EXHIBIT 10.7
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
BY AND AMONG
FLOWSERVE B.V.,
AS APPLICANT
FLOWSERVE CORPORATION
AND
THE MATERIAL SUBSIDIARIES LISTED ON SCHEDULE 1 HERETO,
AS GUARANTORS
CALYON NEW YORK BRANCH,
AS ADMINISTRATIVE AGENT AND ISSUING LENDER
AND
THE LENDERS NAMED HEREIN,
LENDERS
* * *
$89,250,000
* * *
JULY 28, 2004
TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS.....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Number and Gender of Words; Other References...................................................17
1.3 Accounting Terms...............................................................................17
SECTION 2 LETTER OF CREDIT FACILITY......................................................................18
2.1 Letter of Credit Commitment....................................................................18
2.2 Request for Issuance of Letter of Credit.......................................................20
2.3 Amendment Procedures...........................................................................20
2.4 Extension of Credit Expiration Date............................................................20
2.5 Mandatory Letter of Credit Commitment Reduction................................................21
SECTION 3 REIMBURSEMENT AND PAYMENT OBLIGATIONS..........................................................21
3.1 Reimbursement of Drawings Under a Letter of Credit.............................................21
3.2 Fees and Commissions...........................................................................21
3.3 Computation of Rates and Fees..................................................................22
3.4 Additional Costs...............................................................................22
3.5 Expenses; Indemnification......................................................................23
3.6 Taxes..........................................................................................24
3.7 Form and Currency of Payments..................................................................26
3.8 Acceleration of Undrawn Amounts................................................................27
3.9 Maximum Rate...................................................................................28
SECTION 4 GUARANTY.......................................................................................28
4.1 Guaranty of Payment............................................................................28
4.2 Obligations Unconditional......................................................................29
4.3 Modifications..................................................................................29
4.4 Waiver of Rights...............................................................................30
4.5 Reinstatement..................................................................................30
4.6 Remedies.......................................................................................30
4.7 Subrogation....................................................................................30
SECTION 5 CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT.......................................30
5.1 Agreement......................................................................................31
5.2 Officer's Certificate..........................................................................31
5.3 Evidence of Authority..........................................................................31
5.4 Organizational Documents.......................................................................31
5.5 Opinion of Counsel.............................................................................31
5.6 Financial Information..........................................................................31
5.7 Litigation.....................................................................................31
5.8 Compliance with Financial Obligations..........................................................32
5.9 Intercompany Indebtedness......................................................................32
5.10 EIB Loan.......................................................................................32
5.11 Parent Credit Agreement........................................................................32
5.12 Additional Information.........................................................................32
SECTION 6 REPRESENTATIONS AND WARRANTIES.................................................................32
6.1 Organization, Powers...........................................................................32
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
i
6.2 Authorization..................................................................................32
6.3 Enforceability.................................................................................32
6.4 Governmental Approvals.........................................................................33
6.5 Financial Statements...........................................................................33
6.6 No Material Adverse Change.....................................................................33
6.7 Title to Properties; Possession Under Leases...................................................33
6.8 Subsidiaries...................................................................................33
6.9 Litigation; Compliance with Laws...............................................................33
6.10 Agreements.....................................................................................34
6.11 Federal Reserve Regulations....................................................................34
6.12 Investment Company Act; Public Utility Holding Company Act.....................................34
6.13 Tax Returns....................................................................................34
6.14 No Material Misstatements......................................................................34
6.15 Employee Benefit Plans.........................................................................35
6.16 Environmental Matters..........................................................................35
6.17 Labor Matters..................................................................................35
6.18 Solvency.......................................................................................35
6.19 Projections....................................................................................35
6.20 Senior Indebtedness............................................................................36
6.21 Consolidated Coverage Ratio....................................................................36
6.22 EIB Loan.......................................................................................36
SECTION 7 AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES....................................................36
7.1 Existence; Businesses and Properties...........................................................36
7.2 Insurance......................................................................................36
7.3 Obligations and Taxes..........................................................................36
7.4 Financial Statements, Reports, etc.............................................................37
7.5 Litigation and Other Notices...................................................................39
7.6 Maintaining Records; Access to Properties and Inspections......................................39
7.7 Use of Proceeds................................................................................40
7.8 Further Assurances.............................................................................40
7.9 Interest Rate Protection.......................................................................40
7.10 EIB Loan.......................................................................................40
SECTION 8 NEGATIVE COVENANTS OF THE CREDIT PARTIES.......................................................40
8.1 Indebtedness...................................................................................40
8.2 Liens..........................................................................................42
8.3 Sale and Lease-Back Transactions...............................................................43
8.4 Investments, Loans and Advances................................................................43
8.5 Mergers, Consolidations, Sales of Assets and Acquisitions......................................45
8.6 Dividends and Distributions; Restrictive Agreements............................................46
8.7 Transactions with Affiliates...................................................................47
8.8 Business of the Credit Parties.................................................................48
8.9 Other Indebtedness and Agreements..............................................................48
8.10 Capital Expenditures...........................................................................48
8.11 Interest Coverage Ratio........................................................................48
8.12 Fixed Charge Coverage Ratio....................................................................49
8.13 Maximum Leverage Ratio.........................................................................49
8.14 Designated Senior Indebtedness.................................................................49
8.15 Fiscal Year....................................................................................49
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
ii
SECTION 9 EVENTS OF DEFAULT..............................................................................49
9.1 Events of Default..............................................................................50
9.2 Remedies Upon Event of Default.................................................................51
SECTION 10 AGREEMENT AMONG LENDERS.......................................................................52
10.1 Administrative Agent...........................................................................52
10.2 Expenses.......................................................................................53
10.3 Proportionate Absorption of Losses.............................................................53
10.4 Delegation of Duties; Reliance.................................................................53
10.5 Limitation of Liability........................................................................54
10.6 Default; Collateral............................................................................55
10.7 Limitation of Liability........................................................................55
10.8 Relationship of Lenders........................................................................55
10.9 Benefits of Agreement..........................................................................55
10.10 Obligation Several.............................................................................55
SECTION 11 MISCELLANEOUS.................................................................................55
11.1 Headings.......................................................................................55
11.2 Nonbusiness Days...............................................................................55
11.3 Communications.................................................................................56
11.4 Form and Number of Documents...................................................................56
11.5 Survival.......................................................................................56
11.6 Governing Law..................................................................................56
11.7 Invalid Provisions.............................................................................56
11.8 Entirety.......................................................................................56
11.9 Jurisdiction; Venue; Service of Process; Jury Trial............................................57
11.10 Amendments, Consents, Conflicts, and Waivers...................................................57
11.11 Multiple Counterparts..........................................................................58
11.12 Successors and Assigns; Assignments and Participations.........................................58
11.13 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................60
11.14 Judgment Currency..............................................................................61
11.15 Setoff.........................................................................................61
11.16 Confidentiality................................................................................61
11.17 USA PATRIOT Act Notice.........................................................................62
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
iii
SCHEDULES AND EXHIBITS
Schedule 1 Material Subsidiaries
Schedule 1.1(a) Fifth Third Letters of Credit
Schedule 2.1 Lenders and Commitments
Schedule 6.8 Subsidiaries
Schedule 6.9 Litigation
Schedule 6.16 Environmental Matters
Schedule 8.1(a) Existing Indebtedness
Schedule 8.1(d) Existing Purchase Money Indebtedness
Schedule 8.1(e) Existing Capital Lease Obligations
Schedule 8.1(f) Outstanding Industrial Revenue Bonds
Schedule 8.1(g) Existing Indebtedness of Foreign Subsidiaries
Schedule 8.2 Existing Liens
Schedule 8.4 Existing Intercompany Loans
Exhibit A Assignment of Cash Collateral Account
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Letter of Credit
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
iv
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
THIS
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT is made and entered
into as of this 28th day of July, 2004, by and between FLOWSERVE B.V., a company
organized under the laws of the Netherlands (the "COMPANY" or "FBV"),
FLOWSERVE
CORPORATION, a
New York corporation, and the Material Subsidiaries (hereinafter
defined) listed on SCHEDULE 1 hereto (each a "GUARANTOR" and collectively, the
"GUARANTORS"), the LENDERS (hereinafter defined), and CALYON
NEW YORK BRANCH, a
duly licensed branch under the
New York Banking Law of a foreign banking
corporation organized under the laws of the Republic of France, as
Administrative Agent (hereinafter defined) for itself and the other Lenders.
WITNESSETH:
WHEREAS, the Company has requested that (a) the Issuing Lender issue
for the Company's account, a letter of credit in the amount of $89,250,000 in
order to support that certain credit arrangement between the Company and the
EIB, and (ii) the Lenders purchase participations in such letter of credit from
Issuing Lender; and
WHEREAS, the Issuing Lender is willing to issue the requested letter of
credit for the account of the Company and the Lenders are willing to purchase
participations therein under the terms and conditions hereinafter set forth,
including, without limitation, the guarantee of the reimbursement obligations of
the Company by the Guarantors;
NOW, THEREFORE, for and in consideration of the terms, agreements and
covenants set forth herein, the parties hereto do hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 DEFINED TERMS. For the purposes of this Agreement, unless the
context otherwise requires, the following terms shall have the respective
meanings assigned to them in this SECTION 1 or in the Section or recital
referred to:
"ABN" means ABN Amro Bank N.V. and any successor thereto.
"ABN STANDBY CREDIT" means bank guarantees, surety and performance
bonds, letters of credit, and similar financial accommodations issued by ABN or
any Affiliate thereof for the account of the Parent or any of its Subsidiaries
solely to support contractual obligations of the Parent and its Subsidiaries
incurred in the ordinary course of business of the Parent and its Subsidiaries.
"ACQUISITION" means the Parent's acquisition of (i) 100% of the share
capital of Invensys plc, and (ii) certain assets of certain subsidiaries of
Invensys plc.
"ADMINISTRATIVE AGENT" means Calyon
New York Branch, and its permitted
successor or successors as administrative agent for the Lenders under this
Agreement.
"AFFILIATE" of any Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, such Person, and, for purposes of this definition only, "control,"
"controlled by," and "under common control with" mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of voting securities, by contract, or otherwise).
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
1
"AGREEMENT" means this
Letter of Credit and Reimbursement Agreement, of
which this SECTION 1 forms a part, together with all amendments and
modifications thereof and supplements and attachments thereto.
"APPLICABLE LETTER OF CREDIT FEE" means, for any day, with respect to
the Letter of Credit, the applicable fee set forth below based upon the Leverage
Ratio as of the relevant date of determination:
APPLICABLE LETTER OF CREDIT FEE
PRICING LEVEL LEVERAGE RATIO LETTER OF CREDIT FEE
------------- ------------------------------- --------------------
1 > or equal to 4.00 to 1.0 2.50%
2 > or equal to 3.50 to 1.0 < 4.00 to 1.0 2.25%
3 > or equal to 3.00 to 1.0 < 3.50 to 1.0 2.00%
4 > or equal to 2.50 to 1.0 < 3.00 to 1.0 1.75%
5 < 2.50 to 1.0 1.50%
Each change in the Applicable Letter of Credit Fee resulting from a
change in the Leverage Ratio shall be effective on and after the date of
delivery to the Administrative Agent of the financial statements and
certificates required by SECTION 7.4(a)(i) or 7.4(a)(ii) and SECTION
7.4(a)(iii), respectively, indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing, (a)
at any time during which the Parent has failed to deliver the financial
statements and certificates required by SECTION 7.4(a)(i) or 7.4(A)(ii) and
SECTION 7.4(a)(iii), respectively, or (b) at any time after the occurrence and
during the continuance of an Event of Default, the Leverage Ratio shall be
deemed to be in Level 1 for purposes of determining the Applicable Letter of
Credit Fee.
"ASSET SALE" means the sale, transfer, or other disposition (by way of
merger, casualty, condemnation, or otherwise), other than an Asset Swap, by the
Parent or any of its Subsidiaries (other than the Company or the Material
Subsidiaries) to any Person other than the Parent or any other Credit Party of:
(a) any capital stock or other equity interests of any of the Parent's
Subsidiaries (other than directors' qualifying shares) or (b) any other assets
of the Parent or any of its Subsidiaries (other than (i) inventory, damaged,
obsolete or worn out assets, scrap and Permitted Investments, in each case
disposed of in the ordinary course of business, (ii) the sale of Program
Receivables pursuant to the Receivables Program, (iii) dispositions between or
among Subsidiaries of the Parent that are not Credit Parties, (iv) dispositions
from Credit Parties to Subsidiaries of the Parent that are not Credit Parties of
assets having an aggregate value not in excess of the Dollar Equivalent amount
of $25,000,000 (from and after August 8, 2000) and (v) sales, transfers, or
other dispositions (in addition to those described in CLAUSES (i) through (IV)
above) in any fiscal year of the Parent of assets having an aggregate value not
in excess of $5,000,000).
"ASSET SWAP" means any transfer of assets of the Parent or any of its
Subsidiaries (other than the Company or the Material Subsidiaries) to any Person
other than the Parent or any Affiliate of the Parent in exchange for assets of
such Person if such exchange would qualify, whether in part or in full, as a
like-kind exchange pursuant to Section 1031 of the Code. Nothing in this
definition shall require the Parent or any of its Subsidiaries to elect that
Section 1031 of the Code be applicable to any Asset Swap.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement substantially in the form of EXHIBIT B attached hereto.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
2
"ASSIGNMENT OF CASH COLLATERAL ACCOUNT" means that certain Assignment
of Cash Collateral Account substantially in the form of EXHIBIT A attached
hereto and incorporated herein by reference, executed by the Company for the
benefit of the Administrative Agent (for the benefit of the Lenders) with
respect to the Cash Collateral Account.
"ATTRIBUTABLE OBLIGATION" of any Person means, with respect to any Sale
and Lease-Back Transaction of such Person as of any particular time, the present
value at such time discounted at the rate of interest implicit in the terms of
the lease of the obligations of the lessee under such lease for net rental
payments during the remaining term of the lease (including any period for which
such lease has been extended or may, at the option of such Person, be extended).
"AVAILABLE AMOUNT" means, for each day on which the Letter of Credit
shall remain in effect, the aggregate maximum amount which is available to be
drawn under the Letter of Credit.
"BENEFICIARY" means the EIB.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or day on
which banks in
New York City are authorized or required by Law to close;
provided, however, that when used in connection with the LIBOR Rate, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in deposits in Dollars in the applicable interbank market.
"CAPITAL EXPENDITURES" means, for any period, (a) the additions to
property, plant, and equipment and other capital expenditures of the Parent and
its consolidated Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of the Parent for such period prepared in
accordance with GAAP, and (b) Capital Lease Obligations incurred by the Parent
and its consolidated Subsidiaries during such period, but excluding in each case
any such expenditure made to restore, replace, or rebuild property to the
condition of such property immediately prior to any damage, loss, destruction,
or condemnation of such property, to the extent such expenditure is made with
insurance proceeds, condemnation awards, or damage recovery proceeds relating to
any such damage, loss, destruction, or condemnation; provided, however, that (i)
amounts reinvested as contemplated in the proviso to CLAUSE (a) in the
definition of Net Cash Proceeds and (ii) the acquisition of assets pursuant to
any Permitted Acquisition shall not be deemed Capital Expenditures.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean 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 the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CAPTIVE INSURANCE COMPANY" shall have the meaning assigned to it in
SECTION 8.8 hereof.
"CASH COLLATERAL" shall have the meaning assigned to it in SECTION 3.8
hereof.
"CASH COLLATERAL ACCOUNT" means the segregated cash collateral account
of the Company at the Administrative Agent, over which the Administrative Agent
shall have sole dominion and control, established pursuant to SECTION 3.8
hereof, styled Flowserve B.V. Cash Collateral Account, which account is pledged
to the Administrative Agent (for the benefit of the Lenders) pursuant to the
Assignment of Cash Collateral Account.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
3
"CASH COLLATERAL CALL EVENT" means the occurrence and continuance of an
Event of Default.
"CASUALTY PROCEEDS" shall have the meaning assigned to such term in the
"Mortgages" defined in and delivered pursuant to the Parent Credit Agreement.
"CLOSING DATE" means the later of (a) the date of the Agreement, or (b)
the date the Company has satisfied all of the conditions precedent set forth in
SECTION 5 hereof.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor federal tax code, and any reference to any statutory provision shall
be deemed to be a reference to any successor provision or provisions.
"COMMITTED SUM" means, as the case may be, the amount stated beside
each Lender's name on the most-recently amended SCHEDULE 2.1 to this Agreement
(which amount is subject to increase, reduction, or cancellation in accordance
with this Agreement).
"COMPANY" shall have the meaning assigned to it in the preamble hereof.
"CONDEMNATION PROCEEDS" shall have the meaning assigned to such term in
the "Mortgages" defined in and delivered pursuant to the Parent Credit
Agreement.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period, plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) any extraordinary losses or extraordinary non-cash charges for such period,
(v) the amount of premium payments made by Parent or its Subsidiaries associated
with the repurchase or prepayment of the Subordinated Notes from the proceeds of
the Fall 2001 Equity Issuance and the amount of such premium payments associated
with any further repurchase or repayment of the Subordinated Notes to the extent
such repurchase or prepayment is permitted hereunder, (vi) integration and
restructuring charges in connection with the IDP Transactions and taken with
respect to periods ended on or prior to December 31, 2001, (vii) integration and
restructuring charges in connection with the Acquisition and taken with respect
to periods ended on or prior to June 30, 2004, in an aggregate amount not to
exceed $40,000,000, and (viii) restructuring and integration charges taken with
respect to periods beginning on July 1, 2003 and ended on or prior to December
31, 2004, in an aggregate amount not to exceed $15,000,000, and minus (b)
without duplication and to the extent included in determining such Consolidated
Net Income, any extraordinary gains for such period, all determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of (a)
Consolidated Interest Expense for such period, (b) the aggregate amount of
scheduled principal payments (whether or not made) during such period in respect
of long term Indebtedness of the Parent and its Subsidiaries (other than
payments made by the Parent or any of its Subsidiaries to the Parent or any
other Subsidiary of the Parent), (c) Capital Expenditures for such period, (d)
the aggregate amount of Taxes paid in cash by the Parent and its Subsidiaries
during such period, and (e) the aggregate amount of Restricted Payments made in
cash by the Parent and its Subsidiaries during such period in accordance with
SECTION 8.6 (other than SECTION 8.6(a)(II)).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, for the Parent
and its Subsidiaries on a consolidated basis, the sum, without duplication, of:
(a) all interest, premium payments (other than premium payments associated with
the repurchase or prepayment of the Subordinated Notes from
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
4
proceeds of the Fall 2001 Equity Issuance), fees, charges, and related expenses
payable by the Parent and its Subsidiaries in connection with borrowed money
(including capitalized interest and interest paid on intercompany loans) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP and payable in cash, (b) the
portion of rent payable by the Parent and its Subsidiaries with respect to such
period under capital leases that is treated as interest in accordance with GAAP
and payable in cash, and (c) all fees, discounts, premiums, expenses, or similar
amounts incurred by the Parent or any of its Subsidiaries in connection with the
Receivables Program for such period, including purchase discounts (net of any
loss reserves), purchase premiums, operating expense fees, structuring fees,
collection agent fees, unutilized purchase limit fees, and other similar fees
and expenses.
"CONSOLIDATED NET INCOME" means, for any period, the net income or loss
of the Parent and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded: (a) the
income of any Subsidiary of the Parent to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, statute, rule, or regulation applicable
to such Subsidiary, and (b) the income or loss of any person accrued prior to
the date it becomes a Subsidiary of the Parent or is merged into or consolidated
with the Parent or any Subsidiary of the Parent or the date that such Person's
assets are acquired by the Parent or any Subsidiary of the Parent.
"CREDIT EXPIRATION DATE" means May 31, 2006, the expiry date of the
Letter of Credit, or any subsequent expiry date of the Letter of Credit if
extended pursuant to SECTION 2.4.
"CREDIT PARTIES" means the Company, the Parent and each Material
Subsidiary; and "CREDIT PARTY" means any one of them.
"CURRENT ASSETS" means, at any time, the consolidated current assets
(other than cash and Permitted Investments) of the Parent and its Subsidiaries.
"CURRENT LIABILITIES" means, at any time, the consolidated current
liabilities of the Parent and its Subsidiaries at such time, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness and
(b) outstanding "Revolving Loans" and "Swingline Loans" under and as defined in
the Parent Credit Agreement.
"DEBTOR RELIEF LAWS" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights, remedies or recourse of
creditors generally, including without limitation the United States Bankruptcy
Code and all amendments thereto, as are in effect from time to time.
"DEFAULT" means any event or condition which upon notice, lapse of time
or both would constitute an Event of Default.
"DEFAULT RATE" means a per annum rate of interest equal from day to day
to the lesser of (a)(i) the LIBOR Rate, plus (ii) the Applicable Letter of
Credit Fee, plus (iii) 2% or (b) the Maximum Rate.
"DEFEASED IRBS" means the industrial revenue bonds due January 15, 2015
and issued by the City of Albuquerque, New Mexico in the aggregate principal
amount of $15,000,000.
"DETERMINING LENDERS" means for all purposes under the Loan Papers, (i)
on any date of determination occurring prior to the date upon which the Letter
of Credit Commitment has been
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
5
terminated, those Lenders who collectively hold at least 51% of the Letter of
Credit Commitment; and (ii) on any date of determination occurring on or after
the date upon which the Letter of Credit Commitment has been terminated, those
Lenders who collectively hold at least 51% of the LC Exposure.
"DOLLAR EQUIVALENT AMOUNT" means: (a) with respect to any amount of any
currency on any day, the equivalent amount in Dollars of such amount of such
currency as determined by Administrative Agent using the applicable Exchange
Rate on such day, and (b) with respect to any amount of Dollars, such amount.
"DOLLAR SUBORDINATED NOTE INDENTURE" means the indenture dated as of
August 8, 2000, between the Parent, the guarantors identified therein, and The
Bank of
New York, as trustee, as in effect on the date hereof and as hereafter
amended from time to time in accordance with the requirements thereof and of
this Agreement, pursuant to which the Dollar Subordinated Notes are issued.
"DOLLAR SUBORDINATED NOTES" means the Parent's 12-1/4% Senior
Subordinated Notes due 2010, in an initial aggregate principal amount of
$290,000,000 and an aggregate outstanding principal amount as of the date hereof
of $188,500,000, issued pursuant to the Dollar Subordinated Note Indenture and
any notes issued by the Parent in exchange for the Dollar Subordinated Notes, as
contemplated by the Dollar Subordinated Note Indenture, with substantially
identical terms as the Dollar Subordinated Notes.
"DOLLARS" and the sign "$" mean the lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries of the Parent
incorporated or organized under the laws of the United States of America, any
state thereof or the District of Columbia.
"DRAWING" means a demand for payment under the Letter of Credit in
accordance with its terms.
"EIB" means the European Investment Bank, having its seat in
Luxembourg.
"EIB LOAN" means the loan from the EIB to the Company and the Parent,
as evidenced by that certain Finance Contract dated as of April 14, 2004,
between the Company, the Parent, and the EIB, as amended by letter agreement
dated June 30, 2004, and as it may otherwise be amended or supplemented from
time to time.
"ELIGIBLE ASSIGNEE" means: (a) a Lender; (b) an Affiliate of a Lender
with a senior issuer rating from ▇▇▇▇▇'▇ and S&P equal to or greater than the
rating of the assigning Lender; and (c) any other Person approved by the
Administrative Agent and Issuing Lender and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with SECTION 11.12(b), the Company (such approval not to be unreasonably
withheld by the Administrative Agent, Issuing Lender and the Company); provided,
however, that neither the Company nor any Affiliate of the Company shall qualify
as an Eligible Assignee.
"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 LAWS" means all applicable federal, state, local, and
foreign laws (including common law), treaties, regulations, rules, ordinances,
codes, decrees, judgments and orders (including consent orders), in each case,
relating to protection of the environment, natural resources, human health and
safety as related to Hazardous Materials or the presence, Release of, or
exposure to, Hazardous Materials, or the generation, manufacture, processing,
distribution, use, treatment, storage, transport, recycling, or handling of, or
the arrangement for such activities with respect to, Hazardous Materials.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
6
"ENVIRONMENTAL LIABILITY" means liabilities, obligations, claims,
actions, suits, judgments, or orders under or relating to any Environmental Law
for any damages, injunctive relief, losses, fines, penalties, fees, expenses
(including fees and expenses of attorneys and consultants) or costs, including
those arising from or relating to: (a) any action to address the on- or off-site
presence, Release of, or exposure to, Hazardous Materials; (b) permitting and
licensing, administrative oversight, insurance premiums, and financial assurance
requirements; (c) any personal injury (including death), property damage (real
or personal), or natural resource damage; and (d) the compliance or
non-compliance with any Environmental Law.
"EQUITY ISSUANCE" means any issuance or sale by the Parent or any of
its Subsidiaries of any capital stock or other equity interests of the Parent or
any Subsidiary of the Parent, as applicable, or any obligations convertible into
or exchangeable for, or giving any Person a right, option, or warrant to acquire
such capital stock or equity interests or such convertible or exchangeable
obligations, except in each case for (a) any issuance or sale to the Parent or
any of its Subsidiaries, (b) any issuance of directors' qualifying shares, and
(c) sales or issuances of common stock of the Parent to management or employees
of the Parent or any of its Subsidiaries under any employee stock option or
stock purchase plan or employee benefit plan in existence from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with any Credit Party, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" means: (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Credit Party or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any Plan or the withdrawal or partial
withdrawal of any Credit Party or any of its ERISA Affiliates from any
Multiemployer Plan; (e) the receipt by any Credit Party or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (g) the receipt by any Credit Party or any of its ERISA Affiliates of
any notice, or the receipt by any Multiemployer Plan from any Credit Party or
any of its ERISA Affiliates of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; (h) the occurrence of a "prohibited transaction" (within the meaning
of Section 4975 of the Code) with respect to which any Credit Party incurs
liability; (i) any other event or condition with respect to a Plan or
Multiemployer Plan that could reasonably be expected to result in liability of
any Credit Party; or (j) any Foreign Benefit Event.
"EURO" and the sign "E" mean the single currency of the European
Union as constituted by the Treaty on European Union and as referred to in the
EMU Legislation.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
7
"EURO SUBORDINATED NOTE INDENTURE" means the indenture dated as of
August 8, 2000, between FFBV, the Parent, the other guarantors identified
therein, and The Bank of
New York, as trustee, as in effect on the date hereof
and as hereafter amended from time to time in accordance with the requirements
thereof and of this Agreement, pursuant to which the Euro Subordinated Notes are
issued.
"EURO SUBORDINATED NOTES" means FFBV's 12-1/4% Senior Subordinated
Notes due 2010, in an initial aggregate principal amount of E100,000,000 and an
aggregate outstanding principal amount as of the date hereof of E65,000,000,
issued pursuant to the Euro Subordinated Note Indenture and any notes issued by
FFBV in exchange for the Euro Subordinated Notes, as contemplated by the Euro
Subordinated Note Indenture, with substantially identical terms as the Euro
Subordinated Notes.
"EVENT OF DEFAULT" shall have the meaning assigned to it in SECTION 9.1
hereof.
"EXCESS CASH FLOW" means, for any fiscal year of the Parent, (a) the
sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and
(ii) reductions to noncash working capital of the Parent and it Subsidiaries for
such fiscal year (i.e., the decrease, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year), other than any
such reduction attributable solely to the establishment during such fiscal year
of the Receivables Program, less (b) the sum, without duplication, of (i) the
amount of any Taxes payable in cash by the Parent and its Subsidiaries with
respect to such fiscal year, (ii) Consolidated Interest Expense for such fiscal
year, (iii) Capital Expenditures made in cash in accordance with SECTION 8.10
during such fiscal year, except to the extent financed with the proceeds of
Indebtedness, Equity Issuances, Casualty Proceeds, Condemnation Proceeds, or
other proceeds that would not be included in Consolidated EBITDA, (iv) permanent
repayments of Indebtedness (other than repurchases or prepayments of the
Subordinated Notes out of proceeds of the Fall 2001 Equity Issuance) made by the
Parent and its Subsidiaries during such fiscal year, but only to the extent that
such prepayments by their terms cannot be reborrowed or redrawn and do not occur
in connection with a refinancing of all or any portion of such Indebtedness, (v)
for the fiscal years ending December 31, 2002, December 31, 2003, and December
31, 2004, cash restructuring expenses and cash integration expenses, to the
extent added to Consolidated Net Income in determining Consolidated EBITDA for
such year, (vi) for the fiscal year ending December 31, 2002, capitalized cash
restructuring expenses and cash integration expenses in an amount not to exceed
$10,000,000, (vii) the amount of extraordinary cash losses for such period to
the extent added to Consolidated Net Income in determining Consolidated EBITDA
for such year, and (viii) additions to noncash working capital for such fiscal
year (i.e., the increase, if any, in Current Assets minus Current Liabilities
from the beginning to the end of such fiscal year); provided that to the extent
otherwise included therein, the gains and losses attributable to Asset Sales
shall be excluded from the calculation of Excess Cash Flow.
"EXCHANGE RATE" means with respect to any currency on any date of
determination, the spot rate at which such currency may be exchanged into
Dollars on such date determined by reference to such publicly available service
for displaying exchange rates for such date as may be agreed upon from time to
time by the Administrative Agent and the Company or, in the absence of such
agreement, 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 currency are then being conducted, at or about
10:00 a.m., local time, on such date for the purchase of Dollars with such
currency, for delivery two (2) Business Days later; provided, however, that if,
at the time of any such determination, no such spot rate can reasonably be
quoted, the Administrative Agent may use any method (including obtaining quotes
from two (2) or more market makers for such currency) as it reasonably deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error.
"FALL 2001 EQUITY ISSUANCE" means the public offering of the Parent's
common stock made by the Parent on November 21, 2001 resulting in gross cash
proceeds of $154,890,850.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
8
"FBV" shall have the meaning assigned to it in the preamble hereof.
"FBV CAPITAL EXPENDITURES" means, for any period, (a) the additions to
property, plant, and equipment and other capital expenditures of the Company and
its consolidated Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of the Company for such period prepared in
accordance with GAAP, and (b) Capital Lease Obligations incurred by the Company
and its consolidated Subsidiaries during such period, but excluding in each case
any such expenditure made to restore, replace, or rebuild property to the
condition of such property immediately prior to any damage, loss, destruction,
or condemnation of such property, to the extent such expenditure is made with
insurance proceeds, condemnation awards, or damage recovery proceeds relating to
any such damage, loss, destruction, or condemnation.
"FBV EBITDA" means, for any period, FBV Net Income for such period,
plus (a) without duplication and to the extent deducted in determining such FBV
Net Income, the sum of (i) FBV Interest Expense for such period; (ii)
consolidated income tax expense for such period; (iii) all amounts attributable
to depreciation and amortization for such period; (iv) any extraordinary losses
for such period; (v) any expenses resulting from earn-out payments, royalties,
management fees, redistributions paid to any of the Parent's Subsidiaries that
are not consolidated with the Company's consolidated financial statements, and
minus (b) without duplication and to the extent included in determining such FBV
Net Income, any extraordinary gains for such period, all determined on a
consolidated basis in accordance with GAAP.
"FBV FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of
(a) FBV EBITDA minus FBV Capital Expenditures for such period to (b) FBV Fixed
Charges for such period.
"FBV FIXED CHARGES" means, for any period, the sum of (a) FBV Interest
Expense for such period, (b) the aggregate amount of scheduled principal
payments (whether or not made) during such period in respect of long term
Indebtedness of the Company and its Subsidiaries (other than payments made by
the Company or any of its Subsidiaries to the Company or any other Subsidiary of
the Company), (c) the aggregate amount of Taxes paid in cash by the Company and
its Subsidiaries during such period, and (d) the aggregate amount of
distributions paid in cash by the Company and its Subsidiaries for the purposes
of dividends, earn-out payments, loans, royalties, management fees,
redistributions, principal payments of intercompany loan payables, and other
similar items (reasonably determined by the Administrative Agent) paid by
Company to any Subsidiary of the Parent that is not consolidated with the
Company.
"FBV INTEREST EXPENSE" means for any period, for the Company and its
Subsidiaries on a consolidated basis, the sum, without duplication, of: (a) all
interest, premium payments, fees, charges, and related expenses payable by the
Company and its Subsidiaries in connection with borrowed money (including
capitalized interest and interest paid on intercompany loans) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP and payable in cash, and (b) the portion of
rent payable by the Company and its Subsidiaries with respect to such period
under capital leases that is treated as interest in accordance with GAAP and
payable in cash.
"FBV LEVERAGE RATIO" means, on any date, the ratio of the total
consolidated Indebtedness of the Company and its Subsidiaries on such date
(excluding Indebtedness under SECTION 8.1(c)) to FBV EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date.
"FBV NET INCOME" means, for any period, the net income or loss of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
9
"FFBV" means Flowserve Finance B.V., a Netherlands corporation
(besloten vennootschap) and a wholly owned Subsidiary of the Parent.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined (which
determination shall be conclusive and binding, absent manifest error) by the
Administrative Agent to be equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of
New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to the Administrative Agent (in its
individual capacity) on such day on such transactions as determined by the
Administrative Agent (which determination shall be conclusive and binding,
absent manifest error).
"FIFTH THIRD LETTER OF CREDIT" means each letter of credit previously
issued for the account of the Parent or any of its Subsidiaries that: (a) is
outstanding on the date hereof, and (b) is listed on SCHEDULE 1.1(a).
"FINANCIAL OFFICER" of any Person means the chief financial officer,
principal accounting officer, treasurer, or controller of such Person.
"FINSUB" means a bankruptcy-remote, wholly owned Subsidiary of the
Parent, organized solely for the purpose of engaging in the Receivables Program.
"FOREIGN BENEFIT EVENT" means, with respect to any Foreign Pension
Plan, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable Law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure to make
the required contributions or payments, under any applicable Law, on or before
the due date for such contributions or payments, (c) the receipt of a notice by
a Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension
Plan and (d) the incurrence of any liability in excess of the Dollar Equivalent
Amount of $5,000,000 by any Credit Party under applicable Law on account of the
complete or partial termination of such Foreign Pension Plan or the complete or
partial withdrawal of any participating employer therein, or (e) the occurrence
of any transaction that is prohibited under any applicable Law that results in
the incurrence of any liability by any Credit Party, or the imposition on any
Credit Party of any fine, excise tax, or penalty resulting from any
noncompliance with any applicable Law, in each case in excess of the Dollar
Equivalent Amount of $5,000,000.
"FOREIGN PENSION PLAN" shall mean any benefit plan which under
applicable Law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle maintained exclusively by a Governmental
Authority.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Parent that is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
10
"GOVERNMENTAL AUTHORITY" means any: (a) local, state, municipal, or
federal judicial, executive, or legislative instrumentality; (b) private
arbitration board or panel; or (c) central bank.
"GOVERNMENTAL REQUIREMENT" means all judgments, orders, writs,
injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules,
franchises, permits, certificates, licenses, authorization and the like and any
other requirements of any government or any commission, board, court, agency,
instrumentally or political subdivision thereof.
"GUARANTORS" means the Parent and each Material Subsidiary, and
"GUARANTOR" means any one of them.
"GUARANTY" means the Guaranty of each Guarantor made under SECTION 4
hereof.
"HAZARDOUS MATERIALS" means: (a) any petroleum products or byproducts
and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, chlorofluorocarbons, and all other
ozone-depleting substances, in each case regulated by any Environmental Law, and
(b) any chemical, material, substance, or waste that is prohibited, limited, or
regulated by or pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement, or
other interest or currency exchange rate or commodity price hedging arrangement.
"IDP" means Ingersoll-Dresser Pump Company, a Delaware general
partnership.
"IDP PURCHASE AGREEMENT" means the Purchase Agreement dated as of
February 9, 2000, as amended by Amendment No. 1 dated as of July 14, 2000 among
the Parent, Flowserve RED Corporation, IDP Acquisition, LLC, and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Company.
"IDP TRANSACTIONS" means the acquisition of the partnership interests
in IDP pursuant to the IDP Purchase Agreement on or about August 8, 2000.
"INDEBTEDNESS" of any Person means, without duplication: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes, or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all Indebtedness 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, (g) all guarantees by such person of Indebtedness of third
parties, (h) all Capital Lease Obligations of such Person, (i) all obligations
of such person as an account party in respect of letters of credit, and (j) all
obligations of such Person in respect of bankers' acceptances. The Indebtedness
of any Person shall include the Indebtedness of any partnership in which such
Person is a general partner. In addition, for purposes of this Agreement, the
Indebtedness of Finsub shall also include all consideration provided to Finsub
by the purchaser of Program Receivables less any amounts collected with respect
to such Program Receivables. Notwithstanding the foregoing, so long as the
Defeased IRBs are owned by the Parent or a wholly owned subsidiary, neither the
Defeased IRBs nor any guarantee thereof shall constitute Indebtedness hereunder.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
11
"INVESTMENT GRADE RATINGS" means that the credit rating of the Parent's
senior unsecured, non-credit-enhanced long-term debt is (a) BBB- or higher, as
determined by S&P, and (b) Baa3 or higher, as determined by ▇▇▇▇▇'▇.
"ISSUANCE FEE" shall have the meaning assigned to it in SECTION 3.2(b)
hereof.
"ISSUING LENDER" means Calyon
New York Branch or such other Lender, if
any, that becomes the issuer of the Letter of Credit under this Agreement.
"LAWS" means all applicable statutes, laws, treaties, ordinances,
tariff requirements, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, or interpretations of any Governmental Authority.
"LC EXPOSURE" means, at any time and without duplication, under this
Agreement the sum of (a) the aggregate undrawn portion of the Available Amount
plus (b) the aggregate unpaid reimbursement obligations of the Company in
respect of Drawings.
"LENDERS" means, on any date of determination, the financial
institutions named on SCHEDULE 2.1 (as the same may be amended from time to time
by the Administrative Agent to reflect the assignments made in accordance with
SECTION 11.12(c) of this Agreement), and subject to the terms and conditions of
this Agreement, their respective successors and assigns, but not any Participant
who is not otherwise a party to this Agreement.
"LETTER OF CREDIT" means the irrevocable standby letter of credit
issued by the Issuing Lender (a) in an amount of up to $89,250,000, (b)
supporting the EIB Loan, and (c) in the form of EXHIBIT C attached hereto.
"LETTER OF CREDIT COMMITMENT" shall have the meaning assigned to it in
SECTION 2.1 hereof.
"LETTER OF CREDIT FEE" shall have the meaning assigned to it in SECTION
3.2(c) hereof.
"LEVERAGE RATIO" means, on any date for the Parent, the ratio of Total
Debt on such date to Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date; provided, however,
if at any time the Leverage Ratio is being determined, the Parent or any of its
Subsidiaries shall have completed a Permitted Acquisition or an Asset Sale since
the beginning of the relevant four fiscal quarter period, the Leverage Ratio
shall be computed on a pro forma basis (in accordance with the last sentence of
SECTION 8.4(g)) as if such Permitted Acquisition or Asset Sale and any related
incurrence of Indebtedness, had occurred at the beginning of such period.
"LIBOR RATE" means, for any day, a fluctuating rate of interest equal
to (a) the offered quotation which appears on the page of the Telerate Screen
which displays an average rate of the British Bankers' Association for the
Dollar for a three-month period at or about 10:00 A.M. (London time) on such
date, or (b) if such page or such service shall cease to be available, such
other page or such other service for the purpose of displaying an average rate
of the British Bankers' Association as the Administrative Agent, after
consultation with the Company, shall reasonably select; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the "LIBOR Rate," for any day, shall be a
fluctuating rate of interest determined by the Administrative Agent to be the
rate at which deposits in Dollars are offered for a three-month period to major
banks in the European interbank market by the Administrative Agent at
approximately 11:00 a.m. (London time) on such date.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
12
"LIEN" means a mortgage, pledge, lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement to secure
or provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement).
"LOAN PAPERS" means: (a) this Agreement, certificates delivered
pursuant to this Agreement, and Exhibits and Schedules hereto; (b) all
agreements, documents, or instruments in favor of the Administrative Agent,
Issuing Lender, or Lenders (or the Administrative Agent on behalf of Lenders)
delivered pursuant to this Agreement or otherwise delivered in connection with
all or any part of the Obligation; (c) the Letter of Credit; and (d) all
renewals, extensions, or restatements of, or amendments or supplements to, any
of the foregoing.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE CHANGE" means a material adverse change in, or a
material adverse effect upon, the financial condition of the Parent and its
Subsidiaries, taken as a whole.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than Indebtedness
under this Agreement), or obligations in respect of one or more Hedging
Agreements, of any Credit Party in an aggregate principal amount exceeding the
Dollar Equivalent Amount of $10,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of any Credit Party in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Credit Party would be
required to pay if such Hedging Agreement were terminated at such time.
"MATERIAL SUBSIDIARY" means each of the Persons listed on SCHEDULE 1
hereto.
"MAXIMUM AMOUNT and MAXIMUM RATE" respectively mean, for each Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
which, under applicable Law, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means: (a) with respect to any Asset Sale, the cash
proceeds (including cash proceeds subsequently received (as and when received)
in respect of noncash consideration initially received), net of (i) selling
expenses (including broker's fees or commissions, legal fees, transfer and
similar taxes, and the Parent's good faith estimate of income taxes paid or
payable in connection with such sale), (ii) amounts provided as a reserve, in
accordance with GAAP, against any liabilities under any indemnification
obligations or purchase price adjustment associated with such Asset Sale
(provided that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds), and (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by the asset sold in such Asset
Sale and which is required to be repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such asset); provided, however, that if
(x) the Parent shall deliver a certificate of a Financial Officer to the
Administrative Agent at or prior to the time of receipt thereof setting forth
the Parent's intent to reinvest such proceeds in productive assets of a kind
then used or usable in the business of the Parent and its Subsidiaries within
270 days of receipt of such proceeds and (y) no Default or Event of Default
shall have occurred and shall be continuing at the time of such certificate or
at the proposed
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
13
time of the application of such proceeds, such proceeds shall not constitute Net
Cash Proceeds except to the extent not so used or contractually committed to be
used at the end of such 270-day period, at which time such proceeds shall be
deemed to be Net Cash Proceeds; and (b) with respect to any issuance or
disposition of Indebtedness or any Equity Issuance or the initial sale of
Program Receivables pursuant to the Receivables Program (or any subsequent
increase thereto permitted hereunder), the cash proceeds thereof, net of all
taxes and fees, commissions, costs and other expenses incurred in connection
therewith. Any "boot" or other non-like-kind assets received in connection with
an Asset Swap shall, to the extent received in cash or at the time converted
into cash, be considered cash proceeds from the sale of an asset.
"NEW SUBORDINATED DEBT" means Indebtedness having the following
characteristics: (i) the obligor shall be the Parent, (ii) such Indebtedness
shall be unsecured, (iii) such Indebtedness shall be subordinated in right of
payment to the Obligations in a manner reasonably acceptable to the
Administrative Agent, (iv) such Indebtedness shall not have any scheduled
payment of principal, scheduled prepayment, scheduled mandatory redemption, or
sinking fund payment prior to December 31, 2009, (v) such Indebtedness shall not
contain any provision prohibiting the creation or assumption of any Lien on any
of the properties or assets of the Parent or its Subsidiaries, whether then
owned or thereafter acquired, to secure payment of the Obligations or any
agreement renewing, refinancing, or extending the Obligations or this Agreement,
(vi) the Parent shall be in compliance with SECTIONS 8.11, 8.12, and 8.13(a) on
a pro forma basis after giving effect to the incurrence of such Indebtedness,
and (vii) other terms and conditions shall be no less favorable to the Parent or
its Subsidiaries or the Lenders in any material respect than the terms and
conditions applicable to the Subordinated Notes.
"OBLIGATION" means all present and future indebtedness, fees,
commissions, obligations, and liabilities of any Credit Party, and all renewals
and extensions thereof, or any part thereof, now or hereafter owed to the
Administrative Agent, Issuing Lender, or any Lender, arising pursuant to this
Agreement, the Letter of Credit or the Assignment of Cash Collateral Account,
and including, without limitation, any and all interest accruing thereon, and
attorneys' fees incurred in the enforcement or collection thereof.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit Agreement dated
as of August 8, 2000, among the Parent, Bank of America, N.A., as administrative
agent and collateral agent, and certain other agents and lenders party thereto,
as amended, restated, modified, or supplemented from time to time.
"ORIGINAL CURRENCY" shall have the meaning assigned to it in SECTION
11.14(a) hereof.
"OTHER CURRENCY" shall have the meaning assigned to it in SECTION
11.14(a) hereof.
"OTHER TAXES" shall have the meaning assigned to it in SECTION 3.6(c)
hereof.
"PARENT" means
Flowserve Corporation, a New York corporation.
"PARENT CREDIT AGREEMENT" means that certain First Amended and Restated
Credit Agreement dated as of May 2, 2002, by and among the Parent, Bank of
America, N.A., as administrative agent, and the other lenders and agents party
thereto, as amended, restated, modified, or supplemented from time to time.
"PARTICIPANT" shall have the meaning assigned to it in SECTION 11.12(e)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PERMITTED ACQUISITION" shall have the meaning assigned to it in
SECTION 8.4(g) hereof.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
14
"PERMITTED INVESTMENTs" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, one of the
three highest credit ratings obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances, and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any state
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in CLAUSE (a) above and entered into with
a financial institution satisfying the criteria of CLAUSE (c) above;
(e) investments in "money market funds" within the meaning of Rule 2a-7
of the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in CLAUSES (a) through
(d) above; and
(f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
"PERSON" means an individual, sole proprietorship, partnership, joint
venture, association, trust, estate, business trust, corporation, not-for-profit
corporation, sovereign government or agency, instrumentality, or political
subdivision thereof, or any similar entity or organization.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which any Credit
Party or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PRESCRIBED FORMS" means such duly executed form(s) or statement(s),
and in such number of copies, which may, from time to time, be prescribed by Law
and which, pursuant to applicable provisions of: (a) an income tax treaty
between the United States and the country of residence of the Administrative
Agent or a Lender providing the form(s) or statement(s); (b) the Code; or (c)
any applicable rule or regulation under the Code, permit the Company to make
payments hereunder for the account of the Administrative Agent or such Lender
free of deduction or withholding of income or similar taxes.
"PROGRAM RECEIVABLES" means all trade receivables and related contract
rights originated and owned by the Parent or any of its Subsidiaries and sold
pursuant to the Receivables Program.
"PROJECTIONS" shall have the meaning assigned thereto in SECTION
5.6(a)(i) hereof.
"PRO RATA or PRO RATA PART" means on any date of determination for any
Lender: (a) at any time prior to the termination of the Letter of Credit
Commitment, the proportion that such Lender's Committed
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
15
Sum bears to the Letter of Credit Commitment, or (b) at any time on or after the
termination of the Letter of Credit Commitment, such Lender's proportionate part
(whether held directly or through a participation therein and determined after
giving effect to any participations) of the LC Exposure.
"RECEIVABLES PROGRAM" means, collectively, (a) the sale of, or transfer
of interests in, Program Receivables to Finsub in a "true sale" transaction, and
(b) the sale of, or transfer of interests in, such Program Receivables by Finsub
to persons that are not Affiliates of the Parent; provided that all governing
terms and conditions (including any terms or conditions providing for recourse
to the Parent or any of its Subsidiaries (other than Finsub)) of the Receivables
Program shall be subject to the prior written approval of the Administrative
Agent, which approval shall not be unreasonably withheld.
"RECEIVABLES PROGRAM DOCUMENTATION" means all written agreements that
may from time to time be entered into by the Parent and/or any of its
Subsidiaries in connection with the Receivables Program, as such agreements may
be amended, supplemented, or otherwise modified from time to time in accordance
with the provisions thereof and hereof.
"REGULATION T" means Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"RELEASE" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching, or
migration into or through the environment or within or upon any building,
structure, facility, or fixture.
"REPRESENTATIVES" means representatives, officers, directors,
employees, attorneys, and agents.
"RESPONSIBLE OFFICER" means: (a)(i) in the case of a corporation or
trust where such Person has appointed officers, its president or any vice
president, and, in any case where two Responsible Officers are acting on behalf
of such Person, the second such Responsible Officer may be a secretary or
assistant secretary, or (ii) in the case of a corporation or trust where such
Person has not appointed officers, a director or managing director; (b) in the
case of a limited partnership, the Responsible Officer of the general partner,
acting on behalf of such general partner in its capacity as general partner; and
(c) in the case of a limited liability company, the Responsible Officer of the
managing member, acting on behalf of such managing member in its capacity as
managing member.
"RESTRICTED PAYMENT" shall have the meaning assigned to such term in
Section 8.6(a).
"RIGHTS" means rights, remedies, powers, privileges, and benefits.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., a New York corporation, or any successor thereto.
"SALE AND LEASE-BACK TRANSACTION" of any Person means any arrangement
entered into by such Person or any Subsidiary of such Person, directly or
indirectly, whereby such Person or any Subsidiary of such Person shall sell or
transfer any property, whether now owned or hereafter acquired, and whereby such
Person or any Subsidiary of such Person shall then or thereafter rent or lease
as lessee such property
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
16
or any part thereof or other property which such Person or any Subsidiary of
such Person intends to use for substantially the same purpose or purposes as the
property sold or transferred.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, or other entity of which more than 50% of the outstanding capital stock
or other equity interests having ordinary voting power (irrespective of whether
or not at the time capital stock or other equity interest of any other class or
classes of such corporation, partnership, joint venture or other entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person.
"SUBORDINATED NOTES" means the Dollar Subordinated Notes and the Euro
Subordinated Notes.
"TAXES" shall have the meaning assigned thereto in SECTION 3.6(a)
hereof.
"TOTAL DEBT" means, at any time, the total consolidated Indebtedness of
the Parent and its Subsidiaries at such time (excluding (a) Indebtedness under
SECTION 8.1(k); (b) Indebtedness under SECTION 8.1(o); and (c) Indebtedness of
the type described in CLAUSE (i) of the definition of such term and under
SECTION 8.1(l), except in each case to the extent of any unreimbursed drawings
or payments thereunder.
"U.C.P." means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise
specified, in the Loan Papers: (a) where appropriate, the singular includes the
plural and vice versa, and words of any gender include each other gender, (b)
heading and caption references may not be construed in interpreting provisions,
(c) monetary references are to currency of the United States of America, (d)
section, paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Paper in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Papers, (h) references to any Person include that Person's heirs, personal
representatives, successors, trustees, receivers, and permitted assigns, (i)
references to any Law include every amendment or supplement to it, rule and
regulation adopted under it, and successor or replacement for it, and (j)
references to any Loan Paper or other document include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and policies consistent with
those applied in the preparation of the consolidated financial statements
referred to herein.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
17
SECTION 2 LETTER OF CREDIT FACILITY
2.1 LETTER OF CREDIT COMMITMENT.
(a) The Issuing Lender irrevocably agrees, subject to and in
accordance with the terms and conditions contained in this Agreement,
to issue the Letter of Credit in an aggregate amount not to exceed at
any time outstanding $89,250,000 (the "LETTER OF CREDIT COMMITMENT").
The rules of the U.C.P. shall apply to the Letter of Credit.
(b) Immediately upon the issuance by Issuing Lender of the
Letter of Credit, Issuing Lender shall be deemed to have sold and
transferred to each other Lender, and each other such Lender shall be
deemed irrevocably and unconditionally to have purchased and received
from Issuing Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Pro Rata
Part in the Letter of Credit and all Rights of Issuing Lender in
respect thereof (other than Rights to receive certain fees provided for
in SECTION 3.2(c)). Upon issuance, renewal, amendments or extension of
the Letter of Credit, Issuing Lender shall provide copies thereof to
the Administrative Agent and each other Lender.
(c) In order to induce Issuing Lender to issue and maintain
the Letter of Credit and Lenders to participate therein, the Company
agrees to pay or reimburse the Administrative Agent for the benefit of
the Issuing Lender and the other Lenders (i) on the date on which any
draft is paid, the amount of any draft paid by Issuing Lender and (ii)
no later than three (3) days after demand therefor, the amount of any
fees (in addition to the fees described in SECTION 3) Issuing Lender
customarily charges to a Person similarly situated in the ordinary
course of its business for amending letters of credit, for honoring
drafts, and taking similar action in connection with letters of credit.
The Company's obligations under this SECTION 2.1(c) shall be absolute
and unconditional under any and all circumstances and shall be made in
accordance with the terms and conditions of this Agreement, including,
without limitation, any of the following circumstances: (A) the
existence of any claim, setoff, defense, or other Right which the
Company may have at any time against the beneficiary named in the
Letter of Credit, any transferee of the Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent,
Issuing Lender, any Lender, or any other Person, whether in connection
with this Agreement, the Letter of Credit, the transactions
contemplated herein, or any unrelated transactions (including any
underlying transaction between the Company and the beneficiary named in
the Letter of Credit); or (B) any draft, certificate, or any other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or any statement therein being untrue or
inaccurate in any respect. To the extent any funding of a draft has
been made by Lenders pursuant to SECTION 2.1(e), the Administrative
Agent shall promptly distribute any such payments received from the
Company with respect to such draft to the Issuing Lender and all other
Lenders funding such draft according to their Pro Rata Part. Interest
on any amounts remaining unpaid by the Company under this clause at any
time from and after the date such amounts become payable until paid in
full shall be payable by the Company to the Administrative Agent at the
Default Rate. In the event any payment by the Company received by the
Administrative Agent with respect to the Letter of Credit and
distributed to the Issuing Lender and the other Lenders on account of
their participations therein is thereafter set aside, avoided, or
recovered from the Administrative Agent in connection with any
receivership, liquidation, or bankruptcy proceeding, each Lender which
received such distribution shall, upon demand by the Administrative
Agent, contribute such Lender's ratable portion of the amount set
aside, avoided, or recovered, together with interest at the rate
required to be paid by the Administrative Agent upon the amount
required to be repaid by it.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
18
(d) If any draft shall be presented for payment under the
Letter of Credit, the Issuing Lender shall promptly notify the
Administrative Agent thereof and Administrative Agent shall promptly
notify the Company of the date and amount of such draft; provided that
failure to give any such notice shall not affect the obligations of the
Company hereunder. Issuing Lender shall make payment upon presentment
of a draft for honor unless it appears that presentment on its face
does not comply with the terms of the Letter of Credit, regardless of
whether (i) any default or potential default under any other agreement
has occurred and (ii) the obligations under any other agreement have
been performed by the beneficiary or any other Person (and Issuing
Lender shall not be liable for any obligation of any Person
thereunder). The Administrative Agent, Issuing Lender and Lenders shall
not be responsible for, and the Company's reimbursement obligations for
honored drafts shall not be affected by, any matter or event whatsoever
(including, without limitation, the validity or genuineness of
documents or of any endorsements thereof, even if such documents should
in fact prove to be in any respect invalid, fraudulent, or forged), or
any dispute among the Company, the beneficiary of the Letter of Credit,
or any other Person to whom the Letter of Credit may be transferred, or
any claims whatsoever of the Company against any beneficiary of the
Letter of Credit or any such transferee; provided that, nothing in this
Agreement shall constitute a waiver of the Company's Rights to assert
any claim based upon the gross negligence or willful misconduct of the
Administrative Agent, Issuing Lender or any Lender.
(e) If the Company fails to reimburse the Administrative Agent
as provided in SECTION 2.1(c) within 24 hours of the demand therefor by
the Administrative Agent, the Administrative Agent shall promptly
notify each Lender of such failure, of the date and amount of the draft
paid, and of such Lender's Pro Rata Part thereof. Each Lender shall
promptly and unconditionally make available to the Administrative Agent
in immediately available funds such Lender's Pro Rata Part of such
unpaid reimbursement obligation, which funds shall be paid to
Administrative Agent on or before the close of business on the Business
Day on which such notice was given by the Administrative Agent (if
given prior to 1:00 p.m., New York time) or on the next succeeding
Business Day (if notice was given after 1:00 p.m., New York time). All
such amounts payable by any such Lender shall include interest thereon
accruing at the Federal Funds Rate from the day the applicable draft is
paid by Issuing Lender to (but not including) the date such amount is
paid by such Lender to the Administrative Agent. The obligations of
Lenders to make payments to the Administrative Agent with respect to
the Letter of Credit shall be irrevocable and not subject to any
qualification or exception whatsoever (other than the gross negligence
or willful misconduct of the Administrative Agent or Issuing Lender)
and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any
of the following circumstances: (i) any lack of validity or
enforceability of this Agreement or any of the Loan Papers; (ii) the
existence of any claim, setoff, defense, or other Right which the
Company may have at any time against the beneficiary named in the
Letter of Credit, any transferee of the Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent,
Issuing Lender, any Lender, or any other Person, whether in connection
with this Agreement, the Letter of Credit, the transactions
contemplated herein, or any unrelated transactions (including any
underlying transaction between the Company and the beneficiary named in
the Letter of Credit); (iii) any draft, certificate, or any other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; and (iv) the
occurrence of any Event of Default.
(f) The Company acknowledges that the Letter of Credit will be
deemed issued upon delivery to its beneficiary or the Company. If the
Company requests the Letter of Credit be delivered to the Company
rather than the beneficiary, and the Company subsequently cancels the
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
19
Letter of Credit, the Company agrees to return it to Issuing Lender
together with the Company's written certification that it has never
been delivered to such beneficiary. If the Letter of Credit is
delivered to its beneficiary pursuant to the Company's instructions, no
cancellation thereof by the Company shall be effective without written
consent of such beneficiary to the Administrative Agent and Issuing
Lender and return of the Letter of Credit to Issuing Lender.
(g) Issuing Lender agrees with each Lender that it will
exercise and give the same care and attention to the Letter of Credit
as it gives to its other letters of credit, and that it shall have no
liability to any other Lender with respect to the Letter of Credit
(other than liability arising from the gross negligence or willful
misconduct of Issuing Lender). Each Lender, Administrative Agent and
the Company agree that, in paying any draw under the Letter of Credit,
Issuing Lender shall not have any responsibility to obtain any document
(other than any documents required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person delivering any such document.
The Administrative Agent, Issuing Lender, Lenders, and their respective
Representatives shall not be liable to any other Lender or Company for
the use which may be made of the Letter of Credit or for any acts or
omissions of any beneficiary thereof in connection therewith. Any
action, inaction, error, delay, or omission taken or suffered by the
Administrative Agent, Issuing Lender or any of their respective
Representatives under or in connection with the Letter of Credit, the
draws, drafts, or documents relating thereto, or the transmission,
dispatch, or delivery of any message or advice related thereto, if in
good faith and in conformity with applicable Laws and in accordance
with the standards of care specified in the U.C.P., shall be binding
upon the Company and Lenders and shall not place the Administrative
Agent, Issuing Lender or any of their respective Representatives under
any resulting liability to the Company or any Lender. Any action taken
or omitted to be taken by the Administrative Agent or Issuing Lender
under or in connection with the Letter of Credit if taken or omitted in
the absence of gross negligence or willful misconduct shall not create
for the Administrative Agent or Issuing Lender any resulting liability
to any Lender or the Company. Notwithstanding any other limitations of
liability provided in this SECTION 2.1, neither the Administrative
Agent nor Issuing Lender shall be absolved from liability arising from
its gross negligence or willful misconduct in connection with the
Letter of Credit.
(h) Although referenced in the Letter of Credit, terms of any
particular agreement or other obligation to the beneficiary are not in
any manner incorporated herein. The fees and other amounts payable with
respect to the Letter of Credit shall be as provided in this Agreement,
and drafts under the Letter of Credit shall be deemed part of the
Obligation.
2.2 REQUEST FOR ISSUANCE OF LETTER OF CREDIT. The Company hereby
applies to the Issuing Lender and requests the Issuing Lender to issue, execute
and deliver for its account on the Closing Date, the Letter of Credit in an
amount of up to the Letter of Credit Commitment. Subject to the terms and
conditions of this Agreement, the Issuing Lender hereby agrees to issue the
Letter of Credit.
2.3 AMENDMENT PROCEDURES. The Company may, from time to time, on or
after the Closing Date and the initial issuance of the Letter of Credit, upon
not less than ten (10) Business Days prior notice to the Administrative Agent
and Issuing Lender, request that amendments be issued to the Letter of Credit
which modify the terms of the Letter of Credit, as may be necessary. Any such
amendment shall not be effective until it has been approved by the
Administrative Agent, Issuing Lender and Determining Lenders, and acknowledged
and accepted by the Beneficiary.
2.4 EXTENSION OF CREDIT EXPIRATION DATE. The Company may request that
the Credit Expiration Date be extended to a date which is no later than the one
year after the then-current Credit
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
20
Expiration Date; provided that, (a) any such extension request shall be made in
writing (a "FACILITY EXTENSION REQUEST") by the Company and delivered to the
Administrative Agent no more than one-hundred fifty (150) days prior to (but no
later than one-hundred twenty (120) days prior to) the then-current Credit
Expiration Date; (b) no Default or Event of Default shall exist and be
continuing; on the date of such Facility Extension Request and on the date of
such extension, if applicable; (c) any such Facility Extension Request shall be
accompanied by a detailed consolidated budget for the Company and its
Subsidiaries for the next succeeding fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flow as of the end of and for each quarter of such fiscal year and as of
the end of and for such fiscal year and describing the assumptions used for
purposes of preparing such budget); (d) no Facility Extension Request may be
made which would have the effect of extending the Credit Expiration Date to a
date later than July 28, 2011; and (e) the Administrative Agent, Issuing Lender,
and each of the other Lenders must approve and agree, in writing, to any such
extension. The Company acknowledges that (i) neither the Administrative Agent,
Issuing Lender, nor any other Lender has made any representations to the Company
regarding its intent to agree to any extensions set forth in this Section, (ii)
the Administrative Agent, Issuing Lender, and the other Lenders collectively or
individually, shall not have any obligation to extend the Credit Expiration
Date, and (iii) the Administrative Agent's, Issuing Lender's, or any other
Lender's agreement to one or more extensions shall not commit the Administrative
Agent, Issuing Lender, or such other Lender to any additional extensions. On or
prior to the date that is thirty (30) days after receipt by the Administrative
Agent of a Facility Extension Request (the "NOTICE DATE"), each Lender shall
notify the Administrative Agent of its decision regarding such requested
extension and the Administrative Agent shall promptly notify the Company of such
decision by the Lenders. Any Lender not responding within such time period shall
be deemed to have declined such Facility Extension Request. Failure of the
Administrative Agent to provide the Company with written notice of renewal or
non-renewal on or prior to the applicable Notice Date in respect of the original
Credit Expiration Date or any extended Credit Expiration Date, as the case may
be, shall be deemed a nonrenewal of the Letter of Credit beyond the original or
extended Credit Expiration Date, as the case may be. If the Administrative
Agent, Issuing Lender, and all of the other Lenders agree to extend the current
Credit Expiration Date, the Credit Expiration Date of the Letter of Credit
shall, effective from the Notice Date, be such extended date.
2.5 MANDATORY LETTER OF CREDIT COMMITMENT REDUCTION. The Company shall
immediately notify the Administrative Agent in the event of any prepayment,
reduction, or cancellation of the EIB Loan. Upon the occurrence of such event,
the Company shall cause the Beneficiary to immediately notify the Administrative
Agent and Issuing Lender that it desires to reduce the Letter of Credit by a
pro-rated amount. Upon receipt of such notice from the Beneficiary, the Letter
of Credit and the Letter of Credit Commitment shall be permanently reduced by
such amount, and the Committed Sum of each Lender reduced by its Pro Rata share
of such reduction.
SECTION 3 REIMBURSEMENT AND PAYMENT OBLIGATIONS.
In consideration of the issuance of the Letter of Credit, the Company
hereby agrees to pay to the Administrative Agent and the Lenders without
condition or deduction for any counterclaim, defense, recoupment or setoff the
amounts set forth in this SECTION 3 on the dates and in the manner provided
herein:
3.1 REIMBURSEMENT OF DRAWINGS UNDER A LETTER OF CREDIT. An amount equal
to the face amount of each Drawing made under the Letter of Credit, which amount
is due and payable to the Administrative Agent in accordance with SECTION
2.1(c).
3.2 FEES AND COMMISSIONS. The following fees and commissions for the
issuance, arrangement, maintenance and amendment of the Letter of Credit:
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
21
(a) LETTER OF CREDIT FEE. A rate per annum on the Available
Amount equal to the Applicable Letter of Credit Fee for the Letter of
Credit, payable to the Administrative Agent (for the Pro Rata benefit
of the Lenders) quarterly in arrears from the date of issuance of the
Letter of Credit, commencing on the Closing Date, and continuing on the
last Business Day of each June, September, December and March
thereafter through and including the Credit Expiration Date; and any
accrued but unpaid fee as of the Credit Expiration Date shall be due
and payable on the Credit Expiration Date.
(b) ISSUANCE FEE. 0.125%, per annum, on the Available Amount,
payable to the Administrative Agent (for the benefit of the Issuing
Lender) quarterly in arrears from the date of issuance of the Letter of
Credit, commencing on the Closing Date, and continuing on the last
business day of each June, September, December and March thereafter
through and including the Credit Expiration Date; and any accrued but
unpaid fee as of such Credit Expiration Date shall be due and payable
on the Credit Expiration Date (the "ISSUANCE FEE").
(c) OTHER FEES. Such other fees for the administration and
fronting of the Letter of Credit as shall be agreed to between the
Company, the Administrative Agent and the Issuing Lender in any letter
agreements entered into in connection herewith, such fees to be solely
for the account of the Administrative Agent or the Issuing Lender, as
applicable.
3.3 COMPUTATION OF RATES AND FEES. All computations of interest and
fees payable hereunder shall be calculated on the basis of a 360-day year and
actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).
3.4 ADDITIONAL COSTS. Amounts sufficient to compensate the
Administrative Agent, Issuing Lender and each Lender for any additional actual
costs resulting from the introduction of or change in any Law, guideline or
request or in the interpretation thereof by any Governmental Authority, central
bank or comparable agency charged with the administration of such Law or
guideline which directly or indirectly: (a) imposes or modifies or deems
applicable any reserve, special deposit or similar requirement against letters
of credit issued by Issuing Lender or the participation obligation of the
Lenders; (b) increases the amount of capital required or funded against letters
of credit issued by Issuing Lender or the participation obligation of the
Lenders (except to the extent such increase arises as a result of the individual
creditworthiness of the Issuing Lender or a Lender); or (c) imposes on the
Administrative Agent, Issuing Lender or a Lender some other banking or monetary
requirements affecting the cost of issuing the Letter of Credit under this
Agreement, and the result of any event referred to in CLAUSES (a), (b), or (c)
above shall be to increase the cost to Issuing Lender of issuing or maintaining
the Letter of Credit, or to increase the cost to any Lender of maintaining its
participation arrangement in this transaction, payable on demand. Promptly after
the Administrative Agent, Issuing Lender or an affected Lender becomes aware of
any such introduction, change or requirement, the Administrative Agent, Issuing
Lender or such Lender, as the case may be, shall notify the Company thereof;
provided that the delay or failure to promptly provide such notice shall not
affect the Administrative Agent's, Issuing Lender's or affected Lender's rights
under this SECTION 3.4; provided further that the Company shall not be required
to compensate the Administrative Agent, Issuing Lender, or other Lender, as the
case may be, pursuant to this SECTION 3.4 for any increased cost incurred more
than 180 days prior to the date that Administrative Agent, Issuing Lender or
such affected Lender notifies the Company of the event giving rise to such
increased cost and of its intention to claim compensation therefor; and provided
further that, if the event giving rise to such increased cost is retroactive,
then the 180 day period referred to above shall be extended to include the
period of retroactive effect thereof. A certificate in reasonable detail as to
such increased cost, which states the basis of calculation thereof, submitted by
the Administrative Agent, Issuing Lender or an affected Lender to the Company
shall be sufficient for the purpose of making any
22
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
such claim. Such certificate shall certify that such costs are generally being
charged by the Administrative Agent, Issuing Lender or an affected Lender to
other similarly situated companies in connection with the issuance and
maintenance of, or agreements to issue, similar letters of credit. Such increase
in cost shall, with respect to Issuing Lender, be based upon a reasonable
allocation of Issuing Lender's aggregate cost related to the Letter of Credit
and, with respect to the affected Lender, be based upon actual cost incurred.
In the event that any Lender shall claim payment of any increased costs
pursuant to this SECTION 3.4, the Company shall have the option, to be exercised
in writing, to (a) compensate such Lender for the specified additional costs on
the basis, if any, negotiated between such Lender and the Company, or (b)
replace such Lender with another commercial bank or other financial institution;
provided that such replacement commercial bank or other financial institution
shall: (i) be an Eligible Assignee; (ii) unconditionally offer in writing (with
a copy to the Administrative Agent ) to purchase all of such Lender's rights and
assume all of such Lender's obligations hereunder and under this Agreement
without recourse at the principal amount of such Lender's participation plus
interest and fees accrued thereon to the date of such purchase on a date therein
specified; (iii) pay in full the obligations of the Company owing to the Lender
being replaced (other than the requested increased costs) to such Lender
concurrently with such replacement; (iv) execute an Assignment and Acceptance
Agreement, pursuant to which it becomes a party to this Agreement with a
participation commitment equal to that of the Lender being replaced; and (v)
upon such execution of such documents referred to in CLAUSE (IV) above and the
payment by the Company of all of the requested costs accruing to the date of
purchase, the replacement commercial bank or other financial institution shall
constitute a "LENDER" hereunder with a participation commitment as so specified
and the Lender being so replaced shall no longer constitute a Lender hereunder;
provided that: (A) if a Lender accepts such an offer and such commercial bank or
financial institution fails to purchase such rights, interests, and obligations
on such specified date in accordance with the terms of such offer, the Company
shall continue to be obligated to pay the increased costs to such Lender
pursuant to this SECTION 3.4, and (B) if such Lender fails to accept such
purchase offer, the Company shall not be obligated to pay to such Lender such
increased costs from and after the date of such purchase offer.
3.5 EXPENSES; INDEMNIFICATION.
(a) The Company shall promptly pay after request therefor: (i)
all reasonable out-of-pocket costs and expenses paid (or incurred, to
the extent such costs are presented by the Administrative Agent to the
Company for direct payment) by the Administrative Agent in connection
with the syndication of this Agreement, (ii) all reasonable
out-of-pocket costs and expenses paid (or incurred, to the extent such
costs are presented by the Administrative Agent to the Company for
direct payment) by the Administrative Agent and Issuing Lender in
connection with the preparation, negotiation, execution, delivery, and
administration of this Agreement and the other Loan Papers and any
amendment, waiver, consent or other modification of the provisions
hereof and thereof (whether or not the transactions contemplated hereby
or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all
reasonable attorneys' fees, disbursements, and other charges of
external counsel; (iii) all out-of-pocket costs and expenses of the
Administrative Agent, Issuing Lender, and each of the Lenders incurred
in connection with the enforcement, attempted enforcement, or
preservation of any Rights under this Agreement or the other Loan
Papers (including all such costs and expenses incurred during any
"workout" or restructuring in respect of the Obligations and during any
legal proceeding, including any proceeding under any Debtor Relief
Law), including all reasonable attorneys' fees, disbursements, and
other charges of external counsel; and (iv) all out-of-pocket costs and
expenses of the Administrative Agent incurred by the Administrative
Agent as a result of and during the continuance of an Event of
23
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Default. The agreements in this Section shall survive the termination
of the Letter of Credit Commitment and repayment of all the other
Obligations.
(B) TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY HEREBY
AGREES TO INDEMNIFY THE ADMINISTRATIVE AGENT, ISSUING LENDER, AND THE
LENDERS, AND EACH OF THEIR RESPECTIVE AFFILIATES AND REPRESENTATIVES
(EACH AN "INDEMNIFIED PARTY") AND HOLD EACH OF THEM HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS OR
EXPENSES WHICH MAY ARISE OR BE ASSERTED AGAINST ANY OF THEM IN
CONNECTION WITH ANY OF THE LOAN PAPERS, THE LETTER OF CREDIT
COMMITMENT, THE USE OR CONTEMPLATED USE OF THE PROCEEDS OF THE LETTER
OF CREDIT, OR ANY OTHER MATTER RELATED TO THE TRANSACTIONS CONTEMPLATED
HEREBY; PROVIDED, HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY
SUCH CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES CAUSED BY,
ARISING FROM OR EXISTING SOLELY BY REASON OF: (I) SUCH INDEMNIFIED
PARTY'S WILLFUL BREACH OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT
OR THE LETTER OF CREDIT, OR (II) SUCH INDEMNIFIED PARTY'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE EVENT ISSUING LENDER IS
RESTRAINED OR ENJOINED BY ACTION OF THE COMPANY FROM PAYMENT TO THE
BENEFICIARY UNDER THE LETTER OF CREDIT PURSUANT TO ANY JUDICIAL,
GOVERNMENTAL OR QUASI-GOVERNMENTAL PROCEEDING, THE COMPANY AGREES TO:
(A) REIMBURSE EACH INDEMNIFIED PARTY FOR ALL COSTS AND ATTORNEYS' FEES
REASONABLY INCURRED BY SUCH INDEMNIFIED PARTY IN CONNECTION WITH (1)
SUCH PROCEEDING, AND (2) ANY ACTIONS OR CLAIMS OF THE BENEFICIARY
AGAINST SUCH INDEMNIFIED PARTY RESULTING FROM OR NOTWITHSTANDING SUCH
RESTRAINT OR INJUNCTION, AND (B) EXTEND THE PERIOD DURING WHICH THE
COMPANY'S OBLIGATIONS SHALL REMAIN IN FULL FORCE AND EFFECT FOR A
PERIOD OF TIME THAT IS THIRTY (30) DAYS BEYOND THAT PERIOD OF TIME THAT
THE EXPIRATION DATE OF THE LETTER OF CREDIT IS EXTENDED BY VIRTUE OF
SUCH RESTRAINT OR INJUNCTION. NO INDEMNIFIED PARTY SHALL HAVE ANY
LIABILITY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN PAPER OR ARISING OUT OF
ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH. THE AGREEMENTS IN
THIS SECTION SHALL SURVIVE TERMINATION OF THE LETTER OF CREDIT
COMMITMENT AND REPAYMENT OF ALL THE OTHER OBLIGATIONS.
3.6 TAXES.
(a) Amounts sufficient such that any and all payments by the
Company hereunder shall be made, in accordance with SECTION 3.7 hereof,
free and clear of and without deduction for any and all taxes, levies,
imposts, deductions, charges or withholdings, excluding, in the case of
the Administrative Agent, Issuing Lender and each Lender, taxes imposed
on its income, and franchise taxes imposed on it, by the jurisdiction
under the Laws of which the Administrative Agent, Issuing Lender or
such Lender (as the case may be) is organized or any political
subdivision thereof and, in the case of the Administrative Agent,
Issuing Lender and each Lender, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction of the
Administrative Agent's, Issuing Lender's or such Lender's applicable
lending office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES"). If the
Company shall be required by Law to deduct any Taxes from or in respect
of any sum payable hereunder to the Administrative Agent, Issuing
Lender or any Lender, (A) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this SECTION
3.6) the Administrative Agent, Issuing Lender or such Lender (as the
case may be) receives an amount equal to the sum it would have received
had no
24
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
such deductions been made, (B) the Company shall make such deductions,
and (C) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
Law.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall be entitled, to the extent it is required
to do so by Law, to deduct or withhold income or other similar taxes
imposed by the United States of America from interest, fees or other
amounts payable hereunder for the account of the Administrative Agent,
Issuing Lender or any Lender other than the Administrative Agent,
Issuing Lender or a Lender (i) which is a domestic corporation (as such
term is defined in Section 7701 of the Code) for Federal income tax
purposes or (ii) which has the Prescribed Forms on file with the
Company for the applicable year to the extent the deduction or
withholding of such taxes is not required as a result of the filing of
such Prescribed Forms; provided that, if the Company shall so deduct or
withhold any such taxes, it shall provide a statement to the
Administrative Agent, Issuing Lender or such Lender setting forth the
amount of such taxes so deducted or withheld, the applicable rate and
any other information or documentation which the Administrative Agent,
Issuing Lender or such Lender may reasonably request for assisting the
Administrative Agent, Issuing Lender or such Lender to obtain any
allowable credits or deductions for the taxes so deducted or withheld
in the jurisdiction or jurisdictions in which the Administrative Agent,
Issuing Lender or such Lender is subject to tax.
(c) In addition, the Company agrees to pay any stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "OTHER TAXES").
(d) The Company agrees to indemnify the Administrative Agent,
Issuing Lender and each Lender for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this SECTION 3.6) paid by
the Administrative Agent, Issuing Lender or such Lender (as the case
may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto except as a result of the
gross negligence or willful misconduct of the Administrative Agent,
Issuing Lender or such Lender. This indemnification shall be made
within thirty (30) days from the date the Administrative Agent, Issuing
Lender or such Lender (as the case may be) makes written demand
therefor.
(e) Within thirty (30) days after the date of any payment of
Taxes by or at the direction of the Company, the Company will furnish
to the Administrative Agent, at its address referred to in SECTION 11.3
hereof, the original or a certified copy of a receipt evidencing
payment thereof. Should the Administrative Agent, Issuing Lender or any
Lender, within five (5) years of the termination of this Agreement,
receive any refund, credit or deduction from any taxing authority to
which the Administrative Agent, Issuing Lender or such Lender would not
be entitled but for the payment by the Company of Taxes as required by
this SECTION 3.6 (it being understood that the Administrative Agent,
Issuing Lender or such Lender shall use reasonable efforts, as
determined in its sole judgment, to claim and to pursue such refund,
credits or deduction), the Administrative Agent, Issuing Lender or such
Lender thereupon shall repay to the Company an amount with respect to
such refund, credit or deduction equal to any net reduction in taxes
actually obtained by the Administrative Agent, Issuing Lender or such
Lender (as the case may be) and determined by the Administrative Agent,
Issuing Lender or such Lender (as the case may be) to be attributable
to such refund credit or deduction, provided that the Company upon the
request of the Administrative Agent, Issuing Lender or such Lender,
agrees to repay the amount
25
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
paid over to the Company (plus any penalties, interest or other charges
imposed by the relevant taxing authority) to the Administrative Agent,
the Issuing Lender or such Lender in the event the Administrative
Agent, the Issuing Lender or such Lender is required to repay such
amount attributable to such refund, credit or deduction to such taxing
authority. The Company shall reimburse the Administrative Agent,
Issuing Lender and each Lender for any reasonable costs incurred by the
Administrative Agent, Issuing Lender or such Lender with the written
consent of or at the written direction of the Company in determining
the specific amount of any such refund, credit or deduction due to the
Company pursuant to this SECTION 3.6(e). In no event shall the Company
be obligated pursuant to the preceding sentence to make a payment to
the Administrative Agent, Issuing Lender or a Lender for associated
costs exceeding the amount payable to the Company by the Administrative
Agent, Issuing Lender or such Lender in connection with any refund,
credit or deduction, without the prior written consent of the Company.
This subsection shall not be construed to require the Administrative
Agent, Issuing Lender or any Lender to make available its tax returns
(or any other information relating to its taxes that it deems
confidential) to the Company or any other Person.
(f) The Administrative Agent, Issuing Lender and each Lender
shall endeavor in good faith efforts (consistent with its internal
policies and legal and regulatory restrictions) to select a
jurisdiction for its lending office or change the jurisdiction for its
lending office, as the case may be, so as to avoid the imposition of
any Taxes or Other Taxes or to eliminate the amount of any such
additional amounts which may thereafter accrue; provided that no such
selection or change of the jurisdiction for its lending office shall be
made if, in the reasonable judgment of the Administrative Agent,
Issuing Lender or such Lender (as the case may be), such selection or
change would be materially disadvantageous to it. In the event that any
Lender shall claim payment of any additional amounts pursuant to this
SECTION 3.6, such Lender shall, if the Company shall find a commercial
bank or other financial institution which, if it is not a Lender, shall
be reasonably acceptable to the Administrative Agent and the Issuing
Lender, unconditionally offers in writing (with a copy to the
Administrative Agent) to purchase all of such Lender's rights and
assume all of such Lender's obligations hereunder without recourse at
the principal amount of such Lender's participation hereunder plus
interest, fees and other payments accrued thereon to the date of such
purchase on a date therein specified, accept such purchase offer and
the Company shall be obligated to pay the additional amounts to such
Lender pursuant to this SECTION 3.6 to the date of such purchase;
provided that (i) if the Lender accepts such an offer and such bank or
financial institution fails to purchase such rights and assume such
obligations on such specified date in accordance with the terms of such
offer, the Company shall continue to be obligated to pay the additional
amount to such Lender pursuant to this SECTION 3.6, or (ii) if such
Lender fails to accept such purchase offer, the Company shall not be
obligated to pay to such Lender such additional amounts from and after
the date of such purchase offer.
(g) Without prejudice to the survival of any other agreement
of the Company hereunder, the agreements and obligations of the Company
contained in this SECTION 3.6 shall survive the payment in full of the
Obligation.
3.7 FORM AND CURRENCY OF PAYMENTS.
(a) All payments (i) under SECTION 3.1 hereof for
reimbursement of any Drawings, (ii) under SECTION 3.2(a) of the
Applicable Letter of Credit Fee, and (iii) under SECTION 3.2(b) of the
Issuance Fee, shall be payable in Dollars and with respect to CLAUSE
(i) above, shall be payable for the full amount of such Drawing (plus
any accrued interest on any unpaid reimbursement obligation). All
payments of the administrative fee to the Administrative Agent shall be
payable in Dollars. The payment of any and all other fees, commissions,
interest, and expenses (except as
26
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
set forth in this SECTION 3.7(a)) under this Agreement shall be made in
the currency advanced or incurred, as the case may be. All payments
under this Agreement shall be made in immediately available funds at
the Administrative Agent's office at 1301 Avenue of the Americas, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other office as the Administrative
Agent shall specify in writing.
(b) All payments made or required to be made by or on behalf
of the Company pursuant to this Agreement shall be made in the currency
advanced or incurred, as the case may be, without reduction, setoff, or
counterclaim whatsoever; provided, however, that in the event that the
Company is prevented by a Governmental Authority from making such
payment in the currency borrowed, the Company shall forthwith give
notice of such circumstance to the Administrative Agent. The Company,
the Administrative Agent, Issuing Lender, and the Lenders shall attempt
to make an alternative arrangement for such payments; provided that, in
the event that the Lenders, Issuing Lender, the Administrative Agent,
and the Company cannot agree on an alternative arrangement, all such
payments shall be made in the Dollar Equivalent Amount of such
obligation.
3.8 ACCELERATION OF UNDRAWN AMOUNTS. Should a Cash Collateral Call
Event occur with respect to the Letter of Credit, the Administrative Agent, by
written notice to the Company, may, and at the direction of the Determining
Lenders, shall demand that the Company pay to the Administrative Agent (for the
Pro Rata benefit of the Lenders) for deposit in a segregated Cash Collateral
Account, an amount equal to the Available Amount under the Letter of Credit (the
"CASH COLLATERAL"), as security for the Obligation related to the Letter of
Credit under SECTION 3.1 hereof, whereupon such amount shall forthwith be due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Company. The Cash
Collateral Account shall be assigned to the Administrative Agent (for the Pro
Rata benefit of the Lenders) pursuant to the Assignment of Cash Collateral
Account which shall be executed and delivered by the Company concurrently with
the deposit of the Cash Collateral in the Cash Collateral Account. Furthermore,
the Company shall promptly execute and deliver to the Administrative Agent, such
other security agreements, pledge agreements, assignments, financing statements
and amendments and modifications thereto in form and substance satisfactory to
the Administrative Agent, as the Administrative Agent may reasonably require
from time to time for the purpose of granting to, or maintaining or perfecting
in favor of the Administrative Agent perfected Liens in the Cash Collateral and
the Cash Collateral Account, together with other assurances of the
enforceability, perfection and priority of the Administrative Agent's Liens as
the Administrative Agent may reasonably require to avoid material impairment of
the Liens granted or purported to be granted pursuant to this SECTION 3.8.
The Cash Collateral held in the Cash Collateral Account may be invested
and reinvested from time to time in Permitted Investments as the Company shall
determine, which Permitted Investments shall be held in the name of the
Administrative Agent (for the Pro Rata benefit of the Lenders), for the benefit
of the Company. The tax identification number used in connection with each such
Permitted Investment shall be that of the Company. Cash Collateral paid into or
held in the Cash Collateral Account with respect to the Letter of Credit
(including any Permitted Investments acquired or invested in with such Cash
Collateral or allocable to the Letter of Credit), which are in excess of the sum
of (a) the then Available Amount of the Letter of Credit plus (b) the amount of
the Obligation then outstanding under SECTION 3.1 with respect to the Letter of
Credit, may at the option of the Company either: (i) be released to the Company
upon request, or (ii) remain or be deposited in the Cash Collateral Account.
Appropriate measures shall be taken in order to provide the Administrative Agent
with a perfected first priority security interest with respect to each Permitted
Investment purchased with the Cash Collateral. Upon a Drawing under the Letter
of Credit, the Administrative Agent shall have the right to liquidate any
Permitted Investment acquired or invested in with Cash Collateral paid into the
Cash Collateral Account with respect to the Letter of Credit and deposit the
proceeds therefrom in the Cash Collateral Account,
27
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
and apply such proceeds and other sums paid into the Cash Collateral Account
with respect to the Letter of Credit to the Obligation under SECTION 3.1 related
to the Letter of Credit, retain such amounts as security for such Obligation or
exercise such of the other rights and remedies as may be provided in this
Agreement.
In addition to releases to the Company of Cash Collateral and Permitted
Investments pursuant to the preceding paragraph: (a) upon the full and final
payment of the Obligation of the Company to the Administrative Agent, Issuing
Lender and the Lenders under this Agreement, termination of the Letter of Credit
Commitment, and cancellation of the Letter of Credit, the Administrative Agent
will release its Liens in the Cash Collateral Account and any Permitted
Investments and return any remaining Cash Collateral and Permitted Investments
to the Company, and (b) if a Cash Collateral Call Event ceases to be continuing
with respect to the Letter of Credit, all Cash Collateral paid into or held in
the Cash Collateral Account with respect to the Letter of Credit (and any
Permitted Investments invested in or acquired with such Cash Collateral or
allocable to the Letter of Credit) shall be released by the Administrative Agent
to the Company upon request of the Company.
3.9 MAXIMUM RATE. Regardless of any provision contained in any Loan
Paper, no Lender shall ever be entitled to contract for, charge, take, reserve,
receive, or apply, as interest on the Obligation, or any part thereof, any
amount in excess of the Maximum Rate, and, if a Lender ever does so, then such
excess shall be deemed a partial prepayment of principal and treated hereunder
as such and any remaining excess shall be refunded to the Company. In
determining if the interest paid or payable exceeds the Maximum Rate, the
Company and Lenders shall, to the maximum extent permitted under applicable Law:
(a) treat all loans or advances as but a single extension of credit (and Lenders
and the Company agree that such is the case and that any provision herein for
multiple loans or advances is for convenience only), (b) characterize any
nonprincipal payment otherwise payable under the Loan Papers as an expense, fee
or premium, rather than as interest, (c) exclude voluntary prepayments and the
effects thereof, and (d) amortize, prorate, allocate and spread the total amount
of interest throughout the entire contemplated term of the Obligation; provided
that, if the Obligation is paid and performed in full prior to the end of the
full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds the Maximum Amount, Lenders shall refund
such excess, and, in such event, Lenders shall not, to the extent permitted by
Law, be subject to any penalties provided by any Laws for contracting for,
charging, taking, reserving or receiving interest in excess of the Maximum
Amount.
SECTION 4 GUARANTY
4.1 GUARANTY OF PAYMENT. Subject to the limitation set forth below,
each Guarantor hereby irrevocably and unconditionally, jointly and severally
guarantees to each Lender, Issuing Lender and the Administrative Agent the
prompt payment of the Obligation in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration or otherwise) and the timely
performance of all other obligations under this Agreement and the other Loan
Papers. This Guaranty is a guaranty of payment and not of collection and is a
continuing guaranty and shall apply to the entire Obligation whenever arising.
Notwithstanding any provision to the contrary contained herein or in any of the
other Loan Papers, to the extent the obligations of any Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal Law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable Law (whether federal or state or otherwise and including, without
limitation, Debtor Relief Laws). In particular, the aggregate liability of
Flowserve S.A. resulting from the Guaranty or other obligations of Flowserve
S.A. in connection with this Agreement or any other documents (if any)
supplemental to this Agreement shall be limited to the aggregate free capital of
Flowserve S.A. at any given point n time, i.e. limited to the aggregate amount
of retained earnings and reserves of Flowserve S.A. to the extent they can be
paid out as dividends according to
28
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Article 675 of the Swiss Code of Obligations (see also Articles 660 et seq. and
671 et seq. of the Swiss Code of Obligations).
4.2 OBLIGATIONS UNCONDITIONAL. The obligations of each Guarantor
hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Loan Papers or
any other agreement or instrument referred to therein, to the fullest extent
permitted by applicable Law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Each Guarantor agrees that this Guaranty may be enforced by
the Administrative Agent, Issuing Lender or the Lenders without the necessity at
any time of resorting to or exhausting any other security or collateral and
without the necessity at any time of having recourse to the Loan Papers or any
collateral, if any, hereafter securing the Obligation or otherwise and each
Guarantor hereby waives the right to require the Administrative Agent, Issuing
Lender or the Lenders to make demand on or proceed against the Company or any
other Person (including any other Guarantor) or to require the Administrative
Agent, Issuing Lender or Lenders to pursue any other remedy or enforce any other
right. Each Guarantor further agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against the Company or any other
Guarantor of the Obligation for amounts paid under this Guaranty until such time
as the Obligation has been indefeasibly paid in full in cash, the Letter of
Credit Commitment under this Agreement has been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Administrative Agent, Issuing Lender or the
Lenders in connection with monies received under this Agreement or the other
Loan Papers. Each Guarantor further agrees that nothing contained herein shall
prevent the Administrative Agent, Issuing Lender or the Lenders from suing on
the Loan Papers or foreclosing its or their, as applicable, security interest in
or Lien on any collateral, if any, securing the Obligation or from exercising
any other rights available to it or them, as applicable, under this Agreement or
the other Loan Papers, or any other instrument of security, if any, and the
exercise of any of the aforesaid rights and the completion of any foreclosure
proceedings shall not constitute a discharge of any Guarantor's obligations
hereunder; it being the purpose and intent of each Guarantor that, subject to
such Guarantor's rights to raise defenses to payment that would be available to
it if such Guarantor were named as the "Company" hereunder rather than as a
Guarantor, its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither any Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release, increase or limitation of the
liability of the Company or any Guarantor or by reason of the bankruptcy or
insolvency of the Company or any Guarantor. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligation
and notice of or proof of reliance by the Administrative Agent or any Lender on
this Guaranty or acceptance of this Guaranty. The Obligation, and any part of
it, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Guaranty. All
dealings between the Company and the Guarantors, on the one hand, and the
Administrative Agent, Issuing Lender and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. Each Guarantor hereby subordinates to the
Obligation all debts, liabilities and other obligations, now existing or
hereafter created, whether direct, indirect, primary, secondary, several, joint
and several or otherwise, and irrespective of whether such debts, liabilities
and obligations be evidenced by note, contract, open account, book entry or
otherwise, owing by the Company to such Guarantor.
4.3 MODIFICATIONS. Each Guarantor agrees that: (a) all or any part of
the collateral now or hereafter held for the Obligation, if any, may be
exchanged, compromised or surrendered from time to time; (b) none of the
Lenders, Issuing Lender, and the Administrative Agent shall have any obligation
to protect, perfect, secure or insure any such security interests, liens or
encumbrances now or hereafter held, if any, for the Obligation; (c) the time or
place of payment of the Obligation may be changed or extended, in whole or in
part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part;
29
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(d) the Company and any other party liable for payment under the Loan Papers may
be granted indulgences generally; (e) any of the provisions of the Loan Papers
may be modified, amended or waived; (f) any party (including any other
Guarantor) liable for the payment thereof may be granted indulgences or be
released; and (g) any deposit balance for the credit of the Company or any other
party liable for the payment of the Obligation or liable upon any security
therefor may be released, in whole or in part, at, before or after the stated,
extended or accelerated maturity of the Obligation, all without notice to or
further assent by any Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
4.4 Waiver OF RIGHTS. Each Guarantor expressly waives to the fullest
extent permitted by applicable Law: (a) notice of acceptance of this Guaranty by
Issuing Lender and the Lenders and of all extensions of credit to the Company by
Issuing Lender and the Lenders; (b) presentment and demand for payment or
performance of any of the Obligation; (c) protest and notice of dishonor or of
default (except as specifically required in this Agreement) with respect to the
Obligation or with respect to any security therefor; (d) notice of the Lenders
obtaining, amending, substituting for, releasing, waiving or modifying any
security interest, Lien or encumbrance, if any, hereafter securing the
Obligation, or the Lenders subordinating, compromising, discharging or releasing
such security interests, Liens or encumbrances, if any; and (e) all other
notices to which a Guarantor might otherwise be entitled.
4.5 REINSTATEMENT. Notwithstanding anything contained in this Agreement
or the other Loan Papers, the obligations of each Guarantor under this SECTION 4
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Obligation is rescinded
or must be otherwise restored by any holder of any of the Obligation, whether as
a result of any proceedings in bankruptcy or reorganization or otherwise, and
each Guarantor agrees that it will indemnify the Administrative Agent, Issuing
Lender and each Lender on demand for all reasonable costs and out of pocket
expenses incurred by such Person in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar Law.
4.6 REMEDIES. Each Guarantor agrees that, as between the Guarantors, on
the one hand, and the Administrative Agent, Issuing Lender and the Lenders, on
the other hand, the Obligation may be declared to be forthwith due and payable
as provided in SECTION 9.2 (and shall be deemed to have become automatically due
and payable in the circumstances provided in SECTION 9.2) notwithstanding any
stay, injunction or other prohibition preventing such declaration (or preventing
such Obligation from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or such Obligation
being deemed to have become automatically due and payable), such Obligation
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the Guarantors.
4.7 SUBROGATION. Each Guarantor agrees that, until the indefeasible
payment of the Obligation in full in cash and the termination of the Letter of
Credit Commitment, it will not exercise, and hereby waives, any right of
reimbursement, subrogation, contribution, offset or other claims against the
Company arising by contract or operation of law in connection with any payment
made or required to be made by the Guarantors under this Agreement or the other
Loan Papers. After the indefeasible payment in full in cash of the Obligation
(other than any part of the Obligation that represents contingent contractual
indemnities) and the termination of the Letter of Credit Commitment, each
Guarantor shall be entitled to exercise against the Company all such rights of
reimbursement, subrogation, contribution, and offset, and all such other claims,
to the fullest extent permitted by Law.
SECTION 5 CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT
30
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
The effectiveness of this Agreement and the obligation of the Issuing
Lender to issue the Letter of Credit and the Lenders to participate therein
shall be subject to the conditions precedent that the Administrative Agent shall
have received on the Closing Date, unless otherwise expressly stated, all of the
following (in such quantities as may be reasonably requested by the
Administrative Agent), each dated or effective as of the date hereof (unless
otherwise stated below) in form and substance satisfactory to the Administrative
Agent:
5.1 AGREEMENT. This Agreement duly-executed by the Company and each of
the Guarantors;
5.2 OFFICER'S CERTIFICATE. A certificate executed by a Responsible
Officer of the Company stating that no event has occurred and is continuing
which constitutes a Default or Event of Default;
5.3 EVIDENCE OF AUTHORITY. Such certificates of resolutions or other
action, incumbency certificates and/or other certificates of Responsible
Officers of the Company and each of the Guarantors as the Administrative Agent
may require to establish the identities of and verify the authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Papers to which the Company
or any Guarantor is a party;
5.4 ORGANIZATIONAL DOCUMENTS. Such evidence as the Administrative Agent
may reasonably require to verify that the Company and each of the Guarantors are
duly organized or formed, validly existing, and in good standing;
5.5 OPINION OF COUNSEL. A favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇, Senior
Associate General Counsel of the Parent, covering such matters relating to the
transactions contemplated hereby as reasonably requested by the Administrative
Agent, and substantially in a form acceptable to the Administrative Agent;
5.6 FINANCIAL INFORMATION.
(a) For the Parent, (i) a business plan for the Parent and its
consolidated Subsidiaries for the calendar years ending December 31,
2004, December 31, 2005, and December 31, 2006 (the "PROJECTIONS"), in
each case in form satisfactory to the Administrative Agent; and (ii)
consolidated audited financial statements for the Parent and its
Subsidiaries for the fiscal years ended December 31, 2001, December 31,
2002, and December 31, 2003;
(b) For the Company, (i) statutory audited consolidated
financial statements for the Company and its Subsidiaries for the
fiscal years ended December 31, 2001 and December 31, 2002; (ii)
unaudited consolidated financial statements for the Company and its
Subsidiaries for the fiscal years ended December 31, 2001, December 31,
2002, and December 31, 2003, prepared in accordance with GAAP, and
certified by a Financial Officer of the Company; and (iii) a business
plan for the Company and its consolidated Subsidiaries for the calendar
years ending December 31, 2004, December 31, 2005, and December 31,
2006, in each case in form satisfactory to the Administrative Agent;
5.7 LITIGATION. A certificate from each of the Company and the Parent,
executed by a Responsible Officer of the Company and the Parent, as applicable,
stating that except as otherwise disclosed in writing to the Administrative
Agent, there is no pending or, to the knowledge of the Company or the Parent, as
applicable, threatened action or proceeding against the Company and the Parent
or any of its Subsidiaries (including, without limitation, concerning the
ownership of the Company and the Parent or any of its Subsidiaries, or any of
their respective properties or assets) before any court,
31
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
governmental agency, or arbitrator, which could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change;
5.8 COMPLIANCE WITH FINANCIAL OBLIGATIONS. A certificate from each of
the Credit Parties executed by a Responsible Officer of such Credit Party
certifying that such Credit Party is in compliance with all of its existing
financial obligations;
5.9 INTERCOMPANY INDEBTEDNESS. All intercompany Indebtedness of the
Company shall have been subordinated to its Obligations under this Agreement on
terms acceptable to the Administrative Agent;
5.10 EIB LOAN. A fully-executed copy of the EIB Loan.
5.11 PARENT CREDIT AGREEMENT. A fully-executed amendment under the
Parent Credit Agreement which permits the incurrence of the Indebtedness
evidenced by this Agreement.
5.12 ADDITIONAL INFORMATION. Such other information and documents as
may reasonably be required by the Administrative Agent and its counsel.
SECTION 6 REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and the Issuing
Lender to issue the Letter of Credit, each Credit Party represents and warrants
to the Administrative Agent, Issuing Lender, and each Lender, whereby all such
representations and warranties are limited to the applicable Credit Party or the
business of the applicable Credit Party rendering the representation or
warranty, that:
6.1 ORGANIZATION, POWERS. Each of the Credit Parties (a)(i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, and (iii) is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where any such failure, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change, and (b) has the
power and authority to execute, deliver and perform its obligations under each
of the Loan Papers and each other agreement or instrument contemplated hereby to
which it is or will be a party.
6.2 AUTHORIZATION. This Agreement and the transactions contemplated
hereby: (a) have been duly authorized by all requisite corporate and, if
required, stockholder action; and (b) will not (i) violate (A) any provision of
applicable Law, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of each of the Credit Parties, (B) any order
of any Governmental Authority, or (C) any provision of any indenture, agreement,
or other instrument to which any Credit Party is a party or by which any of them
or any of their property is or may be bound, (ii) be in conflict with, result in
a breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase, or redemption of any obligation under any such
indenture, agreement, or other instrument, or (iii) result in the creation or
imposition of any Lien prohibited by this Agreement.
6.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by each Credit Party and constitutes a legal, valid, and binding obligation of
such Credit Party enforceable against such Credit Party in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws or equitable principles relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
32
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
6.4 GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with this Agreement and the transactions
contemplated hereby, except for such as have been made or obtained and are in
full force and effect.
6.5 FINANCIAL STATEMENTS.
(a) The Parent has heretofore furnished to the Administrative
Agent its consolidated balance sheets and statements of income,
stockholders' equity, and cash flows as of and for the fiscal year
ended December 31, 2003, audited by and accompanied by the opinion of
PricewaterhouseCoopers, independent public accountants. Such financial
statements present fairly the financial condition and results of
operations and cash flows of the Parent and its consolidated
Subsidiaries as of such dates and for such periods. Such balance sheets
and the notes thereto disclose all material liabilities, direct or
contingent, of the Parent and its consolidated Subsidiaries as of the
dates thereof. Such financial statements were prepared in accordance
with GAAP.
(b) The Company has heretofore furnished to the Administrative
Agent its consolidated balance sheets and statements of income,
stockholders' equity, and cash flows as of and for the fiscal years
ended December 31, 2001, December 31, 2002, and December 31, 2003. Such
financial statements present fairly the financial condition and results
of operations and cash flows of the Company and its consolidated
Subsidiaries as of such dates and for such periods. Such financial
statements were prepared in accordance with GAAP.
6.6 NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, no event,
change or condition has occurred that has had, or could reasonably be expected
to result in a Material Adverse Change.
6.7 TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
(a) Each of the Credit Parties has valid title to, or valid
leasehold interests in, all its material properties and assets, except
for defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties and
assets for their intended purposes. All such material properties and
assets are free and clear of Liens, other than Liens expressly
permitted by SECTION 8.2.
(b) Each Credit Party has complied with all material
obligations under all material leases to which it is a party and, to
such Credit Party's knowledge, all such leases are in full force and
effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 sets forth as of the Closing Date a list
of all of the Subsidiaries of the Parent and the percentage ownership interest
of the Parent therein. The shares of capital stock or other ownership interests
so indicated on SCHEDULE 6.8 are fully paid and non-assessable and as of date
hereof are owned by the Parent, directly or indirectly, free and clear of all
Liens (other than Liens permitted by this Agreement).
6.9 LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 6.9, there are not any
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the
applicable Credit Party, threatened against such Credit Party or any
33
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
business, property or rights of any such Person (i) that involve any
Loan Paper or the transactions contemplated hereby, or (ii) which could
reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Change.
(b) None of the Credit Parties or any of their respective
material properties or assets is in violation of any Law (including
United Nations and U.S. sanction laws, and any zoning, building,
Environmental Law, ordinance, code or approval, or any building
permits), or is in default with respect to any judgment, writ,
injunction, decree, or order of any Governmental Authority, where such
violation or default could reasonably be expected to result in a
Material Adverse Change.
6.10 AGREEMENTS.
(a) No Credit Party is a party to any agreement or instrument
or subject to any corporate restriction that has resulted or could
reasonably be expected to result in a Material Adverse Change.
(b) No Credit Party is in default in any manner under any
provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it
is a party or by which it or any of its properties or assets are or may
be bound, where such default could reasonably be expected to result in
a Material Adverse Change.
6.11 FEDERAL RESERVE REGULATIONS
(a) No Credit Party is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of the Letter of Credit will be
used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation
of, or that is inconsistent with, the provisions of the regulations of
the Board, including Regulation T, U, or X.
6.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. No
Credit Party is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
6.13 TAX RETURNS. Each Credit Party has filed or caused to be filed all
tax returns, reports, or materials required to have been filed by it and has
paid or caused to be paid all taxes due and payable by it and all material
written assessments received by it, except taxes that are being contested in
good faith by appropriate proceedings and for which such Credit Party shall have
set aside on its books adequate reserves.
6.14 NO MATERIAL MISSTATEMENTS. None of any information, report,
financial statement, exhibit, or schedule furnished by or on behalf of any
Credit Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Paper or included therein or
delivered pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit, or schedule
was based upon or constitutes a forecast or projection, such Credit Party
represents only that it acted in good faith and
34
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit, or schedule.
6.15 EMPLOYEE BENEFIT PLANS. The Parent and its ERISA Affiliates is in
compliance in all respects with the applicable provisions of ERISA and the Code
and the regulations and published interpretations thereunder, except where such
non-compliance, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change. No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Change.
6.16 ENVIRONMENTAL MATTERS
(a) Except as set forth in SCHEDULE 6.16 and except with
respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Change, no Credit Party (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law, (ii) has received notice
of any claim with respect to any Environmental Liability, or (iii)
knows of any basis for any Environmental Liability to which it is or
reasonably could become subject.
(b) Since the date hereof, there has been no change in the
status of the matters disclosed on SCHEDULE 6.16 that, individually or
in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Change.
6.17 LABOR MATTERS. As of the date hereof, there are no strikes,
lockouts, or slowdowns against any Credit Party pending or, to the knowledge of
the applicable Credit Party, threatened. Except with respect to any violations
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Change, the hours worked by and payments made to
employees of each Credit Party have not been in violation of the Fair Labor
Standards Act or any other applicable Laws dealing with such matters. All
payments due from any Credit Party, or for which any claim may be made against
any Credit Party, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
such Credit Party except where the failure to make or accrue any such payments,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change. The consummation of the transactions contemplated
hereby will not give rise to any right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which any
Credit Party is bound.
6.18 SOLVENCY. After giving effect to this Agreement and the
transactions contemplated hereby, (a) the fair value of the assets of each
Credit Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Credit Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Credit Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Credit Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
6.19 PROJECTIONS. As of the date hereof, there has been no change in
the Projections delivered pursuant to SECTIONS 5.6(A)(I) and 5.6(B)(III) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Change.
35
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
6.20 SENIOR INDEBTEDNESS. The Obligations of the Credit Parties
hereunder constitute "Senior Indebtedness" under and as defined in the Dollar
Subordinated Note Indenture and the Euro Subordinated Note Indenture.
6.21 CONSOLIDATED COVERAGE RATIO. After giving effect to the incurrence
of Indebtedness under this Agreement and the EIB Loan, the Consolidated Coverage
Ratio (as defined in the Dollar Subordinated Note Indenture) of the Parent is
2.77 to 1.00.
6.22 EIB LOAN. The EIB has approved the use of proceeds of the EIB Loan
for the purpose of repaying outstanding senior Indebtedness of the Parent.
SECTION 7 AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES
Each Credit Party covenants and agrees that so long as the Letter of
Credit shall be outstanding, and until payment in full of the Obligation and
termination of the Letter of Credit Commitment, each Credit Party will (unless
such Credit Party receives prior written consent to the contrary from the
Administrative Agent as authorized by the Determining Lenders), and always
limited to the applicable Credit Party or the business of the applicable Credit
Party rendering the covenant:
7.1 EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve,
renew, and keep in full force and effect its legal existence, except as
otherwise expressly permitted under SECTION 8.5 and except, with
respect to any Subsidiary, where the failure to do so could not
reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Change.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend, and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights,
trademarks, and trade names material to the conduct of the business of
each Credit Party; maintain and operate such business in substantially
the manner in which it is presently conducted and operated; comply in
all material respects with all applicable Laws (including all
Environmental Laws) and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the
failure to do so could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Change; and at all times
maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements, and replacements
thereto necessary in order that the business carried on in connection
therewith may be properly conducted at all times, except where the
failure to do so could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Change.
7.2 INSURANCE. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in the same or similar locations, including
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 it; and maintain such other
insurance as may be required by law.
7.3 OBLIGATIONS AND TAXES. Pay its Indebtedness promptly and in
accordance with their terms and pay and discharge promptly when due all taxes,
assessments, and governmental charges or
36
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials, and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy, or claim so long as (a) the validity or
amount thereof shall be contested in good faith by appropriate proceedings, (b)
such Credit Party shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP, and (c) such contest operates to
suspend collection of the contested obligation, tax, assessment, or charge and
enforcement of a Lien.
7.4 FINANCIAL STATEMENTS, REPORTS, ETC.
(a) In the case of the Parent, furnish to the Administrative
Agent:
(i) concurrently with same being filed with the SEC,
but in any event no later than 100 days after the end of each
fiscal year, its consolidated balance sheet and related
statements of income, stockholders' equity and cash flows
showing the financial condition of the Parent and its
consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such
Subsidiaries during such year, all audited by
PricewaterhouseCoopers or other independent public accountants
of recognized national standing and accompanied by an opinion
of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated
financial statements fairly present the financial condition
and results of operations of the Parent and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP;
(ii) concurrently with same being filed with the SEC,
but in any event no later than 50 days after the end of each
of the first three fiscal quarters of each fiscal year, its
consolidated balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial
condition of the Parent and its consolidated Subsidiaries as
of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal
year, compared with the consolidated budget for such fiscal
quarter as well as the results of its operations and the
operations of its Subsidiaries in the corresponding quarter
from the prior fiscal year, all certified by one of its
Financial Officers as fairly presenting the financial
condition and results of operations of the Parent and its
consolidated Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit
adjustments;
(iii) concurrently with any delivery of financial
statements under CLAUSE (I) or (II) above, a certificate of a
Financial Officer of the Parent certifying such statements and
certifying that no Event of Default or Default has occurred
or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto,
and, in the case of a certificate delivered with the financial
statements required by CLAUSE (I) above, setting forth the
Parent's calculation of Excess Cash Flow;
(iv) at least 10 days prior to the commencement of
each fiscal year of the Parent, a detailed consolidated budget
for such fiscal year (including a projected consolidated
balance sheet and related statements of projected operations
and cash flow as of the end of and for each quarter of such
fiscal year and as of the end of and for such fiscal year and
describing the assumptions used for purposes of preparing such
budget) and, promptly when available, any significant
revisions of such budget;
37
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(v) promptly after the same become publicly
available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent with the
SEC, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as
the case may be;
(vi) promptly after the receipt thereof by the
Parent, a copy of any final "management letter" received by
any such person from its certified public accountants and the
management's response thereto; and
(vii) promptly, from time to time, such other
information regarding the operations, business affairs, and
financial condition of the Parent and its Subsidiaries, or
compliance with the terms of this Agreement or any other Loan
Paper, as the Administrative Agent or any Lender may
reasonably request.
(b) In the case of the Company, furnish to the Administrative
Agent:
(i) concurrently with the financial statements
delivered pursuant to SECTION 7.4(A)(I), its internally
generated consolidated balance sheet and related statements of
income, stockholders' equity and cash flows showing the
financial condition of the Company and its consolidated
Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such
Subsidiaries during such year, certified by a Responsible
Officer of the Company and a Financial Officer of the Parent
as fairly presenting the financial condition and results of
operations of the Company and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP;
(ii) within 210 days after the end of each fiscal
year, its statutory consolidated balance sheet and related
statements of income, stockholders' equity and cash flows
showing the financial condition of the Company and its
consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such
Subsidiaries during such year, all audited by
PricewaterhouseCoopers or other independent public accountants
of recognized national standing or other independent public
accountants of recognized national standing and accompanied by
an opinion of such accountants to the effect that such
statutory consolidated financial statements fairly present the
financial condition and results of operations of the Company
and its consolidated Subsidiaries on a consolidated basis;
(iii) within 90 days following the delivery of the
statutory financial statements set forth in SECTION
7.4(B)(II), a review prepared by PricewaterhouseCoopers or
other independent public accountants of recognized national
standing of the financial statements set forth in SECTION
7.4(B)(I).
(iv) within 90 days after the end of each of the
first three fiscal quarters of each fiscal year, its
consolidated balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial
condition of the Company and its consolidated Subsidiaries as
of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal
year, all certified by a Responsible Officer of the Company
and a Financial Officer of the Parent as fairly presenting the
financial condition and
38
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP,
subject to normal year-end audit adjustments;
(v) concurrently with any delivery of financial
statements under CLAUSE (I), (II), or (IV) above, a
certificate of a Responsible Officer of the Company and a
Financial Officer of the Parent certifying such statements and
certifying that no Event of Default or Default has occurred
or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto;
(vi) promptly, from time to time, such other
information regarding the operations, business affairs, and
financial condition of the Company, or compliance with the
terms of any Loan Paper, as the Administrative Agent or any
Lender may reasonably request; and
(vii) no later than September 30, 2004, the Company
shall provide the Administrative Agent its statutory audited
consolidated financial statements for the fiscal year ended
December 31, 2003, and as soon as available thereafter, its
audited consolidated financial statements for the fiscal year
ended December 31, 2003, prepared in accordance with GAAP, and
reviewed by PricewaterhouseCoopers or other independent public
accountants of recognized national standing.
7.5 Litigation and Other Notices. Furnish to the Administrative Agent,
Issuing Lender, and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against such Credit Party or any Affiliate
thereof that could reasonably be expected to result in a Material
Adverse Change;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of such Credit Party in an aggregate
amount exceeding the Dollar Equivalent Amount of $5,000,000;
(d) any notice from S&P or ▇▇▇▇▇'▇ indicating the possibility
of an adverse change in the credit ratings applicable to the Parent or
any of its Indebtedness assigned by S&P or ▇▇▇▇▇'▇ and promptly after
the Parent obtains knowledge of any change in the rating established by
S&P or ▇▇▇▇▇'▇, as applicable, a notice of such change, which notice
shall specify the new rating, the date on which such change was
publicly announced, and such other information with respect to such
change as the Administrative Agent may reasonably request;
(e) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Change.
7.6 Maintaining Records; Access to Properties and Inspections. Keep
books of record and account in conformity with the generally accepted accounting
principles in the jurisdiction of its principal place of business. Each Credit
Party will permit any Representatives designated by the Administrative Agent or
any Lender to visit and inspect the financial records and the properties of such
Credit Party at
39
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
reasonable times and as often as reasonably requested and to make extracts from
and copies of such financial records, and permit any Representatives designated
by the Administrative Agent or any Lender to discuss the affairs, finances, and
condition of such Credit Party with the officers thereof and independent
accountants therefor; provided that any such visit or inspection does not
interfere with the normal operation of such business conducted at the
properties.
7.7 Use of Proceeds. Request the issuance of the Letter of Credit only
for the purpose set forth in the preamble to this Agreement.
7.8 Further Assurances. Execute any and all further documents,
financing statements, agreements, and instruments, and take all further action
that may be required under applicable Law, or that the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by this
Agreement and any other the Loan Paper.
7.9 Interest Rate Protection. The Parent shall maintain the lesser of
(a) $375,000,000 in principal amount, and (b) 50% of its long-term Indebtedness
as Indebtedness bearing a fixed rate of interest, whether pursuant to Hedging
Agreements (which shall be acceptable to the Administrative Agent) or otherwise.
7.10 EIB Loan. No later than thirty (30) days after the Closing Date,
the proceeds of the EIB Loan shall be used to reduce outstanding senior
Indebtedness of the Parent. The Company and the Parent shall, at all times,
comply with the terms and provisions of the EIB Loan.
SECTION 8 NEGATIVE COVENANTS OF THE CREDIT PARTIES
Each Credit Party, as applicable, covenants and agrees that so long as
the Letter of Credit shall be outstanding, and until payment in full of the
Obligation and termination of the Letter of Credit Commitment, each Credit
Party, as applicable, will not (unless such Credit Party receives a prior
written consent to the contrary from the Administrative Agent as authorized by
the Determining Lenders), and always limited to the applicable Credit Party or
the business of the applicable Credit Party rendering the covenant:
8.1 INDEBTEDNESS. Incur, create, assume, or permit to exist any
Indebtedness, except:
(a) Indebtedness of any Credit Party for borrowed money
existing on the date hereof and set forth in SCHEDULES 8.1(A), (D),
(E), (F), and (G), and any extensions, renewals, or replacements of
such Indebtedness to the extent the principal amount of such
Indebtedness is not increased, the weighted average life to maturity of
such Indebtedness is not decreased, such Indebtedness, if subordinated
to the Obligations, remains so subordinated on terms not less favorable
to the Lenders, and no Credit Party (unless the original obligor in
respect of such Indebtedness) becomes an obligor with respect thereto;
(b) Indebtedness of any Credit Party created hereunder and
under the other Loan Papers;
(c) intercompany Indebtedness of any Credit Party to the
extent permitted by SECTION 8.4(c); provided, however, that the Company
shall not incur any intercompany Indebtedness in excess of
E150,000,000;
(d) Indebtedness of the Parent incurred to finance the
acquisition, construction, or improvement of any fixed or capital
assets, including any Indebtedness assumed in connection
40
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals,
and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof; provided that (i) such
Indebtedness is incurred prior to or within 90 days after such
acquisition or within 90 days after the completion of such construction
or improvement, and (ii) the aggregate principal amount of Indebtedness
permitted by this SECTION 8.1(d), when combined with the aggregate
principal amount of all Capital Lease Obligations incurred pursuant to
SECTION 8.1(e) and outstanding Indebtedness listed on SCHEDULES 8.1(d)
and 8.1(e), shall not exceed $25,000,000 at any time outstanding;
(e) Capital Lease Obligations of the Parent in an aggregate
principal amount, when combined with the aggregate principal amount of
all Indebtedness incurred pursuant to SECTION 8.1(d) and outstanding
Indebtedness listed on SCHEDULES 8.1(d) and 8.1(e), not in excess of
$25,000,000 at any time outstanding;
(f) Indebtedness of the Parent under industrial revenue bonds
in an aggregate principal amount, when combined with the outstanding
principal amounts of industrial revenue bonds listed on SCHEDULE
8.1(f), not to exceed $20,000,000 at any time outstanding;
(g) Indebtedness incurred by Foreign Subsidiaries (other than
the Credit Parties) in an aggregate principal amount, when combined
with the outstanding principal amount of all Indebtedness listed on
SCHEDULE 8.1(g), not to exceed the Dollar Equivalent Amount of
$25,000,000 at any time outstanding and guarantees thereof by other
Foreign Subsidiaries (other than the Credit Parties);
(h) with respect to the Parent, unsecured guarantees of
Indebtedness of its Subsidiaries permitted to be incurred pursuant to
this Agreement, provided that if such Indebtedness is subordinated to
the Obligations, the guarantee thereof by the Parent shall be
subordinated on terms no less favorable to the Lenders;
(i) Indebtedness of (x) the Parent under the Dollar
Subordinated Notes in an aggregate principal amount not to exceed
$188,500,000, and the senior subordinated guarantees thereof by any of
the Credit Parties, and (y) FFBV under the Euro Subordinated Notes in
an aggregate principal amount not to exceed E65,000,000, and the senior
subordinated guarantees thereof by any of the Credit Parties, in each
case less the amount of any prepayments or repurchases thereof after
May 2, 2002;
(j) Indebtedness of Finsub incurred pursuant to the
Receivables Program Documentation in an amount not exceeding
$200,000,000 in the aggregate at any time outstanding;
(k) with respect to the Parent, guarantees of loans, in an
aggregate amount outstanding at any time not to exceed $30,000,000,
made by third parties to employees who are participants in the Parent's
stock purchase program, if implemented, to enable such employees to
purchase common stock of the Parent;
(l) Indebtedness or other contingent obligations (including
obligations as an account party under any letter of credit of any
Credit Party), solely in respect of surety and performance bonds, bank
guarantees, commercial and standby letters of credit, and similar
obligations in respect of contractual obligations of any Credit Party,
provided that such obligations are (i) incurred in the ordinary course
of business of such Credit Party and (ii) except as expressly permitted
under Section 8.2(k), unsecured;
41
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(m) Indebtedness of the Parent in respect of the ABN Standby
Credit in an aggregate amount outstanding at any time not to exceed
$10,000,000;
(n) Indebtedness of the Parent in respect of the Fifth Third
Letters of Credit, but not any renewals, extensions, or replacements
thereof;
(o) Indebtedness of the Parent constituting New Subordinated
Debt in an aggregate principal amount not to exceed $250,000,000;
(p) other unsecured Indebtedness of the Parent in an aggregate
principal amount not exceeding $25,000,000 at any time outstanding;
(q) unsecured Indebtedness of the Company under Hedging
Agreement; and
(r) other unsecured Indebtedness of the Company in an
aggregate principal amount not exceeding E1,000,000 at any time
outstanding.
8.2 LIENS. Create, incur, assume, or permit to exist any Lien on any
property or assets (including stock or other securities of any Person) now owned
or hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except:
(a) Liens on property or assets of any Credit Party existing
on the date hereof and set forth in SCHEDULE 8.2, inclusive of Liens
otherwise permitted under the Parent Credit Agreement; provided that to
the extent such Liens secure obligations, they shall secure only those
obligations which they secure on the date hereof and any extensions,
renewals, or replacements thereof to the extent the same are permitted
under SECTION 8.1;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by any Credit Party; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition,
and (ii) such Lien does not apply to any other property or assets of
any Credit Party;
(c) with respect to any Credit Party, Liens for taxes not yet
due or which are being contested in compliance with SECTION 7.3;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens of any Credit Party arising in the
ordinary course of business and securing obligations that are not due
and payable or which are being contested in compliance with SECTION
7.3;
(e) in respect of any Credit Party, pledges and deposits made
in the ordinary course of business in compliance with workmen's
compensation, unemployment insurance, and other social security laws or
regulations;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds, and other obligations of a like nature incurred in
the ordinary course of business of any Credit Party;
(g) zoning restrictions, easements, rights-of-way,
restrictions on use of real property, and other similar encumbrances
incurred in the ordinary course of business of any Credit Party which,
in the aggregate, are not substantial in amount and do not materially
detract from the value
42
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
of the property subject thereto or interfere with the ordinary conduct
of the business of any Credit Party;
(h) Liens on fixed or capital assets hereafter acquired (or,
in the case of improvements, constructed) by any Credit Party; provided
that (i) such Liens secure Indebtedness permitted by SECTION 8.1, (ii)
such Liens are incurred, and the Indebtedness secured thereby is
created, within 90 days after such acquisition (or construction), (iii)
except in the case of Capital Lease Obligations, the Indebtedness
secured thereby does not exceed 90% of the lesser of the cost or the
fair market value of such fixed or capital asset at the time of such
acquisition (or construction), and (iv) such Liens do not apply to any
other property or assets of any Credit Party;
(i) Liens on the property of Finsub incurred pursuant to the
Receivables Program Documentation;
(j) Liens arising out of judgments or awards that do not
constitute an Event of Default under SECTION 9.1(i) or in respect of
which any Credit Party shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall be secured a
subsisting stay of execution pending such appeal or proceedings;
provided that the aggregate amount of all such judgments or awards (and
any cash and the fair market value of any property subject to such
Liens) does not exceed the Dollar Equivalent Amount of $10,000,000 at
any time outstanding; and
(k) Liens on assets of Foreign Subsidiaries (other than the
Credit Parties); provided that (i) such Liens do not extend to, or
encumber, the capital stock of any of the Parent's Subsidiaries (except
as permitted by SECTION 8.2(a)), and (ii) such Liens extending to the
assets of such Foreign Subsidiaries secure only Indebtedness (x)
incurred by such Foreign Subsidiary pursuant to SECTION 8.1(g) or (y)
of up to the Dollar Equivalent Amount of $5,000,000 in the aggregate
incurred by such Foreign Subsidiaries pursuant to SECTION 8.1(l).
8.3 SALE and Lease-Back Transactions. With respect to any Credit Party,
enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred unless (a)
the sale of such property is permitted by SECTION 8.5 and (b) any Capital Lease
Obligations or Liens arising in connection therewith are permitted by SECTIONS
8.1 and 8.2, respectively.
8.4 INVESTMENTS, Loans and Advances. Purchase, hold, or acquire any
capital stock, evidences of indebtedness or other securities of, make or permit
to exist any loans or advances to, or make or permit to exist any investment or
any other interest in, any other Person, except:
(a) (i) investments by the Parent existing on the date hereof
in the capital stock or other equity interests of the Parent's
Subsidiaries, (ii) investments by the Parent in an aggregate amount not
to exceed $30,000,000, the proceeds of which are used, directly or
indirectly, to acquire from any third-party joint venture participant
all such participant's interest in a joint venture, with the result
that the joint venture becomes a wholly owned Subsidiary of the Parent,
(iii) additional investments by the Parent in the capital stock or
other equity interests of the Parent's Subsidiaries; provided that the
aggregate amount of equity investments made after August 8, 2000
pursuant to this CLAUSE (iii) by the Parent in any of its Subsidiaries
that is not a Credit Party shall not exceed $25,000,000 at any time
outstanding; and (iv) additional investments by the Parent in the
Captive Insurance Company;
43
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(b) Permitted Investments of any Credit Party;
(c) (i) intercompany loans and advances existing on the date
hereof and set forth on SCHEDULE 8.4 and renewals, refinancings,
substitutions, and replacements of such intercompany loans and advances
to the extent the aggregate principal amount of all such loans and
advances is not increased and, no such renewal, refinancing,
substitution, or replacement shall involve a cash transfer from any
Credit Party to any Person that is not a Credit Party unless the loan
or advance being renewed, refinanced, substituted, or replaced has been
repaid in cash in an amount at least equal to such cash transfer; (ii)
other loans or advances made by the Parent to any of its Subsidiaries
and made by any of the Parent's Subsidiaries to the Parent or any other
Subsidiary of the Parent; provided that the amount of such loans and
advances made pursuant to this CLAUSE (ii) by the Parent to any of its
Subsidiaries that are not Credit Parties shall not exceed the Dollar
Equivalent Amount of $25,000,000 at any time outstanding; (iii) other
loans or advances made by the Parent to a Foreign Subsidiary ("OUTBOUND
DEBTS"); provided that (A) within 10 Business Days of the making of any
such loan or advance by the Parent to any of its Subsidiaries that is
not a Credit Party, one or more of the Foreign Subsidiaries shall
return an equivalent amount of funds to the Parent ("INBOUND
DISTRIBUTIONS") by way of (x) a dividend or return of capital or (y) a
loan or advance to the Parent, which loan or advance shall be
subordinated in right of payment to the Obligations in a manner
satisfactory to the Administrative Agent and (B) the aggregate amount
of Outbound Debts outstanding at any time to any of the Parent's
Subsidiaries that are not Credit Parties shall not exceed the aggregate
amount of Inbound Distributions from such Subsidiaries that are not
Credit Parties by more than the Dollar Equivalent Amount of
$100,000,000 at any time. In addition to the foregoing, the Parent or a
wholly owned Subsidiary of the Parent may own the Defeased IRBs; and
(iv) intercompany loans and advances made by and among the Company and
its Subsidiaries for the purpose of achieving tax efficiencies;
(d) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business of any Credit Party;
(e) the Parent and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding shall not exceed $5,000,000;
(f) the Parent may enter into Hedging Agreements that (i) are
required by SECTION 7.9 or (ii) are not speculative in nature, are
entered into in the ordinary course of business and are related to
interest rate hedging for floating interest rate exposure or hedging of
bookings, sales, income and dividends derived from the foreign
operations of the Parent or any of its Subsidiaries or otherwise
related to purchases from foreign suppliers;
(g) the Parent or any of its Subsidiaries may acquire all or
substantially all the assets of a Person or line of business of such
Person, or not less than 100% of the capital stock or other equity
interests of a Person (referred to herein as the "Acquired Entity");
provided that (i) such acquisition was not preceded by an unsolicited
tender offer for such capital stock or other equity interest by, or
proxy contest initiated by, the Parent or any of its Subsidiaries; (ii)
the Acquired Entity shall be a going concern, shall be in a similar
line of business as that of the Parent and its Subsidiaries as
conducted during the current and most recent calendar year; and (iii)
at the time of such transaction (A) both before and after giving effect
thereto, no Event of Default or Default shall have occurred and be
continuing; (B) the Parent would be in compliance with the covenants
set forth in SECTIONS 8.11 and 8.12 and the Leverage Ratio shall be at
least 25 basis points below the maximum Leverage Ratio permitted at the
time pursuant to SECTION 8.13, in each case as of
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
44
the most recently completed period of four consecutive fiscal quarters
ending prior to such transaction for which the financial statements and
certificates required by SECTION 7.4(a)(i) or 7.4(a)(ii) have been
delivered or for which comparable financial statements have been filed
with the SEC, after giving pro forma effect to such transaction and to
any other event occurring after such period as to which pro forma
recalculation is appropriate (including any other transaction described
in this SECTION 8.4(g) occurring after such period) as if such
transaction had occurred as of the first day of such period; (C) the
Company would be in compliance with the covenant set forth in SECTION
8.13(b) as of the most recently completed period of four consecutive
fiscal quarters ending prior to such transaction for which the
financial statements and certificates required by SECTION 7.4(b)(i),
7.4(b)(ii), 7.4(b)(iv) or 7.4(b)(v) have been delivered, after giving
pro forma effect to such transaction and to any other event occurring
after such period as to which pro forma recalculation is appropriate
(including any other transaction described in this SECTION 8.4(g)
occurring after such period) as if such transaction had occurred as of
the first day of such period, and (D) the aggregate of the
consideration paid in connection with all such acquisitions (including
any Indebtedness of the Acquired Entity that is assumed by the Parent
or any of its Subsidiaries following such acquisition) shall not exceed
(x) in the event that the Parent's Leverage Ratio calculated as
provided under CLAUSE (iii) (B) above is greater than 2.5 to 1.0,
$50,000,000 for all such acquisitions, and (y) in the event that the
Parent's Leverage Ratio calculated as provided under CLAUSE (iii) (B)
above is equal to or less than 2.5 to 1.0, $100,000,000 in any fiscal
year of the Parent, which amount may be increased in any fiscal year
(to an amount not to exceed $150,000,000) by the amount of
consideration for any such acquisition in such fiscal year consisting
solely of common stock of the Parent (any acquisition of an Acquired
Entity meeting all the criteria of this SECTION 8.4(g) being referred
to herein as a "PERMITTED ACQUISITION"). All pro forma calculations
required to be made pursuant to this SECTION 8.4(g) shall (i) include
only those adjustments that would be permitted or required by
Regulation S-X under the Securities Act of 1933, as amended, are
reviewed by the Parent's independent certified public accountants and
are based on reasonably detailed written assumptions reasonably
acceptable to the Administrative Agent and (ii) be certified to by a
Financial Officer as having been prepared in good faith based upon
reasonable assumptions;
(h) in addition to investments permitted by CLAUSES (a)
through (g) above, additional investments, loans, and advances (other
than equity investments in Foreign Subsidiaries) by the Parent and its
Subsidiaries (other than the Company and the Material Subsidiaries) so
long as the aggregate amount invested, loaned, or advanced pursuant to
Section 6.04(h) of the Original Credit Agreement and this CLAUSE (h)
(determined without regard to any write-downs or write-offs of such
investments, loans, and advances) does not exceed $10,000,000 in the
aggregate.
8.5 MERGERS, Consolidations, Sales of Assets and Acquisitions.
(a) Merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell,
transfer, lease, or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all the assets of the
Parent or any other Credit Party (whether now owned or hereafter
acquired) or any capital stock of any Subsidiary of the Parent (except
as permitted by SECTION 8.5(b), below), or purchase, lease, or
otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other Person, except that
(i) the Parent and any of its Subsidiaries may purchase and sell
inventory in the ordinary course of business, (ii) if at the time
thereof and immediately after giving effect thereto no Event of Default
or Default shall have occurred and be continuing (x) any wholly owned
Subsidiary of the Parent may merge into the Parent in a transaction in
which the Parent is the surviving corporation and (y) any wholly owned
Subsidiary of the Parent (other than the Company) may merge into or
consolidate with any other wholly owned Subsidiary of the
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
45
Parent in a transaction in which the surviving entity is a wholly owned
Subsidiary of the Parent (and a Credit Party, if the merged Subsidiary
was a Credit Party) and no Person other than the Parent or a wholly
owned Subsidiary of the Parent receives any consideration, (iii) the
Parent and its Subsidiaries may make Permitted Acquisitions (including
by way of merger of a Person or Persons into the Parent or any
Subsidiary of the Parent), (iv) any Subsidiary of the Parent (other
than the Company) may be liquidated if the assets and liabilities of
such Subsidiary have been (or as a result of such liquidation are)
assigned to and assumed by the Parent or another Subsidiary of the
Parent (which must be a Credit Party if the liquidated Subsidiary is a
Credit Party) in a manner permitted hereunder, (v) any Credit Party
(other than the Company and the Parent) may sell, transfer, lease, or
otherwise dispose of (in one transaction or a series of transactions)
all or substantially all of the assets of such Credit Party to another
Credit Party, and (vi) the Parent or any of its Subsidiaries may sell
Program Receivables to Finsub, and Finsub may sell Program Receivables
pursuant to the Receivables Program Documentation.
(b) With respect to the Parent, engage in any Asset Sale
otherwise permitted under SECTION 8.5(a) unless (i) such Asset Sale is
for consideration at least 75% of which is cash, (ii) such
consideration is at least equal to the fair market value (as certified
by a Responsible Officer of the Parent or, in the case of an asset with
a fair market value in excess of $20,000,000, determined in good faith
by the board of directors of the Parent) of the assets being sold,
transferred, leased, or disposed of and (iii) the fair market value of
all assets sold, transferred, leased, or disposed of pursuant to this
SECTION 8.5(b) shall not exceed (x) $50,000,000 in any fiscal year or
(y) $150,000,000 in the aggregate from and after the August 8, 2000,
provided that the limitations set forth in this CLAUSE (iii) shall not
apply to the non-recourse factoring of accounts receivable by Foreign
Subsidiaries, provided that the aggregate outstanding amount of
accounts receivable (assuming each such account receivable remains
outstanding for the number of days provided in the applicable invoice
for non-delinquent payment) at any time which have been so factored
since August 8, 2000 shall not exceed $50,000,000. Any Asset Sale by a
Subsidiary of the Parent of all or substantially all of its assets and
permitted by this SECTION 8.5 may be effected by a sale of all of the
capital stock of such Subsidiary.
(c) With respect to the Parent, engage in any Asset Swap
otherwise permitted by SECTION 8.5(a) unless all of the following
conditions are met: (i) such exchange complies with the definition of
Asset Swap, (ii) if the fair market value of the assets transferred
exceeds $25,000,000, the board of directors of the Parent approves such
exchange and the Parent secures an appraisal given by an unaffiliated
third party in form and substance reasonably satisfactory to the
Administrative Agent, (iii) the fair market value of all assets of the
Parent and its Subsidiaries transferred pursuant to Asset Swaps since
August 8, 2000 shall not exceed $100,000,000 in the aggregate, and (iv)
the fair market value of any property or assets received is at least
equal to the fair market value of the property or assets so
transferred.
8.6 DIVIDENDS and Distributions; Restrictive Agreements.
(a) Declare or pay, directly or indirectly, any dividend or
make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities, or a combination thereof, with
respect to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary of the Parent to purchase or acquire) any shares of any
class of its capital stock or set aside any amount for any such purpose
(a "RESTRICTED PAYMENT"); provided, however, that (i) the Company may
declare and pay dividends or make other distributions ratably to its
shareholders, so long as the FBV Fixed Charge Coverage Ratio for the
four fiscal quarters then ended is not less than 1.10:1.00 after giving
effect to such dividend or distribution payment, (ii) any Subsidiary of
the Parent may
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
46
declare and pay dividends or make other distributions ratably to its
shareholders, except as otherwise set forth in CLAUSE (i) above, (iii)
so long as no Event of Default or Default shall have occurred and be
continuing or would result therefrom, the Parent may repurchase shares
of its capital stock owned by employees of the Parent or its
Subsidiaries or make payments to employees of the Parent or its
Subsidiaries in connection with the exercise of stock options, stock
appreciation rights, or similar equity incentives or equity based
incentives upon termination of employment or in connection with the
death or disability of such employees, in an aggregate amount not to
exceed $5,000,000 in any fiscal year, (iv) so long as no Event of
Default or Default shall have occurred and be continuing or would
result therefrom, the Parent may repurchase shares of its capital stock
for contribution to employee benefit plans maintained by the Parent and
its Subsidiaries, in an aggregate amount not to exceed $5,000,000 in
any fiscal year and (v) so long as the Parent has obtained and
maintains Investment Grade Ratings, and so long as no Event of Default
or Default shall have occurred and be continuing or would result
therefrom, the Parent may make Restricted Payments in an amount not to
exceed in the aggregate 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) from the beginning
of the fiscal quarter immediately following the fiscal quarter during
which the Investment Grade Ratings are obtained to the end of the most
recent fiscal quarter for which financial statements have been
delivered to the Lenders pursuant to SECTION 7.4(a)(i) or 7.4(a)(II)
prior to the date of such Restricted Payment. Notwithstanding the
foregoing, the Company may make a repatriation of funds from the
Company to its shareholders of up to E70,000,000 from proceeds of the
EIB Loan during the fiscal year ending December 31, 2004.
(b) Enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts, or imposes any condition
upon (i) the ability of the Parent or any of its Subsidiaries to
create, incur, or permit to exist any Lien upon any of its property or
assets to secure the Obligations, or (ii) the ability of any Subsidiary
of the Parent to pay dividends or other distributions with respect to
any shares of its capital stock (except as set forth in SECTION
8.6(a)(i)) or to make or repay loans or advances to the Parent or any
of its Subsidiaries or to guarantee Indebtedness of the Company or any
of its Subsidiaries; provided that (A) the foregoing shall not apply to
restrictions and conditions imposed by Law or by any Loan Paper or
Subordinated Note Document, (B) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary of the Parent pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (C) the foregoing
shall not apply to restrictions and conditions imposed on Finsub under
the Receivables Program Documentation, (D) the foregoing shall not
apply to restrictions and conditions imposed on any Foreign Subsidiary
by the terms of any Indebtedness of such Foreign Subsidiary permitted
to be incurred hereunder, (E) CLAUSE (i) 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 (F) CLAUSE (i) of the foregoing shall
not apply to customary provisions in leases and other contracts
restricting the assignment thereof.
8.7 TRANSACTIONS with Affiliates. Except for transactions by or among
any Credit Party, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that: (a) any Credit Party may
engage in any of the foregoing transactions in the ordinary course of business
at prices and on terms and conditions not less favorable to such Credit Party
than could be obtained on an arm's-length basis from unrelated third parties,
(b) reasonable and customary fees may be paid to members of the board of
directors, officers, employees, and consultants of any Credit Party for services
rendered to such Credit Party in the ordinary course of business, together with
customary indemnities in connection therewith and in accordance with applicable
Law, (c) dividends and other payments permitted to be made under
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
47
SECTION 8.6 will be permitted, (d) the Parent, Finsub, and any other
Subsidiaries of the Parent may consummate the transactions contemplated by the
Receivables Program Documentation, (e) any Credit Party may enter into
intercompany transactions permitted by SECTION 8.4, (f) any Credit Party may
incur intercompany Indebtedness permitted by SECTION 8.1.
8.8 BUSINESS of the Credit Parties. Engage at any time in any business
or business activity other than the business currently conducted by the Credit
Parties and business activities reasonably incidental thereto; provided,
however, that the Parent shall be entitled to create a wholly-owned Subsidiary
engaged solely in the business of providing the insurance coverage required
under SECTION 7.2 hereof solely to the Credit Parties, so long as such
Subsidiary is adequately capitalized to satisfy the requirements of SECTION 7.2
and investments therein do not exceed $1,000,000 in the aggregate (a "CAPTIVE
INSURANCE COMPANY").
8.9 Other Indebtedness and Agreements.
(a) Permit any waiver, supplement, modification, amendment,
termination, or release of any indenture, instrument, or agreement
pursuant to which any Material Indebtedness of any Credit Party is
outstanding if the effect of such waiver, supplement, modification,
amendment, termination, or release would materially increase the
obligations of the obligor or confer additional material rights on the
holder of such Indebtedness in a manner adverse to any Credit Party or
the Lenders.
(b) (i) With respect to any Credit Party, make any
distribution, whether in cash, property, securities, or a combination
thereof, other than regular scheduled payments of interest as and when
due (to the extent not prohibited by applicable subordination
provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly redeem, repurchase, retire, or otherwise acquire
for consideration, or set apart any sum for the aforesaid purposes, any
subordinated Indebtedness (including the Subordinated Notes), or (ii)
pay in cash any amount in respect of any Indebtedness or preferred
equity interests that may at the obligor's option be paid in kind or in
other securities; provided that the Parent was permitted to repurchase
and/or prepay the Subordinated Notes to the extent provided in the
final proviso of Section 2.13(c) of the Original Credit Agreement.
8.10 CAPITAL Expenditures. Until such time as the Parent obtains, and
during any period in which the Parent does not maintain, Investment Grade
Ratings, permit the aggregate amount of Capital Expenditures made by the Parent
and its Subsidiaries in any fiscal year, to exceed $65,000,000 in the aggregate.
The amount of permitted Capital Expenditures set forth above in respect of any
fiscal year commencing with the fiscal year ending on December 31, 2004, shall
be increased (but not reduced) by (i) the amount of unused permitted Capital
Expenditures for the immediately preceding fiscal year less (ii) an amount equal
to unused Capital Expenditures carried forward to such preceding fiscal year.
8.11 INTEREST Coverage Ratio. With respect to the Parent, permit its
Interest Coverage Ratio for any period of four consecutive fiscal quarters, in
each case taken as one accounting period, ending during any period set forth
below to be less than the ratio set forth opposite such period below:
PERIOD RATIO
------ -----
From and including June 30, 2004 through and 2.75x
including December 30, 2005
From and including December 31, 2005 through and 3.75x
including March 31, 2006
Thereafter 4.00x
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
48
8.12 Fixed Charge Coverage Ratio. With respect to the Parent, permit
its Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters, in each case taken as one accounting period, ending during any period
set forth below to be the less than the ratio set forth opposite such period
below:
PERIOD RATIO
------ -----
From and including September 30, 2000 through and 1.10 to 1.00
including December 30, 2005
From and including December 31, 2005 through and 1.15 to 1.00
including September 29, 2006
Thereafter 1.20 to 1.00
8.13 MAXIMUM Leverage Ratio.
(a) With respect to the Parent, permit its Leverage Ratio at
any time during a period set forth below to be greater than the ratio
set forth opposite such period below:
PERIOD RATIO
------ -----
From and including June 30, 2002 through and 4.00x
including September 29, 2004
From and including September 30, 2004 through and 3.75x
including March 30, 2005
From and including March 31, 2005 through and 3.50x
including September 29, 2005
From and including September 30, 2005 through and 3.25x
including December 30,
2005 Thereafter 3.00x
(b) With respect to the Company, permit the FBV Leverage Ratio
at any time for the four consecutive fiscal quarters most recently
ended to be greater than 2.25x.
8.14 DESIGNATED Senior Indebtedness. With respect to the Parent,
designate any Indebtedness as "Designated Senior Indebtedness" for purposes of
either the Dollar Subordinated Note Indenture or the Euro Subordinated Note
Indenture.
8.15 FISCAL Year. With respect to the Parent, change its fiscal
year-end to a date other than December 31; provided that the Parent may use a
52/53 week fiscal year ending around December 31.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
49
SECTION 9 EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall exist if any one or
more of the following events (herein collectively called "EVENTS OF DEFAULT")
shall occur and be continuing:
(a) any representation or warranty made or deemed made in or
in connection with this Agreement or any other Loan Paper, or any
representation, warranty, statement or information contained in any
report, certificate, financial statement, or other instrument furnished
in connection with or pursuant to this Agreement or any other Loan
Paper, shall prove to have been false or misleading in any material
respect when so made or furnished;
(b) default shall be made in the payment of the amount of any
Drawing when the same becomes due and payable pursuant to SECTION 3.1
hereof;
(c) default shall be made in the payment of any interest on
the Obligation or any fees set forth in SECTION 3.2, when and as the
same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance
by any Credit Party of any covenant, condition, or agreement contained
in SECTION 7.1(a), 7.5, or 7.7 or in SECTION 8;
(e) default shall be made in the due observance or performance
by any Credit Party of any covenant, condition, or agreement contained
in any Loan Paper (other than those specified in CLAUSES (b), (c), or
(d) above) and such default shall continue unremedied for a period of
15 days after notice thereof from the Administrative Agent or any
Lender to the Company;
(f) any Credit Party shall: (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material
Indebtedness when and as the same shall become due and payable (after
giving effect to any applicable grace period), or (ii) fail to observe
or perform any other term, covenant, condition or agreement contained
in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this CLAUSE
(II) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking: (i) relief in respect of any Credit Party, or of
a substantial part of the property or assets of any Credit Party, under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other federal, state or foreign bankruptcy, insolvency,
receivership, or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator, or similar official for
any Credit Party or for a substantial part of the property or assets of
any Credit Party, or (iii) the winding-up or liquidation of any Credit
Party; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(h) any Credit Party shall: (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other federal, state or foreign bankruptcy, insolvency, receivership,
or similar law, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or the filing of any
petition described in CLAUSE (g) above, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Credit Party or for a
substantial part of the property or assets of any Credit Party, (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) become unable, admit in writing its
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
50
inability or fail generally to pay its debts as they become due, or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of the Dollar Equivalent Amount of
$10,000,000 shall be rendered against any Credit Party or any
combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
levy upon assets or properties of any Credit Party to enforce any such
judgment;
(j) an ERISA Event shall have occurred that, in the reasonable
opinion of the Determining Lenders, when taken together with all other
such ERISA Events, could reasonably be expected to result in a Material
Adverse Change;
(k) the Guaranty by any Guarantor for any reason shall cease
to be in full force and effect (other than in accordance with its
terms), any Guarantor fails to pay on the Guaranty in respect of the
Obligation, or any Guarantor shall deny in writing that it has any
further liability under the Guaranty (other than as a result of the
discharge of such Guarantor in accordance with the terms of this
Agreement);
(l) the Parent shall cease to be the beneficial owner of 100%
of the voting stock of the Company;
(m) any of the Obligations shall cease to constitute "Senior
Indebtedness" under and as defined in the Dollar Subordinated Note
Indenture or the Euro Subordinated Note Indenture; or
(n) the occurrence and continuance of an "Event of Default"
under the Parent Credit Agreement, or the occurrence and continuance of
an event which gives rise to the right of the EIB to demand repayment
under Section 10.01 of the EIB Loan.
9.2 REMEDIES UPON EVENT OF DEFAULT. If an Event of Default shall occur
and be continuing, then: (a) the Administrative Agent may (and, subject to the
terms of SECTION 10, shall upon the request of Determining Lenders) or
Determining Lenders may declare the Letter of Credit Commitment and the
obligation of Issuing Lender to issue the Letter of Credit on or after the date
thereof terminated, whereupon the same shall forthwith terminate; (b) the
Company shall pay to the Administrative Agent (for the Pro Rata benefit of the
Lenders) immediately after the notice referred to in SECTION 3.8 hereof the full
Available Amount of the Letter of Credit, regardless of whether any Drawing has
been made under the Letter of Credit, which sum shall be placed in the Cash
Collateral Account with the Administrative Agent for the payment of any future
Drawings; (c) the Company shall pay to the Administrative Agent immediately and
upon written notice and demand from the Administrative Agent to the Company the
unpaid amount of any of the remainder of the Obligation then due and owing to
the Administrative Agent, Issuing Lender, and the Lenders hereunder; and (d) the
Administrative Agent may (and, subject to the terms of SECTION 10, shall upon
the request of Determining Lenders) or Determining Lenders may (i) reduce any
claim to judgment, and/or (ii) pursue and enforce any of the Administrative
Agent's, Issuing Lender's, or any Lender's Rights under this Agreement, or
otherwise provided under or pursuant to any applicable Law or agreement;
provided, however, that if any Event of Default specified in SECTION 9.1(g) or
9.1(h) hereof shall occur, the Obligation (including the obligation to pay the
amount set forth in CLAUSES (b) and (c) above) shall thereupon become due and
payable concurrently therewith, without any further action by Administrative
Agent, Issuing Lender, or any Lender and without presentment, demand, protest,
notice of default, notice of acceleration or of intention to accelerate, or
other notice of any kind other than as expressly provided herein, all of which
the Company hereby
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
51
expressly waives to the fullest extent permitted by applicable Law, other than
such notice as is expressly required herein.
SECTION 10 AGREEMENT AMONG LENDERS
10.1 ADMINISTRATIVE AGENT.
(a) Each Lender hereby appoints Calyon New York Branch (and
Calyon New York Branch, hereby accepts such appointment) as its nominee
and agent, in its name and on its behalf: (i) to act as nominee for and
on behalf of such Lender in and under all Loan Papers; (ii) to arrange
the means whereby the funds of the Lenders are to be made available to
or for the benefit of the Company under the Loan Papers; (iii) to take
such action as may be requested by any Lender under the Loan Papers
(when such Lender is entitled to make such request under the Loan
Papers and after such requesting Lender has obtained the concurrence of
such other Lenders as may be required under the Loan Papers); (iv) to
receive all documents and items to be furnished to Lenders under the
Loan Papers; (v) to be the secured party, mortgagee, beneficiary, and
similar party in respect of, and to receive, as the case may be, any
collateral for the benefit of Lenders; (vi) to timely distribute, and
the Administrative Agent agrees to so distribute, to each Lender all
material information, requests, documents, and items received from the
Company under the Loan Papers; (vii) to promptly distribute to each
Lender its ratable part of each payment or prepayment (whether
voluntary, as proceeds of collateral upon or after foreclosure, as
proceeds of insurance thereon, or otherwise) in accordance with the
terms of the Loan Papers; (viii) to deliver to the appropriate Persons
requests, demands, approvals, and consents received from the Lenders;
and (ix) to execute, on behalf of the Lenders, such releases or other
documents or instruments as are permitted by the Loan Papers or as
directed by the Lenders or Determining Lenders (when entitled to so
authorize) from time to time; provided, however, the Administrative
Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to the
Loan Papers or applicable Law.
(b) The Administrative Agent may resign at any time as the
Administrative Agent under the Loan Papers by giving written notice
thereof to the Lenders. Should the initial or any successor
Administrative Agent ever cease to be a party hereto or should the
initial or any successor Administrative Agent ever resign as the
Administrative Agent, then Determining Lenders shall elect the
successor Administrative Agent from among the Lenders (other than the
resigning Administrative Agent). If no successor Administrative Agent
shall have been so appointed by Determining Lenders, within 30 days
after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance of any appointment as the
Administrative Agent under the Loan Papers by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the Rights of the
retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations of Administrative
Agent under the Loan Papers, and each Lender shall execute such
documents as any Lender may reasonably request to reflect such change
in and under the Loan Papers. After any retiring Administrative Agent's
resignation as the Administrative Agent under the Loan Papers, the
provisions of this SECTION 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Papers.
(c) The Administrative Agent, in its capacity as a Lender,
shall have the same Rights under the Loan Papers as any other Lender
and may exercise the same as though it were not
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
52
acting as the Administrative Agent; the term "Lender" shall, unless the
context otherwise indicates, include the Administrative Agent; and any
resignation of the Administrative Agent hereunder shall not impair or
otherwise affect any Rights which it has or may have in its capacity as
an individual Lender. Each Lender and each Credit Party agrees that the
Administrative Agent is not a fiduciary for the Lenders or for the
Credit Parties but simply is acting in the capacity described herein to
alleviate administrative burdens for both the Credit Parties and the
Lenders, that the Administrative Agent has no duties or
responsibilities to the Lenders or the Credit Parties except those
expressly set forth herein, and that the Administrative Agent in its
capacity as a Lender has all Rights of any other Lender.
(d) The Administrative Agent and its Affiliates may now or
hereafter be engaged in one or more loan, letter of credit, leasing, or
other financing transactions with the Credit Parties, act as trustee or
depositary for the Credit Parties, or otherwise be engaged in other
transactions with the Credit Parties (collectively, the "other
activities") not the subject of the Loan Papers. Without limiting the
Rights of the Lenders specifically set forth in the Loan Papers, the
Administrative Agent and its Affiliates shall not be responsible to
account to the Lenders for such other activities, and no Lender shall
have any interest in any other activities, any present or future
guaranties by or for the account of the Credit Parties which are not
contemplated or included in the Loan Papers, any present or future
offset exercised by the Administrative Agent and its Affiliates in
respect of such other activities, any present or future property taken
as security for any such other activities, or any property now or
hereafter in the possession or control of the Administrative Agent or
its Affiliates which may be or become security for the obligations of
the Credit Parties arising under the Loan Papers by reason of the
general description of indebtedness secured or of property contained in
any other agreements, documents or instruments related to any such
other activities; provided that, if any payments in respect of such
guaranties or such property or the proceeds thereof shall be applied to
reduction of the obligations of the Credit Parties arising under the
Loan Papers, then each Lender shall be entitled to share in such
application ratably.
10.2 EXPENSES. Upon demand by the Administrative Agent, each Lender
shall pay its Pro Rata Part of any reasonable expenses (including, without
limitation, court costs, reasonable attorneys' fees and other costs of
collection) incurred by the Administrative Agent in connection with any of the
Loan Papers if and to the extent the Administrative Agent does not receive
reimbursement therefor from other sources within 60 days after incurred;
provided that, each Lender shall be entitled to receive its Pro Rata Part of any
reimbursement for such expenses, or part thereof, which the Administrative Agent
subsequently receives from such other sources.
10.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise provided
in the Loan Papers, nothing in the Loan Papers shall be deemed to give any
Lender any advantage over any other Lender insofar as the Obligation arising
under the Loan Papers is concerned, or to relieve any Lender from absorbing its
Pro Rata Part of any losses sustained with respect to the Obligation (except to
the extent such losses result from unilateral actions or inactions of any Lender
that are not made in accordance with the terms and provisions of the Loan
Papers).
10.4 DELEGATION OF DUTIES; RELIANCE. The Administrative Agent may
perform any of its duties or exercise any of its Rights under the Loan Papers by
or through its Representatives. The Administrative Agent and its Representatives
shall: (a) be entitled to rely upon (and shall be protected in relying upon) any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telecopy, telegram, telex or teletype message, statement, order, or other
documents or conversation believed by it or them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinion of counsel selected by the Administrative Agent, (b) be
entitled to deem and
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
53
treat each Lender as the owner and holder of the Obligation owed to such Lender
for all purposes until, subject to SECTION 11.12, written notice of the
assignment or transfer thereof shall have been given to and received by the
Administrative Agent (and any request, authorization, consent, or approval of
any Lender shall be conclusive and binding on each subsequent holder, assignee,
or transferee of the Obligation owed to such Lender or portion thereof until
such notice is given and received), (c) not be deemed to have notice of the
occurrence of an Event of Default unless a responsible officer of the
Administrative Agent, who handles matters associated with the Loan Papers and
transactions thereunder, has actual knowledge thereof or the Administrative
Agent has been notified thereof by a Lender or the Company, and (d) be entitled
to consult with legal counsel (including counsel for the Company), independent
accountants and other experts selected by the Administrative Agent and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.
10.5 LIMITATION OF LIABILITY.
(a) Neither the Administrative Agent nor any of its
Representatives shall be liable for any action taken or omitted to be
taken by it or them under the Loan Papers in good faith and reasonably
believed by it or them to be within the discretion or power conferred
upon it or them by the Loan Papers or be responsible for the
consequences of any error of judgment, except for gross negligence or
willful misconduct; and neither the Administrative Agent nor any of its
Representatives has any fiduciary relationship with any Lender by
virtue of the Loan Papers (provided that nothing herein shall negate
the obligation of the Administrative Agent to account for funds
received by it for the account of any Lender).
(b) Unless indemnified to its satisfaction against loss, cost,
liability, and expense, the Administrative Agent shall not be compelled
to do any act under the Loan Papers or to take any action toward the
execution or enforcement of the powers thereby created or to prosecute
or defend any suit in respect of the Loan Papers. If the Administrative
Agent requests instructions from the Lenders or Determining Lenders, as
the case may be, with respect to any act or action (including, but not
limited to, any failure to act) in connection with any Loan Paper, the
Administrative Agent shall be entitled (but shall not be required) to
refrain (without incurring any liability to any Person by so
refraining) from such act or action unless and until it has received
such instructions. In no event, however, shall the Administrative Agent
or any of its Representatives be required to take any action which it
or they determine could incur for it or them criminal or onerous civil
liability. Without limiting the generality of the foregoing, no Lender
shall have any right of action against the Administrative Agent as a
result of the Administrative Agent's acting or refraining from acting
hereunder in accordance with the instructions of Determining Lenders.
(c) The Administrative Agent shall not be responsible in any
manner to any Lender or any Participant for, and each Lender represents
and warrants that it has not relied upon the Administrative Agent in
respect of, (i) the creditworthiness of the Credit Parties and the
risks involved to such Lender, (ii) the effectiveness, enforceability,
genuineness, validity, or the due execution of any Loan Paper, (iii)
any representation, warranty, document, certificate, report, or
statement made therein or furnished thereunder or in connection
therewith, (iv) the existence, priority, or perfection of any Lien
hereafter granted or purported to be granted under any Loan Paper, or
(v) observation of or compliance with any of the terms, covenants, or
conditions of any Loan Paper on the part of any of the Credit Parties.
Each Lender agrees to indemnify the Administrative Agent and its
Representatives and hold them harmless from and against (but limited to
such Lender's Pro Rata Part of) any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses, and reasonable disbursements of any kind or nature
whatsoever which may be imposed on, asserted against, or incurred by
them in
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
54
any way relating to or arising out of the Loan Papers or any action
taken or omitted by them under the Loan Papers, to the extent the
Administrative Agent and its Representatives are not reimbursed for
such amounts by the Credit Parties (provided that, neither the
Administrative Agent nor its Representatives shall have the right to be
indemnified hereunder for its or their own gross negligence or willful
misconduct).
10.6 DEFAULT; COLLATERAL. Upon the occurrence and continuance of an
Event of Default, the Lenders agree to promptly confer in order that Determining
Lenders or the Lenders, as the case may be, may agree upon a course of action
for the enforcement of the Rights of Lenders; and the Administrative Agent shall
be entitled to refrain from taking any action (without incurring any liability
to any Person for so refraining) unless and until the Administrative Agent shall
have received instructions from Determining Lenders. In actions with respect to
any property of the Credit Parties, the Administrative Agent is acting for the
ratable benefit of each Lender. Any and all agreements to subordinate (whether
made heretofore or hereafter) other Indebtedness or obligations of the Company
to the Obligation shall be construed as being for the ratable benefit of each
Lender. If the Administrative Agent acquires any security for the Obligation
upon or in lieu of foreclosure, the same shall be held for the Pro Rata benefit
of all Lenders.
10.7 LIMITATION OF LIABILITY. To the extent permitted by Law: (a) the
Administrative Agent (acting in its agent capacity) shall not incur any
liability to any other Lender or Participant except for acts or omissions
resulting from its own gross negligence or willful misconduct, and (b) neither
the Administrative Agent, any Lender, nor any Participant shall incur any
liability to any other Person for any act or omission of any other Lender or
Participant.
10.8 RELATIONSHIP OF LENDERS. Nothing herein shall be construed as
creating a partnership or joint venture among the Administrative Agent and the
Lenders.
10.9 BENEFITS OF AGREEMENT. Except for the representations and
covenants in SECTION 10.1(c) in favor of the Credit Parties, none of the
provisions of this SECTION 10 shall inure to the benefit of the Credit Parties
or any other Person other than Lenders; consequently, neither the Credit Parties
nor any other Person shall be entitled to rely upon, or to raise as a defense,
in any manner whatsoever, the failure of the Administrative Agent or Lender to
comply with such provisions.
10.10 OBLIGATION SEVERAL. The obligations of the Lenders hereunder are
several, and each Lender hereunder shall not be responsible for the obligations
of the other Lenders hereunder, nor will the failure of one Lender to perform
any of its obligations hereunder relieve the other Lenders from the performance
of their respective obligations hereunder.
SECTION 11 MISCELLANEOUS
11.1 HEADINGS. The headings, captions, and arrangements used in any of
the Loan Papers are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify, or modify the terms of the Loan Papers, nor
affect the meaning thereof.
11.2 NONBUSINESS DAYS. In any case where any payment or action is due
under any Loan Paper on a day which is not a Business Day, such payment or
action may be delayed until the next-succeeding Business Day, but interest and
fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
55
11.3 COMMUNICATIONS. Unless specifically otherwise provided, whenever
any Loan Paper requires or permits any consent, approval, notice, request, or
demand from one party to another, such communication must be in writing (which
may be by telex or telecopy) to be effective and shall be deemed to have been
given: (a) if by telex, when transmitted to the telex number, if any, for such
party, and the appropriate answer back is received, (b) if by telecopy, when
transmitted to the telecopy number for such party (and all such communications
sent by telecopy shall be confirmed promptly thereafter by personal delivery or
mailing in accordance with the provisions of this section; provided that any
requirement in this parenthetical shall not affect the date on which such
telecopy shall be deemed to have been delivered), (c) if by certified (return
receipt) or registered mail, shall be deemed to have been given when received,
and (d) if by hand or overnight courier service, shall be deemed to have been
given when received. Until changed by notice pursuant hereto, the address (and
telex and telecopy numbers, if any) for the Administrative Agent and each Lender
is set forth on SCHEDULE 2.1, and for each Credit Party is the address set forth
by such Credit Party's signature on the signature page of this Agreement.
11.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document,
instrument, or other writing to be furnished under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to the Administrative Agent and its counsel.
11.5 SURVIVAL. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Papers shall survive all
closings under the Loan Papers and, except as otherwise indicated, shall not be
affected by any investigation made by any party. All rights of, and provisions
relating to, reimbursement and indemnification of the Administrative Agent,
Issuing Lender or any Lender shall survive termination of this Agreement and
payment in full of the Obligation.
11.6 Governing Law. THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN
PAPERS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE
LOAN PAPERS.
11.7 INVALID PROVISIONS. If any provision in any Loan Paper is held to
be illegal, invalid, or unenforceable, such provision shall be fully severable;
the appropriate Loan Paper shall be construed and enforced as if such provision
had never comprised a part thereof; and the remaining provisions thereof shall
remain in full force and effect and shall not be affected by such provision or
by its severance therefrom. The Administrative Agent, Issuing Lender, the
Lenders, and the Credit Parties agree to negotiate, in good faith, the terms of
a replacement provision as similar to the severed provision as may be possible
and be legal, valid, and enforceable.
11.8 Entirety. THE RIGHTS AND OBLIGATIONS OF THE CREDIT PARTIES,
LENDERS, ISSUING LENDER, AND THE ADMINISTRATIVE AGENT SHALL BE DETERMINED SOLELY
FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN
LOAN PAPERS EXECUTED BY THE CREDIT PARTIES, ANY LENDER, ISSUING LENDER, OR THE
ADMINISTRATIVE AGENT (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS
THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE FINAL
AGREEMENT BETWEEN THE CREDIT PARTIES, LENDERS, ISSUING LENDER, AND THE
ADMINISTRATIVE AGENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
56
11.9 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY
HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY: (A)
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE BOROUGH OF MANHATTAN OR SOUTHERN DISTRICT OF NEW YORK, AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE
OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY NEW YORK LAW, (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN
CONNECTION WITH THE LOAN PAPERS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT,
(C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID, TO ITS PROCESS AGENT SET FORTH BELOW, AND (E)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY LOAN PAPER OR THE TRANSACTIONS CONTEMPLATED THEREBY. In order to
effectuate such submission to jurisdiction, each Credit Party hereby agrees that
service of all writs, process, and summonses in any such suit, action, or
proceeding brought in the State of New York may be brought upon its process
agent appointed below. Each Credit Party hereby irrevocably appoints CT
Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, its process
agent, as its true and lawful attorney-in-fact in the name, place and stead of
such Credit Party to accept such service of any and all such writs, process, and
summonses, and each Credit Party agrees that the failure of such process agent
to notify any Credit Party of the service of such writ, process, or summons
shall not impair the validity of such service or any judgment based thereon. The
scope of each of the foregoing waivers is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
The Credit Parties and each other party to this Agreement acknowledge that this
waiver is a material inducement to the agreement of each party hereto to enter
into a business relationship, that each has already relied on this waiver in
entering into this agreement, and each will continue to rely on each of such
waivers in related future dealings. The Credit Parties and each other party to
this Agreement warrant and represent that they have reviewed these waivers with
their legal counsel, and that they knowingly and voluntarily agree to each such
waiver following consultation with legal counsel. THE WAIVERS IN THIS SECTION
11.9 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS AGREEMENT OR ANY OTHER LOAN PAPER.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
11.10 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.
(a) Except as otherwise specifically provided, (i) this
Agreement may only be amended, modified or waived by an instrument in
writing executed jointly by the Company and Determining Lenders, and,
in the case of any matter affecting the Administrative Agent, by the
Administrative Agent, and may only be supplemented by documents
delivered or to be delivered in accordance with the express terms
hereof, and (ii) the other Loan Papers may only be the subject of an
amendment, modification, or waiver if the Company and Determining
Lenders, and, in the case of any matter affecting the Administrative
Agent, the Administrative Agent, have approved same.
(b) Any amendment to or consent or waiver under this Agreement
or any Loan Paper which purports to accomplish any of the following
must be by an instrument in writing executed
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
57
by the Company and executed (or approved, as the case may be) by each
Lender, and, in the case of any matter affecting the Administrative
Agent or Issuing Lender, by the Administrative Agent or Issuing Lender,
as applicable: (i) extends the Credit Expiration Date or the due date
of any scheduled payment of the Obligation (including interest and
fees) arising under the Loan Papers beyond the date specified in the
Loan Papers; (ii) reduces the interest rate or decreases the amount of
any scheduled payment, interest, fees, or other sums payable to the
Administrative Agent or the Lenders hereunder (except such reductions
as are contemplated by this Agreement); (iii) changes the percentage
specified in the definition of "DETERMINING LENDERS" or any other
provision hereof specifying the number or percentage of the Lenders
which are required to amend, waive, or modify any rights hereunder or
otherwise make any determination or grant any consent hereunder; (iv)
changes this CLAUSE (b) or any other matter specifically requiring the
consent of all Lenders hereunder; (v) consents to the assignment or
transfer of the Company of any of its rights and obligations under this
Agreement; (vi) releases any Guarantor from the Guaranty; (vii) change
SECTION 2.1(c) in any manner that would alter the Pro Rata sharing of
payments required thereby; or (viii) change SECTION 3.8 or any other
provision of this Agreement that would alter the rights of Lenders with
respect to Cash Collateral. Without the consent of such Lender, no
Lender's "COMMITTED SUM" under the Letter of Credit Commitment may be
increased. Without the consent of the Administrative Agent and
Determining Lenders, no provision of SECTION 10 may be amended,
modified, or waived.
(c) Any conflict or ambiguity between the terms and provisions
herein and terms and provisions in any other Loan Paper shall be
controlled by the terms and provisions herein.
(d) No course of dealing nor any failure or delay by the
Administrative Agent, any Lender, or any of their respective
Representatives with respect to exercising any Right of the
Administrative Agent or any Lender hereunder shall operate as a waiver
thereof. A waiver must be in writing and signed by the Administrative
Agent and Determining Lenders (or by all Lenders, if required
hereunder) to be effective, and such waiver will be effective only in
the specific instance and for the specific purpose for which it is
given.
11.11 MULTIPLE COUNTERPARTS. This Agreement may be executed in a number
of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. It is not necessary that each Lender execute
the same counterpart so long as identical counterparts are executed by the
Credit Parties, each Lender, and the Administrative Agent. This Agreement shall
become effective when counterparts hereof shall have been executed and delivered
to the Administrative Agent by each Lender, the Administrative Agent, and each
Credit Party, or, when the Administrative Agent shall have received telecopied,
telexed, or other evidence satisfactory to it that such party has executed and
is delivering to the Administrative Agent a counterpart hereof.
11.12 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.
(a) This Agreement shall be binding upon, and inure to the
benefit of the parties hereto and their respective successors and
assigns, except that (i) the Company may not, directly or indirectly,
assign or transfer, or attempt to assign or transfer, any of its
Rights, duties or obligations under any Loan Papers without the express
written consent of all Lenders, and (ii) except as permitted under this
Section, no Lender may transfer, pledge, assign, sell any participation
in, or otherwise encumber its portion of the Obligation.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
58
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its Rights and obligations under this Agreement and
the other Loan Papers; provided, however, that:
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or to an Affiliate of a Lender, or an assignment of all
of a Lender's Rights and obligations under this Agreement and
the other Loan Papers, any such partial assignment shall be in
an amount at least equal to $5,000,000, and, after such
assignment, no Lender shall have a Committed Sum of less than
$5,000,000 (in each case unless otherwise agreed by the
Company and the Administrative Agent);
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its Rights and
obligations under this Agreement; and
(iv) the parties to such assignment shall execute and
deliver to the Administrative Agent for its acceptance an
Assignment and Acceptance Agreement, together with a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance Agreement, the assignee thereunder shall be a party hereto
and, to the extent of such assignment, have the obligations, Rights,
and benefits of a Lender under the Loan Papers and the assigning Lender
shall, to the extent of such assignment, relinquish its rights and be
released from its obligations under the Loan Papers. If the assignee is
not incorporated under the Laws of the United States of America or a
state thereof, it shall deliver to the Company and the Administrative
Agent certification as to exemption from deduction or withholding of
Taxes in accordance with SECTION 3.6.
(c) The Administrative Agent shall maintain at its address
referred to in SECTION 11.3 a copy of each Assignment and Acceptance
Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and their
respective Committed Sums, and principal amount of the Drawings, if
any, owing to each Lender from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Company, the Administrative
Agent, Issuing Lender, and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of
the Loan Papers. The Register shall be available for inspection by the
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon the consummation of any assignment in
accordance with this Section, SCHEDULE 2.1 shall automatically be
deemed amended (to the extent required) by the Administrative Agent to
reflect the name, address, and respective Committed Sums of the
assignor and assignee.
(d) Upon its receipt of an Assignment and Acceptance Agreement
executed by the parties thereto, and payment of the processing fee, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of EXHIBIT B hereto: (i)
accept such Assignment and Acceptance Agreement, (ii) record the
information contained therein in the Register, and (iii) give prompt
notice thereof to the parties thereto.
(e) Subject to the provisions of this Section and in
accordance with applicable Law, any Lender may, in the ordinary course
of its commercial lending business and in accordance with applicable
Law, at any time sell to one or more Persons (each a "PARTICIPANT")
participating interests in its portion of the Obligation. In the event
of any such sale to a Participant, (i) such
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
59
Lender shall remain a "Lender" under this Agreement and the Participant
shall not constitute a "Lender" hereunder, (ii) such Lender's
obligations under this Agreement shall remain unchanged, (iii) such
Lender shall remain solely responsible for the performance thereof,
(iv) such Lender shall remain the holder of its share of the Obligation
for all purposes under this Agreement, (v) the Company and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's Rights and obligations
under the Loan Papers, and (vi) such Lender shall be solely responsible
for any withholding taxes or any filing or reporting requirements
relating to such participation and shall hold the Company and the
Administrative Agent and their respective successors, permitted
assigns, officers, directors, employees, agents, and representatives
harmless against the same. Participants shall have no Rights under the
Loan Papers, other than certain voting Rights as provided below.
Subject to the following, each Lender shall be entitled to obtain (on
behalf of its Participants) the benefits of SECTION 3.4 with respect to
all participations in its part of the Obligation outstanding from time
to time so long as the Company shall not be obligated to pay any amount
in excess of the amount that would be due to such Lender under SECTION
3.4 calculated as though no participations have been made. No Lender
shall sell any participating interest under which the Participant shall
have any Rights to approve any amendment, modification, or waiver of
any Loan Paper, except to the extent such Lender has voting rights
pursuant to SECTION 11.10; provided that, in those cases where a
Participant is entitled to the benefits of SECTION 3.4 or a Lender
grants Rights to its Participants to approve amendments to or waivers
of the Loan Papers respecting the matters previously described in this
sentence, such Lender must include a voting mechanism in the relevant
participation agreement or agreements, as the case may be, whereby a
majority of such Lender's portion of the Obligation (whether held by
such Lender or Participant) shall control the vote for all of such
Lender's portion of the Obligation. Except in the case of the sale of a
participating interest to another Lender, the relevant participation
agreement shall not permit the Participant to transfer, pledge, assign,
sell participations in, or otherwise encumber its portion of the
Obligation, unless the consent of the transferring Lender (which
consent will not be unreasonably withheld) has been obtained.
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any
portion of its loans and advances hereunder to any Federal Reserve Bank
as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Credit Parties in the possession of such Lender from time to time to
Eligible Assignees and Participants (including prospective Eligible
Assignees and Participants), subject, however, to SECTION 11.16 hereof.
11.13 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The Credit Parties' obligations under the Loan Papers shall
remain in full force and effect until termination of the Letter of Credit
Commitment and payment in full of all interest, fees, and other amounts of the
Obligation then due and owing, and termination of the Letter of Credit except
that SECTION 2.1(h), SECTION 3.4, SECTION 3.5(a), SECTION 3.5(b), and SECTION
11, and any other provisions under the Loan Papers expressly intended to survive
by the terms hereof or by the terms of the applicable Loan Papers, shall survive
such termination. If at any time any payment of the principal, interest, fees,
or any other amount payable by any Credit Party under any Loan Paper is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of such Credit Party or otherwise, the obligations
of such Credit Party under the Loan Papers with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
60
11.14 Judgment Currency.
(a) If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder from a currency (the
"ORIGINAL CURRENCY") into another currency (the "OTHER CURRENCY"), the
parties hereto agree, to the fullest extent that they may effectively
do so, such conversion shall be done at the Exchange Rate used on the
second Business Day preceding that day on which final judgment is
given.
(b) The obligation of the Credit Parties in respect of any sum
due in the Original Currency from any of them to any Lender, Issuing
Lender, or the Administrative Agent under this Agreement shall,
notwithstanding any judgment in any Other Currency, be discharged only
if and to the extent that on the Business Day following receipt by such
Lender, Issuing Lender, or the Administrative Agent of any sum adjudged
to be so due in such Other Currency such Lender, Issuing Lender, or the
Administrative Agent may in accordance with normal banking procedures
purchase such amount of the Original Currency with such Other Currency
at its principal office in London, England which the Administrative
Agent could have purchased on the second Business Day preceding that on
which the final judgment referred to in SECTION 11.9 is given; if the
amount of the Original Currency so purchased is less than the amount of
the Original Currency which the Administrative Agent could have
purchased on the second Business Day preceding that on which such final
judgment is given, each Credit Party agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such Lender,
Issuing Lender, or the Administrative Agent against such difference,
and if the amount of the Original Currency so purchased exceeds the
amount of the Original Currency which the Administrative Agent could
have purchased on the second Business Day preceding that on which such
final judgment is given, such Lender, Issuing Lender, or the
Administrative Agent agrees to remit such excess to the applicable
Credit Party.
11.15 Setoff. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to any Credit Party or any other obligor, any such notice being
waived by such Credit Party to the fullest extent permitted by Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing by, such
Lender to or for the credit or the account of such Credit Party, or any of them,
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Paper and although such
Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify such Credit Party and Administrative Agent after any such setoff and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.16 CONFIDENTIALITY. The Administrative Agent and each Lender (each,
a "LENDING PARTY") agrees to use its best efforts to keep confidential any
information furnished or made available to it by the Credit Parties pursuant to
this Agreement that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information: (a) to any other
Lending Party, or any officer, director, employee, agent, or advisor of any
Lending Party, (b) to its auditors, accountants, legal counsel or other
professional advisors, (c) as required by any Law, (d) upon the order of any
court or administrative agency, (e) upon the request or demand of any regulatory
agency or authority, (f) that is or becomes available to the public or that is
or becomes available to any Lending Party other than as a result of a disclosure
by any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Paper, and (i) subject
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
61
to provisions substantially similar to those contained in this Section, to any
Affiliate of any Lending Party or to any actual or proposed participant or
assignee.
11.17 USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act
(as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Company that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "ACT"), it is required to obtain, verify and record
information that identifies the Company and the Guarantors, which information
includes the name and address of the Company and the Guarantors and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Company and the Guarantors in accordance with the
Act.
EXECUTED by the parties hereto as of the day and year first above
written.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE(S) FOLLOW.
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
62
COMPANY:
FLOWSERVE B.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director
ADDRESS FOR NOTICES:
▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page to Letter of Credit and Reimbursement Agreement
GUARANTORS:
ADDRESS FOR NOTICES:
FLOWSERVE CORPORATION
▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ---------------------------------
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇ Vice President
FLOWSERVE INTERNATIONAL B.V. FLOWSERVE DORTMUND GMBH & CO. KG
FLOWSERVE REPAIR & SERVICES B.V.
By: FLOWSERVE DORTMUND
VERWALTUNGS-GMBH, its General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇ ---------------------------------
Managing Director ▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director
FLOWSERVE S.A. FLOWSERVE BELGIUM N.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
Chairman Director
By: /s/ ▇▇▇ ▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇ ▇▇▇▇
FLOWSERVE FLOW CONTROL BENELUX B.V. Managing Director
By: FLOWSERVE B.V., its Managing Director
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇.
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director
Signature Page to Letter of Credit and Reimbursement Agreement
ADMINISTRATIVE AGENT, ISSUING LENDER,
AND A LENDER:
CALYON NEW YORK BRANCH
By: /s/ Philippe Soustra
---------------------------------
Name: Philippe Soustra
Title: Executive Vice President
By: /s/ Attila Coach
---------------------------------
Name: Attila Coach
Title: Sr. Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇▇ Noique
-----------------------------
Name: ▇▇▇▇▇▇ Noique
Title: Group Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇. ▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
CITICORP NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
CREDIT INDUSTRIEL ET COMMERCIAL
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President First Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
CREDIT SUISSE FIRST BOSON, ACTING
THROUGH ITS CAYMAN ISLANDS BRANCH
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
MIZUHO CORPORATE BANK, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page to Letter of Credit and Reimbursement Agreement
LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Letter of Credit and Reimbursement Agreement