000 (the "Facility") of which up
to $20,000,000 will be available for the issuance of letters of credit on behalf
of the Borrower and its Subsidiaries (the "Letter of Credit Facility") and up to
$50,000,000 will be available for borrowings in Foreign Currency (as hereinafter
defined). On the Closing Date (as hereinafter defined) under this Agreement, the
US Borrower will use a portion of the funds available under the Facility to
repay all of the loans outstanding under the Existing Facility (as hereinafter
defined). Thereafter, availability under the Facility may be utilized by the
Borrowers for letters of credit, acquisitions, working capital, general
corporate purposes (including payments permitted pursuant to Section 7.3), in
each case subject to the terms and conditions set forth herein.
The obligations of the Loan Parties (as defined below) under this Agreement
and the other Loan Documents are not guaranteed by Alleghany (as defined below)
and no commitments are made by Alleghany with respect thereto.
IN WITNESS WHEREOF, the parties to this Agreement, intending to be bound
hereby, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS.
As used in this Agreement. the following terms shall have the following
respective meanings:
"ABR Loan" shall mean a Loan made in accordance with the provisions of
Article II bearing interest at a rate based on the Alternate Base Rate.
"ABR Margin" shall have the meaning given to such term in Section 2.4(c).
"Administrative Agent" shall mean UBOC, as administrative agent for the
Banks hereunder, and any successor appointed in accordance with Article IX
hereof.
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"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" shall mean, with respect to any Person, another Person that
directly or indirectly through one or more intermediaries Controls, is
Controlled by or is under common Control with such Person.
"Alleghany" shall mean Alleghany Corporation, a Delaware corporation and as
of the date hereof, holder of a majority of the outstanding capital stock of
Holdings.
"Alleghany Subordination Agreement" shall mean a subordination agreement
dated as of the date hereof between Alleghany and the Collateral Agent in the
form of Exhibit A attached hereto.
"Alternate Base Rate" shall mean, with respect to any ABR Loan made by a
Bank, for any day, a variable rate per annum equal to the greater of (a) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (b) the
fluctuating rate of interest announced from time to time by the Administrative
Agent in its office in Los Angeles,
California as its "reference rate" in effect
on such day (it being understood that such reference rate is not intended to
represent the lowest rate of interest charged by the Administrative Agent in
connection with extensions of credit to debtors). If for any reason any Bank
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (a) of this definition until
the circumstances giving rise to such inability no longer exist. For purposes of
this Agreement, any change in the Alternate Base Rate shall be effective on the
date such change is announced.
"Applicable Law" shall mean all provisions of laws, statutes, ordinances,
rules, regulations or orders of any Governmental Authority applicable to the
Person in question, and all judgments, injunctions, orders and decrees of all
courts and arbitrators in proceedings or actions in which the Person in question
is a party or by which any of its assets or properties may be bound.
"Approved Offshore Currency Rate" shall mean, for any Loan to be made in a
Foreign Currency for any Interest Period therefor, the interest rate per annum
determined by the Administrative Agent at approximately 9:00 a.m., London time,
on the date which is two Business Days before the first day of such Interest
Period, to be the offered quotation that appears on the ▇▇▇▇▇▇'▇ LIBOR01 page
(or on any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to such deposits in the London interbank market) for
deposits in the applicable Foreign Currency in the London interbank market for a
length of time approximately equal to the Interest Period for such Loan made by
the Administrative Agent. If at least two such offered quotations appear on the
▇▇▇▇▇▇'▇ LIBOR01 page, the Approved Offshore Currency Rate shall be the
arithmetic average of such offered quotations, as determined by the
Administrative Agent. If the ▇▇▇▇▇▇'▇
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Credit Agreement Final
LIBORO1 page is not available at such time for any reason, the Approved Offshore
Currency Rate shall be the rate per annum that the Administrative Agent
determines to be the arithmetic average of the per annum rates of interest at
which deposits in the applicable Foreign Currency in an amount approximately
equal to the principal amount of, and for a length of time approximately equal
to the Interest Period for, such Loan made by the Administrative Agent are
offered to the Administrative Agent in immediately available funds in the London
interbank market for such Foreign Currency at 11:00 a.m., London time, on the
date which is two Business Days prior to the first day of an Interest Period.
"Asset Sale" shall mean any sale, transfer, lease or other disposition of
all or any part of the assets, properties or rights of Holdings, any Borrower or
any other Subsidiary, other than (i) a sale, transfer, lease or other
disposition solely between the Subsidiaries in accordance with Section 7.8(b),
(ii) sales of inventory in the ordinary course of business, (iii) sales or
trade-ins of property, machinery or equipment which is being replaced in the
ordinary course of business or otherwise within one year of sale or trade-in,
(iv) the issuance or sale by Holdings to the US Borrower of shares of common
stock of Holdings to the extent required in order for the US Borrower to be able
to deliver shares of common stock of Holdings upon exercise of options granted
under the 2001 Stock Option Plan, (v) the issuance or sale by the US Borrower of
shares of common stock of Holdings upon exercise of options granted under the
2001 Stock Option Plan and (vi) subleases of real property leased by Holdings
and its Subsidiaries.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Bank and an assignee in the form of Exhibit B attached hereto.
"Bank" and "Banks" shall mean the financial institutions named in Annex I
which have executed and delivered a counterpart of this Agreement, and any
assignee of a Bank pursuant to Section 11.3(b). Unless the context otherwise
requires, "Bank" and "Banks" shall include the Issuing Bank.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrowers" shall have the meaning given to such term in the introduction
to this Agreement, and "Borrower" shall mean any of such Borrowers.
"Borrower Pledge Agreement" shall mean the Pledge Agreement dated as of the
date hereof and delivered by the US Borrower to the Collateral Agent for the
ratable benefit of the Lender Parties, in the form of Exhibit C.
"Business" shall have the meaning given to such term in Section 4.11
hereof.
"Business Day" shall mean any day (other than a Saturday, Sunday or legal
holiday in the State of
California) on which banks are open for business in
California except that, if any determination of a "Business Day" shall relate to
a Eurodollar Loan, the term "Business Day" shall, in addition, exclude any day
on which banks are not open for dealings in dollar deposits or, if applicable,
for dealings in foreign currency and exchange, in the London interbank market.
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Credit Agreement Final
"Capital Expenditure" shall mean, with respect to any Person in any period,
the sum of all amounts that would, in accordance with GAAP, be included as
capital expenditures on a consolidated statement of cash flows of such Person
during such period; provided, however, that for the purpose of determining
compliance with Section 7.11, "Capital Expenditure" shall not include capital
expenditures made to improve or develop property (as opposed to capital
expenditures for maintenance or similar ordinary course of business
improvements) acquired in an Acquisition permitted under Section 7.7 if, prior
to the closing of such Acquisition, (i) the US Borrower notifies the
Administrative Agent in writing that it has elected to treat certain capital
expenditures (the "Acquisition CapEx") relating to such Acquisition as part of
the original acquisition or investment cost, (ii) the US Borrower provides the
Administrative Agent with a reasonably detailed description of the Acquisition
CapEx, (iii) if all Acquisition CapEx is included in the "aggregate
consideration" for such Acquisition, the Acquisition is permitted under Section
7.7 and (iv) the US Borrower represents to the Administrative Agent, on behalf
of the Banks, that such Acquisition CapEx will be utilized to refurbish, develop
or make similar major improvements on such property, rather than to maintain or
make minor improvements in the ordinary course of business.
"Capital Lease Obligations" shall mean, with respect to any Person in any
period, the obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Cash Collateral Account" shall have the meaning given such term in Section
3.3(c) hereof.
"Cash Flow Ratio" shall have the meaning given such term in Section 2.4(c).
"Celite" shall mean Celite Corporation, a Delaware corporation and a
wholly-owned subsidiary of the US Borrower.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., as amended from time to time.
"Charges" shall have the meaning given such term in Section 11.15.
"Closing" shall mean the closing of the transactions contemplated by this
Agreement.
"Closing Date" shall mean March 12, 2003, or such other date as the
Administrative Agent, the Banks and the US Borrower shall agree.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as now and hereafter in effect, or any
successor provision thereto.
"Collateral" shall mean all of the "Collateral" as defined in each of the
Financing Documents.
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Credit Agreement Final
"Collateral Agent" shall mean UBOC, as Collateral Agent for the Lender
Parties under the Financing Documents, and any successor appointed in accordance
with Article IX hereof.
"Commitment" shall mean, at any time, $100,000,000 less any reductions
thereto made in accordance with Section 2.7.
"Commitment Fee" shall have the meaning given such term in Section 2.16
hereof.
"Control" shall mean, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Core Products" shall have the meaning given such term in Section 7.4.
"Currency" shall mean, as applicable, Dollars or a Foreign Currency.
"Default" shall mean any event which, with (i) the giving of any notice
expressly provided for in Article VIII and/or (ii) the passage of any waiting
period or cure period expressly provided for therein, would constitute an Event
of Default.
"Designated Subsidiary Borrower" shall mean (i) each Domestic Subsidiary of
the US Borrower, (ii) each Foreign Subsidiary of the US Borrower listed on
Schedule 1.1 on the Closing Date and (iii) each other Foreign Subsidiary of the
US Borrower that may be approved as such by the Administrative Agent, in each
case referred to in clauses (i) - (iii) so long as the conditions set forth in
Section 5.4 have been satisfied with respect to such Subsidiary.
"Designated Subsidiary Joinder Agreement" shall mean an agreement delivered
by a Subsidiary to the Administrative Agent as contemplated by Section 5.4,
substantially in the form of Exhibit H, with such modifications and additions as
shall be appropriate under Applicable Law and shall be reasonably requested or
agreed to by the Administrative Agent.
"Dollar Equivalent Amount" shall mean, with respect to (a) the amount of
any Foreign Currency on any date, the equivalent amount in Dollars of such
amount of Foreign Currency, as determined by the Administrative Agent using the
Exchange Rate and (b) any amount in Dollars, such amount. For the purposes of
this Agreement, unless otherwise expressly stated herein, the Dollar Equivalent
principal amount of any Loan shall be determined on the date on which the
request therefor is received by the Administrative Agent.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Domestic Subsidiaries" shall mean, collectively, those Subsidiaries
organized and existing under the laws of the United States or any state of the
United States but excluding any branches of such Subsidiaries registered or
operating in jurisdictions located outside the United States.
"Drawing" shall mean any payment or disbursement made by the Issuing
Bank under a Letter of Credit honoring a demand for payment by a beneficiary of
such Letter of Credit.
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Credit Agreement Final
"EBITDA" shall be calculated on a consolidated basis for Holdings and its
Subsidiaries and shall mean, for each four consecutive quarter period, without
duplication, (a) Net Income for such four consecutive quarter period, plus (b)
interest expense deducted in determining such Net Income, plus (c) depreciation
expense deducted in determining such Net Income, plus (d) amortization expense
deducted in determining such Net Income, plus (e) other non-cash items of
expense deducted in determining such Net Income, plus (f) provision for federal,
state, local and foreign taxes to the extent deducted in determining such Net
Income, less (g) to the extent included in determining such Net Income, income
during such period attributable to non-operating gains (including Asset Sales),
including extraordinary or unusual gains, gains from discontinuance of
operations and other non recurring gains, plus (h) to the extent deducted in
determining such Net Income, losses during such period attributable to any
similar non operating losses, in each case computed in accordance with GAAP.
"Eligible Assignee" means (A) (i) a commercial bank, finance company, trust
company or fund organized under the laws of the United States or any state
thereof and engaged generally in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business; (ii) a savings bank or
savings and loan organized under the laws of the United States or any state
thereof; and (iii) a commercial bank, finance company, trust company or fund
engaged generally in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and organized under the laws of any
other country or a political subdivision thereof, provided that such entity is
organized under the laws of a country that is a member of the Organization for
Economic Cooperation and Development or a political subdivision of such country
and (B) any Bank and any Affiliate of any Bank; provided that no Affiliate of
any Borrower shall be an Eligible Assignee; and provided further that such
Eligible Assignee (x) if a commercial bank, savings bank or savings and loan
must have at the time of determination unimpaired capital and surplus of not
less than $200,000,000 and (y) if a fund, must have at least $200,000,000 in
assets under management.
"EMU Legislation" shall mean the legislative measures of the European Union
for the introduction of, changeover to or operation of the Euro in one or more
member states.
"Environmental Claim" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of Holdings, any Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract. agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices, common law or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
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Credit Agreement Final
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
such Act may from time to time be amended, and final regulations promulgated
thereunder.
"ERISA Affiliate" shall mean any Person (including each trade or business
(whether or not incorporated)) which together with Holdings or any of its
Subsidiaries would be deemed to be a member of the same "controlled group"
within the meaning of Section 414(b) of the Code, under "common control" within
the meaning of Section 414(c) of the Code or a member of the same "affiliated
service group" within the meaning of Section 414(m) of the Code and the
regulations, if any, promulgated under Section 414(o) of the Code.
"Euro" shall mean the single currency of the European Union as constituted
by the Treaty on European Union and as referred to in the EMU Legislation.
"Eurodollar Adjusted Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the Approved
Offshore Currency Rate or LIBOR, as applicable, in effect for such Interest
Period and (b) Statutory Reserves.
"Eurodollar Loan" shall mean a Loan denominated in a Foreign Currency, and
any other Loan bearing interest at a rate based on LIBOR in accordance with the
provisions of Article II.
"Eurodollar Margin" shall have the meaning given to such term in Section
2.4(c).
"Event of Default" shall mean any of the events set forth in Article VIII
hereof.
"Exchange Rate" shall mean, with respect to any Foreign Currency on any
date, the rate at which such Foreign Currency may be exchanged into Dollars, as
set forth on such date on the Reuters currency page (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time) for exchanges of such Foreign Currency into Dollars. In the event that
such rate does not appear on any Reuters currency page, the Exchange Rate shall
instead be the Administrative Agent's spot rate of exchange in the interbank
market where its foreign currency exchange operations in respect of such Foreign
Currency are then being conducted, at or about 10:00 a.m., local time, on such
date for the purchase of Dollars with such Foreign Currency, for delivery two
Business Days later; provided that if at the time of any such determination, no
such spot rate can reasonably be quoted, the Administrative Agent may use any
reasonable method it deems applicable to determine such rate, and such
determination shall be conclusive absent manifest error.
"Excluded Subsidiary" shall have the meaning given such term in clause (v)
of the proviso to Section 7.7 hereof.
"Existing Facility" shall mean the credit facility provided pursuant to the
Credit Agreement dated as of March 17, 1999, as amended, among the US Borrower,
Holdings, JPMorgan Chase Bank, as Administrative Agent and Collateral Agent, and
the other banks named therein.
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Credit Agreement Final
"Expropriatory Action" shall mean any action or series of actions that is
taken, authorized, ratified or condoned by the United States of America or any
Governmental Authority or other Person in any country in which a Subsidiary
operates, owns or maintains a place of business, or any agency or
instrumentality thereof, for the appropriation, confiscation, expropriation or
nationalization (by intervention, condemnation or other form of taking), whether
with or without compensation and whether under color of law or otherwise, of any
ownership interest in the stock of any Subsidiary or ownership interest of any
Subsidiary in any asset or property or access thereto.
"Facility" shall have the meaning given to such term in the Preamble to
this Agreement.
"Fair Value" of an asset shall mean the consideration obtainable in a sale
of such asset in an arm's length transaction with a Person who is not an
Affiliate of the seller.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York or if such rate is not so published
for any day which is a Business Day, the average (rounded upwards, if necessary,
to the next 1/100 of 1%) of the quotations for the day of such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fees" shall mean any and all fees and compensation payable to any Lender
Party hereunder or under any other Loan Document.
"Final Maturity Date" shall mean May 31, 2007.
"Financial Officer" shall mean, (i) with respect to the US Borrower, its
chief financial officer or corporate controller and treasurer, (ii) with respect
to Holdings, a Financial Officer of the US Borrower designated by Holdings in a
writing delivered to the Administrative Agent and (iii) with respect to each
Borrower other than the US Borrower and with respect to any Subsidiary whose
stock is pledged to the Collateral Agent, the chief financial officer or
corporate controller and treasurer of the US Borrower acting on such Borrower's
or Subsidiary's behalf.
"Financing Documents" shall mean each of the documents identified on Annex
II and the documents and instruments entered into to perfect the security
interest in the capital stock or other ownership interests of a Foreign
Subsidiary granted to the Collateral Agent for the benefit of the Lender Parties
under the Subsidiary Pledge Agreement or the Borrower Pledge Agreement.
"Fiscal Year" shall mean, with respect to Holdings and its Subsidiaries,
each period from January 1 to December 31 of each year.
"Foreign Borrower" shall mean a Designated Subsidiary Borrower that is a
Foreign Subsidiary (excluding for such purposes the parenthetical phrase in the
definition of Foreign Subsidiaries).
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Credit Agreement Final
"Foreign Currency" means Euros and Sterling.
"Foreign Currency Exposure" means, at any date, the aggregate Dollar
Equivalent Amount of the outstanding principal amount of all Loans which are
denominated in a Foreign Currency.
"Foreign Currency Sublimit" shall mean, at any time, $50,000,000 less any
reductions thereto made in accordance with Section 2.7.
"Foreign Subsidiaries" shall mean, collectively, those Subsidiaries which
are organized or existing under the laws of a jurisdiction located outside of
the United States (and any branches of Domestic Subsidiaries which are
registered or operating in jurisdictions located outside of the United States).
"Funding Office" shall mean, for the borrowing of each type of Loan and
each Currency, the office at which each Bank shall make its Pro Rata Share of
such borrowing available to the Administrative Agent in the applicable Currency,
as set forth in Annex III to this Agreement, as such office may be changed by
the Administrative Agent from time to time pursuant to notice given in
accordance with Section 11.1 hereof.
"Funding Time" shall mean, for the borrowing of each type of Loan and each
Currency, the time by which each Bank shall make its Pro Rata Share of such
borrowing available to the Administrative Agent in the applicable Currency, as
set forth in Annex III to this Agreement.
"GAAP" shall mean generally accepted accounting principles in the United
States in effect from time to time.
"Governmental Authority" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantors" shall mean, collectively, each Parent Guarantor and each of
the Subsidiary Guarantors.
"Guaranty" shall mean any obligation, contingent or otherwise, of any
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person in any manner, whether
directly or indirectly, including any obligation of such Person, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b) to
purchase property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment of such Indebtedness, (c) to purchase or
otherwise pay for merchandise, materials, supplies, services or other property
which provides that payment for such merchandise, materials, supplies, services
or other property shall be made regardless of whether delivery of such
merchandise, materials, supplies, services or other property is ever made or
tendered, (d) to maintain the working capital, equity capital or other financial
statement condition or results of
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Credit Agreement Final
the primary obligor so as to enable the primary obligor to pay such indebtedness
or other obligation or (e) as an account party in respect of any letter of
credit or letter of guaranty issued to support such indebtedness or obligation,
provided that the term "Guaranty" shall not include endorsements for collection
or deposit in the ordinary course of business.
"Harborlite" shall mean Harborlite Corporation, a Delaware corporation and
wholly owned subsidiary of the US Borrower.
"Hazardous Materials" shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any hazardous substance under Section 101(14) of
CERCLA.
"Holdings" shall have the meaning given to such term in the introduction to
this Agreement.
"Holdings Guaranty" shall have the meaning given to such term in Section
10.1.
"Holdings Pledge Agreement" shall mean the Pledge Agreement dated as of the
date hereof, and delivered by Holdings to the Collateral Agent for the ratable
benefit of the Lender Parties, in the form of Exhibit D.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (including any acknowledgments
evidencing payment-in-kind loan transactions), (c) all obligations of such
Person upon which interest charges are customarily paid (other than trade
payables in the ordinary course of business), (d) reimbursement obligations with
respect to letters of credit and similar instruments, (e) all obligations of
such Person under conditional sale or other title retention agreements relating
to property or assets purchased by such Person (other than trade payables in the
ordinary course of business which are not outstanding for more than 90 days),
(f) all obligations of such Person issued or assumed as the deferred purchase
price of property or services, other than accounts payable incurred and paid on
terms customary in the business of such Person (it being understood that the
"deferred purchase price" in connection with any purchase of property or assets
shall include only that portion of the purchase price which shall be deferred
beyond the date on which the purchase is actually consummated), (g) all
obligations of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (h) obligations under forward sales, futures,
options and other similar hedging arrangements, including interest rate ▇▇▇▇▇▇
and foreign currency ▇▇▇▇▇▇, (i) obligations to purchase or otherwise pay for
merchandise, materials, supplies, services or other property which provides that
payment for such merchandise, materials, supplies, services or other property
shall be made regardless of whether delivery of such merchandise, materials,
supplies, services or other property is ever made or tendered, (j) any Guaranty
by such Person of an obligation of others and (k) all Capital
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Credit Agreement Final
Lease Obligations of such Person. The Indebtedness of any Person shall include,
without duplication, the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Person" shall have the meaning given to such term in Section
11.5(a).
"Information" shall have the meaning given to such term in Section
11.14(a)(iv).
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Intellectual Property" shall have the meaning given to such term in
Section 4.10(b) hereof.
"Interest Expense" shall be calculated on a consolidated basis for Holdings
and its Subsidiaries and shall mean, for any period, all cash interest expense
of such Persons for all Indebtedness outstanding during such period computed in
accordance with GAAP.
"Interest Payment Date" shall mean (a) the last day of an Interest Period,
(b) in the case of any Eurodollar Loan having an Interest Period of six months,
(i) the day which is three months after the first day of such Interest Period
and (ii) the last day of such Interest Period and (c) the date of any
refinancing or conversion of such Loan with or into a Loan of a different type,
the date of any prepayment of such Loan and the Final Maturity Date; provided,
however, that any Interest Payment Date which is not a Business Day shall be
extended to the immediately succeeding Business Day except with respect to a
Eurodollar Loan as provided in the definition of Interest Period.
"Interest Period" shall mean, (a) as to any Eurodollar Loan the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month one month, two months, three months or six months
thereafter, as the applicable Borrower may elect and, thereafter, each period
commencing on the last day of the immediately preceding Interest Period for such
Eurodollar Loan and ending on the numerically corresponding day in the calendar
month one month, two months, three months or six months thereafter, as the
applicable Borrower may elect and (b) as to any ABR Loan, the period commencing
on the date of such Loan and ending on the earliest of (i) the immediately
succeeding March 31, June 30, September 30, or December 31 or (ii) the date of
any conversion in accordance with Section 2.9 hereof (if after the date of such
Loan); provided, however, that (A) if any Interest Period would end on a day
which shall not be a Business Day, such Interest Period shall be extended to the
immediately succeeding Business Day, unless, in the case such Interest Period is
applicable to a Eurodollar Loan, such next succeeding Business Day would fall in
the immediately succeeding calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day and (B) any Interest Period
with respect to a Eurodollar Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.
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Credit Agreement Final
"Investments" shall have the meaning given such term in Section 7.4 hereof.
"Issuing Bank" shall mean UBOC in its capacity as the issuer of a Letter of
Credit hereunder.
"LC Fee" shall have the meaning given to such term in Section 3.5.
"Lender Parties" shall mean the Banks, the Administrative Agent and the
Collateral Agent.
"Lending Office" shall mean, with respect to any of the Banks, the branch
or branches (or Affiliate or Affiliates) from which any such Bank's Eurodollar
Loans or ABR Loans, as the case may be, are made or maintained and for the
account of which all payments of principal of, and interest on, such Bank's
Eurodollar Loans or ABR Loans are made, as provided to the Administrative Agent
from time to time in accordance with Section 11.1 hereof.
"Letter of Credit" shall have the meaning given to such term in Section
3.1(a) hereof.
"Letter of Credit Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn principal amount of all Letters of Credit outstanding at such
time, (b) the aggregate principal amount of all Letters of Credit requested by
the US Borrower prior to such time pursuant to Section 3.2 and not yet issued by
the Issuing Bank and (c) the aggregate amount of all Reimbursement Obligations
which have not at such time been converted to ABR Loans.
"Letter of Credit Facility" shall have the meaning given to such term in
the Preamble to this Agreement.
"LIBOR" shall mean, with respect to any Eurodollar Loan denominated in
Dollars for any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then "LIBOR" with
respect to such Eurodollar Loan for such Interest Period shall be the rate
determined by the Administrative Agent to be the arithmetic average of the rates
at which dollar deposits approximately equal in principal amount to such
Eurodollar Loan made by the Administrative Agent and for a maturity comparable
to such Interest Period are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest of
any kind whatsoever in or on such asset (including the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction, other than in connection with an operating lease),
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Credit Agreement Final
(b) the interest of a vendor or a lessor under any conditional sale agreement.
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call, appreciation
right or similar right of a third party with respect to such securities, other
than purchase options held by persons granted options to purchase shares of
common stock of Holdings under the 2001 Stock Option Plan.
"Loan" shall mean any loan made by a Bank to a Borrower in accordance with
Section 2.3.
"Loan Documents" shall mean this Agreement, the Financing Documents, the
Alleghany Subordination Agreement, each Designated Subsidiary Joinder Agreement,
and any other agreement, instrument or certificate delivered by a Loan Party in
connection herewith, including any interest rate hedge or foreign currency hedge
entered into by the Administrative Agent or any Bank in connection herewith.
"Loan Parties" shall mean the Borrowers and the Guarantors.
"Majority Banks" shall mean, at any time, Banks holding fifty-one percent
(51%) or more of the aggregate principal amount of the Loans then outstanding,
or if no Loans are then outstanding, Banks having Pro Rata Shares representing
fifty-one percent (51%) or more of the Commitment.
"Material Adverse Effect" shall mean (a) a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Holdings
and its Subsidiaries, taken as a whole, (b) a material impairment of the ability
of any Loan Party to perform any of its material obligations under any Loan
Document to which it is a party or (c) any material impairment of the security
interest of the Lender Parties in the Collateral.
"Material Subsidiary" shall mean each Borrower, Celite, Harborlite and each
other Subsidiary (whether existing as of the Closing Date or created in the
future) having total assets or net worth equal to at least five percent (5%) of
Holdings' total assets or net worth, as the case may be, on a consolidated
basis.
"Maximum Rate" shall have the meaning given such term in Section 11.15.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Income" shall mean, for any Person for any period, the net income of
such Person computed in accordance with GAAP.
"Net Worth" shall be calculated on a consolidated basis for Holdings and
its Subsidiaries and shall mean, at any point in time, the net book value of the
assets of Holdings and its Subsidiaries, as shown on Holdings' consolidated
balance sheet, less the sum of (i) the amount of any write-up effective after
December 31, 2002 in the value of any asset above the cost or depreciated cost
thereof to Holdings and/or the Subsidiaries and (ii) total liabilities as shown
on such balance sheet, in each case computed in accordance with GAAP, provided,
however, that
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Credit Agreement Final
Net Worth shall be adjusted to exclude losses or gains arising solely as a
result of currency translations.
"Obligations" shall mean the due and punctual payment of principal of and
interest on the Loans, the Fees and any Reimbursement Obligations hereunder and
all other obligations of any Loan Party to any Lender Party under this Agreement
(including, without limitation. all obligations under Section 2.10 and 3.4), the
Letters of Credit and any other Loan Document.
"Offering Memorandum" means the Confidential Offering Memorandum dated
February 2003 relating to the US Borrower.
"Organizational Documents" shall mean, with respect to any Person, each
instrument or other document that (a) defines the existence of such Person, as
filed or recorded with an applicable Governmental Authority or (b) governs the
internal affairs of such Person, in each case as amended, supplemented or
restated.
"Other Taxes" shall have the meaning given to such term in Section 2.15(b).
"Parent Contributions" shall mean cash received by Holdings from its
stockholders as a contribution to capital and up to $15 million of any cash
received by Holdings from its stockholders as subordinated debt, provided that
any such subordinated debt is subject to the Alleghany Subordination Agreement.
"Parent Guarantor" shall have the meaning set forth in Section 10.1.
"Payment Office" shall mean, with respect to each type of Loan and each
Currency, the office of the Administrative Agent as set forth in Annex III to
this Agreement, as such office may be changed by the Administrative Agent from
time to time pursuant to notice given in accordance with Section 11.1 hereof.
"Payment Time" shall mean, with respect to each type of Loan and each
Currency, the time by which payment must be received by the Administrative
Agent, as set forth in Annex III to this Agreement. Any payment required
hereunder that is not received by the applicable Payment Time shall be deemed
received on the next succeeding Business Day.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Acquisitions" shall have the meaning given such term in Section
7.7 hereof.
"Permitted Indebtedness" shall mean Indebtedness permitted to be incurred
under Section 7.1 hereof.
"Permitted Investments" shall mean (i) direct obligations of the United
States or of any agency thereof, or obligations guaranteed as to principal and
interest by the United States government, (ii) bankers' acceptances and
certificates of deposit issued by the Administrative Agent, any Bank or any
other bank or trust company or, in the case of any subsidiary bank of a bank
holding company, a bank holding company, having capital, surplus and undivided
profits of at least $500,000,000, the short-term deposit rating of which is
given an A1 or P1 rating by
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Credit Agreement Final
Standard & Poor's Ratings Services or ▇▇▇▇▇'▇ Investors Service, Inc., as
applicable, (iii) obligations of the Administrative Agent, any Bank or any bank
or trust company or bank holding company described in clause (ii) above, in
respect of the repurchase of obligations of the type described in clause (i)
hereof, provided that such repurchase obligations shall be fully secured by
obligations of the type described in said clause (i) and the possession of such
obligations shall be transferred to, and segregated from other obligations owed
by, the Administrative Agent, any Bank or any such Bank's trust company or bank
holding company, (iv) commercial paper given a rating of A1 or P1 by Standard &
Poor's Ratings Services or ▇▇▇▇▇'▇ Investors Service, Inc., as applicable,
maturing not more than 270 days from the date of acquisition, (v) shares of
funds registered under the Investment Company Act of 1940, as amended, that have
assets of at least $500,000,000 and invest substantially all their assets in
obligations described in clauses (i) through (iv) above to the extent that such
shares are rated by ▇▇▇▇▇'▇ Investor Services, Inc. or Standard & Poor's Ratings
Service in one of the two highest rating categories assigned by such agency for
shares of such nature and (vi) investments made by the US Borrower in shares of
common stock of Holdings to the extent required in order for the US Borrower to
be able to deliver shares of common stock of Holdings upon exercise of options
granted under the 2001 Stock Option Plan.
"Permitted Liens" shall mean Liens permitted in accordance with Section 7.2
hereof.
"Permitted Subsidiary Indebtedness" shall mean, at any time, an aggregate
of $15.0 million of Indebtedness incurred by the Foreign Subsidiaries in the
ordinary course of business, other than (i) Indebtedness of a Foreign Subsidiary
to a Loan Party incurred in accordance with the provisions of this Agreement and
(ii) Indebtedness of a Foreign Borrower to the Banks incurred under this
Agreement. Notwithstanding the foregoing, such amount may be increased to the
extent necessary (but not in excess of an aggregate of $25.0 million) to permit
a Foreign Subsidiary to enter into, and incur Indebtedness under, a credit
facility (the "Local Facility") extended to such Foreign Subsidiary by a
financial institution in the country in which such Subsidiary is formed or doing
business; provided that (i) the applicable Foreign Subsidiary has delivered to
the Administrative Agent, at least 30 days prior to its entering into the Local
Facility, written notice indicating that such Subsidiary has determined that the
taxes such country would impose on borrowings under the Local Facility will be
less than Taxes that would be imposed by such country on Loans extended to such
Subsidiary under this Agreement, which notice shall attach an opinion of counsel
regarding the taxes payable on borrowing under the Local Facility issued by a
firm of attorneys reasonably satisfactory to the Administrative Agent; provided,
further that no Local Facility may be entered into if an Event of Default has
occurred and is continuing.
"Person" shall mean and include any natural person, company, partnership,
limited liability company, joint venture, corporation, business trust,
unincorporated organization or Governmental Authority.
"Plan" shall mean any defined benefit pension plan which is subject to the
provisions of Title IV of ERISA (or similar legislation in the jurisdiction in
which a Subsidiary is organized) and which is maintained for or contributed to
on behalf of employees of the Parent or any Subsidiary, as the case may be, or
any ERISA Affiliate of Holdings or any Subsidiary.
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Credit Agreement Final
"Pro Rata Share" shall mean, with respect to any Bank at any time, the
percentage set forth in Column B of Annex I attached hereto, as amended from
time to time.
"Rate Certificate" shall have the meaning given to such term in Section
2.4(c).
"Register" shall have the meaning given such term in Section 11.3(d).
"Regulation D" shall mean Regulation D of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation T" shall mean Regulation T of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation L" shall mean Regulation L of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Reimbursement Obligation" shall mean, as to any Letter of Credit issued
hereunder which has been the subject of a Drawing, the obligations of the US
Borrower to reimburse the Issuing Bank or, if applicable, the Banks for the
principal amount of such Drawing, plus accrued interest thereon, as provided in
Section 3.3(a) hereof.
"Release" has the meaning set forth in Section 101(22) of CERCLA.
"Reorganization" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Reportable Event" shall mean any reportable event as defined in Section
4043(c) of ERISA, other than a reportable event as to which provision for 30 day
notice to the PBGC has been waived under applicable regulations (including
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section 2615).
"Responsible Officer" of any Person shall mean any executive officer or the
chief financial officer of such a Person.
"Restricted Payment" shall have the meaning given to such term in Section
7.3 hereof.
"Sale and Leaseback Transaction" shall mean any arrangement whereby a
Person sells or transfers real or personal property, and thereafter rents or
leases such property to be used for substantially the same purpose or purposes
as the property was used prior to such sale or transfer.
"Single Employer Plan" shall mean a Plan described in Section 4001(a)(15)
of ERISA.
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Credit Agreement Final
"Solvent" shall mean, when used with respect to any Person, that:
(a) the present fair salable value of such Person's assets is in excess
of the total amount of the probable liability on such Person's debts;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all businesses in which such
Person is about to engage.
"Special Dividend" shall mean a dividend paid by Holdings to its
stockholders during Fiscal Year 2003 in an aggregate amount not exceeding
$22,800,000, it being understood that (i) up to $13,000,000 of such amount may
be in the form of a non-cash distribution from the US Borrower to Holdings
(which in turn will distribute such amount to Alleghany) in the form of
forgiveness of Indebtedness owing by Alleghany to the US Borrower in a
corresponding amount and (ii) up to $10,700,000 of such amount may be in the
form of cash from the US Borrower to Holdings (which in turn will distribute
such amount to Holdings' shareholders).
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by the Board and any other banking authority to which the
Administrative Agent is subject with respect to the Eurodollar Adjusted Rate for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and to
be subject to such reserve requirements as Eurocurrency Liabilities are from
time to time subject without benefit of or credit for proration, exemptions or
offsets which may be available from time to time to any Bank under such
Regulation D or any comparable regulation. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Sterling" shall mean lawful money of the United Kingdom.
"Subsidiary" shall mean, at any time, any Person (other than an Excluded
Subsidiary) (a) of which more than 50% of the shares of stock or other ownership
interests entitled to vote in the election of directors (excluding shares or
other ownership interests entitled to vote only upon the failure to pay
dividends thereon or other contingencies) are at the time owned directly or
indirectly through one or more Subsidiaries, by Holdings (including, without
limitation, the US Borrower, Celite and Harborlite) or (b) (i) of which at least
25% of the shares of stock or other ownership interests entitled to vote in the
election of directors (excluding shares or other ownership interests entitled to
vote only upon the failure to pay dividends thereon or other contingencies) are
at the time owed directly or indirectly through one or more Subsidiaries, by
Holdings (including, without limitation, the US Borrower, Celite and Harborlite)
and (ii) who is under the Control of Holdings.
"Subsidiary Guarantors" shall mean all the Domestic Subsidiaries other than
the US Borrower.
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Credit Agreement Final
"Subsidiary Guaranty Agreement" shall mean the Guaranty Agreement dated the
date hereof and delivered by the Subsidiary Guarantors to the Collateral Agent
for the ratable benefit of the Lender Parties, in the form of Exhibit E.
"Subsidiary Pledge Agreement" shall mean the Pledge Agreement dated the
date hereof and delivered by the Subsidiary Pledgors to the Collateral Agent for
the ratable benefit of the Lender Parties, in the form of Exhibit F.
"Subsidiary Pledgors" shall mean the Subsidiaries named as pledgors in the
Subsidiary Pledge Agreement.
"Taxes" shall have the meaning given to such term in Section 2.15(a).
"Third Party Financing" shall mean any funds which are (a) obtained from
sources other than (i) Parent Contributions or (ii) Loans made pursuant to this
Agreement and (b) used by Holdings or any of its Subsidiaries to effect a
Permitted Acquisition.
"Total Capitalization" shall be calculated on a consolidated basis for
Holdings and its Subsidiaries and shall mean, at any time, (i) the sum of (A)
capital stock taken at par value, (B) capital surplus and (C) retained earnings
at such date less (ii) treasury stock plus (iii) Total Indebtedness, in each
case computed in accordance with GAAP.
"Total Exposure" means, at any date, the aggregate Dollar Equivalent Amount
of (i) the outstanding principal amount of all Loans and (ii) the Letter of
Credit Exposure.
"Total Indebtedness" shall mean, at any time, the aggregate amount of
Indebtedness (other than Indebtedness described in clause (h) of the definition
thereof) of Holdings and its Subsidiaries on a consolidated basis, computed in
accordance with GAAP.
"2001 Stock Option Plan" means World Minerals Inc. 2001 Stock Option Plan,
which provides for the issuance to employees of the US Borrower and its
Subsidiaries of options to purchase an aggregate of up to 5% of the number of
outstanding shares of common stock of Holdings.
"UBOC" shall have the meaning given to such term in the introduction to
this Agreement.
"US Borrower " shall have the meaning given to such term in the
introduction to this Agreement and shall, where appropriate, include the US
Borrower in its capacity as a Parent Guarantor hereunder.
"US Borrower Guaranty" shall have the meaning given to such term in Section
10.1.
1.2 TERMS GENERALLY.
The definitions in Section 1.1 shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be
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deemed to be followed by the phrase "without limitation." The word "to" shall
mean "to and excluding" and "from" shall mean "from and including." All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless the context
requires otherwise any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein).
1.3 ACCOUNTING TERMS, GAAP.
Except as otherwise expressly provided herein, all terms of an accounting
or financial nature shall be construed in accordance with GAAP, consistently
applied, and all financial statements or accounting determinations required
herein to be prepared or made in accordance with GAAP shall be prepared or made
in accordance with GAAP applied on a consistent basis. In the event of any
change in GAAP or announcement by the Financial Accounting Standards Board (the
"FASB") of the effective date of any change in GAAP, which change could
reasonably be expected to materially affect the Borrowers' compliance with
Sections 7.11 through 7.13 or any definition of a financial term used herein,
each of the Borrowers and the Administrative Agent shall have the right by
written notice to the other to require such other party to negotiate in good
faith for a period of thirty (30) days with respect to amending such Sections or
definitions appropriately to take account of such change, without liability to
either party in the event an agreement is not reached with respect to any such
amendment; provided, however, that such 30 day period shall not extend beyond
the effective date of any change except to the extent that such effective date
was announced by the FASB less than thirty (30) days in advance of such
effective date. Notwithstanding the foregoing, all calculations required under
Sections 7.11 through 7.13 hereof shall be made in accordance with GAAP in
effect as of the Closing Date, unless and until such Sections shall have been
modified in accordance with the preceding sentence.
ARTICLE II
THE LOANS
2.1 MAKING OF LOANS.
(a) Subject to the terms and conditions contained herein, each Bank
severally agrees to make Loans to the Borrowers from time to time during the
period from the Closing Date to the Final Maturity Date (or upon the earlier
termination of the Commitment in accordance with the provisions hereof);
provided that (i) no Loan shall be made if, after giving effect to the making of
such Loan (including, with respect to Loans made pursuant to Section 3.3(a), the
application of the proceeds thereof), the outstanding principal amount of such
Bank's Loans would exceed such Bank's Pro Rata Share of (A) the Commitment on
such date less (B) the Letter of Credit Exposure, (ii) no Loan shall be made if,
after giving effect to the making of such Loan, the Total Exposure would exceed
the Commitment and (iii) no Loan denominated in a Foreign Currency shall be made
if, after giving effect to the making of such Loan, the Foreign Currency
Exposure would exceed the Foreign Currency Sublimit. Subject to the
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foregoing, each Loan shall be made to the requesting Borrower by each Bank in
accordance with its Pro Rata Share of the then applicable Commitment as provided
in clause (c) below. Loans requested hereunder (i) in Dollars, shall be (x) if
an ABR Loan, in a minimum principal amount of $500,000 and in integral multiples
of $500,000 in excess thereof (except as expressly provided in Section 3.3) and
(y) if a Eurodollar Loan, in a minimum principal amount of $1,000,000 and in
integral multiples of $1,000,000 in excess thereof and (ii) in any Foreign
Currency, shall be in a minimum principal amount equal to the Dollar Equivalent
Amount of $1,000,000 and in integral multiples of the Dollar Equivalent Amount
of $500,000 in excess thereof.
(b) Each Loan shall be either an ABR Loan or a Eurodollar Loan as the
applicable Borrower may request in accordance with Section 2.3 hereof; provided
that all ABR Loans shall be denominated in Dollars. Loans of more than one type
may be outstanding at the same time; provided that there shall not at any time
be more than a total of six Eurodollar Loans outstanding. Each Bank may, at its
option, fulfill its Pro Rata Share with respect to any Eurodollar Loan by
causing a Lending Office of such Bank to make such Loan; provided, however, that
any exercise of such option shall not affect the obligation of the applicable
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) Each Bank shall advance its portion of each Loan hereunder on the
proposed date thereof by paying the required amount to the Administrative Agent
in immediately available funds in the applicable Currency at the applicable
Funding Office, at or prior to the applicable Funding Time, on the date of such
Loan. The amounts made available by each Bank to the Administrative Agent will
then be made available by the Administrative Agent to the applicable Borrower at
the applicable Funding Office, in like funds as received by the Administrative
Agent (which shall, in the case of borrowings by the US Borrower, be made
available by credit of such funds to the general deposit account maintained by
the US Borrower with the Administrative Agent). If a Loan is not made on any
date requested by a Borrower because any condition precedent to such Loan
hereunder shall not have been met or for any other reason, the Administrative
Agent shall promptly return to each Bank which has advanced funds to the
Administrative Agent any amounts so transferred.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the proposed date of any Loan that such Bank will not make
available to the Administrative Agent such Bank's share of such Loan, the
Administrative Agent may assume that such Bank has made such share available on
such date in accordance with paragraph (c) of this Section and may, in reliance
upon such assumption, make available to the applicable Borrower a corresponding
amount. In such event, if a Bank has not in fact made its share of the
applicable Loan available to the Administrative Agent, then the applicable Bank
and the applicable Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to such Borrower
to but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Bank, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
conventions on interbank compensation or (ii) in the case of such Borrower, the
interest rate applicable to ABR Loans. If such Bank pays such amount to the
Administrative Agent, then such amount shall constitute such Bank's Loan.
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2.2 REPAYMENT OF LOANS, EVIDENCE OF DEBT.
(a) Each Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Bank the then unpaid principal
amount of each Loan made by such Bank to such Borrower on the Final Maturity
Date.
(b) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Bank
resulting from each Loan made by such Bank to such Borrower, including the
amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made to each Borrower hereunder and the
Interest Period and Currency applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Bank hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Banks and each Bank's
share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be conclusive evidence, absent manifest error,
of the existence and amounts of the obligations recorded therein, provided that
the failure of any Bank or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the respective obligation of
each Borrower to repay the Loans made to it in accordance with the terms of this
Agreement.
(e) Any Bank may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Bank a promissory note payable to the order of such Bank (or, if
requested by such Bank, to such Bank and its registered assigns) and in a
customary form reasonably satisfactory to the Administrative Agent. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 11.3) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
(f) During the period from the date hereof to the Final Maturity Date,
each Borrower may borrow, pay, prepay and reborrow Loans hereunder subject to
the terms and conditions of this Agreement (including the provisions regarding
prepayment set forth in Sections 2.7 and 2.8 hereof).
2.3 NOTICE OF LOANS.
(a) In order to request a Loan of any type and in any Currency
hereunder, the appropriate Borrower shall, except as otherwise expressly
provided in Section 3.3, give the Administrative Agent irrevocable notice,
substantially in the form of Exhibit G, executed by a Financial Officer thereof,
(i) not later than 9:00 a.m., Los Angeles time, one Business Day before such
Loan is to be made if such Loan is to be an ABR Loan and (ii) not later than
10:00 a.m., Los Angeles time, three Business Days before such Loan is to be made
if such Loan is to be a Eurodollar Loan denominated in Dollars (or at least five
Business Days before such Loan is to be
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made if such Loan is to be a Eurodollar Loan denominated in a Foreign Currency).
Such notice shall specify (A) the Currency in which such Loan will be
denominated, (B) whether the Loan then being requested is to be an ABR Loan or a
Eurodollar Loan, (C) the date of the proposed borrowing (which shall be a
Business Day) and amount thereof and (D) if such Loan is to be a Eurodollar
Loan, the Interest Period with respect thereto. If no election as to the type of
Loan is specified in such notice, the Loan shall be an ABR Loan. If no Interest
Period with respect to any Eurodollar Loan is specified in any such notice, then
such Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following the receipt of a notice of borrowing request, the
Administrative Agent shall advise each Bank of the details thereof and of the
amount of such Bank's Loan to be made as part of the requested borrowing.
Notwithstanding the foregoing, unless the Administrative Agent has notified, in
its sole and absolute discretion, the Borrowers to the contrary, a Loan may be
requested by telephone by a Financial Officer of the applicable Borrower, in
which case such Borrower shall confirm such request by promptly delivering a
borrowing notice in the form of Exhibit G, in person or by telecopier to the
Administrative Agent. The Administrative Agent shall incur no liability
whatsoever hereunder in acting upon any telephonic request for Loans purportedly
made by a such Financial Officer, and the Borrowers hereby agree to indemnify
the Administrative Agent from any loss, cost, expense or liability as a result
of so acting.
(b) Each Borrower, as applicable, may continue any Eurodollar Loan or
convert all or any part of any ABR Loan or Eurodollar Loan into a Loan of a
different type, in each case in accordance with Section 2.9 hereof and subject
to the limitations set forth therein.
2.4 INTEREST.
(a) Subject to Section 2.4(c) below, in the case of an ABR Loan,
interest shall be payable at a variable rate per annum (calculated on the basis
of the actual number of days elapsed over a year of 360 days) equal to the
Alternate Base Rate plus the ABR Margin determined in accordance with Section
2.4(c). Interest will be payable on each ABR Loan on each applicable Interest
Payment Date.
(b) Subject to Section 2.4(c) below, in the case of a Eurodollar Loan,
interest shall be payable at a variable rate per annum (calculated on the basis
of the actual number of days elapsed over a year of 360 days) equal to the
Eurodollar Adjusted Rate plus the Eurodollar Margin determined in accordance
with Section 2.4(c). Interest will be payable on each Eurodollar Loan on each
applicable Interest Payment Date. The Administrative Agent shall determine the
applicable Eurodollar Adjusted Rate for each Interest Period two Business Days
prior to the commencement of such Interest Period and shall notify the Borrowers
of the Eurodollar Adjusted Rate so determined. Such determination shall be
conclusive absent manifest error.
(c) Within 60 days (75 days in the case of the fourth fiscal quarter of
each Fiscal Year other than 2002, and 120 days in the case of the fiscal quarter
ending December 31, 2002) after the end of each fiscal quarter of each Fiscal
Year commencing with the fiscal quarter ending December 31, 2002, the Borrowers
shall deliver to the Administrative Agent a certificate (a "Rate Certificate")
setting forth the calculation, certified as to accuracy by a Financial Officer
of Holdings, of the ratio of Total Indebtedness as of the last day of such
fiscal quarter to
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EBITDA for the four-fiscal-quarter period ending on such last day (the "Cash
Flow Ratio"). If the Administrative Agent determines that the Rate Certificate
is accurate, then the ABR Margin or the Eurodollar Margin, as the case may be,
shall be the rate (the "ABR Margin" or the "Eurodollar Margin," as the case may
be) set forth in the applicable column of the table below opposite the
applicable range for such Cash Flow Ratio:
Cash Flow Ratio ABR Margin Eurodollar Margin
--------------- ---------- -----------------
Greater than 2.25x 0.500% 2.000%
1.5x to 2.25x 0.250% 1.750%
Less than 1.5x 0% 1.500%
Notwithstanding the foregoing, for the period commencing on the Closing
Date and ending on the earlier of (i) receipt by the Administrative Agent of the
Fiscal Year 2002 financial statements contemplated by Section 6.11(a), along
with the certificate with respect thereto contemplated by Section 6.11(f), and
(ii) the due date for such financial statements and certificate set forth in
Sections 6.11(a) and (f), respectively, the ABR Margin and the Eurodollar Margin
shall be 0% and 1.500%, respectively. Following the delivery of a Rate
Certificate in accordance with this Section 2.4(c), any change in the ABR Margin
or the Eurodollar Margin, as the case may be, shall become effective with
respect to all ABR Loans or Eurodollar Loans, as the case may be, and Letters of
Credit outstanding hereunder on the first day of the fiscal quarter immediately
following the fiscal quarter in which the Rate Certificate is delivered.
2.5 ALTERNATIVE RATE OF INTEREST.
In the event, and on each occasion, that on the date two Business Days
prior to the commencement of any Interest Period for any Eurodollar Loan, the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that adequate and reasonable means do
not exist for ascertaining the Eurodollar Adjusted Rate for such Interest
Period, or the Administrative Agent is advised by the Majority Banks that the
rate at which such deposits in the applicable Currency are being offered will
not adequately and fairly reflect the cost to such Banks of making or
maintaining the principal amount of such Eurodollar Loan (or Loans) during such
Interest Period, then the Administrative Agent shall promptly give notice of
such determination to the Borrowers and the Banks. For one Business Day after
receipt of such notice, any Borrower shall have the right to withdraw its
request pursuant to Section 2.1 for a Eurodollar Loan by notice to the
Administrative Agent. After such notice shall have been given and until the
Administrative Agent notifies the Borrowers and the Banks that the circumstances
giving rise to such notice no longer exist, Eurodollar Loans of the affected
type shall be unavailable hereunder.
2.6 INTEREST ON OVERDUE AMOUNTS.
If any Borrower defaults in the payment of the principal of or interest on
any Loan made to it or any other amount due from it hereunder, such Borrower
shall, on demand from time to time, pay interest to the extent permitted by law
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (calculated on the basis
of the actual number of days elapsed over a year of 360 days) equal to
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(i) in the case of overdue principal of any Loan, two percent (2%) plus the rate
otherwise applicable to such Loan, or (ii) in the case of any other amount, two
percent (2%) plus the rate applicable to ABR Loans.
2.7 REDUCTION OF COMMITMENT.
(a) Upon at least two Business Days prior notice to the Administrative
Agent and subject to the limitations set forth in paragraph (d) below, the
Borrowers may at any time permanently terminate, or from time to time
permanently reduce, the Commitment in effect at such time. Each such reduction
of the Commitment shall be in a minimum principal amount of $5,000,000 or an
integral multiple thereof and shall reduce, on a dollar for dollar basis, the
aggregate Commitment of the Banks in effect on such date. Each such reduction of
the Commitment shall result in a pro rata reduction of the Foreign Currency
Sublimit and the sublimit for Letters of Credit set forth in Section 3.1(a).
Each notice delivered by the Borrowers pursuant to this Section shall be
irrevocable.
(b) If on any date that the Commitment is reduced (including in
connection with a termination of the Commitment) in accordance with paragraph
(a) above the sum of (i) the aggregate amount of Loans outstanding under the
Facility plus (ii) the aggregate amount of the Letter of Credit Exposure at such
time exceeds the Commitment as so reduced, then simultaneously with, and as a
condition to such reduction, the Borrowers shall prepay Loans by making a
payment to the Administrative Agent, on behalf of the Banks, in an amount equal
to such excess, so that, after giving effect to such payment, the aggregate
outstanding principal amount of all Loans plus the aggregate amount of the
Letter of Credit Exposure at such time does not exceed the Commitment, as so
reduced. To the extent the aggregate Letter of Credit Exposure exceeds the
Commitment as so reduced, then on such date the US Borrower shall make a deposit
in the Cash Collateral Account in accordance with Section 3.3(d).
(c) If on any date, whether due to a reduction of the Commitment or any
change in any Exchange Rate, the Foreign Currency Exposure exceeds the Foreign
Currency Sublimit, then the Borrowers shall immediately prepay Loans denominated
in Foreign Currency by making a payment to the Administrative Agent, on behalf
of the Banks, in an amount equal to such excess, so that, after giving effect to
such payment, the Foreign Currency Exposure at such time does not exceed the
Foreign Currency Sublimit.
(d) Any reduction of the Commitment in accordance with clause (a) above
shall be accompanied (i) by payment of the accrued Commitment Fee on the amount
of the reduction, (ii) in the event that the Commitment is being terminated, by
payment to the Administrative Agent in accordance with Section 3.3(c) hereof and
for the benefit of the Banks, of an amount equal to the aggregate Letter of
Credit Exposure and (iii) include any other required charges on the amount
prepaid (including any payments required by Section 2.8 hereof). Any prepayment
of the Loans in accordance with clause (c) above shall be accompanied by any
other required charges on the amount prepaid (including any payments required by
Section 2.8 hereof).
(e) All amounts paid by the Borrowers under this Section 2.7 shall be
made ratably to each Bank in accordance with its respective Pro Rata Share.
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2.8 REDEPLOYMENT COST.
Each Borrower, respectively, shall reimburse each Bank for any loss
incurred or to be incurred by it in the redeployment of the funds released as a
result of (A) any prepayment or payment of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (B) any failure or refusal of such Borrower to accept (or to
meet the conditions precedent for) any Eurodollar Loan as to which notice was
given by such Borrower hereunder, (C) repayment of any Loans which are
Eurodollar Loans in connection with a reduction of the Commitment in accordance
with Section 2.7, or (D) automatic conversions pursuant to Section 2.11. In the
case of a Eurodollar Loan, such loss, cost or expense to any Bank shall be
deemed to include an amount determined by such Bank to be the excess, if any, of
(i) the amount of interest that would have accrued on the principal amount of
such Loan had such event not occurred, at the Eurodollar Adjusted Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate that
prime banks in the Eurodollar market would bid were they to bid, at the
commencement of such period, for deposits in the applicable Currency of a
comparable amount and period from other banks in the Eurodollar market;
provided, however, that such loss shall not include any loss, damage, or
exposure resulting from the failure of any Person to whom any such funds are
loaned to timely and duly repay the same, or from any other default or non
performance of such Person's obligations. Upon the occurrence of any event set
forth in clauses (A) through (D) above, the Administrative Agent shall deliver
to the Borrowers a certificate setting forth any amount or amounts which each
Bank is entitled to receive pursuant to this Section 2.8 and reasonable
supporting calculations therefor. Such certificate shall be conclusive absent
manifest error. Within 20 days after receipt, the applicable Borrower(s) shall
pay the Administrative Agent, on behalf of the Banks, all amounts set forth
therein. Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.8 shall
survive the payment in full of principal and interest hereunder.
2.9 CONVERSION AND CONTINUATION OF BORROWINGS.
Each Borrower shall have the right, at any time, with at least three
Business Days' prior irrevocable notice to the Administrative Agent (or five
Business Days' prior irrevocable notice in the case of a Eurodollar Loan
denominated in a Foreign Currency), (a) to continue any Loan made to it or
portion thereof into a subsequent Interest Period, or (b) to convert any type of
Loan denominated in Dollars made to it or portion thereof into a Loan
denominated in Dollars of a different type, in each case subject to the
following:
(i) with respect to Eurodollar Loans, no Event of Default shall have
occurred and be continuing at the time of such continuation or conversion
and no notice described in Section 2.5 or 2.11 (which shall not have been
rescinded) shall have been given by the Bank from which the Eurodollar Loan
is requested;
(ii) each conversion shall be effected by the Banks applying the
proceeds of the new Loan to the Loan (or portion thereof) being converted;
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(iii) if the new Loan made in respect of the conversion shall be a
Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of conversion;
(iv) each request for a Eurodollar Loan conversion or for a
continuation thereof which shall fail to state the applicable Interest
Period shall be for one month's duration;
(v) no more than a total of six Eurodollar Loans may be outstanding at
any one time; and
(vi) each request for conversion of an ABR Loan to a Eurodollar Loan
hereunder shall be in the principal amount of at least the Dollar
Equivalent Amount of $500,000.
In the event that the applicable Borrower shall not give notice to continue
any Eurodollar Loan, such Loan (unless repaid) shall automatically become an ABR
Loan (which, in the case of a Foreign Currency Loan, shall be the Dollar
Equivalent Amount of such Loan) at the expiration of the then current Interest
Period; provided that if such Eurodollar Loan is denominated in a Foreign
Currency, such Loan shall be automatically continued as a Eurodollar Loan with
an Interest Period of one month; provided, further, that such automatic
extension shall not be available in successive months, and shall not be
available in more than three instances during the term of this Agreement unless
otherwise agreed to by the Administrative Agent in its sole discretion.
2.10 INCREASED COSTS.
(a) Subject to compliance with subsections (d) and (e) below, if after
the date of this Agreement any change in Applicable Law or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Bank of the principal
of or interest on any Eurodollar Loan or any other fees or amounts payable
hereunder with respect to any Eurodollar Loan (other than Taxes), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, such Bank or shall impose on such Bank or the London interbank
market any other condition affecting this Agreement or the Eurodollar Loans, and
the result of any of the foregoing shall be to increase the cost to such Bank of
making or maintaining any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Bank hereunder (whether of principal, interest or
otherwise) in respect thereof, by an amount deemed by such Bank to be material,
then (to the extent the amount is not included in the computation of the
Eurodollar Adjusted Rate) the Borrowers shall pay to the Administrative Agent
for the account of such Bank, upon the Administrative Agent's demand, such
additional amount or amounts as will compensate such Bank for such additional
costs or reduction.
(b) Subject to compliance with subsections (d) and (e) below, if any
Bank shall have determined that the adoption after the date hereof of any law,
rule, regulation, agreement or guideline regarding capital adequacy, or any
change in any of the foregoing or in
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the interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any Lending Office of such
Bank) or any Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital or on the capital
of such Bank's holding company, if any, as a consequence of this Agreement or
the Loans made by such Bank pursuant hereto to a level below that which such
Bank or such Bank's holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies and the
policies of such Bank's holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material, such Bank shall so notify the
Administrative Agent in writing and then, from time to time after submission by
the Administrative Agent to the Borrowers of a written request therefor, the
Borrowers shall pay to the Administrative Agent for the account of such Bank
such additional amount or amounts as will compensate such Bank or such Bank's
holding company for any such reduction suffered.
(c) A certificate of each Bank setting forth such amount or amounts and
the basis for determination from time to time of such amount or amounts as shall
be necessary to compensate such Bank or its holding company as specified in
paragraph (a) or (b) above, as the case may be, shall be delivered by the
Administrative Agent (following its receipt thereof from such Bank) to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
each Bank the amount shown as due on any such certificate delivered by it within
10 days after their receipt of the same.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Bank's right to demand compensation with respect to such period, except
that no Bank shall be entitled to compensation under this Section 2.10 for any
costs incurred or reduction suffered with respect to any date unless such Bank
shall have notified the Borrowers that it will demand compensation for such
costs or reductions not more than nine months after the later of (i) such date
and (ii) the date on which such Bank shall have become aware of such costs or
reductions. The protection of this Section 2.10 shall be available to each Bank
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
(e) Any Bank claiming any additional amounts payable pursuant to this
Section 2.10 shall use reasonable efforts (consistent with legal and regulatory
restrictions and such Bank's or such Bank's holding company's internal policies)
to file any certificate or document requested by the Borrowers or change its
applicable Lending Office to another of its offices, branches or Affiliates, if
the making of such filing or change of Lending Office would avoid the need for
or reduce the amount of any such additional amount attributable to the Loans and
would not, in the sole determination of such Bank, result in any unreimbursed
loss, cost or expense or otherwise be disadvantageous to such Bank.
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(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.10 shall
survive the payment in full of principal and interest hereunder.
2.11 CHANGE IN LEGALITY.
(a) Notwithstanding any other provision herein, if any change in any
law or regulation or in the interpretation thereof (each, a "Change in Law") by
any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Bank to make or maintain any Eurodollar
Loan or to otherwise give effect to its obligations as contemplated hereby then,
by notice to the Borrowers and to the other Banks, (i) if such Change in Law
pertains to Eurodollar Loans denominated in Dollars, all Eurodollar Loans then
outstanding due to such Bank shall be automatically converted to an ABR Loan,
subject to Sections 2.8 and 2.9, as of the effective date of such notice as
provided in paragraph (b) below, (ii) if such Change in Law pertains to
Eurodollar Loans denominated in a Foreign Currency, all Loans denominated in
such Foreign Currency then outstanding due to such Bank shall be automatically
converted to an ABR Loan denominated in Dollars, subject to Sections 2.8, (iii)
the obligation of such Bank to continue or convert to Eurodollar Loans of the
affected type shall terminate immediately, (iv) if such Change in Law pertains
to Eurodollar Loans denominated in Dollars, each subsequent request to such Bank
for a Eurodollar Loan in Dollars shall be deemed to be a request for an ABR Loan
and (v) if such Change in Law pertains to Loans in such Foreign Currency, each
subsequent request to such Bank for a Loan in such Currency shall be deemed to
be a request for a Loan denominated in Dollars. Any Bank giving such notice
shall (A) use reasonable efforts (consistent with legal and regulatory
restrictions and such Bank's internal policies) to change its applicable Lending
Office to another of its offices, branches or Affiliates, if such change of
Lending Office would permit such Bank to make Eurodollar Loans or Loans in such
Foreign Currency, as applicable, and would not, in the sole determination of
such Bank, result in any unreimbursed loss, cost or expense or otherwise be
disadvantageous to such Bank and (B) notify the Administrative Agent and the
Borrowers at such time as the circumstances giving rise to its notice shall
cease to exist. If the Borrowers shall be prohibited from incurring, continuing
or converting to a Eurodollar Loan from any Bank, Eurodollar Loans shall be
made, continued or converted by the other Banks pro rata in accordance with
their respective Pro Rata Share of the Commitment.
(b) For purposes of Section 2.11(a)(i), a notice to the Borrowers by
any Bank shall be effective, if lawful, and if any Eurodollar Loans shall then
be outstanding, on the last day of the then current Interest Period or, if there
is more than one current Interest Period, on the last day of each such Interest
Period, respectively; otherwise, such notice shall be effective on the date of
receipt by the Borrowers.
2.12 PRO RATA TREATMENT.
Except as required under Section 2.11 or 2.15, each Loan, each payment or
prepayment of principal of any Loan, each payment of interest on any Loan and
each conversion of any Loan or continuation of any Loan as a Loan of any type
shall be allocated pro rata among the Banks in accordance with their respective
Pro Rata Shares. Each Bank agrees that in computing such Bank's portion of any
Loan or any payment, prepayment, interest payment, conversion or
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continuation with respect thereto, the Administrative Agent may, in its sole
discretion, round the dollar amount of such Bank's pro rata portion to the next
higher or lower whole dollar amount.
2.13 SHARING OF SETOFFS.
(a) Each Bank agrees that if, through the exercise of a right of
banker's lien, set-off or counterclaim against any Borrower or any other Loan
Party, the unpaid portion of the Loans made by it is proportionately less than
the unpaid portion of the Loans made by any other Bank (i) it shall
simultaneously purchase from such other Bank a participation in the Loans made
by such other Bank, so that the aggregate unpaid principal amount of all Loans
and participations in Loans made by each Bank shall be in the same proportion to
the aggregate unpaid principal amounts of all Loans then outstanding as the
principal amount of such Loans made by it prior to such exercise of banker's
lien, set-off or counterclaim and (ii) such other adjustments shall be made from
time to time as shall be equitable to ensure that all the Banks share such
payment pro rata; provided, however, that if any such purchase or purchases
shall be made pursuant to clause (i) above and the payment giving rise thereto
shall be recovered, such purchase or purchases shall be rescinded to the extent
of such recovery and the purchase price or prices restored without interest.
(b) If an Event of Default shall have occurred and be continuing, each
Bank is hereby authorized at any time and from time to time to the fullest
extent permitted by law, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of any Borrower or Holdings against any of and all the obligations of any
Borrower now or hereafter existing under this Agreement and other Loan Documents
held by such Bank, irrespective of whether or not such Bank shall have made any
demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Bank under this Section 2.13(b)
are in addition to other rights and remedies (including other rights of set-off)
which such Bank may have.
2.14 PAYMENTS.
(a) Each Borrower shall make each payment in respect of the principal
of or accrued interest on any Loan, Fee, Reimbursement Obligation or other
amount due from it to the Administrative Agent or any Bank under this Agreement
or any other Loan Document, not later than the applicable Payment Time, on the
day when due, to the Administrative Agent at the Payment Office, for the account
of the Administrative Agent or such Bank, as applicable. All payments hereunder
shall be made in immediately available funds in the Currency borrowed, and shall
be made without set-off or counterclaim.
(b) On the date any principal or interest is due from any Borrower
under the Loan Documents, the Administrative Agent shall debit any bank accounts
of such Borrower with the Administrative Agent for the purpose of paying such
amounts; provided that, in no event shall the failure of any such accounts to
have available funds sufficient to pay such amounts on the date due relieve such
Borrower of its obligation to pay such amounts in accordance with Section
2.14(a). Each Borrower authorizes the Administrative Agent to make such debits,
and,
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in its discretion, to make a borrowing of Loans for the purpose of effecting
payment of such amounts.
(c) Whenever any payment (including principal of or interest on any
Loan or any Fee or other amount) hereunder or under any other Loan Document
shall become due, or otherwise would occur, on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of such interest, Fee
or other amount, if applicable; provided, however, that, in the case of any
Eurodollar Loan, if such next succeeding Business Day would fall in the next
calendar month, such payment shall be made on the first preceding Business Day.
2.15 TAXES.
(a) Except as otherwise expressly provided in this Section 2.15, any
and all payments by any Borrower in respect of principal or accrued interest on
any Loan, Fee, Reimbursement Obligation or other amount due to any Lender Party
under this Agreement or by a Guarantor pursuant to the Holdings Guaranty or the
Subsidiary Guaranty Agreement shall be made, in accordance with Section 2.14,
free and clear of and without deduction for any and all present or future United
States federal, state or local and foreign taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, including
withholding taxes imposed by the United States, any jurisdiction under the laws
of which any Borrower is organized, and other jurisdiction or any political
subdivision thereof but excluding taxes imposed on such Lender Party's overall
net income and franchise taxes imposed on such Lender Party by the jurisdiction
of such Bank's Lending Office or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being referred to herein as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender Party, then (i) subject to the last sentence of Section
2.15(f), the sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.15) such Lender Party shall receive
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make all required deductions and (iii) such
Borrower shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with Applicable Law.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Subject to the last sentence of Section 2.15(f), the applicable
Borrower will indemnify each Lender Party for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender Party, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be made within 30 days following the date
such
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Lender Party makes written demand therefor. If any Lender Party receives a
refund (or a credit against its taxes due) directly attributable to any Taxes or
Other Taxes for which such Lender Party has received payment hereunder (or which
were paid directly by any Borrower), it shall repay such refund to such Borrower
without interest promptly after the responsible account officer of such Lender
Party has notice that such refund was so received.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld hereunder (and, with respect to any Taxes or Other Taxes not so
withheld, to the extent available) such Borrower will furnish to the
Administrative Agent, at its address set forth in Section 11.1, the original or
a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of principal and interest hereunder.
(f) Each Bank that is organized under the laws of a jurisdiction
outside the United States agrees that if and to the extent it is legally able to
do so, it shall deliver to the US Borrower and the Administrative Agent, on or
before the first date of any payment by the US Borrower hereunder, such
certificates, documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including Interval Revenue Service Form
W-8BEN or W-8ECI (as applicable to it) and any other certificate or statement or
exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Bank establishing that such payment is (i) not subject to
withholding under the Code because such payment is effectively connected with
the conduct by such Bank of a trade or business in the United States or (ii)
totally exempt from United States withholding tax or subject to a reduced rate
of such tax under a provision of an applicable tax treaty. Each Bank that has
delivered such certificate or form shall, upon such certificate or form's
obsolescence, expiration or invalidity or upon the US Borrower's reasonable
request, replace or update such certificate or form as necessary. A Bank shall
not be entitled to any additional amounts under Section 2.15(a) or to any
indemnification under Section 2.15(c) with respect to any Tax (x) that is in
effect and would apply to amounts payable to such Bank, at the time such Bank
becomes a party to this Agreement (or designates a new Lending Office), except
to the extent that such Bank (or its assignor, if any) would have been entitled,
at the time of designation of a new Lending Office (or assignment), to receive
additional amounts or indemnity from any Borrower with respect to any
withholding tax pursuant to Section 2.15(a) or 2.15(c) or (y) that is
attributable to such Bank's failure to comply with this Section 2.15(f) or
Section 2.15(g).
(g) Each Bank that is entitled to an exemption from or reduction of
non-U.S. withholding tax or other Tax under the law of the jurisdiction in which
any Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to any payments under this Agreement shall deliver to such Borrower
and the Administrative Agent, at the time or times prescribed by applicable law
or reasonably requested by such Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or other Tax or at a reduced rate, provided that such
Bank is legally entitled to complete, execute and deliver such documentation
and, in such Bank's sole judgment, such completion, execution or delivery would
not materially prejudice the legal position of such Bank.
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(h) Any Lender Party claiming any additional amounts in respect of
Taxes payable pursuant to this Section 2.15 shall use reasonable efforts
(consistent with legal and regulatory restrictions and such Lender Party's
internal policies) to file any certificate or document requested by the
Borrowers or to change its applicable Lending Office to another of its offices,
branches or Affiliates, if the making of such a filing or change of Lending
Office would avoid the need for or reduce the amount of any such Taxes
attributable to the Loans and would not, in the sole determination of such
Lender Party, result in any unreimbursed loss, cost or expense or otherwise be
disadvantageous to such Lender Party.
2.16 COMMITMENT FEES. The US Borrower agrees to pay to the Administrative Agent
for the account of each Bank a commitment fee (the "Commitment Fee") from the
Closing Date to the Final Maturity Date, on the daily unused amount of such
Bank's Pro Rata Share of the Commitment (less the Letter of Credit Exposure, if
any) during the period for which payment is made at the rate per annum set forth
in the table below opposite the applicable range for the Cash Flow Ratio, as set
forth in the Rate Certificate.
Cash Flow Ratio Commitment Fee
--------------- --------------
Greater than 2.25x 0.500%
Less than or equal to 2.25x 0.375%
Notwithstanding the foregoing, for the period commencing on the Closing
Date and ending on the earlier of (i) receipt by the Administrative Agent of the
Fiscal Year 2002 financial statements contemplated by Section 6.11(a), along
with the certificate with respect thereto contemplated by Section 6.11(f), and
(ii) the due date for such financial statements and certificate set forth in
Sections 6.11(a) and (f), respectively, the applicable rate shall be 0.375%. Any
change in the Commitment Fee following the delivery of a Rate Certificate in
accordance with Section 2.4 shall become effective on the first day of the
fiscal quarter immediately following the fiscal quarter in which the Rate
Certificate is delivered. The Commitment Fee shall be payable in immediately
available funds (i) quarterly on the last Business Day of each March, June,
September and December of each Fiscal Year and (ii) on any date that the
Commitment is terminated or reduced as provided herein. The Commitment Fee shall
be calculated on the basis of the actual number of days elapsed over a year of
360 days.
2.17 REMOVAL OF BANKS.
If any Bank requests compensation under Section 2.10 or 3.4 or if any
Borrower is required to pay any additional amount to any Bank or any
Governmental Authority for the account of any Bank pursuant to Section 2.15, or
if any Bank defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Bank and
the Administrative Agent, require such Bank to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.3), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Bank, if a Bank accepts such assignment), provided that (i) the Borrowers shall
have received the prior written consent of the Administrative Agent (and, if any
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Bank's Pro Rata Share of the Commitment is being assigned, the Issuing Bank),
which consents shall not unreasonably be withheld or delayed, (ii) such Bank
shall have received payment of an amount equal to its Pro Rata Share of the
outstanding principal of the Loans and Drawings on Letters of Credit, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrowers (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.10 or 3.4 or payments required to be made pursuant to Section 2.15,
such assignment is reasonably expected to result in a material reduction in such
compensation or payments. A Bank shall not be required to make any such
assignment and delegation if within ten Business Days after notification by the
Borrowers that they intend to replace such Bank, as a result of a waiver by such
Bank or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
2.18 US BORROWER AS AGENT FOR OTHER BORROWERS.
Each Borrower (other than the US Borrower) hereby irrevocably appoints the
US Borrower as its agent and attorney-in-fact for all purposes of this Agreement
and each of the Loan Documents, including the giving and receiving of notices
and other communications, the making of requests for, or conversions or
continuations of, Loans and/or Letters of Credit and the execution and delivery
of certificates. The US Borrower hereby accepts such appointment. The
Administrative Agent and each Bank may regard any notice or other communication
pursuant to any Loan Document from the US Borrower as a notice or communication
from all Borrowers and may give any notice or communication required or
permitted to be given to any Borrower or Borrowers hereunder to the US Borrower
on behalf of such Borrower or Borrowers. Each Borrower agrees that each notice,
election, representation and warranty, covenant, agreement and undertaking made
on its behalf by the US Borrower shall be deemed for all purposes to have been
made by such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by such
Borrower.
ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT.
(a) Subject to the terms and conditions contained herein, the Issuing
Bank shall from time to time issue, on behalf of the US Borrower and its
Subsidiaries, letters of credit (each, a "Letter of Credit") to
(i) insurance carriers,
(ii) Governmental Authorities in connection with reclamation plans
implemented by the US Borrower and its Subsidiaries,
(iii) trade creditors to support purchases and sale of materials and
inventory and
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(iv) other Persons with whom the US Borrower and its Subsidiaries have
business dealings for requirements which arise in the ordinary course of
business.
The aggregate Letter of Credit Exposure on any date shall not exceed the
lesser of (A) $20,000,000 and (B) the Commitment less the sum of (x) the amount
of all Loans then outstanding (or requested in accordance with Section 2.1
hereof) under the Facility less (y) the Letter of Credit Exposure on such date.
The aggregate Letter of Credit Exposure for Letters of Credit issued to
Governmental Authorities to satisfy or secure obligations of the Borrowers and
their Subsidiaries with respect to workers' compensation laws shall not exceed
$5,000,000 at any time.
(b) Each Letter of Credit shall be issued pursuant to and in accordance
with a letter of credit application in a form acceptable to the Administrative
Agent and the Issuing Bank. Each Letter of Credit shall be denominated in
Dollars. Each Letter of Credit shall be issued in a minimum principal amount of
$25,000, and shall permit drawings upon the presentation of one or more sight
drafts; provided, however, that no more than thirty (30) Letters of Credit shall
be outstanding at any time. Each Letter of Credit shall have an expiry which
shall be a Business Day and (i) at least two Business Days prior to the Final
Maturity Date and (ii) no later than the first anniversary of the date such
Letter of Credit is issued. Notwithstanding the foregoing, if requested by the
US Borrower, the Administrative Agent may, in its sole discretion, permit any
Letter of Credit to include language providing for the automatic extension of
the expiry thereof, provided that no such Letter of Credit shall have an expiry
later than two Business Days prior to the Final Maturity Date.
(c) Immediately upon issuance by the Issuing Bank of a Letter of Credit
in accordance herewith, each other Bank shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation in such Letter of Credit,
including all obligations of the Borrowers with respect thereto and any security
therefor or guaranty pertaining thereto, in an amount equal to the product of
(i) the Pro Rata Share of such Bank and (ii) the stated amount of such Letter of
Credit. Each issuance of a Letter of Credit by the Issuing Bank shall be deemed
to utilize the Commitment of each Bank (other than the Issuing Bank) by an
amount equal to the amount of such participation and to utilize the Commitment
of the Issuing Bank by an amount equal to the stated amount of such Letter of
Credit less the aggregate amount of all participations therein.
3.2 NOTICE.
The US Borrower shall give the Issuing Bank irrevocable notice not
later than 12:00 noon, Los Angeles time, at least three Business Days prior to
the date of requested issuance of any Letter of Credit under this Agreement.
Such notice shall refer to this Agreement and shall include
(i) a properly completed letter of credit application on an
appropriate form and
(ii) a form of notice with respect to such Letter of Credit including
(A) the date of issuance (which shall be a Business Day) (B) the principal
amount,
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(C) the name and address of the beneficiary, (D) whether multiple drawings
should be permitted, (E) the form of the draft and any other documents
required to be presented at the time of any drawing (such notice to attach
copies of such documents) and (F) the expiry date. Each notice pursuant to
this Section 3.2 shall include a representation by the US Borrower, in form
satisfactory to the Issuing Bank, as to the purpose of the issuance
thereof. The Issuing Bank shall promptly advise the Banks of any notice
given hereunder.
Unless the Administrative Agent has notified, in its sole and absolute
discretion, the US Borrower to the contrary, the foregoing notices and
application regarding Letters of Credit may be requested by telephone by a
Financial Officer of the US Borrower, in which case the US Borrower shall
confirm such request by promptly delivering the foregoing notices and
application in writing, in person or by telecopier to the Administrative Agent.
The Administrative Agent shall incur no liability whatsoever hereunder in acting
upon any telephonic request for Letters of Credit purportedly made by a such
Financial Officer, and the US Borrower hereby agree to indemnify the
Administrative Agent from any loss, cost, expense or liability as a result of so
acting.
3.3 REIMBURSEMENT; REPAYMENT WITH LOANS.
(a) In the event of a Drawing on any Letter of Credit, the Issuing Bank
shall give prompt telephonic, telecopied or telex notice to the US Borrower and
the other Banks of the amount of such Drawing. If the Issuing Bank shall pay any
Drawing under a Letter of Credit, then the US Borrower shall without further
notice reimburse the Issuing Bank (or the Issuing Bank shall set-off from the
general account of the US Borrower) an amount equal to the amount so drawn,
together with interest on such amount at a rate per annum (calculated on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
rate applicable to ABR Loans, not later than 11:00 a.m., Los Angeles time, on
(i) the Business Day immediately following the day that the US Borrower receives
notice of such if such notice is received prior to 12:00 noon, Los Angeles time,
or (ii) the second Business Day following the day that the US Borrower receives
such notice, if such notice is not received prior to such time (but in any event
before the Final Maturity Date), provided that the US Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section
2.1 that such payment be financed with an ABR Loan in an equivalent amount and,
to the extent so financed, the US Borrower's obligation to make such payment
shall be discharged and replaced by the resulting ABR Loan. If the US Borrower
fails to make such payment when due, then the Issuing Bank shall promptly so
notify, by telephonic or telex notice, each Bank of such failure to receive
payment of the Reimbursement Obligation and each Bank shall pay to the Issuing
Bank in Los Angeles,
California, in immediately available funds, not later than
12:00 noon, Los Angeles time, on the Business Day immediately following the day
such Bank receives such notice, such Bank's Pro Rata Share of the Reimbursement
Obligation and the Issuing Bank shall assign to each such Bank its Pro Rata
Share of such Reimbursement Obligation. Notwithstanding anything contained in
this Agreement to the contrary, each Bank's obligation to make payments to the
Issuing Bank under this Section 3.3 shall be unconditional and shall survive the
termination of this Agreement.
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(b) The obligations of the US Borrower under this Section 3.3 shall be
absolute, unconditional and irrevocable and shall be satisfied strictly in
accordance with the terms of this Agreement and the applicable Letter of Credit
irrespective of:
(i) the lack of validity or enforceability, in whole or in part, of
any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
the US Borrower, any other Borrower, any Subsidiary of any Borrower or any
other Person may at any time have against the beneficiary under such Letter
of Credit, the Issuing Bank or any Bank (other than the defense of payment
in accordance with the terms of this Agreement and the applicable Letter of
Credit or a defense based on the gross negligence or willful misconduct of
the Issuing Bank) or any other Person in connection with this Agreement or
any other transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; provided,
however, that payment by the Issuing Bank under such Letter of Credit
against presentation of such draft or document shall not have constituted
gross negligence or willful misconduct of the Issuing Bank;
(iv) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document which does not comply with terms
of such Letter of Credit; provided, however, that payment by the Issuing
Bank under such Letter of Credit against presentation of such draft or
document shall not have constituted gross negligence or willful misconduct
of the Issuing Bank; and
(v) any other circumstance or event whatsoever, whether or not similar
to any of the foregoing; provided, however, that such other circumstance or
event shall not have been the result of gross negligence or willful
misconduct of the Issuing Bank.
It is understood and agreed that in making any payment under a Letter of
Credit (x) the Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including, without limitation, reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement proves to be inaccurate or
untrue in any respect whatsoever, and (y) any non-compliance in any immaterial
respect of the documents presented under a Letter of Credit with the terms
thereof shall, in each case, not be deemed willful misconduct or gross
negligence of the Issuing Bank.
(c) If on the date of termination of the Commitment in accordance with
Section 2.7 or Section 8.1 hereof, any Letter of Credit shall be outstanding,
then on the date of such termination and as a condition thereto, the US Borrower
shall deposit in an interest-bearing account of the Collateral Agent, for the
benefit of the Banks (the "Cash Collateral Account") an
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amount equal to the aggregate Letter of Credit Exposure existing on such date
plus any applicable Fees payable to the last expiry date of any Letter of Credit
issued hereunder. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over the Cash Collateral
Account. If the Issuing Bank shall pay any Drawing after the date of termination
of this Agreement, the Administrative Agent shall make a payment to each Bank
out of the Cash Collateral Account in an amount equal to such Bank's Pro Rata
Share of the aggregate amount of such Drawing. Any amounts deposited by the US
Borrower pursuant to this clause (c) (other than amounts representing fees or
expenses due hereunder) shall be returned with any interest actually earned to
the US Borrower, to the extent such funds have not been used to pay
Reimbursement Obligations, on the Business Day following the latest expiry date
of any Letter of Credit issued hereunder.
(d) If on any date on which the Commitment is reduced in accordance
with Section 2.7, the aggregate Letter of Credit Exposure exceeds the Commitment
in effect after giving effect to such reduction, then on such date the US
Borrower shall deposit in the Cash Collateral Account an amount equal to the
amount by which the Letter of Credit Exposure then exceeds the Commitment in
effect after giving effect to such reduction.
3.4 INCREASED COSTS.
(a) Subject to compliance with subsections (d) and (e) below, if after
the date of this Agreement any change in Applicable Law or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law)
(i) shall change the basis of taxation of payments to any Bank of the
LC Fee or any other amounts payable hereunder in respect of the Letters of
Credit except to the extent converted to Loans (other than Taxes imposed on
the overall net income of such Bank and franchise taxes imposed by the
jurisdiction in which such Bank has its principal office or by any
political subdivision or taxing authority therein), or
(ii) shall impose, modify or deem applicable any reserve (other than a
reserve included in the calculation of Statutory Reserves), special deposit
or similar requirement with respect to its obligations under this Article
III or the Letters of Credit or shall impose on such Bank any other
condition affecting this Agreement with respect to the obligations of such
Bank under this Article III or the Letters of Credit, and the result of any
of the foregoing shall be to increase the cost to such Bank of issuing or
participating in any Letters of Credit or to reduce the amount of any sum
received or receivable by such Bank hereunder in respect thereof, by any
amount reasonably deemed by such Bank to be material, then the US Borrower
will pay such Bank, upon demand, such additional amount or amounts as will
compensate such Bank for such additional costs incurred or reduction
suffered.
(b) Subject to compliance with subsections (d) and (e) below, if any
Bank shall determine that the adoption after the date hereof of any law, rule,
regulation, agreement or guideline regarding capital adequacy, or any change in
any of the foregoing or in the interpretation or administration of any of the
foregoing by any Governmental Authority, central
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bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank (or any Lending Office of such Bank) or such
Bank's holding company with any, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital or on the capital of such Bank's holding
company, if any, as a consequence of its obligations with respect to this
Article III or any Letter of Credit to a level below that which such Bank or
such Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies and the policies of
such Bank's holding company with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, after submission by
such Bank to the US Borrower of a written request therefor, the US Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank or such Bank's holding company for any such reduction suffered.
(c) A certificate of any Bank setting forth such amount or amounts and
the basis for determination from time to time of such amount or amounts as shall
be necessary to compensate such Bank or its holding company as specified in
paragraph (a) or (b) above, as the case may be shall be delivered to the US
Borrower and shall be conclusive absent manifest error. The US Borrower shall
pay such Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Bank's right to demand compensation with respect to such period, except
that no Bank shall be entitled to compensation under this Section 3.4 for any
costs incurred or reduction suffered with respect to any date unless such Bank
shall have notified the US Borrower that it will demand compensation for such
costs or reductions not more than nine months after the later of (i) such date
and (ii) the date on which such Bank shall have become aware of such costs or
reductions. The protection of this Section 3.4 shall be available to any Bank
regardless of any possible contention of the invalidity or inapplicability of
any law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
(e) Any Bank claiming any additional amounts payable pursuant to this
Section 3.4 shall use reasonable efforts (consistent with legal and regulatory
restrictions and such Bank's or such Bank's holding company's internal policies)
to file any certificate or document requested by the Borrower or change its
applicable Lending Office to another of its offices, branches or Affiliates, if
the making of such filing or change of Lending Office would avoid the need for
or reduce the amount of any such additional amount attributable to the Loans and
would not, in the sole determination of such Bank, result in any unreimbursed
loss, cost or expense or otherwise be disadvantageous to such Bank.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 3.4 shall
survive the payment in full of principal and interest hereunder.
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3.5 LETTER OF CREDIT FEES.
The US Borrower agrees to pay each Bank a letter of credit fee (the "LC
Fee"), on the last Business Day of each March, June, September and December,
equal to such Bank's Pro Rata Share of the then applicable Eurodollar Margin
(determined in accordance with Section 2.4(c)) per annum of the average daily
aggregate undrawn principal amount of all Letters of Credit outstanding from
time to time during the fiscal quarter ending on such date of payment. In
addition, the US Borrower agrees to pay to the Issuing Bank for its own account,
on demand, the Issuing Bank's customary issuance, negotiation, amendment and
other fees for each Letter of Credit issued by the Issuing Bank (including its
standard out-of-pocket costs, including reasonable fees of counsel). LC Fees
shall be calculated on the basis of the actual number of days elapsed over a
year of 360 days.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the US Borrower and Holdings, jointly and severally, represents and
warrants, and each other Borrower hereby represents and warrants as to itself
only, to each of the Banks that:
4.1 ORGANIZATION.
Each of Holdings and each of its Subsidiaries is a company duly organized,
validly existing (subject to Section 7.10) and in good standing under the laws
of the jurisdiction in which it is incorporated, has all requisite power and
authority to own its property and assets and to carry on its business as
currently conducted and is qualified to do business in each jurisdiction in
which the nature of the business conducted or the property owned or leased by it
requires such qualification, except where the failure to so qualify or remain in
good standing or, in the case of a Subsidiary that is not a Loan Party or a
Material Subsidiary, to remain in existence, could not reasonably be expected to
have a Material Adverse Effect.
4.2 CORPORATE POWER AND AUTHORITY; NO REQUIRED CONSENTS OR APPROVALS.
(a) Each Loan Party has the power to execute, deliver and perform its
obligations under each Loan Document to which it is a party, to borrow hereunder
(in the case of the Borrowers) and to grant Liens pursuant to the Financing
Documents to which it is a party.
(b) The execution, delivery and performance by each Loan Party of each
Loan Document to which it is a party, the borrowings to be made hereunder by the
Borrowers and the grant by each Loan Party of Liens pursuant to the Financing
Documents to which it is a party have been duly authorized by all required
company and stockholder action of such Person and will not
(i) violate any provision of Applicable Law, any Organizational
Document, or any indenture or other material agreement or instrument to
which such Loan Party is a party, or by which such Loan Party or any of its
respective properties are or may be bound,
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(ii) conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any such indenture,
material agreement or instrument to which such Loan Party is a party, or by
which such Loan Party or any of its respective properties are or may be
bound, or
(iii) result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any property of such Loan Party.
(c) No registration with or consent or approval of, or other action by,
any Governmental Authority is or will be required in connection with the
execution, delivery and performance by any Loan Party of any Loan Document to
which it is a party, any borrowings hereunder (if applicable) or the grant of
Liens by any Loan Party pursuant to the Financing Documents to which it is a
party except (i) as required in connection with the perfection of the security
interests granted pursuant to the Loan Documents and (ii) such as have been
obtained.
4.3 ENFORCEABILITY.
Each Loan Document has been duly executed and delivered by each Loan Party
thereto and constitutes the legal, valid and binding obligation of such Loan
Party enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
4.4 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES.
(a) Except as set forth on Schedule 4.4(a), the audited consolidated
financial statements of Holdings and its Subsidiaries for the Fiscal Year ended
December 31, 2001 (the "Audited Financial Statements") and the unaudited
consolidated financial statements of Holdings and its Subsidiaries for the
three-quarter period ended September 30, 2002 (the "Third Quarter Financial
Statements"),
(i) fairly present in all material respects the financial position of
Holdings and its Subsidiaries at the date thereof and their respective
results of operations for the periods covered therein in accordance with
GAAP (except as set forth in the notes to such financial statements and
subject, in the case of the Third Quarter Financial Statements, to normal
year-end audit adjustments) and
(ii) disclose all material liabilities, including contingent and/or
unmatured liabilities, of Holdings and its Subsidiaries as of the date
thereof, which are required to be disclosed thereon in accordance with
GAAP.
(b) Except as set forth on Schedule 4.4(b), neither Holdings nor any
Subsidiary has any obligations or liabilities, contingent, unmatured or
otherwise, which are material to Holdings and the Subsidiaries considered as a
whole and which have not been disclosed in the Third Quarter Financial
Statements.
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4.5 NO MATERIAL ADVERSE CHANGE.
There has been no material adverse change in the business, assets,
operations or condition (financial or otherwise) of Holdings and the
Subsidiaries taken as a whole since September 30, 2002.
4.6 LITIGATION.
Except as set forth on Schedule 4.6, to the knowledge of Holdings and its
Subsidiaries, there are no actions, suits or proceedings at law or in equity
instituted or threatened against or directly affecting Holdings or any such
Subsidiary or any of their respective businesses, properties or rights as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could be expected to have a Material Adverse Effect, or
which involve any of the Loan Documents.
4.7 COMPLIANCE WITH LAWS.
Neither Holdings nor any of its Subsidiaries is in violation of, or in
default with respect to, any Applicable Law (including, without limitation, any
Environmental Law), other than any such violations or defaults which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
4.8 EMPLOYEE BENEFIT PLANS.
Holdings, each of its Domestic Subsidiaries, each Plan and each "employee
benefit plan" (within the meaning of Section 3(3) of ERISA) maintained by
Holdings or any of its Domestic Subsidiaries is in compliance in all material
respects with all provisions of ERISA (or similar legislation in the
jurisdiction in which a Domestic Subsidiary is organized) which are applicable
thereto. No Reportable Event within the preceding six years has occurred with
respect to any Single Employer Plan as to which Holdings or any of its Domestic
Subsidiaries was required to file a report (other than on Form 5500) with the
PBGC. No Single Employer Plan has any material unfunded liability that subjects
such Plan to additional funding requirements under Section 412(1) of the Code.
No Single Employer Plan has an accumulated or waived funding deficiency or an
extension of amortization periods for unfunded liability as reflected in its
funding standard account within the meaning of Section 412 of the Code. Neither
Holdings, any of its Domestic Subsidiaries nor any ERISA Affiliate thereof has
incurred any material liability to or on account of a Plan pursuant to Sections
515, 4062, 4063, 4064, 4201 or 4204 of ERISA or expects to incur any liability
under any of the foregoing Sections on account of the termination of
participation in or contributions to any Plan. No proceedings have been
instituted to terminate any Single Employer Plan in other than a "standard
termination" under Section 4041(b) of ERISA. No condition exists which presents
a material risk to Holdings or any of its Domestic Subsidiaries of incurring a
material liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code. No Lien imposed under the Code or ERISA on the
assets of Holdings or any of its Domestic Subsidiaries exists or is likely to
arise on account of any Single Employer Plan. Except as set forth on Schedule
4.8, Holdings and each of its Domestic Subsidiaries may terminate contributions
to any other employee benefit plans maintained by it without incurring any
material liability to any Person interested therein (other
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than claims for benefits incurred or payable under the terms of such plans in
the ordinary course of business and plans maintained pursuant to collective
bargaining agreements).
4.9 TAXES.
Each of Holdings and each of its Subsidiaries has filed or caused to be
filed all federal, state, local, and foreign tax returns which, to its best
knowledge, are required to be filed by it, and have paid or caused to be paid
all taxes shown to be due and payable on such returns or on any assessments
received by it, other than any taxes or assessments the validity of which it is
contesting in good faith by appropriate proceedings and with respect to which
adequate accounting reserves have been set aside to the extent required by GAAP.
4.10 TITLE TO PROPERTIES.
(a) Holdings or a Subsidiary has good title, of a quality commensurate
with prudent standards of business practice, to all of the properties and assets
purported to be owned by them (excluding unpatented mining claims), and all
properties and assets necessary for the conduct of their respective businesses,
including all properties reflected on the Audited Financial Statements
(including real property, tangible and intangible personal property, minerals,
whether or not extracted from the ground, and other mineral rights), except
properties and assets disposed of from the date of the most recent Audited
Financial Statements through the Closing Date in the ordinary course of
business. No Lien exists with respect to any such assets or properties other
than Permitted Liens.
(b) Holdings and its Subsidiaries, own, or are licensed to use, all
trademarks, tradenames, patents, patent applications, copyrights, technology,
know-how, processes and other intellectual and proprietary rights (collectively,
the "Intellectual Property") necessary for the conduct of their respective
businesses, except where the failure to own or license such Intellectual
Property would not have a Material Adverse Effect. Schedule 4.10 attached hereto
contains a list of all patents, patent applications, trademark and service ▇▇▇▇
registrations and applications therefor, and copyright registrations and
applications therefor, purported to be owned by Holdings or its Subsidiaries as
of the Closing Date. Except as set forth on Schedule 4.10, no claim has been
asserted and is pending by any Person as of the date hereof with respect to the
use by Holdings or any of its Subsidiaries of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
4.11 BUSINESS.
Except as set forth on Schedule 4.11 attached hereto, Holdings and its
Subsidiaries have engaged (and are currently engaged) only in the mining,
processing and sale of diatomite, perlite and other industrial minerals, the
manufacture and sale of silicates and other filtration and filler products for
industrial and retail applications and the provision of related services (the
"Business").
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4.12 AGREEMENTS.
Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any material agreement or instrument the breach of which
would result in a Material Adverse Effect.
4.13 NO MATERIAL MISSTATEMENTS.
Neither the Offering Memorandum nor any of the other reports, financial
statements, certificates, exhibits or schedules or other information furnished
by or on behalf of Holdings or any of its Subsidiaries to the Administrative
Agent or any Bank in connection with the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any misstatement of
material fact or omits to state any material fact necessary to make such
statements, in light of the circumstances under which they were made, not
misleading. The Borrowers have disclosed to the Banks all agreements,
instruments and corporate or other restrictions to which Holdings, any Borrower
or any of the Subsidiaries is subject, and all other matters known to any of
them, that, individually, or together with other related items, could reasonably
be expected to result in a Material Adverse Effect.
4.14 RELATED PARTY TRANSACTIONS.
The terms of any transactions between Holdings and any of its Subsidiaries,
on the one hand, and any Affiliate of Alleghany which is not a Subsidiary, on
the other hand, were not materially less favorable to Holdings and its
Subsidiaries than terms obtainable in a comparable arm's-length transaction
between non-affiliated parties (it being understood that such transactions have
not been submitted for competitive bids by unrelated Persons).
4.15 LABOR MATTERS AND ACTS OF GOD.
Since September 30, 2002, neither Holdings nor any of its Subsidiaries has
been affected by any fire, explosion, accident, strike, lockout or other labor
dispute which has had a Material Adverse Effect.
4.16 OUTSTANDING DEBT.
Neither Holdings nor any of its Subsidiaries has outstanding Indebtedness,
directly or indirectly, except Permitted Indebtedness. There does not exist,
and, after giving effect to the transactions contemplated by the Loan Documents,
there will not exist, any material default under any instrument or agreement
relating to or evidencing any direct or indirect Indebtedness of Holdings or any
of its Subsidiaries (or any event which, with only the giving of notice or the
passage of time or both, would result in such a breach or default).
4.17 FEDERAL RESERVE REGULATIONS.
The making of the Loans hereunder to the Borrowers, the use by the
Borrowers of the proceeds thereof as contemplated hereby and the security
arrangements contemplated hereby and
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by the Financing Documents, will not violate or be inconsistent with any of the
provisions of Regulation T, Regulation U or Regulation X.
4.18 INVESTMENT COMPANY ACT AND PUBLIC UTILITY HOLDING COMPANY ACT.
Neither Holdings nor any of its Subsidiaries is an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
4.19 SECURITY INTERESTS.
The provisions of each Financing Document to which any Loan Party is a
party are effective to create in favor of the Collateral Agent, for the benefit
of the Lender Parties, a valid, binding and perfected security interest in and
Lien on all right, title and interest of such Loan Party in all of the
Collateral purported to be covered thereby. Upon the delivery of the shares of
capital stock to be pledged, such security interests and Liens shall have first
priority for all purposes over any other Lien (other than Permitted Liens with
higher priority under Applicable Law) on the Collateral.
4.20 CAPITAL STOCK; SUBSIDIARIES.
(a) As of the Closing Date, the authorized capital stock of Holdings
consists of 2,000,000 shares of common stock, $.10 par value, and 1,700 shares
of preferred stock, $1.00 par value, of which 1,018,720 shares of common stock
are validly issued, fully paid and nonassessable and are outstanding and owned
beneficially and of record as follows: 966,010 shares--Alleghany Corporation;
52,710 shares--▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. As of the Closing Date, except for the
options held by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and except for options granted under the
2001 Stock Option Plan, no Person holds any option, warrant, stock subscription
or other right to acquire any capital stock of Holdings and no securities
convertible into or exchangeable for any capital stock of Holdings have been
authorized or issued.
(b) As of the Closing Date, the authorized capital of the US Borrower
consists of 1,000 shares of common stock, par value $1.00 per share (the
"Borrower Common Stock") all of which shares are validly issued, fully paid and
nonassessable and are outstanding. All of the shares of Borrower Common Stock
are owned beneficially and of record by Holdings and pledged to the Collateral
Agent for the benefit of the Lender Parties as provided in the Holdings Pledge
Agreement. As of the Closing Date, no Person holds any option, warrant, stock
subscription or other right to acquire any capital stock of the US Borrower and
no securities convertible into or exercisable or exchangeable for any capital
stock of the US Borrower have been authorized or issued. Except for the pledge
provided for in the Holdings Pledge Agreement, as of the Closing Date, no Person
has any Lien against any capital stock of the US Borrower.
(c) As of the Closing Date, the authorized capital of each Subsidiary
(other than the US Borrower) is set forth opposite such Subsidiary's name on
Schedule 4.20 attached hereto. All of the shares listed on Schedule 4.20 as
being issued are validly issued, fully paid and nonassessable and are
outstanding and owned beneficially and of record in the amounts and
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by the Persons set forth thereon. As of the Closing Date, no person holds any
option, warrant, stock subscription or other right to acquire any capital stock
of any Subsidiary and no securities convertible into or exercisable or
exchangeable for any capital stock of such Subsidiary have been authorized or
issued. Except for the pledge provided in the Borrower Pledge Agreement and the
Subsidiary Pledge Agreement and as set forth on Schedule 4.20, as of the Closing
Date, no Person has any Lien against any capital stock of any Subsidiary.
(d) As of the Closing Date, Schedule 4.20 attached hereto sets forth a
correct and complete list of each Person (other than the Subsidiaries) in whom
the US Borrower or any Subsidiary presently owns, directly or indirectly, any
ownership interest (other than securities representing less than 10% of the
aggregate ownership interest of Persons making periodic reports under the
Securities Exchange Act of 1934, as amended, or similar foreign laws). Except as
set forth on Schedule 4.20, Holdings and/or a Subsidiary has the absolute right
and power to sell, assign, convey and transfer any right or benefit incident to
the ownership thereof.
(e) All Material Subsidiaries as of the date hereof have been
identified as such on Schedule 4.20.
4.21 ENVIRONMENTAL MATTERS.
Except to an extent that could not reasonably be expected to have a
Material Adverse Effect:
(a) Holdings and the Subsidiaries have complied and are in compliance
with all Environmental Laws, including without limitation all permits required
for the occupation of their respective properties or facilities;
(b) Neither Holdings nor any of the Subsidiaries has received any
notice, report or other information regarding an Environmental Claim with
respect to its past or current operations, properties or facilities; and
(c) Neither Holdings nor any of the Subsidiaries, nor any of their
respective predecessors or Affiliates, has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or released any
substance (including any Hazardous Material), or owned or operated its business
or any property or facility (and no such property or facility is contaminated by
any such substance) in a manner that has given or would give rise to any
liabilities or investigative, corrective or remedial obligations pursuant to
Environmental Laws.
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4.22 INSOLVENCY. After giving effect to the repayment of all Indebtedness to be
repaid on the Closing Date in accordance with the terms of this Agreement, the
funding of Loans and the issuance of any Letters of Credit on the Closing Date,
the application of the proceeds of such Loans as provided herein, and the
payment of all estimated legal, underwriting, investment banking, accounting and
other fees related hereto and thereto, Holdings and the Subsidiaries, taken as a
whole, will be Solvent as of and on the Closing Date.
ARTICLE V
CONDITIONS TO LENDING
5.1 LOANS ON THE CLOSING DATE.
The obligations of the Banks to make Loans hereunder and the obligations of
the Issuing Bank to issue Letters of Credit hereunder, in each case on the
Closing Date, are subject to the satisfaction of the following conditions:
(a) Termination of Existing Facility. Concurrently with the making of
the Loans to be made on the Closing Date, the US Borrower shall have repaid all
loans outstanding, and shall have no further obligations, under the Existing
Facility, and all related Liens, agreements and instruments shall have been
terminated.
(b) Corporate Documents. The Administrative Agent shall have received
(i) a copy of each Organizational Document of the Loan Parties, including all
amendments thereto, certified, as of a recent date by an appropriate public
official of its jurisdiction of incorporation (or, with the consent of the
Administrative Agent, the Secretary or Assistant Secretary thereof) and a
certificate as to the good standing and charter documents from such public
official as of a recent date, (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Closing Date and certifying (A) that
attached thereto is a correct and complete copy of the by-laws of such Person as
in effect on the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B), below, (B) that attached thereto is a
correct and complete copy of resolutions duly adopted by the Board of Directors
of such Person, authorizing the execution, delivery and performance of the Loan
Documents, the borrowings hereunder (if applicable), the granting of Liens
pursuant to the Financing Documents and the other transactions contemplated
hereby, (C) that the certificate of incorporation of such Person has not been
amended since the date of the last amendment thereto shown on the certificate of
good standing furnished pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer of such Person executing any
Loan Document or any other document delivered in connection herewith, (iii) a
certificate of another officer of such Person as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the certificate
pursuant to (ii) above, (iv) a certificate from the Secretary of State of each
state in the United States in which the conduct of such Person's business or
such Person's ownership of assets requires qualification as to the qualification
of such Person to do business and its good standing in such state, and (v) such
other documents as the Administrative Agent, or counsel to the Administrative
Agent, may reasonably request.
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(c) Lien Search. The Collateral Agent shall have received and be
reasonably satisfied with the results of a search of the Uniform Commercial Code
filings made with respect to such Loan Parties and in such jurisdictions as it
shall determine, which shall not have disclosed any prior Lien or security
interest in the Collateral, other than (A) Permitted Liens and (B) any Liens
being released contemporaneously with the Closing.
(d) No Defaults. Each Loan Party shall be in compliance with the terms and
provisions set forth in each Loan Document to which it is a party, and at the
time of and immediately after the consummation of the transactions contemplated
hereby, no Event of Default or Default shall have occurred and be continuing.
(e) Insurance. The US Borrower and its Subsidiaries shall have
delivered to the Administrative Agent certificates of insurance complying with
Section 6.12.
(f) Security. The Financing Documents shall be in full force and effect
and no default or event of default shall have occurred and be continuing
thereunder. Each Loan Party shall have delivered to the Collateral Agent all
certificates representing shares of capital stock of each Domestic Subsidiary to
be pledged to the Administrative Agent for the benefit of the Lender Parties in
connection with the transactions contemplated by this Agreement, accompanied by
blank undated stock powers and duly executed for transfer; and, with respect
each Foreign Subsidiary set forth on Schedule 5.1, there shall have also been
delivered to the Administrative Agent such pledge agreements, documents,
instruments and filings as the Administrative Agent shall require, in its
discretion, to have been delivered to it prior to the Closing Date to perfect
the security interest in the stock of such Subsidiary under relevant applicable
foreign law. The Collateral Agent shall have received all other documents and
instruments, including Uniform Commercial Code financing statements, required by
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded with respect to such Collateral.
(g) Representations and Warranties. The representations and warranties
of Holdings and the Borrowers contained herein, in any other Loan Document and
in any certificate or other instrument delivered pursuant to this Agreement or
any Loan Document shall be correct in all material respects as though made on
and as of such date.
(h) Officer's Certificate. The Administrative Agent shall have received
certificates signed by a Responsible Officer of Holdings and the Borrowers
confirming the satisfaction of the conditions precedent set forth herein on and
as of the Closing Date. The Administrative Agent shall have received a
certificate signed by a Responsible Officer of Holdings designating its
Financial Officer, as contemplated by clause (ii) of the definition of
"Financial Officer" contained in Section 1.1 hereof.
(i) Fees and Expenses. All fees and other consideration owing by
Holdings or any of its Subsidiaries to the Lender Parties under the terms of
this Agreement, the other Loan Documents, or any other document executed in
connection herewith shall have been paid in full.
(j) Legal Matters. All matters relating to this Agreement, the other
Loan Documents and the transactions contemplated hereby and thereby shall be
satisfactory to
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the Administrative Agent and its counsel. The Administrative Agent shall have
received a legal opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, satisfactory in
form and substance to the Administrative Agent and such legal opinions in form
and substance satisfactory to the Administrative Agent from legal counsel to
such Foreign Subsidiaries as the Administrative Agent shall have reasonably
requested.
(k) Mining Plan. The Administrative Agent and the Banks shall have
received and be satisfied with a mining plan as described in Section 6.13(a).
(l) Financial Statements. The Administrative Agent and the Banks shall
have received and be satisfied with (i) the audited balance sheets and related
statements of income and cash flows of Holdings and its Subsidiaries as of and
for the two fiscal years ended December 31, 2001 and (ii) unaudited financial
information for three-quarter period ended September 30, 2002.
(m) Projections. The Administrative Agent shall have received and be
satisfied with financial projections of the consolidated balance sheets and
statements of income and cash flows of Holdings and its Subsidiaries, prepared
and presented in accordance with GAAP, for the five fiscal years ending December
31, 2007.
5.2 LOANS MADE AFTER CLOSING DATE.
The obligation of the Banks to make Loans to the Borrowers hereunder from
time to time after the Closing Date is subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties contained in any Loan Document qualified as to materiality shall be
true and correct and those not so qualified shall be true and correct in all
material respects, in each case on and as of the date of such Loan, except to
the extent such representations expressly relate to an earlier date in which
case such representations and warranties shall be true and correct as of such
earlier date.
(b) Compliance. At the time of and immediately following the
consummation of such Loan or Loans, no Default or Event of Default shall have
occurred and be continuing.
(c) Notice of Borrowings. The applicable Borrower shall have provided
(i) a notice of borrowing to the Administrative Agent in substantially the form
of Exhibit G and (ii) all other documents reasonably requested by the Banks
related to the making of Loans hereunder.
The making of each Loan shall be deemed to constitute a representation and
warranty by Holdings and the applicable Borrower on the date thereof as to the
matters specified in paragraphs (a) and (b) of this Section.
5.3 LETTERS OF CREDIT ISSUED AFTER THE CLOSING DATE.
The obligation of an Issuing Bank to issue, amend, renew or extend any
Letter of Credit hereunder from time to time after the Closing Date is subject
to the following conditions:
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(a) Representations and Warranties. Each of the representations and
warranties contained in any Loan Document qualified as to materiality shall be
true and correct and those not so qualified shall be true and correct in all
material respects, in each case on and as of the date of issuance, amendment,
renewal or extension of such Letter of Credit, except to the extent such
representations expressly relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date.
(b) Compliance. At the time of and immediately following the issuance,
amendment, renewal or extension of such Letter of Credit, no Default or Event of
Default shall have occurred and be continuing.
(c) Notice. The US Borrower shall have provided the notice required by
Section 3.2 hereof.
Each issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by Holdings and the US
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
5.4 CONDITIONS OF THE INITIAL LOAN TO A DESIGNATED SUBSIDIARY BORROWER. The
obligations of the Banks to make Loans hereunder to a Designated Subsidiary
Borrower are subject to the satisfaction of the following conditions:
(a) Designated Subsidiary Borrower. Such Subsidiary shall be a Domestic
Subsidiary, shall be listed on Schedule 1.1, or the Administrative Agent shall
have given its written approval thereto in its sole discretion. The
Administrative Agent shall have received a Designated Subsidiary Joinder
Agreement, and, with respect to any Bank that has requested a promissory note
pursuant to Section 2.2(e), a promissory note as contemplated by such Section,
in each case duly executed by such Subsidiary.
(b) Notice. The Administrative Agent shall have received at least 30
days' prior written notice from the US Borrower and Holdings requesting that
such Subsidiary become a Borrower.
(c) Corporate Documents. The Administrative Agent shall have received
with respect to such Subsidiary, in each case certified to the satisfaction of
the Administrative Agent, (i) a copy of each Organizational Document of such
Subsidiary, including all amendments thereto, (ii) a certificate as to the good
standing and charter documents of such Subsidiary (or similar certification
applicable under local law), to the extent available under local law, (iii) a
copy of resolutions duly adopted by the Board of Directors (or similar governing
body) of such Subsidiary, authorizing the execution, delivery and performance of
the Loan Documents, the borrowings hereunder, the appointment of the US Borrower
as its agent for the purposes described in Section 2.18, and the other
transactions contemplated hereby, (iv) an incumbency certificate in form
satisfactory to the Administrative Agent and (v) such other documents as the
Administrative Agent, or counsel to the Administrative Agent, may reasonably
request.
(d) Officer's Certificate. The Administrative Agent shall have received
a certificate signed by a Financial Officer of Holdings and the US Borrower on
behalf of such Subsidiary (i) stating that no Event of Default or Default shall
have occurred and be continuing
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or would occur as a result of the addition of such Subsidiary as a Borrower
hereunder, (ii) stating that the representations and warranties of Holdings and
the Borrowers contained herein, in any other Loan Document and in any
certificate or other instrument delivered pursuant to this Agreement or any Loan
Document shall be correct in all material respects as though made on and as of
such date and (iii) attaching certificates of insurance evidencing insurance
maintained by or with respect to such Subsidiary, to the extent required by
Section 6.12.
(e) Opinion. The Administrative Agent shall have received an opinion of
counsel reasonably acceptable to the Administrative Agent with respect to such
Subsidiary, in form and substance satisfactory to the Administrative Agent.
5.5 CERTAIN DELIVERIES AFTER CLOSING DATE. Within 60 days after the Closing
Date, the Borrowers shall deliver to the Administrative Agent,
(i) with respect to each Foreign Subsidiary whose stock has been
pledged to the Collateral Agent under the Financing Documents, a copy of
each Organizational Document of such Subsidiary, including all amendments
thereto, certified, as of a recent date by a Financial Officer;
(ii) with respect to each Foreign Subsidiary set forth on Schedule
5.1, such pledge agreements, documents, instruments, opinions and filings
as the Administrative Agent shall require to perfect the security interest
in the stock of such Subsidiary under relevant applicable foreign law, in
each case to the extent not so delivered on or prior to the Closing Date;
and
(iii) with respect to all other Foreign Subsidiaries whose stock has
been pledged to the Collateral Agent under the Financing Documents (other
than Harborlite (U.K. Limited)), stock certificates representing 65% (or,
if less, the amount owned by Holdings or its Domestic Subsidiaries) of the
capital stock of each such Subsidiary (to the extent the law of formation
of such Subsidiary contemplates certificated shares), accompanied by blank
undated stock powers and duly executed for transfer (it being understood
that, subject to Section 6.16, the Borrowers need not comply with foreign
law in connection with the pledge of such stock).
ARTICLE VI
AFFIRMATIVE COVENANTS
Each of the Borrowers and Holdings covenants and agrees with each Bank
that, so long as this Agreement shall remain in effect or any Obligation is
outstanding, without the prior written consent of the Majority Banks, it will,
and it will cause each Subsidiary to:
6.1 CORPORATE EXISTENCE.
Do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its corporate existence and any necessary state or foreign
qualifications (other than any qualifications the absence of which, in the
aggregate, would not result in a Material Adverse
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Effect), except that the foregoing shall not prohibit mergers and consolidations
permitted under Section 7.10).
6.2 OBLIGATIONS AND TAXES.
Pay or discharge, or cause to be paid or discharged, before the same shall
become delinquent
(i) all taxes, assessments and governmental charges or levies lawfully
imposed upon it or upon its income or profits or in respect of its
property.
(ii) all mineral and other royalties.
(iii) all lawful claims for labor, materials and supplies.
(iv) all required payments under any Permitted Indebtedness and
(v) all other material obligations:
provided, however, that it shall not be required to pay or discharge or to cause
to be paid or discharged any such amount so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and, if
required by GAAP, appropriate reserves or accruals have been made with respect
thereto.
6.3 PERFORMANCE UNDER AGREEMENTS.
Perform its obligations under this Agreement, each Loan Document and each
other material indenture, agreement or other instrument to which it is a party;
provided, however, that it shall not be required to so perform its obligations
under any such other material indenture, agreement or other instrument to the
extent it shall reasonably believe in good faith that such performance is not
required and, if required by GAAP, appropriate reserves or accruals have been
made with respect thereto.
6.4 ACCESS TO PROPERTIES AND INSPECTIONS.
Maintain financial records in accordance with reasonable and prudent
accounting practices and controls sufficient to prepare the financial statements
required by Section 6.11 and, upon reasonable written notice, at all reasonable
times and as often as any Bank may reasonably request, permit any authorized
representative of any Bank to visit and inspect its properties and records
during normal business hours, and to make extracts from such records and permit
any authorized representative of any Bank to discuss its affairs, finances and
condition with such officers and, with the consent of a Responsible Officer of
the US Borrower (which consent shall not be unreasonably withheld or delayed),
with its independent public accountants, in each case as any Bank shall deem
appropriate.
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6.5 DEFENSE OF CLAIMS.
Use reasonable commercial efforts to vigorously defend itself and its
properties from and against any lawsuits or claims which could reasonably be
expected to result in a Material Adverse Effect unless the applicable Borrower
reasonably believes it has no good faith defense to any such lawsuit or claim.
6.6 NOTICES OF LITIGATION OR CLAIMS.
Promptly upon obtaining notice of the commencement thereof, provide the
Administrative Agent with written notice of any of the following events if any
such event could reasonably be expected to have a Material Adverse Effect:
(a) the issuance by any court or Governmental Authority of any
injunction, order or decision involving Holdings or any Subsidiary or any of
their respective properties:
(b) the filing or commencement of any action, suit or proceeding
against or affecting Holdings or any Subsidiary or any of their respective
properties whether at law or in equity or by or before any court or any federal,
state, municipal, foreign or other Governmental Authority:
(c) any imposition by any Governmental Authority of a Lien which is not
a Permitted Lien;
(d) any claim, demand or action impairing title to any of the
properties or assets of Holdings or any Subsidiary; and
(e) any other adverse action by or notice from a Governmental Authority
with respect to Holdings or any Subsidiary or any of their respective properties
(including any Environmental Claim),
in each case specifying, as applicable, (i) the details of the event or
development requiring such notice and (ii) any action taken or proposed to be
taken with respect thereto.
6.7 NOTICE OF CERTAIN ACTIONS.
Furnish to the Administrative Agent as promptly as possible after obtaining
knowledge of the occurrence thereof, written notice of
(a) any Default or Event of Default hereunder,
(b) any material default by Holdings or any Subsidiary under any other
material agreement or instrument evidencing Indebtedness,
(c) any development in the business or affairs of Holdings or any
Subsidiary which is likely, in the reasonable judgment of Holdings, to have a
Material Adverse Effect, or
(d) the sale by Alleghany of any capital stock of Holdings,
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in each case specifying, as applicable, (i) the nature and extent thereof, (ii)
any rights of any other parties thereto with respect to termination,
acceleration or similar provisions and (iii) any action taken or proposed to be
taken with respect thereto.
6.8 COMPLIANCE.
Comply with all Applicable Laws (including ERISA and Environmental Laws),
and maintain all required clearances, consents, permits and governmental
approvals, if the failure to comply with such Applicable Laws or failure to
maintain such clearances, consents, permits and governmental approvals could
reasonably be expected to have a Material Adverse Effect.
6.9 FURTHER ASSURANCES.
Duly execute and deliver, or cause to be duly executed and delivered, at
its own cost and expense, such further documents, and to take all such further
actions, as may be necessary or proper in the reasonable judgment of the
Administrative Agent to carry out the provisions and purposes of this Agreement
and the other Loan Documents and to maintain and preserve the perfection and
priority of the Liens granted pursuant to the Financing Documents.
6.10 BUSINESS AND PROPERTIES.
(a) At all times do or cause to be done all things necessary to
(i) preserve, renew and keep in full force and effect the rights,
licenses, permits, franchises and mining concessions necessary to, or used
or useful in the conduct of, its Business; provided, however, that Holdings
and the Subsidiaries will not be required to preserve, renew or maintain
any right, license, permit or franchise if the Board of Directors or a
Responsible Officer of the applicable Borrower(s) shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of such Person, and
(ii) keep its properties used or useful in the conduct of its business
in good repair, working order and condition and from time to time make, or
cause to be made, all needful and proper repairs, renewals and
replacements, betterments and improvements thereto, all as in the judgment
of Holdings or such Subsidiary may be necessary so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section
6.10 shall prevent Holdings and any Subsidiary from discontinuing the
operation or maintenance of any of its properties if such discontinuance
is, in the judgment of the Board of Directors or a Responsible Officer of
the applicable Borrower(s), desirable in the conduct of the business of
such Person.
(b) As promptly as possible after obtaining knowledge of the occurrence
thereof, furnish written notice to the Collateral Agent of the institution of
any proceeding for the condemnation or other taking of any material property of
Holdings or its Subsidiaries.
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6.11 FINANCIAL STATEMENTS AND REPORTS.
Furnish to the Administrative Agent:
(a) within 120 days after the end of each Fiscal Year (commencing with
the Fiscal Year ending December 31, 2002), (i) consolidated and consolidating
balance sheets, income statements, cash flow statements and comparisons to
budget showing their financial condition as of the close of such Fiscal Year and
the results of their operations during such year of Holdings and the
Subsidiaries, the consolidated financial statements to be audited by independent
accountants of nationally recognized standing acceptable to the Administrative
Agent and prepared in accordance with GAAP and (ii) summary information, in such
detail as the Administrative Agent shall reasonably request, regarding any
obligations of Holdings or any of its Subsidiaries in respect of forward sales
contracts, commodities futures, options or similar hedging arrangements
regarding commodities, and, if the Administrative Agent requests, copies of any
instruments, agreements or other documents evidencing such obligations;
(b) within 120 days after the end of each Fiscal Year, current and
projected annual and cumulative budgets, operating plans and financial
projections for Holdings and the Subsidiaries on a consolidated and
consolidating basis, in each case in form satisfactory to the Administrative
Agent, for such Fiscal Year and each succeeding Fiscal Year through the Final
Maturity Date;
(c) within 60 days after the end of the first three fiscal quarters of
each Fiscal Year, commencing March 31, 2003, (i) the unaudited consolidating and
consolidated balance sheets, income statements and cash flow statements (along
with comparisons to budget), showing the financial condition and results of
operations of Holdings and the Subsidiaries, as at the end of each such quarter
and for the then elapsed portion of the fiscal year, in each case prepared in
accordance with GAAP and (ii) summary information, in such detail as the
Administrative Agent shall reasonably request, regarding any obligations of
Holdings or any of its Subsidiaries in respect of forward sales contracts,
commodities futures, options or similar hedging arrangements regarding
commodities, and, if the Administrative Agent requests, copies of any
instruments, agreements or other documents evidencing such obligations:
(d) concurrently with the financial statements delivered pursuant to
Section 6.11(a) and (c), certificates of a Financial Officer of Holdings and
concurrently with the financial statements delivered pursuant to Section 6.11(a)
certificates of the independent auditors of Holdings, certifying that no Default
or Event of Default has occurred or, if such a Default or Event of Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto:
(e) concurrently with the statements delivered pursuant to Section
6.11(a) and (c), a report, in form and substance satisfactory to the Banks,
describing
(i) the activities of Holdings or any Subsidiary undertaken with
respect to applicable Environmental Law and
(ii) describing any Environmental Claim received by Holdings or any
Subsidiary;
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(f) concurrently with the statements delivered pursuant to Section
6.11(a) and (c), certificates of a Financial Officer of Holdings, certifying for
the fiscal period then ended and as of the last day of such fiscal period
compliance with the covenants set forth in Sections 7.11, 7.12 and 7.13 hereof,
in each case showing the calculation thereof; and
(g) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings and the
Subsidiaries as any Bank may reasonably request.
Each consolidated financial statement delivered in accordance with this
Agreement shall be accompanied by a certificate of a Financial Officer of
Holdings (and, in the case of year-end financial statements and reports, the
independent auditors of Holdings) certifying that such statement fairly presents
in all material respects the consolidated financial position and results of
operations of Holdings and each Subsidiary at the dates thereof and for the
periods then ended and has been prepared in accordance with GAAP, subject to
normal year end adjustments, as appropriate. Each consolidating financial
statement delivered in accordance with this Agreement shall identify each
Material Subsidiary as of the date of such statement.
6.12 INSURANCE.
(a) Maintain insurance (including, without limitation, business
interruption insurance) on the business and properties of Holdings and each
Subsidiary to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies similarly
situated and in the same or similar businesses, provided that primary insurance
coverages for property and general liability will at all times be provided by
insurance carriers rated at least A+, A1 or A by Standard & Poor's Ratings
Services, ▇▇▇▇▇'▇ Investors Services, Inc. or A.M. Best, respectively.
(b) Maintain in full force and effect workers' compensation insurance
(with respect to the Domestic Subsidiaries only) and public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, about or in connection with, the use of any properties owned, occupied or
controlled by Holdings or any Subsidiary, in each case as such Person shall deem
reasonably necessary.
(c) Each insurance policy required under Section 6.12(a) shall contain
endorsements in form satisfactory to the Collateral Agent providing, among other
things, that any loss shall be payable in accordance with the terms of such
policy notwithstanding any act of Holdings or any Subsidiary which might
otherwise result in forfeiture of such insurance and that the insurer waives all
rights of set off, counterclaim, deduction or subrogation against Holdings or
any Subsidiary.
6.13 MINING PLAN.
Prepare and deliver to the Banks
(a) on each anniversary of the Closing Date, an annual calculation of
minable reserves for a portion of the material mining properties of the US
Borrower and its Subsidiaries (such materiality to be reasonably determined by
the Administrative Agent), together with a
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detailed five year mine plan for such reserves and a conceptual mine plan for
recovery of such reserves for an additional five year period (such portion to be
determined by the US Borrower, but provided that the Banks shall have received,
by the second anniversary of the Closing Date and the end of each successive
two-year period thereafter, such information with respect to all such material
mining properties), and
(b) within 12 months of any Permitted Acquisition which involves
material mining properties, the mine plans described in clause (a) above
prepared with respect to such acquired mining properties.
6.14 ERISA.
Comply in all material respects with the provisions of ERISA (or other
similar legislation in the jurisdiction in which such Subsidiary is organized)
applicable to the Plans or any "employee benefit plan" (within the meaning of
Section 3(3) of ERISA) maintained by Holdings or any Subsidiary and (b) furnish
to each Bank, as soon as possible, and in any event within 30 days after any
Responsible Officer of Holdings or any Subsidiary knows or has reason to know of
the following events: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Single Employer Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other action by
the PBGC, any Borrower or any ERISA Affiliate, or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Multiemployer Plan, a certificate of a Financial Officer of the
applicable Borrower(s) setting forth the details thereof and the action that
Holdings or such ERISA Affiliate proposes to take with respect thereto.
6.15 PROCEEDS.
Use the proceeds of the Loans solely for the purposes set forth in the
Preamble to this Agreement.
6.16 ADDITIONAL SUBSIDIARIES.
Notify the Administrative Agent and the Banks if any additional Subsidiary
is formed or acquired after the Closing Date and (a) if such Subsidiary is a
Domestic Subsidiary, Holdings shall cause such Subsidiary to guaranty the
Obligations within 15 Business Days after such Subsidiary becomes a Material
Subsidiary and (b) if any shares of capital stock of such Subsidiary are owned
by or on behalf of Holdings or any of its Domestic Subsidiaries, Holdings shall
cause such shares to be pledged within 15 Business Days after such Subsidiary
becomes a Material Subsidiary (except that, if such Subsidiary is a Foreign
Subsidiary, the shares of capital stock of such Subsidiary to be pledged shall
be limited to 65% (or, if less, the amount owned by Holdings or its Domestic
Subsidiaries) of the issued and outstanding shares of each class of capital
stock or other ownership interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) of such Subsidiary and 100% (or, if less, the
amount owned by Holdings or its Domestic Subsidiaries) of the issued and
outstanding shares of each class of capital stock or other ownership interests
not entitled to vote (within the meaning of Treas. Reg, Section 1.956-2(c)(2))
of such Subsidiary).
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6.17 BANK ACCOUNTS. The US Borrower will maintain its primary operating accounts
with the Administrative Agent until all Obligations have been paid in full and
this Agreement has terminated. The fees applicable to such accounts shall not
exceed the fees customarily charged by the Administrative Agent to comparable
borrowers for similar accounts.
ARTICLE VII
NEGATIVE COVENANTS
Each of the Borrowers and Holdings covenants and agrees with each Bank
that, so long as this Agreement shall remain in effect or any Obligation is
outstanding, without the prior written consent of the Majority Banks, it will
not, and will not permit any Subsidiary to:
7.1 INDEBTEDNESS.
Incur, create, assume or permit to exist any Indebtedness, except:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) Indebtedness between or among Holdings and the Subsidiaries which
(i) in each instance is unsecured, and
(ii) if the issuer of such Indebtedness is a Borrower or a Subsidiary
Guarantor, such Indebtedness is subordinate in all respects to the payment
in full of all Obligations under the Facility (provided that the terms of
such subordination will permit (A) the repayment of Indebtedness of any
Subsidiary (other than a Borrower) to a Borrower or a Subsidiary Guarantor
and (B) if no Default or Event of Default has occurred and is continuing or
will occur as a result of such repayment, the repayment of Indebtedness of
a Borrower or a Subsidiary Guarantor to any Subsidiary);
(c) any obligations in respect of forward sales contracts, commodities
futures, options or similar hedging arrangements regarding commodities not to
exceed $10 million outstanding at any one time determined on a marked-to-market
basis in accordance with customary practice in the financial industry;
(d) any Letter of Credit issued hereunder;
(e) endorsements for collection or deposit in the ordinary course of
business;
(f) Capital Lease Obligations and other indebtedness secured by
purchase money security interests created in the ordinary course and not to
exceed $15 million principal amount at any time outstanding; and Indebtedness
for letters of credit issued in the ordinary course and not to exceed $1 million
in aggregate face amount at any time outstanding;
(g) the Permitted Subsidiary Indebtedness;
(h) Indebtedness to Alleghany
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(i) not to exceed $25 million principal amount at any one time
outstanding and
(ii) which is subordinated in all respects to the payment in full of
the Obligations of the Loan Parties to the Lender Parties in accordance
with the Alleghany Subordination Agreement;
(i) surety bonds issued in connection with reclamation obligations not
to exceed $15 million outstanding at any one time:
(j) Indebtedness arising under one or more carnets relating to the
export or import of goods or goods temporarily brought into foreign countries
obtained in the ordinary course of business; and
(k) Indebtedness permitted under Sections 7.4 and 7.7 hereof.
7.2 NEGATIVE PLEDGE.
Incur, create, assume or suffer or permit to exist any Lien on any property
or assets (including the capital stock of any Subsidiary) or on any income or
rights in respect of any thereof, except:
(a) Liens granted to the Collateral Agent for the benefit of the Lender
Parties pursuant to this Agreement, the Financing Documents, or any other Loan
Document;
(b) Liens incurred and arising out of surety bonds, appeal bonds,
statutory obligations, bids, performance and return of money and similar
obligations and pledges or deposits made in the ordinary course of business in
connection with workmen's compensation, unemployment insurance, old age pensions
and other social security benefits;
(c) Liens imposed by law, including carriers', warehousemen's,
mechanics', landlords', materialmen's and vendors' Liens incurred in the
ordinary course of business and securing obligations which are not yet due or
which are being contested in good faith by appropriate proceedings and as to
which it shall have set aside adequate reserves in accordance with GAAP;
(d) Liens securing the payment of taxes, assessments and governmental
charges or levies, either not yet delinquent or being contested in good faith by
appropriate legal or administrative proceedings and as to which it shall have
set aside adequate reserves in accordance with GAAP;
(e) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use of property or minor
irregularities of title which do not in the aggregate impair the use of any
parcel of property material to the operation of the business of Holdings or any
Subsidiary or the value of such property for the purpose of the business of
Holdings or any Subsidiary;
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(f) Liens constituting purchase money security interests permitted by
Section 7.1(f) hereof;
(g) Liens described on Schedule 7.2 attached hereto;
(h) extensions and renewals of Liens permitted hereunder; provided,
however, that the Indebtedness secured thereby is not increased and the Lien
does not encumber any property not encumbered by the Lien so extended or
renewed;
(i) Liens on assets acquired in an Acquisition permitted under Section
7.7, and
(j) Liens to secure Permitted Subsidiary Indebtedness; provided,
however, that such Liens encumber only the property of the Foreign Subsidiary
that has incurred such Indebtedness.
Notwithstanding anything herein to the contrary, no Loan Party shall
create, incur, assume, or suffer or permit to exist any Lien on the capital
stock of any Subsidiary, or any part thereof or interest therein, except Liens
granted pursuant to the Financing Documents.
7.3 RESTRICTED PAYMENTS.
Declare or pay any dividends (other than dividends payable solely in shares
of its capital stock) or make any other distribution to any security holder,
whether in cash, property, securities or a combination thereof, or directly or
indirectly redeem, repurchase, retire or otherwise acquire for a consideration,
any shares of any class of its respective capital stock or other ownership
interest or set apart any sum for the aforesaid purposes (any such dividend,
distribution, redemption, purchase, retirement or acquisition being referred to
herein as a "Restricted Payment") except as follows:
(i) each Subsidiary shall be authorized to distribute to any Loan
Party and Holdings shall be authorized to distribute to Alleghany such
funds as shall be required to pay the obligations of such Person for
reasonable federal, state, local and foreign income tax purposes in
accordance with the Amended Tax Sharing Agreement dated as of January 1,
2001, between Alleghany and Holdings,
(ii) each Subsidiary shall be authorized to make dividends or
distributions from time to time to Holdings or another Subsidiary, provided
that a Loan Party domiciled in the United States shall not make dividends
or distributions to any Subsidiary domiciled outside of the United States,
(iii) Holdings shall be authorized to declare or pay dividends or
other distributions in respect of its capital stock during any fiscal year
in an amount not to exceed 50% of Holdings' Net Income during the preceding
fiscal year; provided, however, that no such dividend or other distribution
shall be declared or paid by Holdings if any Default or Event of Default
shall have occurred and be continuing; and provided further that if payment
of a dividend or distribution is not otherwise prohibited under this clause
(iii), Holdings may pay such dividend or distribution if the declaration
thereof was
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permitted under this clause (iii) even if such dividend relates to a year
prior to the immediately preceding year,
(iv) the US Borrower shall be authorized to purchase shares of common
stock of Holdings acquired by employees of the US Borrower or its
Subsidiaries upon exercise of options granted under the 2001 Stock
Option Plan, provided that such purchases are made in accordance with
the terms of the 2001 Stock Option Plan and the related award
agreements,
(v) the US Borrower shall be authorized to purchase from Holdings shares
of common stock of Holdings to the extent required in order for the
US Borrower to be able to deliver shares of common stock of Holdings
upon exercise of options granted under the 2001 Stock Option Plan and
(vi) Holdings shall be authorized to declare and pay the Special Dividend;
provided, however, that no Default or Event of Default shall have
occurred and be continuing.
Any Restricted Payment permitted pursuant to this Section 7.3 may be made in the
form of a dividend or distribution (including cancellation of Indebtedness) as
the Person making such Restricted Payment shall determine. The making of any
loan to an Affiliate (other than Holdings or a Subsidiary), or the repayment of
any Indebtedness to an Affiliate (other than Alleghany (provided such repayment
is in accordance with the terms of the Alleghany Subordination Agreement),
Holdings or a Subsidiary) shall be a Restricted Payment for the purposes hereof.
7.4 INVESTMENTS.
Purchase, directly or beneficially, any stock, other securities or
evidences of Indebtedness of, or make or permit to exist any loans or advances
to, or make any investment or acquire any interest whatsoever in any other
Person, including any Excluded Subsidiary (any such transaction, an
"Investment") other than Permitted Investments and Investments
(a) by Holdings in the US Borrower,
(b) by the US Borrower in a Subsidiary Guarantor,
(c) by a Loan Party in any other Subsidiary provided such Investment is
in the form of equity or debt, and, if such Subsidiary is a newly formed
Subsidiary and is a Material Subsidiary, the stock of such Subsidiary is first
pledged to the Collateral Agent for the benefit of the Lender Parties in
accordance with Section 6.16 hereof,
(d) as permitted in accordance with Section 7.7 hereof,
(e) by a Loan Party in any other Subsidiary resulting from the delivery
of goods or the provision of services in the ordinary course of business,
(f) by any Subsidiary (other than a Borrower or a Subsidiary Guarantor)
in any other Subsidiary, and
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(g) by Holdings or any Subsidiary in Persons that are not Subsidiaries;
provided, however, that, with respect to clauses (a) through (g) above, (i) in
no event shall any Investment (other than a Permitted Investment) be made if any
Default or Event of Default shall have occurred and be continuing, (ii) the
aggregate amount of all Investments in Excluded Subsidiaries shall not exceed $5
million and (iii) the aggregate amount of all Investments (other than Permitted
Investments and Investments in Excluded Subsidiaries) in (A) Persons that are
not Subsidiaries and (B) Subsidiaries that are primarily engaged in businesses
other than the production or marketing of Core Products shall not exceed $5
million in any Fiscal Year. In this Agreement, the term "Core Products" means
(w) diatomite, (x) perlite, (y) other industrial minerals that are the principal
products produced by any business or Person, acquired by any Borrower or any
Subsidiary with the prior written consent of the Majority Banks and (z) products
that are produced through the refining or processing of diatomite, perlite or
any such other industrial minerals.
7.5 NATURE OF BUSINESS.
(a) Effect any material change in its business or create any new
business or subsidiary (including any Excluded Subsidiary) which does not
involve filtration, fillers, diatomite, perlite and/or other industrial
minerals, and related materials and services.
(b) Engage or invest in any business relating to the recycling of spent
filter cake at locations other than Celite's existing facilities without
(i) providing an environmental assessment, in form and substance
satisfactory to the Majority Banks, of such proposed activity, and
(ii) receiving written acknowledgement from the Majority Banks of
their receipt and satisfaction with such report.
(c) Engage in any business involving the disposal in landfills or other
means of permanent storage of spent filter cake without
(i) providing an environmental assessment, in form and substance
satisfactory to the Majority Banks, of such proposed disposal activities,
and
(ii) receiving written acknowledgment from the Majority Banks of their
receipt and satisfaction with such report.
7.6 ASSET SALES.
Make any Asset Sale, unless
(a) such Asset Sale is for consideration reasonably believed by the
Borrowers to be at least equal to the Fair Value of the assets being sold or
(b) the Borrowers obtain the prior written consent of the Majority
Banks.
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7.7 ACQUISITIONS.
Acquire all or a substantial part of the assets or stock of any other
Person, or a substantial part of the assets of a division of such Person (an
"Acquisition"), unless:
(a) no Default or Event of Default (i) has occurred and is continuing
or (ii) will occur after giving effect to such Acquisition;
(b) the Acquisition does not involve aggregate consideration exceeding
$25 million;
(c) the consideration for such Acquisition, when added to the
consideration for all Acquisitions consummated during the twelve month period
immediately preceding the closing of such Acquisition, does not exceed $25
million;
(d) if the Acquisition involves the acquisition of entities or assets
not primarily engaged in the diatomite or perlite businesses, the consideration
for such Acquisition, when added to the consideration for all such Acquisitions
consummated on and after the Closing Date, does not exceed $10 million;
(e) no Third Party Financing is used to effect such Acquisition;
(f) if the Acquisition involves aggregate consideration exceeding $15
million, Holdings shall provide to the Banks, at least 15 days prior to the
consummation of such Acquisition (provided that Holdings shall use its best
efforts to provide such information to the Banks at least 30 days prior to such
Acquisition), (i) an income statement and a statement of cash flows, in each
case covering the twelve month period ending on the last day of the most
recently completed fiscal quarter for which financials were last provided with
pro forma adjustments to reflect the consummation, on the first day of such
period, of such Acquisition (including the incurrence of any related Loans under
this Agreement), (ii) a balance sheet as of the last day of the most recently
completed fiscal quarter for which financials were last provided, with pro forma
adjustments to reflect the consummation of such Acquisition (including the
incurrence of any related Loans under this Agreement), (iii) certificates of a
Financial Officer of Holdings, certifying compliance with the covenants set
forth in Sections 7.11, 7.12 and 7.13 hereof as of the most recently ended month
both prior to consummation of such acquisition and, on a pro forma basis,
immediately after such consummation, in each case showing the calculation
thereof and (iv) projected financial statements prepared on a pro forma basis
reflecting consummation of the Acquisition and covering the twelve-month period
immediately following such consummation, which financial statements shall
reflect a projected EBITDA ("Projected EBITDA") deficit of not more than
$3,000,000, as a result of such Acquisition; provided that no such Acquisition
shall be consummated without prior written consent of the Majority Banks if the
Projected EBITDA for such Acquisition, when added to the Projected EBITDA for
all Acquisitions incurred on and after the Closing Date (in each case calculated
immediately prior to the consummation of each respective Acquisition) would
result in a deficit of more than $7,500,000;
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(g) the pro forma financial statements provided pursuant to subsection
(d) above shall show that the financial covenants set forth in Sections 7.11,
7.12 and 7.13 shall have been satisfied on such pro forma basis; and
(h) the Borrowers shall have taken all steps necessary to pledge as
security for the Facility capital stock acquired in any Acquisition in
accordance with Section 6.16 hereof;
provided, however, that Holdings or any Subsidiary may effect an Acquisition
using Third Party Financing if
(i) no Default or Event of Default (A) has occurred and is continuing
or (B) will occur as a result of such Acquisition,
(ii) the entity or business to be acquired in such Acquisition is
engaged primarily in one or more of the businesses referred to in Section
7.5(a),
(iii) 50% of the aggregate consideration involved in such Acquisition
is provided as a Parent Contribution in the form of equity or subordinated
debt,
(iv) the Borrowers shall have (A) notified the Banks of all material
terms of such proposed Acquisition, (B) given the Banks reasonable time to
prepare bids on providing such additional debt financing and (C) considered
in good faith the terms of a Bank's bid, if any,
(v) the Borrowers shall have created a special purpose subsidiary (an
"Excluded Subsidiary") to effect such Acquisition and recourse under such
Third Party Financing shall be limited to the assets or capital stock of
such Excluded Subsidiary,
(vi) no Guaranty or other commitment with respect to such Excluded
Subsidiary shall be entered into by Holdings, any Borrower or any
Subsidiary,
(vii) if required under Section 7.4, the Administrative Agent, on
behalf of the Banks, shall have received documentation in form and
substance acceptable to the Collateral Agent, to pledge as security for the
Facility the capital stock of such Excluded Subsidiary in accordance with
Section 6.16 hereof, provided, however, that any pledge under this Section
7.7 may be junior to any pledge granted to secure such Third Party
Financing.
Any Acquisition permitted under this Section 7.7, is herein referred to as a
"Permitted Acquisition."
7.8 TRANSACTIONS WITH AFFILIATES.
(a) Except as permitted by Section 7.4, enter into any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate (including an Excluded Subsidiary
but excluding Holdings or any of its Subsidiaries), except
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(i) upon terms which are not less favorable and reasonable than those
obtainable in an arm's length transaction with a Person who is not an
Affiliate or
(ii) any management agreement, entered into in the ordinary course of
the Borrowers' business, pursuant to which any Borrower provides reasonable
management services to any Affiliate in which Holdings or one of its
Subsidiaries owns a material amount of capital stock.
(b) Enter into any transaction providing for the purchase, sale, lease
or exchange of any property or the rendering of any service involving a Loan
Party, on the one hand, and any other Subsidiary on the other hand, except in
the ordinary course of business and upon terms which are not less favorable to
such Loan Party than those obtainable in an arm's length transaction with a
Person who is not an Affiliate of Holdings.
7.9 SALE AND LEASEBACK TRANSACTIONS.
Enter into any Sale and Leaseback Transaction.
7.10 MERGER OR CONSOLIDATION.
Merge into or consolidate or combine with any other Person; provided,
however, that this provision shall not prohibit the merger or consolidation of a
wholly owned Subsidiary (other than an Excluded Subsidiary) with or into a
Borrower, a Subsidiary Guarantor or another wholly owned Subsidiary which is not
an Excluded Subsidiary or as otherwise permitted in accordance with Section 7.7
hereof if
(i) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing,
(ii) immediately after giving effect to such transaction, all shares
of capital stock that have been pledged pursuant to the Loan Documents
shall continue to be pledged, and
(iii) the Borrowers shall deliver a certificate of a Financial Officer
and an opinion of counsel satisfactory in form and substance to the
Administrative Agent to the effect that such transaction complies with
clauses (i) and (ii) above.
7.11 INTEREST COVERAGE.
Permit the ratio of (a) EBITDA for any four consecutive quarter period less
actual Capital Expenditures for such four consecutive quarter period to (b)
Interest Expense for such four consecutive quarter period to be less than 3.0x.
7.12 DEBT TO WORTH.
Permit the ratio of (a) Total Indebtedness to (b) Total Capitalization to
at any time exceed 40%.
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7.13 NET WORTH.
Permit Net Worth at any time to be less than the sum of (i) either (x) if
the Special Dividend shall have been consummated, $185,000,000, or (y) if the
Special Dividend shall not have been consummated, $205,000,000, plus (ii) with
respect to each fiscal year ending after December 31, 2002, 50% of Net Income
for such fiscal year (with no deduction for a net loss in such fiscal year),
such increase to take place on the last day of such fiscal year.
7.14 FISCAL YEAR.
Effect any change in the Fiscal Year without obtaining the prior written
approval of the Majority Banks and making any necessary amendments to the
provisions of this Agreement.
7.15 RESTRICTIVE AGREEMENTS.
Directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement that prohibits or materially restricts or imposes any
material condition upon (a) the ability of Holdings, any Borrower or any other
Subsidiary to create, incur or permit to exist any Lien upon any of its property
or assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to any Borrower or any other Subsidiary or to guarantee
Indebtedness of any Borrower or any other Subsidiary, provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.15 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary or any property or assets of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) the
foregoing shall not apply to customary restrictions and conditions contained in
joint venture agreements, (v) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (vi) clause
(a) of the foregoing shall not apply to customary provisions in leases, licenses
and similar contracts restricting the subletting, assignment or transfer
thereof, or any property or asset the subject thereof.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 DEFAULTS.
In case of the happening of any of the following events (each, an "Event of
Default"):
(a) any Borrower shall fail to make any payment on principal of any
Loan when and as the same shall become due and payable including at the due date
thereof, by acceleration or otherwise; or
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(b) any Borrower shall fail to pay any interest or Fee due hereunder or
in connection herewith when and as the same shall become due and payable,
whether at the due date thereof, by acceleration or otherwise, and such failure
shall continue for more than two Business Days following the date such payment
was due; or
(c) the US Borrower shall fail to pay any Reimbursement Obligation when
and as the same shall become due or payable; or
(d) default shall be made in the due observance or performance of any
covenant or agreement contained in Article VII of this Agreement or any covenant
or agreement of the Borrower pursuant to Sections 5.5, 6.1, 6.6, 6.7 or 6.12; or
(e) default shall be made in the due observance or performance of any
other covenant or agreement to be observed or performed under this Agreement or
in any other Loan Document, and such default shall continue unremedied for 30
days after written notice thereof to the Borrowers by the Administrative Agent;
or
(f) any representation or warranty contained in this Agreement or in
any other Loan Document or in any report, certificate, financial statement or
other instrument furnished pursuant to this Agreement shall prove to have been
false or misleading in any material respect when made or furnished; or
(g) Holdings or any Material Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other federal, state
or foreign bankruptcy, insolvency or similar law,
(ii) consent to the institution of, or fail to controvert in a timely
and appropriate manner, any such proceeding or the filing of any such
petition,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for any such Person or for any
substantial part of its property or assets,
(iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors,
(vi) fail generally to pay its debts as they become due or
(vii) take any corporate or stockholder action in furtherance of any
of the foregoing; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
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(i) relief in respect of Holdings or any Material Subsidiary or of any
substantial part of the property or assets thereof, under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for any such Person or for any substantial part of its
property, or
(iii) the winding up or liquidation of any such Person, and such
proceeding, petition or order shall continue unstayed and in effect for a
period of 60 consecutive days, or
(i) a final judgment for the payment of money in an amount in excess of
$5,000,000 shall be rendered by a court or other tribunal against Holdings or
any Subsidiary and shall remain undischarged for a period of 60 consecutive days
during which execution of any such judgment shall not have been effectively
stayed, bonded or vacated; or
(j) any event shall occur or fail to occur if the effect of such
occurrence or failure is to accelerate the maturity of Indebtedness for borrowed
money or Capitalized Lease Obligations aggregating $2,500,000 of Holdings or any
Subsidiary (other than any Loan or Letter of Credit Exposure hereunder) or to
permit the holder thereof (or a trustee on behalf of such holder) to cause such
Indebtedness to become due prior to the stated maturity thereof and such
occurrence or failure shall not have been remedied within any applicable period
of grace, or any such Indebtedness shall not be paid when due, whether by
acceleration or otherwise; or
(k) (i) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Single Employer Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Single
Employer Plan,
(iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Majority Banks, likely to result in
the termination of such Plan for purposes of Title IV of ERISA,
(iv) any Single Employer Plan shall terminate for purposes of Title IV
of ERISA,
(v) Holdings or any Subsidiary or any ERISA Affiliate thereof shall,
or is, in the reasonable opinion of the Majority Banks, likely to, incur
any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, or
(vi) any other event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to subject Holdings or any Subsidiary to any tax,
penalty or other liabilities which, if the then
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present value thereof (estimated in good faith by such Person) were
deducted from the then total assets of such Person, could reasonably be
expected to have a Material Adverse Effect; or
(l) any of the other Loan Documents shall cease to be in full force and
effect, enforceable in accordance with its terms or any security interest
purported to be created by the Financing Documents shall cease to be a valid and
perfected first priority security interest or first priority Lien, as
applicable, subject to any Permitted Liens or any Loan Party shall assert the
invalidity of any such security interest or Lien; or
(m) any Expropriatory Action shall have been taken by any Person
against capital stock of Holdings or any Subsidiary having a Fair Value in
excess of $5,000,000, provided, however, that the Borrowers will be permitted to
cure such default within 30 days of the occurrence thereof, by making a payment
with respect to then outstanding Loans to the Administrative Agent, on behalf of
the Banks, in an amount equal to the Fair Value of the capital stock subject to
such Expropriatory Action; or
(n) Holdings shall cease to be the record and beneficial owner of all
of the outstanding shares of the capital stock of the US Borrower, or the US
Borrower shall cease to be, directly or indirectly, the record and beneficial
owner of all of the outstanding shares of the capital stock of the other
Borrowers and the Subsidiary Guarantors; or
(o) either (i) Alleghany shall cease to own of record and beneficially
at least 80% of the outstanding capital stock of Holdings or (ii) Alleghany
shall distribute all or a portion of such stock to its shareholders such that it
ceases to own of record and beneficially at least 80% of such stock and, at any
time thereafter, any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended,
whether or not applicable) is or becomes the "beneficial owner," directly or
indirectly, of more than 30% of the total voting power in the aggregate of all
classes of capital stock of Holdings then outstanding normally entitled to vote
in elections of directors; or
(p) any event or condition shall occur which the Majority Banks
reasonably believe could have a Material Adverse Effect (disregarding, for
purposes of this Section 8.1(p), clause (b) of the definition of Material
Adverse Effect contained in Section 1.1 hereof);
then, and in any such event (other than an event described in paragraph (g) or
(h) above), and at any time thereafter during the continuance of such event, the
Administrative Agent shall, upon the written request of the Majority Banks, by
notice to the Borrower, take any of the following actions at the same or
different times:
(i) terminate forthwith the Commitment of the Banks under the
Facility,
(ii) declare any Loans then outstanding to be forthwith due and
payable, whereupon the entire unpaid principal of such Loans, together with
accrued interest thereon and any unpaid accrued Fees and all other
liabilities of Holdings and the Borrowers accrued hereunder, shall become
forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby
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expressly waived by the Borrowers, anything contained herein to the
contrary notwithstanding, and
(iii) refuse to issue any additional Letters of Credit and demand that
the Borrowers provide to the Collateral Agent cash collateral in an amount
equal to the Letter of Credit Exposure, such collateral to be deposited in
the Cash Collateral Account to be held by the Collateral Agent for the
benefit of the Lender Parties;
and in any event described in paragraph (g) or (h) above, the Commitment of the
Banks under the Facility shall automatically terminate (together with all
obligations to issue Letters of Credit) and any Loans shall automatically become
due and payable and the Borrowers shall be obligated to provide cash collateral
to the Administrative Agent as described in clause (iii), all without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Holdings and the Borrowers, anything contained herein
to the contrary notwithstanding.
ARTICLE IX
THE ADMINISTRATIVE AGENT
In order to expedite the various transactions contemplated by this
Agreement, UBOC is hereby appointed to act as Administrative Agent and
Collateral Agent. Each Bank hereby irrevocably authorizes and directs the
Administrative Agent and the Collateral Agent, respectively, to take such action
on behalf of such Bank under the terms and provisions of this Agreement and the
Loan Documents and to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent and the
Collateral Agent, respectively, by the terms and provisions hereof and thereof,
together with such powers as are reasonable incidental thereto.
Subject to the appointment and acceptance of a successor Administrative
Agent or Collateral Agent as provided in this paragraph, the Administrative
Agent or the Collateral Agent may resign at any time by notifying the Banks and
the Borrowers. Upon any such resignation, the Majority Banks shall have the
right, with the consent of the Borrowers except during an Event at Default, to
appoint a successor. If no successor shall have been so appointed by the
Majority Banks and shall have accepted such appointment within 30 days after the
retiring Administrative Agent or Collateral Agent gives notice of its
resignation, then the retiring Administrative Agent or Collateral Agent may, on
behalf of the Banks and the Issuing Bank, appoint a successor Administrative
Agent or Collateral Agent. Upon the acceptance of its appointment as
Administrative Agent or Collateral Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent or Collateral Agent,
and the retiring Administrative Agent or Collateral Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the Borrowers to
a successor Administrative Agent or Collateral Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor. After the Administrative Agent's or Collateral Agent's
resignation hereunder, the provisions of this Article, Section 11.4 and Section
11.5 shall continue in effect for the benefit of such retiring Administrative
Agent or Collateral Agent, or any of the respective directors,
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officers, employees or agents in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent or Collateral
Agent.
The Administrative Agent is hereby expressly authorized on behalf of the
Banks, without hereby limiting any implied authority,
(a) to receive on behalf of each Bank any payment of principal of or
interest on the Loans outstanding hereunder and all other amounts accrued
hereunder paid to the Administrative Agent, and promptly to distribute to each
Bank its proper share of all payments so received.
(b) to give notice within a reasonable time on behalf of each of the
Banks to the Borrowers of any Event of Default specified in this Agreement of
which the Administrative Agent has actual knowledge, and
(c) to distribute promptly to each Bank copies of all notices,
agreements and other material as provided for in this Agreement as received by
the Administrative Agent.
The Collateral Agent is hereby expressly authorized on behalf of the Lender
Parties, without hereby limiting any implied authority,
(a) to execute, directly or through duly empowered attorneys in fact,
any instrument or deed that may be required for the execution of Collateral for
the benefit of the Lender Parties,
(b) to receive and hold on behalf of the Lender Parties any instrument
or certificate which constitutes Collateral,
(c) to give notice within a reasonable time on behalf of each of the
Banks to any Guarantor or any Borrower of any event of default specified in any
Loan Document of which the Collateral Agent has actual knowledge, and
(d) to take any and all action on behalf of the Banks permitted under
the terms any Loan Document.
The Collateral Agent may, in its discretion and without the consent of the
Banks, appoint subagents to act as the Collateral Agent in any jurisdiction or
with respect to any Collateral.
For the sole purpose of taking a security interest in the Collateral in any
country other than the United States (including, without limitation, France and
The Netherlands), the Collateral Agent shall be the joint and several creditor
of each of the Obligations owed by the Loan Parties to the other Lender Parties.
The Collateral Agent shall have its own independent right to demand payment or
performance of any Obligations owed by the Loan Parties, provided that the
Collateral Agent shall receive the written consent of the Majority Banks prior
to exercising such right. The Collateral Agent agrees to distribute any amounts
paid to the Collateral Agent by any Loan Party in satisfaction of such Loan
Party's Obligations to the other Lender Parties in accordance with this
Agreement and the Loan Documents. The payment or performance of any
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Obligations to the Collateral Agent shall discharge the corresponding
Obligations to the other Lender Parties.
Neither the Administrative Agent, the Collateral Agent, nor any of
their respective directors, officers, employees or agents shall be liable as
such for any action taken or omitted by any of them hereunder except for such
Person's own gross negligence or willful misconduct, or be responsible for any
statement, warranty or representation herein or the contents of any document
delivered in connection herewith or be required to ascertain or to make any
inquiry concerning the performance or observance by Holdings or any other Loan
Party of any of the terms, conditions, covenants or agreements of this Agreement
or any other Loan Document. The Administrative Agent and the Collateral Agent
shall not be responsible to the Banks for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement, the Loan Documents
or any other instrument or agreement to which reference is made herein, The
Administrative Agent and the Collateral Agent may deem and treat the payee of
any Loan as the owner thereof for all purposes hereof until it shall have
received from the payee of such Loan notice, given as provided herein, of the
transfer thereof. The Administrative Agent and the Collateral Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Majority Banks, and, except as otherwise
specifically provided herein, such instructions and any action taken or failure
to act pursuant thereto shall be binding on all the Banks. Each of the
Administrative Agent and the Collateral Agent shall, in the absence of knowledge
to the contrary, be entitled to rely on any paper or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper Person or Persons. None of the Lender Parties or any of their respective
directors, officers, employees or agents shall have any responsibility to
Holdings, any Borrower, or any other Person on account of the failure or delay
in performance or breach by any other Bank of any of its obligations hereunder
or to any other Bank on account of the failure of or delay in performance or
breach by such other Bank, Holdings, or any Borrower, or any other Person of any
of their respective obligations hereunder or in connection herewith. The
Administrative Agent and the Collateral Agent may execute any and all their
respective duties hereunder by or through agents or employees and shall be
entitled to advice of legal counsel selected by the Administrative Agent with
respect to all matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the advice of such
counsel.
Any Person serving as the Administrative Agent or Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Bank as any
other Bank and may exercise the same as though it were not the Administrative
Agent or Collateral Agent. Each of the Administrative Agent, the Collateral
Agent and their respective Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrowers and their
Affiliates as if it were not the Administrative Agent, the Collateral Agent or
such an Affiliate.
Each Bank agrees
(i) to reimburse each of the Administrative Agent and the Collateral
Agent in the amount of such Bank's Pro Rata Share of any expenses incurred
for the benefit of the Banks by such Administrative Agent or Collateral
Agent, including reasonable counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Banks, not reimbursed
by the Loan Parties and
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(ii) to indemnify and hold harmless the Administrative Agent, the
Collateral Agent and any of their respective directors, officers, employees
or agents, on demand, in the amount of such Bank's Pro Rata Share, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
it in such capacity or in any way relating to or arising out of this
Agreement, any other Loan Document or any action taken or omitted by it or
any of them under this Agreement or any other Loan Document, to the extent
not reimbursed by the Loan Parties, provided, however, that no Bank shall
be liable to the Administrative Agent or the Collateral Agent for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the gross negligence or willful misconduct of the Administrative Agent or
the Collateral Agent, as the case may be, or of any of the directors,
officers, employees or agents of such Person.
Each Bank acknowledges that it has, independently and without reliance upon
any other Lender Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents and to make Loans as contemplated hereby.
Each Bank also acknowledges that it will, independently and without reliance
upon any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under or based upon this Agreement, any related agreement
or any document furnished hereunder or thereunder.
ARTICLE X
HOLDINGS GUARANTY; US BORROWER GUARANTY
10.1 GUARANTY BY HOLDINGS AND THE US BORROWER.
Holdings hereby absolutely, unconditionally and irrevocably guarantees to
the Lender Parties and their successors and assigns, as primary obligor and not
merely as surety, the full and punctual payment and performance of all
Obligations of the Borrowers to the Lender Parties, when and as due, whether at
maturity, by acceleration, or upon a date fixed for prepayment or mandated
prepayment (the "Holdings Guaranty"). The US Borrower hereby absolutely,
unconditionally and irrevocably guarantees to the Lender Parties and their
successors and assigns, as primary obligor and not merely as surety, the full
and punctual payment and performance of all Obligations of the other Borrowers
to the Lender Parties, when and as due, whether at maturity, by acceleration, or
upon a date fixed for prepayment or mandated prepayment (the "US Borrower
Guaranty," and, together with the Holdings Guaranty, the "Parent Guaranties").
In their capacities as guarantors under this Article X, Holdings and the US
Borrower are each referred to as a "Parent Guarantor" and, collectively, the
"Parent Guarantors". The Obligations of the Parent Guarantors under this Article
X shall be joint and several.
The liability of each Parent Guarantor hereunder is as a guarantor of
payment and performance, and not merely of collectability, and is not
conditioned or contingent upon the enforceability of the Loan Documents or any
other instruments relating to the creation or
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performance of the Obligations or the pursuit by the Lender Parties of any
remedies which they now have or may hereafter have under any Loan Document, at
law, in equity or otherwise. None of the Lender Parties need inquire into the
power of the Borrowers or the authority its officers or agents acting or
purporting to act on its behalf. Nothing contained in this Article X shall
prevent the Lender Parties from suing or from exercising any rights available to
them hereunder, under any of the Loan Documents or under applicable, law, and
the exercise of any of such rights shall not constitute a legal or equitable
discharge of any Parent Guarantor. Each Parent Guarantor shall continue to be
liable under this Parent Guaranty and the provisions hereof shall remain in full
force and effect notwithstanding the occurrence of any or all of the following,
none of which shall require notice to such Parent Guarantor;
(a) any modification, agreement, stipulation or course of dealing
between any Borrower and any Lender Party with respect to the Obligations or any
other matter relating to the Loan Documents, including, without limitation, any
alteration, compromise, acceleration, extension or change in the time or manner
for the payment or performance of any Obligations, any increase or reduction in
the rate of interest charged on funds borrowed pursuant to the Loan Documents;
(b) any waiver of or failure to enforce any of the terms, covenants or
conditions contained in the Loan Documents;
(c) any waiver of any right or remedy against any Borrower or against
any other Person, including, without limitation, any other guarantor, with
respect to all or any portion of such Borrower's or such other Person's
liability for or with respect to the Obligations;
(d) the addition or substitution of one or more guarantors of any or
all of the Borrowers' Obligations under the Loan Documents;
(e) the subordination of any rights with respect to any security given
for the Borrowers' Obligations or the acceptance of any additional or
substituted security therefor;
(f) the foreclosure of any Lien with respect to any or all of the real
or personal property now or hereafter securing any of the Obligations, whether
by exercise of a power of sale contained therein, by an action for judicial
foreclosure or by acceptance of a deed in lieu of foreclosure. As security for
the performance of its obligation under this Article X, Holdings shall execute
and deliver to the Collateral Agent for the benefit of the Lender Parties the
Holdings Pledge Agreement. As security for the performance of its obligation
under this Article X (as well as its other Obligations under the Loan
Documents), the US Borrower shall execute and deliver to the Collateral Agent
for the benefit of the Lender Parties the Borrower Pledge Agreement.
10.2 GUARANTORS' WAIVERS.
Each Parent Guarantor hereby irrevocably waives and relinquishes, and
agrees not to assert or take advantage of, to the maximum extent permitted by
law in each jurisdiction in which the enforcement of such waiver is sought, any
and all rights, remedies and defenses accorded by Applicable Law to guarantors
or sureties. In addition to, not in limitation of the
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immediately preceding sentence, each Parent Guarantor hereby expressly waives
and relinquishes, and agrees not to assert or take advantage of, to the maximum
extent permitted by law in each jurisdiction in which the enforcement of such
waiver is sought, the following rights, remedies and defenses:
(a) notice of acceptance of this Guaranty;
(b) notice of the existence, creation, incurrence, renewal, extension,
modification or accrual of any Obligations of any Borrower to the Lender
Parties;
(c) notice of any action on the part of any Borrower, the Lender
Parties or any creditor of any Borrower or Holdings, or on the part of any other
Person whomsoever relating to the Obligations or the Loan Documents, including,
without limitation, notice of enforcement of any right or remedy with respect
thereto, except as otherwise expressly set forth herein;
(d) any statute of limitations affecting such Parent Guarantor's or any
Borrower's liability hereunder or the enforcement thereof;
(e) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any Person or the failure of any Lender Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any Person;
(f) the right to require the Lender Parties to proceed against any
Borrower or any other Person (including, without limitation, any other
guarantor), or to proceed against or exhaust any security or collateral held by
the Lender Parties at any time, or to enforce any other right or pursue any
other remedy, and such Parent Guarantor expressly agrees that the Lender Parties
may enforce this Guaranty without the necessity of resorting to or exhausting
any security or collateral and without the necessity of proceeding against any
Borrower, the other Parent Guarantor or any other Person;
(g) any defense based upon an election of remedies by the Lender
Parties;
(h) any other defense based upon destruction or diminution of such
Parent Guarantor's rights against any Borrower or any Borrower's assets, whether
or not hypothecated as security;
(i) any defense arising by reason of any invalidity or unenforceability
of any of the Loan Documents or any provision thereof, or any disability of any
Borrower or any guarantor or of any manner in which the Lender Parties have
exercised their rights and remedies under the Loan Documents;
(j) any defense based on any action taken or omitted by any Lender
Party in any proceeding of the type referred to in Section 8.1(g) or (h)
involving any Borrower or any guarantor, including any election to have the
Lender Parties' claim(s) allowed as being secured, partially secured or
unsecured, any extension of credit by any Bank to any Borrower in any such
proceeding and the taking and holding by such Bank of any security for any such
extension of credit;
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(k) any duty of any Lender Party to advise the Parent Guarantors of any
information known to such Lender Party regarding the financial condition of the
Borrowers and all other circumstances affecting the Borrowers' ability to
perform the Obligations, it being agreed that the Parent Guarantors assume the
responsibility for being and keeping informed regarding such condition or any
such circumstances;
(l) any rights of subrogation, reimbursement, exoneration, contribution
and indemnity, and any rights or claims of any kind or nature against any
Borrower which arise out of or are caused by this Parent Guaranty, and any
rights to enforce any remedy which any Lender Party now has or may hereafter
have against any Borrower, and any benefit of, and any right to participate in,
any security now or hereafter held by any Lender Party;
(m) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; and
(n) without limiting the generality of the foregoing or any other
provision of this Parent Guaranty, any rights, defenses and benefits which might
otherwise be available to any Parent Guarantor under
California Civil Code
Sections 2787 to 2855, inclusive (including without limitation,
California Civil
Code Sections 2809, 2810, 2815, 2819, 2839, 2845, 2848, 2849 and 2850), 2899 and
3433, and any successor sections.
Each Parent Guarantor's sole right with respect to any foreclosure of
collateral or security for any of the obligations shall be to bid at the sale
thereof in accordance with applicable law. The Lender Parties may also bid at
any such sale, and in the event such collateral is sold to any Lender Party in
whole or in partial satisfaction of the Obligations, no Parent Guarantor shall
have any further right or interest with respect thereto, including, without
limitation, any right of redemption, whether arising under law or in equity.
10.3 BANKRUPTCY.
(a) No Effect on Guaranty. The obligations of the Parent Guarantors
under this Guaranty shall not be altered, limited or affected by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation, or arrangement of any Borrower, or by any defense
or decision of any court or administrative body resulting from any such
proceeding. Any interest on the Obligations which accrues after the commencement
of any such proceeding (or, if interest on any portion of the Obligations ceases
to accrue by operation of law by reason of the commencement of such proceeding,
such interest as would have accrued on any such portion of the Obligations if
such proceeding had not been commenced) shall be included in the Obligations for
the purposes hereof, each Parent Guarantor expressly agreeing that its liability
pursuant to this Guaranty shall be determined without regard to any rule of law
or order arising out of such proceeding which may relieve any Borrower of
liability for any portion of the Obligations. The Parent Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors, or similar Person, to pay the Lender Parties, or to allow
the claim of the Lender Parties with respect to, any such interest accruing
after the date on which such proceeding is commenced. In the event that all or
any portion of the Obligations are paid or performed by the Borrowers, the
obligations of
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the Parent Guarantors hereunder shall continue and remain in full force and
effect in the event that all or any part of such payment or performance is
avoided or recovered directly or indirectly from the Lender Parties as a
preference, fraudulent transfer or otherwise.
(b) Filing of Claims. In any bankruptcy or other proceeding involving
any Borrower in which the filing of claims is required or permitted by law, each
Parent Guarantor shall file all claims that it may have against any Borrower
relating to any Indebtedness of such Borrower to such Parent Guarantor, and will
assign to the Collateral Agent on behalf of the Lender Parties all rights of
such Parent Guarantor thereunder. If such Parent Guarantor does not file any
such claim, the Collateral Agent, as attorney in fact for such Parent Guarantor,
is hereby authorized to do so in the name of such Parent Guarantor, or, in the
Collateral Agent's discretion, to assign the claim to a nominee and to cause a
proof of claim to be filed in the name of the Collateral Agent's nominee. The
foregoing power of attorney is coupled with an interest and cannot be revoked.
The Collateral Agent or its nominee shall have the sole right to accept or
reject any plan proposed in such proceeding and to take any other action which a
party filing a claim is entitled to do. In any such case, whether in
administration, bankruptcy or otherwise, the Person authorized to pay such claim
shall pay to the Collateral Agent, on behalf of the Lender Parties, the amount
payable on such claim and, to the full extent necessary for that purpose, such
Parent Guarantor hereby assigns to the Collateral Agent, on behalf of the Lender
Parties, all of such Parent Guarantor's rights to any such payments or
distributions to which such Parent Guarantor would otherwise be entitled;
provided, however, that such Parent Guarentor's obligations hereunder shall not
be satisfied except to the extent that the Collateral Agent receives cash by
reason of any such payment or distribution. If the Collateral Agent receives
anything hereunder other than cash, the same shall be held as additional
collateral for amounts due under this Guaranty.
10.4 PAYMENT.
In furtherance of the provisions of this Article and not in limitation of
any other right which any Lender Party may have at law or in equity against any
Parent Guarantor by virtue of this Guaranty or otherwise, upon the failure of
any Borrower to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, upon a date fixed for prepayment or
mandatory prepayment or otherwise, each Parent Guarantor hereby promises to, and
will, upon receipt of a written or telexed demand by the Administrative Agent,
forthwith pay, or cause to be paid, to the Collateral Agent for distribution to
the Lender Parties, in cash, the amount of such unpaid Obligation.
ARTICLE XI
MISCELLANEOUS
11.1 NOTICES.
All notices, demands and requests of any kind to be delivered to any party
hereto in connection with this Agreement shall be in writing (including
telecopy) and shall be deemed to have been duly given and received if delivered
personally or if sent by nationally recognized
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overnight courier, by telecopier or by first class, registered or certified
mail, return receipt requested, to such party at its address as follows:
(a) if to any Borrower or Holdings, to:
World Minerals Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President, Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
World Minerals Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Senior Vice President, Secretary and
General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to UBOC, as Administrative Agent, to:
Union Bank of
California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any other Bank, to it at its address (or telecopy number) set
forth on its Administrative Questionnaire.
Any such notice, demand or request so delivered shall be deemed to have
been received (i) on the day of actual delivery in the case of personal delivery
or telecopier delivery, (ii) on the next business day after the date when sent
in the case of delivery by nationally recognized overnight courier, or (iii) on
the fifth business day after the date of deposit in the U.S. mail in the case of
mailing. Any party hereto may from time to time by notice in writing served upon
the other as aforesaid designate a different mailing address or a different
person to which all such notices, demands or requests thereafter are to be
addressed.
11.2 SURVIVAL OF AGREEMENT.
All representations and warranties made by any Loan Party herein and in the
other Loan Documents and in any certificate or other instrument prepared or
delivered pursuant to this
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Agreement or any other Loan Document (i) shall be considered to have been relied
upon by the Lender Parties and (ii) shall survive the making of Loans by the
Banks and all covenants and agreements made by any Loan Party herein or in any
other Loan Document and continue in full force and effect as long as any
principal of or accrued interest on any Loan, any Fee, any Reimbursement
Obligation or any other amount payable under or in connection with this
Agreement or any other Loan Document is outstanding and unpaid.
11.3 SUCCESSORS AND ASSIGNS; SYNDICATIONS; LOAN SALES; PARTICIPATIONS.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the permitted successors and
assigns of such party, and all covenants, promises and agreements by or on
behalf of any Loan Party or any Lender Party that are contained in this
Agreement or any other Loan Document shall bind and inure to the benefit of
their respective successors and assigns.
(b) Each Bank may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment, the Loans at the time owing to it and its
rights, titles and interests under the other Loan Documents); provided, however,
that
(i) except in the case of an assignment to a Bank or an Affiliate of a
Bank, the written consent of the Administrative Agent, the Issuing Bank and
the US Borrower (which consent shall not be unreasonably withheld or
delayed (it being agreed that the US Borrower may withhold its consent to
an Eligible Assignee based on its prior experience with such Assignee and
such withholding shall be deemed to be reasonable) and, in the case of the
US Borrower, shall not be required if an Event of Default has occurred and
is continuing) to such assignment shall have been given,
(ii) such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this
Agreement (other than, in the case of the Issuing Bank, any rights or
obligations relating to the Letters of Credit),
(iii) except in the case of an assignment to a Bank or an Affiliate of
a Bank, the Pro Rata Share of the Commitment of the assigning Bank subject
to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 and the Pro Rata
Share of the Commitment of such Bank remaining after such assignment shall
not be less than $5,000,000 or shall be zero,
(iv) the parties to each such assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, subject to such
assignment and a processing and recordation fee of $3,500,
(v) such assignment shall not result in any increased costs which must
be paid by the Borrowers (including, without limitation, any amounts
payable under Sections 2.8, 2.10, 2.15 and 3.4 hereof) and
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(vi) the assignee, if it shall not be a Bank, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Upon acceptance and recording pursuant to paragraph (e) of this Section
11.3, from and after the effective date specified in each Assignment and
Acceptance (which effective date shall be at least five Business Days after the
execution thereof, unless the Administrative Agent shall otherwise agree) (A)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, become and have the rights and obligations of a
Bank under this Agreement and (B) the assigning Bank thereunder shall, to the
extent of the interest assigned pursuant to such assignment, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto) but shall continue to be entitled to the benefits of Sections 2.8, 2.10,
2.15 and 3.4, as well as to any fees or other amounts accrued to its account but
unpaid on such date.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder shall be deemed to confirm
to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim and that its Pro Rata Share of the Commitment and the total
outstanding balance of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in
such Assignment and Acceptance,
(ii) except as set forth in clause (i) above, such assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any
other Loan Documents or any other instrument or document furnished pursuant
hereto, or to the financial condition of any Loan Party, or the performance
or observance by any Loan Party of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto,
(iii) such assignee represents and warrants that it is legally
authorized to execute and deliver the Assignment and Acceptance,
(iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.11 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance;
(v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Bank or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
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(vi) such assignee appoints and authorizes the Administrative Agent
and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent and Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Bank.
Effective upon the assignment of an interest hereunder, Annex I hereto
shall be amended by the Administrative Agent to reflect such assignment.
(d) The Administrative Agent shall maintain at one of its offices in
California a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Banks, and the
commitments of, and principal amount of the Loans owing to, each Bank pursuant
to the terms thereof from time to time (the "Register"). The entries in the
Register shall be conclusive in the absence of manifest error, and Holdings and
the Borrowers, the Administrative Agent and the Banks may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers, the Administrative Agent and any Bank, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and a permitted assignee subject to such
assignment, the processing and recordation fee referred to in paragraph (b)
above and the written consent of the Borrowers to such assignment if required
pursuant to paragraph (b) above, the Administrative Agent shall
(i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to the Banks and the Borrowers.
(f) Each Bank may without the consent of any Loan Party or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of the Loans owing to it); provided, however, that
(i) such Bank's obligations under this Agreement (including its Pro
Rata Share of the Commitment) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to
the benefit of the cost and yield protection provisions contained in
Sections 2.8, 2.10, 2.15
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and 3.4 to the same extent that the Bank from which such participating bank
or other entity acquired its participation would be entitled to the benefit
of such cost protection provisions (but shall not, in the aggregate, be
entitled to receive payments under such Sections in amounts in excess of
the payments which would have been made to the selling Bank had such
participations not been sold) and
(iv) the Borrowers, the Administrative Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, and such Bank shall
retain the sole right to enforce the obligations of Holdings or the
Borrowers relating to the Loans and to approve any amendment, modification
or waiver of any provision of this Agreement (other than amendments,
modifications or waivers with respect to reducing any Fees payable
hereunder or reduce the amount of principal of or decrease the rate at
which interest is payable on the Loans, or the dates fixed for payments of
principal of or interest on the Loans and increasing or extending the
Commitment).
(g) Any Bank or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.3, disclose to the assignee or participant or proposed assignee or
participant any information relating to Holdings and any Subsidiary furnished to
such Bank by or on behalf of Holdings and such Subsidiary; provided, however,
that, prior to any such disclosure of information designated by Holdings or any
Subsidiary as confidential, each such assignee or participant or proposed
assignee or proposed participant shall execute an agreement whereby such Person
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information and to use such information solely for purposes
related to this Agreement.
(h) Any Bank may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided, however, that no such
assignment shall release a Bank from any of its obligations hereunder.
(i) No Loan Party shall assign or delegate any of its rights or duties
hereunder without the prior written consent of all of the Banks and any
purported assignment or delegation without such consent shall be null and void
and shall be given no force and effect.
11.4 EXPENSES OF THE LENDER PARTIES.
The US Borrower agrees to pay all reasonable out-of-pocket expenses
reasonably incurred by the Administrative Agent and the Collateral Agent
associated with the arrangement of the credit facilities hereunder (including
printing, duplicating, mailing, advertising and similar expenses), the
preparation, execution and delivery of this Agreement and the other Loan
Documents (whether or not the transactions hereby contemplated shall be
consummated), and in connection with the transactions contemplated by Section
5.4 and the definition of Permitted Subsidiary Indebtedness contained in Section
1.1 and the deliveries contemplated by Sections 5.5 and 6.16, or reasonably
incurred by any Lender Party in connection with the enforcement or protection of
its rights under this Agreement, any other Loan Document or the Loans made and
Letters of Credit issued hereunder, including, but not limited to, the
reasonable fees and disbursements of Pillsbury Winthrop LLP, special counsel for
the Administrative Agent and the
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Collateral Agent, and the reasonable fees and disbursements of foreign counsel
to the Administrative Agent and the Collateral Agent in connection with any
Foreign Borrower, any foreign stock Collateral (including pursuant to Section
6.16) and any foreign tax analysis, and in connection with such enforcement or
protection, the reasonable fees and disbursements of other counsel (including
in-house counsel) for the Banks. All amounts due under this Section 11.4 shall
be payable within 15 Business Days after demand by any Lender Party therefor.
11.5 INDEMNIFICATION.
(a) General. The US Borrower hereby agrees to indemnify and hold
harmless the Lender Parties and each of their respective officers, directors,
employees, counsel and agents (each, an "Indemnified Person") from and against
any and all losses, claims, damages and liabilities to which any Indemnified
Person may become subject (excluding any losses, claims, damages and liabilities
to the extent arising from gross negligence, willful misconduct, fraud or breach
of fiduciary duty owed to third parties on the part of such Indemnified Person
or arising from any assertion, putative or otherwise, as to the legal capacity
or authority of any Indemnified Person to execute and deliver this Agreement or
in respect of any law governing the corporate powers of any Indemnified Person
to perform its obligations hereunder) arising out of this Agreement, any other
Loan Document, the Facility or any Loans, Letters of Credit or other financial
accommodations thereunder, the use of the proceeds of any such Loans, Letters of
Credit or financial accommodations, the breach of any representation or covenant
contained herein or in any other Loan Document, any act or omission by the
Administrative Agent or the Collateral Agent in connection herewith or with any
of the foregoing (including any claim asserted in any litigation, investigation
or proceeding relating to any of the foregoing, whether or not any Indemnified
Person is a party thereto), and to reimburse each Indemnified Person, within 15
Business Days after written demand, for all legal and other expenses incurred in
connection with investigating or defending any of the foregoing. The foregoing
indemnity obligation shall not, as to any Indemnified Person, apply to any loss,
claim, damage or liability (i) incurred by any Indemnified Person against any
other Indemnified Person hereunder, (ii) arising from the breach by any
Indemnified Person of any of its obligations to Holdings or the Borrowers
hereunder or (iii) arising out of any commitment made by any Indemnified Person
which would be breached by performance of such Indemnified Person's obligations
hereunder. Each Indemnified Person will provide prompt written notice to the US
Borrower of its assertion of any claim or the commencement of any legal action
or proceeding against such Indemnified Person related to the Facility or the
transactions contemplated hereby.
(b) Environmental Indemnity. The US Borrower hereby agrees to
indemnify, defend and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable fees and expenses of counsel and the allocated cost of internal
counsel), which may be incurred by or asserted against an Indemnified Person in
connection with or arising out of any Environmental Claim arising out of or
related to any property owned or operated by, any operation of, or the conduct
of business by any Borrower or any of its Subsidiaries. No action taken by legal
counsel chosen by any Lender Party in defending against any such investigation,
litigation or proceeding or requested remedial, removal or response action shall
vitiate or any way impair any Borrower's obligation and duties hereunder to
indemnify and hold harmless the Indemnified Persons. In no event shall site
visit,
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observation, or testing by any Lender Party be a representation that Hazardous
Materials are or are not present in, on, or under the site, or that there has
been or shall be compliance with any law, regulation, or ordinance pertaining to
Hazardous Materials or any other Applicable Law. Neither any Loan Party nor any
other party is entitled to rely on any site visit, observation, or testing by
any Lender Party. Except as may be required by Applicable Law, no Lender Party
owes any duty of care to protect Holdings or any Subsidiary or any other party
against, or to inform Holdings or any Subsidiary or any other party of, any
Hazardous Materials or any other adverse condition affecting any site or
property. Except as may be required by Applicable Law, no Lender Party shall be
obligated to disclose to Holdings or any Subsidiary or any other party any
report or findings made as a result of, or in connection with, any site visit,
observation, or testing by any Lender Party.
(c) The provisions of this Section 11.5 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document or any investigation made
by or on behalf of any Lender Party. All amounts due under this Section 11.5
shall be payable within 15 Business Days after written demand therefor.
(d) To the extent permitted by applicable law, neither Holdings nor any
Borrower shall assert, and each hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, any Loan or Letter of Credit or the use of the proceeds
thereof.
11.6 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO CONFLICTS OF
LAWS PRINCIPLES.
(b) For all purposes of this Agreement or any other Loan Document, and
for all purposes of any suit or proceeding arising out of or relating to the
transactions contemplated hereby or thereby or for recognition or enforcement of
any judgment, each Loan Party and each Lender Party hereby submits to the
personal jurisdiction of the courts of the State of California and the federal
courts of the United States for the Central District of California, and any
appellate court from any such state or federal court, and hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such California court or, to the
extent permitted by law, in such federal court. Each Borrower, Holdings, and
each Lender Party hereby agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any Lender Party or any Borrower may
otherwise have to bring any action or proceeding relating to this Agreement or
any related matter against any Borrower or its properties in the case of the
Lender Party, or against any Lender Party, or their respective properties in the
case of any Borrower, in the courts of any jurisdiction.
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(c) Each Borrower, Holdings and each Lender Party hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so,
(i) any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Agreement or any related matter in any California State court or the courts
of the United States of America for the Central District of California, and
appellate courts from any thereof and
(ii) the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(d) Each Borrower and each Lender Party hereby irrevocably consents to
service of process by registered United States mail, return receipt requested,
as provided in Section 11.1. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by
law.
11.7 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.8 WAIVERS; AMENDMENTS.
(a) No failure or delay of any Lender Party in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender Parties hereunder are cumulative and not exclusive of
any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by any Loan Party therefrom shall in any event be effective unless the
same shall be authorized as provided in paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances. Each Bank shall be bound by any amendment, modification,
waiver or consent authorized as provided herein.
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(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrowers and the Majority Banks or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent (or, if applicable, the Collateral
Agent) and Holdings, the Borrowers or the Subsidiaries that are parties thereto,
in each case with the consent of the Majority Banks; provided, however, that no
such agreement shall
(i) change the principal amount of, or extend the maturity of or any
date for the payment of any Loan or any Fee or Reimbursement Obligation or
waive or excuse any such payment or any part thereof, increase any Bank's
Pro Rata Share of the Commitment, amend or modify the provisions of
Sections 2.12 and 2.13 in a manner that would alter pro rata sharing of
payments required thereby or decrease the rate of interest on any Loan,
without the written consent of each Bank affected thereby,
(ii) amend or modify the provisions of this Section 11.8 or the
definition of "Majority Banks", without the written consent of each Bank,
or
(iii) release any Parent Guarantor from the Parent Guaranty, release
any Subsidiary Guarantor from the Subsidiary Guaranty Agreement or release
any material part of the Collateral (except as expressly permitted by the
applicable Financing Document) without the written consent of each Bank;
and provided, further, however, that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent or
Collateral Agent under this Agreement or any other Loan Document without
the written consent of the Administrative Agent and Collateral Agent,
respectively, or change the Issuing Bank's rights and obligations
thereunder without the consent of the Issuing Bank; and provided, further,
that the Issuing Bank may cease to be the Issuing Bank by agreement between
the Issuing Bank and the US Borrower (which shall not unreasonably withhold
consent to any proposed resignation by the Issuing Bank).
11.9 SEVERABILITY.
In the event any one or more of the provisions contained in this Agreement
or other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein or therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
11.10 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective when copies hereof
which, when taken together, bear the signatures of each of the parties hereto
shall be received by the Administrative Agent, the Collateral Agent, Holdings
and the Borrowers. Delivery of an executed counterpart of a signature page of
this
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Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
11.11 HEADINGS.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
11.12 OBLIGATIONS OF LENDER PARTIES SEVERAL.
The rights and obligations of the Lender Parties under this Agreement and
the other Loan Documents are several and not joint. Nothing contained in this
Agreement or any other Loan Document and no action taken by any Lender Party or
any Borrower pursuant hereto or thereto shall be deemed to constitute the Lender
Parties as a partnership, association, joint venture or other entity.
11.13 ENTIRE AGREEMENT.
This Agreement, together with the agreements and documents referred to
herein contain the entire agreement of the parties and supersedes any and all
prior agreements among the parties with respect to the subject matter hereof.
11.14 CONFIDENTIALITY.
(a) Each Lender Party agrees to keep confidential (and to cause its
respective officers, directors, employees, agents, representatives and
Affiliates to keep confidential) the Information (as defined below), except that
any Lender Parry shall be permitted to disclose Information:
(i) to such of its officers, directors, employees, agents,
representatives and Affiliates (including outside counsel) as need to know
such Information;
(ii) to the extent required by applicable laws and regulations or by
any subpoena or similar legal process, or requested by any bank regulatory
authority (provided that such Lender Party shall, except for Information
requested by any such bank regulatory authority, promptly notify the
Borrowers (to the extent practicable and lawful, notice shall be given to
the Borrowers before such disclosure is made so as to permit the Borrowers
to seek a protective order) of the circumstances and content of each such
disclosure and shall request confidential treatment of any Information so
disclosed);
(iii) to the extent such Information
(A) becomes publicly available other than as a result of a breach
of this Agreement,
(B) becomes available to such Lender Party on a non-confidential
basis from a source other than the Borrowers or their Affiliates, or
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(C) was available to such Lender Party on a non-confidential
basis prior to its disclosure to such Lender Party by the Borrowers or
their Affiliates; or
(iv) to the extent any Borrower shall have consented to such
disclosure in writing. As used in this Section 11.14, as to any Lender
Party, "Information" shall mean any financial statements, materials,
documents and other information that the Borrowers or any of their
Affiliates may have furnished or may hereafter furnish to the Lender
Parties in connection with this Agreement or any other materials prepared
by any such person from any of the foregoing.
(b) Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
11.15 INTEREST RATE LIMITATION.
Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to any Loan, together with all fees, charges and other
amounts that are treated as interest on such Loan under applicable law
(collectively, the "Charges"), shall exceed the maximum lawful rate (the
"Maximum Rate") that may be contracted for, charged, taken, received or reserved
by the Bank holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to such Bank in respect
of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Bank.
11.16 CONVERSION OF CURRENCIES. If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum owing hereunder in one Currency into
another Currency, each party hereto agrees that the rate of exchange used shall
be that at which in accordance with normal banking procedures in the relevant
jurisdiction the first Currency could be purchased with such other Currency on
the Business Day immediately preceding the day on which final judgment is given.
The obligation of a Borrower in respect of any sum due to any Bank (the
"Applicable Bank") shall, notwithstanding any judgment in a Currency (the
"Judgment Currency") other than the Currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that
on the Business Day following receipt by the Applicable Bank of any sum adjudged
to be so due in the Judgment Currency, the Applicable Bank may in accordance
with normal banking procedures in the relevant jurisdiction purchase the
Agreement Currency with the Judgment Currency; if the amount of the Agreement
Currency so purchased is less than the sum originally due to the Applicable Bank
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Bank against such
loss. The obligations of the Borrowers contained in this
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Section 11.16 shall survive the termination of this Agreement and the payment of
all other amounts owing hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers, all as of the day and year
first above written.
MINERALS HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President
WORLD MINERALS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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UNION BANK OF CALIFORNIA, N.A.,
individually and as Administrative Agent,
Collateral Agent and Issuing Bank
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Vice President
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BANK OF THE WEST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President & Senior
Relationship Manager
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LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
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COMERICA WEST INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
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JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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BANK LEUMI USA
By: /s/ ▇▇▇▇▇ ▇▇▇ Hong
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇ Hong
Title: Vice President
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SANTA ▇▇▇▇▇▇▇ BANK & TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
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