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$37,000,000
CREDIT AGREEMENT
AMONG
THE ▇▇▇▇▇ CORPORATION
FERREX TRADING CORPORATION
PAULDING RECYCLING, INC.
AND
BRIQUETTING CORPORATION OF AMERICA
AS BORROWERS
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THEIR ASSIGNEES
PURSUANT TO SECTION 11.8 HEREOF
AS LENDERS
WITH
THE ▇▇▇▇▇ CORPORATION
AS ▇▇▇▇▇ FUNDS ADMINISTRATOR
AND
BT COMMERCIAL CORPORATION,
AS AGENT
DATED AS OF JUNE 23, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.3 Other Terms; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 2. REVOLVING LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 Borrowing of Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3 Notice of Request for Lender Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 Periodic Settlement of Agent Advances; Interest and Fees; Statements. . . . . . . . . . . . . 23
2.5 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.7 Allocation of Revolving Loans and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 Terms of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3 Notice of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4 Lenders' Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.5 Payments of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . 28
3.6 Payment by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.7 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 Agent's Execution of Applications and Other Issuing Bank Documentation; Reliance on Credit
Agreement by Issuing Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION OF
COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.1 Interest on Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 Closing Fee; Unused Line Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.4 Interest and Letter of Credit Fees After Event of Default. . . . . . . . . . . . . . . . . . . 31
4.5 Collateral Monitoring Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.7 Mandatory Payment of Revolving Loans; Reductions of Commitments. . . . . . . . . . . . . . . . 32
4.8 Maintenance of Loan Account; Statements of Account . . . . . . . . . . . . . . . . . . . . . . 32
4.9 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.10 Collection of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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4.11 Distribution and Application of Collections and other Amounts . . . . . . . . . . . . . . . . 33
4.12 Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.13 Special Provisions Relating to LIBOR Rate Loans . . . . . . . . . . . . . . . . . . . . . . . 34
4.14 Indemnification in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1 Conditions Precedent to Initial Revolving Loan and Letter of Credit . . . . . . . . . . . . . 39
5.2 Conditions Precedent to All Revolving Loans and Letters of Credit . . . . . . . . . . . . . . 40
ARTICLE 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.5 Consents and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.6 Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.7 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.8 Rights in Collateral; Priority of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.9 Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.10 Locations of Offices, Records and Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.11 Subsidiaries; Ownership of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.12 No Judgments or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.13 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.14 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.15 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.16 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.17 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.18 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.19 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.20 Taxes and Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.21 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.22 Accuracy and Completeness of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.23 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.1 Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.2 Collateral Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.3 Notification Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.4 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.5 Books and Records; Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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7.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.10 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.11 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.12 ERISA Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.13 Environmental and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.14 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.15 Deposit of Collections and Other
Proceeds of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.1 Minimum EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.3 Additional Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.4 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.5 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.6 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.7 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.8 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.9 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.12 Additional Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.2 Acceleration, Termination of Commitments and Cash Collateralization . . . . . . . . . . . . . 63
9.3 Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.5 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.6 License of Use of Software and Other Intellectual Property . . . . . . . . . . . . . . . . . . 65
9.7 Application of Proceeds; Surplus; Deficiencies . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.1 Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.2 Nature of Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.3 Lack of Reliance on Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.4 Certain Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.5 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.6 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.7 The Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.8 Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.10 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.1 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.2 SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.3 SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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11.4 JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.5 LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.6 Delays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.8 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.12 Counterparts and Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.14 Maximum Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.15 Entire Agreement; Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.16 Joint and Several Liability of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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ANNEXES
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ANNEX I List of Lenders; Commitment Amounts; Applicable
Lending Offices
SCHEDULES
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SCHEDULE A Closing Document List
SCHEDULE B Disclosure Schedules
SCHEDULE B, PART 6.1 States in which Qualified
SCHEDULE B, PART 6.9 Contingent Obligations and Other Liabilities
SCHEDULE B, PART 6.10 Chief Executive Offices; Locations of Collateral
SCHEDULE B, PART 6.11 Subsidiaries
SCHEDULE B, PART 6.12 Pending Judgments, Litigation and other Claims
SCHEDULE B, PART 6.14 Labor Contracts
SCHEDULE B, PART 6.16 Plans
SCHEDULE B, PART 6.17 Environmental Matters
SCHEDULE B, PART 6.20 Tax Matters; Tax Sharing Agreements
SCHEDULE B, PART 6.21 Material Contracts
SCHEDULE B, PART 8.3 Existing Indebtedness
SCHEDULE B, PART 8.4 Existing Liens
SCHEDULE B, PART 8.10 Disbursement Accounts
EXHIBITS
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EXHIBIT A Form of Borrowing Base Certificate
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Revolving Note
EXHIBIT D Form of Notice of Continuation
EXHIBIT E Form of Notice of Conversion
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Assignment and Assumption Agreement
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THIS CREDIT AGREEMENT ("CREDIT AGREEMENT") is entered into as of June
23, 1997, among THE ▇▇▇▇▇ CORPORATION, an Ohio corporation ("▇▇▇▇▇"), FERREX
TRADING CORPORATION, a Delaware corporation formerly known as ▇▇▇▇▇ Acquisition
Corporation ("FERREX"), PAULDING RECYCLING, INC., an Ohio corporation
("PAULDING"), BRIQUETTING CORPORATION OF AMERICA, an Ohio corporation
("BRIQUETTING") (▇▇▇▇▇, Ferrex, Paulding and Briquetting each sometimes
hereinafter are referred to individually as a "BORROWER" and collectively as
"BORROWERS"); each financial institution identified on ANNEX I (together with
its successors and permitted assigns, hereinafter referred to individually as a
"LENDER" and collectively as "LENDERS"); ▇▇▇▇▇, acting in its capacity as
borrowing agent hereunder for the Borrowers (▇▇▇▇▇, in such capacity, the
"▇▇▇▇▇ FUNDS ADMINISTRATOR"); and BT COMMERCIAL CORPORATION, a Delaware
corporation (in its individual capacity, hereinafter referred to as "BTCC"),
acting in its capacity as agent for the Lenders (in such capacity, together
with its successors in such capacity, hereinafter referred to as the "AGENT").
ARTICLE 1. DEFINITIONS.
1.1 GENERAL DEFINITIONS.
ACCOUNT has the meaning set forth in the Security Agreement.
ACQUISITION DOCUMENTS means, collectively, the Purchase Agreement and
Plan of Merger and all other documents and instruments executed by ▇▇▇▇▇, MTLM,
Ferrex Ohio, Ferrex, Paulding, Briquetting or any ▇▇▇▇▇ Seller in connection
with the Acquisition and the Merger, in each case as in effect on the Closing
Date and as amended, restated, supplemented or otherwise modified from time to
time hereafter in accordance with the terms and provisions hereof.
ACQUISITION means the acquisition by MTLM of the Ferrex Ohio Capital
Stock, the ▇▇▇▇▇ Capital Stock, the Paulding Capital Stock and the Briquetting
Capital Stock pursuant to the terms and conditions of the Acquisition
Documents.
AFFILIATE of a Person means another Person who directly or indirectly
controls, is controlled by, is under common control with or is a director or
officer of, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to vote five percent (5%) or
more of the securities having ordinary voting power for the election of
directors or the direct or indirect power to direct the management and policies
of a business.
AGENT ADVANCES has the meaning set forth in SECTION 2.2.
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ALLOCATION ACCOUNT has the meaning set forth in SECTION 2.7(b).
APPLICABLE LENDING OFFICE means, with respect to each Lender, such
Lender's LIBOR Lending Office in the case of a LIBOR Rate Loan, and such
Lender's Domestic Lending Office in the case of a Prime Rate Loan.
ASSIGNMENT AND ASSUMPTION AGREEMENT has the meaning set forth in
SECTION 11.8(B).
AUDITORS means a nationally recognized firm of independent public
accountants selected by the Borrowers and reasonably satisfactory to the Agent;
PROVIDED, THAT for purposes of this Credit Agreement, the firm of Price
Waterhouse L.L.P. shall be deemed to be satisfactory to the Agent.
BANKRUPTCY CODE means Title 11 of the U.S. Code (11 U.S.C. Section 101
et seq.), as amended from time to time, and any successor statute.
BENEFIT PLAN means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which any Borrower, any Subsidiary of any Borrower or any
ERISA Affiliate has been an "employer" (as defined in Section 3(5) of ERISA)
within the past six years.
BOND CLOSING DATE means the date on which the net cash proceeds of the
approximately $130,000,000 to $170,000,000 high yield bond offering presently
contemplated by MTLM are received by or for the account of MTLM.
BORROWER AGENCY AGREEMENT means that certain Contribution and Agency
Agreement of even date herewith among the Borrowers and ▇▇▇▇▇, in its capacity
as borrowing agent for the Borrowers hereunder and under the other Credit
Documents.
BORROWER INFORMATION has the meaning set forth in SECTION 11.9.
BORROWING means a borrowing of Revolving Loans of the same Type by the
▇▇▇▇▇ Funds Administrator for the joint and several account of the Borrowers
from (or, in the case of Agent Advances, on behalf of) the Lenders on a pro
rata basis on a given date (whether pursuant to SECTION 2.2 or resulting from
continuations or conversions of Revolving Loans on a given date pursuant to
SECTIONS 4.13(A) and (B), respectively) having, in the case of LIBOR Loans, the
same Interest Period.
BORROWING BASE means, at any time, the sum at such time of:
(a) the Fixed Asset Sublimit, PLUS
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(b) eighty-five percent (85%) of Eligible Accounts
Receivable, PLUS
(c) the lesser of $15,000,000 and seventy percent (70%)
of Eligible Inventory, PLUS
(d) one hundred percent (100%) of all cash collateral for
the Obligations delivered to and held by Agent from
time to time.
In addition, the Agent, in the exercise of its Permitted Discretion, may (I)
establish and increase or decrease reserves against Eligible Accounts
Receivable and Eligible Inventory, (II) reduce the advance rates provided for
in this definition, or restore such advance rates to any level equal to or
below the advance rates in effect as of the date of this Credit Agreement, and
(III) impose additional restrictions (or eliminate the same) to the standards
of eligibility set forth in the definitions of "ELIGIBLE ACCOUNTS RECEIVABLE"
and "ELIGIBLE INVENTORY."
BORROWING BASE CERTIFICATE means a certificate of the ▇▇▇▇▇ Funds
Administrator concerning the Borrowing Base, in each case provided under
SECTION 7.2 and substantially in the form of EXHIBIT A.
BRIQUETTING CAPITAL STOCK means all of the issued and outstanding
capital stock and options, warrants and other rights to acquire capital stock
of Briquetting.
BT ACCOUNT has the meaning set forth in SECTION 4.10.
BUSINESS DAY means any day that is neither a Saturday nor a Sunday nor
a day on which commercial banks in Chicago, Illinois are required or permitted
by law to be closed and, when used in connection with LIBOR Rate Loans, this
definition will also exclude any day on which commercial banks are not open for
dealing in United States dollar deposits in the London (U.K.) interbank market.
CAPITAL EXPENDITURES means, for any Person for any period, the sum of
all expenditures which have been, or should have been, capitalized by such
Person for financial statement purposes in accordance with GAAP during such
period (whether payable in cash or other property or accrued as a liability),
including the capitalized portion of capital leases and that portion of
Investments made by such Person allocable to property, plant or equipment.
Capital Expenditures shall exclude proceeds of a casualty loss applied to the
repair or replacement of the property affected by the casualty loss. "CASUALTY
LOSS", as used herein, means, for any Person, (I) the loss, damage, or
destruction of any asset or property owned or used by such Person, (II) the
condemnation, confiscation, or other taking, in whole or in part,
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of any such asset or property, or (III) the diminishment of the use of any such
asset or property so as to render impracticable or unreasonable the use thereof
for its intended purpose.
CASH EQUIVALENTS means either of the following, so long as the same
are maintained in accounts in which the Agent has a perfected security
interest: (I) securities issued, guarantied or insured by the United States,
or any of its agencies and having maturities of not more than one year; and
(II) certificates of deposit having maturities of not more than one year issued
by a United States national or state chartered commercial bank of recognized
standing whose combined capital and unimpaired surplus is in excess of
$200,000,000 and whose short-term commercial paper rating, or that of its
parent holding company, is at least "A-1" or the equivalent by S&P and at least
"Prime-1" or the equivalent by ▇▇▇▇▇'▇.
CLOSING DATE means the date of execution and delivery of this Credit
Agreement by all of the parties hereto or, if later, the date on which the
initial Revolving Loan is made or the initial Letter of Credit is issued,
whichever occurs earlier.
CLOSING DOCUMENT LIST has the meaning set forth in SECTION 5.1.
CLOSING FEE has the meaning set forth in SECTION 4.2.
CODE has the meaning set forth in SECTION 1.3.
COLLATERAL means the Accounts, Inventory, Equipment and other personal
property identified in the Collateral Documents as security for the
Obligations.
COLLATERAL ACCESS AGREEMENT means an agreement in form and substance
reasonably satisfactory to the Agent pursuant to which a mortgagee or lessor of
real property on which Collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory, acknowledges the Liens of
the Agent and, in the case of any such agreement with a mortgagee or lessor,
permits the Agent access to and use of such real property for a reasonable
amount of time following the occurrence and during the continuance of an Event
of Default to assemble, complete and sell any Collateral stored or otherwise
located thereon.
COLLATERAL DOCUMENTS means, collectively, the Security Agreement and
all other documents, agreements and instruments pursuant to which Liens are now
or hereafter granted to the Agent to secure any or all of the Obligations.
COLLATERAL MONITORING FEE has the meaning set forth in SECTION 4.5.
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COLLECTION ACCOUNT has the meaning set forth in SECTION 4.10.
COLLECTION BANKS has the meaning set forth in SECTION 4.10.
COLLECTIONS means all cash, funds, checks, notes, instruments and any
other form of remittance tendered by account debtors in payment of Accounts of
any Borrower.
COMMITMENT of a Lender means such Lender's commitment, on the terms
and subject to the conditions set forth herein, to make Revolving Loans and to
participate in Letters of Credit, up to the amount set forth below its name on
ANNEX I (as amended from time to time pursuant to SECTION 11.8(B)), as such
amount may be reduced from time to time in accordance with the terms and
provisions of this Credit Agreement.
CONSOLIDATED ENTITY means all of the Borrowers.
CONSOLIDATED NET INCOME means the consolidated net income of the
Consolidated Entity.
CONTINGENT OBLIGATION means, with respect to any Person, any direct,
indirect, contingent or non-contingent guaranty or obligation of such Person
for the Indebtedness of another Person, except for endorsements in the ordinary
course of business.
CREDIT DOCUMENTS means, collectively, this Credit Agreement, the
Revolving Notes, the Letters of Credit, each of the Collateral Documents and
all other documents, agreements and instruments now or hereafter executed in
connection herewith or therewith in each case as modified, amended, extended,
restated or supplemented from time to time.
CREDIT PARTIES means, collectively, the Borrowers and ▇▇▇▇▇ in its
capacity as ▇▇▇▇▇ Funds Administrator.
DEFAULT means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
DEFAULTING LENDER has the meaning set forth in SECTION 2.6.
DEPOSITARY ACCOUNT AGREEMENTS has the meaning set forth in SECTION
4.10.
DISBURSEMENT ACCOUNT means the operating account of the ▇▇▇▇▇ Funds
Administrator maintained with the Disbursement Account Bank.
DISBURSEMENT ACCOUNT BANK means Bankers Trust Company or any other
financial institution selected from time to time by the Agent and reasonably
acceptable to the ▇▇▇▇▇ Funds Administrator.
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DOMESTIC LENDING OFFICE means, with respect to any Lender, the office
of such Lender specified as its "DOMESTIC LENDING OFFICE" on ANNEX I, as such
annex may be amended from time to time, which office shall in any event be
located in the United States.
EBITDA means, for any period, Consolidated Net Income (excluding
extraordinary items) for such period, PLUS (A) all Interest Expense, income tax
expense, depreciation and amortization (including amortization of any goodwill
or other intangibles) for such period; MINUS or PLUS (without double counting)
(B) gains and losses attributable to any fixed asset sales; PLUS or MINUS (C)
any other non-cash charges or gains which have been subtracted or added in
calculating such Consolidated Net Income.
ELIGIBLE ACCOUNTS RECEIVABLE means Accounts of the respective Borrowers
deemed by the Agent in the exercise of its Permitted Discretion to be eligible
for inclusion in the calculation of the Borrowing Base. In determining the
amount to be so included, the face amount of such Accounts shall be reduced by
the amount of all returns, discounts, deductions, claims, credits, charges, or
other allowances. Unless otherwise approved in writing by the Agent, no Account
of any Borrower shall be deemed to be an Eligible Account Receivable if:
(A) it arises out of a sale made by such Borrower to an Affiliate
of such Borrower or to any other Borrower; or
(B) its payment terms are longer than 30 days from date of
invoice; or
(C) it is unpaid (I) more than 60 days after the original payment
due date on payment terms of 30 days or less from date of
invoice, or (II) more than 30 days after the original payment
due date on payment terms of or more than 30 days from date of
invoice; or
(D) it is from the same account debtor or its Affiliate and fifty
percent (50%) or more of all Accounts from that account debtor
(and its Affiliates) are ineligible under (c) above; or
(E) when aggregated with all other Accounts of an account debtor,
the Account exceeds forty percent (40%) in face value of all
Accounts of all Borrowers then outstanding, to the extent of
such excess, unless supported by an irrevocable letter of
credit satisfactory to the Agent (as to form, substance and
issuer) and assigned to and directly drawable by the Agent; or
(F) the account debtor for the Account is a creditor of such
Borrower, has or has asserted a right of setoff against such
Borrower, has disputed its liability or made any
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claim with respect to the Account or any other Account which
has not been resolved, but in each of the foregoing cases,
solely to the extent of the amount of such actual or asserted
right of setoff, or the amount of such dispute or claim, as
the case may be; or
(G) the account debtor is (or the assets of the account debtor
are) the subject of an Insolvency Event; or
(H) the Account is not payable in United States dollars or the
account debtor for the Account is located outside the
continental United States, unless the Account is supported by
an irrevocable letter of credit satisfactory to the Agent (as
to form, substance and issuer) and assigned to and directly
drawable by the Agent; or
(I) the sale to the account debtor is on a guaranteed sale,
sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for
repurchase or return; or
(J) the Agent determines by its own credit analysis that
collection of the Account is uncertain or the Account may not
be paid; or
(K) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless such
Borrower duly assigns its rights to payment of such Account to
the Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq.); or
(L) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor, the
services giving rise to such Account have not been performed
and accepted or the Account otherwise does not represent a
final sale; or
(M) the Account does not comply with all Requirements of Law,
including, without limitation, the Federal Consumer Protection
Act, the Federal Truth-in-Lending Act and Regulation Z; or
(N) the Account is subject to any adverse security deposit,
progress payment or other similar advance made by or for the
benefit of the applicable account debtor; or
(O) the Account is not subject to a valid and perfected first
priority Lien in favor of the Agent or does not otherwise
conform to the representations and warranties contained in the
Credit Documents.
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ELIGIBLE INVENTORY means the aggregate amount of Inventory of the
respective Borrowers deemed by the Agent in the exercise of its Permitted
Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, Inventory shall be valued
at the lower of cost or market on a basis consistent with the Borrowers'
current and historical accounting practice. Unless otherwise approved in
writing by the Agent, no Inventory of any Borrower shall be deemed Eligible
Inventory if:
(A) it is not owned solely by such Borrower or such Borrower does
not have good, valid and marketable title thereto; or
(B) it is not located in the United States; or
(C) it is not located on property owned by a Borrower or by a
third party that has executed and delivered a Collateral
Access Agreement and, in the case of Inventory located on
property owned by such a third party, it is segregated or
otherwise separately identifiable from goods of others, if
any, stored on such property PROVIDED, that Inventory shall
not be deemed ineligible solely by reason of this CLAUSE (C)
until the date which is sixty (60) days after the Closing
Date; or
(D) it is not subject to a valid and perfected first priority Lien
in favor of the Agent, except, with respect to such Inventory
stored at locations other than locations owned by a Borrower,
for Liens for unpaid rent or normal and customary warehousing
charges; or
(E) it consists of goods returned or rejected by such Borrower's
customers or goods in transit to third parties (other than to
warehouse sites covered by a Collateral Access Agreement); or
(F) it could not reasonably be expected to be sold within twelve
(12) months after the date of its initial processing, or does
not otherwise conform to the representations and warranties
contained in the Credit Documents.
PROVIDED, however, that notwithstanding the foregoing, Inventory of
any Borrower which has been sold and shipped to the applicable Account
Debtor but with respect to such Account Debtor has not yet been
invoiced shall be deemed Eligible Inventory until issuance of such
invoice, PROVIDED, further that such Inventory constituted Eligible
Inventory immediately prior to such sale.
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ERISA means the Employee Retirement Income Security Act of 1974, 29
U.S.C. Section 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
ERISA AFFILIATE means any entity required to be aggregated with any
Borrower or any Subsidiary of any Borrower under Sections 414 (b), (c), (m) or
(o) of the Internal Revenue Code.
EVENT OF DEFAULT has the meaning set forth in ARTICLE 9.
EXCESS CASH FLOW means, for any fiscal year, (A) EBITDA of the
Consolidated Entity for such fiscal year MINUS (B) the sum of the following
items for the Consolidated Entity for such fiscal year: (I) Interest Expense,
(II) income taxes paid in cash, (III) principal payments on or mandatory
redemptions of Indebtedness (other than repayments of Revolving Loans in the
ordinary course of business which do not permanently reduce the Commitments)
and (IV) Capital Expenditures, MINUS (C) the aggregate amount of cash dividends
paid by Borrowers during such fiscal year.
EXPENSES means all reasonable costs and expenses of the Agent incurred
in connection with the Credit Documents and the transactions contemplated
therein, including, without limitation, (I) the costs of conducting record
searches, examining collateral, opening bank accounts and lockboxes, depositing
checks, and receiving and transferring funds (including charges for checks for
which there are insufficient funds), (II) the reasonable fees and expenses of
legal counsel and paralegals (including the allocated cost of internal counsel
and paralegals), accountants, appraisers and other consultants, experts or
advisors retained by the Agent, (III) expenses incurred in connection with the
assignments of or sales of participations in the Revolving Loans, (IV) the cost
of title insurance premiums, real estate survey costs, and fees and taxes in
connection with the filing of financing statements, and (V) the costs of
preparing and recording Collateral Documents, releases of Collateral, and
waivers, amendments, and terminations of any of the Credit Documents. EXPENSES
also means all reasonable costs and expenses (including the reasonable fees and
expenses of legal counsel and other professionals) paid or incurred by the
Agent and any Lender (I) during the continuance of an Event of Default, (II) in
enforcing or defending its respective rights under or in respect of this Credit
Agreement, the Credit Documents or any other document or instrument now or
hereafter executed and delivered in connection herewith or therewith, (III)
collecting the Revolving Loans, (IV) foreclosing or otherwise collecting upon
the Collateral or any part thereof and (V) in obtaining any legal, accounting
or other advice in connection with any of the foregoing.
EXPIRATION DATE means the earliest to occur of (I) June 23, 1998 and
(II) the Bond Closing Date.
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FEDERAL FUNDS RATE means, for any period, a fluctuating interest rate
per annum for each day during such period equal to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
FEDERAL RESERVE BOARD means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
FEES means, collectively, the Closing Fee, the Unused Line Fee, the
Letter of Credit Fees, the L/C Facing Fee, the Issuing Bank Fees and the
Collateral Monitoring Fee.
FERREX OHIO CAPITAL STOCK means all of the issued and outstanding
capital stock and options, warrants and other rights to acquire capital stock
of Ferrex Ohio.
FERREX OHIO means Ferrex Trading Corporation, an Ohio corporation.
FINANCIAL STATEMENTS means the consolidated and consolidating balance
sheets, statements of operations, statements of cash flows and statements of
changes in shareholder's equity of the Consolidated Entity for the period
specified, prepared in accordance with GAAP and consistently with prior
practices.
FIXED ASSET SUBLIMIT means an amount equal to $9,100,000; PROVIDED,
that such amount shall be automatically and permanently reduced (I) on the
first business day of each calendar quarter, commencing October 1, 1997, by
$455,000 and (II) on the date which is one hundred twenty (120) days after the
end of each fiscal year of ▇▇▇▇▇, commencing with such fiscal year ending
December 31, 1997, by an amount equal to seventy-five percent (75%) of Excess
Cash Flow of the Consolidated Entity for such fiscal year.
GAAP means generally accepted accounting principles in the United
States as in effect from time to time.
GOVERNING DOCUMENTS means certificates or articles of incorporation,
by-laws and other similar organizational or governing documents.
GOVERNMENTAL AUTHORITY means any nation or government, any state or
other political subdivision thereof and any entity
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exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
HIGHEST LAWFUL RATE means, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate that at any time or from time to time may be contracted for, taken,
reserved, charged or received on such Obligations, under the laws of the State
of Illinois (or the law of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Credit Agreement and any of
the other Credit Documents), or under applicable federal laws which may
presently or hereafter be in effect and which allow a higher maximum
nonusurious interest rate than under the State of Illinois (or such other
jurisdiction's) law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under
this Credit Agreement and any other Credit Documents executed in connection
herewith, and any available exemptions, exceptions and exclusions.
INDEBTEDNESS of a Person means, without duplication, (A) indebtedness
for borrowed money or for the deferred purchase price of property or services
(other than trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), whether on open account or
evidenced by a note, bond, debenture or similar instrument, (B) obligations
under capital leases, (C) reimbursement obligations for letters of credit,
banker's acceptances or other credit accommodations, whether drawn or undrawn,
(D) liabilities, as determined by the Agent, under any Interest Rate Agreement,
(E) Contingent Obligations and (F) Indebtedness secured by any Lien on any
property of that Person, even if that Person has not assumed such Indebtedness.
INSOLVENCY EVENT means, with respect to any Person, the occurrence of
any of the following: (A) such Person shall be adjudicated insolvent or
bankrupt, or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, (B) the voluntary commencement of any proceeding
or the filing of any petition under any bankruptcy, insolvency or similar law,
(C) the seeking of dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for it or a substantial portion of
its property, assets or business or to effect a plan or other arrangement with
its creditors, (D) the filing of any answer admitting the jurisdiction of the
court and the material allegations of an involuntary petition filed against it
in any bankruptcy, insolvency or similar proceeding, (E) the making by such
Person of a general assignment for the benefit of its creditors, or the consent
to, or acquiescence in the appointment of, a receiver, trustee, custodian or
liquidator for a substantial portion of such Person's property, assets or
business. INSOLVENCY EVENT shall also mean, with respect to any Person, the
occurrence of any of the following: an involuntary proceeding or
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involuntary petition shall be commenced or filed against such Person under any
bankruptcy, insolvency or similar law seeking the dissolution or reorganization
of it or the appointment of a receiver, trustee, custodian or liquidator for it
or of a substantial part of its property, assets or business, or any writ,
judgment, warrant of attachment, execution or similar process shall be issued
or levied against a substantial part of its property, assets or business, and
such proceedings or petitions shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded, within sixty (60) days after commencement, filing, or
levy, as the case may be, or any order for relief shall be entered in any such
proceeding.
INTEREST EXPENSE means, for any period, the aggregate consolidated
expense of the Consolidated Entity for interest on Indebtedness for such
period, including, without limitation, (I) amortization of original issue
discount, (II) incurrence fees (to the extent included in interest expense),
(III) the interest portion of any deferred payment obligation, (IV) the
interest component of any capital lease obligation.
INTEREST PERIOD means, for any LIBOR Rate Loan, the period commencing
on the date of such Borrowing and ending on the last day of the period selected
by the ▇▇▇▇▇ Funds Administrator pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months,
in each case as the ▇▇▇▇▇ Funds Administrator may, in an appropriate Notice of
Borrowing, Notice of Continuation or Notice of Conversion, select; PROVIDED,
THAT the ▇▇▇▇▇ Funds Administrator may not select any Interest Period that ends
after the Expiration Date. Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day;
PROVIDED, THAT if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day.
INTEREST RATE AGREEMENT means any interest rate protection or hedge
agreement, including, without limitation, interest rate future, option, swap,
and cap agreements.
INTERNAL REVENUE CODE means the Internal Revenue Code of 1986,
amendments thereto, successor statutes, and regulations or guidance promulgated
thereunder.
INVENTORY has the meaning set forth in the Security Agreement.
INVESTMENT means all expenditures made and all liabilities incurred
(contingently or otherwise) for or in connection with the acquisition of stock
or Indebtedness of, or for loans, advances,
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capital contributions or similar transfers of property to, or acquisition of
substantially all the assets of, a Person. In determining the aggregate amount
of Investments outstanding at any particular time, (I) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and outstanding; (II) there
shall be deducted in respect of each such Investment any amount received as a
return of capital (but only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution); (III) there shall not be
deducted in respect of any Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise; and (IV) there shall
not be deducted from the aggregate amount of Investments any decrease in the
market value thereof.
▇▇▇▇▇ FUNDS ADMINISTRATOR means ▇▇▇▇▇ acting in its capacity as
borrowing agent for the Borrowers pursuant the Borrower Agency Agreement.
▇▇▇▇▇ CAPITAL STOCK means all of the issued and outstanding capital
stock and options, warrants and other rights to acquire capital stock of ▇▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇ means collectively, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, as trustee, ▇▇▇▇ ▇. ▇▇▇▇▇,
as trustee, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇ AGENTS mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇ INDEBTEDNESS means the Indebtedness owing by MTLM to the
▇▇▇▇▇ ▇▇▇▇▇▇▇ evidenced by the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Notes, the outstanding principal
amount of which shall not exceed $27,400,000 and the repayment of which shall
be secured by the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Letter of Credit.
▇▇▇▇▇ ▇▇▇▇▇▇▇ LETTER OF CREDIT shall mean the Letter of Credit in the
face amount of $27,400,000 issued to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Agents to secure
repayment of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Indebtedness.
▇▇▇▇▇ ▇▇▇▇▇▇▇ NOTES means collectively, (I) that certain promissory
note of even date herewith issued by MTLM to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in
the original principal amount of $1,297,306, (II) that certain promissory note
of even date herewith issued by MTLM to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in the
original principal amount of $4,633,212, (III) that certain promissory note of
even date herewith issued by MTLM to ▇▇▇▇▇ ▇▇▇▇▇, in the original principal
amount of $341,166, (IV) that certain promissory note of even date herewith
issued by MTLM to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in the original principal amount of
$341,166, (V) that certain promissory note of even date herewith issued by MTLM
to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as
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trustee, in the original principal amount of $828,203, (VI) that certain
promissory note of even date herewith issued by MTLM to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as
trustee, in the original principal amount of $4,633,212, (VII) that certain
promissory note of even date herewith issued by MTLM to ▇▇▇▇▇▇ ▇▇▇▇▇, in the
original principal amount of $575,718, (VIII) that certain promissory note of
even date herewith issued by MTLM to ▇▇▇ ▇▇▇▇▇, in the original principal
amount of $575,718, (IX) that certain promissory note of even date herewith
issued by MTLM to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, as trustee, in the original principal
amount of $2,074,681, (X) that certain promissory note of even date herewith
issued by MTLM to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, as trustee, in the original principal
amount of $2,000,000, (XI) that certain promissory note of even date herewith
issued by MTLM to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, as trustee, in the original principal
amount of $5,206,983, (XII) that certain promissory note of even date herewith
issued by MTLM to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, in the original principal amount of
$150,113, (XIII) that certain promissory note of even date herewith issued by
MTLM to ▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in the original principal amount of
$2,224,794, (XIV) that certain promissory note of even date herewith issued by
MTLM to ▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in the original principal amount of
$5,206,983, (XV) that certain promissory note of even date herewith issued by
MTLM to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in the original principal amount of
$2,191,134, (XVI) that certain promissory note of even date herewith issued by
MTLM to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, in the original principal amount of
$4,266,511, without giving effect to any amendments, restatements or
modifications thereof, supplements thereto, or substitutions therefor, except
for any of the foregoing previously consented to in writing by the Majority
Lenders or as permitted under SECTION 8.13.
ISSUING BANK means Bankers Trust Company or any Lender or other
financial institution that is acceptable to the Agent and the Borrowers which
may at any time issue or be requested to issue a Letter of Credit for the
account of any Borrower.
ISSUING BANK FEES has the meaning set forth in SECTION 4.3(B).
L/C FACING FEE has the meaning set forth in SECTION 4.3(A).
LENDER ADVANCES has the meaning set forth in SECTION 2.2.
LETTER OF CREDIT FEE has the meaning set forth in SECTION 4.3(A).
LETTER OF CREDIT OBLIGATIONS means, without duplication, the sum of
the aggregate undrawn face amount of all Letters of Credit outstanding, PLUS
the aggregate amount of all drawings under Letters of Credit for which the
Borrowers have not reimbursed the Issuing Bank, PLUS the aggregate amount of
all payments made by
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Lenders to the Issuing Bank for their participations in Letters of Credit, for
which the Borrowers have not reimbursed the Lenders.
LETTER OF CREDIT REQUEST has the meaning set forth in SECTION 3.3.
LETTERS OF CREDIT means all letters of credit, issued for the account
of any Borrower under ARTICLE 3 and all amendments, renewals, extensions or
replacements thereof.
LIBOR LENDING OFFICE means, with respect to any Lender, the office of
such Lender specified as its "LIBOR LENDING OFFICE" opposite its name on ANNEX
I, as such annex may be amended from time to time (or, if no such office is
specified, its Domestic Lending Office).
LIBOR RATE means, with respect to any Interest Period for each LIBOR
Rate Loan comprising part of the same Borrowing, an interest rate per annum
equal to the rate (rounded upward to the nearest whole multiple of
one-sixteenth (1/16) of one percent (1.00%) per annum, if such rate is not such
a whole multiple of one-sixteenth (1/16) of one percent (1.00%)) of the offered
quotation, if any, to first class banks in the London (U.K.) interbank market
by Bankers Trust Company for United States dollar deposits of amounts in
immediately available funds comparable to the principal amount of the LIBOR
Rate Loan of BTCC for which the LIBOR Rate is being determined with maturities
comparable to the Interest Period for which such LIBOR Rate will apply as of
approximately 10:00 a.m. Chicago time two (2) Business Days prior to the
commencement of such Interest Period.
LIBOR RATE LOAN means a Revolving Loan that bears interest as provided
in SECTION 4.1(B) hereof.
LIEN means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title, or other preferential arrangement having substantially the
same economic effect as any of the foregoing, whether voluntary or imposed by
law.
LINE OF CREDIT means the aggregate revolving line of credit extended
pursuant to this Credit Agreement by the Lenders to the Borrowers for Revolving
Loans and Letters of Credit, in an amount up to $37,000,000, as such amount may
be reduced from time to time pursuant to the respective terms and provisions
hereof.
LOAN ACCOUNT has the meaning set forth in SECTION 4.8.
MAJORITY LENDERS means those Lenders holding in the aggregate more
than fifty-percent (50%) of the total Commitments, or if the Commitments are
terminated, those Lenders owed more than fifty-
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percent (50%) of the Revolving Loans and Letter of Credit Obligations then
outstanding.
MATERIAL ADVERSE EFFECT means a material adverse effect on (I) the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Credit Parties taken as a whole, (II) the
ability of any Credit Party to perform its obligations under the Credit
Documents to which it is a party, or on the ability of the Agent or the Lenders
to enforce the Obligations or realize upon the Collateral, or (III) the value
of the Collateral or the amount which the Agent or the Lenders would be likely
to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral.
MATERIAL CONTRACT means any contract or other arrangement to which a
Credit Party or any Subsidiary of a Credit Party is a party (other than the
Credit Documents) or by which the property or assets of any Credit Party or any
Subsidiary of a Credit Party are bound, for which such contract or other
arrangement is material to the business, assets, properties or prospects of
such Person.
MERGER means the merger of Ferrex Ohio with and into Ferrex with
Ferrex as the surviving corporation, in accordance with the terms and
conditions of the Acquisition Documents.
MOODY'S means ▇▇▇▇▇'▇ Investors Services, Inc., or any successor
thereto.
MTLM means Metal Management, Inc., a Delaware corporation.
MULTIEMPLOYER PLAN means a "multiemployer plan" (as defined in Section
4001(a) (3) of ERISA) to which a Borrower, any Subsidiary of Borrower or any
ERISA Affiliate has contributed within the past six years or with respect to
which a Borrower or any Subsidiary of a Borrower could reasonably be expected
to incur any liability.
NOTICE OF BORROWING means an irrevocable and binding notice delivered
by the ▇▇▇▇▇ Funds Administrator to the Agent either by telephone or by
facsimile transmission (and if by telephone, promptly confirmed in writing), of
the request by the ▇▇▇▇▇ Funds Administrator, for and on behalf of the
Borrowers, for a Borrowing, which notice shall be substantially in the form of
EXHIBIT B.
NOTICE OF CONTINUATION has the meaning set forth in SECTION 4.13(A).
NOTICE OF CONVERSION has the meaning set forth in SECTION 4.13(B).
OBLIGATIONS means the unpaid principal and interest hereunder
(including interest accruing on or after the occurrence of an
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Insolvency Event) in respect of Revolving Loans, reimbursement obligations
under Letters of Credit, Fees, Expenses and all other obligations and
liabilities of the Borrowers to the Agent, the Issuing Bank or any of the
Lenders under this Credit Agreement, the Revolving Notes or any of the other
Credit Documents.
PAULDING CAPITAL STOCK means all of the issued and outstanding capital
stock and options, warrants and other rights to acquire capital stock of
Paulding.
PERMITTED DISCRETION means the Agent's judgment exercised in good
faith and not in an irrational manner based upon its consideration of any
factor which the Agent believes in good faith could affect the value of any
Collateral, including any Inventory or Accounts of any Borrower or the amount
which the Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral. In exercising such judgment, the Agent may consider such
factors which are already included in or tested by the definition of Eligible
Accounts Receivable or Eligible Inventory, as well as any of the following:
(I) the financial and business climate of any Borrower's industry and general
macroeconomic conditions, (II) changes in collection history and dilution with
respect to the Accounts of any Borrower, (III) changes in levels of backlog of
firm purchase orders and demand for, and pricing of, Inventory of any Borrower,
(IV) changes in any concentration of risk with respect to Accounts and
Inventory of any Borrower, and (V) any other factors that change the credit
risk of lending to the Borrowers on the security of the Accounts and Inventory
of the Borrowers.
PERMITTED LIENS means the Liens referred to in CLAUSES (A) through (I)
of SECTION 8.4.
PERSON means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, entity, party or government (including any
division, agency or department thereof), and its successors, heirs and assigns.
PLAN means any Benefit Plan, Multiemployer Plan, or Retiree Health
Plan, or any employee benefit plan, fund, program or arrangement, whether oral
or written, maintained or contributed to by any Borrower or any Subsidiary of
any Borrower, or with respect to which any of them could reasonably be expected
to incur liability.
PRIME LENDING RATE means the rate which Bankers Trust Company announces
as its prime lending rate, from time to time. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company and each of the Lenders
may make commercial loans or
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other loans at rates of interest at, above or below the Prime Lending Rate.
PRIME RATE LOAN means a Revolving Loan that bears interest as provided
in SECTION 4.1(A) hereof.
PROPORTIONATE SHARE of a Lender means a fraction, expressed as a
percentage, obtained by dividing its Commitment by the Line of Credit or, if
the Commitments are terminated, by dividing its then outstanding Revolving
Loans and Letter of Credit participations by the then outstanding aggregate
Revolving Loans and Letter of Credit Obligations.
PURCHASE AGREEMENT AND PLAN OF MERGER means the Purchase Agreement
Common Stock of The ▇▇▇▇▇ Corporation, Ferrex Trading Corporation, Paulding
Recycling, Inc. and Briquetting Corporation of America and Plan of Merger by
and among Metal Management, Inc., ▇▇▇▇▇ Acquisition Corporation and Ferrex
Trading Corporation dated as of June 23, 1997 among MTLM, ▇▇▇▇▇, Ferrex Ohio,
Ferrex, Paulding, Briquetting and the ▇▇▇▇▇ ▇▇▇▇▇▇▇.
PURCHASE MONEY LIENS has the meaning set forth in SECTION 8.3(E).
REGISTER has the meaning set forth in SECTION 11.8(C).
REGULATION D means Regulation D of the Federal Reserve Board, as in
effect from time to time.
REGULATION G means Regulation G of the Federal Reserve Board, as in
effect from time to time.
REGULATION Z means Regulation Z of the Federal Reserve Board, as in
effect from time to time.
REPORTABLE EVENT means any of the events described in Section 4043 of
ERISA and the regulations thereunder.
REQUIREMENT OF LAW means, with respect to any Person, (A) the Governing
Documents of such Person, (B) any law, treaty, rule or regulation or
determination of an arbitrator, court or other Governmental Authority binding on
such Person, or (C) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or approval binding
on a Person or any of its property.
RETIREE HEALTH PLAN means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA, and any other plan, program or arrangement,
whether oral or written, that provides benefits to persons after termination of
employment, other than as required by Section 601 of ERISA.
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REVOLVING LOANS has the meaning set forth in SECTION 2.1.
REVOLVING NOTE means a promissory note of the Borrowers payable to the
order of any Lender, substantially in the form of EXHIBIT C, as amended,
restated, supplemented or otherwise modified from time to time, and including
all notes issued in replacement of, or in substitution or exchange for, any
Revolving Note.
▇▇▇▇▇▇▇ AND ▇▇▇▇▇ NOTES means (I) that certain promissory note in the
original principal amount of $3,027,825 of even date herewith, 1997 issued by
▇▇▇▇▇ to the ▇▇▇▇▇ ▇▇▇▇▇ Corporation, (II) that certain promissory note in the
original principal amount of $2,021,898 of even date herewith issued by ▇▇▇▇▇
to the ▇▇▇▇▇ ▇▇▇▇▇ Corporation, (III) that certain promissory note in the
original principal amount of $2,063,277 of even date herewith issued by ▇▇▇▇▇
to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation, and (IV) that certain promissory note in the
original principal amount of $1,431,200 of even date herewith issued by ▇▇▇▇▇
to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation, without giving effect to any amendments,
restatements or modifications thereof, supplements thereto, or substitutions
therefor, except for any of the foregoing previously consented to 21992in
writing by the Majority Lenders or as permitted under SECTION 8.13.
S&P means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
SECURITY AGREEMENT means the Security Agreement of even date herewith
executed by the Borrowers in favor Agent.
SETTLEMENT DATE has the meaning set forth in SECTION 2.4.
SUBSIDIARY of a Person means a corporation or other entity in which
that Person directly or indirectly owns or controls the shares of stock or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or appoint other managers of such corporation or other
entity.
TERMINATION EVENT means (I) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (II) the withdrawal of any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate from a Benefit Plan during a
plan year in which it was a "substantial employer" (as defined in Section
4001(a) (2) of ERISA); (III) the providing of notice of intent to terminate a
Benefit Plan in a distress termination (as described in Section 4041 (c) of
ERISA); (IV) the institution by the Pension Benefit Guaranty Corporation of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (V) any event or
condition (A) which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Benefit Plan or Multiemployer Plan, or (B) that may result
in termination of a Multiemployer Plan pursuant to Section
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4041A of ERISA; or (VI) the partial or complete withdrawal, within the meaning
of Sections 4203 and 4205 of ERISA, of a Borrower, any Subsidiary of a Borrower
or any ERISA Affiliate from a Multiemployer Plan.
TYPE means a LIBOR Rate Loan or a Prime Rate Loan.
UNUSED LINE FEE has the meaning set forth in SECTION 4.2.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms
used in this Credit Agreement shall be construed in accordance with GAAP,
applied on a basis consistent in all material respects with the Financial
Statements referred to in SECTION 6.9. All accounting determinations for
purposes of determining compliance with the financial covenants contained in
ARTICLE 8 shall be made in accordance with GAAP as in effect on the Closing
Date and applied on a basis consistent in all material respects with the
audited Financial Statements delivered to the Agent on or before the Closing
Date. The Financial Statements required to be delivered hereunder from and
after the Closing Date, and all financial records, shall be maintained in
accordance with GAAP. If GAAP shall change from the basis used in preparing
the audited Financial Statements delivered to the Agent on or before the
Closing Date, the certificates required to be delivered pursuant to SECTION 7.1
demonstrating compliance with the covenants contained herein shall include, at
the election of the Borrowers or upon the request of the Majority Lenders,
calculations setting forth the adjustments necessary to demonstrate that the
Borrowers are in compliance with the financial covenants based upon GAAP as in
effect on the Closing Date.
1.3 OTHER TERMS; HEADINGS.
Terms used herein and not otherwise defined in ARTICLE 1 that are
defined in the Uniform Commercial Code in effect in the State of Illinois (the
"CODE") shall have the meanings given in the Code. Each of the words "hereof,"
"herein," and "hereunder" refer to this Credit Agreement as a whole. An Event
of Default shall "continue" or be "continuing" until such Event of Default has
been waived in accordance with SECTION 11.11 hereof. References to Articles,
Sections, Annexes, Schedules, and Exhibits are internal references to this
Credit Agreement, and to its attachments, unless otherwise specified. The
headings and the Table of Contents are for convenience only and shall not
affect the meaning or construction of any provision of this Credit Agreement.
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ARTICLE 2. REVOLVING LOANS.
2.1 COMMITMENTS.
Subject to the terms and conditions set forth in this Credit
Agreement, and in reliance on the representations and warranties of the
Borrowers set forth herein, on and after the Closing Date and to but excluding
the Expiration Date, each Lender severally agrees to make loans and advances to
the Borrowers on a joint and several basis (each a "REVOLVING LOAN") in an
amount not to exceed at any time its Proportionate Share of the lesser at such
time of (A) the Line of Credit and (B) the Borrowing Base MINUS, in each case,
the then outstanding Letter of Credit Obligations. The Revolving Loans of each
Lender shall be evidenced by a Revolving Note dated as of the Closing Date and
executed by each of the Borrowers in the maximum amount of such Lender's
Commitment.
2.2 BORROWING OF REVOLVING LOANS.
Revolving Loans may be made available to the ▇▇▇▇▇ Funds Administrator
for the account of the Borrowers directly by the Lenders ("LENDER ADVANCES")
or, in the circumstances described in SECTION 2.2(B), from the Agent acting on
behalf of the Lenders ("AGENT ADVANCES").
(A) LENDER ADVANCES. Subject to the determination by the
Agent and the Lenders that the conditions for borrowing contained in
SECTION 5.2 are satisfied, upon receipt of a Notice of Borrowing from
the ▇▇▇▇▇ Funds Administrator received by the Agent before 12:00 noon
Chicago time on a Business Day, Lender Advances of Revolving Loans
shall be made to the extent of each Lender's Proportionate Share of
the requested Borrowing.
(B) AGENT ADVANCES. The Agent is authorized by the
Lenders, but is not obligated, to make Agent Advances upon a receipt
of any Notice of Borrowing received by the Agent before 3:00 P.M.
Chicago time on a Business Day. Agent Advances shall be subject to
periodic settlement with the Lenders under SECTION 2.4. Agent
Advances may be made only in the following circumstances:
(I) NORMAL COURSE AGENT ADVANCES. For
administrative convenience, the Agent may, but is not
obligated, to make Agent Advances up to the amount available
for borrowing under SECTION 2.1 in reliance upon the actual or
deemed representations of the Borrowers under SECTION 5.2 that
the conditions for borrowing are satisfied.
(II) OTHER AGENT ADVANCES. When the conditions
for borrowing under SECTION 5.2 cannot be fulfilled, and
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notwithstanding the Borrowing Base limitation of SECTION 2.1,
the Agent may, but is not obligated, to continue to make Agent
Advances for seven (7) Business Days or until sooner instructed
by the Majority Lenders to cease, in an aggregate amount at any
time not to exceed $2,000,000.
(C) DISBURSEMENT OF REVOLVING LOANS. The proceeds of
Revolving Loans shall be transmitted: (X) in the circumstances
described in SECTION 3.5, by the Agent directly to the Issuing Bank,
and (Y) in all other circumstances, by the Agent or Lenders, as the
case may be, to the Disbursement Account.
(D) NOTICES OF BORROWING. Notices of Borrowing may be
given under this Section by telephone or facsimile transmission, and,
if by telephone, promptly shall be confirmed in writing. The ▇▇▇▇▇
Funds Administrator shall specify in each Notice of Borrowing whether
the conditions for the requested Borrowing are satisfied. The
Borrowers may request one or more Borrowings of Revolving Loans
constituting Prime Rate Loans on the same Business Day. Each Notice
of Borrowing for LIBOR Rate Loans shall be given not later than noon
Chicago time on the third Business Day prior to the proposed
Borrowing. Each Notice of Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Revolving Loans of
the same Type and, if such Borrowing is to consist of LIBOR Rate
Loans, shall be in an aggregate amount of not less than $5,000,000 or
an integral multiple of $500,000 in excess thereof. The right of the
Borrowers to choose LIBOR Rate Loans is subject to the provisions of
SECTION 4.13. Once given, a Notice of Borrowing is irrevocable and
binding on the Borrowers. The ▇▇▇▇▇ Funds Administrator shall provide
to the Agent a list, with specimen signatures, of officers and other
Persons, if any, authorized to request Revolving Loans. The Agent is
entitled to rely upon such list until it is replaced by the ▇▇▇▇▇
Funds Administrator.
2.3 NOTICE OF REQUEST FOR LENDER ADVANCES.
Subject to the last sentence of this Section, the Agent shall give
each Lender prompt notice by telephone or facsimile transmission of a Notice of
Borrowing that is received pursuant to SECTION 2.2(A) and is to be satisfied by
Lender Advances. No later than 3:00 P.M. Chicago time on the date of receipt
of such notice, each Lender shall make available for the account of its
Applicable Lending Office to the Agent at the Agent's address for deposit into
the Disbursement Account, its Proportionate Share of such Borrowing in
immediately available funds. Unless the Agent receives contrary written notice
prior to any such Borrowing, it is entitled to assume that each Lender will
make available its Proportionate Share of the Borrowing and in reliance upon
that assumption, but without any obligation to do so, may advance such
Proportionate Share on
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behalf of the Lender, without the necessity of giving daily notice to each
Lender of the receipt of a Notice of Borrowing.
2.4 PERIODIC SETTLEMENT OF AGENT ADVANCES; INTEREST AND FEES;
STATEMENTS.
(A) THE SETTLEMENT DATE; ALLOCATION OF INTEREST AND FEES.
The amount of each Lender's Proportionate Share of Revolving Loans
shall be computed weekly (or more frequently in the Agent's
discretion) and shall be adjusted upward or downward based on all
Revolving Loans (including Agent Advances) and repayments received by
the Agent as of 5:00 P.M. Chicago time on the last Business Day of the
period specified by the Agent (such date, the "SETTLEMENT DATE").
(B) SUMMARY STATEMENTS; SETTLEMENTS. The Agent shall
deliver to each of the Lenders promptly after the Settlement Date a
summary statement of the account of outstanding Revolving Loans
(including Agent Advances) for the period, the amount of repayments
received for the period, and the amount allocated to each Lender of
the interest and Unused Line Fee for the period. After application of
payments under SECTION 4.11, as reflected on the summary statement,
(I) the Agent shall transfer to each Lender its allocated share of
interest and Unused Line Fee, and its Proportionate Share of
repayments received by the Agent in respect of the period covered by
such summary statement; and (II) each Lender shall transfer to the
Agent, or the Agent shall transfer to each Lender, such amounts as are
necessary to insure that, after giving effect to all such transfers,
the amount of Revolving Loans made by each Lender shall be equal to
such Lender's Proportionate Share of the aggregate amount of Revolving
Loans outstanding as of such Settlement Date. If the summary
statement requires transfers to be made to the Agent by the Lenders
and is received by the Lenders prior to 12:00 noon Chicago time on a
Business Day, such transfers shall be made in immediately available
funds no later than 3:00 P.M. Chicago time that day; and, if received
after 12:00 noon Chicago time, then no later than 3:00 P.M. Chicago
time on the next Business Day. The obligation of each Lender to
transfer such funds is irrevocable, unconditional and without recourse
to or warranty by the Agent.
(C) DISTRIBUTION OF INTEREST AND UNUSED LINE FEES.
Interest on the Revolving Loans (including Agent Advances) and the
Unused Line Fee shall be allocated by the Agent to each Lender (I) in
the case of interest, in accordance with the Revolving Loans actually
advanced by and repaid to such Lender and (II) in the case of the
Unused Line Fee, in accordance with the Proportionate Share of such
Lender. Interest shall accrue from and including the date Revolving
Loans are advanced and to but excluding the date such Revolving Loans
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are either repaid by the Borrowers or, if later, actually settled
under this Section. Promptly after the end of each month, the Agent
shall distribute to each Lender its portion, allocated as provided
above, of the interest and Unused Line Fee which has been received by
the Agent during such month.
2.5 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether made voluntarily or
involuntarily, or through the exercise of any right of set-off, or otherwise)
on account of the Revolving Loans made by it or its participation in the Letter
of Credit Obligations in excess of its Proportionate Share of payments on
account of the Revolving Loans or Letter of Credit Obligations obtained by all
the Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Loans made by them or in their participation in
Letters of Credit as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; PROVIDED, THAT if all or
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each other Lender shall be rescinded and each such
other Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery, together with an amount equal to such other Lender's
ratable share (according to the proportion of (I) the amount of such Lender's
required repayment to (II) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect to the total amount so recovered. The Borrowers agree that
any Lender so purchasing a participation from another Lender pursuant to this
SECTION 2.5, to the fullest extent permitted by law, may exercise all of its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
2.6 DEFAULTING LENDERS.
(A) A Lender who fails to pay the Agent its Proportionate
Share of any Revolving Loans (including Agent Advances) made available
by the Agent on such Lender's behalf, or who fails to pay any other
amounts owing by it to the Agent, is a "DEFAULTING LENDER." The Agent
is entitled to recover from such Defaulting Lender all such amounts
owing by such Defaulting Lender on demand. If the Defaulting Lender
does not pay such amounts on the Agent's demand, the Agent shall
promptly notify the ▇▇▇▇▇ Funds Administrator and the Borrowers shall
pay such amounts to the Agent (to the extent the Agent has made such
amounts available to or for the account of the Borrowers) within five
(5) Business Days of the receipt by the ▇▇▇▇▇ Funds Administrator of
such notice. In addition, the Defaulting Lender or the Borrowers
shall pay to the Agent for its own account interest on such amount for
each
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day from the date it was made available by the Agent to the Borrowers
to the date it is recovered by the Agent at a rate per annum equal to
(X) the overnight Federal Funds Rate if paid by the Defaulting Lender,
or (Y) the then applicable rate of interest calculated under SECTION
4.1, if paid by the Borrowers; plus, in each case, the Expenses and
losses, if any, incurred as a result of the Defaulting Lenders'
failure to perform its obligations. Nothing herein shall be deemed to
relieve any Lender of its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Borrowers may have
against any Lender as a result of any default by such Lender
hereunder, including, without limitation, the right of the Borrowers
to seek reimbursement from any Defaulting Lender for any amounts paid
by the Borrowers under CLAUSE (Y) above on account of such Defaulting
Lender's default.
(B) The failure of any Lender to fund its Proportionate
Share of a Revolving Loan shall not relieve any other Lender of its
obligation to fund its Proportionate Share of a Revolving Loan.
Conversely, no Lender shall be responsible for the failure of another
Lender to fund its Proportionate Share of a Revolving Loan.
(C) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by the Borrowers to the Agent for
the Defaulting Lender's benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to
a Defaulting Lender shall instead be paid to or retained by the Agent.
The Agent may hold and, in its discretion, re-lend to the Borrowers
the amount of all such payments received by it for the account of such
Lender. For purposes of voting or consenting to matters with respect
to the Credit Documents and determining Proportionate Shares, such
Defaulting Lender shall be deemed not to be a "LENDER" and such
Lender's Commitment shall be deemed to be zero (-0-). This section
shall remain effective with respect to such Lender until (X) the
Obligations shall have been declared or shall have become immediately
due and payable or (Y) the Majority Lenders, the Agent and the
Borrowers shall have waived such Lender's default in writing. The
operation of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, or relieve or excuse
the performance by the Borrowers of their respective duties and
obligations hereunder.
2.7 ALLOCATION OF REVOLVING LOANS AND EXPENSES.
(A) The Borrowers maintain an integrated cash management
system reflecting their interdependence on one another and the mutual benefits
shared among them as a result of their respective operations. In order to
efficiently fund and operate their
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respective businesses and minimize the number of Borrowings which they will
make under this Credit Agreement and thereby reduce the administrative costs
and record keeping required in connection therewith, including the necessity to
enter into and maintain separately identified and monitored borrowing
facilities, the Borrowers have requested, and the Agent and the Lenders have
agreed that, subject to SECTION 11.16, (I) all Revolving Loans will be advanced
to and for the account of the Borrowers on a joint and several basis to the
Disbursement Account and (II) all Letters of Credit will be issued pursuant to
an application therefor executed by the ▇▇▇▇▇ Funds Administrator on behalf and
for the account of the Borrower or Borrowers specified by the ▇▇▇▇▇ Funds
Administrator in such application. Each of the Borrowers hereby acknowledges
that it will be receiving a direct benefit from each Revolving Loan made and
each Letter of Credit issued pursuant to this Credit Agreement.
(B) In order to track more precisely the respective
recipients of the proceeds of each Revolving Loan and the Borrower receiving
the primary benefit from the issuance of each Letter of Credit, and to assist
the ▇▇▇▇▇ Funds Administrator, the Borrowers, the Agent and the Lenders in
administering the Revolving Loans and the Letters of Credit, each of the
Borrowers has agreed with the Agent and the Lenders to cause the ▇▇▇▇▇ Funds
Administrator to establish and maintain, and the ▇▇▇▇▇ Funds Administrator
hereby agrees to establish and maintain, accounts with respect to each Borrower
(each Borrower's "ALLOCATION ACCOUNT") in which the ▇▇▇▇▇ Funds Administrator
shall record its good faith allocation to each of the Borrowers of (W) the
proceeds, if any, of each Revolving Loan received by or for the account of such
Borrower, (X) payments made to the Agent on account of the Obligations of such
Borrower, (Y) the aggregate face amount of all outstanding Letters of Credit
covering goods which such Borrower will receive and (Z) all previously
unallocated Expenses.
(C) As soon as available, but not later than ten (10)
Business Days after the last Business Day of each month ending after the
Closing Date, the ▇▇▇▇▇ Funds Administrator shall deliver to the Agent and each
Borrower a report prepared by or under the supervision of the chief financial
officer of the ▇▇▇▇▇ Funds Administrator, and certified by such officer,
setting forth with respect to each Borrower the balance of the Allocation
Account of such Borrower as of the end of, and all activity occurring in such
Allocation Account during, such month. Absent demonstrable error, each such
monthly statement shall be final, conclusive and binding on the respective
Borrowers.
ARTICLE 3. LETTERS OF CREDIT.
3.1 ISSUANCE OF LETTERS OF CREDIT.
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Subject to the terms and conditions hereof and in reliance on the
representations and warranties of the Borrowers set forth herein, the Agent
shall cause the Issuing Bank to issue Letters of Credit hereunder at the
request of the ▇▇▇▇▇ Funds Administrator and for its account, as more
specifically described below. The Agent shall not be obligated to cause the
Issuing Bank to issue any Letter of Credit if:
(A) issuance of the requested Letter of Credit (I) would
cause the Letter of Credit Obligations then outstanding to exceed
$27,400,000 or (II) would cause the sum of the Revolving Loans PLUS
the Letter of Credit Obligations then outstanding to exceed the lesser
of (X) the Line of Credit and (Y) the Borrowing Base, in each case
then in effect; or
(B) issuance of the Letter of Credit is enjoined,
restrained or prohibited by any Governmental Authority, Requirement of
Law or any request or directive of any Governmental Authority (whether
or not having the force of law) or would impose upon the Agent or the
Issuing Bank any material restriction, reserve, capital requirement,
loss, cost or expense (for which the Agent or the Issuing Bank is not
otherwise compensated) not in effect or known as of the Closing Date.
3.2 TERMS OF LETTERS OF CREDIT.
The proposed amount, terms and conditions, and form of each Letter of
Credit (and of any drafts or acceptances thereunder) shall be subject to
approval by the Issuing Bank. The term of each standby Letter of Credit shall
not exceed 360 days, but may be subject to annual renewal. The term of each
documentary Letter of Credit shall not exceed 120 days. No Letter of Credit
shall have an expiry date later than five (5) Business Days prior to the
Expiration Date.
3.3 NOTICE OF ISSUANCE.
A request for issuance of a Letter of Credit (a "LETTER OF CREDIT
REQUEST") may be given in writing or electronically and, if given
electronically and if requested by the Agent, promptly shall be confirmed in
writing. A Letter of Credit Request must be received by the Agent no later
than 1:00 P.M. Chicago time at least ten (10) Business Days (or such shorter
period as may be agreed to by the Issuing Bank) in advance of the proposed date
of issuance.
3.4 LENDERS' PARTICIPATION.
Immediately upon issuance or amendment of any Letter of Credit, each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation
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in all rights and obligations under such Letter of Credit (other than fees and
other amounts owing to the Issuing Bank) in accordance with such Lender's
Proportionate Share.
3.5 PAYMENTS OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
The Agent shall notify the ▇▇▇▇▇ Funds Administrator of the receipt by
the Agent of notice from the Issuing Bank of a draft or other presentation for
payment or drawing under a Letter of Credit not later than 11:00 A.M. Chicago
time on the Business Day immediately prior to the date on which the Issuing
Bank intends to honor such drawing. Unless the procedures set forth in SECTION
9.2(C) shall be applicable, the ▇▇▇▇▇ Funds Administrator shall be deemed to
have concurrently given a Notice of Borrowing to the Agent to make a Revolving
Loan in the amount of and at the time of such drawing (which Revolving Loan
shall be a Prime Rate Loan), the proceeds of which shall be applied directly by
the Agent to reimburse the Issuing Bank for the amount of such drawing.
3.6 PAYMENT BY LENDERS.
If a Revolving Loan is not made in an amount sufficient to reimburse
the Issuing Bank in full for the amount of any draw under a Letter of Credit,
the Agent shall promptly notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation therein. Each Lender
shall make available to the Agent, for the account of the Issuing Bank, the
amount of its participation in immediately available funds not later than 1:00
P.M. Chicago time on the next Business Day after such Lender receives notice
from the Agent of the amount of such Lender's participation in such
unreimbursed amount. If any Lender fails to make available to the Agent the
amount of such Lender's participation, the Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest at the
Federal Funds Rate for the first three Business Days and thereafter at the
Prime Lending Rate. For each Letter of Credit, the Agent shall promptly
distribute to each Lender which has funded the amount of its participation its
Proportionate Share of all payments subsequently received by the Agent from the
Borrowers in reimbursement of honored drawings.
3.7 OBLIGATIONS ABSOLUTE.
The joint and several obligations of the Borrowers to reimburse the
Lenders under SECTION 3.5 hereof shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Credit Agreement
under all circumstances including, without limitation, upon the occurrence and
during the continuance of an Event of Default.
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3.8 AGENT'S EXECUTION OF APPLICATIONS AND OTHER ISSUING BANK
DOCUMENTATION; RELIANCE ON CREDIT AGREEMENT BY ISSUING BANK.
The Agent shall be authorized to execute, deliver and perform on
behalf of the Lenders such letter of credit applications, shipping indemnities,
letter of credit modifications and consents and other undertakings for the
benefit of the Issuing Bank as may be reasonably necessary or appropriate in
connection with the issuance or modification of Letters of Credit requested by
the Borrowers hereunder. The Lenders, the Agent, the Borrowers and the ▇▇▇▇▇
Funds Administrator all expressly agree that the terms of this ARTICLE 3 and
various other provisions of this Credit Agreement identifying the Issuing Bank
are also intended to benefit the Issuing Bank and the Issuing Bank shall be
entitled to enforce the provisions hereof which are for its benefit.
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION
OF COMMITMENTS.
4.1 INTEREST ON REVOLVING LOANS.
(A) Interest on the unpaid principal amount of Revolving
Loans which are Prime Rate Loans shall be payable monthly in arrears,
on the first Business Day of each month, at an interest rate per annum
equal to the Prime Lending Rate PLUS one-half of one percent (0.5%)
calculated on the net balances owing to the Agent and the Lenders at
the close of business each day during such month. The rate hereunder
shall change each day the Prime Lending Rate changes.
(B) Interest on the unpaid principal amount of Revolving
Loans which are LIBOR Rate Loans shall be payable on the earliest to
occur of (I) the last day of each Interest Period with respect to such
LIBOR Rate Loans, (II) ninety (90) days following the commencement of
such LIBOR Rate Loans, (III) the date of conversion of such LIBOR Rate
Loans (or a portion thereof) to a Prime Rate Loan and (IV) the
maturity of such LIBOR Rate Loans, at an interest rate per annum equal
during the Interest Period for such LIBOR Rate Loans to the LIBOR Rate
for the Interest Period in effect for such LIBOR Rate Loans PLUS two
percent (2.00%). After maturity of such LIBOR Rate Loans (whether by
acceleration or otherwise), interest shall be payable upon demand.
The Agent upon determining the LIBOR Rate for any Interest Period
shall promptly notify the ▇▇▇▇▇ Funds Administrator and the Lenders by
telephone (confirmed promptly in writing) or in writing thereof. Each
determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent demonstrable error.
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(C) Notwithstanding the provisions of SECTION 4.1(B), the
Borrowers shall pay to each Lender, so long as and to the extent such
Lender shall be required under regulations of the Board of Governors
of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of
each Revolving Loan comprised of LIBOR Rate Loans of such Lender, from
the date of such LIBOR Rate Loan until such principal amount is paid
in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (I) the LIBOR Rate for the
applicable Interest Period for such LIBOR Rate Loan from (II) the rate
obtained by dividing such LIBOR Rate by a percentage equal to 1 MINUS
the stated maximum rate (stated as a decimal) applicable two (2)
Business Days before the first day of such Interest Period of all
reserves, if any, required to be maintained against "EUROCURRENCY
LIABILITIES" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to which
the interest rate on LIBOR Rate Loans is determined or any category of
extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents)
having a term equal to the Interest Period applicable to such LIBOR
Rate Loan. Such Lender shall as soon as practicable provide notice to
the Agent and the ▇▇▇▇▇ Funds Administrator of any such additional
interest arising in connection with such LIBOR Rate Loan, which notice
shall be conclusive and binding, absent demonstrable error.
4.2 CLOSING FEE; UNUSED LINE FEE.
(A) The Borrowers shall pay to the Agent, for the ratable benefit
of the Lenders, a non-refundable fee (the "CLOSING FEE") in the amount of
$277,500. The Closing Fee shall be fully earned on the Closing Date and
payable on or before the date which is the earlier to occur of (I) 75 days
after the Closing Date and (II) the Bond Closing Date (the "FEE PAYMENT DATE").
(B) The Borrowers shall pay to the Agent for its own account a
non-refundable structuring fee (the "STRUCTURING FEE") in the amount of
$370,000. The Structuring Fee shall be fully earned on the Closing Date and
payable on the Fee Payment Date.
(C) The Borrowers shall pay to the Agent, for the ratable benefit
of the Lenders, a non-refundable fee (the "UNUSED LINE FEE") equal to one-half
of one percent (0.50%) per annum of the unused portion of the Line of Credit
(with any outstanding Letters of Credit constituting usage of the Line of
Credit). The Unused Line Fee shall accrue daily from the Closing Date until
the Expiration Date, and shall be due and payable monthly in arrears, on the
first Business Day of each month and on the Expiration Date. The Agent and
each of the Lenders hereby agree that,
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notwithstanding the provisions of SUBSECTION 4.2(A) and (B), an amount equal to
the Closing Fee and the Structuring Fee shall be deducted from any closing fee
and structuring fee, respectively, payable by Borrowers in connection with any
replacement or restatement of this Agreement contemplated to occur following
the Bond Closing Date.
4.3 LETTER OF CREDIT FEES.
(A) The Agent, for the ratable benefit of the Lenders,
shall be entitled to charge to the account of the Borrowers on the
first Business Day of each month, a fee (the "LETTER OF CREDIT FEE"),
in an amount equal to one and three-quarters percent (1.75%) per annum
of the daily weighted average undrawn amount of Letters of Credit
outstanding during the immediately preceding month. In addition, the
Agent, for its own account, shall be entitled to charge to the account
of the Borrowers on the date of issuance of any standby Letter of
Credit, a facing fee equal to one-half of one percent (0.50%) on the
initial face amount of each such standby Letter of Credit (the "L/C
FACING FEE").
(B) The Agent shall also be entitled to charge to the
account of the Borrowers, as and when incurred by the Agent or any
Lender, the customary charges, fees, costs and expenses charged to the
Agent or any Lender for the Borrower's account by any Issuing Bank
(the "ISSUING BANK FEES") in connection with the issuance, transfer,
drawing, amendment or negotiation of any Letters of Credit by the
Issuing Bank. Each determination by the Agent of Letter of Credit
Fees, L/C Facing Fees, Issuing Bank Fees and other fees, costs and
expenses charged under this Section shall be conclusive and binding
for all purposes, absent manifest error.
4.4 INTEREST AND LETTER OF CREDIT FEES AFTER EVENT OF DEFAULT.
From the date of occurrence of an Event of Default until the earlier
of the date upon which (I) all Obligations shall have been paid and satisfied
in full or (II) such Event of Default shall have been waived, interest on the
Revolving Loans and Letter of Credit Fees on Letter of Credit Obligations shall
each be payable on demand at a rate per annum equal to, with respect to the
Revolving Loans, the rate in effect under SECTION 4.1, PLUS two percent (2%),
and with respect to the Letter of Credit Obligations, the rate at which Letter
of Credit Fees are charged pursuant to the first sentence of SECTION 4.3(A),
PLUS two percent (2%).
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4.5 COLLATERAL MONITORING FEE.
The Borrowers shall pay to the Agent, for its own account, a
non-refundable annual collateral monitoring fee (the "COLLATERAL MONITORING
FEE") in the amount of $37,000. The Collateral Monitoring Fee shall be fully
earned and payable on the Closing Date and on each anniversary thereof.
4.6 EXPENSES.
The Borrowers shall reimburse the Expenses of the Agent or any Lender,
as the case may be, promptly upon demand.
4.7 MANDATORY PAYMENT OF REVOLVING LOANS; REDUCTIONS OF
COMMITMENTS.
(A) Except during the period described in SECTION
2.2(B)(II), the aggregate outstanding principal amount of Revolving
Loans PLUS Letter of Credit Obligations at any time in excess of the
lesser at such time of (I) the Line of Credit and (II) the Borrowing
Base, shall be immediately due and payable without the necessity of
any demand.
(B) On the Expiration Date, the Commitment of each Lender
shall automatically reduce to zero (-0-) and may not be reinstated.
(C) The Borrowers may not reduce the Line of Credit in
part at any time. The Borrowers may terminate the Line of Credit in
whole, but not in part, at any time and from time to time.
4.8 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers (the "LOAN ACCOUNT") in which the Borrowers will be charged with all
loans and advances made by the Lenders to the Borrowers or for the account of
the Borrowers, including the Revolving Loans and all Letter of Credit
Obligations, the Fees, the Expenses and any other Obligations, as and when such
payments become due. The Loan Account will be credited with all payments
received by the Agent from the Borrowers or for the account of the Borrowers,
including all amounts received in the BT Account from the Collection Banks.
After the end of each month, the Agent shall send the ▇▇▇▇▇ Funds Administrator
a monthly statement accounting for the charges, loans, advances and other
transactions occurring among and between the Agent, the Lenders and the
Borrowers during that month, PROVIDED, THAT the failure of the Agent to send
such statement to the ▇▇▇▇▇ Funds Administrator shall not relieve the Borrowers
of any Obligations. Absent demonstrable error, each monthly statement shall be
an account stated and shall be final, conclusive and binding on the Borrowers.
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4.9 PAYMENT PROCEDURES.
Payments of Fees, principal of and interest on the Revolving Loans and
Expenses payable to the Agent or any Lender shall be made in each case not
later than 2:00 P.M. Chicago time on the day when due, in immediately available
dollars, to the offices of the Agent, at the address set forth in SECTION 11.7,
or as the Agent may otherwise direct the ▇▇▇▇▇ Funds Administrator. The
Borrowers hereby authorize the Agent to charge the Loan Account with the amount
of all payments to be made hereunder and under the other Credit Documents,
including all Fees and Expenses, as and when such payments become due. The
joint and several obligations of the Borrowers to the Lenders with respect to
such payments shall be discharged by making such payments to the Agent pursuant
to this Section or by the charging of the Loan Account by the Agent.
4.10 COLLECTION OF ACCOUNTS. Until instructed otherwise by the
Agent, each Borrower shall be entitled to receive Collections directly from
account debtors in accordance with its historical practices. Within sixty (60)
days after the Closing Date, each Borrower, the Agent and financial
institutions selected by such Borrower and reasonably acceptable to the Agent
(the "COLLECTION BANKS") shall enter into agreements in form and substance
satisfactory to Agent (the "DEPOSITARY ACCOUNT AGREEMENTS"), which among other
things shall provide for the opening of an account for the deposit of
Collections (a "COLLECTION ACCOUNT") at a Collection Bank. For purposes of
this Agreement, National City Bank shall be deemed acceptable to Agent to act
as a Collection Bank. All Collections and other amounts received by each
Borrower from any account debtor, in addition to all other cash received from
any other Collateral, shall upon receipt be deposited into a Collection
Account. Termination of such arrangements shall also be subject to approval by
the Agent. Upon the terms and subject to the conditions set forth in the
Depositary Account Agreements, all available amounts held in each Collection
Account shall be wired each Business Day into an account (the "BT ACCOUNT")
maintained by the Agent at Bankers Trust Company. Amounts received in the BT
Account from the Collection Banks shall be credited to the Loan Account and
distributed and applied as set forth in SECTION 4.11.
4.11 DISTRIBUTION AND APPLICATION OF COLLECTIONS AND OTHER AMOUNTS.
All Collections received by the Agent, and all other amounts received
by the Borrowers and delivered to the Agent, shall be credited to the Loan
Account; provided, however, that if an Event of Default has occurred and is
continuing, all Collections and other amounts received by Agent shall be
distributed and applied in the following order: FIRST, to the payment of any
Fees, Expenses or other Obligations due and payable to the Agent under any of
the Credit Documents, including Agent Advances and any other amounts
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advanced by the Agent on behalf of the Lenders; SECOND, to the payment of any
Fees, Expenses or other Obligations due and payable to the Issuing Bank under
any of the Credit Documents; THIRD, to the ratable payment of any Fees,
Expenses or other Obligations due and payable to the Lenders under any of the
Credit Documents other than those Obligations specifically referred to in this
Section; FOURTH, to the ratable payment of interest due on the Revolving Loans;
and, FIFTH, to the ratable payment of principal due on the Revolving Loans.
4.12 CALCULATIONS.
All calculations of (I) interest hereunder and (II) Fees, including,
without limitation, Unused Line Fees and Letter of Credit Fees, shall be made
by the Agent, on the basis of a year of 360 days, or, if such computation would
cause the interest and fees chargeable hereunder to exceed the Highest Lawful
Rate, 365/366 days, in each case for the actual number of days elapsed
(including the first day but excluding the last day) occurring in the period
for which such interest or Fees are payable. Each determination by the Agent
of an interest rate, Fee or other payment hereunder shall be conclusive and
binding for all purposes, absent manifest error.
4.13 SPECIAL PROVISIONS RELATING TO LIBOR RATE LOANS.
(A) CONTINUATION. With respect to any Borrowing
consisting of LIBOR Rate Loans, the Borrowers may, subject to the
provisions of SECTION 4.13(C), elect to maintain such Borrowing or any
portion thereof as consisting of LIBOR Rate Loans by selecting a new
Interest Period for such Borrowing, which new Interest Period shall
commence on the last day of the immediately preceding Interest Period.
Each selection of a new Interest Period shall be made by notice given
not later than noon Chicago time on the third Business Day prior to
the date of any such continuation relating to LIBOR Rate Loans, by the
▇▇▇▇▇ Funds Administrator to the Agent. Such notice by the ▇▇▇▇▇
Funds Administrator of a continuation (a "NOTICE OF CONTINUATION")
shall be by telephone or facsimile transmission, and if by telephone,
promptly confirmed in writing, substantially in the form of EXHIBIT D,
in each case specifying (I) the date of such continuation, (II) the
Type of Revolving Loans subject to such continuation, (III) the
aggregate amount of Revolving Loans subject to such continuation and
(IV) the duration of the selected Interest Period. The Borrowers may
elect to maintain more than one Borrowing consisting of LIBOR Rate
Loans by combining such Borrowings into one Borrowing and selecting a
new Interest Period pursuant to this SECTION 4.13(A). If the
Borrowers shall fail to select a new Interest Period for any Borrowing
consisting of LIBOR Rate Loans in accordance with this SECTION
4.13(A), such Revolving Loans will automatically, on the last day of
the then existing Interest Period therefor, convert
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into Prime Rate Loans. The Agent shall give each Lender prompt notice
by telephone or facsimile transmission of each Notice of Continuation.
(B) CONVERSION. The Borrowers may on any Business Day
(so long as no Default or Event of Default has occurred and is
continuing), upon notice (each such notice, a "NOTICE OF CONVERSION")
given to the Agent, and subject to the provisions of SECTION 4.13(C),
convert the entire amount of or a portion of all Revolving Loans of
one Type comprising the same Borrowing into Revolving Loans of another
Type; PROVIDED, THAT any conversion of any LIBOR Rate Loans into
Revolving Loans of another Type shall be made on, and only on, the
last day of an Interest Period for such LIBOR Rate Loans and, upon
conversion of any Prime Rate Loans into Revolving Loans of another
Type, the Borrowers shall pay accrued interest to the date of
conversion on the principal amount converted. Each such Notice of
Conversion shall be given not later than Noon Chicago time on the
Business Day prior to the date of any proposed conversion into Prime
Rate Loans and on the third Business Day prior to the date of any
proposed conversion into LIBOR Rate Loans. Subject to the
restrictions specified above, each Notice of Conversion shall be by
telephone or facsimile transmission, and if by telephone, promptly
confirmed in writing, substantially in the form of EXHIBIT E, in each
case specifying (I) the requested date of such conversion, (II) the
Type of Revolving Loans to be converted (III) the portion of such Type
of Revolving Loan to be converted, (IV) the Type of Revolving Loans
such Revolving Loans are to be converted into and (V) if such
conversion is into LIBOR Rate Loans, the duration of the Interest
Period of such Revolving Loan. Each conversion shall be in an
aggregate amount of not less than $5,000,000 or an integral multiple
of $500,000 in excess thereof. The Borrowers may elect to convert the
entire amount of or a portion of all Revolving Loans of one Type
comprising more than one Borrowing into Revolving Loans of another
Type by combining such Borrowings into one Borrowing; PROVIDED, THAT
if the Borrowings so combined consist of LIBOR Rate Loans, such Loans
shall have Interest Periods ending on the same date.
(C) CERTAIN LIMITATIONS ON LIBOR RATE LOANS. The right
of the Borrowers to maintain, select, continue or convert LIBOR Rate
Loans shall be limited as follows:
(I) If the Agent is advised by Bankers Trust
Company that it is not offering United States dollar deposits
(in the applicable amounts) in the London interbank market, or
the Agent determines that adequate and fair means do not
otherwise exist for ascertaining the LIBOR Rate or LIBOR Rate
Loans comprising any requested Borrowing, continuation or
conversion, the right of the
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Borrowers to select or maintain LIBOR Rate Loans for such
Borrowing or any subsequent Borrowing shall be suspended until
the Agent shall notify the ▇▇▇▇▇ Funds Administrator and the
Lenders that the circumstances causing such suspension no
longer exists, and each Revolving Loan shall be made as a Prime
Rate Loan.
(II) If the Majority Lenders shall, at least one
Business Day before the date of any requested Borrowing,
continuation or conversion, notify the Agent that the LIBOR
Rate for Revolving Loans comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or
funding their respective Revolving Loans for such Borrowing,
the right of the Borrowers to select LIBOR Rate Loans for such
Borrowing shall be suspended until the Agent shall notify the
▇▇▇▇▇ Funds Administrator and the Lenders that the
circumstances causing such suspension no longer exist, and
each Revolving Loan comprising such Borrowing and each other
Borrowing requested during such period of suspension shall be
made as a Prime Rate Loan.
(III) If at any time any Lender determines (which
determination shall, absent manifest error, be conclusive and
binding on all parties) that the making, continuation or
conversion of any Revolving Loan as a LIBOR Rate Loan by such
Lender has become unlawful or impermissible by reason of
compliance by that Lender with any law, governmental rule,
regulation or order of any Governmental Authority (whether or
not having the force of law), then, and in any such event,
such Lender may give notice of that determination in writing,
to the Agent and the ▇▇▇▇▇ Funds Administrator and the Agent
shall promptly transmit the notice to each other Lender.
Until such Lender gives notice otherwise, the right of the
Borrowers to select LIBOR Rate Loans from that Lender shall be
suspended and each Revolving Loan made by that Lender,
notwithstanding the Type of Revolving Loan made by the other
Lenders, shall be a Prime Rate Loan and each LIBOR Rate Loan
outstanding from that Lender shall automatically, on the last
day of the existing Interest Period therefor (or earlier, if
so required under such law, rule, regulation or order),
convert to a Prime Rate Loan.
(IV) No Agent Advance shall be made as a LIBOR
Rate Loan.
(V) No Revolving Loans may be made, continued or
converted as or to LIBOR Rate Loans at any time that a Default
or Event of Default shall have occurred and be continuing.
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(VI) The Borrowers may not select a LIBOR Rate
Loan prior to the earlier to occur of (X) the completion of
the syndication by the Agent in the exercise of its sole
discretion and (Y) ninety (90) days after the Closing Date.
(D) COMPENSATION.
(I) Each Notice of Continuation and Notice of
Conversion shall be irrevocable by and binding on the
Borrowers. In the case of any Borrowing, continuation or
conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be
comprised of LIBOR Rate Loans, the Borrowers shall indemnify
each Lender against any loss, cost or expense incurred by such
Person as a result of any failure to fulfill, on or before the
date for such Borrowing, continuation or conversion specified
in such Notice of Borrowing, Notice of Continuation or Notice
of Conversion, the applicable conditions set forth in ARTICLE
5, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of
the liquidation or re-employment of deposits or other funds
acquired by such Lender to fund the Revolving Loan to be made
by such Lender as part of such Borrowing, continuation or
conversion.
(II) If any payment of principal of, or conversion
or continuation of, any LIBOR Rate Loan is made other than on
the last day of the Interest Period for such Loan as a result
of a payment, prepayment, conversion or continuation of such
Loan or acceleration of the maturity of the Revolving Notes or
for any other reason, the Borrowers shall, upon demand by any
Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by
reason of the liquidation or re-employment of deposits or
other funds acquired by any Lender to fund or maintain such
Loan.
(III) Calculation of all amounts payable to a
Lender under this SECTION 4.13(D) shall be made as though such
Lender elected to fund all LIBOR Rate Loans by purchasing
United State dollar deposits in its LIBOR Lending Office's
interbank eurodollar market.
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4.14 INDEMNIFICATION IN CERTAIN EVENTS.
(A) INCREASED COSTS. If after the Closing Date, either
(I) any change in or in the interpretation of any law or regulation is
introduced, including, without limitation, with respect to reserve
requirements applicable to the Agent, to any of the Lenders, Bankers
Trust Company or any other affiliated banking or financial institution
from whom any of the Lenders borrows funds or obtains credit (a
"FUNDING BANK"), or (II) the Agent, a Funding Bank or any of the
Lenders complies with any future guideline or request from any central
bank or other Governmental Authority proposed or promulgated after the
date of the Agreement or (III) the Agent, a Funding Bank or any of the
Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy or any change therein, or any
change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof announced after the date
of this Credit Agreement has or would have the effect described below,
or the Agent, a Funding Bank or any of the Lenders complies with any
request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable
agency announced after the date of this Credit Agreement and in the
case of any event set forth in this clause (III), such adoption,
change or compliance has or would have the direct or indirect effect
of reducing the rate of return on any of such Person's capital as a
consequence of its obligations hereunder to a level below that which
such Person could have achieved but for such adoption, change or
compliance (taking into consideration such Person's policies with
respect to capital adequacy) by an amount deemed by such Person to be
material, and any of the foregoing events described in CLAUSES (I),
(II) OR (III) increases the cost to the Agent, or any of the Lenders
of (A) funding or maintaining any Commitment or (B) issuing, causing
the issuance of making or maintaining any Letter of Credit or of
purchasing or maintaining any participation therein, or reduces the
amount receivable in respect thereof by the Agent or any Lender, then
the Borrowers shall upon demand by the Agent at any time within one
hundred eighty (180) days after the date on which an officer of the
Agent, such Funding Bank or such Lender, as the case may be,
responsible for overseeing this Credit Agreement knows or has reason
to know of its right to additional compensation under this SECTION
4.14(A), pay to the Agent, for the account of such Lender or, as
applicable, the Agent or a Funding Bank, additional amounts sufficient
to reimburse the Agent, such Funding Bank and such Lender against such
increase in cost or reduction in amount receivable; PROVIDED, HOWEVER,
that if the Agent or any such Lender or Funding Bank, as the case may
be, fails to deliver such demand within such 180 day period, such
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entity shall only be entitled to additional compensation for any such
costs incurred from and after the date that is one hundred eighty
(180) days prior to the date the Borrowers received such demand; and
PROVIDED FURTHER, HOWEVER, that before making any such demand, the
Agent and each Lender agree to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such
a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender. A certificate as
to the amount of such increased cost, and setting forth in reasonable
detail the calculation thereof, shall be submitted to the ▇▇▇▇▇ Funds
Administrator by the Agent, or the applicable Lender or Funding Bank,
and shall be conclusive absent demonstrable error.
(B) Each Lender will promptly notify the Agent, and the
Agent will promptly notify the ▇▇▇▇▇ Funds Administrator, of any event
of which it has knowledge that would entitle such entity to additional
compensation under this SECTION 4.14. Neither the Agent nor any
Lender shall request any additional compensation under this SECTION
4.14 unless it is generally making similar requests of other borrowers
similarly situated, and the Agent and each Lender agrees to use a
reasonable basis for calculating amounts allocable to its commitment
to lend or its Loans and Letter of Credit Obligations, if any,
hereunder.
ARTICLE 5. CONDITIONS PRECEDENT.
5.1 CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN AND LETTER OF
CREDIT.
The obligation of each Lender to fund its Proportionate Share of the
initial Borrowing (or, if it shall occur earlier, the obligation of the Agent
to cause the issuance by the Issuing Bank of the initial Letter of Credit and
of each Lender to purchase a participation therein) is in each case subject to
the satisfaction or waiver of the following conditions precedent:
(A) ACQUISITION AND MERGER. Agent shall have received
evidence satisfactory to it, in its sole discretion, that (I) the
Acquisition and the Merger have been consummated in accordance with
the terms of the Acquisition Documents and all applicable Requirements
of Law, (II) Borrowers have good and marketable title to all Property
necessary for the operation of their respective businesses, free and
clear of all Liens other than Permitted Liens, (III) the Acquisition
Documents are in full force and effect and (IV) none of the parties to
the Acquisition Documents shall have failed to perform any material
obligation or covenant required by any Acquisition
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Document to be performed or complied with by it on or before the
Closing Date.
(B) CLOSING DOCUMENTS. The Agent and the Lenders shall
have received each of the agreements, opinions, reports, approvals,
consents, certificates and other documents set forth on the List of
Closing Documents attached hereto as SCHEDULE A (the "CLOSING DOCUMENT
LIST").
(C) FEES AND EXPENSES. All Fees and Expenses payable by
the Borrowers hereunder on or before the Closing Date shall have been
paid in full.
(D) OTHER DOCUMENTS. Borrowers shall have delivered or
caused to be delivered to the Agent, in each case in form and
substance satisfactory to Agent, (I) all information required pursuant
to SECTION 7.2 and (II) such other business and/or financial and data
and other information as the Agent shall reasonably request.
(E) OFFICER'S CERTIFICATE. The Agent shall have received
a certificate dated the Closing Date signed on behalf of the ▇▇▇▇▇
Funds Administrator and each of the Borrowers by the Chairman or Vice
Chairman of the ▇▇▇▇▇ Funds Administrator stating that all of the
conditions set forth in SECTIONS 5.1(A) through (D), and SECTIONS
5.2(A) and (B), have been satisfied on and as of such date.
5.2 CONDITIONS PRECEDENT TO ALL REVOLVING LOANS AND LETTERS OF
CREDIT.
The obligation of each Lender to fund its Proportionate Share of any
requested Revolving Loan (or of the Agent to cause the Issuing Bank to issue
any requested Letter of Credit and of each Lender to purchase a participation
therein) is in each case subject to the satisfaction of the conditions
precedent set forth below. Each Notice of Borrowing, each Letter of Credit
Request and each issuance by any Borrower of a check drawn against, or request
for transfer from, the Disbursement Account shall constitute a representation
and warranty to the Agent and each Lender by the Borrowers that such conditions
are satisfied.
(A) All representations and warranties contained in this
Credit Agreement and the other Credit Documents are true and correct
in all material respects on and as of the date of such Notice of
Borrowing, Letter of Credit Request, or issuance of a check drawn
against, or request for transfer from, the Disbursement Account both
before and after giving effect thereto and to the application of the
proceeds thereof, in each case as if then made, other than
representations and warranties that expressly relate solely to an
earlier date (in which case such representations and warranties shall
have been
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true and accurate in all material respects on and as of such earlier
date); and
(B) No Default or Event of Default shall have occurred or
could reasonably be expected to result from the making of the
requested Revolving Loan or the issuance of the requested Letter of
Credit, which has not been waived.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
To induce the Agent and the Lenders to enter into this Credit
Agreement and to induce the Lenders to make the Loans and other financial
accommodations described herein, each of the Borrowers hereby represents and
warrants to the Agent and the Lenders that, after giving effect to the events
described in SECTIONS 5.1(A) and (B), the representations and warranties
contained in this ARTICLE 6 are true and correct. Such representations and
warranties, and all other representations and warranties made by the Borrowers
in any other Credit Documents, shall survive the execution and delivery of this
Credit Agreement and such other Credit Documents.
6.1 ORGANIZATION AND QUALIFICATION.
Each Credit Party and each Subsidiary of each Credit Party (I) are
corporations duly organized, validly existing and in good standing under the
laws of the respective states or other jurisdictions of their incorporation,
(II) have the power and authority to own their respective properties and assets
and to transact their respective businesses in which they presently are, or
propose to be, engaged and (III) are duly qualified and are authorized to do
business and are in good standing in each of the respective jurisdictions where
they presently are, or propose to be, engaged in business, in each case, except
where any failures to do so could not reasonably be expected singly or in the
aggregate to have a Material Adverse Effect. SCHEDULE B, PART 6.1 lists all
jurisdictions in which each Credit Party and each Subsidiary of each Credit
Party are qualified to do business as foreign corporations.
6.2 AUTHORITY.
Each Credit Party and each Subsidiary of each Credit Party has the
requisite corporate power and authority to execute, deliver and perform the
respective Credit Documents to which they are parties. All corporate action
necessary for the execution, delivery and performance of any of the Credit
Documents by each Credit Party and each Subsidiary of each Credit Party which
is a party thereto has been taken.
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6.3 ENFORCEABILITY.
This Credit Agreement and each of the other Credit Documents are the
legal, valid and binding obligations of each Credit Party and each Subsidiary
of each Credit Party which are parties thereto, enforceable in accordance with
their respective terms, except as such enforceability may be limited by (I)
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and (II) general principles of equity.
6.4 NO CONFLICT.
The execution, delivery and performance of each Credit Document by
each Credit Party and each Subsidiary of each Credit Party which are parties
thereto are not in contravention of (I) the Governing Documents of such
Persons, or (II) to the Borrowers' knowledge, any Requirement of Law, or (III)
to the Borrowers' knowledge, any indenture, contract, agreement or instrument
or other commitment to which any or all of such Persons are parties or by which
any of such Persons or any of its properties are bound, and will not, except as
contemplated herein, result in the imposition of any Liens upon any of the
properties of any of such Persons.
6.5 CONSENTS AND FILINGS.
To the Borrower's knowledge, no consent, authorization, permit or
filing is required in connection with the Acquisition, the Merger, the
execution, delivery and performance of the Acquisition Documents, this Credit
Agreement or any other Credit Document by any Credit Party or any Subsidiary of
any Credit Party which are parties thereto, or in connection with the
continuing operations of such Persons, except (I) those that have been obtained
or made, (II) filings necessary to create, perfect or retain the perfection of
Liens against the Collateral and (III) the filing of a file-stamped certificate
of merger from the Secretary of State of Ohio evidencing the merger of Ferrex
Trading Corporation, an Ohio corporation, with and into ▇▇▇▇▇ Acquisition
Corporation, a Delaware corporation, in the office of the recorder of each of
▇▇▇▇▇▇▇▇, Defiance and Cuyahoga County, Ohio.
6.6 GOVERNMENT REGULATION.
No Borrower nor any Subsidiary of any Borrower is subject to
regulation under the Public Utility Holding Company Act of 1935, the Investment
Company Act of 1940, the Federal Power Act or any other similar Requirement of
Law that limits the respective abilities of such Persons to incur indebtedness
or consummate the transactions contemplated in the Acquisition Documents, this
Credit Agreement and the other Credit Documents.
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6.7 SOLVENCY.
The present fair saleable value of the assets of each Borrower exceeds
all its probable liability on its existing debts as they become absolute and
matured, including those to be incurred pursuant to this Credit Agreement and
the other Credit Documents. No Borrower (I) has unreasonably small capital in
relation to the business in which it is or proposes to be engaged and (II) has
incurred and believes that it will incur, after giving effect to the
transactions contemplated by this Credit Agreement, debts beyond its ability to
pay as such debts become due.
6.8 RIGHTS IN COLLATERAL; PRIORITY OF LIENS.
All property constituting Collateral is owned or leased by the
respective Borrowers, free and clear of any and all Liens in favor of third
parties, other than Permitted Liens. Upon the proper filing of the UCC
financing and termination statements, in each case listed in the Closing
Document List, the security interests granted pursuant to the Credit Documents
constitute valid and enforceable first, prior (subject to Permitted Liens) and
perfected Liens on the Collateral, to the extent such Liens can be perfected by
the filing of such financing statements.
6.9 FINANCIAL DATA.
The Borrowers have provided or caused to be provided to the Agent and
each of the Lenders complete and accurate copies of the following Financial
Statements: (I) audited Financial Statements for the twelve-month fiscal period
ended December 31, 1996, (II) unaudited Financial Statements for the quarter
ended March 31, 1997 and (III) unaudited Financial Statements for the month
ended April 30, 1997. All such Financial Statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved and
fairly present the respective consolidated financial positions, results of
operations and cash flows of Persons indicated for each of the periods covered
subject, in the case of interim Financial Statements, to normal year-end audit
adjustments. The Consolidated Entity has no Contingent Obligation (or any
other material liabilities which were not incurred in the ordinary course of
business) which is not reflected in such Financial Statements or the footnotes
thereto, or is not otherwise disclosed on SCHEDULE B, PART 6.9.
6.10 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
(A) The address of the principal place of business and, if there is
more than one principal place of business, the chief executive office, of each
Credit Party is set forth on SCHEDULE B, PART 6.10(A), as the same may be
amended after the Closing Date in accordance with SECTION 11.11. The books and
records of each Credit Party, and all its chattel paper, if any, and records of
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Accounts, are maintained exclusively at one or more of such locations.
(B) There is no location in which any Borrower has any Collateral
(except for vehicles and Inventory in transit) other than those locations
identified on SCHEDULE B, PART 6.10(B), as the same may be amended after the
Closing Date in accordance with SECTION 11.11. A complete list of the legal
name and address of each warehouse at which Inventory of any Borrower is stored
is set forth on SCHEDULE B, PART 6.10(B), as the same may be amended after the
Closing Date in accordance with SECTION 11.11. None of the receipts received
and to be received by any Borrower from any warehouseman state that the
Inventory covered thereby is to be delivered to bearer or to the order of a
named Person or to a named Person and such named Person's assigns, in each case
other than such Borrower.
6.11 SUBSIDIARIES; OWNERSHIP OF STOCK.
As of the Closing Date, (I) the only direct or indirect Subsidiaries
of the respective Credit Parties are those listed on SCHEDULE B, PART 6.11,
(II) each Credit Party is the record and beneficial owner of all of the
respective shares of capital stock of each of its Subsidiaries listed on
SCHEDULE B, PART 6.11, (III) there are no proxies, irrevocable or otherwise,
with respect to such shares, and no equity securities of any of such
Subsidiaries are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any capital stock of any such Subsidiary, and (IV)
there are no contracts, commitments, understandings or arrangements by which
any such Subsidiary is or may become bound to issue additional shares of its
capital stock or securities convertible into or exchangeable for such shares.
All of such shares so owned by any Credit Party are owned by such Credit Party
free and clear of any Liens.
6.12 NO JUDGMENTS OR LITIGATION.
No judgments, orders, writs or decrees are outstanding against any
Credit Party or any Subsidiary of any Credit Party, nor is there now pending
or, to any Credit Party's knowledge, threatened, any litigation, contested
claim, investigation, arbitration, or governmental proceeding by or against any
Credit Party or any Subsidiary of any Credit Party other than (I) as set forth
on SCHEDULE B, PART 6.12, or (II) with respect to matters arising after the
Closing Date, that singly or in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
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6.13 NO DEFAULTS.
No Credit Party nor any Subsidiary of any Credit Party is in default
under (I) the Acquisition Documents or (II) any term of any other indenture,
contract, lease, agreement, instrument or commitment to which any of them is a
party or by which any of them is bound, in the case of the items described in
CLAUSE (II) above, the default under which singly or in the aggregate could
reasonably be expected to have a Material Adverse Effect. No Credit Party
knows of any dispute regarding any such indenture, contract, lease, agreement,
instrument or other commitment.
6.14 LABOR MATTERS.
SCHEDULE B, PART 6.14 accurately sets forth all labor union contracts
to which any Borrower or any Subsidiary of any Borrower is a party as of the
Closing Date (including their dates of expiration). There are no existing or,
to the knowledge of any Borrower, threatened strikes, lockouts or other
disputes relating to any collective bargaining or similar agreement to which
any Borrower or any Subsidiary of any Borrower is a party that singly or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.15 COMPLIANCE WITH LAW.
To the Borrowers' knowledge, no Credit Party nor any Subsidiary of any
Credit Party has violated or failed to comply in any material respect with any
Requirements of Law.
6.16 ERISA.
No Borrower, no Subsidiary of any Borrower and no ERISA Affiliate
maintains or contributes to any Plan other than those listed on SCHEDULE B,
PART 6.16. Each Plan has been and is maintained and funded in accordance with
its terms and in compliance with all applicable provisions of ERISA and the
Internal Revenue Code. Each Borrower, each Subsidiary of a Borrower and each
ERISA Affiliate has fulfilled all contribution obligations for each Plan
(including obligations related to the minimum funding standards of ERISA and
the Internal Revenue Code). No Termination Event has occurred nor has any
other event occurred that may result in a Termination Event. No Borrower, no
Subsidiary of any Borrower, no ERISA Affiliate, and no fiduciary of any Plan is
subject to any direct or indirect liability with respect to any Plan under any
Requirement of Law or agreement. No Borrower, no Subsidiary of a Borrower and
no ERISA Affiliate, is required to provide security to any Plan under Section
401(a)(29) of the Internal Revenue Code.
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6.17 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except for matters disclosed on SCHEDULE B, PART 6.17 and for matters
arising after the Closing Date, in each case none of which matters could singly
or in the aggregate reasonably be expected to have a Material Adverse Effect,
(I) the operations of each Borrower and each Subsidiary of each Borrower comply
with all applicable federal, state and local environmental, health and safety
statutes, regulations, directions, ordinances, criteria and guidelines; (II) no
Borrower has received notice that any of the operations of such Borrower or any
of its Subsidiaries is the subject of any judicial or administrative proceeding
alleging the violation of any federal, state or local environmental, health or
safety statute, regulation, direction, ordinance, criteria or guideline; (III)
none of the operations of such Borrower or any of its Subsidiaries is the
subject of any federal or state investigation evaluating whether such Borrower
or any of its Subsidiaries disposed of any hazardous or toxic waste, substance
or constituent or other substance at any site that may require remedial action,
or any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any hazardous or toxic waste, substance or
constituent or other substance into the environment; (IV) no Borrower nor any
Subsidiary of any Borrower has filed any notice under any federal or state law
indicating past or present treatment, storage or disposal of a hazardous or
toxic waste, substance or constituent or reporting a spill or release of a
hazardous or toxic waste, substance or constituent or other substance into the
environment; and (V) no Borrower nor any Subsidiary of any Borrower has any
contingent liability of which the Borrower has knowledge, or reasonably should
have knowledge, in connection with any release or potential release of any
hazardous or toxic waste, substance or constituent or other substance into the
environment, nor has the Borrower or any of its Subsidiaries received any
notice, letter or other indication of potential liability arising from the
disposal of any hazardous or toxic waste, substance or constituent or other
substance into the environment.
6.18 INTELLECTUAL PROPERTY.
Each Borrower and each Subsidiary of each Borrower possesses such
assets, licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names as are necessary or advisable to continue to conduct
their respective present and proposed business activities.
6.19 LICENSES AND PERMITS.
Each Borrower and each Subsidiary of each Borrower has obtained and
holds in full force and effect, all franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and
other rights and
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approvals which are necessary or advisable for the operation of its business as
presently conducted and as proposed to be conducted.
6.20 TAXES AND TAX RETURNS.
(A) Except as set forth on SCHEDULE B, PART 6.20, all
income tax returns required to be filed by each Credit Party and each
Subsidiary of each Credit Party have been timely filed without request
for extension. The information filed is complete and accurate in all
material respects. All deductions taken in such income tax returns
are appropriate and in accordance with applicable laws and
regulations, except deductions that may have been disallowed but are
being challenged in good faith and for which adequate reserves have
been made in accordance with GAAP.
(B) All taxes, assessments, fees and other governmental
charges for periods beginning prior to the date hereof, other than
such taxes, assessments, fees and other governmental charges that are
not yet due and payable, have been timely paid and no Credit Party nor
any Subsidiary of any Credit Party has any liability for taxes in
excess of the amounts so paid or reserves so established.
(C) Except as set forth in SCHEDULE B, PART 6.20, no
material deficiencies for taxes have been claimed, proposed or
assessed by any taxing or other Governmental Authority against any
Credit Party or any Subsidiary of any Credit Party and no tax liens
have been filed. Except as set forth in SCHEDULE B, PART 6.20, there
are no pending or, to the knowledge of any Credit Party, threatened
audits, investigations or claims for or relating to any liability for
taxes and there are no matters under discussion with any Governmental
Authority which could reasonably be expected to result in a material
additional liability for taxes. As of the Closing Date, either the
federal income tax returns of each Borrower have been audited by the
Internal Revenue Service and such audits have been closed, or the
period during which any assessments may be made by the Internal
Revenue Service has expired without waiver or extension for all years
up to and including the fiscal year ended December 31, 1992. Except
as set forth in SCHEDULE B, PART 6.20, as of the Closing Date, no
extension of a statute of limitations relating to taxes, assessments,
fees or other governmental charges is in effect with respect to any
Credit Party or any Subsidiary of any Credit Party.
(D) Except as set forth on SCHEDULE B, PART 6.20, no
Credit Party nor any Subsidiary of any Credit Party has any obligation
under any written tax sharing agreement or agreement regarding
payments in lieu of taxes.
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6.21 MATERIAL CONTRACTS.
SCHEDULE B, PART 6.21, contains a true, correct and complete list of
all the Material Contracts in effect on the Closing Date. Except as described
on SCHEDULE B, PART 6.21, no Material Contract contains any burdensome
restrictions on any Credit Party or any Subsidiary of any Credit Party or any
of their respective properties that could prevent such Credit Party or
Subsidiary from conducting its business as conducted on the Closing Date. As
of the Closing Date, all of the Material Contracts are in full force and
effect, and no defaults currently exist thereunder by any Credit Party or
Subsidiary of a Credit Party that is a party thereto, or to the knowledge of
any Credit Party, any other party thereto.
6.22 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information furnished by or on behalf of any Credit Party
or any Subsidiary of any Credit Party in writing to the Agent or any Lender for
purposes of or in connection with this Credit Agreement or any Credit Documents
or any transaction contemplated hereby or thereby, is or will be true and
accurate in all material respects on the date as of which such information is
dated or certified and, taken as a whole, is not incomplete by omitting to
state any material fact necessary to make such information not misleading at
such time.
6.23 NO CHANGE.
Except as a result of the transactions and events disclosed on
SCHEDULE B, PART 6.23, since December 31, 1996, no event has occurred which has
had or could reasonably be expected to have a Material Adverse Effect.
ARTICLE 7. AFFIRMATIVE COVENANTS.
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder:
7.1 FINANCIAL REPORTING.
The Borrowers shall timely deliver to each Lender the following
information:
(A) AUDITOR'S ENGAGEMENT LETTER. As soon as available,
but in any event not later than the earlier of (I) 15 days prior to
the end of each fiscal year or (II) prior to the date the Auditors
commence work on the preparation of the annual audited Financial
Statement, a copy of the engagement letter between the Credit Parties
and their Auditors, which engagement letter shall notify such Auditors
that such annual
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audited Financial Statement will be delivered by the Credit Parties to
the Agent and Lenders, and stating that Agent and Lenders shall be
entitled to rely thereon with respect to the transactions which are
the subject of this Agreement.
(B) ANNUAL FINANCIAL STATEMENTS. As soon as available,
but not later than 90 days after each fiscal year end: (I) the annual
audited consolidated, and unaudited consolidating, Financial
Statements of the Consolidated Entity and of MTLM; (II) a comparison
in reasonable detail to the prior year annual audited and unaudited
Financial Statements; (III) the Auditors' unqualified opinion,
"Management Letter" (if any) and statement indicating whether the
Auditors have obtained knowledge of the existence of any Default or
Event of Default during their audit; (IV) a narrative discussion of
the consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated
Entity for such fiscal year, prepared by the chief financial officer
of ▇▇▇▇▇; and (V) a compliance certificate substantially in the form
of EXHIBIT F with an attached schedule of calculations demonstrating
compliance with the financial covenants set forth in ARTICLE 8.
(C) MONTHLY AND ANNUAL PROJECTIONS. Not later than 45
days after each fiscal year end, beginning with the fiscal year ended
December 31, 1997, monthly projections of the financial condition and
results of operations of the Consolidated Entity for the next
succeeding year, quarterly projections for the second succeeding year,
and annual projections for each succeeding fiscal year thereafter,
through and including the fiscal year in which the Expiration Date
will occur, in each case containing projected consolidating balance
sheets, statements of operations, statements of cash flows and
statements of changes in shareholders equity.
(D) QUARTERLY FINANCIAL STATEMENTS. As soon as
available, but not later than 45 days after each end of each of the
first three fiscal quarters, and 90 days after the end of the last
fiscal quarter: (I) Financial Statements of the Consolidated Entity
and of MTLM as of the fiscal quarter then ended, and for the fiscal
year to date; (II) a comparison in reasonable detail to the Financial
Statements for the corresponding periods of the prior fiscal year;
(III) the certification of the chief executive officer or chief
financial officer of MTLM that such Financial Statements have been
prepared in accordance with GAAP (subject to year-end audit
adjustments); (IV) a narrative discussion of the consolidated
financial condition and results of operations and the consolidated
liquidity and capital resources of the Consolidated Entity for such
fiscal quarter and fiscal year to date, prepared by the chief
financial officer of ▇▇▇▇▇; and
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(V) a compliance certificate substantially in the form of EXHIBIT F
with an attached schedule of calculations demonstrating compliance
with the financial covenants set forth in ARTICLE 8.
(E) MONTHLY FINANCIAL STATEMENTS. As soon as available,
but not later than (I) 30 days after the end of each month (other than
the last month in each fiscal quarter), (II) 45 days after the end of
the last month in the first three fiscal quarters and (III) 90 days
after the end of the last month in the fourth fiscal quarter; (A) a
balance sheet for the Consolidated Entity and MTLM as at the end of
such month and for the fiscal year to date and statements of
operations and cash flows for such month and for the fiscal year to
date; (B) a comparison to the balance sheet, statement of operations
and statement of cash flows for the same periods in the prior year;
(C) a certification by the chief executive officer or chief financial
officer of ▇▇▇▇▇ that such balance sheet, statement of operations and
statement of cash flows have been prepared in accordance with GAAP
(subject to year-end audit adjustments); and (D) a compliance
certificate substantially in the form of EXHIBIT F with an attached
schedule of calculations demonstrating compliance with the financial
covenants set forth in ARTICLE 8.
(F) MONTHLY COMPARISON TO PRIOR PROJECTIONS. As soon as
available, but not later than 30 days after the end of each of the
first eleven months of each fiscal year, and 45 days after end of the
last month of each fiscal year, a comparison of actual results of
operations, cash flow and capital expenditures for the Consolidated
Entity and MTLM for such month and for the period from the beginning
of the current fiscal year through the end of such month with amounts
previously projected for those periods (see SECTION 7.1(C)) and with
actual results for corresponding periods in the previous fiscal year.
(G) PUBLIC REPORTING. Promptly upon their becoming
available, copies of all regular and periodic reports, proxy
statements and other materials, if any, filed by MTLM any Borrower
with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of such
Commission, or with any national securities exchange, or distributed
to the stockholders of any Borrower or MTLM.
7.2 COLLATERAL REPORTING.
The Borrowers shall timely deliver or cause to be delivered to the
Agent the following certificates and reports:
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(A) WEEKLY AND MONTHLY BORROWING BASE CERTIFICATES.
Weekly, before 12:00 noon on the third Business Day of each week
(except the last week of each month), monthly, within three (3)
Business Days after the last Business Day of each month, and at any
other time reasonably requested by the Agent, a Borrowing Base
Certificate, which shall be: (I) substantially in the form of EXHIBIT
A, detailing the Eligible Accounts Receivable and Eligible Inventory,
in each case of each of the Borrowers, PROVIDED, HOWEVER, Eligible
Inventory shall be updated only on monthly Borrowing Base
Certificates, as of each Friday of the immediately preceding week (if
a weekly Borrowing Base Certificate), or as of the last Business Day
of the immediately preceding month (if a monthly Borrowing Base
Certificate), or as of such other date as the Agent may request; and
(II) prepared by or under the supervision of the chief executive
officer or chief financial officers of each Borrower and certified by
such officer subject only to adjustment upon completion of the normal
annual audit of physical inventory. Each Borrowing Base Certificate
shall have attached to it such additional schedules and other
information as the Agent may reasonably request, including, without
limitation, an aging of Accounts.
(B) APPRAISALS. When requested by the Agent, (I) so long
as an Event of Default shall not have occurred and be continuing, not
more than once in any fiscal year of the ▇▇▇▇▇ Funds Administrator and
(II) following the occurrence and during the continuance of an Event
of Default, at any time, a report of Inventory of each Borrower, based
upon a physical count, which shall describe each Borrower's Inventory
by category and by item (in reasonable detail) and report the then
appraised value (at lower of cost or market) of such Inventory.
(C) FURTHER ASSURANCES. When requested by the Agent, any
further information regarding the Collateral, business affairs and
financial condition of ▇▇▇▇▇, any other Credit Party or any Subsidiary
of any Credit Party.
7.3 NOTIFICATION REQUIREMENTS.
The Borrowers shall timely give to the Agent and each of the Lenders
the following notices:
(A) NOTICE OF DEFAULTS. Promptly, and in any event
within five (5) Business Days after becoming aware of the occurrence
of a Default or Event of Default, a certificate of the chief executive
officer or chief financial officer of the ▇▇▇▇▇ Funds Administrator
specifying the nature thereof and the proposed response of the Credit
Parties with respect thereto, each in reasonable detail.
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(B) PROCEEDINGS OR ADVERSE CHANGES. Promptly, and in any
event within five (5) Business Days after any Credit Party becomes
aware of (I) any proceedings being instituted or threatened to be
instituted by or against such Credit Party or any of its Subsidiaries
in any federal, state, local or foreign court or before any commission
or other regulatory body (federal, state, local or foreign), (II) any
order, judgment or decree in excess of $250,000 being entered against
such Credit Party or any of its Subsidiaries or any of their
respective properties or assets or (III) any actual or prospective
change, development or event which has had or could reasonably be
expected to have a Material Adverse Effect, a written statement
describing such proceeding, order, judgment, decree, change,
development or event and any action being taken with respect thereto
by such Credit Party or such Subsidiary.
(C) ERISA NOTICES. (I) Promptly, and in any event within
ten (10) Business Days after any Borrower, any Subsidiary of any
Borrower or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred, a written statement of the chief
financial officer of ▇▇▇▇▇ Funds Administrator describing such
Termination Event and any action that is being taken with respect
thereto by such Borrower, such Subsidiary or such ERISA Affiliate, and
any action taken or threatened by the Internal Revenue Service,
Department of Labor or Pension Benefit Guaranty Corporation. Each
Borrower, each Subsidiary of each Borrower and each ERISA Affiliate
shall be deemed to know all facts known by the administrator of any
Benefit Plan of which it is the plan sponsor; (II) promptly, and in
any event within three (3) Business Days after the filing thereof with
the Internal Revenue Service, a copy of each funding waiver request
filed with respect to any Benefit Plan and all communications received
by any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
with respect to such request; and (III) promptly, and in any event
within three (3) Business Days after receipt by any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate, of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed
to administer a Benefit Plan, copies of each such notice.
(D) ENVIRONMENTAL AND HEALTH AND SAFETY NOTICES.
Promptly, and in any event within ten (10) Business Days after receipt
by any Credit Party or any Subsidiary of any Credit Party of any
notice, complaint or order alleging any actual or prospective
violation of any environmental, health or safety Requirement of Law or
alleging responsibility for costs of a cleanup, together with a copy
of such notice, complaint, or order and a written statement describing
any action being taken with respect thereto by such Credit Party or
Subsidiary.
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(E) MATERIAL CONTRACTS. Promptly, and in any event
within ten (10) Business Days after any Material Contract of any
Credit Party or any Subsidiary of any Credit Party is terminated or
amended or any new Material Contract is entered into, a written
statement describing such event, with copies of amendments or new
contracts, and an explanation of any actions being taken with respect
thereto.
(F) COLLATERAL MATTERS. At least thirty (30) Business
Days prior written notice to the Agent of any additional location of
any Collateral of any Borrower or in the location of the chief
executive office or places of business of any Borrower or any
Subsidiary of any Borrower from the respective locations specified in
SCHEDULE B, PART 6.10. At least twenty (20) Business Days prior to
any such change, the Borrowers shall cause to be executed and
delivered to the Agent any financing statements or other documents
reasonably required by the Agent, all in form and substance reasonably
satisfactory to the Agent.
7.4 CORPORATE EXISTENCE.
Each Borrower shall, and shall cause each of its Subsidiaries to, (I)
maintain its corporate existence (except that Subsidiaries of a Borrower may
merge with each other and with such Borrower, PROVIDED, THAT the Agent receives
five (5) Business Days prior written notice thereof), (II) maintain in full
force and effect all licenses, bonds, franchises, leases, trademarks and
qualifications to do business, and all patents, contracts and other similar
rights necessary or advisable for the profitable conduct of their businesses,
(III) continue in, and limit their operations to, the same general lines of
business as presently conducted by them and (IV) in the case of each Borrower,
maintain all material terms and provisions of its corporate charter and bylaws
in the form in effect on the Closing Date.
7.5 BOOKS AND RECORDS; INSPECTIONS.
Each Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, books and records pertaining to the Collateral in
such detail, form and scope as is consistent with good business practice. Each
Borrower agrees that the Agent, or its agents, may enter upon the premises of
such Borrower or any of its Subsidiaries at any time and from time to time,
during normal business hours and upon reasonable notice under the
circumstances, and at any time at all upon the occurrence and during the
continuance of an Event of Default, for the purposes of (I) inspecting and
verifying the Collateral, (II) inspecting and/or copying (at the expense of
such Borrower) any and all records pertaining thereto, and (III) discussing the
affairs, finances and business of such Borrower with the Auditors or any
officers, employees and directors of such Borrower.
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7.6 INSURANCE.
Each Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, public liability insurance, fire and extended
coverage insurance and replacement value insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks as are at all times satisfactory to the Agent in its
commercially reasonable judgment; provided, that the Agent acknowledges that
the insurance coverage maintained by the Borrowers and disclosed in writing to
the Agent, in each case on or prior to the Closing Date, satisfies the
foregoing requirements. All policies covering the Collateral are to name the
Agent as an additional insured and/or the loss payee in case of loss, and are
to contain such other provisions as the Agent may reasonably require to fully
protect the Agent's interest in the Collateral and to any payments to be made
under such policies.
7.7 TAXES.
Each Borrower agrees to pay, when due, and to cause each of its
Subsidiaries to pay when due, all taxes lawfully levied or assessed against
such Borrower, such Subsidiary or any of the Collateral before any penalty or
interest accrues thereon; PROVIDED, THAT, unless such taxes have become a
federal tax or ERISA Lien on any of the assets of such Credit Party or such
Subsidiary, no such tax need be paid if the same is being contested, in good
faith, by appropriate proceedings promptly instituted and diligently conducted
and if an adequate reserve or other appropriate provision shall have been made
therefor as required in order to be in conformity with GAAP.
7.8 COMPLIANCE WITH LAWS.
Each Borrower agrees to comply, and to cause each of its Subsidiaries
to comply, in all material respects with all Requirements of Law applicable to
the Collateral or any part thereof, or to the operation of its business or its
assets generally, unless such Credit Party contests any such Requirements of
Law in a reasonable manner and in good faith.
7.9 USE OF PROCEEDS.
The Borrowers shall use the initial extension of credit under the Line
of Credit for the issuance of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Letter of Credit and to pay the
costs and expenses of the transactions contemplated by the Acquisition
Documents and by this Credit Agreement, including without limitation the Fees
and Expenses payable pursuant to ARTICLE 4 hereof. The proceeds of subsequent
Revolving Loans and other extensions of credit made hereunder shall be used by
the Borrowers solely for ongoing working capital requirements and other general
corporate purposes. No Borrower
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shall use any portion of the proceeds of any Revolving Loans for the purpose of
purchasing or carrying any "margin stock" (as defined in Regulation G) in any
manner which violates the provisions of Regulation G or X or of the terms and
conditions of this Credit Agreement or any other Credit Document.
7.10 FISCAL YEAR.
Each Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, its fiscal year as a year ending December 31st.
7.11 MAINTENANCE OF PROPERTY.
Except to the extent otherwise expressly permitted pursuant to SECTION
8.6, each Borrower agrees to keep, and to cause each of its Subsidiaries to
keep, all property useful and necessary to their respective businesses in good
working order and condition (ordinary wear and tear excepted) in accordance
with their past operating practices and not to commit or suffer any waste with
respect to any of their properties.
7.12 ERISA DOCUMENTS.
Each Borrower will cause to be delivered to the Agent, upon the
Agent's request, each of the following: (I) a copy of each Plan (or, where any
such plan is not in writing, complete description thereof) (and if applicable,
related trust agreements or other funding instruments) and all amendments
thereto, all written interpretations thereof and written descriptions thereof
that have been distributed to employees or former employees of such Borrower or
any of its Subsidiaries; (II) the most recent determination letter issued by
the Internal Revenue Service with respect to each Benefit Plan; (III) for the
three most recent plan years, Annual Reports on Form 5500 Series required to be
filed with any governmental agency for each Benefit Plan; (IV) all actuarial
reports prepared for the last three plan years for each Benefit Plan; (V) a
listing of all Multiemployer Plans, with the aggregate amount of the most
recent annual contributions required to be made by such Borrower or any ERISA
Affiliate to each such plan and copies of the collective bargaining agreements
requiring such contributions; (VI) any information that has been provided to
such Borrower or any ERISA Affiliate regarding withdrawal liability under any
Multiemployer Plan; and (VII) the aggregate amount of the most recent annual
payments made to former employees of such Borrower or any ERISA Affiliate under
any Retiree Health Plan.
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7.13 ENVIRONMENTAL AND OTHER MATTERS.
(A) Each Borrower shall, and shall cause each of its
Subsidiaries to, conduct their businesses so as to comply in all
material respects with all environmental, land use, occupational,
safety or health laws, regulations, directions, ordinances, criteria
and guidelines in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that such Borrower or
such Subsidiary is contesting, in good faith by appropriate legal
proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; PROVIDED,
THAT such Borrower and each of its Subsidiaries shall comply with the
order of any court or other Governmental Authority relating to such
laws unless such Borrower or such Subsidiary shall currently be
prosecuting an appeal or proceedings for review and shall have secured
a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for
review.
(B) If the Agent reasonably believes, or the Majority
Lenders reasonably believe, that the facts or circumstances evidence
or suggest that any Borrower or any Subsidiary of any Borrower is in
material non-compliance with any environmental law and that such
non-compliance could reasonably be expected to have a Material Adverse
Effect, then at the written request of the Agent or the Majority
Lenders, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, such Borrower will
provide at its sole cost and expense a Phase I or Phase II
environmental site assessment report or update report concerning the
site owned, operated or leased by such Borrower or such Subsidiary in
respect of which such material non-compliance is believed to have
occurred and be continuing, such report to be prepared by an
environmental consulting firm approved by the Agent and the Majority
Lenders, indicating the presence, release or absence of hazardous
materials on or from such site and the potential cost of any removal,
remedial or corrective action in connection with any such hazardous
materials on such site.
7.14 FURTHER ACTIONS.
Each Borrower shall take, and shall cause each of its Subsidiaries to
take, all such further actions and execute all such further documents and
instruments as the Agent may at any time reasonably determine to be necessary
or desirable to further carry out and consummate the transactions contemplated
by the Credit Documents, to cause the execution, delivery and performance of
the Credit Documents to be duly authorized and to perfect or protect the Liens
(and the priority status thereof) of the Agent on the Collateral.
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7.15 DEPOSIT OF COLLECTIONS AND OTHER PROCEEDS OF COLLATERAL.
From and after the Closing Date, Borrowers shall cause all Collections
on all Accounts of Borrowers, and all other cash payments made for Inventory of
Borrowers, and all other payments of any kind constituting proceeds of
Collateral received by or for the account any Borrower from any Person,
promptly upon receipt thereof to be deposited into a Collection Account or the
BT Account in the identical form in which such payment was made, whether by
cash or check.
ARTICLE 8. NEGATIVE COVENANTS.
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder, each Borrower shall comply with,
and, where required, shall cause each of its Subsidiaries to comply with, the
following covenants:
8.1 MINIMUM EBITDA.
The Borrowers shall not permit EBITDA to be less than (I) $1,600,000,
for the four-month period ending as of September 30, 1997, (II) $2,800,000, for
the seven-month period ending as of December 31, 1997 and (III) $3,600,000, for
the nine-month period ending as of February 28, 1998.
8.2 CAPITAL EXPENDITURES.
The Borrowers shall not make payments for Capital Expenditures in the
aggregate for all Borrowers during the fiscal year of the Consolidated Entity
ending December 31, 1997, and during any fiscal year of the Consolidated Entity
ending thereafter, in an amount greater than $1,500,000.
8.3 ADDITIONAL INDEBTEDNESS. No Borrower nor any Subsidiary of
any Borrower shall directly or indirectly incur, create, assume or suffer to
exist any Indebtedness other than:
(A) Indebtedness under the Credit Documents;
(B) Indebtedness in the ordinary course of business under
Interest Rate Agreements, in each case in form and substance
satisfactory to the Agent;
(C) Indebtedness of any Subsidiary of any Borrower to
such Borrower or any other Subsidiary of such Borrower;
(D) Indebtedness described on SCHEDULE B, PART 8.3 and
any refinancing of such Indebtedness, so long as the aggregate
principal amount of the Indebtedness so refinanced shall not be
increased and the refinancing shall be on terms and
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conditions no more restrictive than the terms and conditions of the
Indebtedness to be refinanced;
(E) Indebtedness secured by purchase money Liens on
equipment acquired after the date of this Credit Agreement not to
exceed $1,000,000 in the aggregate for all of the Credit Parties
outstanding at any one time ("PURCHASE MONEY LIENS") so long as (I)
each Purchase Money Lien shall attach only to the property to be
acquired, (II) a description shall have been furnished to the Agent
for any item of equipment for which the purchase price is greater than
$250,000 and (III) the debt incurred shall not exceed one hundred
percent (100%) of the purchase price of the item or items of equipment
purchased; and
(F) The ▇▇▇▇▇▇▇ and ▇▇▇▇▇ Notes.
8.4 LIENS.
No Borrower nor any Subsidiary of any Borrower shall directly or
indirectly create, incur, assume, or suffer to exist any Lien on any of its
property now owned or hereafter acquired except:
(A) Liens granted to the Agent under the Credit
Documents;
(B) Liens listed on SCHEDULE B, PART 8.4;
(C) Purchase Money Liens permitted under SECTION 8.3;
(D) Liens of warehousemen, mechanics, materialmen,
workers, repairmen, common carriers, or landlords, liens for taxes,
assessments or other governmental charges, and other similar Liens
arising by operation of law, in each case for amounts that are not yet
due and payable or that are being diligently contested in good faith
by a Borrower or Subsidiary of a Borrower, so long as the Agent has
been notified thereof and adequate reserves are maintained by such
Person for their payment in accordance with GAAP;
(E) Attachment or judgment Liens not to exceed an
aggregate of $250,000 for the Borrowers and their Subsidiaries,
excluding amounts (I) bonded to the reasonable satisfaction of the
Agent or (II) covered by insurance to the reasonable satisfaction of
the Agent;
(F) Deposits or pledges to secure obligations under
workmen's compensation, social security or similar laws, under
unemployment insurance, or to secure public or statutory obligations
not to exceed an aggregate of $500,000 for all Borrowers;
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(G) Deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations
of like nature arising in the ordinary course of business not to
exceed an aggregate of $500,000 for all Borrowers;
(H) Easements, rights-of-way, restrictions and other
similar encumbrances on title to, or restrictions on the use of, real
property, which, in the aggregate, do not materially detract from the
value of the item of property subject thereto or materially interfere
with the ordinary conduct of the business of any Borrower or any of
its Subsidiaries;
(I) Extensions and renewals of any of the foregoing so
long as the aggregate amount of extended or renewed Liens are not
increased and are on terms and conditions no more restrictive than the
terms and conditions of the Liens extended or renewed.
8.5 CONTINGENT OBLIGATIONS.
No Borrower nor any Subsidiary of any Borrower shall directly or
indirectly incur, assume, or suffer to exist any Contingent Obligation,
excluding Contingent Obligations for Indebtedness permitted to be incurred
under SECTION 8.3, and Investments permitted under Section 8.8.
8.6 SALE OF ASSETS.
No Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, sell, lease, assign, transfer or otherwise dispose of
any assets other than (I) Inventory in the ordinary course of business; (II)
obsolete or worn out property disposed of in the ordinary course of business;
and (III) dispositions of assets not otherwise permitted under this SECTION
8.6, PROVIDED, THAT, (A) such dispositions are for fair value, (B) the
aggregate consideration is paid in cash at the time of disposition and is
thereupon delivered to the Agent for application to the outstanding principal
balance of the Revolving Loans and (C) the aggregate amount of all such
dispositions does not exceed $150,000 in the aggregate for any fiscal year.
8.7 RESTRICTED PAYMENTS.
No Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, (A) declare or pay any dividend (other than dividends
payable solely in capital stock of such Person) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of capital stock of such Person or any warrants, options or
rights to
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purchase any such capital stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of such Person or any of its
Subsidiaries; (B) make any optional payment or optional prepayment on or
optional redemption (including, without limitation, by making payments to a
sinking or analogous fund) or optional repurchase of any Indebtedness (other
than Indebtedness pursuant to this Credit Agreement); PROVIDED, THAT,
notwithstanding the foregoing:
(I) any Subsidiary of any Borrower may make payments or
prepayments on account of Indebtedness owing to any Borrower or any
Subsidiary of any Borrower;
(II) any Subsidiary of any Borrower may declare and pay
dividends to such Borrower or any Subsidiary of such Borrower; and
(III) so long as, in each case, before and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing, Borrowers may make (A) distributions to MTLM to permit
the payment by MTLM of regularly scheduled payments of interest under
the ▇▇▇▇▇ Seller Notes and (B) other distributions to MTLM, PROVIDED
that the aggregate amount of distributions made pursuant to this
CLAUSE (B) shall not exceed $500,000 in any fiscal year of the
Consolidated Entity.
8.8 INVESTMENTS.
No Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, make any Investment in any Person, whether in cash,
securities, or other property of any kind including, without limitation, any
Subsidiary or Affiliate of any Credit Party, other than:
(A) Advances or loans made in the ordinary course of business
not to exceed $100,000 outstanding at any time to any one Person and
$300,000 in the aggregate for all Credit Parties outstanding at any
one time;
(B) Loans, investments and advances between a Borrower and
any other Borrower;
(C) Cash Equivalents;
(D) Investments in account debtors received in connection
with the bankruptcy or reorganization, or in settlement of delinquent
obligations of customers, in the ordinary course of business and in
accordance with applicable collection and credit policies established
by such Borrower or such Subsidiary, as the case may be;
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(E) such other Investments as the Agent may approve in
writing in the exercise of its sole discretion.
8.9 AFFILIATE TRANSACTIONS.
No Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction with (including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service to) any Subsidiary or Affiliate of any Borrower, except in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's or
such Subsidiary's business, as the case may be, and upon fair and reasonable
terms no less favorable in any material respect to Borrower or such Subsidiary
than could be obtained in a comparable arm's-length transaction with an
unaffiliated Person, except for transactions otherwise permitted under SECTIONS
8.7, 8.8 and 8.3(F).
8.10 ADDITIONAL BANK ACCOUNTS.
From and after the Closing Date, no Borrower shall, or shall permit
any of its Subsidiaries to, directly or indirectly, open, maintain or otherwise
have any checking, savings or other accounts at any bank or other financial
institution, or any other account where money is or may be deposited or
maintained with any Person, other than the Disbursement Account and the
accounts set forth on SCHEDULE B, PART 8.10.
8.11 ADDITIONAL NEGATIVE PLEDGES.
Except as otherwise disclosed on SCHEDULES 8.3 or 8.4, no Borrower
shall, or shall permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective, (A) any
prohibition or restriction (including any agreement to provide equal and
ratable security to any other Person in the event a Lien is granted to or for
the benefit of the Agent and the Lenders) on the creation or existence of any
Lien upon the assets of such Borrower or any of its Subsidiaries; or (B) any
contractual obligation which may restrict or inhibit the Agent's rights or
ability to sell or otherwise dispose of the Collateral or any part thereof
after the occurrence of an Event of Default.
8.12 ADDITIONAL SUBSIDIARIES.
No Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, form or acquire any new Subsidiaries.
8.13 CHANGES TO ACQUISITION DOCUMENTS.
No Borrower shall, or shall permit any of its Subsidiaries to, amend,
restate, supplement or otherwise modify in any respect any of the Acquisition
Documents, except for any of the foregoing which
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singly or in the aggregate could not reasonably by expected to have a material
and adverse effect on (A) any Borrower's ability to perform and satisfy its
obligations and liabilities under this Agreement or any of the other Credit
Documents or (B) any right or remedies of Agent or any Lender under this
Agreement or any of the other Credit Documents, and in any event (I) which
would not result in any increase in the amount of any payment or distribution
by any Borrower to any other Person thereunder, and (II) do not increase in any
material respect the obligations of any Borrower or confer additional material
rights on any other Person thereunder and (III) are not otherwise expressly
prohibited by the terms of any of the Credit Documents.
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.
9.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an
event of default (each an "EVENT OF DEFAULT") hereunder:
(A) FAILURE TO PAY. The Borrowers shall fail to pay any
Obligations in respect of principal on the Revolving Loans or interest
on the Revolving Loans, in each case when the same shall become
payable or shall fail to pay, within five (5) days after the same
shall become payable, any other amount due under this Agreement or any
of the other Credit Documents.
(B) BREACH OF CERTAIN COVENANTS. Any Borrower shall fail
to comply with any covenant contained in ARTICLE 7 (other than SECTION
7.4, 7.7, 7.8, 7.11, 7.12 and 7.13) or ARTICLE 8.
(C) BREACH OF REPRESENTATION OR WARRANTY. Any
representation or warranty made or deemed to be made by any Credit
Party in this Credit Agreement or in any other Credit Document (and in
any statement or certificate given under this Credit Agreement or any
other Credit Document), shall be false or misleading in any material
respect when made or deemed to be made.
(D) BREACH OF OTHER COVENANTS. Any Credit Party shall
fail to comply with any covenant contained in this Credit Agreement or
any other Credit Document, other than as set forth in SECTION 9.1(B),
and such failure shall continue for ten (10) days after the ▇▇▇▇▇
Funds Administrator receives notice of such failure from Agent.
(E) DISSOLUTION. Any Credit Party shall dissolve, wind
up or otherwise cease its business.
(F) INSOLVENCY EVENT. Any Credit Party shall become the
subject of an Insolvency Event.
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(G) CHANGE OF CONTROL. MTLM shall cease for any reason
to be the record and beneficial owner of one hundred percent (100%) of
all of the issued and outstanding capital stock of each of the
Borrowers.
(H) CROSS DEFAULT. A default or event of default shall
occur (and continue beyond any applicable grace period) under any
note, agreement or instrument evidencing any other Indebtedness of any
Credit Party or any Subsidiary of any Credit Party, which default or
event of default permits the acceleration of its maturity, PROVIDED
THAT the aggregate principal amount of all such Indebtedness for which
the default or event of default has occurred exceeds $200,000.
(I) FAILURE OF ENFORCEABILITY OF CREDIT DOCUMENTS;
SECURITY. Any covenant, agreement or obligation of any Credit Party
contained in or evidenced by any of the Credit Documents shall cease
to be enforceable, or shall be determined to be unenforceable, in
accordance with its terms; any Credit Party shall deny or disaffirm
its obligations under any of the Credit Documents or any Liens granted
in connection therewith; or, any Liens granted on any of the
Collateral shall be determined to be void, voidable, invalid or
unperfected, are subordinated or not given the priority contemplated
by this Credit Agreement.
(J) FAILURE OF MERGER. The office of the Secretary of
State of Ohio shall reject the certificate of merger filed in
connection with the Merger, and such certificate of merger is not
re-submitted by Borrowers to the office of the Secretary of State of
Ohio, and accepted as corrected within the appropriate time limit set
by the laws of the State of Ohio.
9.2 ACCELERATION, TERMINATION OF COMMITMENTS AND CASH
COLLATERALIZATION.
Upon the occurrence and during the continuance of any Event of
Default, without prejudice to the rights of the Agent or any Lender to enforce
its claims against the Credit Parties:
(A) ACCELERATION. Upon the written request of the
Majority Lenders and by delivery of written notice to the ▇▇▇▇▇ Funds
Administrator from the Agent, all Obligations shall be immediately due
and payable (except with respect to any Event of Default set forth in
SECTION 9.1(F), in which case all Obligations shall automatically
become immediately due and payable without the necessity of any
request of the Majority Lenders or notice or other demand to the ▇▇▇▇▇
Funds Administrator or any of the Borrowers) without presentment,
demand, protest or any other action or obligation of the Agent or any
Lender.
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(B) TERMINATION OF COMMITMENTS. Upon the written request
of the Majority Lenders, and by delivery of written notice to the
▇▇▇▇▇ Funds Administrator from the Agent (except with respect to any
Event of Default set forth in SECTION 9.1(F)), in which case all of
the Commitments shall automatically and immediately terminate without
the necessity of any request of the Majority Lenders or notice or
other demand to the ▇▇▇▇▇ Funds Administrator or any of the Borrowers)
the Commitments shall be immediately terminated and, at all times
thereafter, all Revolving Loans made by any Lender pursuant to this
Credit Agreement shall be at such Lender's sole discretion, unless
such Event of Default is waived in accordance with SECTION 11.11, in
which case the Commitments shall be automatically reinstated.
(C) CASH COLLATERALIZATION. On demand of the Agent or
the Majority Lenders, the Borrowers shall immediately deposit with the
Agent for each Letter of Credit then outstanding, cash or Cash
Equivalents in an amount equal to 100% of the greatest amount drawable
thereunder. Such deposit shall be held by the Agent and used to
reimburse the Issuing Bank for the amount of each drawing made under
such Letters of Credit, as and when each such drawing is made.
9.3 RESCISSION OF ACCELERATION.
After acceleration of the maturity of all or any part of the
Obligations, if the Borrowers pay all accrued interest and all principal due
(other than by reason of the acceleration) and all Events of Default are waived
in accordance with SECTION 11.11, the Majority Lenders may elect in their sole
discretion, to rescind the acceleration and return to the Borrowers any cash
collateral, if any, deposited with the Agent pursuant to SECTION 9.2(C). (This
Section is intended only to bind all of the Lenders to a decision of the
Majority Lenders and not to confer any right on the Borrowers, even if the
described conditions for the Majority Lenders' election may be met.)
9.4 REMEDIES.
Upon the occurrence and during the continuance of an Event of Default,
upon the written request and at the direction of the Majority Lenders, the
Agent may exercise any rights and remedies available to it under applicable law
(including under the Code) and under the Collateral Documents. The foregoing
rights and remedies are not intended to be exhaustive and the full or partial
exercise of any right or remedy shall not preclude the full or partial exercise
of any other right or remedy available under this Credit Agreement, any other
Credit Document, at equity or at law.
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9.5 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender may have under applicable law, upon the occurrence and during the
continuance of any Event of Default, and whether or not any Lender has made any
demand or the Obligations of any Credit Party have matured, each Lender shall
have the right to appropriate and apply to the payment of the Obligations of
such Credit Party all deposits and other obligations then or thereafter owing
by such Lender to such Credit Party. Each Lender exercising such rights shall
notify the Agent thereof and any amount received as a result of the exercise of
such rights shall be shared by the Lenders in accordance with SECTION 2.5.
9.6 LICENSE OF USE OF SOFTWARE AND OTHER INTELLECTUAL PROPERTY.
Unless expressly prohibited by the licensor thereof, if any, the Agent
is hereby granted a license to use all computer software programs, data bases,
processes and materials used by the Borrowers in connection with their
respective businesses or in connection with any Collateral. The Agent agrees
not to use any such license prior to the occurrence of an Event of Default.
9.7 APPLICATION OF PROCEEDS; SURPLUS; DEFICIENCIES.
The net cash proceeds resulting from the Agent's exercise of any of
the foregoing rights against any Collateral (after deducting all of the Agent's
Expenses related thereto) shall be applied by the Agent to the payment of the
Obligations, whether due or to become due, in the order set forth in SECTION
4.11. The Borrowers shall remain liable to the Agent and the Lenders for any
deficiencies, and the Agent and the Lenders in turn agree to remit to the
Borrowers or its successors or assigns, any surplus resulting therefrom.
ARTICLE 10. THE AGENT.
10.1 APPOINTMENT OF AGENT.
(A) Each Lender hereby designates BTCC as Agent to act as
herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Revolving Note, by the acceptance of such Note, shall be
deemed irrevocably to authorize the Agent to take such action on its
behalf under the provisions of this Credit Agreement and the other
Credit Documents and any other instruments and agreements referred to
herein and therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. The Agent
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shall hold all Collateral and all payments of principal, interest,
Fees (other than Fees that are exclusively for the account of the
Agent), charges and Expenses received pursuant to this Credit
Agreement or any other Credit Document for the ratable benefit of the
Lenders. The Agent may perform any of its duties hereunder by or
through its agents or employees.
(B) Other than rights of the Credit Parties under SECTION
10.9, the provisions of this ARTICLE 10 are for the benefit of the
Agent and the Lenders only and none of the Credit Parties or any other
Persons shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under
this Credit Agreement and the other Credit Documents, the Agent shall
act only for the Lenders and does not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or
trust with or for any Credit Party.
10.2 NATURE OF DUTIES OF AGENT.
The Agent has no duties or responsibilities except those expressly set
forth in the Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Credit Agreement or any of the other Credit Documents a fiduciary relationship
in respect of any Lender or any participant of any Lender; and nothing in this
Credit Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Credit Agreement or any other Credit Document,
except as expressly set forth herein or therein.
10.3 LACK OF RELIANCE ON AGENT.
(A) Independently and without reliance upon the Agent,
each Lender, to the extent it deems appropriate, has made and shall
continue to make (I) its own independent investigation of the
financial or other condition and affairs of each Credit Party in
connection with the taking or not taking of any action in connection
herewith and (II) its own appraisal of the creditworthiness of each
Credit Party, and, except as expressly provided in this Credit
Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into
its possession before the making of the Revolving Loans or at any time
or times thereafter.
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(B) The Agent shall not be responsible to any Lender for
any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of
this Credit Agreement or any of the other Credit Documents or the
financial or other condition of any Credit Party. The Agent shall not
be required to make any inquiry concerning either the performance or
observance of any other terms, provisions or conditions of this Credit
Agreement or any of the other Credit Documents, or the financial
condition of any Credit Party, or the existence or possible existence
of any Default or Event of Default, unless specifically requested to
do so in writing by any Lender.
10.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the
Lenders by notice to each of such Lenders. If the Agent shall request
instructions from the Lenders with respect to any act or action (including the
failure to act) in connection with this Credit Agreement, the Agent shall be
entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from such Lenders, and the Agent shall
not incur liability to any Person by reason of so refraining. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the requisite Lenders required to give such
instructions hereunder. The Agent may give any notice required under ARTICLE 9
hereof without the consent of any of the Lenders unless otherwise directed by
the Majority Lenders in writing and will, at the direction of the Majority
Lenders, give any such notice required under ARTICLE 9.
10.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
documentary, facsimile or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person. The Agent
may consult with legal counsel (including counsel for the Credit Parties with
respect to matters concerning the Credit Parties), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
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10.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the
Borrowers, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement; PROVIDED, THAT no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
10.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement,
the Revolving Loans made by it and the Revolving Notes issued to it and its
participation in Letters of Credit issued hereunder, the Agent shall have the
same rights and powers hereunder as any other Lender or holder of a Revolving
Note or participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders," "Lenders,"
"Majority Lenders," "holders of Revolving Notes," or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory or other business with any Credit Party or any
Affiliate of any Credit Party as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Credit Party for
services in connection with this Credit Agreement and otherwise without having
to account for the same to the Lenders.
10.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Revolving Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Revolving
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Revolving Note or of any Revolving Note or Revolving Notes
issued in exchange therefor.
10.9 SUCCESSOR AGENT.
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(A) The Agent may, upon five (5) Business Days' notice to
the Lenders and the ▇▇▇▇▇ Funds Administrator, resign at any time
(effective upon the appointment of a successor Agent pursuant to the
provisions of this SECTION 10.9) by giving written notice thereof to
the Lenders and the ▇▇▇▇▇ Funds Administrator. Upon any such
resignation, the Majority Lenders shall have the right, upon five (5)
days' notice and approval by the Credit Parties (which approval shall
not be unreasonably withheld or delayed) to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority
Lenders and accepted such appointment, within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a bank or a trust company or other financial
institution which maintains an office in the United States, or a
commercial bank organized under the laws of the United States of
America or of any State thereof, or any Affiliate of such bank or
trust company or other financial institution which is engaged in the
banking business, having a combined capital and surplus of at least
$500,000,000.
(B) Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Credit Agreement
and the other Credit Documents. After any retiring Agent's
resignation hereunder as Agent, the provisions of this ARTICLE 10
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under or in connection with this Credit
Agreement.
10.10 COLLATERAL MATTERS.
(A) Each Lender authorizes and directs the Agent to enter
into the Collateral Documents for the benefit of the Lenders. Each
Lender hereby agrees, and each holder of any Revolving Note by the
acceptance thereof will be deemed to agree, that, except as otherwise
set forth herein or in the other Credit Documents, any action taken by
the Majority Lenders in accordance with the provisions of this Credit
Agreement and the other Credit Documents, and the exercise by the
Majority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. The Agent is hereby
authorized on behalf of all of the Lenders, without the necessity of
any notice to or further consent from any Lender, from time to time so
long as an Event of Default shall not then exist, to take any action
with respect to any Collateral or Collateral Documents which
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may be necessary to perfect and maintain the perfection of the Liens
upon the Collateral granted pursuant to the Collateral Documents.
(B) The Lenders hereby authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (I) upon termination of the Commitments and
payment and satisfaction of all of the Obligations at any time arising
under or in respect of this Credit Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby or (II)
if approved, authorized or ratified in writing by the Majority
Lenders, unless such release is required to be approved by all of the
Lenders pursuant to SECTION 11.11. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this
SECTION 10.10.
(C) The Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or
is owned by any Borrower or is cared for, protected or insured or that
the Liens granted to the Agent in or pursuant to any of the Collateral
Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the
rights, authorities and powers granted or available to the Agent in
this SECTION 10.10 or in any of the Collateral Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Agent's own
interest in the Collateral as one of the Lenders and that the Agent
shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct. The Agent agrees to
conduct or cause to be conducted at least one audit of the Collateral
during each year that this Credit Agreement shall remain in effect.
10.11 ACTIONS WITH RESPECT TO DEFAULTS. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to a Default or Event
of Default as shall be directed by the Majority Lenders; PROVIDED, THAT until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable and in
the best interests of the Lenders.
10.12 DELIVERY OF INFORMATION. The Agent shall not be required to
deliver to any Lender originals or copies of any documents,
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instruments, notices, communications or other information received by the Agent
from any of the Credit Parties or any Subsidiary of any of the Credit Parties,
the Majority Lenders, any Lender or any other Person under or in connection
with this Credit Agreement or any other Credit Document except (I) as
specifically provided in this Credit Agreement or any other Credit Document and
(II) as specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written
communication received by and in the possession of the Agent at the time of
receipt of such request and then only in accordance with such specific request.
ARTICLE 11. MISCELLANEOUS.
11.1 GOVERNING LAW.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS CREDIT AGREEMENT
AND EACH OF THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS.
11.2 SUBMISSION TO JURISDICTION.
ALL DISPUTES AMONG THE LENDERS AND THE CREDIT PARTIES (OR THE AGENT OR
▇▇▇▇▇ FUNDS ADMINISTRATOR, RESPECTIVELY, ACTING ON THEIR BEHALF), WHETHER
SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY
STATE AND FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, AND THE COURTS TO WHICH
AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENT ON BEHALF
OF THE LENDERS, SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TO PROCEED AGAINST THE ▇▇▇▇▇ FUNDS ADMINISTRATOR OR ANY CREDIT PARTY OR
THEIR RESPECTIVE PROPERTIES IN ANY LOCATION REASONABLY SELECTED BY THE AGENT IN
GOOD FAITH TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. THE ▇▇▇▇▇ FUNDS
ADMINISTRATOR AND EACH OF THE OTHER CREDIT PARTIES AGREE THAT NONE OF SUCH
PERSONS WILL ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN
ANY PROCEEDING BROUGHT BY THE AGENT OR ANY LENDER. THE ▇▇▇▇▇ FUNDS
ADMINISTRATOR AND EACH OF THE OTHER CREDIT PARTIES WAIVE ANY OBJECTION THAT ANY
OF SUCH PERSONS MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY
LENDER HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
11.3 SERVICE OF PROCESS.
EACH OF THE ▇▇▇▇▇ FUNDS ADMINISTRATOR AND THE OTHER CREDIT PARTIES
HEREBY WAIVES PERSONAL SERVICE UPON IT AND, AS ADDITIONAL SECURITY FOR THE
OBLIGATIONS, HEREBY IRREVOCABLY DESIGNATES AND APPOINTS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, WITH
AN OFFICE ON THE DATE HEREOF AT C/O METAL MANAGEMENT, INC., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
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ILLINOIS 60610, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY SUCH
PERSON WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT, TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS ISSUED BY ANY COURT IN ANY LEGAL ACTION OR
OTHER PROCEEDING WITH RESPECT TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT
DOCUMENT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED
SHALL BE MAILED BY REGISTERED MAIL TO THE ▇▇▇▇▇ FUNDS ADMINISTRATOR AT ITS
ADDRESS PROVIDED HEREIN EXCEPT THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE
LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF
PROCESS. IF ANY AGENT APPOINTED BY THE ▇▇▇▇▇ FUNDS ADMINISTRATOR OR ANY OTHER
CREDIT PARTIES REFUSES TO ACCEPT SERVICE, EACH SUCH PERSON HEREBY AGREES THAT
SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE AND EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE ▇▇▇▇▇ FUNDS ADMINISTRATOR OR ANY OTHER CREDIT PARTY IN
THE COURTS OF ANY OTHER JURISDICTION.
11.4 JURY TRIAL.
THE ▇▇▇▇▇ FUNDS ADMINISTRATOR, EACH OF THE OTHER CREDIT PARTIES, THE
AGENT AND THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY
DISPUTES WILL BE RESOLVED IN A BENCH TRIAL.
11.5 LIMITATION OF LIABILITY.
NEITHER THE AGENT NOR ANY LENDER SHALL HAVE ANY LIABILITY TO THE ▇▇▇▇▇
FUNDS ADMINISTRATOR OR ANY OTHER CREDIT PARTY (WHETHER SOUNDING IN TORT,
CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY ANY SUCH PERSON IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR
RELATIONSHIPS CONTEMPLATED BY THIS CREDIT AGREEMENT, OR ANY OF THE OTHER CREDIT
DOCUMENTS, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OR COURT ORDER
BINDING ON THE AGENT OR ANY SUCH LENDER, THAT THE LOSSES WERE THE RESULT OF
ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
11.6 DELAYS.
No delay or omission of the Agent or the Lenders in exercising any
right or remedy hereunder shall impair any such right or operate as a waiver
thereof.
11.7 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified
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or registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Agent or any of the Lenders, then to BT
Commercial Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Credit Department, if to the ▇▇▇▇▇ Funds Administrator or any other
Credit Party, then to The ▇▇▇▇▇ Corporation at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: President, with, in the case of any such notice to the
▇▇▇▇▇ Funds Administrator or any other Credit Party, a copy thereof to ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, Ltd., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or by facsimile transmission, promptly
confirmed in writing sent by first class mail, if to the Agent, or any of the
Lenders, at (▇▇▇) ▇▇▇-▇▇▇▇ and if to the ▇▇▇▇▇ Funds Administrator or any other
Credit Party at (▇▇▇) ▇▇▇-▇▇▇▇. All such notices and correspondence shall be
deemed given (I) if sent by certified or registered mail, three Business Days
after being postmarked, (II) if sent by overnight delivery service, when
received at the above stated addresses or when delivery is refused and (III) if
sent by telex or facsimile transmission, when receipt of such transmission is
acknowledged PROVIDED that failure or delay in delivering copies of any notices
to any persons designated above to receive copies thereof shall in no way
adversely affect the effectiveness of such notice.
11.8 ASSIGNMENTS AND PARTICIPATIONS.
(A) BORROWER ASSIGNMENT. Neither the ▇▇▇▇▇ Funds
Administrator nor any of the other Credit Parties shall have any right
to assign this Credit Agreement or any of the other Credit Documents,
or any rights or obligations hereunder or thereunder, without the
prior written consent of the Agent and the Lenders.
(B) LENDER ASSIGNMENTS. Each Lender may assign to one or
more banks or other financial institutions all or a portion of its
rights and obligations under this Credit Agreement, the Revolving
Notes and the other Credit Documents, with the consent of the Agent;
and upon execution and delivery to the Agent, for its acceptance and
recording in the Register, of an agreement in substantially the form
of EXHIBIT G (an "ASSIGNMENT AND ASSUMPTION AGREEMENT"), together with
surrender of any Revolving Note or Revolving Notes subject to such
assignment and a processing and recordation fee of $2,500, such
assignment shall be effective and ANNEX I hereto shall be deemed to be
modified accordingly. No such assignment shall be for less than
$10,000,000 of the Commitments unless it is to another Lender or is an
assignment of all of such Lender's rights and obligations under this
Credit Agreement. (This Section does not apply to branches and
Affiliates of a Lender, it being understood that a Lender may make,
carry or transfer Revolving Loans at or for the account of any of its
branch offices or Affiliates without consent of the Borrowers, the
Agent or any other Lender.)
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(C) AGENT'S REGISTER. The Agent shall maintain a
register of the names and addresses of the Lenders, their Commitments,
and the principal amount of their Revolving Loans (the "REGISTER") at
the address specified for the Agent in SECTION 11.7. The Agent shall
also maintain a copy of each Assignment and Assumption Agreement
delivered to and accepted by it, and modify the Register to give
effect to each Assignment and Assumption Agreement. Upon its receipt
of each Assignment and Assumption Agreement and surrender of the
affected Revolving Note or Revolving Notes, the Agent will give prompt
notice thereof to the ▇▇▇▇▇ Funds Administrator and deliver to the
▇▇▇▇▇ Funds Administrator a copy of the Assignment and Assumption
Agreement and the surrendered Revolving Note or Revolving Notes.
Within five Business Days after its receipt of such notice, the
Borrowers shall execute and deliver to the Agent a substitute
Revolving Note or Revolving Notes to the order of the assignee in the
amount of the Commitment or Commitments assumed by it and to the
assignor in the amount of the Commitment or Commitments retained by
it, if any. Such substitute Revolving Note or Revolving Notes shall
re- evidence the Indebtedness outstanding under the surrendered
Revolving Note or Revolving Notes and shall be dated as of the Closing
Date. The Agent shall be entitled to rely upon the Register
exclusively for purposes of identifying the Lenders hereunder. The
Register shall be available for inspection by the Credit Parties and
the Lenders (or any of them) at any reasonable time and from time to
time upon reasonable notice to the Agent.
(D) PARTICIPATIONS. Each Lender may sell participations
(without the consent of the Agent, any Credit Party or any other
Lender) to one or more parties in or to all or a portion of its rights
and obligations under this Credit Agreement, the Revolving Notes and
the other Credit Documents. Notwithstanding a Lender's sale of a
participation interest, its obligations hereunder shall remain
unchanged. The Credit Parties, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender. No participant
shall have rights to approve any amendment or waiver of this Credit
Agreement or any of the other Credit Documents except to the extent
such amendment or waiver would (I) increase the participant's
obligation in respect of the Commitment of the Lender from whom the
participant purchased its participation interest; (II) reduce the
principal of, or stated rate or amount of interest on, the Revolving
Loans subject to such participation, (III) postpone any maturity date
fixed for final payment of principal of the Revolving Loans subject to
the participation interest, and (IV) release any guarantor of the
Obligations or all or a substantial portion of the Collateral, other
than when otherwise permitted hereunder.
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11.9 CONFIDENTIALITY.
(A) Each Lender agrees that it will use its best efforts not disclose
to any Person, without the prior consent of the ▇▇▇▇▇ Funds Administrator, any
information with respect to any of the Credit Parties or any Subsidiary of any
of the Credit Parties which is furnished pursuant to this Credit Agreement and
which is designated by the respective Credit Parties to the Lenders in writing
as confidential (the "BORROWER INFORMATION"), PROVIDED, THAT, each Lender may
disclose any such information (I) to its employees, auditors, or counsel, or to
another Lender if the disclosing Lender or such disclosing Lender's holding or
parent company in its sole discretion determines that any such party should
have access to such information, (II) as has become generally available to the
public, (III) as may be required in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction
over such Lender, (IV) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (V) in order to
comply with any Requirement of Law, and (VI) to any actual or prospective
transferee or participant in connection with any contemplated transfer or
participation of any of the Revolving Notes or Commitments or any interest
therein by such Lender, so long as prior to such disclosure such prospective or
actual transferee or participant has agreed to preserve the confidentiality of
such information on terms substantially similar to those set forth in this
SECTION 11.9 or on terms otherwise satisfactory to the ▇▇▇▇▇ Funds
Administrator.
(B) In the event that the Agent or any Lender is requested or
becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any of the Credit Party Information, such Person will (I) provide the ▇▇▇▇▇
Funds Administrator with prompt written notice so that the Credit Parties may
seek a protective order or other appropriate remedy and/or waive compliance
with the provisions of this SECTION 11.9; (II) unless the Credit Parties waive
compliance by such Person with the provisions of this SECTION 11.9, make a
timely objection to the request or compulsion to provide such Credit Party
Information on the basis that such Credit Party Information is confidential and
subject to the agreements contained in this SECTION 11.9; and (III) take action
as is necessary to preserve such confidentiality, such as seeking a protective
order or other appropriate remedy.
In the event that a protective order or other remedy is not obtained,
or the Credit Parties waive compliance with the provisions of this SECTION
11.9, such Person will furnish only that portion of the Credit Party
Information which is legally required to be furnished and will exercise such
Person's best efforts to obtain reliable assurance that confidential treatment
will be accorded to the Credit Party Information.
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11.10 INDEMNIFICATION.
The Borrowers hereby jointly and severally indemnify and agree to defend
and hold harmless the Agent and each of the Lenders and their respective
directors, officers, agents, employees and counsel from and against any and all
losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) arising out of or by reason of (A) any litigations, investigations,
claims or proceedings which arise out of (I) this Credit Agreement or the
transactions contemplated hereby, (II) the issuance of the Letters of Credit,
(III) the failure of the Issuing Bank to honor a drawing under any Letter of
Credit, as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or Governmental Authority,
(IV) any actual or proposed use by any Borrower of the proceeds of the
Revolving Loans or (V) the Agent's or the Lenders' entering into this Credit
Agreement, the other Credit Documents or any other agreements and documents
relating hereto, including, without limitation, amounts paid in settlement,
court costs and the fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any advice
rendered in connection with any of the foregoing and (B) any remedial or other
action taken by any of the Borrowers or any of the Lenders in connection with
compliance by any of the Borrowers or any Subsidiary of any of the Borrowers,
or any of their respective properties, with any federal, state or local
environmental laws, acts, rules, regulations, orders, directions, ordinances,
criteria or guidelines.
11.11 AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Credit Agreement, any
part of SCHEDULE B, or any other Credit Document shall be effective unless in
writing and signed by the Majority Lenders (or by the Agent on their behalf),
except that:
(A) the consent of all the Lenders is required to (I)
increase the Commitments, (II) reduce the principal of, or interest on,
any Revolving Note, any Letter of Credit reimbursement obligations or
any Fees hereunder (other than Fees that are exclusively for the account
of the Agent), (III) postpone any date fixed for any payment in respect
of principal of, or interest on, any Revolving Note, any Letter of
Credit reimbursement obligations or any Fees hereunder, (IV) change the
percentage of the Commitments, or any minimum requirement necessary for
the Lenders or the Majority Lenders to take any action hereunder, (V)
amend or waive this SECTION 11.11(A), or change the definition of
Majority Lenders or (VI) except as otherwise expressly provided in this
Credit Agreement, and other than in connection with the financing,
refinancing, sale
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or other disposition of any asset of a Borrower permitted under this
Credit Agreement, release any Liens in favor of the Agent on any of the
Collateral; and
(B) the consent of the Agent shall be required for any
amendment, waiver or consent affecting the rights or duties of the Agent
under any Credit Document, in addition to the consent of the Lenders
otherwise required by this Section.
Neither the consent of the ▇▇▇▇▇ Funds Administrator nor any other
Credit Party shall be required for any amendment, modification or waiver of the
provisions of ARTICLE 10 (other than SECTION 10.9). The ▇▇▇▇▇ Funds
Administrator, the other Credit Parties and the Lenders each hereby authorize
the Agent to modify this Credit Agreement by unilaterally amending or
supplementing ANNEX I to reflect assignments of the Commitments.
Notwithstanding the foregoing, the Credit Parties may amend SCHEDULE B, PARTS
6.1, 6.10 and 6.14, without the consent of the Majority Lenders.
11.12 COUNTERPARTS AND EFFECTIVENESS.
This Credit Agreement and any waiver or amendment hereto may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. This Credit Agreement shall become effective on the date on which
all of the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent.
11.13 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement, the
Revolving Notes or any of the other Credit Documents shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
11.14 MAXIMUM RATE. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement or in any other Credit Document,
the Borrowers, the Agent, and the Lenders hereby agree that all agreements
among them under this Credit Agreement and the other Credit Documents, whether
now existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever shall the amount paid, or
agreed to be paid, to the Agent or any Lender for the use, forbearance, or
detention of the money loaned to the Borrowers and evidenced hereby or thereby
or for the performance or payment of any covenant or obligation contained
herein or therein, exceed the Highest Lawful Rate. If due to any circumstance
whatsoever, fulfillment of any provisions of this Credit Agreement or any of
the other Credit
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Documents at the time performance of such provision shall be due shall exceed
the Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest to
the Highest Lawful Rate, and if from any such circumstance any Lender should
ever receive anything of value deemed interest by applicable law which would
exceed the Highest Lawful Rate, such excessive interest shall be applied
pursuant to the terms hereof to the reduction of the principal amount then
outstanding hereunder or on account of any other then outstanding Obligations
and not to the payment of interest, or if such excessive interest exceeds the
principal unpaid balance then outstanding hereunder and such other then
outstanding Obligations, such excess shall be refunded to the Borrowers. All
sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other Indebtedness of the
Borrowers to the Agent or any Lender, to the extent permitted by applicable
law, shall be amortized, prorated, allocated and spread throughout the full
term of such Indebtedness, until payment in full thereof, so that the actual
rate of interest on account of all such Indebtedness does not exceed the
Highest Lawful Rate throughout the entire term of such Indebtedness. The terms
and provisions of this SECTION 11.14 shall control over every other provision
of this Credit Agreement, the other Credit Documents, and all agreements among
the Borrower, the Agent and the Lenders.
11.15 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS.
This Credit Agreement and the other Credit Documents constitute the
entire agreement among the Credit Parties, the Agent and the Lenders, supersede
any prior agreements among them, and shall bind and benefit each of such
Persons and their respective successors and permitted assigns.
11.16 JOINT AND SEVERAL LIABILITY OF BORROWERS.
Each of the Borrowers shall be jointly and severally liable hereunder
and under each of the other Credit Documents with respect to all Obligations,
regardless of which of the Borrowers actually receives the proceeds of the
Revolving Loans or the benefit of any other extensions of credit hereunder, or
the manner in which the ▇▇▇▇▇ Funds Administrator, the Borrowers, the Agent or
the Lenders account therefor in their respective books and records.
Notwithstanding the foregoing, (A) each Borrower's obligations and liabilities
with respect to proceeds of Revolving Loans which it receives or Letters of
Credit issued for its account, and related fees, costs and expenses, and (B)
each Borrower's obligations and liabilities arising as a result of the joint
and several liability of the Borrowers hereunder with respect to proceeds of
Revolving Loans received by, or Letters of Credit issued for the account of,
any of the other Borrowers, together with the related fees, costs and expenses,
shall be separate and distinct obligations, both of
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which are primary obligations of such Borrower. Neither the joint and several
liability of, nor the Liens granted to the Agent under the Collateral Documents
by, any of the Borrowers shall be impaired or released by any action or
inaction on the part of the Agent or any Lender, or any other event or
condition with respect to any other Borrower, including any such action or
inaction or other event or condition, which might otherwise constitute a
defense available to, or a discharge of, such Borrower, or a guarantor or
surety of or for any or all of the Obligations.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the respective parties hereto have caused this
Credit Agreement to be executed and delivered by their duly authorized officers
as of the date first set forth above.
THE ▇▇▇▇▇ CORPORATION, an Ohio corporation,
individually and in its capacity as ▇▇▇▇▇
Funds Administrator
By: ______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
President
FERREX TRADING CORPORATION, a
Delaware corporation
By: ______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
President
PAULDING RECYCLING, INC., an Ohio
corporation
By: ______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
President
BRIQUETTING CORPORATION OF AMERICA, an Ohio
corporation
By: ______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
President
BT COMMERCIAL CORPORATION, individually and
in its capacity as Agent
By: ______________________________________
Name: ___________________________________
Title: __________________________________
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ANNEX I
TO
CREDIT AGREEMENT
DATED AS OF JUNE 23, 1997
LIST OF LENDERS; COMMITMENT
AMOUNTS; APPLICABLE LENDING OFFICES
1. BT COMMERCIAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $37,000,000
DOMESTIC LENDING OFFICE: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LIBOR LENDING OFFICE: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇