EXHIBIT 10.22
FORM 10-K
YEAR ENDED DECEMBER 31, 2001
LOAN AND SECURITY AGREEMENT
GMAC BUSINESS CREDIT, LLC
(AS LENDER AND AS AGENT)
AND
BANK ONE, WISCONSIN
(AS LENDER AND AS SYNDICATION AGENT)
AND
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME
(AS LENDERS),
WITH
BUCYRUS INTERNATIONAL, INC.
MINSERCO, INC.
BOONVILLE MINING SERVICES, INC.
(AS BORROWERS)
BUCYRUS INTERNATIONAL, INC.
(BORROWING AGENT)
AND
THE OTHER LOAN PARTIES SIGNATORY HERETO
(AS LOAN PARTIES)
March 7, 2002
LOAN AND SECURITY AGREEMENT
Loan and Security Agreement dated March 7, 2002 among BUCYRUS
INTERNATIONAL, INC., a corporation organized under the laws of the State of
Delaware ("Bucyrus"), MINSERCO, INC., a corporation organized under the
laws of the State of Delaware ("Minserco") and BOONVILLE MINING SERVICES,
INC., a corporation organized under the laws of the State of Delaware
("Boonville"), (Bucyrus, Minserco and Boonville, each a "Borrower" and
collectively, the "Borrowers"), BUCYRUS CANADA LIMITED, a corporation
organized under the laws of the Province of Ontario ("Bucyrus Canada"),
BUCYRUS HOLDINGS, LLC, a limited liability company organized under the laws
of the State of Delaware ("Holdings"), (Holdings and, Bucyrus Canada, each
a "Guarantor" and collectively, the "Guarantors"), the financial
institutions which are now or which hereafter become a party hereto (each a
"Lender" and collectively, the "Lenders"), GMAC BUSINESS CREDIT, LLC, a
limited liability company organized under the laws of the State of Delaware
("GMACBC"), as agent for Lenders (GMACBC, in such capacity, the "Agent")
and BANK ONE, WISCONSIN ("BOW"), as syndication agent for Lenders (BOW, in
such capacity, the "Syndication Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, Loan Parties, Lenders and Agent hereby agree as follows:
I. DEFINITIONS.
1.1. Accounting Terms. As used in this Agreement, the Note, any
Other Document, or any certificate, report or other document made or
delivered pursuant to this Agreement, accounting terms not defined in
Section 1.2 or elsewhere in this Agreement and accounting terms partly
defined in Section 1.2 to the extent not defined, shall have the respective
meanings given to them under GAAP; provided, however, whenever such
accounting terms are used for the purposes of determining compliance with
financial covenants in this Agreement, such accounting terms shall be
defined in accordance with GAAP as applied in preparation of the audited
financial statements of Loan Parties for the fiscal year ended December 31,
2000.
1.2. General Terms. For purposes of this Agreement the following
terms shall have the following meanings:
"Accountants" shall have the meaning set forth in Section 9.7
hereof.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Rate Loan for any Interest Period a rate of interest equal to:
(a) the offered rate for deposits in U.S. dollars in
the London interbank market for the relevant Interest Period which is
published by the British Bankers' Association and currently appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the day which is two
(2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, that if such a rate
ceases to be available on that or any other source from the British
Bankers' Association, Adjusted LIBO Rate shall be a rate per annum equal to
the offered rate for deposits in U.S. dollars in the London interbank
market for the relevant Interest Period that appears on Reuters Screen LIBO
Page (or any successor page) as of 11:00 a.m. (London time) on the day
which is two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period, provided that if more
than one rate is specified on Reuters Screen LIBO Page, Adjusted LIBO Rate
shall be a rate per annum equal to the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%); provided,
however, that if, for any reason, such a rate is not published by the
British Bankers Association or available on the Reuters Screen LIBO Page,
Adjusted LIBO Rate shall be equal to a rate per annum equal to the average
rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which
Agent determines that U.S. dollars in an amount comparable to the amount of
the applicable Loans are being offered to prime banks at approximately
11:00 a.m. (London time) on the day which is two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period for settlement in immediately available funds by leading
banks in the London interbank market selected by Agent; divided by
(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day which is two (2) Business Days
prior to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or
other governmental authority having jurisdiction with respect thereto, as
now and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
which are required to be maintained by a member bank of the Federal Reserve
System; such rate (if greater than zero) to be rounded upward to the next
whole multiple of one-sixteenth of one percent (.0625%).
"Advances" shall mean and include the Revolving Advances,
Swingline Loans and Letters of Credit.
"Advance Rates" shall have the meaning set forth in Section
2.1(a) hereof.
"Affiliate" of any Person shall mean (a) any Person (other than
a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or (b) any
Person who is a director or officer (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in clause (a)
above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 5% or more of the securities having
ordinary voting power for the election of directors of such Person, or (y)
to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble to
this Agreement and shall include its successors and assigns.
"Agreement" shall mean this Loan and Security Agreement, as
amended, restated, modified and supplemented from time to time.
"Applicable Margin" for each type of Advance shall mean as of
the Closing Date, the applicable percentage specified below:
TYPE OF ADVANCE APPLICABLE MARGIN APPLICABLE MARGIN
FOR DOMESTIC RATE FOR EURODOLLAR
LOANS RATE LOANS
Revolving Advances (in 2.00% 3.50%
excess of Supplemental
Amount)
Revolving Advances (up to 2.25% 3.75%
the Supplemental Amount)
"Authority" shall have the meaning set forth in Section
4.19(d).
"Bahama Rock Transaction" shall mean that certain transaction
by and among Holdings, BCC Equipment Leasing Corporation ("BCC"), Bahama
Rock Ltd. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Materials, Inc. (together with Bahama Rock
Ltd., "Customer") evidenced by an Equipment Lease Agreement between BCC and
Holdings dated November 7, 2001 and a Limestone Extraction Agreement dated
July 2, 2001.
"Bank One Facility" shall mean that certain lending facility
established pursuant to a Credit Agreement dated as of September 24, 1997,
as amended, among Bucyrus, the Banks (as defined therein), The Bank of Nova
Scotia, as documentation agent, and Bank One, Wisconsin, as Agent.
"Base Rate" shall mean a variable rate of interest per annum
equal to the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System in Federal Reserve statistical
release H.15 (519) entitled "Selected Interest Rates" as the Bank Prime
Loan Rate, such rate to be adjusted automatically, without notice, on the
effective date of any change in such rate. Base Rate also includes rates
published in any successor publications of the Federal Reserve System
reporting the Bank Prime Loan Rate or its equivalent. The statistical
release generally sets forth a Bank Prime Loan Rate for each Business Day.
The applicable Bank Prime Loan Rate for any date not set forth in such
statistical release or equivalent document shall be the rate set forth for
the last preceding date. In the event the Board of Governors of the
Federal Reserve System ceases to publish a Bank Prime Loan Rate or
equivalent, the term "Base Rate" shall mean a variable rate of interest per
annum equal to the highest of the "prime rate," "reference rate," "base
rate" or other similar rate as determined by Agent announced from time to
time by any of Bank One, ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. or Citibank, N.A. (or any
successor to any of the foregoing institutions) (with the understanding
that any such rate may merely be a reference rate and may not necessarily
represent the lowest or best rate actually charged to any customer by such
bank).
"Borrower" or "Borrowers" shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors
and assigns of such Persons.
"Borrowers' Account" shall have the meaning set forth in
Section 2.7.
"Borrowing Agent" shall mean Bucyrus International, Inc.
"Borrowing Base Certificate" shall mean a certificate duly
executed by an officer of Borrowing Agent appropriately completed and in
substantially the form of Exhibit A hereto.
"Business Day" shall mean with respect to Eurodollar Rate
Loans, any day on which commercial banks are open for domestic and
international business, including dealings in Dollar deposits, in London,
England and New York, New York and with respect to all other matters, any
day other than a day on which commercial banks in New York are authorized
or required by law to close.
"C$" shall mean lawful money of Canada.
"Canadian Benefit Plans" shall mean all material employee
benefit plans of any nature or kind whatsoever that are not Canadian
Pension Plans and are maintained or contributed to by any Loan Party having
employees in Canada except that the term "Canadian Benefit Plans" shall not
include any statutory plans in Canada with which any Loan Party is required
to comply including without limitation the Canada/Quebec Pension Plan or
plans administered pursuant to applicable provincial health, tax, workers'
compensation and employment insurance legislation.
"Canadian Credit Facility" shall mean that certain lending
facility, consisting of a C$10,000,000 Revolving Term Credit and a
C$3,920,000 Non-Revolving Credit, established pursuant to (i) the letter
from The Bank of Nova Scotia to Bucyrus Canada dated July 20, 2000 and
accepted by Bucyrus Canada on August 1, 2000, as amended by the letter
dated April 2, 2001 and accepted by Bucyrus Canada on April 9, 2001, and as
further amended by the letter dated January 21, 2002 and accepted by
Bucyrus Canada on January 29, 2002, (ii) the Application for Credit and
Promise to Give Security under Section 427 dated April 24, 2001 made by
Bucyrus Canada for the benefit of The Bank of Nova Scotia, and (iii) the
Security under Section 427(1) on All Property of Specified Kinds dated
April 24, 2001 made by Bucyrus Canada for the benefit of The Bank of Nova
Scotia, as such Canadian Credit Facility may be amended, restated,
refinanced or replaced.
"Canadian Intercompany Advances" shall have the meaning set
forth in Section 7.5(c) hereof.
"Canadian Pension Plans" shall mean each pension plan
registered under the Income Tax Act (Canada) and/or any other applicable
pension statute and/or regulation in Canada established, maintained or
contributed to by any Loan Party for its employees or former employees.
"Canadian Security Agreement" shall mean those separate
security agreements, hypothecs, debentures and pledges of debentures
entered into between Bucyrus Canada and Agent for its benefit and for the
benefit of Lenders, each in form and substance satisfactory to Agent,
pursuant to which the obligations of Bucyrus Canada as Guarantor herein are
secured by all of its assets except real estate and equipment located in
Edmonton, Canada.
"Capital Expenditures" means, without duplication, all
expenditures (including deposits) for, or contracts for expenditures with
respect to any fixed assets or improvements, or for replacements,
substitutions or additions thereto, which have a useful life of more than
one year, including the direct or indirect acquisition of such assets by
way of increased product or service charges, offset items or otherwise.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) that, in conformity with GAAP, should be accounted for
as a capital lease.
"Cash Equivalents" shall mean: (a) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within six (6) months
from the date of acquisition thereof; (b) commercial paper maturing no more
than six (6) months from the date issued and, at the time of acquisition,
having a rating of at least A-1 from Standard & Poor's Corporation or at
least P-1 from ▇▇▇▇▇'▇ Investors Service, Inc.; and (c) certificates of
deposit or bankers' acceptances maturing within six (6) months from the
date of issuance thereof issued by, or overnight reverse repurchase
agreements from, any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 and whose debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency and not subject to setoff rights in favor of such
bank.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sub-Section
9601 et seq.
"Change in Management" shall mean the first date on which both
(i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is no longer employed as the President (or in a
similar executive capacity) of Borrowing Agent and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is
no longer employed as the Executive Vice President (or in a similar
executive capacity) of Borrowing Agent.
"Change of Control" shall mean (a) the occurrence of any event
(whether in one or more transactions) which results in a transfer of
control of any Loan Party to a Person who is not an Original Owner; (b)
100% of the common stock of any Loan Party is no longer owned or controlled
by (including for the purposes of the calculation of percentage ownership,
any shares of common stock into which any capital stock of any Loan Party
held by any of the Original Owners is convertible or for which any such
shares of the capital stock of any Loan Party or of any other Person may be
exchanged and any shares of common stock issuable to such Original Owners
upon exercise of any warrants, options or similar rights which may at the
time of calculation be held by such Original Owners) a Person who is either
an Original Owner or an Affiliate of an Original Owner, (c) any merger or
consolidation of or with any Loan Party or sale of all or substantially all
of the property or assets of any Loan Party; provided, that the sale by
Holdings of any shares of the capital stock of Bucyrus shall be deemed a
sale of substantially all of Holdings' assets or (d) any portion of the
Senior Unsecured Debt held by Holdings as of the Closing Date is disposed
of by sale or otherwise. For purposes of clause (a) of this definition,
"control of Loan Party" shall mean the power, direct or indirect (x) to
vote 100% of the securities having ordinary voting power for the election
of directors of any Loan Party or (y) to direct or cause the direction of
the management and policies of any Loan Party by contract or otherwise.
"Charges" shall mean all taxes, charges, fees, imposts, levies
or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance,
stamp, occupation and property taxes, custom duties, fees, assessments,
liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed
by any taxing or other authority, domestic or foreign (including, without
limitation, the PBGC or any environmental agency or superfund), upon the
Collateral, any Loan Party or any of its Affiliates.
"Closing Date" shall mean March 7, 2002 or such other date as
may be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and the regulations promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b) all Equipment;
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property;
(f) all Subsidiary Stock;
(g) all of each Loan Party's right, title and interest
in and to (i) its respective goods and other property including, but not
limited to, all merchandise returned or rejected by Customers, relating to
or securing any of the Receivables; (ii) all of each Loan Party's rights as
a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other
lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all supporting obligations and all
additional amounts due to any Loan Party from any Customer relating to the
Receivables; (iv) other property, including warranty claims, relating to
any goods securing this Agreement; (v) all of each Loan Party's contract
rights, rights of payment which have been earned under a contract right,
letter of credit rights (whether or not the letter of credit is evidenced
by a writing), instruments (including promissory notes), documents, chattel
paper (whether tangible or electronic), warehouse receipts, deposit
accounts, money and securities; (vi) if and when obtained by any Loan
Party, all personal property of third parties in which such Loan Party has
been granted a lien or security interest as security for the payment or
enforcement of Receivables; and (vii) any other goods or personal property
now owned or hereafter acquired in which any Loan Party has expressly
granted a security interest or may in the future grant a security interest
to Agent hereunder, or in any amendment or supplement hereto or thereto, or
under any other agreement between Agent and any Loan Party;
(h) all of each Loan Party's ledger sheets, ledger
cards, files, correspondence, records, books of account, business papers,
computers, computer software (owned by any Loan Party or in which it has an
interest), computer programs, tapes, disks and documents relating to (a),
(b), (c), (d), (e), (f) or (g) of this Paragraph; and
(i) all proceeds and products of (a), (b), (c), (d),
(e), (f), (g) and (h) in whatever form, including, but not limited to:
cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard, flood and
credit insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements, documents, eminent
domain proceeds, condemnation proceeds and tort claim proceeds; provided,
however, that Collateral shall not include the Capital Lease between Banc
One Leasing Corporation and Bucyrus International, Inc. for the Manitowoc
4100 W Crane in the face amount of $350,000, nor shall it include the
Equipment subject to such Capital Lease.
"Commitment Percentage" of any Lender shall mean the percentage
set forth below such ▇▇▇▇▇▇'s name on the signature page hereof as same may
be adjusted upon any assignment by a Lender pursuant to Section 17.3(b)
hereof.
"Commitment Transfer Supplement" shall mean a document in the
form of Exhibit 17.3 hereto, properly completed and otherwise in form and
substance satisfactory to Agent by which the Purchasing Lender purchases
and assumes a portion of the obligation of Lenders to make Advances under
this Agreement.
"Commitments" shall mean, as to any Lender, its obligation to
make Advances (including participating in Letters of Credit) in an
aggregate amount not to exceed at any one time outstanding the amount set
forth below such ▇▇▇▇▇▇'s name on the signature page hereof under the
heading "Commitment," as same may be adjusted in accordance with this
Agreement.
"Consents" shall mean all filings and all licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties, domestic or foreign,
necessary to carry on any Loan Party's business, including, without
limitation, any Consents required under all applicable federal, state,
provincial or other applicable law.
"Controlled Group" shall mean all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with any Loan Party, are treated as a
single employer under Section 414 of the Code.
"Customer" shall mean and include the account debtor with
respect to any Receivable and/or the prospective purchaser or lessee of
goods, services or both with respect to any contract or contract right,
and/or any party who enters into or proposes to enter into any contract or
other arrangement with any Loan Party, pursuant to which such Loan Party is
to deliver any personal property or perform any services.
"Default" shall mean an event which, with the giving of notice
or passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1
hereof.
"Defaulting Lender" shall have the meaning set forth in Section
2.15(a) hereof.
"Deferral Agreement" shall mean an agreement, in form and
substance satisfactory to Agent, pursuant to which Holdings agrees to defer
the receipt of interest on not less than $75,600,000 in principal amount of
the Senior Unsecured Note, until repayment in full of the Obligations in
cash and termination of this Agreement.
"Depository Accounts" shall have the meaning set forth in
Section 4.15(h) hereof.
"Documents" shall have the meaning set forth in Section 8.1(c)
hereof.
"Dollar" and the sign "$" shall mean lawful money of the United
States of America.
"Domestic Rate Loan" shall mean any Advance that bears interest
based upon the Base Rate.
"EBITDA" shall mean for any period the sum of (i) net income
(or loss) of Loan Parties on a Consolidated Basis for such period
(excluding extraordinary gains and losses) minus interest income for Loan
Parties on a Consolidated Basis for such period, plus (ii) all interest
expense of Loan Parties on a Consolidated Basis for such period, plus (iii)
all charges against income of Loan Parties on a Consolidated Basis for such
period for federal, state, provincial and local taxes, plus (iv)
depreciation expenses of Loan Parties on a Consolidated Basis for such
period, plus (v) amortization expenses of Loan Parties on a Consolidated
Basis for such period, plus (vi) accrued management fees payable to the
Original Owner of Holdings or any Affiliate of such Original Owner (other
than Loan Parties and their Subsidiaries) not paid in cash, plus (vii) non-
cash charges of Loan Parties on a Consolidated Basis incurred with respect
to compensation paid in stock, or options to acquire stock, plus (viii)
other non-cash charges; provided, however, that in determining EBITDA (i)
any foreign currency translation loss (or gain, as the case may be) shall
be added to (in the case of a loss) or subtracted from (in the case of a
gain) net income (or loss), and (ii) any loss (or gain, as the case may be)
from the sale of fixed assets shall be added to (in the case of a loss) or
subtracted from (in the case of a gain) net income (or loss).
"Eligible Billed Progress Receivables" shall mean the amount
actually billed by a Borrower or Bucyrus Canada for payments to be made by
a Customer pursuant to a sales contract, in advance of completion of the
Inventory by the applicable Borrower or Bucyrus Canada, in accordance with
the percentage completion method of accounting under GAAP.
"Eligible North American Inventory" shall mean and include
Inventory owned by a Borrower or Bucyrus Canada and either (i) located at
premises of a Borrower or Bucyrus Canada listed on Schedule 4.5 hereto or
(ii) located at a consignment location listed on Schedule 4.5 hereto with
the consignee(s) noted on Schedule 4.5 or (iii) located at a distribution
location listed on Schedule 4.5 with the distributor(s) noted on Schedule
4.5 or (iv) located at a location of a Customer listed on Schedule 4.5 with
respect to each Site Location Agreement where such Customer authorizes the
filing by a Borrower or Bucyrus Canada of a financing statement (provided,
however, that the maximum amount of Inventory deemed eligible under clauses
(ii), (iii) and (iv) in the aggregate shall not exceed the sum of
$4,000,000), in each case valued at the lower of cost or market value,
determined on a first-in-first-out basis, which is not, in Agent's opinion,
obsolete, slow moving or unmerchantable and which Agent, in its sole
discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time deem appropriate including,
without limitation, whether the Inventory is subject to a perfected, first
priority security interest in favor of Agent and no other Lien (with all
necessary consignment or bailment filings by a Borrower or Bucyrus Canada
being of record in the appropriate jurisdiction and assigned to Agent) and
whether the Inventory conforms to all standards imposed by any governmental
agency, division or department thereof which has regulatory authority over
such Inventory or the use or sale thereof.
"Eligible North American Receivables" shall mean and include
with respect to each Borrower and Bucyrus Canada, each Receivable of such
Loan Party arising in the ordinary course of such Loan Party's business and
which Agent, in its sole credit judgment, shall deem to be an Eligible
North American Receivable, based on such considerations as Agent may from
time to time deem appropriate. A Receivable shall not be deemed eligible
unless such Receivable is subject to Agent's first priority perfected
security interest and no other Lien (other than Permitted Encumbrances),
and is evidenced by an invoice or other documentary evidence satisfactory
to Agent. In addition, no Receivable shall be an Eligible North American
Receivable if:
(a) it arises out of a sale made by any Borrower or
Bucyrus Canada to an Affiliate of any Loan Party or to a Person controlled
by an Affiliate of any Loan Party;
(b) it is due or unpaid more than (i) ninety (90) days
after the original invoice date with respect to Customers in the United
States of America and one hundred twenty (120) days after the original
invoice date with respect to Customers outside of the United States of
America, or (ii) more than sixty (60) days after the original due date;
(c) twenty-five percent (25%) or more of the
Receivables from such Customer are not deemed Eligible North American
Receivables hereunder. Such percentage may, in Agent's sole discretion, be
increased or decreased from time to time;
(d) any covenant, representation or warranty contained
in this Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of its property or call a meeting of its creditors, (ii) admit in writing
its inability, or be generally unable, to pay its debts as they become due
or cease operations of its present business, (iii) make a general
assignment for the benefit of creditors, (iv) commence a voluntary case
under any state, provincial or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, any
petition which is filed against it in any involuntary case under such
bankruptcy laws, or (viii) take any action for the purpose of effecting any
of the foregoing;
(f) it arises out of or under any Lease/Sublease
Transaction;
(g) the sale to the Customer is on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment or any
other repurchase or return basis or is evidenced by chattel paper;
(h) Agent believes, in its sole judgment, that
collection of such Receivable is insecure or that such Receivable may not
be paid by reason of the Customer's financial inability to pay;
(i) the Customer is the United States of America, any
state or any department, agency or instrumentality of any of them, unless
Borrower or Bucyrus Canada assigns its right to payment of such Receivable
to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or
has otherwise complied with other applicable statutes or ordinances;
(j) the Customer is the Canadian Government (Her
Majesty the Queen in Right of Canada) or a political subdivision thereof,
or any province or territory, or any municipality or department, agency or
instrumentality thereof, unless Agent, in its sole discretion, has agreed
to the contrary in writing, the Receivable is assignable by way of security
and Borrower or Bucyrus Canada, if necessary or desirable, has complied
with the Financial Administration Act (Canada) and any amendments thereto
or any applicable provincial statute or municipal ordinance of similar
purpose and effect, with respect to the assignment or assignment by way of
security of such obligation;
(k) the goods giving rise to such Receivable have not
been shipped and delivered to and accepted by the Customer or the services
giving rise to such Receivable have not been performed by the applicable
Borrower and accepted by the Customer or the Receivable otherwise does not
represent a final sale (provided, however, that this clause (k) shall not
serve to disqualify Eligible Billed Progress Receivables or Eligible
Unbilled Progress Receivables);
(l) the Receivables of the Customer exceed a credit
limit determined by Agent, in its sole discretion, to the extent such
Receivable exceeds such limit;
(m) the Receivable is subject to any offset, deduction,
defense, dispute, or counterclaim (except normal and customary discounts
for prompt payment), the Customer is also a creditor or supplier of a
Borrower or Bucyrus Canada or the Receivable is contingent in any respect
or for any reason;
(n) the applicable Borrower or Bucyrus Canada has made
any agreement with any Customer for any deduction therefrom, except for
discounts or allowances made in the ordinary course of business for prompt
payment, all of which discounts or allowances are reflected in the
calculation of the face value of each respective invoice related thereto;
(o) any return, rejection or repossession of the
merchandise has occurred;
(p) such Receivable is not payable to a Borrower or
Bucyrus Canada;
(q) Receivables with respect to which the Customer is
located in New Jersey, Minnesota, or any other state denying creditors
access to its courts in the absence of a Notice of Business Activities
Report or other similar filing, unless the applicable Borrower is
incorporated under the laws of such state or has either qualified as a
foreign corporation authorized to transact business in such state or has
filed a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year; or
(r) such Receivable is not otherwise satisfactory to
Agent as determined in good faith by Agent in the exercise of its
discretion in a reasonable manner.
"Eligible Unbilled Progress Receivables" shall mean the amount,
with respect to a sales contract, which a Borrower or Bucyrus Canada has,
in accordance with the past practices of such Borrower or Bucyrus Canada,
reflected as an asset on its balance sheet as an unbilled receivable in
accordance with the percentage completion method of accounting under GAAP
(representing the cost of goods sold plus a profit component) minus, at any
time, amounts actually billed to the applicable Customer under the
applicable contract.
"Environmental Complaint" shall have the meaning set forth in
Section 4.19(d) hereof.
"Environmental Laws" shall mean all federal, state, provincial
and local environmental, land use, zoning, health, chemical use, safety and
sanitation laws, statutes, ordinances and codes relating to the protection
of the environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Substances and the rules, regulations, policies, guidelines,
interpretations, decisions, orders and directives of federal, state,
provincial and local governmental agencies and authorities with respect
thereto.
"Equipment" shall mean and include as to each Loan Party all of
such Loan Party's goods (other than Inventory) whether now owned or
hereafter acquired and wherever located including, without limitation, all
equipment, machinery, apparatus, motor vehicles, fittings, furniture,
furnishings, fixtures, parts, accessories and all replacements and
substitutions therefor or accessions thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the rules and regulations
promulgated thereunder.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for
the then current Interest Period relating thereto the rate per annum (such
Eurodollar Rate to be adjusted to the next higher 1/100 of one percent
(1%)) equal to the Adjusted LIBO Rate.
"Eurodollar Rate Loan" shall mean an Advance at any time that
bears interest based on the Adjusted LIBO Rate.
"Event of Default" shall mean the occurrence and continuance of
any of the events set forth in Article X hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Federal Funds Rate" shall mean, for any day, 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 which is a Business Day, the average
of quotations for such day on such transactions received by Agent from
three Federal funds brokers of recognized standing selected by Agent.
"Fee Letter" shall mean the fee letter dated the Closing Date
between Loan Parties and GMACBC in connection with this Agreement.
"Fixed Charge Coverage Ratio" shall mean and include for Loan
Parties on a Consolidated Basis, with respect to any fiscal period, the
ratio of (a) Operating Cash Flow during such period to (b) Fixed Charges
during such period.
"Fixed Charges" means for Loan Parties on a Consolidated Basis,
for any period, the sum of (i) all Senior Debt Payments net of interest
income during such period, plus (ii) all income or franchise taxes paid in
cash during such period net of tax refunds received in cash, plus (iii) all
"earnout" payments made in cash during such period as required pursuant to
the Asset Sale Agreement dated March 31, 1999 between Bucyrus Canada
Acquisition, Ltd. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (1986) Ltd.
"Foreign Subsidiary" shall mean any Subsidiary organized under
the laws of a jurisdiction other than the United States of America, any
state thereof or the District of Columbia.
"Formula Amount" shall have the meaning set forth in Section
2.1(a).
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"General Intangibles" shall mean and include as to each Loan
Party all of such Loan Party's general intangibles, whether now owned or
hereafter acquired including, without limitation, all payment intangibles,
choses in action, commercial tort claims, causes of action, corporate or
other business records, inventions, designs, patents, patent applications,
equipment formulations, manufacturing procedures, quality control
procedures, trademarks, service marks, trade secrets, goodwill, copyrights,
design rights, registrations, licenses, franchises, customer lists, tax
refunds, tax refund claims, computer programs and computer software, all
claims under guaranties, security interests or other security held by or
granted to such Loan Party to secure payment of any of the Receivables by a
Customer, all rights of indemnification and all other intangible property
of every kind and nature (other than Receivables).
"GMACBC" shall have the meaning set forth in the preamble to
this Agreement and shall include its successors and assigns.
"Governmental Body" shall mean any nation or government, any
state, province or other political subdivision thereof or any entity
exercising the legislative, judicial, regulatory or administrative
functions of or pertaining to a government.
"Guarantor" or "Guarantors" shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors
and assigns of such Persons.
"Guaranty" shall mean the guaranty set forth in Article XV of
this Agreement and any other guaranty of the obligations of Borrowers
executed by a Guarantor in favor of Agent for its benefit and for the
ratable benefit of Lenders.
"Hazardous Discharge" shall have the meaning set forth in
Section 4.19(d) hereof.
"Hazardous Substance" shall mean, without limitation, any
flammable explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum products, methane, hazardous materials, Hazardous Wastes,
hazardous or Toxic Substances or related materials as defined in CERCLA,
the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections
1801, et seq.), RCRA or any other applicable Environmental Law and in the
regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to
regulation under CERCLA, RCRA or applicable state law, and any other
applicable Federal, provincial or state laws now in force or hereafter
enacted relating to hazardous waste disposal.
"Holdings" shall have the meaning set forth in the preamble to
this Agreement.
"Indebtedness" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be
classified upon a balance sheet as liabilities (except capital stock and
surplus earned or otherwise) and in any event, without limitation by reason
of enumeration, shall include (a) all indebtedness, debt and similar
monetary obligations of such Person which are contingent or guaranteed; (b)
all obligations with respect to Surety Instruments issued for the account
of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments; (c) all indebtedness for borrowed
money; (d) obligations with respect to Capital Leases; (e) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money; (f) any obligation owed for
all or any part of the deferred purchase price of property or services if
the purchase price is due more than six (6) months from the date the
obligation is incurred or is evidenced by a note or similar written
instrument; and (g) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to
the credit of that Person.
"Indebtedness for Money Borrowed" shall mean the Indebtedness
described in clauses (b) through and including (g) of the definition of
"Indebtedness" set forth in this Agreement.
"Indenture" shall mean the Indenture dated as of September 24,
1997 among Bucyrus, ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee and
Boonville, Minserco and Von's Welding, Inc. as guarantors, relating to the
Senior Unsecured Note.
"Indirect Subsidiary Stock" shall mean all of the issued
and outstanding shares of stock owned by the applicable Subsidiary of
Equipment Assurance Limited and BWP Gear, Inc.
"Interest Period" shall mean the period provided for any
Eurodollar Rate Loan pursuant to Section 2.2(b).
"Inventory" shall mean and include as to each Loan Party all of
such Loan Party's now owned or hereafter acquired goods, merchandise and
other personal property, wherever located, to be furnished under any
contract of service or held for sale or lease, all raw materials, work in
process, finished goods and materials and supplies of any kind, nature or
description which are or might be used or consumed in such Loan Party's
business or used in selling or furnishing such goods, merchandise and other
personal property, all other inventory of such Loan Party, and all
documents of title or other documents representing them.
"Inventory Advance Rate" shall have the meaning set forth in
Section 2.1(a)(y)(iii) hereof.
"Investment Property" shall mean and include as to each Loan
Party, all such Loan Parties' now owned or hereafter acquired securities
(whether certificated or uncertificated), securities entitlements,
securities accounts, commodities contracts, commodities accounts, stocks,
mutual fund shares, money market shares and U.S. Government securities;
provided, however, that Investment Property (i) shall include only sixty-
five percent (65%) of the capital stock or other equity interests of any
Foreign Subsidiary and (ii) shall not include any Senior Unsecured Note
held by Holdings.
"Issuer" shall mean any Person who issues a Letter of Credit
and/or accepts a draft pursuant to the terms thereof (it being agreed that
so long as GMACBC shall be Agent or a Lender, then the Issuer shall be
General Motors Acceptance Corporation ("GMAC"); provided, however, that in
the event that GMACBC is neither the Agent nor a Lender, the "Issuer" with
respect to all subsequently issued Letters of Credit shall be a Lender
selected by the Borrowers).
"Lease" shall mean a lease, sublease, rental agreement or
similar agreement in respect of Inventory in which the Borrowing Agent or a
Subsidiary is the lessor.
"Lease/Sublease Transaction" means the series of related
transactions pursuant to which (a) the Borrowing Agent or a Subsidiary
thereof (i) sells to a Person (other than an Affiliate of the Borrowing
Agent or its Subsidiaries) either (1) a product manufactured by such
Borrowing Agent or Subsidiary or (2) a product of the type manufactured by
the Borrowing Agent or its Subsidiaries or (ii) arranges for the purchase
and sale of such product to another Person (other than an Affiliate),
(b) the Borrowing Agent or a Subsidiary leases that product from such
Person, (c) the Borrowing Agent or a Subsidiary subleases that product to
another Person (other than an Affiliate) or enters into an Operating
Agreement with respect to such product for the benefit of such other
Person, (d) the purchaser of the product has paid the full purchase price
in connection with the sale and (e) the Person which leases the product to
the Borrowing Agent or such Subsidiary is obligated to return to Borrowing
Agent or such Subsidiary, other than in the event of a default under such
sublease or Operating Agreement, all amounts received from the sublessee or
other party to the Operating Agreement which are in excess of the lease
obligations due from the Borrowing Agent or such Subsidiary to such lessor.
"Leasehold Interests" shall mean all of each Loan Party's
right, title and interest in and to the premises located at the locations
identified on Schedule 4.5 hereto.
"Lender" and "Lenders" shall have the meaning ascribed to such
term in the preamble to this Agreement and shall include each Person which
becomes a transferee, successor or assign of any Lender.
"Lender Default" shall have the meaning set forth in Section
2.15(a) hereof.
"Letter of Credit Application" shall have the meaning set forth
in Section 2.9(a).
"Letter of Credit Fees" shall have the meaning set forth in
Section 3.2.
"Letters of Credit" shall have the meaning set forth in Section
2.8.
"Leverage Ratio" shall mean, for any period, the ratio of (x)
Indebtedness for Money Borrowed as of the end of such period to (y) EBITDA
for such period. For purposes of this definition, Indebtedness for Money
Borrowed shall exclude Senior Unsecured Notes subject to the Deferral
Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, lien (whether statutory or
otherwise), claim or encumbrance, or preference, priority or other security
agreement or preferential arrangement held or asserted in respect of any
asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the
filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction.
"Loan Parties on a Consolidated Basis" shall mean the
consolidation in accordance with GAAP of the accounts or other items of
Borrowing Agent and its Subsidiaries.
"Loan Party" shall mean, individually, each Borrower and
each Guarantor, and "Loan Parties" shall mean, collectively, the Borrowers
and the Guarantors.
"Majority Lenders" shall mean Lenders holding at least fifty-
one percent (51%) of the Advances and, if no Advances are outstanding,
shall mean Lenders holding fifty-one percent (51%) of the Commitment
Percentages.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the condition, operations, assets, business or prospects of the Loan
Parties taken as a whole, (b) the ability of the Loan Parties taken as a
whole to pay the Obligations in accordance with the terms thereof, (c) the
value of the Collateral, or Agent's Liens on the Collateral or the priority
of any such Lien (except as otherwise permitted herein) or (d) the
practical realization of the benefits of Agent's and each ▇▇▇▇▇▇'s rights
and remedies under this Agreement and the Other Documents.
"Maximum Formula Amount" shall mean $65,000,000.
"Maximum Revolving Advance Amount" shall mean (a) $85,000,000
(inclusive of outstanding Swingline Loans), minus (b) a sum equal to (i)
$20,000,000, minus (ii) the Supplemental Amount at any time then in effect.
"Maximum Swingline Loan Amount" means at any time the lesser of
(i) $2,500,000 and (ii) the Maximum Revolving Advance Amount at such time
less the outstanding balance of Revolving Advances and issued and undrawn
Letters of Credit at such time.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Sections 3(37) and 4001(a)(3) of ERISA.
"Net Income" shall mean, for any period, the aggregate income
(or loss) of the Loan Parties on a Consolidated Basis for such period, all
computed and calculated in accordance with GAAP.
"Non-Defaulting Lenders" shall have the meaning set forth in
Section 2.15(b) hereof.
"Note" or "Notes" shall mean, individually or collectively, the
Revolving Credit Note and the Swingline Note.
"Obligations" shall mean and include any and all of each Loan
Party's Indebtedness and/or liabilities to Agent, Lenders, any Issuer or
any corporation that directly or indirectly controls or is controlled by or
is under common control with Agent, any Lender or any Issuer (any of the
foregoing, an "Obligee") of every kind, nature and description, direct or
indirect, secured or unsecured, joint, several, joint and several, absolute
or contingent, due or to become due, now existing or hereafter arising,
contractual or tortious, liquidated or unliquidated, under this Agreement,
under any Swap Contract with any Obligee, in connection with any letter of
credit issued by any Obligee or under any of the Other Documents (including
all interest accruing after the commencement of any bankruptcy or similar
proceeding whether or not enforceable in such proceeding), and all
obligations of any Loan Party to any Obligee to perform acts or refrain
from taking any action under this Agreement or under any of the Other
Documents or with respect to any Swap Contract with, or any letter of
credit issued by, an Obligee.
"Operating Agreement" shall mean an agreement pursuant to which
the Borrowing Agent or a Subsidiary thereof operates a product manufactured
by such Loan Party, or of the type manufactured by the Borrowing Agent and
its Subsidiaries, for the benefit of another Person, as part of a
Lease/Sublease Transaction.
"Operating Cash Flow" shall mean for Loan Parties on a
Consolidated Basis for any period, (i) EBITDA for such period minus (ii)
non-financed Capital Expenditures for such period (which shall include any
Capital Expenditures to the extent financed by utilization of Advances).
"Original Owners" shall mean (i) American Industrial Partners
Capital Fund II, L.P., a Delaware limited partnership, with respect to
Holdings; (ii) Holdings, with respect to Bucyrus; and (iii) Bucyrus
(directly or indirectly), with respect to the Loan Parties (other than
Holdings).
"Original Term" shall have the meaning set forth in Section
13.1 hereof.
"Other Documents" shall mean the Notes, the Pledge Agreement,
the Canadian Security Agreement, the Questionnaire, any Guaranty and any
and all other agreements, instruments and documents, including, without
limitation, guaranties, pledges, powers of attorney, consents, and all
other writings heretofore, now or hereafter executed by any Loan Party
and/or delivered to Agent or any Lender in respect of the transactions
contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or other entity
owning, directly or indirectly, at least 50% of the shares of stock or
other ownership interests having ordinary voting power to elect a majority
of the directors of the Person, or other Persons performing similar
functions for any such Person. The term "Parent" shall include, without
limitation, the Original Owners of the applicable Loan Party.
"Participant" shall mean each Person who shall be granted the
right by any Lender to participate in any of the Advances and who shall
have entered into a participation agreement in form and substance
satisfactory to such Lender.
"Payment Office" shall mean initially ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; thereafter, such other office of Agent, if
any, which it may designate by notice to Borrowing Agent and to each Lender
to be the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent
for the benefit of Agent, Lenders and/or any Issuer, which, in each case,
secure Obligations; (b) Liens for taxes, assessments or other governmental
charges not delinquent or, if delinquent, are being contested in good faith
and by appropriate proceedings and with respect to which proper reserves
have been taken by Loan Parties; provided, that, the Lien shall have no
effect on the priority of the Liens in favor of Agent or the value of the
assets in which Agent has such a Lien or a stay of enforcement of any such
Lien shall be in effect; (c) Liens disclosed in the financial statements
referred to in Section 5.5, the existence of which Agent has consented to
in writing; (d) deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment
insurance; (e) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money including, without
limitation, Surety Instruments), leases, statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the ordinary
course of any Loan Party's business; (f) judgment Liens that have been
stayed or bonded within ten (10) days of the imposition thereof and
mechanics', workers', materialmen's or other like Liens arising in the
ordinary course of any Loan Party's business with respect to obligations
which are not due or which are being contested in good faith by the
applicable Loan Party; (g) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided that
(x) any such lien shall not encumber any other property of the Loan Parties
and (y) the aggregate amount of Indebtedness secured by such Liens incurred
as a result of such purchases during any fiscal year shall not exceed the
amount provided for in Section 7.8; and (h) easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course
of business, (i) Liens securing obligations in respect of Capital Leases,
provided that such Capital Leases are otherwise permitted hereunder, (j)
Liens in the sublease, the subleased equipment and the sublease
Receivables, or in the Operating Agreement, the applicable Equipment or the
lease Receivables, in each case arising pursuant to a Lease/Sublease
Transaction permitted under subsection 7.1(b) hereof, (k) Liens securing
refinancings of Indebtedness (which refinancings are permitted under the
Indenture) provided that the Indebtedness being refinanced is secured by
the same assets, and is on terms and conditions not less favorable to such
Loan Party and the Agent (including, without limitation, in respect of any
applicable intercreditor issues) than those in effect prior to such
refinancing and (l) Liens disclosed on Schedule 1.2.
"Permitted Prior Encumbrances" shall mean the Permitted
Encumbrances set forth in clauses (c)(solely to the extent Agent has
consented in writing to such Lien being prior to the Lien of Agent and the
Lenders therein), (d), (e), (g), (h), (i), (j) and (k)(solely to the extent
the Lien securing the refinanced Indebtedness is permitted to be prior to
the Lien of Agent and the Lenders therein pursuant to this definition of
Permitted Prior Encumbrances) in the definition of Permitted Encumbrances.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of a Loan Party or any Subsidiary existing or arising under
Swap Contracts to which a Lender is a counterparty, provided that each of
the following criteria is satisfied: (a) such obligations are (or were)
entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities,
commitments or assets held or reasonably anticipated by such Person, or
changes in the value of securities issued by such Person in conjunction
with a securities repurchase program not otherwise prohibited hereunder,
and not for purposes of speculation or taking a "market view;" and (b) such
Swap Contracts do not contain any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make payments
on outstanding transactions to the defaulting party.
"Person" shall mean any individual, sole proprietorship,
partnership, corporation, business trust, joint stock company, trust,
unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or
government (whether federal, state, provincial, county, city, municipal or
otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA, maintained for employees of Loan Parties or any
member of the Controlled Group or any such Plan to which any Loan Party or
any member of the Controlled Group is required to contribute on behalf of
any of its employees.
"Pledge Agreement" shall mean, collectively, those certain
pledge agreements dated as of the Closing Date entered into (a) by Bucyrus
in favor of Agent for its benefit and for the benefit of Lenders, in form
and substance satisfactory to Agent, pursuant to which the Subsidiary Stock
is pledged as security for the Obligations, (b) by certain Subsidiaries of
Bucyrus in favor of Agent for its benefit and for the benefit of Lenders,
in form and substance satisfactory to Agent, pursuant to which the Indirect
Subsidiary Stock is pledged as security for the Obligations and (c) by
Holdings in favor of Agent for its benefit and for the benefit of Lenders,
pursuant to which all of the issued and outstanding shares of the capital
stock of Bucyrus is pledged as security for the obligations of Holdings
hereunder as Guarantor.
"Pro Forma Balance Sheet" shall have the meaning set forth in
Section 5.5(a) hereof.
"Pro Forma Financial Statements" shall have the meaning set
forth in Section 5.5(b) hereof.
"Projections" shall have the meaning set forth in Section
5.5(b) hereof.
"Purchasing Lender" shall have the meaning set forth in Section
17.3(c) hereof.
"Questionnaire" shall mean the Documentation Information
Questionnaire and the responses thereto provided by Loan Parties and
delivered to Agent.
"RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. Sub-Section 6901 et seq., as same may be amended from time to time.
"Receivables" shall mean and include, as to each Loan Party,
all of such Loan Party's accounts (including, without limitation, all
health-care insurance receivables), contract rights, instruments (including
promissory notes and instruments evidencing indebtedness owed to Loan
Parties by their Affiliates), documents, chattel paper (whether tangible or
electronic), general intangibles relating to accounts, drafts and
acceptances, and all other forms of obligations owing to such Loan Party
arising out of or in connection with the sale, lease or other disposition
of Inventory or the rendition of services, all guarantees and other
security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to Agent
hereunder.
"Receivables Advance Rate" shall have the meaning set forth in
Section 2.1(a)(y)(i) hereof.
"Release" shall have the meaning set forth in Section 5.7(c)(i)
hereof.
"Reportable Event" shall mean a reportable event described in
Section 4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least sixty-
six and two-thirds percent (66-2/3%) of the Advances and, if no Advances
are outstanding, shall mean Lenders holding sixty-six and two-thirds
percent (66-2/3%) of the Commitment Percentages.
"Responsible Person" shall mean the chief executive officer or
the president of the Borrowing Agent, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer, the
treasurer, the assistant treasurer or controller of the Borrowing Agent, or
any other officer having substantially the same authority and
responsibility.
"Revolving Advances" shall mean Advances made other than
Swingline Loans and Letters of Credit.
"Revolving Credit Note" shall mean, collectively, the
promissory notes referred to in Section 2.1(a) hereof.
"Revolving Interest Rate" shall mean an interest rate per annum
equal to (a) the sum of the Base Rate plus the Applicable Margin per annum
with respect to Domestic Rate Loans that are Advances and (b) the sum of
the Eurodollar Rate plus the Applicable Margin per annum with respect to
Eurodollar Rate Loans that are Advances.
"Senior Debt Payments" shall mean and include all cash actually
expended by Loan Parties on a Consolidated Basis to make (a) prepayments of
the Advances resulting from any reduction in the Supplemental Amount, plus
(b) interest payments on any Advances hereunder, plus, (c) the payments for
all fees, commissions and charges set forth herein and with respect to any
Advances, plus (d) Capital Lease payments, plus (e) payments with respect
to any other Indebtedness for Money Borrowed, including, without limitation
(x) the Senior Unsecured Debt and (y) Indebtedness of Bucyrus Canada and
Foreign Subsidiaries, but only to the extent permitted under Section 7.18
and Section 7.20 hereof.
"Senior Unsecured Debt" shall mean all Indebtedness of any Loan
Party under or in connection with the Senior Unsecured Debt Documentation.
"Senior Unsecured Debt Documentation" shall mean the Senior
Unsecured Note, the Indenture and any and all guarantees and other
documents and instruments executed in connection with the issuance thereof
and subsequent thereto.
"Senior Unsecured Debt Payments" shall mean and include all
cash actually expended to make principal and interest payments on the
Senior Unsecured Note.
"Senior Unsecured Note" shall mean, collectively, the senior
unsecured 9.75% notes due September 15, 2007 issued by Bucyrus under the
Indenture in the original principal sum of $150,000,000.
"Settlement Date" shall mean the Closing Date and every
Business Day designated by Agent as a "Settlement Date" by notice from
Agent to each Lender, but not less frequently than every Wednesday.
"Site Location Agreement" shall mean a maintenance and repair
contract, sales contract or other agreement pursuant to which a Loan Party
keeps Inventory at a Customer's location for future sale, and pursuant to
which such Loan Party retains title to such Inventory while it is at such
location until such time as it is sold.
"Standby Letters of Credit" shall mean all Letters of Credit
issued in connection with this Agreement as a credit enhancement for
certain Indebtedness (other than Indebtedness for Money Borrowed) of
Borrowers.
"Subsidiary" shall mean a corporation or other entity of whose
shares of stock or other ownership interests having ordinary voting power
(other than stock or other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar
functions for such entity, are owned, directly or indirectly, by such
Person.
"Subsidiary Stock" shall mean all or substantially all (or, in
the case of each Foreign Subsidiary, sixty-five percent (65%)) of the
issued and outstanding shares of stock owned by Bucyrus in Minserco,
Boonville, Bucyrus Europe Holdings, Ltd., Bucyrus Industries, Inc., Bucyrus
(Africa) (Proprietary) Limited, Bucyrus (Brasil) Ltda., Bucyrus Canada
Limited, Bucyrus International (Chile) Limitada, Bucyrus India Private
Limited, Bucyrus (Mauritius) Limited, Bucyrus International (Peru) S.A.,
Wisconsin Holdings Pty. Ltd., Western Gear Machinery Co. and BWC Gear, Inc.
"Supplemental Amount" shall mean, initially, $20,000,000;
provided, however, that the Supplemental Amount shall be permanently
reduced (but to an amount not less than $0) (a) by $1,500,000 on the last
day of each calendar quarter commencing June 30, 2002 and (b) as required
pursuant to Section 2.13 hereof.
"Surety Instruments" shall mean all letters of credit
(including standby and commercial), banker's acceptances, bank guarantees,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swingline Lender" means GMACBC, or if GMACBC shall resign as
Swingline Lender, another Lender selected by Agent and reasonably acceptable
to Borrowers.
"Swingline Loan" means each Advance made by Swingline Lender
pursuant to Section 2.1(c).
"Swingline Note" shall mean the promissory note referred to in
Section 2.1(c) hereof.
"Term" shall have the meaning set forth in Section 13.1 hereof.
"Termination Date" shall have the meaning set forth in Section
13.1 hereof.
"Termination Event" shall mean (i) a Reportable Event with
respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Loan
Party or any member of the Controlled Group from a Plan or Multiemployer
Plan during a plan year in which such entity was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of
intent to terminate a Plan in a distress termination described in Section
4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Plan or Multiemployer Plan; (v) any event or condition (a)
which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial
or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of any Loan Party or any member of the Controlled Group from a
Multiemployer Plan.
"Toxic Substance" shall mean and include any material present
on the Leasehold Interests which has been shown to have significant adverse
effect on human health or which is subject to regulation under the Toxic
Substances Control Act (TSCA), 15 U.S.C. Sub-Section 2601 et seq.,
applicable state law, or any other applicable Federal, state or provincial
laws now in force or hereafter enacted relating to toxic substances.
"Toxic Substance" includes but is not limited to asbestos, polychlorinated
biphenyls (PCBs) and lead-based paints.
"Transactions" shall have the meaning set forth in Section
5.5(a) hereof.
"Transferee" shall have the meaning set forth in Section
17.3(b) hereof.
"UCC Article 9" shall mean Article 9 of the Uniform Commercial
Code as in effect in the State of New York on July 1, 2001, as same may be
amended from time to time.
"Unbilled Progress Receivables Rate" shall have the meaning set
forth in Section 2.1(a)(y)(ii) hereof.
"Undrawn Availability" at a particular date shall mean an
amount equal to (a) the lesser of (i) the Formula Amount or (ii) the
Maximum Revolving Advance Amount, minus (b) the sum of (i) the outstanding
amount of Advances, plus (ii) all amounts due and owing to Borrowers' trade
creditors beyond normal trade terms, except to the extent the past due
amount is consistent with past practices, plus (iii) fees and expenses for
which Borrowers are liable to Agent and the Lenders but which have not been
paid or charged to Borrowers' Account.
"Week" shall mean the time period commencing with the opening
of business on a Monday and ending on the end of business the following
Sunday.
"WIP Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(iii) hereof.
1.3. Uniform Commercial Code Terms. All terms used herein and
defined in the Uniform Commercial Code as adopted in the State of New York
shall have the meaning given therein unless otherwise defined herein.
1.4. Certain Matters of Construction. The terms "herein", "hereof"
and "hereunder" and other words of similar import refer to this Agreement
as a whole and not to any particular section, paragraph or subdivision.
Any pronoun used shall be deemed to cover all genders. Wherever
appropriate in the context, terms used herein in the singular also include
the plural and vice versa. All references to statutes (including the
Uniform Commercial Code) and related regulations shall include any
amendments of same and any successor statutes and regulations. Unless
otherwise provided, all references to any instruments or agreements to
which Agent is a party, including, without limitation, references to any of
the Other Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof. For purposes of
Sections 3.1, 3.5, 3.6, 3.7, 3.8, Articles IV, V, VIII, XI, XII, XIII, XIV,
XV, XVI and XVII, the term "Lender" shall include each Lender and Swingline
Lender.
II. ADVANCES, PAYMENTS.
2.1. (a) Revolving Advances. Subject to the terms and conditions
set forth in this Agreement (including, without limitation, Section
2.1(b)), each Lender, severally and not jointly, will make Revolving
Advances to Borrowers in aggregate amounts outstanding at any time equal to
such ▇▇▇▇▇▇'s Commitment Percentage of the lesser of (x) the Maximum
Revolving Advance Amount less the aggregate amount of outstanding Letters
of Credit and the outstanding principal amount of the Swingline Loans and
(y) an amount equal to the sum of:
(i) up to 85%, subject to the provisions of Section
2.1(b) hereof ("Receivables Advance Rate"), of Eligible North
American Receivables (excluding Eligible Unbilled Progress
Receivables); provided, however, that other than with respect
to Eligible Billed Progress Receivables backed by a letter of
credit, surety bond, guaranty issued by the Export-Import Bank
of the United States or other credit enhancement acceptable to
Agent in its sole reasonable discretion, the maximum amount of
Revolving Advances attributable to Eligible Billed Progress
Receivables shall not exceed the sum of $10,000,000, plus
(ii) up to the lesser of (A) when combined with
Revolving Advances based upon clause 2.1(a)(y)(iii)(A)(y)(I)
below, the sum of $5,000,000 or (B) 35%, subject to the
provisions of Section 2.1(b) hereof ("Unbilled Progress
Receivables Rate"), of Eligible Unbilled Progress Receivables;
plus
(iii) up to the lesser of (A) the sum of (x) 50%, subject
to the provisions of Section 2.1(b) hereof ("Inventory Advance
Rate"), of the value of Eligible North American Inventory
(other than work-in-process Inventory) and (y) 35%, subject to
(I) the provisions of Section 2.1(b) hereof ("WIP Advance
Rate"), of the value of Eligible North American Inventory
consisting of work-in-process with respect to which an Eligible
Billed Progress Receivable or Eligible Unbilled Progress
Receivable has not arisen (the Receivables Advance Rate, the
Unbilled Progress Receivables Rate, the WIP Advance Rate and
the Inventory Advance Rate shall be referred to collectively,
as the "Advance Rates") and (II) the aggregate $5,000,000
limitation set forth in clause 2.1(a)(y)(ii)(A) above or (B)
85%, subject to the provisions of Section 2.1(b) hereof, of the
net orderly liquidation value of the Inventory of Borrowers and
Bucyrus Canada, as determined from time to time by appraisers
acceptable to Agent, plus
(iv) the Supplemental Amount; minus
(v) the aggregate amount of outstanding Letters of
Credit and Swingline Loans, minus
(vi) such reserves as Agent may reasonably deem proper
and necessary from time to time.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii),
(iii) and (iv) minus (y) Section 2.1(a)(y)(vi) at any time and from time to
time shall be referred to as the "Formula Amount"; provided, however, that
in the event at any time the sum of (1) Sections 2.1(a)(y)(i), (ii) and
(iii) minus (2) Section 2.1(a)(y)(vi) exceeds the Maximum Formula Amount,
the Formula Amount shall then be limited to the sum of (A) the Maximum
Formula Amount plus (B) the Supplemental Amount then in effect. The
Revolving Advances shall be evidenced by one or more secured promissory
notes ("Revolving Credit Note") substantially in the form attached hereto
as Exhibit 2.1(a).
(b) Discretionary Rights. The Advance Rates may be increased
or decreased by Agent at any time and from time to time in the exercise of
its reasonable discretion. Each Borrower consents to any such increases or
decreases and acknowledges that decreasing the Advance Rates or increasing
the reserves may limit or restrict Advances requested by Borrowing Agent.
Agent shall give Borrowing Agent ten (10) days prior written notice of its
intention to decrease the Advance Rates.
(c) Swingline Loans. (i) Agent may convert any request by
Borrowing Agent for a Revolving Advance into a request for a Swingline
Loan. The Swingline Loans shall be Domestic Rate Loans each in a minimum
amount of $100,000 and in integral multiples of $100,000 in excess thereof
and shall not exceed in the aggregate at any time outstanding the Maximum
Swingline Loan Amount. In the event that on any Business Day Swingline
Lender desires that all or any portion of the outstanding Swingline Loans
should be reduced in whole or in part, Swingline Lender shall promptly
notify Agent to that effect and indicate the portion of the Swingline Loans
to be reduced. Swingline Lender hereby agrees that it shall notify Agent
to reduce the outstanding Swingline Loans to $0 at least twice every month.
Agent agrees to promptly transmit to Lenders the information contained in
each notice received by Agent from Swingline Lender and shall concurrently
notify Lenders of each Lender's Commitment Percentage of the obligation to
make a Revolving Advance to repay the Swingline Loan (or portion thereof).
(ii) Each of the Lenders hereby unconditionally and
irrevocably agrees to fund to Agent for the benefit of Swingline Lender, in
lawful money of the United States and in same day funds, not later than
1:00 p.m. New York City time, on the Settlement Date, such ▇▇▇▇▇▇'s
Commitment Percentage of a Revolving Advance (which Revolving Advance shall
be a Domestic Rate Loan and shall be deemed to be requested by Borrowing
Agent) in the principal amount of such portion of the Swingline Loans which
is required to be paid to Swingline Lender under this subsection 2.1(c)
(regardless of whether the conditions precedent thereto set forth in
Section 8 are then satisfied and whether or not Borrowing Agent has
provided a notice of borrowing under Section 2.2 and whether or not any
Default or Event of Default exists or all or any of the Advances have been
accelerated, but subject to the other provisions of this Section 2.1(c)).
The proceeds of any such Revolving Advance shall be immediately paid over
to Agent for the benefit of Swingline Lender for application to the
Swingline Loan.
(iii) In the event that an Event of Default shall occur
and either (i) such Event of Default is of the type described in subsection
10.7 or 10.9 hereof or (ii) no further Revolving Advances are being made
under this Agreement, so long as any such Event of Default is continuing,
then, each of the Lenders (other than Swingline Lender) shall be deemed to
have irrevocably, unconditionally and immediately purchased from Swingline
Lender such Lender's Commitment Percentage of the Swingline Loan
outstanding as of the date of the occurrence of such Event of Default.
Each Lender shall effect such purchase by making available an amount equal
to its participation on the date of such purchase in Dollars in immediately
available funds to Agent for the benefit of Swingline Lender. In the event
any Lender fails to make available to Swingline Lender when due the amount
of such ▇▇▇▇▇▇'s participation in the Swingline Loan, Swingline Lender
shall be entitled to recover such amount on demand from such Lender
together with interest at the Federal Funds Rate. Each such purchase by a
Lender shall be made without recourse to Swingline Lender, without
representation or warranty of any kind, and shall be effected and evidenced
pursuant to documents reasonably acceptable to Swingline Lender. The
Swingline Loans shall be evidenced by one or more promissory notes
substantially in the form of Exhibit 2.1(c). The obligations of the
Lenders under this Section 2.1(c) shall be absolute, irrevocable and
unconditional, shall be made under all circumstances and shall not be
affected, reduced or impaired for any reason whatsoever.
2.2. Procedure for Borrowing.
(a) Borrowing Agent on behalf of any Borrower may notify
Agent prior to 11:00 a.m. Milwaukee time, on a Business Day of a ▇▇▇▇▇▇▇▇'s
request to incur, on that day, a Revolving Advance hereunder. Any amount
required to be paid as interest hereunder, or as fees or other charges
under this Agreement or any other agreement with Agent, Lenders and/or any
Issuer, or with respect to any other Obligation, which shall become due,
shall be deemed a request for an Advance as of the date such payment is
due, in the amount required to pay in full such interest, fee, charge or
Obligation under this Agreement or any other agreement with Agent, Lenders
and/or any Issuer and such request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event
any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent
shall give Agent at least three (3) Business Days' prior written notice,
specifying (i) the date of the proposed borrowing (which shall be a
Business Day), (ii) the type of borrowing and the amount on the date of
such Advance to be borrowed, which amount shall be in a minimum amount of
$5,000,000 and in integral multiples of $1,000,000 in excess thereof, and
(iii) the duration of the first Interest Period therefor. Interest Periods
for Eurodollar Rate Loans shall be for one, two, three, or six months. No
Eurodollar Rate Loan shall be made available to any Borrower during the
continuance of an Event of Default.
(c) Each Interest Period of a Eurodollar Rate Loan shall
commence on the date such Eurodollar Rate Loan is made and shall end on
such date as Borrowing Agent may elect as set forth in (b)(iii) above
provided that the exact length of each Interest Period shall be determined
in accordance with the practice of the interbank market for offshore Dollar
deposits and no Interest Period shall end after the Termination Date.
Borrowing Agent shall elect the initial Interest Period applicable to
a Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant
to Section 2.2(b) or by its notice of conversion given to Agent pursuant to
Section 2.2(d), as the case may be. Borrowing Agent shall elect the
duration of each succeeding Interest Period by giving irrevocable written
notice to Agent of such duration not less than three (3) Business Days
prior to the last day of the then current Interest Period applicable to
such Eurodollar Rate Loan. If Agent does not receive timely notice of the
Interest Period elected by Borrowing Agent, Borrowers shall be deemed to
have elected to convert to a Domestic Rate Loan subject to Section 2.2(d)
herein below.
(d) Provided that no Event of Default shall have occurred and
be continuing, any Borrower may, on the last Business Day of the then
current Interest Period applicable to any outstanding Eurodollar Rate Loan,
or on any Business Day with respect to Domestic Rate Loans, convert any
such loan into a loan of another type in the same aggregate principal
amount provided that any conversion of a Eurodollar Rate Loan shall be made
only on the last Business Day of the then current Interest Period
applicable to such Eurodollar Rate Loan. If a Borrower desires to convert
a loan, Borrowing Agent shall give Agent not less than three (3) Business
Days' prior written notice to convert from a Domestic Rate Loan to a
Eurodollar Rate Loan or one (1) Business Day's prior written notice to
convert from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying the
date of such conversion, the loans to be converted and if the conversion is
from a Domestic Rate Loan to any other type of loan, the duration of the
first Interest Period therefor. After giving effect to each such
conversion, there shall not be outstanding more than six (6) Eurodollar
Rate Loans, in the aggregate.
(e) At its option and upon three (3) Business Days' prior
written notice, any Borrower may prepay the Eurodollar Rate Loans in whole
at any time or in part from time to time, without premium or penalty, but
with accrued interest on the principal being prepaid to the date of such
repayment. Such Borrower shall specify the date of prepayment of Advances
which are Eurodollar Rate Loans and the amount of such prepayment. In the
event that any prepayment of a Eurodollar Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, such Borrower and each other Loan
Party shall indemnify Agent and Lenders therefor in accordance with Section
2.2(f) hereof.
(f) Each Loan Party shall indemnify Agent and Lenders and
hold Agent and Lenders harmless from and against any and all losses or
expenses that Agent and Lenders may sustain or incur as a consequence of
any prepayment, conversion of or any default by any Borrower in the payment
of the principal of or interest on any Eurodollar Rate Loan or failure by
any Borrower to complete a borrowing of, a prepayment of or conversion of
or to a Eurodollar Rate Loan after notice thereof has been given,
including, but not limited to, any interest payable by Agent or Lenders to
lenders of funds obtained by it in order to make or maintain its Eurodollar
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrowing Agent shall be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof, if any
applicable law, treaty, regulation or directive, or any change therein or
in the interpretation or application thereof, shall make it unlawful for
any Lender (for purposes of this subsection (g), the term "Lender" shall
include any Lender and the office or branch where any Lender or any
corporation or bank controlling such Lender makes or maintains any
Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans , the
obligation of Lenders to make Eurodollar Rate Loans hereunder, as the case
may be, shall forthwith be cancelled and Borrowers shall, if any affected
Eurodollar Rate Loans are then outstanding, promptly upon request from
Agent, either pay all such affected Eurodollar Rate Loans or convert such
affected Eurodollar Rate Loans into loans of another type. If any such
payment or conversion of any Eurodollar Rate Loan is made on a day that is
not the last day of the Interest Period applicable to such Eurodollar Rate
Loan, Borrowers shall pay Agent, upon Agent's request, such amount or
amounts as may be necessary to compensate Lenders for any loss or expense
sustained or incurred by Lenders in respect of such Eurodollar Rate Loan as
a result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained
by ▇▇▇▇▇▇▇ in order to make or maintain such Eurodollar Rate Loan. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by ▇▇▇▇▇▇▇ to Borrowing Agent shall be conclusive absent
manifest error.
2.3. Disbursement of Advance Proceeds. All Advances shall be
disbursed from whichever office or other place Agent may designate from
time to time and, together with any and all other Obligations of Borrowers
to Agent or Lenders, shall be charged to Borrowers' Account on Agent's
books. During the Term, Borrowers may use the Advances by borrowing,
prepaying and reborrowing, all in accordance with the terms and conditions
hereof. The proceeds of each Advance requested by Borrowers or deemed to
have been requested by Borrowers under Section 2.2(a) hereof shall, with
respect to requested Advances to the extent Lenders make such Advances, be
made available to the applicable Borrower on the day so requested by way of
credit to such Borrower's operating account at Bank One or such other bank
as Borrowing Agent may designate following notification to Agent, in
immediately available federal funds or other immediately available funds
or, with respect to Advances deemed to have been requested by any Borrower,
be disbursed to Agent to be applied to the outstanding Obligations giving
rise to such deemed request.
2.4. Maximum Revolving Advances. The aggregate balance of (i)
Revolving Advances, plus (ii) the amount of outstanding Swingline Loans,
plus (iii) the aggregate amount of Letters of Credit outstanding at any
time shall not exceed the lesser of (a) the Maximum Revolving Advance
Amount or (b) the Formula Amount.
2.5. Repayment of Advances.
(a) The Revolving Advances and Swingline Loans shall be due
and payable in full on the Termination Date subject to earlier prepayment
as herein provided.
(b) Each Borrower recognizes that the amounts evidenced by
checks, notes, drafts or any other items of payment relating to and/or
proceeds of Collateral may not be collectible by Agent on the date
received. In consideration of Agent's agreement to conditionally credit
Borrowers' Account as of the Business Day on which Agent receives those
items of payment, each Borrower agrees that, in computing the charges under
this Agreement, all items of payment shall be deemed applied by Agent on
account of the Obligations on the same Business Day of confirmation to
Agent by the Depository Account bank, as provided for in Section 4.15(h)
hereof, that such items of payment have been collected in good funds and
finally credited to Agent's account. Agent is not, however, required to
credit ▇▇▇▇▇▇▇▇▇' Account for the amount of any item of payment which is
unsatisfactory to Agent and Agent may charge Borrowers' Account for the
amount of any item of payment which is returned to Agent unpaid.
(c) All payments of principal, interest and other amounts
payable hereunder, or under any of the related agreements shall be made to
Agent at the Payment Office not later than 1:00 p.m. Milwaukee time, on the
due date therefor in lawful money of the United States of America in
federal funds or other funds immediately available to Agent. Agent shall
have the right to effectuate payment on any and all Obligations due and
owing hereunder by charging Borrowers' Account or by making Revolving
Advances as provided in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and all other
amounts payable hereunder, or under any related agreement, without any
deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
2.6. Repayment of Excess Advances. The aggregate balance of
Advances outstanding at any time in excess of the maximum amount of
Advances permitted hereunder shall be immediately due and payable without
the necessity of any demand, at the Payment Office, whether or not a
Default or Event of Default has occurred.
2.7. Statement of Account. Agent shall maintain, in accordance with
its customary procedures, a loan account ("Borrowers' Account") in the name
of Borrowers in which shall be recorded the date and amount of each Advance
made by Lenders and the date and amount of each payment in respect thereof;
provided, however, the failure by Agent to record the date and amount of
any Advance shall not adversely affect Agent or any Lender. Each month,
Agent shall send to Borrowing Agent a statement showing the accounting for
the Advances made, payments made or credited in respect thereof, and other
transactions between ▇▇▇▇▇▇▇ and Borrowers, during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the
absence of manifest error and shall constitute an account stated between
▇▇▇▇▇▇▇ and Borrowers unless Agent receives a written statement of
Borrowers' specific exceptions thereto within thirty (30) days after such
statement is received by Borrowing Agent. The records of Agent with
respect to the loan account shall be conclusive evidence absent manifest
error of the amounts of Advances and other charges thereto and of payments
applicable thereto.
2.8. Letters of Credit .
Subject to the terms and conditions hereof, Agent shall issue
or cause the issuance of Standby Letters of Credit ("Letters of Credit") by
the Issuer on behalf of any Borrower; provided, however, that Agent will
not be required to issue or cause to be issued any Letters of Credit to the
extent that the face amount of such Letters of Credit would then cause the
sum of (i) the outstanding Revolving Advances plus (ii) the outstanding
Swingline Loans, plus (iii) outstanding Letters of Credit to exceed the
lesser of (x) the Maximum Revolving Advance Amount or (y) the Formula
Amount. The maximum amount of outstanding Letters of Credit shall not
exceed $10,000,000 in the aggregate at any time. All disbursements or
payments related to Letters of Credit shall be deemed to be Domestic Rate
Loans and shall bear interest at the Revolving Interest Rate for Domestic
Rate Loans; except to the extent drawn upon, Letters of Credit shall not
bear interest.
2.9. Issuance of Letters of Credit.
(a) Borrowing Agent, on behalf of ▇▇▇▇▇▇▇▇▇, may request
Agent to issue or cause the issuance of a Letter of Credit by delivering to
Agent at the Payment Office, Issuer's standard form of letter of credit and
security agreement and standard form of letter of credit application
(collectively, the "Letter of Credit Application") and any draft if
applicable, completed to the satisfaction of Agent; and, such other
certificates, documents and other papers and information as Agent or Issuer
may reasonably request. Borrowing Agent, on behalf of ▇▇▇▇▇▇▇▇▇, also has
the right to give instructions and make agreements with respect to any
application, any applicable letter of credit and security agreement, any
applicable letter of credit reimbursement agreement and/or any other
applicable agreement, any letter of credit and the disposition of
documents, disposition of any unutilized funds, and to arrange the issuance
of any amendment, extension or renewal of any Letter of Credit.
(b) Each Letter of Credit shall, among other things, (i)
provide for the payment of sight drafts or acceptances of issuance drafts
when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an
expiry date not later than one (1) year after such Standby Letter of
Credit s date of issuance or the date on which such Standby Letter of
Credit is extended automatically in accordance with its terms, and in no
event having an expiry date later than the Termination Date unless, prior
to the Termination Date, Loan Parties provide cash collateral equal to not
less than one hundred five percent (105%) of the face amount thereof to be
held by Agent pursuant to a cash collateral agreement in form and substance
satisfactory to Agent. All Standby Letters of Credit shall be subject to
the laws or rules designated in such Standby Letter of Credit, or if no
laws or rules are designated, the International Standby Practices (ISP98 -
International Chamber of Commerce Publication Number 590) (the "ISP98
Rules") and, as to matters not governed by the ISP98 Rules, the laws of the
State of New York.
(c) Agent shall use its reasonable efforts to notify Lenders
of the request by Borrowing Agent for a Letter of Credit hereunder.
2.10. Requirements For Issuance of Letters of Credit.
(a) In connection with the issuance of any Letter of Credit
Borrowers shall indemnify, save and hold Agent, each Lender and each Issuer
harmless from any loss, cost, expense or liability, including, without
limitation, payments made by Agent, any Lender or any Issuer and expenses
and reasonable attorneys' fees incurred by Agent, any Lender or any Issuer
arising out of, or in connection with, any Letter of Credit to be issued or
created for any Borrower. Borrowers shall be bound by Agent's or Issuer's
regulations and good faith interpretations of any Letter of Credit issued
or created for Borrowers' Account, although this interpretation may be
different from its own; and, neither Agent, nor any Lender, nor any Issuer
nor any of their correspondents shall be liable for any error, negligence,
or mistakes, whether of omission or commission, in following Borrowing
Agent's or any Borrower's instructions or those contained in any Letter of
Credit or of any modifications, amendments or supplements thereto or in
issuing or paying any Letter of Credit except for Agent's, any Lender's,
any Issuer's or such correspondents' willful misconduct.
(b) Borrowing Agent shall authorize and direct any Issuer of
a Letter of Credit to name the applicable Borrower as the "Applicant" or
"Account Party" therein to deliver to Agent all related payment/acceptance
advices, to deliver to Agent all instruments, documents, and other writings
and property received by the Issuer pursuant to the Letter of Credit and to
accept and rely upon Agent's instructions and agreements with respect to
all matters arising in connection with the Letter of Credit or the
application therefor.
(c) Each Lender shall to the extent of the percentage amount
equal to the product of such ▇▇▇▇▇▇'s Commitment Percentage times the
aggregate amount of all unreimbursed reimbursement obligations arising from
disbursements made or obligations incurred with respect to the Letters of
Credit be deemed to have irrevocably purchased an undivided participation
in (i) each such unreimbursed reimbursement obligation, (ii) Agent's credit
support enhancement provided to the Issuer of any Letter of Credit and
(iii) each Revolving Advance made as a consequence of the issuance of a
Letter of Credit and all disbursements thereunder, in each case in an
amount equal to such ▇▇▇▇▇▇'s applicable Commitment Percentage times the
outstanding amount of the Letters of Credit and disbursements thereunder.
In the event that at the time a disbursement is made the unpaid balance of
Revolving Advances exceeds or would exceed, with the making of such
disbursement, the amount permitted under Section 2.1(a) hereof, and such
disbursement is not reimbursed by Borrowers within two (2) Business Days,
Agent shall promptly notify each Lender and upon Agent's demand each Lender
shall pay to Agent such Lender's proportionate share of such unreimbursed
disbursement together with such ▇▇▇▇▇▇'s proportionate share of Agent's
unreimbursed costs and expenses relating to such unreimbursed disbursement.
Upon receipt by Agent of a repayment from any Borrower of any amount
disbursed by Agent for which Agent had already been reimbursed by ▇▇▇▇▇▇▇,
Agent shall deliver to each Lender that ▇▇▇▇▇▇'s pro rata share of such
repayment. Each Lender's participation commitment shall continue until the
last to occur of any of the following events: (A) Agent ceases to be
obligated to issue or cause to be issued Letters of Credit hereunder; (B)
no Letters of Credit issued hereunder remains outstanding and uncancelled
or (C) all Persons (other than the applicable Borrower) have been fully
reimbursed for all payments made under or relating to Letters of Credit.
2.11. Additional Payments. Any sums expended by Agent or any Lender
due to any Loan Party's failure to perform or comply with its obligations
under this Agreement or any Other Document including, without limitation,
any Loan Party's obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and
6.1 hereof, may be charged to Borrowers' Account as a Revolving Advance and
added to the Obligations.
2.12. ▇▇▇▇▇▇ of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall be advanced
according to the applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on
account of the principal of the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment
Percentages of Lenders. Except as expressly provided herein, all payments
(including prepayments) to be made by Borrowers on account of principal,
interest and fees shall be made without set off or counterclaim and shall
be made to Agent on behalf of the Lenders to the Payment Office, in each
case on or prior to 1:00 p.m. Milwaukee time, in Dollars and in immediately
available funds.
(c) (i) Notwithstanding anything to the contrary contained
in Sections 2.12(a) and (b) hereof, commencing with the first Business Day
following the Closing Date, each borrowing of Revolving Advances shall be
advanced by Agent and each payment by any Borrower on account of Revolving
Advances shall be applied first to those Revolving Advances advanced by
Agent. On or before 1:00 p.m., New York City time, on each Settlement Date
commencing with the first Settlement Date following the Closing Date, Agent
and Lenders shall make certain payments as follows: (I) if the aggregate
amount of new Revolving Advances made by Agent during the preceding Week
(if any) exceeds the aggregate amount of repayments applied to outstanding
Revolving Advances during such preceding Week, then each Lender shall
provide Agent with funds in an amount equal to its applicable Commitment
Percentage of the difference between (w) such Revolving Advances and (x)
such repayments and (II) if the aggregate amount of repayments applied to
outstanding Revolving Advances during such Week exceeds the aggregate
amount of new Revolving Advances made during such Week, then Agent shall
provide each Lender with funds in an amount equal to its applicable
Commitment Percentage of the difference between (y) such repayments and (z)
such Revolving Advances set forth in Section 2.1(c).
(ii) Each Lender shall be entitled to earn interest at
the applicable Revolving Interest Rate on outstanding Advances which it has
funded.
(iii) Promptly following each Settlement Date, Agent
shall submit to each Lender a certificate with respect to payments received
and Revolving Advances made during the Week immediately preceding such
Settlement Date. Such certificate of Agent shall be conclusive in the
absence of manifest error.
(d) If any Lender or Participant (a "benefited Lender") shall
at any time receive any payment of all or part of its Advances, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily
or involuntarily or by set-off) in a greater proportion than any such
payment to and Collateral received by any other Lender, if any, in respect
of such other Lender's Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly permitted
hereunder, such benefited Lender shall purchase for cash from the other
Lenders a participation in such portion of each such other Lender's
Advances, or shall provide such other Lender with the benefits of any such
Collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such Collateral
or proceeds ratably with each of Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Lender so purchasing a portion of another ▇▇▇▇▇▇'s Advances
may exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
(e) Unless Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender will not make the
amount which would constitute its applicable Commitment Percentage of the
Advances available to Agent, Agent may (but shall not be obligated to)
assume that such Lender shall make such amount available to Agent on the
next Settlement Date and, in reliance upon such assumption, make available
to Borrowers a corresponding amount. Agent will promptly notify Borrowers
of its receipt of any such notice from a Lender. If such amount is made
available to Agent on a date after such next Settlement Date, such Lender
shall pay to Agent on demand an amount equal to the product of (i) the
daily average Federal Funds Rate (computed on the basis of a year of 360
days) during such period as quoted by Agent, times (ii) such amount, times
(iii) the number of days from and including such Settlement Date to the
date on which such amount becomes immediately available to Agent. A
certificate of Agent submitted to any Lender with respect to any amounts
owing under this paragraph (e) shall be conclusive, in the absence of
manifest error. If such amount is not in fact made available to Agent by
such Lender within three (3) Business Days after such Settlement Date,
Agent shall be entitled to recover such an amount, with interest thereon at
the rate per annum then applicable to such Revolving Advances hereunder, on
demand from Borrowers; provided, however, that Agent's right to such
recovery shall not prejudice or otherwise adversely affect Borrowers'
rights (if any) against such Lender.
2.13. Mandatory Prepayments. When any Loan Party sells or otherwise
disposes of any Collateral other than Inventory sold in the ordinary course
of business or in connection with the disposition of Collateral otherwise
permitted hereunder, or received proceeds of any insurance settlements from
casualty losses (subject to the provisions of Section 4.11), or consummates
a debt offering or equity offering (other than any increase in the stock
ownership or equity interest of, or other investment by, directly or
indirectly, the Original Owners or their Affiliates), Borrowers shall repay
the Advances in an amount equal to the net proceeds of such sale, insurance
recovery or debt or equity offering (i.e., gross proceeds less the
reasonable costs of such sales or other dispositions or in connection with
the disposition of Collateral otherwise permitted hereunder, or the costs
of such debt or equity offering), such repayments to be made promptly but
in no event more than one (1) Business Day following receipt of such net
proceeds, and until the date of payment, such proceeds shall be held in
trust for Agent. The foregoing shall not be deemed to be implied consent
to any such sale otherwise prohibited by the terms and conditions hereof.
Such repayments shall be applied with respect to all Collateral (other than
Inventory sold in the ordinary course of business) to the Advances in such
order as Agent may determine, subject to Borrowers' ability to reborrow
Advances in accordance with the terms hereof, with a corresponding
reduction of the Supplemental Amount.
2.14. Use of Proceeds. Borrowers shall apply the proceeds of (i)
Advances made on the Closing Date to (a) repay existing indebtedness owed
to the lenders under the Bank One Facility, (b) make Canadian Intercompany
Advances for the purpose of repaying existing indebtedness of Bucyrus
Canada under the revolving portion of the Canadian Credit Facility and (c)
pay fees and expenses relating to this transaction and (ii) Advances made
on and after the Closing Date to provide for their respective working
capital needs, including the making of Canadian Intercompany Advances.
2.15. Defaulting Lender.
(a) Notwithstanding anything to the contrary contained
herein, in the event any Lender (x) has refused (which refusal constitutes
a breach by such Lender of its obligations under this Agreement) to make
available its portion of any Advance or (y) notifies either Agent or
Borrowing Agent that it does not intend to make available its portion of
any Advance (if the actual refusal would constitute a breach by such Lender
of its obligations under this Agreement) (each, a "Lender Default"), all
rights and obligations hereunder of such ▇▇▇▇▇▇ (a "Defaulting Lender") as
to which a Lender Default is in effect and of the other parties hereto
shall be modified to the extent of the express provisions of this Section
2.15 while such Lender Default remains in effect.
(b) Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of any
Lender or any pro rata share of any Advances required to be advanced by any
Lender shall be increased as a result of such Lender Default. Amounts
received in respect of principal of any type of Advances shall be applied
to reduce the applicable Advances of each Lender pro rata based on the
aggregate of the outstanding Advances of that type of all Lenders at the
time of such application; provided, that, such amount shall not be applied
to any Advances of a Defaulting Lender at any time when, and to the extent
that, the aggregate amount of Advances of any Non-Defaulting Lender exceeds
such Non-Defaulting ▇▇▇▇▇▇'s Commitment Percentage of all Advances then
outstanding.
(c) A Defaulting Lender shall not be entitled to give
instructions to Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the Other Documents. All
amendments, waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and, for
purposes of the definition of "Required Lenders", a Defaulting Lender shall
be deemed not to be a Lender and not to have either Advances outstanding or
a Commitment Percentage.
(d) Other than as expressly set forth in this Section 2.15,
the rights and obligations of a Defaulting Lender (including the obligation
to indemnify Agent) and the other parties hereto shall remain unchanged.
Nothing in this Section 2.15 shall be deemed to release any Defaulting
Lender from its obligations under this Agreement and the Other Documents,
shall alter such obligations, shall operate as a waiver of any default by
such Defaulting Lender hereunder, or shall prejudice any rights which any
Borrower, Agent or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to
the satisfaction of Agent the breach which caused a Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting
Lender and shall be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1. Interest. Interest on Advances shall be payable to Agent for
the benefit of Lenders in arrears on the first day of each month with
respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans,
at the end of each Interest Period or, for Eurodollar Rate Loans with an
Interest Period in excess of three months, at the earlier of (a) each three
months on the anniversary date of the commencement of such Eurodollar Rate
Loan or (b) the end of the Interest Period. Interest shall be calculated
based upon the assumption that Revolving Advances and Swingline Loans are
first advanced against the Supplemental Amount. Interest charges shall be
computed on the actual principal amount of Advances (other than Letters of
Credit) outstanding during the month at a rate per annum equal to the
applicable Revolving Interest Rate. Whenever, subsequent to the date of
this Agreement, the Base Rate is increased or decreased, the applicable
Revolving Interest Rate shall be similarly changed without notice or demand
of any kind by an amount equal to the amount of such change in the Base
Rate during the time such change or changes remain in effect. Upon and
after the occurrence of an Event of Default, and during the continuation
thereof, Agent may, and at the direction of Required Lenders shall,
increase the interest rate so that the Obligations shall then bear interest
at the applicable Revolving Interest Rate plus two (2%) percent per annum
the "Default Rate").
3.2. Letter of Credit Fees.
Borrowers shall pay (x) to Agent, for the benefit of Lenders,
fees for each Letter of Credit for the period from and excluding the date
of issuance of same to and including the date of expiration or termination,
equal to the average daily face amount of each outstanding Letter of Credit
multiplied by 3.50% per annum, such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable
monthly in arrears on the first day of each month and on the last day of
the Term and (y) to Agent for the benefit of the Issuer, any and all fees
and expenses as agreed upon by the Issuer and the Borrowing Agent in
connection with any Letter of Credit, including, without limitation, in
connection with the opening, amendment or renewal of any such Letter of
Credit and shall reimburse Agent for any and all fees and expenses, if any,
paid by Agent to the Issuer (all of the foregoing fees, the "Letter of
Credit Fees"). All such charges shall be deemed earned in full on the date
when the same are due and payable hereunder and shall not be subject to
rebate or proration upon the termination of this Agreement for any reason.
Any such charge in effect at the time of a particular transaction shall be
the charge for that transaction, notwithstanding any subsequent change in
the Issuer's prevailing charges for that type of transaction. Upon and
after the occurrence of an Event of Default, and during the continuance
thereof, Agent may, and at the direction of Required Lenders shall,
increase the Letter of Credit Fees by two percent (2%) per annum, but only
to the extent the outstanding Letters of Credit are not cash-collateralized
pursuant to the next succeeding paragraph. All Letter of Credit Fees
payable hereunder shall be deemed earned in full on the date when the same
are due and payable hereunder and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason.
Upon and after the occurrence of an Event of Default, and
during the continuance thereof, Borrowers will cause cash to be deposited
and maintained in an account with Agent, as cash collateral, in an amount
equal to one hundred and five percent (105%) of the outstanding Letters of
Credit, and each Borrower hereby irrevocably authorizes Agent, in its
discretion, on such ▇▇▇▇▇▇▇▇'s behalf and in such Borrower's name, to open
such an account and to make and maintain deposits therein, or in an account
opened by such Borrower, in the amounts required to be made by such
Borrower, out of the proceeds of Receivables or other Collateral or out of
any other funds of such Borrower coming into any ▇▇▇▇▇▇'s possession at any
time. Agent will invest such cash collateral (less applicable reserves) in
such short-term money-market items as to which Agent and such Borrower
mutually agree and the net return on such investments shall be credited to
such account and constitute additional cash collateral. No Borrower may
withdraw amounts credited to any such account until the earlier of (i) the
expiration of the related Letter of Credit with the beneficiary having no
right to draw thereunder, in which case an amount equal to the undrawn
amount of the Letter of Credit at such time may be withdrawn from such
account and (ii) such time as all Events of Default have been cured or
waived.
3.3. Unused Line Fee. If, for any month during the Term, the
average daily unpaid balance of the Advances for each day of such month
does not equal the Maximum Revolving Advance Amount, then Borrowers shall
pay to Agent for the ratable benefit of Lenders a fee at a rate equal to
one half of one percent (0.5%) per annum on the amount by which the Maximum
Revolving Advance Amount exceeds such average daily unpaid balance. Such
fee shall be payable to Agent in arrears on the first day of each month.
3.4. Fees. Borrowers shall pay to Agent, for its own account, all
fees and other amounts set forth in the Fee Letter when and as due in
accordance with the terms thereof. Borrowers shall pay (a) to each of BOW
and Marine Bank, a fee in the amount of three-quarters of one percent
(0.75%) of their respective Commitment Percentages of the Maximum Revolving
Advance Amount as of the Closing Date, payable on the Closing Date and (b)
to each of the Lenders other than GMACBC, BOW and Marine Bank, a fee in the
amount of three-eighths of one percent (0.375%) of their respective
Commitment Percentages (as of the date such payment is due) of the Maximum
Revolving Advance Amount as of the Closing Date, payable on (a) the Closing
Date, (b) July 7, 2002 and (c) October 7, 2002.
3.5. Computation of Interest and Fees. Interest and fees hereunder
shall be computed on the basis of a year of 360 days and for the actual
number of days elapsed. If any payment to be made hereunder becomes due
and payable on a day other than a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and interest thereon shall
be payable at the applicable Revolving Interest Rate during such extension.
3.6. Maximum Charges. In no event whatsoever shall interest and
other charges charged hereunder exceed the highest rate permissible under
law. In the event interest and other charges as computed hereunder would
otherwise exceed the highest rate permitted under law, such excess amount
shall be first applied to any unpaid principal balance owed by Borrowers,
and if the then remaining excess amount is greater than the previously
unpaid principal balance, Lenders shall promptly refund such excess amount
to Borrowers and the provisions hereof shall be deemed amended to provide
for such permissible rate.
3.7. Increased Costs. In the event that any applicable law, treaty
or governmental regulation, or any change therein or in the interpretation
or application thereof, or compliance by any Lender (for purposes of this
Section 3.7, the term "Lender" shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) and the office or
branch where Agent or any Lender (as so defined) makes or maintains any
Eurodollar Rate Loans with any request or directive (whether or not having
the force of law) from any central bank or other financial, monetary or
other authority, shall, after the date hereof:
(a) subject Agent or any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Other Document or change
the basis of taxation of payments to Agent or any Lender of principal,
fees, interest or any other amount payable hereunder or under any Other
Documents (except for changes in the rate of tax on the overall net income
of Agent or any Lender by the jurisdiction in which it maintains its
principal office or any branch office);
(b) impose, modify or hold applicable any reserve, special
deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended by, any office of Agent or any Lender, including (without
limitation) pursuant to Regulation D of the Board of Governors of the
Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank
Eurodollar market any other condition with respect to this Agreement or any
Other Document;
and the result of any of the foregoing is to increase the cost to Agent or
any Lender of making, renewing or maintaining its Advances hereunder by an
amount that Agent or such Lender deems to be material or to reduce the
amount of any payment (whether of principal, interest or otherwise) in
respect of any of the Advances by an amount that Agent or such Lender deems
to be material, then, in any case Borrowers shall promptly pay Agent or
such Lender, upon its demand, such additional amount as will compensate
Agent or such Lender for such additional cost or such reduction, as the
case may be, provided that the foregoing shall not apply to increased costs
which are reflected in the Adjusted LIBO Rate. Agent or such Lender shall
certify the amount of such additional cost or reduced amount to Borrowers,
and such certification shall be conclusive absent manifest error.
3.8. Basis For Determining Interest Rate Inadequate or Unfair. In
the event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the
Adjusted LIBO Rate applicable pursuant to Section 2.2 hereof for any
Interest Period; or
(b) Dollar deposits in the relevant amount and for the
relevant maturity are not available in the London interbank Eurodollar
market, with respect to an outstanding Eurodollar Rate Loan, a proposed
Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into
a Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or
telegraphic notice of such determination. If such notice is given, (i) any
such requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan,
unless Borrowing Agent shall notify Agent no later than 10:00 a.m.
Milwaukee time, two (2) Business Days prior to the date of such proposed
borrowing, that its request for such borrowing shall be cancelled or made
as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan
or Eurodollar Rate Loan which was to have been converted to an affected
type of Eurodollar Rate Loan shall be continued as or converted into a
Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later
than 10:00 a.m. Milwaukee time, two (2) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of Eurodollar Rate
Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 10:00 a.m. Milwaukee time, two (2) Business Days prior
to the last Business Day of the then current Interest Period applicable to
such affected Eurodollar Rate Loan, shall be converted into an unaffected
type of Eurodollar Rate Loan, on the last Business Day of the then current
Interest Period for such affected Eurodollar Rate Loans. Until such notice
has been withdrawn, Lenders shall have no obligation to make an affected
type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar
Rate Loans and no Borrower shall have the right to convert a Domestic Rate
Loan or an unaffected type of Eurodollar Rate Loan into an affected type of
Eurodollar Rate Loan.
3.9. Capital Adequacy.
(a) In the event that Agent or any Lender shall have
determined that any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any Lender (for purposes
of this Section 3.9, the term "Lender" shall include Agent or any Lender
and any corporation or bank controlling Agent or any Lender) and the office
or branch where Agent or any Lender (as so defined) makes or maintains any
Eurodollar Rate Loans 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 made after the date hereof, has or would
have the effect of reducing the rate of return on Agent or any Lender's
capital as a consequence of its obligations hereunder to a level below that
which Agent or such Lender could have achieved but for such adoption,
change or compliance (taking into consideration Agent's and each Lender's
policies with respect to capital adequacy) by an amount deemed by Agent or
any Lender to be material, then, from time to time, Borrowers shall pay
upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction. In determining
such amount or amounts, Agent or such Lender may use any reasonable
averaging or attribution methods. The protection of this Section 3.9 shall
be available to Agent and each Lender regardless of any possible contention
of invalidity or inapplicability with respect to the applicable law,
regulation or condition.
(b) A certificate of Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate Agent or such Lender
with respect to Section 3.9(a) hereof when delivered to Borrowers shall be
conclusive absent manifest error.
IV. COLLATERAL: GENERAL TERMS
4.1. Security Interest in the Collateral. To secure the prompt
payment and performance to Agent, each Issuer and each Lender of the
Obligations, each Loan Party hereby assigns, pledges, hypothecates and
grants to Agent for the ratable benefit of Agent, each Issuer and each
Lender a continuing security interest in and to all of its Collateral,
whether now owned or existing or hereafter acquired or arising and
wheresoever located. Each Loan Party shall mark its books and records as
may be necessary or appropriate to evidence, protect and perfect Agent's
security interest and shall cause its financial statements to reflect such
security interest.
4.2. Perfection of Security Interest. (a) Each Loan Party shall
take all action that may be necessary or desirable, or that Agent may
request, so as at all times to maintain the validity, perfection,
enforceability and priority of Agent's security interest in the Collateral
or to enable Agent to protect, exercise or enforce its rights hereunder and
in the Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii) obtaining
landlords' or mortgagees' lien waivers, (iii) delivering to Agent, endorsed
or accompanied by such instruments of assignment as Agent may specify, and
stamping or marking, in such manner as Agent may specify, any and all
chattel paper, instruments, letters of credits and advices thereof and
documents evidencing or forming a part of the Collateral, (iv) entering
into warehousing, lockbox, bailee and other custodial arrangements
satisfactory to Agent, and (v) executing and delivering financing
statements, instruments of pledge, mortgages, notices and assignments, in
each case in form and substance satisfactory to Agent, relating to the
creation, validity, perfection, maintenance or continuation of Agent's
security interest under the Uniform Commercial Code or other applicable
law.
(b) Agent may at any time and from time to time file
financing statements, continuation statements and amendments thereto that
describe the Collateral as all assets of the applicable Person(s) or words
of similar effect and which contain any other information required by Part
5 of UCC Article 9 or other applicable law for the sufficiency or filing
office acceptance of any financing statements, continuation statements or
amendments. Each Loan Party agrees to furnish any such information to
Agent promptly upon request.
(c) Loan Parties shall, at any time and from time to time,
take such steps as Agent may reasonably request (i) to obtain an
acknowledgment, in form and substance reasonably satisfactory to Agent, of
any bailee having possession of any of the Collateral, stating that the
bailee holds such Collateral for Agent, (ii) to obtain "control" of any
letter-of-credit rights, deposit accounts or electronic chattel paper (as
such terms are defined in UCC Article 9 with corresponding provisions
thereof defining what constitutes "control" for such items of Collateral),
with any agreements establishing control to be in form and substance
reasonably satisfactory to Agent, and (iii) otherwise to insure the
continued perfection and priority of Agent's security interest in any of
the Collateral for the benefit of the Lenders and of its rights therein.
If any Loan Party shall at any time, acquire a "commercial tort claim" (as
such term is defined in UCC Article 9) in excess of $250,000, such Loan
Party shall promptly notify Agent thereof in writing, therein providing a
reasonable description and summary thereof, and upon delivery thereof to
Agent, such Loan Party shall be deemed to thereby grant to Agent for the
benefit of the Lenders and each Loan Party hereby grants to Agent, for the
benefit of each Lender) a security interest and lien in and to such
commercial tort claim and all proceeds thereof, all upon the terms of and
governed by this Agreement.
(d) Each Loan Party hereby confirms and ratifies all UCC
financing statements and other financing statements under applicable
personal property legislation filed by Agent with respect to such Loan
Party on or prior to the date of this Agreement.
(e) All charges, expenses and fees Agent may incur in doing
any of the foregoing, and any taxes relating thereto, shall be charged to
Borrowers' Account as a Revolving Advance and added to the Obligations, or,
at Agent's option, shall be paid to Agent for the ratable benefit of
Lenders immediately upon demand.
4.3. Disposition of Collateral. Each Loan Party will safeguard and
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise except (a) the sale or lease
(to the extent not otherwise prohibited hereunder) of Inventory in the
ordinary course of business, (b) pursuant to Lease/Sublease Transactions
permitted under Section 7.11 hereof, and (c) the disposition or transfer of
obsolete and worn-out Equipment in the ordinary course of business during
any fiscal year having an aggregate fair market value of not more than
$1,000,000 and only to the extent that no Default or Event of Default shall
then exist and (i) the proceeds of any such disposition are used to acquire
replacement Equipment which is subject to Agent's first priority security
interest or (ii) if such proceeds exceed the sum of $250,000 in any fiscal
year of Borrowers the proceeds of such dispositions in such fiscal year are
remitted to Agent as a prepayment on the Advances, and a reduction to the
Supplemental Amount, as required by Section 2.13 hereof.
4.4. Preservation of Collateral. In addition to the rights and
remedies set forth in Section 11.1 hereof, Agent: (a) may at any time take
such steps as Agent deems necessary to protect Agent's interest in and to
preserve the Collateral, including the hiring of such security guards or
the placing of other security protection measures as Agent may deem
appropriate; (b) may employ and maintain at any Loan Party's premises a
custodian who shall have full authority to do all acts necessary to protect
Agent's interests in the Collateral; (c) may lease warehouse facilities to
which Agent may move all or part of the Collateral; (d) may use any Loan
Party's owned or leased lifts, hoists, trucks and other facilities or
equipment for handling or removing the Collateral; and (e) shall have, and
is hereby granted, a right of ingress and egress to the places where the
Collateral is located, and may proceed over and through any Loan Party's
owned or leased property. Each Loan Party shall cooperate fully with all
of Agent's efforts to preserve the Collateral and will take such actions to
preserve the Collateral as Agent may direct. All of Agent's expenses of
preserving the Collateral, including any expenses relating to the bonding
of a custodian, shall be charged to Borrowers' Account as a Revolving
Advance and added to the Obligations.
4.5. Ownership of Collateral. With respect to the Collateral, at
the time the Collateral becomes subject to Agent's security interest:
(a) each Loan Party shall be the sole owner of and fully authorized and
able to sell, transfer, pledge and/or grant a first priority security
interest (subject to Permitted Prior Encumbrances, where applicable) in
each and every item of its respective Collateral to Agent; and, except for
Permitted Encumbrances the Collateral shall be free and clear of all Liens
and encumbrances whatsoever; (b) each document and agreement executed by
each Loan Party or delivered to Agent or any Lender in connection with this
Agreement shall be true and correct in all respects; (c) all signatures and
endorsements of each Loan Party that appear on such documents and
agreements shall be genuine and each Loan Party shall have full capacity to
execute same; and (d) each Loan Party's Equipment and Inventory shall be
located as set forth on Schedule 4.5 (with Loan Parties permitted to update
Schedule 4.5, as necessary, upon not less than thirty (30) days' prior
written notice to Agent) and shall not be removed from such location(s)
without the prior written consent of Agent except with respect to the sale
of Inventory in the ordinary course of business and Equipment to the extent
permitted in Section 4.3 hereof.
4.6. Defense of Agent's and ▇▇▇▇▇▇▇' Interests. Until (a) payment
and performance in full of all of the Obligations and (b) termination of
this Agreement, Agent's interests in the Collateral shall continue in full
force and effect. During such period no Loan Party shall, without Agent's
prior written consent, pledge, sell (except Inventory in the ordinary
course of business and Equipment to the extent permitted in Section 4.3
hereof), assign, transfer, create or suffer to exist a Lien upon or
encumber or allow or suffer to be encumbered in any way except for
Permitted Encumbrances, any part of the Collateral. Each Loan Party shall
defend Agent's interests in the Collateral against any and all Persons
whatsoever. At any time following demand by Agent for payment of all
Obligations, Agent shall have the right to take possession of the indicia
of the Collateral and the Collateral in whatever physical form contained,
including without limitation: labels, stationery, documents, instruments
and advertising materials. If Agent exercises this right to take
possession of the Collateral, Loan Parties shall, upon demand, assemble it
in the best manner possible and make it available to Agent at a place
reasonably convenient to Agent. In addition, with respect to all
Collateral, Agent and Lenders shall be entitled to all of the rights and
remedies set forth herein and further provided by the Uniform Commercial
Code or other applicable law. Each Loan Party shall, and Agent may, at its
option, instruct all suppliers, carriers, forwarders, warehouses or others
receiving or holding cash, checks, Inventory, documents or instruments in
which Agent holds a security interest to deliver same to Agent and/or
subject to Agent's order and if they shall come into any Loan Party's
possession, they, and each of them, shall be held by such Loan Party in
trust as Agent's trustee, and such Loan Party will immediately deliver them
to Agent in their original form together with any necessary endorsement.
4.7. Books and Records. Each Loan Party shall (a) keep proper books
of record and account in which full, true and correct entries will be made
of all dealings or transactions of or in relation to its business and
affairs; (b) set up on its books accruals with respect to all taxes,
assessments, charges, levies and claims; and (c) on a reasonably current
basis set up on its books, from its earnings, allowances against doubtful
Receivables, advances and investments and all other proper accruals
(including without limitation by reason of enumeration, accruals for
premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set aside
from such earnings in connection with its business. All determinations
pursuant to this subsection shall be made in accordance with, or as
required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Loan Parties.
4.8. Financial Disclosure. Each Loan Party hereby irrevocably
authorizes and directs all accountants and auditors employed by such Loan
Party at any time during the Term to exhibit and deliver to Agent and each
Lender copies of any of the Loan Party's financial statements, trial
balances or other accounting records of any sort in the accountant's or
auditor's possession, and to disclose to Agent and each Lender any
information such accountants may have concerning such Loan Party's
financial status and business operations. Each Loan Party hereby
authorizes all federal, state, provincial and municipal authorities to
furnish to Agent and each Lender copies of reports or examinations relating
to such Loan Party, whether made by such Loan Party or otherwise; however,
Agent and each Lender will attempt to obtain such information or materials
directly from such Loan Party prior to obtaining such information or
materials from such accountants or such authorities.
4.9. Compliance with Laws. Each Loan Party shall comply in all
material respects with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to its
respective Collateral or any part thereof or to the operation of such Loan
Party's business the non-compliance with which could reasonably be expected
to have a Material Adverse Effect. Each Loan Party may, however, contest
or dispute any acts, rules, regulations, orders and directions of those
bodies or officials in any reasonable manner, provided that any related
Lien is inchoate or stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Agent's Lien on or security
interest in the Collateral. The assets of Loan Parties at all times shall
be maintained in accordance with the requirements of all insurance carriers
which provide insurance with respect to the assets of Loan Parties so that
such insurance shall remain in full force and effect.
4.10. Inspection of Premises. At all reasonable times Agent and each
Lender shall have full access to and the right to audit, check, inspect and
make abstracts and copies from each Loan Party's books, records, audits,
correspondence and all other papers relating to the Collateral and the
operation of each Loan Party's business. Agent, any Lender and their
agents may enter upon any of Loan Party's premises at any time during
business hours and at any other reasonable time, and from time to time, for
the purpose of inspecting the Collateral and any and all records pertaining
thereto and the operation of such Loan Party's business.
4.11. Insurance. Each Loan Party shall bear the full risk of any
loss of any nature whatsoever with respect to the Collateral. At each Loan
Party's own cost and expense in amounts and with carriers acceptable to
Agent, each Loan Party shall (a) keep all its insurable properties and
properties in which each Loan Party has an interest insured against the
hazards of fire, flood, sprinkler leakage, those hazards covered by
extended coverage insurance and such other hazards, and for such amounts,
as is customary in the case of companies engaged in businesses similar to
such Loan Party's including, without limitation, business interruption
insurance; (b) maintain a bond in such amounts as is customary in the case
of companies engaged in businesses similar to such Loan Party insuring
against larceny, embezzlement or other criminal misappropriation of
insured's officers and employees who may either singly or jointly with
others at any time have access to the assets or funds of such Loan Party
either directly or through authority to draw upon such funds or to direct
generally the disposition of such assets; (c) maintain public and product
liability insurance against claims for personal injury, death or property
damage suffered by others; (d) maintain all such worker's compensation or
similar insurance as may be required under the laws of any state or
jurisdiction in which Loan Party is engaged in business; (e) furnish Agent
with (i) copies of all policies and evidence of the maintenance of such
policies by the renewal thereof at least thirty (30) days before any
expiration date, and (ii) appropriate loss payable endorsements in form and
substance satisfactory to Agent, naming Agent as a co-insured and loss
payee as its interests may appear with respect to all insurance coverage
referred to in clauses (a), and (c) above, and providing (A) that all
proceeds thereunder shall be payable to Agent, (B) no such insurance shall
be affected by any act or neglect of the insured or owner of the property
described in such policy, and (C) that such policy and loss payable clauses
may not be cancelled, amended or terminated unless at least thirty (30)
days' prior written notice is given to Agent. In the event of any loss
covered by the insurance referred to in clauses (a) and (c) above, the
carriers named therein hereby are directed by Agent and the applicable Loan
Party to make payment for such loss to Agent and not to such Loan Party and
Agent jointly. If any insurance losses are paid by check, draft or other
instrument payable to any Loan Party and Agent jointly, Agent may endorse
such Loan Party's name thereon and do such other things as Agent may deem
advisable to reduce the same to cash. Agent is hereby authorized to adjust
and compromise claims under insurance coverage referred to in clauses (a),
(b) and (c) above. All loss recoveries received by Agent upon any such
insurance may be applied to the Obligations, in such order as Agent in its
sole discretion shall determine (with a corresponding reduction in the
Supplemental Amount). Any surplus shall be paid by Agent to Loan Parties
or applied as may be otherwise required by law. Any deficiency thereon
shall be paid by Loan Parties to Agent, on demand.
4.12. Failure to Pay Insurance. If any Loan Party fails to obtain
insurance as hereinabove provided, or to keep the same in force, Agent, if
Agent so elects, may obtain such insurance and pay the premium therefor for
Borrowers' Account, and charge Borrowers' Account therefor and such
expenses so paid shall be part of the Obligations.
4.13. Payment of Taxes. Each Loan Party will pay, when due, all
taxes, assessments and other Charges lawfully levied or assessed upon such
Loan Party or any of the Collateral including, without limitation, real and
personal property taxes, assessments and charges and all franchise, income,
employment, social security benefits, withholding, and sales taxes. If any
tax by any governmental authority is or may be imposed on or as a result of
any transaction between any Loan Party and Agent or any Lender which Agent
or any Lender may be required to withhold or pay or if any taxes,
assessments, or other Charges remain unpaid after the date fixed for their
payment, or if any claim shall be made which, in Agent's or any Lender's
reasonable opinion, could create a valid Lien on the Collateral, Agent may
without notice to Loan Parties pay the taxes, assessments or other Charges
and each Loan Party hereby indemnifies and holds Agent and each Lender
harmless in respect thereof. Agent will not pay any taxes, assessments or
Charges to the extent that any Loan Party has contested or disputed those
taxes, assessments or Charges in good faith, by expeditious protest,
administrative or judicial appeal or similar proceeding provided that any
related tax lien is stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Agent's security interest in or
Lien on the Collateral. The amount of any payment by Agent under this
Section 4.13 shall be charged to Borrowers' Account as a Revolving Advance
and added to the Obligations and, until Loan Parties shall furnish Agent
with an indemnity therefor (or supply Agent with evidence satisfactory to
Agent that due provision for the payment thereof has been made), Agent may
hold without interest any balance standing to Loan Parties' credit and
Agent shall retain its security interest in any and all Collateral held by
Agent.
4.14. Payment of Leasehold Obligations. Each Loan Party shall at all
times pay, when and as due, its rental obligations under all leases under
which it is a tenant, and shall otherwise comply, in all material respects,
with all other terms of such leases and keep them in full force and effect
and, at Agent's request will provide evidence of having done so.
4.15. Receivables.
(a) Nature of Receivables. Each of the Receivables shall be
a bona fide and valid account representing a bona fide indebtedness
incurred by the Customer therein named, for a fixed sum as set forth in the
invoice relating thereto (provided immaterial or unintentional invoice
errors shall not be deemed to be a breach hereof) with respect to an
absolute sale or lease and delivery of goods upon stated terms of a Loan
Party, or a progress billing or work, labor or services theretofore
rendered by a Loan Party as of the date each Receivable is created. Same
shall be due and owing in accordance with the applicable Loan Party's
standard terms of sale without dispute, setoff or counterclaim except as
may be stated on the accounts receivable schedules delivered by Loan
Parties to Agent.
(b) Solvency of Customers. Each Customer, to the best of
each Loan Party's knowledge, as of the date each Receivable is created, is
and will be solvent and able to pay all Receivables on which the Customer
is obligated in full when due or with respect to such Customers of any Loan
Party who are not solvent such Loan Party has set up on its books and in
its financial records bad debt reserves adequate to cover such Receivables.
(c) Locations of Loan Party. Each Loan Party's chief
executive office and domicile (for purposes of the Quebec Civil Code) is
located at the addresses set forth on Schedule 4.15(c) hereto. Until
written notice is given to Agent by Borrowing Agent of any other office at
which any Loan Party keeps its records pertaining to Receivables, all such
records shall be kept at such executive office.
(d) Collection of Receivables. Until any Loan Party's
authority to do so is terminated by Agent (which notice Agent may give at
any time following the occurrence of an Event of Default), each Loan Party
will, at such Loan Party's sole cost and expense, but on Agent's behalf and
for Agent's account, collect as Agent's property and in trust for Agent all
amounts received on Receivables, and shall not commingle such collections
with any Loan Party's funds or use the same except to pay Obligations.
Each Loan Party shall, upon request, deliver to Agent, or deposit in the
Depository Accounts, in original form and on the date of receipt thereof,
all checks, drafts, notes, money orders, acceptances, cash and other
evidences of Indebtedness.
(e) Notification of Assignment of Receivables. At any time
following the occurrence of an Event of Default, Agent shall have the right
to send notice of the assignment of, and Agent's security interest in, the
Receivables to any and all Customers or any third party holding or
otherwise concerned with any of the Collateral. Thereafter, Agent shall
have the sole right to collect the Receivables, take possession of the
Collateral, or both. Agent's actual collection expenses, including, but
not limited to, stationery and postage, telephone and telecopy, secretarial
and clerical expenses and the salaries of any collection personnel used for
collection, may be charged to Borrowers' Account and added to the
Obligations.
(f) Power of Agent to Act on Loan Parties' Behalf. Agent
shall have the right to receive, endorse, assign and/or deliver in the name
of Agent or any Loan Party any and all checks, drafts and other instruments
for the payment of money relating to the Receivables, and each Loan Party
hereby waives notice of presentment, protest and non-payment of any
instrument so endorsed. Each Loan Party hereby constitutes Agent or
Agent's designee as such Loan Party's attorney with power (i) to endorse
such Loan Party's name upon any notes, acceptances, checks, drafts, money
orders or other evidences of payment or Collateral; (ii) to sign such Loan
Party's name on any invoice or bill of lading relating to any of the
Receivables, drafts against Customers, assignments and verifications of
Receivables; (iii) to send verifications of Receivables to any Customer;
(iv) to sign such Loan Party's name on all financing statements or any
other documents or instruments deemed necessary or appropriate by Agent to
preserve, protect, or perfect Agent's interest in the Collateral and to
file same; (v) to demand payment of the Receivables; (vi) to enforce
payment of the Receivables by legal proceedings or otherwise; (vii) to
exercise all of Loan Parties' rights and remedies with respect to the
collection of the Receivables and any other Collateral; (viii) to settle,
adjust, compromise, extend or renew the Receivables; (ix) to settle, adjust
or compromise any legal proceedings brought to collect Receivables; (x) to
prepare, file and sign such Loan Party's name on a proof of claim in
bankruptcy or similar document against any Customer; (xi) to prepare, file
and sign such Loan Party's name on any notice of ▇▇▇▇, assignment or
satisfaction of Lien or similar document in connection with the
Receivables; and (xii) to do all other acts and things necessary to carry
out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable
for any acts of omission or commission nor for any error of judgment or
mistake of fact or of law, unless done maliciously or with gross (not mere)
negligence; this power being coupled with an interest is irrevocable while
any of the Obligations remain unpaid. Agent shall have the right at any
time following the occurrence of an Event of Default, to change the address
for delivery of mail addressed to any Loan Party to such address as Agent
may designate and to receive, open and dispose of all mail addressed to any
Loan Party.
(g) No Liability. Neither Agent nor any Lender shall, under
any circumstances or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Receivables or any instrument received
in payment thereof, or for any damage resulting therefrom. Following the
occurrence of an Event of Default Agent may, without notice or consent from
any Loan Party, sue upon or otherwise collect, extend the time of payment
of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance applicable
thereto and/or release any obligor thereof. Agent is authorized and
empowered to accept following the occurrence of an Event of Default the
return of the goods represented by any of the Receivables, without notice
to or consent by any Loan Party, all without discharging or in any way
affecting any Loan Party's liability hereunder.
(h) Establishment of a Lockbox Account, Dominion Account.
All proceeds of Collateral shall be deposited by Loan Parties into
depository accounts ("Depository Accounts") as Agent may require pursuant
to an arrangement with Bank One or such other bank as may be selected by
Loan Parties and be acceptable to Agent. Loan Parties shall issue to Bank
One or such other bank, an irrevocable letter of instruction directing said
bank to transfer such funds so deposited to Agent, either to any account
maintained by Agent at said bank or by wire transfer to appropriate
account(s) of Agent. All funds deposited in the Depository Accounts shall
immediately become the property of Agent and Loan Party shall obtain the
agreement by such bank to waive any offset rights against the funds so
deposited other than for regular and customary charges imposed by Bank One
or such other bank with respect to the Depositary Accounts and with respect
to checks previously credited to the Depositary Accounts which are returned
due to nonsufficient funds. Neither Agent nor any Lender assumes any
responsibility for the Depository Accounts arrangement, including without
limitation, any claim of accord and satisfaction or release with respect to
deposits accepted by any bank thereunder.
(i) Adjustments. No Loan Party will, without Agent's
consent, compromise or adjust any Receivables (or extend the time for
payment thereof) or accept any returns of merchandise or grant any
additional discounts, allowances or credits thereon except for those
compromises, adjustments, returns, discounts, credits and allowances as
have been heretofore customary in the business of such Loan Party.
4.16. Inventory. To the extent Inventory held for sale or lease has
been produced by any Loan Party, it has been and will be produced by such
Loan Party in accordance with the Federal Fair Labor Standards Act of 1938,
as amended, and all rules, regulations and orders thereunder.
4.17. Maintenance of Equipment. The Equipment shall be maintained in
good operating condition and repair (reasonable wear and tear excepted) and
all necessary replacements of and repairs thereto shall be made so that the
value and operating efficiency of the Equipment shall be maintained and
preserved. No Loan Party shall use or operate the Equipment in violation
of any law, statute, ordinance, code, rule or regulation.
4.18. Exculpation of Liability. Nothing herein contained shall be
construed to constitute Agent or any Lender as any Loan Party's agent for
any purpose whatsoever, nor shall Agent or any Lender be responsible or
liable for any shortage, discrepancy, damage, loss or destruction of any
part of the Collateral wherever the same may be located and regardless of
the cause thereof. Neither Agent nor any Lender, whether by anything
herein or in any assignment or otherwise, assume any of Loan Party's
obligations under any contract or agreement assigned to Agent or such
Lender, and neither Agent nor any Lender shall be responsible in any way
for the performance by Loan Party of any of the terms and conditions
thereof.
4.19. Environmental Matters. (a) Loan Parties shall ensure that the
Leasehold Interests remain in material compliance with all Environmental
Laws and they shall not place or permit to be placed any Hazardous
Substances on any Leasehold Interests except as not prohibited by
applicable law or appropriate governmental authorities or as may not be
material.
(b) Loan Parties shall establish and maintain a system to
assure and monitor continued compliance with all applicable Environmental
Laws which system shall include periodic reviews of such compliance.
(c) Loan Parties shall (i) employ in connection with the use
of the Leasehold Interests appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any
and all Hazardous Waste generated at the Leasehold Interests only at
facilities and with carriers that maintain valid permits under RCRA and any
other applicable Environmental Laws. Loan Parties shall use their best
efforts to obtain certificates of disposal, such as hazardous waste
manifest receipts, from all treatment, transport, storage or disposal
facilities or operators employed by Loan Parties in connection with the
transport or disposal of any Hazardous Waste generated at the Leasehold
Interests.
(d) In the event any Loan Party obtains, gives or receives
written notice of any Release or threat of Release of a reportable quantity
of any Hazardous Substances at the Leasehold Interests (any such event
being hereinafter referred to as a "Hazardous Discharge") or receives any
written notice of violation, request for information or notification that
it is potentially responsible for investigation or cleanup of environmental
conditions at the Leasehold Interests, demand letter or complaint, order,
citation, or other written notice with regard to any Hazardous Discharge or
violation of Environmental Laws affecting the Leasehold Interests or any
Loan Party's interest therein (any of the foregoing is referred to herein
as an "Environmental Complaint") from any Person, including any
governmental agency responsible in whole or in part for environmental
matters in the state or province in which the Leasehold Interests is
located or the United States Environmental Protection Agency or any similar
agency in another jurisdiction (any such person or entity hereinafter the
"Authority"), then Borrowing Agent shall, within five (5) Business Days,
give written notice of same to Agent detailing facts and circumstances of
which any Loan Party is aware giving rise to the Hazardous Discharge or
Environmental Complaint. Such information is to be provided to allow Agent
to protect its security interest in the Leasehold Interests and is not
intended to create nor shall it create any obligation upon Agent or any
Lender with respect thereto.
(e) Loan Parties shall promptly forward to Agent copies of
any written request for information, notification of potential liability,
demand letter relating to potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by any Loan Party to dispose of Hazardous Substances
received after the Closing Date, except with respect to superfund sites
disclosed to Agent which are not located on any Leasehold Interests, unless
hereafter requested by Agent and shall continue to forward copies of
correspondence between any Loan Party and the Authority regarding such
claims to Agent until the claim is settled. Loan Parties shall promptly
forward to Agent copies of all documents and reports concerning a Hazardous
Discharge at the Leasehold Interests that any Loan Party is required to
file under any Environmental Laws. Such information is to be provided
solely to allow Agent to protect Agent's security interest in the Leasehold
Interests and the Collateral.
(f) Loan Parties shall respond promptly to any Hazardous
Discharge or Environmental Complaint and take all necessary action in order
to safeguard the health of any Person and to avoid subjecting the
Collateral or Leasehold Interests to any Lien. If any Loan Party shall
fail to respond promptly to any Hazardous Discharge or Environmental
Complaint or any Loan Party shall fail to comply with any of the
requirements of any Environmental Laws, Agent on behalf of Lenders may, but
without the obligation to do so, for the sole purpose of protecting Agent's
interest in Collateral: (A) give such notices or (B) enter onto the
Leasehold Interests (or authorize third parties to enter onto the Leasehold
Interests) and take such actions as Agent (or such third parties as
directed by Agent) deem reasonably necessary or advisable, to clean up,
remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint. All reasonable costs and expenses incurred by
Agent and Lenders (or such third parties) in the exercise of any such
rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together
with interest thereon from the date expended at the Default Rate for
Domestic Rate Loans constituting Revolving Advances shall be paid upon
demand by Loan Parties, and until paid shall be added to and become a part
of the Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any Loan
Party.
(g) Upon thirty (30) days prior written request of Agent,
which notice may be given after an Event of Default has occurred or upon
Agent's reasonable belief that a material violation of Environmental Law
may exist, Loan Parties shall provide Agent, at Loan Parties' expense, with
an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable in the reasonable opinion of
Agent, to assess with a reasonable degree of certainty the existence of a
Hazardous Discharge and the potential costs in connection with abatement,
cleanup and removal of any Hazardous Substances found on, under, at or
within the Leasehold Interests. Any report or investigation of such
Hazardous Discharge proposed and acceptable to an appropriate Authority
that is charged to oversee the clean-up of such Hazardous Discharge shall
be acceptable to Agent. If such estimates, individually or in the
aggregate, exceed $100,000, Agent shall have the right to require Loan
Parties to post a bond, letter of credit or other security reasonably
satisfactory to Agent to secure payment of these costs and expenses.
(h) Loan Parties shall defend and indemnify Agent and Lenders
and hold Agent, Lenders and their respective employees, agents, directors
and officers harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney's fees,
suffered or incurred by Agent or Lenders under or on account of any
Environmental Laws, including, without limitation, the assertion of any
Lien thereunder, with respect to any Hazardous Discharge, the presence of
any Hazardous Substances affecting the Leasehold Interests, whether or not
the same originates or emerges from the Leasehold Interests or any
contiguous real estate, including any loss of value of the Leasehold
Interests as a result of the foregoing except to the extent such loss,
liability, damage and expense is attributable to any Hazardous Discharge
resulting from actions on the part of Agent or any Lender. Loan Parties'
obligations under this Section 4.19 shall arise upon the discovery of the
presence of any Hazardous Substances at the Leasehold Interests, whether or
not any federal, state, provincial or local environmental agency has taken
or threatened any action in connection with the presence of any Hazardous
Substances. Loan Parties' obligation and the indemnifications hereunder
shall survive the termination of this Agreement.
(i) For purposes of Sections 4.19 and 5.7, all references to
Leasehold Interests shall be deemed to include all of Loan Parties' right,
title and interest in and to any real property now or hereafter leased or
owned.
4.20. Financing Statements. Except as respects the financing
statements filed by Agent and the financing statements described on
Schedule 1.2, no financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office.
V. REPRESENTATIONS AND WARRANTIES.
Each Loan Party represents and warrants as follows:
5.1. Authority. Each Loan Party has full power, authority and legal
right to enter into this Agreement and the Other Documents and to perform
all its respective Obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and of the Other Documents (a)
are within such Loan Party's limited liability company or corporate powers,
have been duly authorized, are not in contravention of law or the terms of
such Loan Party's certificate of formation, limited liability company
agreement, by-laws, certificate of incorporation or other applicable
documents relating to such Loan Party's formation or to the conduct of such
Loan Party's business or of any material agreement or undertaking to which
such Loan Party is a party or by which such Loan Party is bound, and (b)
will not conflict with nor result in any breach in any of the provisions of
or constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of such Loan Party under the
provisions of any agreement, charter document, instrument, by-law, or other
instrument to which such Loan Party or its property is a party or by which
it may be bound.
5.2. Formation and Qualification. (a) Each Loan Party is duly
formed or incorporated and in good standing under the laws of the
jurisdiction listed on Schedule 5.2(a) and is qualified to do business and
is in good standing in the jurisdictions listed on Schedule 5.2(a) which
constitute all jurisdictions in which qualification and good standing are
necessary for such Loan Party to conduct its business and own its property
and where the failure to so qualify could reasonably be expected to have a
Material Adverse Effect. The exact State organizational number of each
Loan Party is set forth on Schedule 5.2(a). Each Loan Party has delivered
to Agent true and complete copies of its certificate of formation, limited
liability company agreement, certificate of incorporation and by-laws, as
the case may be and will promptly notify Agent of any amendment or changes
thereto. The exact name of each Loan Party is set forth in the first
paragraph to this Agreement (or, if such Loan Party is not listed in such
first paragraph, such exact name is set forth on Schedule 5.2(a) hereof).
(b) The only Subsidiaries of each Loan Party are listed on
Schedule 5.2(b).
5.3. Survival of Representations and Warranties. All
representations and warranties of such Loan Party contained in this
Agreement and the Other Documents shall be true at the time of such Loan
Party's execution of this Agreement and the Other Documents, and shall
survive the execution, delivery and acceptance thereof by the parties
thereto and the closing of the transactions described therein or related
thereto.
5.4. Tax Returns. Each Loan Party's federal tax identification
number is set forth on Schedule 5.4. Each Loan Party has filed all
federal, state, provincial and local tax returns and other reports each is
required by law to file and has paid all taxes, assessments, fees and other
governmental charges that are due and payable. Federal income tax returns
of each Loan Party have been examined and reported upon by the appropriate
taxing authority or closed by applicable statute and satisfied for all
fiscal years prior to and including the fiscal year ending December 31,
1997. The provision for taxes on the books of each Loan Party are adequate
for all years not closed by applicable statutes, and for its current fiscal
year, and no Loan Party has any knowledge of any deficiency or additional
assessment in connection therewith not provided for on its books.
5.5. Financial Statements.
(a) The pro forma balance sheet of Loan Parties on a
Consolidated Basis and on a consolidating basis (the "Pro Forma Balance
Sheet") furnished to Agent on the Closing Date reflects the consummation of
the transactions contemplated by this Agreement (the "Transactions") and is
accurate, complete and correct and fairly reflects the financial condition
of Loan Parties on a Consolidated Basis and on a consolidating basis as of
the Closing Date after giving effect to the Transactions, and has been
prepared in accordance with GAAP, consistently applied. The Pro Forma
Balance Sheet has been certified as accurate, complete and correct in all
material respects by the President and Controller of Borrowing Agent. All
financial statements referred to in this subsection 5.5(a), including the
related schedules and notes thereto, have been prepared, in accordance with
GAAP, except as may be disclosed in such financial statements.
(b) The twelve-month cash flow projections of the Loan
Parties on a Consolidated Basis and on a consolidating basis and their
projected balance sheets as of the Closing Date, copies of which are
annexed hereto as Exhibit 5.5(b) (the "Projections") were prepared by the
Controller of Borrowing Agent, are based on underlying assumptions which
provide a reasonable basis for the projections contained therein and
reflect Loan Parties' judgment based on present circumstances of the most
likely set of conditions and course of action for the projected period.
The cash flow Projections together with the Pro Forma Balance Sheet, are
referred to as the "Pro Forma Financial Statements".
(c) The consolidated and consolidating balance sheets of the
Loan Parties, their Subsidiaries and such other Persons described therein
(including the accounts of all Subsidiaries for the respective periods
during which a subsidiary relationship existed) as of December 31, 2000,
and the related statements of income, changes in stockholder's equity, and
changes in cash flow for the period ended on such date, all accompanied by
a draft of reports thereon containing opinions without qualification by
independent certified public accountants, copies of which have been
delivered to Agent, have been prepared in accordance with GAAP,
consistently applied (except for changes in application in which such
accountants concur and present fairly the financial position of the Loan
Parties and their Subsidiaries at such date and the results of their
operations for such period). The unaudited consolidated and consolidating
balance sheets of the Loan Parties, their Subsidiaries and such other
Persons described therein (including the accounts of all Subsidiaries for
the respective periods during which a subsidiary relationship existed) as
of September 30, 2001, and the related unaudited statements of income,
changes in stockholder's equity, and changes in cash flow for the period
ended on such date, copies of which have been delivered to Agent, have been
prepared on a basis consistent with prior practices and are complete and
correct in all material respects, subject to normal and recurring year end
adjustments that individually and in the aggregate are not material to the
business of Loan Parties. Since September 30, 2001, there has been no
event or occurrence that, individually or with any other event or
occurrence, could have a Material Adverse Effect.
5.6. Corporate Name. The exact name of each Loan Party is set forth
in the first paragraph to this Agreement (or, if such Loan Party is not
listed in such first paragraph, such exact name is set forth on Schedule
5.6 hereof). Except in each case as set forth on Schedule 5.6, no Loan
Party has been known by any other corporate, limited liability company or
partnership name in the past five years. No Loan Party sells Inventory
under any other name except as set forth on Schedule 5.6 and no Loan Party
has been the surviving corporation of a merger or consolidation or acquired
all or substantially all of the assets of any Person during the preceding
five (5) years.
5.7. O.S.H.A. and Environmental Compliance.
(a) Except as otherwise provided on Schedule 5.7, each Loan
Party has duly complied in all material respects with, and its facilities,
business, assets, property, leaseholds and Equipment are in compliance in
all material respects with, the provisions of the Federal Occupational
Safety and Health Act, the Environmental Protection Act, RCRA and all other
Environmental Laws; there have been no outstanding citations, notices or
orders of non-compliance issued to any Loan Party or relating to its
business, assets, property, leaseholds or Equipment under any such laws,
rules or regulations. None of the Loan Parties is aware of any property or
assets with respect to which the Loan Parties should be taking any material
action.
(b) Each Loan Party has been issued all required federal,
state, provincial and local licenses, certificates or permits relating to
all applicable Environmental Laws.
(c) (i) There are no visible signs of releases, spills,
discharges, leaks or disposal (collectively referred to as "Releases") of
Hazardous Substances at, upon, under or within any Leasehold Interests or
any other premises leased by any Loan Party; (ii) there are no underground
storage tanks or polychlorinated biphenyls on the Leasehold Interests or
any premises leased by any Loan Party; (iii) neither the Leasehold
Interests nor any other premises leased by any Loan Party has ever been
used as a treatment, storage or disposal facility of Hazardous Waste; and
(iv) no Hazardous Substances are present on the Leasehold Interests or any
premises leased by any Loan Party, excepting such quantities as are handled
in accordance with all applicable manufacturer's instructions and
governmental regulations and in proper storage containers and as are
necessary for the operation of the commercial business of any Loan Party or
of its tenants.
5.8. Solvency; No Litigation, Violation, Indebtedness or Default.
(a) After giving effect to the Transactions, each Loan Party
will be solvent, able to pay its debts as they mature, has capital
sufficient to carry on its business and all businesses in which it is about
to engage, and (i) as of the Closing Date, the fair present saleable value
of each Loan Party's assets, calculated on a going concern basis, is in
excess of the amount of its liabilities and (ii) subsequent to the Closing
Date, the fair saleable value of each Loan Party's assets (calculated on a
going concern basis) will be in excess of the amount of its liabilities.
(b) Except as disclosed in Schedule 5.8(b), no Loan Party has
(i) any pending or threatened litigation, arbitration, actions or
proceedings which involve the possibility of having a Material Adverse
Effect, and (ii) any liabilities for Indebtedness for Money Borrowed other
than the Obligations.
(c) No Loan Party is in violation of any applicable statute,
regulation or ordinance in any respect which could reasonably be expected
to have a Material Adverse Effect, nor is any Loan Party in violation of
any order of any court, governmental authority or arbitration board or
tribunal.
(d) No Loan Party nor any member of the Controlled Group
maintains or contributes to any Plan other than those listed on Schedule
5.8(d) hereto. Except as set forth in Schedule 5.8(d), (i) no Plan has
incurred any "accumulated funding deficiency," as defined in Section
302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived,
and each Loan Party and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA in
respect of each Plan, (ii) each Plan which is intended to be a qualified
plan under Section 401(a) of the Code as currently in effect has been
determined by the Internal Revenue Service to be qualified under Section
401(a) of the Code and the trust related thereto is exempt from federal
income tax under Section 501(a) of the Code, (iii) no Loan Party nor any
member of the Controlled Group has incurred any liability to the PBGC other
than for the payment of premiums, and there are no premium payments which
have become due which are unpaid, (iv) no Plan has been terminated by the
plan administrator thereof nor by the PBGC, and there is no occurrence
which would cause the PBGC to institute proceedings under Title IV of ERISA
to terminate any Plan, (v) at this time, the current value of the assets of
each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Loan Party nor any member of the Controlled
Group knows of any facts or circumstances which would materially change the
value of such assets and accrued benefits and other liabilities, (vi) no
Loan Party or any member of the Controlled Group has breached any of the
responsibilities, obligations or duties imposed on it by ERISA with respect
to any Plan, (vii) no Loan Party nor any member of a Controlled Group has
incurred any liability for any excise tax arising under Section 4972 or
4980B of the Code, and no fact exists which could give rise to any such
liability, (viii) no Loan Party nor any member of the Controlled Group nor
any fiduciary of, nor any trustee to, any Plan, has engaged in a
"prohibited transaction" described in Section 406 of ERISA or Section 4975
of the Code nor taken any action which would constitute or result in a
Termination Event with respect to any such Plan which is subject to ERISA,
(ix) each Loan Party and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists
no event described in Section 4043(b) of ERISA, for which the thirty (30)
day notice period contained in 29 CFR Section 2615.3 has not been waived,
(xi) no Loan Party nor any member of the Controlled Group has any fiduciary
responsibility for investments with respect to any plan existing for the
benefit of persons other than employees or former employees of any Loan
Party and any member of the Controlled Group, and (xii) no Loan Party nor
any member of the Controlled Group has withdrawn, completely or partially,
from any Multiemployer Plan so as to incur liability under the
Multiemployer Pension Plan Amendments Act of 1980.
(e) No Loan Party has any Canadian Benefit Plans (other than,
for greater certainty, universal plans created by and to which such Loan
Party is obligated to contribute by statute) or any Canadian Pension Plans,
other than those listed in Schedule 5.8(e). The Canadian Pension Plans are
duly registered under the Income Tax Act (Canada) and all other applicable
laws which require registration and no event has occurred which is
reasonably likely to cause the loss of such registered status. All
material obligations of each Loan Party (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with the Canadian Pension Plans and the funding agreements
therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension
Plans or the Canadian Benefit Plans. There are no outstanding disputes
concerning the assets of the Canadian Pension Plans or the Canadian Benefit
Plans. Each of the Canadian Pension Plans is fully funded on a solvency
basis (using actuarial methods and assumptions which are consistent with
the valuations last filed with the applicable Governmental Body and which
are consistent with generally accepted actuarial principles).
5.9. Patents, Trademarks, Copyrights and Licenses. All patents,
patent applications, trademarks, trademark applications, service marks,
service mark applications, copyrights, copyright applications, design
rights, tradenames, assumed names, trade secrets and licenses owned or
utilized by any Loan Party are set forth on Schedule 5.9, are valid and
have been duly registered or filed with all appropriate governmental
authorities and constitute all of the intellectual property rights which
are necessary for the operation of its business; there is no objection to
or pending challenge to the validity of any such material patent,
trademark, copyright, design right, tradename, trade secret or license and
no Loan Party is aware of any grounds for any challenge, except as set
forth in Schedule 5.9 hereto. Each patent, patent application, patent
license, trademark, trademark application, trademark license, service mark,
service mark application, design, service mark license, copyright,
copyright application and copyright license owned or held by any Loan Party
and all trade secrets used by any Loan Party consist of original material
or property developed by such Loan Party or was lawfully acquired by such
Loan Party from the proper and lawful owner thereof. Each of such items
has been maintained so as to preserve the value thereof from the date of
creation or acquisition thereof. With respect to all software used by any
Loan Party, other than commercial "off-the-shelf" applications, such Loan
Party is in possession of all source and object codes related to each piece
of software or is the beneficiary of a source code escrow agreement, each
such source code escrow agreement being listed on Schedule 5.9 hereto.
5.10. Licenses and Permits. Except as set forth in Schedule 5.10,
each Loan Party (a) is in compliance with and (b) has procured and is now
in possession of, all material licenses or permits required by any
applicable federal, state, provincial or local law or regulation for the
operation of its business in each jurisdiction wherein it is now conducting
or proposes to conduct business and where the failure to procure such
licenses or permits could have a Material Adverse Effect.
5.11. Default of Indebtedness. No Loan Party is in default in the
payment of the principal of or interest on any Indebtedness or under any
instrument or agreement under or subject to which any Indebtedness has been
issued and no event has occurred under the provisions of any such
instrument or agreement which with or without the lapse of time or the
giving of notice, or both, constitutes or would constitute an event of
default thereunder.
5.12. No Default. No Loan Party is in default in the payment or
performance of any of its contractual obligations and no Default has
occurred.
5.13. No Burdensome Restrictions. No Loan Party is party to any
contract or agreement the performance of which could have a Material
Adverse Effect. No Loan Party has agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien
which is not a Permitted Encumbrance.
5.14. No Labor Disputes. No Loan Party is involved in any labor
dispute; there are no strikes or walkouts or union organization of any Loan
Party's employees threatened or in existence and no labor contract is
scheduled to expire during the Term other than as set forth on Schedule
5.14 hereto.
5.15. Margin Regulations. No Loan Party is engaged, nor will it
engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the meaning of the quoted term under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect. No part of the proceeds of any Advance will
be used for "purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
5.16. Investment Company Act. No Loan Party is an "investment
company" registered or required to be registered under the Investment
Company Act of 1940, as amended, nor is it controlled by such a company.
5.17. Disclosure. No representation or warranty made by any Loan
Party in this Agreement or in any financial statement, report, certificate
or any other document furnished in connection herewith contains any untrue
statement of a material fact or omits to state any material fact necessary
to make the statements herein or therein not misleading. There is no fact
known to Loan Parties or which reasonably should be known to Loan Parties
which Loan Parties have not disclosed to Agent in writing with respect to
the transactions contemplated by this Agreement which could reasonably be
expected to have a Material Adverse Effect.
5.18. Delivery of Documentation. Agent has received complete copies
of the Senior Unsecured Debt Documentation and the Deferral Agreement
(including all exhibits, schedules and disclosure letters referred to
therein or delivered pursuant thereto, if any) and all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the
terms thereof. None of such documents and agreements has been amended or
supplemented, nor have any of the provisions thereof been waived, except
pursuant to a written agreement or instrument which has heretofore been
delivered to Agent.
5.19. Swap Obligations. No Loan Party has incurred any outstanding
obligations under any Swap Contracts, other than Permitted Swap
Obligations. Borrowers have undertaken their own independent assessment of
their consolidated assets, liabilities and commitments and have considered
appropriate means of mitigating and managing risks associated with such
matters and have not relied on any swap counterparty or any Affiliate of
any swap counterparty in determining whether to enter into any Swap
Contract.
5.20. Conflicting Agreements. No provision of any mortgage,
indenture, contract, agreement, judgment, decree or order binding on any
Loan Party or affecting the Collateral conflicts with, or requires any
Consent which has not already been obtained to, or would in any way prevent
the execution, delivery or performance of, the terms of this Agreement or
the Other Documents.
5.21. Application of Certain Laws and Regulations. No Loan Party nor
any Affiliate of any Loan Party is subject to any statute, rule or
regulation which regulates the incurrence of any Indebtedness, including
without limitation, statutes or regulations relative to common or
interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.
5.22. Business and Property of Loan Parties. Upon and after the
Closing Date, Loan Parties do not propose to engage in any business other
than the manufacture, distribution, sale and servicing of surface mining
equipment and activities necessary to conduct the foregoing. On the
Closing Date, each Loan Party will own all the property and possess all of
the rights and Consents necessary for the conduct of the business of such
Loan Party.
5.23. Material Contracts Schedule 5.23 contains a true, correct and
complete list of all contracts which are material to the operation of any
Loan Party's business including, without limitation, all Lease/Sublease
Transactions. Except as set forth on Schedule 5.23, each such contract is
in full force and effect and no material defaults enforceable against such
Loan Party exist thereunder. No Loan Party has received notice from any
party to such contract stating that it intends to terminate or amend such
contract.
VI. AFFIRMATIVE COVENANTS.
Each Loan Party shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. Payment of Fees. Pay to Agent on demand all usual and
customary fees and expenses which Agent incurs in connection with (a) the
forwarding of Advance proceeds and (b) the establishment and maintenance of
the Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge Borrowers' Account for all such fees and
expenses.
6.2. Conduct of Business and Maintenance of Existence and Assets.
(a) Conduct continuously and operate actively its business according to
good business practices and maintain all of its properties useful or
necessary in its business in good working order and condition (reasonable
wear and tear excepted and except as may be disposed of in accordance with
the terms of this Agreement), including, without limitation, all licenses,
patents, copyrights, design rights, tradenames, trade secrets and
trademarks and take all actions necessary to enforce and protect the
validity of any intellectual property right or other right included in the
Collateral; (b) keep in full force and effect its existence and comply in
all material respects with the laws and regulations governing the conduct
of its business where the failure to do so could reasonably be expected to
have a Material Adverse Effect; and (c) make all such reports and pay all
such franchise and other taxes and license fees and do all such other acts
and things as may be lawfully required to maintain its rights, licenses,
leases, powers and franchises under the laws of the United States, Canada
or any political subdivision of either of them.
6.3. Violations. Promptly notify Agent in writing of any violation
of any law, statute, regulation or ordinance of any Governmental Body, or
of any agency thereof, applicable to any Loan Party which could reasonably
be expected to have a Material Adverse Effect.
6.4. Government Receivables. Take all steps necessary to protect
Agent's interest in the Collateral under the Federal Assignment of Claims
Act, Financial Administration Act (Canada) or other applicable federal,
state, provincial or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Loan Party and the United
States, Canada, any state or province, any department, agency or
instrumentality of any of them.
6.5. Execution of Supplemental Instruments. Execute and deliver to
Agent from time to time, upon demand, such supplemental agreements,
statements, assignments and transfers, or instructions or documents
relating to the Collateral, and such other instruments as Agent may
reasonably request, in order that the full intent of this Agreement may be
carried into effect.
6.6. Payment of Indebtedness. Subject at all times to any
applicable subordination arrangement in favor of Agent and/or Lenders, pay,
discharge or otherwise satisfy at or before maturity (subject, where
applicable, to specified grace periods and, in the case of the trade
payables, to normal payment practices) all its obligations and liabilities
of whatever nature, except when the failure to do so could not reasonably
be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and each Loan Party shall have provided for such reserves as
Agent may reasonably deem proper and necessary.
6.7. Standards of Financial Statements. Cause all financial
statements referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13
and 9.14 as to which GAAP is applicable to be complete and correct in all
material respects (subject, in the case of interim financial statements, to
normal year-end audit adjustments) and to be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the periods
reflected therein (except as concurred in by such reporting accountants or
officer, as the case may be, and disclosed therein).
6.8. Financial Covenants.
(a) EBITDA. Maintain EBITDA for the Loan Parties on a
Consolidated Basis as of the end of each fiscal quarter set forth below for
the respective fiscal periods set forth below ending on the last day of
such fiscal quarter in an amount not less than the amount set forth below:
Fiscal Period Minimum EBITDA
January 1, 2002 to March 31, 2002 $5,200,000
January 1, 2002 to June 30, 2002 $12,000,000
January 1, 2002 to September 30, 2002 $18,500,000
Four Fiscal Quarters
Ending in Fiscal Quarter
December 31, 2002 $24,000,000
(b) Leverage Ratio. Maintain a Leverage Ratio for the Loan
Parties on a Consolidated Basis as of the end of each fiscal quarter set
forth below for the respective periods set forth below of not greater than
the ratios set forth below:
Fiscal Period Leverage Ratio
January 1, 2002 to March 31, 2002 6.25:1.0
January 1, 2002 to June 30, 2002 5.75:1.0
January 1, 2002 to September 30, 2002 5.75:1.0
Four Fiscal Quarters Leverage Ratio
Ending in Fiscal Quarter
December 31, 2002 5.75:1.0
(c) Fixed Charge Coverage Ratio. Maintain as of the end of
each quarter a Fixed Charge Coverage Ratio for the Loan Parties on a
Consolidated Basis as of the end of each fiscal quarter set forth below for
the respective periods set forth below of not less than the ratios set
forth below:
Fiscal Period Fixed Charge Coverage Ratio
January 1, 2002 to March 31, 2002 1.05:1.0
January 1, 2002 to June 30, 2002 1.05:1.0
January 1, 2002 to September 30, 2002 1.05:1.0
Four Fiscal Quarters
Ending in Fiscal Quarter
December 31, 2002 1.05:1.0
6.9. Minimum Undrawn Availability. Maintain at all times Undrawn
Availability of not less than $5,000,000.
6.10. Leases. All Leases shall (i) except with respect to
Lease/Sublease transactions, conspicuously note the existence of Agent's
first priority perfected security interest in the Lease and the assets
subject to such Lease and shall state that this Agreement prohibits other
Liens on the Lease and the assets subject to the Lease, (ii) expressly
prohibit the lessee from relocating any assets subject to the Lease to any
location which would result in Agent not having a perfected first priority
security interest in the assets subject to such Lien, (iii) with respect to
Leases entered into subsequent to the date hereof, have only one originally
executed copy thereof and (iv) shall be a "true lease" and not a secured
financing. Upon an Event of Default, promptly upon the request of Agent,
each Borrower shall deliver to Agent each Lease. Loan Parties shall, with
respect to all Leases in the United States of America and Canada (a) use
reasonable efforts to file precautionary UCC-1 financing statements or
other financing statements under personal property security legislation
with respect to any Lease in effect on the Closing Date which does not
prohibit the filing of such UCC-1 financing statements or such other
financing statements and which has a term of one year or greater and (b)
use reasonable efforts to include in each Lease entered into after the
Closing Date to the extent such Lease will have a term of one year or
greater, a right of the applicable Loan Party to file, and, if such right
has been obtained, then, at the request of Agent, such Loan Party shall
file precautionary UCC-1 financing statements and/or other financing
statements. All such precautionary UCC-1 financing statements and other
financing statements shall be assigned to Agent.
6.11. Canadian Pension Plans. (a) For each existing Canadian
Pension Plan, ensure that such plan retains its registered status under and
is administered in a timely manner in all respects in accordance with the
applicable pension plan text, funding agreement, the Income Tax Act
(Canada) and all other applicable laws; (b) for each Canadian Pension Plan
hereafter adopted by any Loan Party which is required to be registered
under the Income Tax Act (Canada) or any other applicable laws, use its
best efforts to seek and receive confirmation in writing from the
applicable Governmental Body to the effect that such plan is duly
registered under the Income Tax Act (Canada) and such other applicable
laws; (c) for each existing Canadian Pension Plan and Canadian Benefit Plan
hereafter adopted, perform in a timely fashion in all material respects all
obligations (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with such plan and the
funding media therefor; and (d) deliver to Agent if requested by Agent, (i)
promptly after the filing thereof by any Loan Party with any applicable
Governmental Body, copies of each annual and other return, report or
valuation with respect to each Canadian Pension Plan, (ii) promptly after
receipt thereof, a copy of any direction, order, notice, ruling or opinion
that any Loan Party may receive from any applicable Governmental Body with
respect to any Canadian Pension Plan, (iii) notification within 30 days of
any increases having a cost to such Loan Party in excess of C$250,000 per
annum, in the benefits of any existing Canadian Pension Plan or Canadian
Benefit Plan, or the establishment of any new Canadian Pension Plan or
Canadian Benefit Plan, or the commencement of contributions to any such
plan to which any Loan Party was not previously contributing.
VII. NEGATIVE COVENANTS.
No Loan Party shall, nor shall it permit any of its Subsidiaries
(except, other than Bucyrus Canada, for Foreign Subsidiaries with respect
to Sections 7.2, 7.3, 7.8, 7.21, 7.22 and 7.23) to, until satisfaction in
full of the Obligations and termination of this Agreement:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or other
reorganization with or into any other Person or acquire all or a
substantial portion of the assets or stock of any Person or permit any
other Person to consolidate with or merge with it other than a merger or
consolidation of a Borrower into Borrowing Agent, a Subsidiary of a
Borrower into such Borrower, and/or of Loan Parties that are not Borrowers
into each other.
(b) Sell, lease, transfer or otherwise dispose of any of its
properties or assets, except in the ordinary course of its business and
except as provided in Section 4.3.
7.2. Creation of Liens. Create or suffer to exist any Lien or
transfer upon or against any of its property or assets now owned or
hereafter acquired, except Permitted Encumbrances.
7.3. Guarantees. Become liable upon the obligations of any Person
by assumption, endorsement or guaranty thereof or otherwise (other than to
Lenders) except (a) as disclosed on Schedule 7.3 and guarantees of
obligations incurred to refinance or replace the obligations subject to the
guarantees disclosed on such Schedule, to the extent such refinancing or
replacement would be permitted hereunder, (b) guarantees made in the
ordinary course of business up to an aggregate amount of $1,000,000 for all
Loan Parties and (c) the endorsement of checks in the ordinary course of
business.
7.4. Investments. Except as permitted by Sections 7.5 and 7.12(a),
purchase or acquire obligations or stock of, or any other interest in, any
Person, except Cash Equivalents.
7.5. Loans. Make advances, loans or extensions of credit to any
Person, including without limitation, any Parent, Subsidiary or Affiliate
except (a) with respect to the extension of commercial trade credit in
connection with the sale of Inventory in the ordinary course of its
business, (b) loans to employees on an arm's-length basis in the ordinary
course of business consistent with past practices for travel expenses,
relocation costs and similar purposes up to a maximum of $25,000 to any
employee and up to a maximum of $100,000 in the aggregate at any one time
outstanding, (c) advances, loans or extensions of credit by Borrowers to
their domestic Subsidiaries which are also Borrowers hereunder, (d)
advances, loans or extensions of credit by Borrowers to Bucyrus Canada
("Canadian Intercompany Advances") in amounts from time to time not to
exceed an aggregate of $10,000,000 at any time outstanding, (e) advances,
loans or extensions of credit by Borrowers to other Foreign Subsidiaries of
Borrowers, not to exceed $500,000 in the aggregate made after the Closing
Date, nor $18,900,000 in the aggregate at any time outstanding ("Foreign
Subsidiary Advances") and (f) loans by any Subsidiary either to the parent
of that Subsidiary or to Bucyrus. The obligation of Bucyrus Canada to
repay Canadian Intercompany Advances shall be evidenced by a note
("Canadian Note") and the obligations of the other Foreign Subsidiaries to
repay Foreign Subsidiary Advances shall also be evidenced by notes
("Foreign Intercompany Notes"), all of which shall be in form and substance
satisfactory to Agent. Each of the Canadian Note and the Foreign
Intercompany Notes shall be pledged to Agent for the benefit of the Lender
as Collateral for the Obligations pursuant to terms acceptable to Agent and
all payments on the Canadian Note and the Foreign Intercompany Notes (other
than payments in the ordinary course of business as contemplated in Section
7.20) should be applied to repay the Obligations in such manner as Agent
shall determine.
7.6. Capital Expenditures. Contract for, purchase or make any
Capital Expenditures as of the end of each fiscal quarter set forth below
for the respective fiscal periods set forth below ending on the last day of
such fiscal quarter in an aggregate amount in excess of the amounts set
forth below:
Four Fiscal Quarters Capital Expenditures
Ending in Fiscal Quarter
December 31, 2002 $4,800,000
7.7. Dividends and Distributions. Declare, pay or make any dividend
or distribution on any shares of the common stock, preferred stock or other
equity interests of any Loan Party (other than dividends or distributions
payable in its stock or other equity interests or split-ups or
reclassifications of its stock or other equity interests) or apply any of
its funds, property or assets to the purchase, redemption or other
retirement of any common or preferred stock, or of any options to purchase
or acquire any such shares of common or preferred stock or other equity
interests of any Loan Party except that each of the Loan Parties (other
than Bucyrus) and their respective Subsidiaries shall be permitted to pay
dividends (i) to Bucyrus in accordance with the provisions of each Loan
Party's Certificate of Incorporation as in effect on the Closing Date, (ii)
to Bucyrus, to pay professional fees, franchise taxes and other ordinary
course of business operating expenses incurred by Bucyrus in its capacity
as parent corporation of Loan Parties.
7.8. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness for Money Borrowed of Loan Party except in respect of (i)
Indebtedness to Lenders; (ii) Indebtedness incurred consisting of Canadian
Intercompany Advances and Foreign Subsidiary Advances permitted under
Section 7.5 hereof; (iii) Indebtedness due under the Senior Unsecured
Notes, (iv) Indebtedness consisting of the deferred purchase price of
property or services or other purchase money debt in a principal amount not
to exceed $5,000,000 in the aggregate at any time outstanding, (v)
Indebtedness with respect to Capital Leases in a principal amount not to
exceed $2,000,000 in the aggregate at any time outstanding, (vi)
Indebtedness outstanding on the Closing Date and set forth on Schedule 7.8,
(vii) construction financing in a principal amount not in excess of
$1,000,000 at any time outstanding with respect to Minserco s property in
Gillette, Wyoming, (viii) any extension, renewal, refinancing, in whole or
in part, of Indebtedness described in the foregoing clauses (ii) through
(viii), provided the terms of which are not more onerous on the relevant
Loan Party than the terms in effect as to the Indebtedness being refinanced
and such refinancing is otherwise permitted under the Indenture and (ix)
additional Indebtedness in an amount not in excess of $1,000,000 at any
time outstanding.
7.9. Nature of Business. Substantially change the nature of the
business in which it is presently engaged as set forth in Section 5.22
hereof, nor except as specifically permitted hereby purchase or invest,
directly or indirectly, in any assets or property other than in the
ordinary course of business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.
7.10. Transactions with Affiliates. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease
any property to, or otherwise deal with, any Affiliate, except (a)
transactions disclosed in the ordinary course of business, on an arm's-
length basis on terms no less favorable than terms which would have been
obtainable from a Person other than an Affiliate, (b) if after giving
effect to the payment thereof no Event of Default shall have occurred and
be continuing hereunder including, without limitation, due to a breach of
Section 6.9 hereof, the Borrowing Agent and its Subsidiaries may pay up to
$1,500,000 per year in management fees and reimbursement of expenses to the
Original Owners of Borrowing Agent and the Affiliates of such Original
Owners and (c) the Borrowing Agent and its Subsidiaries may make the loans,
advances and extensions of credit to Subsidiaries permitted under Section
7.5 and (d) the Borrowing Agent may otherwise conduct business with its
Subsidiaries in a manner consistent with past practices and (e) additional
cash transfers may be made by Borrowing Agent to its domestic Subsidiaries
not to exceed $500,000 in any fiscal year of Borrowing Agent.
7.11. Leases. Enter as lessee into any Lease, Lease/Sublease
Transaction or other lease arrangement for real or personal property
(unless capitalized and permitted under Section 7.8 hereof) if after giving
effect thereto, aggregate annual rental payments for all leased property
would exceed $6,000,000 in any one fiscal year for all Loan Parties,
exclusive of (a) rental payments under Leases listed on Schedule 7.11 and
(b) rental payments under any lease of equipment pursuant to a
Lease/Sublease Transaction, to the extent of rental payments by a Customer
of a Loan Party under a sublease of such equipment or Operating Agreement
with respect thereto, so long as (i) each such Customer has a rating of at
least the lowest investment grade rating from Standard & Poor's Corporation
and (ii) the sum of the Discounted Remaining Lease Payments (as hereinafter
defined) for the leases under which a Loan Party is lessee in connection
with all such Lease/Sublease Transactions entered into on and after the
Closing Date does not exceed $10,000,000. For purposes hereof, "Discounted
Remaining Lease Payments" for each lease, means the sum of all remaining
lease payments discounted to present value at the "Applicable Discount
Rate" for such lease. The "Applicable Discount Rate" for each lease shall
mean the discount rate which would be necessary, upon the commencement date
of the lease, to discount the sum of all lease payments thereunder to an
amount equal to the aggregate purchase price paid by the applicable lessor
for such equipment.
7.12. Subsidiaries.
(a) Form any Subsidiary unless (i) such Subsidiary expressly
joins in this Agreement as a Loan Party and becomes jointly and severally
liable for the obligations of Loan Parties hereunder, under the Notes, and
under any other agreement between any Loan Party and Lenders and (ii) Agent
shall have received all documents, including legal opinions, it may
reasonably require to establish compliance with each of the foregoing
conditions.
(b) Enter into any partnership, joint venture or similar
arrangement.
7.13. Fiscal Year and Accounting Changes. Change its fiscal year
from December 31 or make any change (i) in accounting treatment and
reporting practices except as required by GAAP or (ii) in tax reporting
treatment except as required by law.
7.14. Pledge of Credit. Now or hereafter pledge Agent's or any
Lender's credit on any purchases or for any purpose whatsoever or use any
portion of any Advance in or for any business other than the applicable
Loan Party's business as conducted on the date of this Agreement.
7.15. Amendment of Articles of Formation, LLC Agreement, Certificate
of Incorporation and By-Laws. Amend, modify or waive any term or provision
of its Articles of Formation, Incorporation, LLC Agreement, Certificate of
Incorporation and By-Laws or any shareholders agreement unless required by
law.
7.16. Compliance with ERISA. (i) (x) Maintain, or permit any member
of the Controlled Group to maintain, or (y) become obligated to contribute,
or permit any member of the Controlled Group to become obligated to
contribute, to any Plan, other than those Plans disclosed on Schedule
5.8(d) or Schedule 5.8(e), (ii) engage, or permit any member of the
Controlled Group to engage, in any non-exempt "prohibited transaction", as
that term is defined in section 406 of ERISA and Section 4975 of the Code,
(iii) incur, or permit any member of the Controlled Group to incur, any
"accumulated funding deficiency", as that term is defined in Section 302 of
ERISA or Section 412 of the Code, (iv) terminate, or permit any member of
the Controlled Group to terminate, any Plan where such event could result
in any liability of any Loan Party or any member of the Controlled Group or
the imposition of a lien on the property of any Loan Party or any member of
the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or
permit any member of the Controlled Group to assume, any obligation to
contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d) or
Schedule 5.8(e), (vi) incur, or permit any member of the Controlled Group
to incur, any withdrawal liability to any Multiemployer Plan; (vii) fail
promptly to notify Agent of the occurrence of any Termination Event, (viii)
fail to comply, or permit a member of the Controlled Group to fail to
comply, with the requirements of ERISA or the Code or other applicable laws
in respect of any Plan, (ix) fail to meet, or permit any member of the
Controlled Group to fail to meet, all minimum funding requirements under
ERISA or the Code or postpone or delay or allow any member of the
Controlled Group to postpone or delay any funding requirement with respect
of any Plan.
7.17. Prepayment of Indebtedness for Money Borrowed Except as
expressly permitted pursuant to Sections 7.18 or 7.20 hereof, any time,
directly or indirectly, prepay any Indebtedness for Money Borrowed (other
than to Lenders), or repurchase, redeem, retire or otherwise acquire any
Indebtedness of any Loan Party.
7.18. Senior Unsecured Notes. At any time, directly or indirectly,
pay, prepay, repurchase, redeem, retire or otherwise acquire, or make any
payment on account of any principal of, interest on or premium payable in
connection with the repayment or redemption of the Senior Unsecured Notes,
except as expressly required by the terms of the Senior Unsecured Notes as
in effect on the Closing Date, as modified by the Deferral Agreement.
7.19. UCC Article 9 Location . (a) Change the state in which it is
located (for the purpose of UCC Article 9) or (b) change the jurisdiction
(or province, in the case of Bucyrus Canada) in which its chief executive
office, principal place of business, domicile (within the meaning of the
Quebec Civil Code) or the location of its records concerning Collateral.
7.20. Retention of Cash; Payment of Foreign Loans . Permit Loan
Parties and their respective Subsidiaries (direct or indirect, including
without limitation, all Foreign Subsidiaries and other foreign entities
which are owned by any of the Loan Parties or their Subsidiaries), other
than the Borrowers, (a) to retain net cash balances in excess of
$10,000,000 at any time in the aggregate (with any surplus in excess of
such sum to be utilized to repay the Canadian Note or Foreign Subsidiary
Advances or otherwise paid to Bucyrus as permitted pursuant to Section 7.7
hereof) or (b) to repay Indebtedness for Money Borrowed in the case of term
debt or permanently reduce committed amounts in the case of revolving debt,
other than (i) in the case of Bucyrus Canada, the principal sum of not in
excess of $500,000 each year, plus interest and fees accrued with respect
thereto, to the lender under the Canadian Credit Facility and (ii) in the
case of all other Foreign Subsidiaries, in the aggregate principal amount
not in excess of $500,000 each year, plus interest and fees accrued with
respect thereto; provided, however, that the refinancing of Indebtedness
for Money Borrowed on terms and conditions not less favorable to Bucyrus
Canada or the other Foreign Subsidiaries than those in effect prior to such
refinancing shall not be deemed to be restricted by this Section 7.20(b) so
long as (x) the limitations of clauses (i) and (ii) would not subsequently
be violated under the new terms and conditions and (y) with respect to
indebtedness of Bucyrus Canada, the applicable refinancing lender (A)
enters into a mortgagee waiver or similar agreement with Agent on terms and
conditions not less favorable to Agent and the Lenders than those in effect
prior to such refinancing and (B) does not seek to obtain a Lien on any
assets of Bucyrus Canada then held as Collateral by Agent.
7.21. Performance Bonds. Engage in projects with respect to which
Loan Parties and their Subsidiaries have provided performance bonds and/or
comparable Surety Instruments to or for the benefit of the Person for whom
such projects are being undertaken in excess of $10,000,000 at any time in
the aggregate outstanding with respect to all such bonds and Surety
Instruments.
7.22. Letters of Credit. Request the issuance of any letters of
credit other than Letters of Credit to be issued under this Agreement.
7.23. Swap Obligations. Enter into or incur any outstanding
obligations under any Swap Contracts, other than Permitted Swap
Obligations.
7.24. Foreign Subsidiary Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness by any Foreign Subsidiary (other than
Bucyrus Canada which is subject to the provisions of Section 7.8) in
respect of (a) indebtedness for borrowed money, (b) obligations with
respect to Capital Leases, (c) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, or (d) any obligation owed for all or any part of the
deferred purchase price of property or services if the purchase price is
due more than six (6) months from the date the obligation is incurred or is
evidenced by a note or similar written instrument, except in an amount not
in excess of $5,000,000 in the aggregate at any time outstanding.
VIII. CONDITIONS PRECEDENT.
8.1. Conditions to Initial Advances. The agreement of Lenders to
make the initial Advances requested to be made on the Closing Date is
subject to the satisfaction, or waiver by ▇▇▇▇▇▇▇, immediately prior to or
concurrently with the making of such Advances, of the following conditions
precedent:
(a) Notes. Agent shall have received the Notes duly executed
and delivered by an authorized officer of each Borrower;
(b) Filings, Registrations, Recordings and Searches. Each
document (including, without limitation, any Uniform Commercial Code
financing statement or other financing statement under applicable personal
property legislation) required by this Agreement, any related agreement or
under law or reasonably requested by the Agent to be filed, registered or
recorded in order to create, in favor of Agent, a perfected security
interest in or lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested, and Agent
shall have received an acknowledgment copy, or other evidence satisfactory
to it, of each such filing, registration or recordation and satisfactory
evidence of the payment of any necessary fee, tax or expense relating
thereto. The Agent shall also have received UCC, personal property,
immovable property, tax and judgment lien searches with respect to each
Loan Party in such jurisdictions as the Agent shall require, and the
results of such searches shall be satisfactory to the Agent;
(c) Corporate Proceedings of Loan Parties. Agent shall have
received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, of the Board of Directors (or equivalent authority)
of each Loan Party authorizing (i) the execution, delivery and performance
of this Agreement and the Other Documents, the Notes, the Pledge Agreement,
any related agreements (collectively the "Documents") and (ii) the granting
by each Loan Party of the security interests in and liens upon the
Collateral in each case certified by the Secretary or an Assistant
Secretary of each Loan Party as of the Closing Date; and, such certificate
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate;
(d) Capital Structure; Other Indebtedness. The capital
structure, tax assumptions and legal structure of Loan Parties and the
terms and conditions of all Indebtedness of Loan Parties shall be
acceptable to Agent in its sole reasonable discretion;
(e) Incumbency Certificates of Loan Parties. Agent shall
have received a certificate of the Secretary or an Assistant Secretary of
each Loan Party, dated the Closing Date, as to the incumbency and signature
of the officers of each Loan Party executing this Agreement, any
certificate or other documents to be delivered by it pursuant hereto,
together with evidence of the incumbency of such Secretary or Assistant
Secretary;
(f) Certificates. Agent shall have received a copy of the
Articles or Certificate of Incorporation (or equivalent charter documents)
of each Loan Party, and all amendments thereto, certified by the Secretary
of State or other appropriate official of its jurisdiction of incorporation
together with copies of the By-Laws (or equivalent documents) of each Loan
Party and all agreements of each Loan Party's shareholders, members or
partners certified as accurate and complete by the Secretary of each Loan
Party;
(g) Good Standing Certificates. Agent shall have received
good standing certificates for each Loan Party dated not more than thirty
(30) days prior to the Closing Date, issued by the Secretary of State or
other appropriate official of each Loan Party's jurisdiction of
incorporation and each jurisdiction where the conduct of each Loan Party's
business activities or the ownership of its properties necessitates
qualification;
(h) Legal Opinion. Agent shall have received the executed
legal opinions of (a) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, (b) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, (c)
Fasken ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and (d) such other local counsel as Agent may
reasonably require, each in form and substance satisfactory to Agent which
shall cover such matters incident to the transactions contemplated by this
Agreement and the Other Documents as Agent may reasonably require and each
Loan Party hereby authorizes and directs such counsel to deliver such
opinions to Agent and ▇▇▇▇▇▇▇;
(i) No Litigation. (i) No litigation, investigation or
proceeding before or by any arbitrator or Governmental Body shall be
continuing or threatened against any Loan Party or against the officers or
directors of any Loan Party (A) in connection with this Agreement and/or
the Other Documents or any of the transactions contemplated thereby and
which, in the reasonable opinion of Agent, is deemed material or (B) which
could, in the reasonable opinion of Agent, have a Material Adverse Effect;
and (ii) no injunction, writ, restraining order or other order of any
nature materially adverse to any Loan Party or the conduct of its business
or inconsistent with the due consummation of the Transactions shall have
been issued by any Governmental Body;
(j) Financial Condition Certificates. Agent shall have
received an executed Financial Condition Certificate in the form of Exhibit
8.1(j).
(k) Collateral Examination; Appraisals. Agent shall have (i)
completed its pre-Closing Date audit, which shall include without
limitation, verifications of Receivables, Inventory, and Undrawn
Availability, the results of which shall be satisfactory to Agent, and (ii)
had an opportunity to discuss the results of the foregoing with Loan
Parties' management completed Collateral examinations and received
appraisals, the results of which shall be satisfactory in form and
substance to Lenders, of the Receivables, Inventory, General Intangibles,
Investment Property, Leasehold Interests and Equipment of each Loan Party
and all books and records in connection therewith;
(l) Fees. Agent shall have received all fees payable to
Agent and Lenders on or prior to the Closing Date pursuant to Article III
hereof and under the Fee Letter;
(m) Pro Forma Financial Statements. Agent shall have
received a copy of the Pro Forma Financial Statements, as required pursuant
to Section 5.5(c), and a draft of the financial statements for the fiscal
year of Loan Parties ended December 31, 2001 which will be required to be
delivered at a subsequent date in final pursuant to Section 9.7 hereof,
each of which shall be satisfactory in all respects to Lenders;
(n) Canadian Documentation. Agent shall have received final
executed copies of (i) the Canadian Security Agreement and all related
agreements, documents and instruments as may be necessary or advisable, in
the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Canadian Counsel to Lenders, to perfect
Agent's interest in the assets of Bucyrus Canada as security for its
Obligations hereunder as Guarantor, (ii) all loan agreements and other
documents relating to the Canadian Credit Facility in effect as of the
Closing Date (including, without limitation, all documentation pursuant to
which either (x) The Bank of Nova Scotia has extended the expiration date
of the term portion of the Canadian Credit Facility to a date not earlier
than the Termination Date or (y) one or more lenders has refinanced the
term portion of the Canadian Credit Facility), all satisfactory in form and
substance to Agent, (iii) a release of Lien by The Bank of Nova Scotia (or
such other lender(s) under the Canadian Credit Facility) on the Receivables
and Inventory of Bucyrus Canada and on the Equipment of Bucyrus Canada
which is not located at ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and (iv) a
mortgagee waiver (or similar agreement) by such lender under the Canadian
Credit Facility in favor of Agent for the benefit of itself and the
Lenders, in form and substance satisfactory to Agent in its sole
discretion, pursuant to which Agent is granted access to the real property
and Equipment of Bucyrus Canada for a period of up to sixty (60) days, at
no expense to Agent, for the purpose of completing production of Inventory
and liquidating or otherwise disposing of Receivables and Inventory of
Bucyrus Canada;
(o) Deferral Agreement. Agent shall have received final
executed copies of all of the Senior Unsecured Debt Documentation and of
the Deferral Agreement which shall set forth the basis upon which Holdings
may receive, and Loan Parties may make, payments under the Senior Unsecured
Note, which shall be satisfactory in form and substance to Agent in its
sole discretion;
(p) Pledge Agreement, Other Documents. Agent shall have
received the executed Pledge Agreement together with the original stock
certificates and undated executed stock powers relating thereto as required
under the Pledge Agreement, and all Other Documents, each in form and
substance satisfactory to Lenders;
(q) Insurance. Agent shall have received in form and
substance satisfactory to Agent certified copies of Loan Parties' casualty
insurance policies, together with loss payable endorsements on Agent's
standard form of loss payee endorsement naming Agent as loss payee, and
certified copies of Loan Parties' liability insurance policies, together
with endorsements naming Agent as a co-insured;
(r) Environmental Reports. Agent shall have received all
environmental studies and reports prepared by independent environmental
engineering firms with respect to all real property owned or leased by Loan
Parties;
(s) Payment Instructions. Agent shall have received written
instructions from Loan Parties directing the application of proceeds of the
initial Advances made pursuant to this Agreement;
(t) Depository Accounts. Agent shall have received duly
executed agreements establishing the Blocked Accounts or Depository
Accounts with Bank One or other financial institutions acceptable to Agent
for the collection or servicing of the Receivables and proceeds of the
Collateral;
(u) Consents. Agent shall have received any and all Consents
necessary to permit the effectuation of the transactions contemplated by
this Agreement and the Other Documents; and, Agent shall have received such
Consents and waivers of such third parties as might assert claims with
respect to the Collateral, as Agent and its counsel shall deem necessary;
(v) No Adverse Material Change. (i) Since September 30,
2001, there shall not have occurred any event, condition or state of facts
which could reasonably be expected to have a Material Adverse Effect and
(ii) no representations made or information supplied to Lenders shall have
been proven to be inaccurate or misleading in any material respect;
(w) Leasehold Agreements. Agent shall have received
landlord, mortgagee or warehouseman agreements satisfactory to Agent with
respect to all premises leased by Loan Parties at which Inventory is
located;
(x) Contract Review. Agent shall have reviewed all material
contracts of Loan Parties including, without limitation, leases, union
contracts, labor contracts, customer service contracts, progress billing
agreements, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;
(y) Closing Certificate. Agent shall have received a closing
certificate signed by a Responsible Officer of each Loan Party dated as of
the date hereof, stating that (i) all representations and warranties set
forth in this Agreement and the Other Documents are true and correct on and
as of such date, (ii) Loan Parties are on such date in compliance with all
the terms and provisions set forth in this Agreement and the Other
Documents and (iii) on such date no Default or Event of Default has
occurred or is continuing;
(z) Borrowing Base. Agent shall have received a duly
executed Borrowing Base Certificate which shall indicate that the aggregate
amount of Eligible North American Receivables and Eligible North American
Inventory is sufficient in value and amount to support Advances in the
amount requested by Borrowers on the Closing Date;
(aa) Undrawn Availability. After giving effect to the initial
Advances hereunder, Borrowers shall have Undrawn Availability of at least
$15,000,000;
(bb) Control Agreements. Agent shall have received control
agreements with respect to all Collateral in which a security interest may
be perfected by means of control under the Uniform Commercial Code;
(cc) Intercompany Notes. Agent shall have received the
original Canadian Note, the Canadian Security Agreement and the Foreign
Intercompany Notes, in accordance with Section 7.5 hereof, each of which
shall have been endorsed to the order of the Agent or, at the request of
Agent, in blank; and
(dd) Other. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
Transactions shall be satisfactory in form and substance to Agent, Lenders
and their counsel.
8.2. Conditions to Each Advance. The agreement of Lenders to make
any Advance requested to be made on any date (including, without
limitation, the initial Advance), is subject to the satisfaction of the
following conditions precedent as of the date such Advance is made:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
this Agreement and any related agreements to which it is a party, and each
of the representations and warranties contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any related agreement shall be true and
correct in all material respects on and as of such date as if made on and
as of such date (with Loan Parties permitted to update Schedules 5.9 and
5.23 as necessary, except to the extent any such disclosure would disclose
any fact or occurrence of an event which could reasonably be expected to
have a Material Adverse Effect);
(b) No Default. No Event of Default or Default shall have
occurred and be continuing on such date, or would exist after giving effect
to the Advances requested to be made, on such date and, in the case of the
initial Advance, after giving effect to the consummation of the Transac-
tions; provided, however that Required Lenders, in their sole discretion,
may elect to have Lenders continue to make Advances notwithstanding the
existence of an Event of Default or Default and that any Advances so made
shall not be deemed a waiver of any such Event of Default or Default;
(c) Maximum Advances. In the case of any Revolving Advances
and/or Swingline Loans requested to be made, after giving effect thereto,
the aggregate Revolving Advances and/or Swingline Loans shall not exceed
the maximum amount of Advances permitted under Section 2.1 hereof; and
(d) Maximum Letters of Credit. In the case of any Letters of
Credit requested to be made, after giving effect thereto, the aggregate
face amount and reimbursement obligations outstanding in respect of Letters
of Credit shall not exceed the maximum amount permitted under Section 2.10.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Loan Party shall, until satisfaction in full of the Obligations
and the termination of this Agreement:
9.1. Disclosure of Material Matters. Immediately upon learning
thereof, report to Agent all matters materially affecting the value,
enforceability or collectibility of any portion of the Collateral
including, without limitation, any Loan Party's reclamation or repossession
of, or the return to any Loan Party of, a material amount of goods or
claims or disputes asserted by any Customer or other obligor.
9.2. Schedules. Deliver to Agent on or before (x) Wednesday of each
week a Borrowing Base Certificate (which shall be calculated as of the last
day of the prior week and which shall not be binding upon Agent or
restrictive of Agent's rights under this Agreement) and (y) the tenth
(10th) day of each month as and for the prior month (a) accounts receivable
ageings, (b) accounts payable schedules and (c) Inventory reports. In
addition, each Borrower will deliver to Agent at such intervals as Agent
may require: (i) confirmatory assignment schedules, (ii) copies of
Customer's invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may require including, without limitation, trial balances and test
verifications. Agent shall have the right to confirm and verify all
Receivables by any manner and through any medium it considers advisable and
do whatever it may deem reasonably necessary to protect its interests
hereunder. The items to be provided under this Section are to be in form
satisfactory to Agent and executed by each Borrower and delivered to Agent
from time to time solely for Agent's convenience in maintaining records of
the Collateral, and any Borrower's failure to deliver any of such items to
Agent shall not affect, terminate, modify or otherwise limit Agent's Lien
with respect to the Collateral.
9.3. Environmental Reports. Furnish Agent, concurrently with the
delivery of the financial statements referred to in Sections 9.7 and 9.8,
with a certificate signed by a Responsible Officer stating, to the best of
his knowledge, that each Loan Party is in compliance in all material
respects with all federal, state, provincial and local laws relating to
environmental protection and control and occupational safety and health.
To the extent any Loan Party is not in compliance with the foregoing laws,
the certificate shall set forth with specificity all areas of non-
compliance and the proposed action Loan Party will implement in order to
achieve full compliance.
9.4. Litigation. Promptly notify Agent in writing of any
litigation, suit or administrative proceeding affecting any Loan Party,
whether or not the claim is covered by insurance, and of any suit or
administrative proceeding, which in any such case could reasonably be
expected to have a Material Adverse Effect.
9.5. Material Occurrences. Promptly notify Agent in writing upon
the occurrence of (a) any Event of Default or Default; (b) any event of
default under the Senior Unsecured Debt Documentation; (c) any event which
with the giving of notice or lapse of time, or both, would constitute an
event of default under the Senior Unsecured Debt Documentation; (d) any
event, development or circumstance whereby any financial statements or
other reports furnished to Agent fail in any material respect to present
fairly, in accordance with GAAP consistently applied, the financial
condition or operating results of any Loan Party as of the date of such
statements; (e) any accumulated retirement plan funding deficiency which,
if such deficiency continued for two plan years and was not corrected as
provided in Section 4971 of the Code, could subject any Loan Party to a tax
imposed by Section 4971 of the Code; (f) each and every default by any Loan
Party which might result in the acceleration of the maturity of any
Indebtedness for Money Borrowed in a principal amount in excess of
$100,000, including the names and addresses of the holders of such
Indebtedness for Money Borrowed with respect to which there is a default
existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness for Money Borrowed; and
(g) any other development in the business or affairs of any Loan Party
which could reasonably be expected to have a Material Adverse Effect; in
each case describing the nature thereof and the action Loan Parties propose
to take with respect thereto.
9.6. Government Receivables. Notify Agent immediately if any of its
Receivables arise out of contracts between any Loan Party and the United
States, Canada, any state, province or any department, agency or
instrumentality of any of them.
9.7. Annual Financial Statements. Furnish Agent within ninety (90)
days after the end of each fiscal year of Loan Parties, financial
statements of Loan Parties on a Consolidated Basis and such parties on a
consolidating basis including, but not limited to, statements of income and
stockholders' equity and cash flow from the beginning of the current fiscal
year to the end of such fiscal year and the balance sheet as at the end of
such fiscal year, all prepared in accordance with GAAP applied on a basis
consistent with prior practices, and in reasonable detail and reported upon
without qualification by an independent certified public accounting firm
selected by Loan Parties and satisfactory to Agent (the "Accountants").
The report of the Accountants shall be accompanied by a statement of the
Accountants certifying that (i) they have caused the Loan Agreement to be
reviewed, (ii) in making the examination upon which such report was based
either no information came to their attention which to their knowledge
constituted an Event of Default or a Default under this Agreement or any
related agreement or, if such information came to their attention,
specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or
have appended thereto calculations which set forth Loan Parties' compliance
with the requirements or restrictions imposed by Sections 6.8, 6.9, 7.6 and
7.11 hereof. In addition, the reports shall be accompanied by a
certificate of a Responsible Officer which shall state that, based on an
examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default, its nature, when it occurred, whether it
is continuing and the steps being taken by Loan Parties with respect to
such event, and such certificate shall have appended thereto calculations
which set forth Loan Parties' compliance with the requirements or
restrictions imposed by Sections 6.8, 6.9, 7.6 and 7.11 hereof.
9.8. Quarterly Financial Statements. Furnish Agent within 45 days
after the end of each fiscal quarter, an unaudited balance sheet of Loan
Parties on a Consolidated Basis and such parties on a consolidating basis
and unaudited statements of income and stockholders' equity and cash flow
of Loan Parties reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a
basis consistent with prior practices and complete and correct in all
material respects, subject to normal and recurring year end adjustments
that individually and in the aggregate are not material to the business of
Loan Parties. Each such balance sheet, statement of income and
stockholders' equity and statement of cash flow shall set forth a
comparison of the figures for (x) (i) the current fiscal period and the
current year-to-date with (ii) the figures for the same fiscal period and
year-to-date period of the immediately preceding fiscal year and (y) the
projections for such fiscal period and year-to-date period delivered
pursuant to Section 5.5(b) or Section 9.12, as applicable. The financial
statements shall be accompanied by a certificate signed by a Responsible
Officer, which shall state that, based on an examination sufficient to
permit him to make an informed statement, no Default or Event of Default
exists, or, if such is not the case, specifying such Default or Event of
Default, its nature, when it occurred, whether it is continuing and the
steps being taken by Loan Parties with respect to such default and, such
certificate shall have appended thereto calculations which set forth Loan
Parties' compliance with the requirements or restrictions imposed by
Sections 6.8, 6.9, 7.6 and 7.11 hereof.
9.9. Monthly Financial Statements. Furnish Agent within thirty (30)
days after the end of each month, an unaudited balance sheet of Loan
Parties on a Consolidated Basis and such parties on a consolidating basis
and unaudited statements of income and stockholders' equity and cash flow
of Loan Parties on a consolidated and consolidating basis reflecting
results of operations from the beginning of the fiscal year to the end of
such month and for such month, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to
normal and recurring year end adjustments that individually and in the
aggregate are not material to the business of Loan Parties. Each such
balance sheet, statement of income and stockholders' equity and statement
of cash flow shall set forth a comparison of the figures for (x) (i) the
current fiscal period and the current year-to-date with (ii) the figures
for the same fiscal period and year-to-date period of the immediately
preceding fiscal year and (y) the projections for such fiscal period and
year-to-date period delivered pursuant to Section 5.5(b) or Section 9.12,
as applicable. The financial statements shall be accompanied by a
certificate of a Responsible Officer, which shall state that, based on an
examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default, its nature, when it occurred, whether it
is continuing and the steps being taken by Loan Parties with respect to
such event and, such certificate shall have appended thereto calculations
which set forth Loan Parties' compliance with the requirements or
restrictions imposed by Sections 6.8, 6.9, 7.6 and 7.11 hereof.
9.10. Other Reports. Furnish Agent as soon as available, but in any
event within ten (10) days after the issuance thereof, with copies of (i)
such financial statements and reports as each Loan Party shall send to its
stockholders, (ii) all notices sent to the holders of Senior Unsecured Note
or otherwise pursuant to the Senior Unsecured Debt Documentation and (iii)
all notices sent pursuant to the Industrial Lease Agreement, Insite South
Milwaukee, L.L.C., as Landlord, and Borrowing Agent, as Tenant, dated as of
January 4, 2002.
9.11. Additional Information. Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Notes have been complied with by Loan Parties including,
without limitation and without the necessity of any request by Agent, (a)
copies of all environmental audits and reviews, (b) at least thirty (30)
days prior thereto, notice of any Loan Party's opening of any new office or
place of business or any Loan Party's closing of any existing office or
place of business, and (c) promptly upon any Loan Party's learning thereof,
notice of any labor dispute to which any Loan Party may become a party, any
strikes or walkouts relating to any of its plants or other facilities, and
the expiration of any labor contract to which any Loan Party is a party or
by which any Loan Party is bound.
9.12. Projected Operating Budget. Furnish Agent, no later than (a)
the Closing Date with respect to each Loan Party's 2002 fiscal year and (b)
thirty (30) days prior to the beginning of each Loan Party's fiscal years
commencing with fiscal year 2003, a month by month projected operating
budget and cash flow of Loan Parties on a Consolidated Basis and such
parties on a consolidating basis for such fiscal year (including an income
statement for each month and a balance sheet as at the end of the last
month in each fiscal quarter), such projections to be accompanied by a
certificate signed by a Responsible Officer of each Loan Party to the
effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial
statements and that such officer has no reason to question the
reasonableness of any material assumptions on which such projections were
prepared.
9.13. Variances From Operating Budget. Furnish Agent, concurrently
with the delivery of the financial statements referred to in Section 9.7
and each monthly report, a written report summarizing all material
variances from budgets submitted by Loan Parties pursuant to Section 9.12
and a discussion and analysis by management with respect to such variances.
9.14. Notice of Suits, Adverse Events. Furnish Agent with prompt
notice of (i) any lapse or other termination of any Consent issued to any
Loan Party by any Governmental Body or any other Person that is material to
the operation of any Loan Party's business, (ii) any refusal by any
Governmental Body or any other Person to renew or extend any such Consent;
and (iii) copies of any periodic or special reports filed by any Loan Party
with any Governmental Body or Person, if such reports indicate any material
change in the business, operations, affairs or condition of any Loan Party,
or if copies thereof are requested by Agent or any Lender, and (iv) copies
of any material notices and other communications from any Governmental Body
or Person which specifically relate to any Loan Party.
9.15. ERISA Notices and Requests. Furnish Agent with immediate
written notice in the event that (i) any Loan Party or any member of the
Controlled Group knows or has reason to know that a Termination Event has
occurred, together with a written statement describing such Termination
Event and the action, if any, which such Loan Party or member of the
Controlled Group has taken, is taking, or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, Department of Labor or PBGC with respect thereto, (ii) any
Loan Party or any member of the Controlled Group knows or has reason to
know that a prohibited transaction (as defined in Sections 406 of ERISA and
4975 of the Code) has occurred together with a written statement describing
such transaction and the action which such Loan Party or any member of the
Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any
Plan together with all communications received by any Loan Party or any
member of the Controlled Group with respect to such request, (iv) any
increase in the benefits of any existing Plan or the establishment of any
new Plan or the commencement of contributions to any Plan to which any Loan
Party or any member of the Controlled Group was not previously contributing
shall occur, (v) any Loan Party or any member of the Controlled Group shall
receive from the PBGC a notice of intention to terminate a Plan or to have
a trustee appointed to administer a Plan, together with copies of each such
notice, (vi) any Loan Party or any member of the Controlled Group shall
receive any favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of a Plan under Section 401(a)
of the Code, together with copies of each such letter; (vii) any Loan Party
or any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such
notice; (viii) any Loan Party or any member of the Controlled Group shall
fail to make a required installment or any other required payment under
Section 412 of the Code on or before the due date for such installment or
payment; (ix) any Loan Party or any member of the Controlled Group knows
that (a) a Multiemployer Plan has been terminated, (b) the administrator or
plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan.
9.16. Additional Documents. Execute and deliver to Agent, upon
request, such documents and agreements as Agent may, from time to time,
reasonably request to carry out the purposes, terms or conditions of this
Agreement.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1. failure by any Loan Party to pay any principal or interest on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this Agreement, Other Documents or by notice of
intention to prepay, or by required prepayment or failure to pay any other
liabilities or make any other payment, fee or charge provided for herein
when due or in any Other Document;
10.2. (i) failure by Loan Parties to perform, keep or observe any
provision of Sections 4.2, 4.3, 4.4, 4.5, 4.6 (except as otherwise provided
in Section 10.4 with respect to Liens which were not granted or created by
a Loan Party), 4.10, 4.11, 4.15(h), 4.19, 6.8, 6.9, 6.10, Article VII or
(ii) any representation or warranty made or deemed made by any Loan Party
in this Agreement or any related agreement or in any certificate, document
or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;
10.3. Intentionally Omitted;
10.4. issuance of a notice of ▇▇▇▇, levy, assessment, injunction or
attachment against a material portion of any Loan Party's property which is
not stayed or lifted within thirty (30) days;
10.5. failure or neglect of any Loan Party to perform, keep or
observe any term, provision, condition, covenant herein contained, or
contained in any Other Document, now or hereafter entered into between any
Loan Party, Agent and/or any Lender (to the extent such breach is not
otherwise embodied in any other provision of this Article X for which a
different grace or cure period is specified or which constitute an
immediate Event of Default under this Agreement or the Other Documents),
which is not cured within thirty (30) days (or, in the case of Article IX,
five (5) Business Days) after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure or
(ii) the date upon which written notice thereof is given to the Borrowing
Agent by Agent or any Lender;
10.6. any judgment or judgments are rendered or judgment liens filed
against one or more Loan Parties for an aggregate amount in excess of
$2,000,000 which within thirty (30) days of such rendering or filing is not
either satisfied, stayed or discharged of record;
10.7. any Loan Party shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) make a general assignment for the
benefit of creditors, (iii) commence a voluntary case under any state,
provincial or federal bankruptcy laws (as now or hereafter in effect), (iv)
be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vi)
acquiesce to, or fail to have dismissed, within sixty (60) days, any
petition filed against it in any involuntary case under such bankruptcy
laws, or (vii) take any action for the purpose of effecting any of the
foregoing;
10.8. any Loan Party shall admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations
of its present business;
10.9. any Affiliate or any Subsidiary of any Loan Party (other than
Original Owners and their Affiliates which are not Loan Parties or
Subsidiaries thereof) shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or
be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment for the
benefit of creditors, (iv) commence a voluntary case under any state,
provincial or federal bankruptcy laws (as now or hereafter in effect), (v)
be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to
take advantage of any other law providing for the relief of debtors, (vii)
acquiesce to, or fail to have dismissed, within sixty (60) days, any
petition filed against it in any involuntary case under such bankruptcy
laws, or (viii) take any action for the purpose of effecting any of the
foregoing;
10.10. any change in any Loan Party's condition or affairs
(financial or otherwise) which in Agent's opinion has a Material Adverse
Effect;
10.11. any ▇▇▇▇ created hereunder or provided for hereby, under
the Canadian Security Agreement or under any Other Document for any reason
ceases to be or is not a valid and perfected Lien having a first priority
interest (except for Permitted Prior Encumbrances, where applicable);
10.12. an event of default has occurred and been declared under
the Senior Unsecured Debt Documentation, which default shall not have been
cured or waived within any applicable grace period and with respect to
which the Deferral Agreement is not applicable or any payment on the Senior
Unsecured Note shall be made in contravention of the Deferral Agreement as
in effect on the Closing Date or as modified with the express written
consent of Agent;
10.13. a default of the obligations of any Loan Party under any
other agreement to which it is a party shall occur which materially and
adversely affects its condition, affairs or prospects (financial or
otherwise) which default is not cured within any applicable grace period;
10.14. termination or breach of the Canadian Security Agreement
or any Guaranty or similar agreement executed and delivered to Agent in
connection with the Obligations of any Loan Party, or if any Guarantor
attempts to terminate, challenges the validity of, or its liability under,
any such Guaranty or similar agreement;
10.15. any Change of Control or Change in Management shall
occur;
10.16. any material provision of this Agreement shall, for any
reason, cease to be valid and binding on any Loan Party, or any Loan Party
shall so claim in writing to Agent;
10.17. (i) any Governmental Body shall (A) revoke, terminate,
suspend or adversely modify any license, permit, patent trademark or
tradename of any Loan Party, the continuation of which is material to the
continuation of any Loan Party's business, or (B) commence proceedings to
suspend, revoke, terminate or adversely modify any such license, permit,
trademark, tradename or patent and such proceedings shall not be dismissed
or discharged within sixty (60) days, or (c) schedule or conduct a hearing
on the renewal of any license, permit, trademark, tradename, design right,
or patent necessary for the continuation of any Loan Party's business and
the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of
such license, permit, trademark, tradename or patent; (ii) any agreement
which is necessary or material to the operation of any Loan Party's
business shall be revoked or terminated and not replaced by a substitute
acceptable to Agent within thirty (30) days after the date of such
revocation or termination, and such revocation or termination and non-
replacement would reasonably be expected to have a Material Adverse Effect;
10.18. any material portion of the Collateral shall be seized or
taken by a Governmental Body, or any Loan Party or the title and rights of
any Loan Party or any Original Owner which is the owner of any material
portion of the Collateral shall have become the subject matter of
litigation which might, in the opinion of Agent, upon final determination,
result in impairment or loss of the security provided by this Agreement or
the Other Documents;
10.19. an event or condition specified in Sections 7.16 or 9.15
hereof shall occur or exist with respect to any Plan and, as a result of
such event or condition, together with all other such events or conditions,
any Loan Party or any member of the Controlled Group shall incur, or in the
opinion of Agent be reasonably likely to incur, a liability to a Plan or
the PBGC (or both) which, in the reasonable judgment of Agent, would have a
Material Adverse Effect; or
10.20. a material default of any obligations of a Loan Party or
any Affiliate thereof under the Asset Sale Agreement dated March 31, 1999
between Bucyrus Canada Acquisition, Ltd. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (1986) Ltd.
or the amount of the "earnout" pursuant to Exhibit F thereof shall exceed
the sum of $500,000.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1. Rights and Remedies. Upon the occurrence of (i) an Event of
Default pursuant to Section 10.7, all Obligations shall be immediately due
and payable and this Agreement and the obligation of Lenders to make
Advances shall be deemed terminated; and, (ii) any of the other Events of
Default and at any time thereafter (such default not having previously been
cured), at the option of Majority Lenders all Obligations shall be
immediately due and payable and Lenders shall have the right to terminate
this Agreement and to terminate the obligation of Lenders to make Advances
and (iii) a filing of a petition against any Loan Party in any involuntary
case under any state, provincial or federal bankruptcy laws, the obligation
of Lenders to make Advances hereunder shall be terminated other than as may
be required by an appropriate order of the bankruptcy court having
jurisdiction over any Loan Party. Upon the occurrence of any Event of
Default, Agent shall have the right to exercise any and all other rights
and remedies provided for herein, under the Uniform Commercial Code, any
applicable personal property security legislation and at law or equity
generally, including, without limitation, the right to foreclose the
security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or
all of the Collateral with or without judicial process. Agent may enter
any Loan Party's premises or other premises without legal process and
without incurring liability to any Loan Party therefor, and Agent may
thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as Agent may
deem advisable and Agent may require Loan Parties to make the Collateral
available to Agent at a convenient place. With or without having the
Collateral at the time or place of sale, Agent may sell the Collateral, or
any part thereof, at public or private sale, at any time or place, in one
or more sales, at such price or prices, and upon such terms, either for
cash, credit or future delivery, as Agent may elect. Except as to that
part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent
shall give Loan Parties reasonable notification of such sale or sales, it
being agreed that in all events written notice mailed to Loan Parties at
least ten (10) days prior to such sale or sales is reasonable notification.
At any public sale Agent or any Lender may bid for and become the
purchaser, and Agent, any Lender or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and such right
and equity are hereby expressly waived and released by each Loan Party.
Agent may specifically disclaim any warranties of title or the like at any
sale of Collateral. In connection with the exercise of the foregoing
remedies, Agent is granted permission to use all of each Loan Party's
trademarks, trade styles, trade names, patents, patent applications,
licenses, franchises and other proprietary rights which are used in
connection with (a) Inventory for the purpose of disposing of such
Inventory and (b) Equipment for the purpose of completing the manufacture
of unfinished goods.
11.2. Application of Proceeds. The proceeds realized from the sale
of any Collateral shall be applied as follows: first, to the reasonable
costs, expenses and attorneys' fees and expenses incurred by Agent for
collection and for acquisition, completion, protection, removal, storage,
sale and delivery of the Collateral; second, to interest due upon any of
the Advances; third, to fees payable in connection with this Agreement;
fourth, to furnish to Agent cash collateral in an amount not less than 105%
of the aggregate undrawn amount of all Letters of Credit, such cash
collateral arrangements to be in form and substance satisfactory to Agent;
fifth, to the principal of the Advances; sixth to the interest on any other
Obligations; and seventh, to the principal of any other Obligations. If
any deficiency shall arise, Loan Parties shall remain liable to Agent and
Lenders therefor. If it is determined by an authority of competent
jurisdiction that a disposition by Agent did not occur in a commercially
reasonably manner, Agent may obtain a deficiency judgment for the
difference between the amount of the Obligation and the amount that a
commercially reasonable sale would have yielded. Agent will not be
considered to have offered to retain the Collateral in satisfaction of the
Obligations unless Agent has entered into a written agreement with Loan
Party to that effect.
11.3. Agent's Discretion. Agent shall have the right in its sole
discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take
any other action with respect thereto and such determination will not in
any way modify or affect any of Agent's or ▇▇▇▇▇▇▇' rights hereunder.
11.4. Setoff. In addition to any other rights which Agent, any
Lender or any Issuer may have under applicable law, upon the occurrence of
an Event of Default hereunder, Agent, such ▇▇▇▇▇▇ and such Issuer shall
have a right to apply any Loan Party's property held by Agent, such Lender
or such Issuer to reduce the Obligations.
11.5. Rights and Remedies not Exclusive. The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the
exercise of any right or remedy shall not preclude the exercise of any
other right or remedies provided for herein or otherwise provided by law,
all of which shall be cumulative and not alternative.
XII. ▇▇▇▇▇▇▇ AND JUDICIAL PROCEEDINGS.
12.1. Waiver of Notice. Each Loan Party hereby waives notice of non-
payment of any of the Receivables, demand, presentment, protest and notice
thereof with respect to any and all instruments, notice of acceptance
hereof, notice of loans or advances made, credit extended, Collateral
received or delivered, or any other action taken in reliance hereon, and
all other demands and notices of any description, except such as are
expressly provided for herein.
12.2. Delay. No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or
any other right, remedy or option or of any default.
12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1. Term. This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of
each Loan Party, Agent and each Lender, shall become effective on the date
hereof and shall continue in full force and effect until the earliest of
(x) January 2, 2003 (the "Original Term"), (y) the acceleration of all
Obligations pursuant to the terms of this Agreement or (z) the date on
which this Agreement shall be terminated in accordance with the provisions
hereof or by operation of law (the "Termination Date"), such period
referred to herein as the "Term". Loan Parties may terminate this
Agreement at any time upon ninety (90) days' prior written notice upon
payment in full of the Obligations.
13.2. Termination. The termination of the Agreement shall not affect
any Loan Party's, Agent's or any Lender's rights, or any of the Obligations
having their inception prior to the effective date of such termination, and
the provisions hereof shall continue to be fully operative until all
transactions entered into, rights or interests created or Obligations have
been fully disposed of, concluded or liquidated. The security interests,
▇▇▇▇▇ and rights granted to Agent and Lenders hereunder and under the
Canadian Security Agreement and the financing statements filed hereunder
and under the Canadian Security Agreement shall continue in full force and
effect, notwithstanding the termination of this Agreement or the fact that
Borrowers' Account may from time to time be temporarily in a zero or credit
position, until all of the Obligations of each Loan Party have been paid or
performed in full after the termination of this Agreement or each Loan
Party has furnished Agent and Lenders with an indemnification satisfactory
to Agent and Lenders with respect thereto. Accordingly, each Loan Party
waives any rights which it may have under Section 9-513(c) of the Uniform
Commercial Code, or any other applicable personal property legislation, to
demand the filing of termination statements with respect to the Collateral,
and Agent shall not be required to send such termination statements to each
Loan Party, or to file them with any filing office, unless and until this
Agreement shall have been terminated in accordance with its terms and all
Obligations paid in full in immediately available funds. All
representations, warranties, covenants, waivers and agreements contained
herein shall survive termination hereof until all Obligations are paid or
performed in full.
XIV. REGARDING AGENT.
14.1. Appointment. Each Lender hereby designates GMACBC to act as
Agent for such Lender under this Agreement and the Other Documents. Each
Lender hereby irrevocably authorizes Agent to take such action on its
behalf under the provisions of this Agreement and the Other Documents and
to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto and
Agent shall hold all Collateral, payments of principal and interest, fees
(except the fees set forth in the Fee Letter), charges and collections
(without giving effect to any collection days) received pursuant to this
Agreement, for the ratable benefit of Lenders. Agent may perform any of
its duties hereunder by or through its agents or employees. As to any
matters not expressly provided for by this Agreement (including without
limitation, collection of the Note) Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and
such instructions shall be binding; provided, however, that Agent shall not
be required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless
Agent is furnished with an indemnification reasonably satisfactory to Agent
with respect thereto.
14.2. Nature of Duties. Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents. None of Agent, any Lender, or any Issuer nor any of their
respective officers, directors, employees or agents shall be (i) liable for
any action taken or omitted by them as such hereunder or in connection
herewith, unless caused by their gross (not mere) negligence or willful
misconduct, or (ii) responsible in any manner for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or
any of the Other Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, or any of the
Other Documents or for any failure of Loan Party to perform its obligations
hereunder. Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any of the
Other Documents, or to inspect the properties, books or records of any Loan
Party. The duties of Agent as respects the Advances to Borrowers shall be
mechanical and administrative in nature; Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Agreement, expressed or implied, is intended to or shall be
so construed as to impose upon Agent any obligations in respect of this
Agreement except as expressly set forth herein.
14.3. Lack of Reliance on Agent and Resignation. Independently and
without reliance upon Agent, any Issuer or any other Lender, each Lender
has made and shall continue to make (i) its own independent investigation
of the financial condition and affairs of each Loan Party in connection
with the making and the continuance of the Advances hereunder and the
taking or not taking of any action in connection herewith, and (ii) its own
appraisal of the creditworthiness of each Loan Party. 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 making of the Advances
or at any time or times thereafter except as shall be provided by any Loan
Party pursuant to the terms hereof. Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or
warranties herein or in any agreement, document, certificate or a statement
delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of
this Agreement or any Other Document, or of the financial condition of any
Loan Party, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement, the Note, the Other Documents or the financial condition of
any Loan Party, or the existence of any Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each of
▇▇▇▇▇▇▇ and Borrowing Agent and upon such resignation, the Required ▇▇▇▇▇▇▇
will promptly designate a successor Agent reasonably satisfactory to Loan
Parties. If no such successor Agent is appointed at the end of such sixty
(60) day period, Agent may designate one of the Lenders as a successor
Agent.
Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent. After any Agent's resignation as
Agent, the provisions of this Article XIV shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
14.4. Certain Rights of Agent. If Agent shall request instructions
from Lenders with respect to any act or action (including failure to act)
in connection with this Agreement or any Other Document, Agent shall be
entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions from the Required Lenders; and Agent
shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, Lenders shall not have any right of action
whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required
Lenders.
14.5. Reliance. 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,
order or other document or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person or
entity, and, with respect to all legal matters pertaining to this Agreement
and the Other Documents and its duties hereunder, upon advice of counsel
selected by it. Agent may employ agents and attorneys-in-fact and shall
not be liable for the default or misconduct of any such agents or
attorneys-in-fact selected by Agent with reasonable care.
14.6. Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder or
under the Other Documents, unless Agent has received notice from a Lender
or a Loan Party referring to this Agreement or the Other Documents,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that Agent receives such a notice,
Agent shall give notice thereof to Lenders. Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, that, unless and until Agent
shall have received such directions, 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 in the best
interests of Lenders.
14.7. Indemnification. To the extent Agent is not reimbursed and
indemnified by Loan Parties, each Lender will reimburse and indemnify Agent
and each Issuer in proportion to its respective portion of the Advances
(or, if no Advances are outstanding, according to its Commitment
Percentage), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent and such Issuer in performing its
duties hereunder, or in any way relating to or arising out of this
Agreement or any Other Document; provided that, Lenders shall not be liable
for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the indemnified party's gross (not mere) negligence or
willful misconduct.
14.8. Agent in its Individual Capacity. With respect to the
obligation of Agent to lend under this Agreement, the Advances made by it
shall have the same rights and powers hereunder as any other Lender and as
if it were not performing the duties as Agent specified herein; and the
term "Lender" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity as a Lender.
Agent may engage in business with any Loan Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Loan Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
14.9. Delivery of Documents. To the extent Agent receives documents
and information from any Loan Party pursuant to Section 9.7 through and
including 9.9 of this Agreement, Agent will promptly furnish such documents
and information to Lenders.
14.10. Loan Parties' Undertaking to Agent. Without prejudice to
their respective obligations to Lenders under the other provisions of this
Agreement, each Loan Party hereby undertakes with Agent to pay to Agent
from time to time on demand all amounts from time to time due and payable
by it for the account of Agent or Lenders or any of them pursuant to this
Agreement to the extent not already paid. Any payment made pursuant to any
such demand shall pro tanto satisfy the relevant Loan Party's obligations
to make payments for the account of Lenders or the relevant one or more of
them pursuant to this Agreement.
14.11. Syndication Agent. The entity identified on the cover
page of this Agreement as the "Syndication Agent" shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement
(or any of the Other Documents) other than those applicable to all Lenders
as such. Without limiting the foregoing, the entity so identified as the
"Syndication Agent" shall not have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on the entity so identified as the "Syndication
Agent" in deciding to enter into this Agreement and each of the Other
Documents to which it is a party or in taking or not taking action
hereunder or thereunder.
XV. GUARANTEE.
15.1. Each Guarantor hereby unconditionally guarantees, as a primary
obligor and not merely as a surety, jointly and severally with each other
Guarantor when and as due, whether at maturity, by acceleration, by notice
of prepayment or otherwise, the due and punctual performance of all
Obligations of each other party hereto. Each payment made by any Guarantor
pursuant to this Guaranty shall be made in lawful money of the United
States in immediately available funds, (a) without set-off or counterclaim
and (b) free and clear of and without deduction or withholding for or on
account of any present and future taxes, levies, imposts, stamp taxes,
duties, charges to tax, fees, deductions, withholdings and any conditions
or restrictions resulting in charges to tax and all penalties, interest and
other payments on or in respect thereof (except for charges based on the
overall net income of Agent or a Lender) ("Tax" or "Taxes") unless
Guarantor is compelled by law to make payment subject to such Taxes.
15.2. All Taxes in respect of this Guaranty or any amounts payable or
paid under this Guaranty shall be paid by Guarantor when due and in any
event prior to the date on which penalties attach thereto. Guarantor will
indemnify Agent and each of the Lenders against and in respect of all such
Taxes. Without limiting the generality of the foregoing, if any Taxes or
amounts in respect thereof must be deducted or withheld from any amounts
payable or paid by Guarantor hereunder, Guarantor shall pay such additional
amounts as may be necessary to ensure that the Agent and each of the
Lenders receives a net amount equal to the full amount which it would have
received had payment (including of any additional amounts payable under
this Section 15.2) not been made subject to such Taxes. Within thirty (30)
days of each payment by Guarantor hereunder of Taxes or in respect of
Taxes, Guarantor shall deliver to Agent satisfactory evidence (including
originals, or certified copies, of all relevant receipts) that such Taxes
have been duly remitted to the appropriate authority or authorities.
15.3. Each Guarantor hereby absolutely, unconditionally and
irrevocably waives (i) promptness, diligence, notice of acceptance, notice
of presentment of payment and any other notice hereunder, (ii) demand of
payment, protest, notice of dishonor or nonpayment, notice of the present
and future amount of the Obligations and any other notice with respect to
the Obligations, (iii) any requirement that the Agent or any Lender
protect, secure, perfect or insure any security interest or Lien or any
property subject thereto or exhaust any right or take any action against
any other Loan Party, or any Person or any Collateral, (iv) any other
action, event or precondition to the enforcement hereof or the performance
by each such Guarantor of the Obligations, and (v) any defense arising by
any lack of capacity or authority or any other defense of any Loan Party or
any notice, demand or defense by reason of cessation from any cause of
Obligations other than payment and performance in full of the Obligations
by the Loan Parties and any defense that any other guarantee or security
was or was to be obtained by Agent.
15.4. No invalidity, irregularity, voidableness, voidness or
unenforceability of this Agreement or any Other Document or any other
agreement or instrument relating thereto, or of all or any part of the
Obligations or of any collateral security therefor shall affect, impair or
be a defense hereunder.
15.5. The Guaranty hereunder is one of payment and performance, not
collection, and the obligations of each Guarantor hereunder are independent
of the Obligations of the other Loan Parties, and a separate action or
actions may be brought and prosecuted against any Guarantor to enforce the
terms and conditions of this Article XV, irrespective of whether any action
is brought against any other Loan Party or other Persons or whether any
other Loan Party or other Persons are joined in any such action or actions.
Each Guarantor waives any right to require that any resort be had by Agent
or any Lender to any security held for payment of the Obligations or to any
balance of any deposit account or credit on the books of any Agent or any
Lender in favor of any Loan Party or any other Person. No election to
proceed in one form of action or proceedings, or against any Person, or on
any Obligations, shall constitute a waiver of Agent's right to proceed in
any other form of action or proceeding or against any other Person unless
Agent has expressed any such waiver in writing. Without limiting the
generality of the foregoing, no action or proceeding by Agent against any
Loan Party under any document evidencing or securing indebtedness of any
Loan Party to Agent shall diminish the liability of any Guarantor
hereunder, except to the extent Agent receives actual payment on account of
Obligations by such action or proceeding, notwithstanding the effect of any
such election, action or proceeding upon the right of subrogation of any
Guarantor in respect of any Loan Party.
15.6. As an original and independent obligation under this Guaranty,
Guarantor shall (a) indemnify the Agent and each of the Lenders and keep
the Agent and each of the Lenders indemnified against all costs, losses,
expenses and liabilities of whatever kind resulting from the failure by any
party to make due and punctual payment of any of the Obligations or
resulting from any of the Obligations being or becoming void, voidable,
unenforceable or ineffective against Borrower (including, but without
limitation, all legal and other costs, charges and expenses incurred by the
Agent and each of the Lenders, or any of them in connection with preserving
or enforcing, or attempting to preserve or enforce, its rights under this
Guaranty); and (b) pay on demand the amount of such costs, losses, expenses
and liabilities whether or not Agent or any of the Lenders have attempted
to enforce any rights against Borrower or any other Person or otherwise.
15.7. The liability of each Guarantor hereunder shall be absolute,
unlimited and unconditional and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any claim, defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any other Obligation or
otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor shall not be discharged or impaired,
released, limited or otherwise affected by:
(i) any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, release, renewal or alteration of, or any new
agreements relating to any Obligation, any security therefor, or any
liability incurred directly or indirectly in respect thereof, or any
rescission of, or amendment, waiver or other modification of, or any
consent to departure from, this Agreement or any Other Document,
including any increase in the Obligations resulting from the
extension of additional credit to any Borrower or otherwise;
(ii) any sale, exchange, release, surrender, loss,
abandonment, realization upon any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, all or any of
the Obligations, and/or any offset there against, or failure to
perfect, or continue the perfection of, any Lien in any such
property, or delay in the perfection of any such Lien, or any
amendment or waiver of or consent to departure from any other
guaranty for all or any of the Obligations;
(iii) the failure of the Agent or any Lender to assert any
claim or demand or to enforce any right or remedy against any
Borrower or any other Loan Party or any other Person under the
provisions of this Agreement or any Other Document or any other
document or instrument executed an delivered in connection herewith
or therewith;
(iv) any settlement or compromise of any Obligation, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and any
subordination of the payment of all or any part thereof to the
payment of any obligation (whether due or not) of any Loan Party to
creditors of any Loan Party other than any other Loan Party;
(v) any manner of application of Collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Obligations
or any other assets of any Loan Party; and
(vi) any other agreements or circumstance of any nature
whatsoever that may or might in any manner or to any extent vary the
risk of any Guarantor, or that might otherwise at law or in equity
constitute a defense available to, or a discharge of, the Guaranty
hereunder and/or the obligations of any Guarantor, or a defense to,
or discharge of, any Loan Party or any other Person or party hereto
or the Obligations or otherwise with respect to the Advances, Letters
of Credit or other financial accommodations to any Borrower pursuant
to this Agreement and/or the Other Documents.
15.8. The Agent shall have the right to take any action set forth in
Section 15.7 without notice to or the consent of any Guarantor and each
Guarantor expressly waives any right to notice of, consent to, knowledge of
and participation in any agreements relating to any of the above or any
other present or future event relating to Obligations whether under this
Agreement or otherwise or any right to challenge or question any of the
above and waives any defenses of such Guarantor which might arise as a
result of such actions.
15.9. Agent may at any time and from time to time (whether prior to
or after the revocation or termination of this Agreement) without the
consent of, or notice to, any Guarantor, and without incurring
responsibility to any Guarantor or impairing or releasing the Obligations,
apply any sums by whomsoever paid or howsoever realized to any Obligations
regardless of what Obligations remain unpaid.
15.10. (a) The Guaranty provisions herein contained shall continue
to be effective or be reinstated, as the case may be, if claim is ever made
upon the Agent or any Lender for repayment or recovery of any amount or
amounts received by such Person in payment or on account of any of the
Obligations and such Person repays all or part of said amount for any
reason whatsoever, including, without limitation, by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over such Person or the respective property of each, or any
settlement or compromise of any claim effected by such Person with any such
claimant (including any Loan Party); and in such event each Guarantor
hereby agrees that any such judgment, decree, order, settlement or
compromise or other circumstances shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any note or
other instrument evidencing any Obligation, and each Guarantor shall be and
remain liable to the Agent and/or Lenders for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by such Person(s).
(b) Agent shall not be required to marshal any assets in
favor of any Guarantor, or against or in payment of Obligations.
(c) No Guarantor shall be entitled to claim against any
present or future security held by Agent from any Person for Obligations in
priority to or equally with any claim of Agent, or assert any claim for any
liability of any Loan Party to any Guarantor in priority to or equally with
claims of Agent for Obligations, and no Guarantor shall be entitled to
compete with Agent with respect to, or to advance any equal or prior claim
to any security held by Agent for Obligations.
(d) If any Loan Party makes any payment to Agent, which
payment is wholly or partly subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to any
Person under any federal or provincial statute or at common law or under
equitable principles, then to the extent of such payment, the Obligation
intended to be paid shall be revived and continued in full force and effect
as if the payment had not been made, and the resulting revived Obligation
shall continue to be guaranteed, uninterrupted, by each Guarantor
hereunder.
(e) All present and future monies payable by any Loan Party
to any Guarantor, whether arising out of a right of subrogation or
otherwise, are assigned to Agent for its benefit and for the ratable
benefit of Lenders as security for such Guarantor's liability to Agent and
Lenders hereunder and are postponed and subordinated to Agent's prior right
to payment in full of Obligations. Except to the extent prohibited
otherwise by this Agreement, all monies received by any Guarantor from any
Loan Party shall be held by such Guarantor as agent and trustee for Agent.
This assignment, postponement and subordination shall only terminate when
the Obligations are paid in full in cash and this Agreement is irrevocably
terminated.
(f) Each Loan Party acknowledges this assignment,
postponement and subordination and, except as otherwise set forth herein,
agrees to make no payments to any Guarantor without the prior written
consent of Agent. Each Loan Party agrees to give full effect to the
provisions hereof.
15.11. Upon the occurrence and during the continuance of any Event
of Default, the Agent may and upon written request of the Required Lenders
shall, without notice to or demand upon any Loan Party or any other Person,
declare any obligations of such Guarantor hereunder immediately due and
payable, and shall be entitled to enforce the obligations of each
Guarantor. Upon such declaration by the Agent, the Agent and Lenders are
hereby authorized at any time and from time to time to set off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the
Agent or Lenders to or for the credit or the account of any Guarantor
against any and all of the obligations of each Guarantor now or hereafter
existing hereunder, whether or not the Agent or Lenders shall have made any
demand hereunder against any other Loan Party and although such obligations
may be contingent and unmatured. The rights of the Agent and ▇▇▇▇▇▇▇
hereunder are in addition to other rights and remedies (including other
rights of set-off) which the Agent and Lenders may have. Upon such
declaration by the Agent, with respect to any claims (other than those
claims referred to in the immediately preceding paragraph) of any Guarantor
against any Loan Party (the "Claims"), the Agent shall have the full right
on the part of the Agent in its own name or in the name of such Guarantor
to collect and enforce such Claims by legal action, proof of debt in
bankruptcy or other liquidation proceedings, vote in any proceeding for the
arrangement of debts at any time proposed, or otherwise, the Agent and each
of its officers being hereby irrevocably constituted attorneys-in-fact for
each Guarantor for the purpose of such enforcement and for the purpose of
endorsing in the name of each Guarantor any instrument for the payment of
money. Each Guarantor will receive as trustee for the Agent and will pay
to the Agent forthwith upon receipt thereof any amounts which such
Guarantor may receive from any Loan Party on account of the Claims. Each
Guarantor agrees that at no time hereafter will any of the Claims be
represented by any notes, other negotiable instruments or writings, except
and in such event they shall either be made payable to the Agent, or if
payable to any Guarantor, shall forthwith be endorsed by such Guarantor to
the Agent. Each Guarantor agrees that no payment on account of the Claims
or any security interest therein shall be created, received, accepted or
retained during the continuance of any Event of Default nor shall any
financing statement be filed with respect thereto by any Guarantor.
15.12. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by any Loan Party or others
with respect to any of the Obligations shall, if the statute of limitations
in favor of any Guarantor against the Agent or Lenders shall have commenced
to run, toll the running of such statute of limitations and, if the period
of such statute of limitations shall have expired, prevent the operation of
such statute of limitations.
15.13. All amounts due, owing and unpaid from time to time by any
Guarantor hereunder shall bear interest at the interest rate per annum then
chargeable with respect to Domestic Rate Loans constituting Revolving
Advances (without duplication of interest on the underlying Obligation).
15.14. For purposes of the Interest Act (Canada), where in this
Guaranty a rate of interest is to be calculated on the basis of a year of
360 or 365 days, the yearly rate of interest to which the rate is
equivalent is the rate multiplied by the number of days in the year for
which the calculation is made and divided by 360 or 365, as applicable.
15.15. Without limiting any other rights in this Agreement, if for
the purposes of obtaining judgment in any court in any jurisdiction with
respect to this Guaranty or any Other Document it becomes necessary to
convert into the currency of such jurisdiction (herein called the "Judgment
Currency") any amount due hereunder in any currency other than the Judgment
Currency, then conversion shall be made at the rate of exchange prevailing
on the Business Day before the day on which judgment is given. For this
purpose, "rate of exchange" means the rate at which Agent would, on the
relevant date at or about 12:00 noon (New York time), be prepared to sell a
similar amount of such currency in New York, New York against the Judgment
Currency. In the event that there is a change in the rate of exchange
prevailing between the Business Day before the day on which the judgment is
given and the date of payment of the amount due, Guarantor will, on the
date of payment, pay such additional amounts (if any) as may be necessary
to ensure that the amount paid on such date is the amount in the Judgment
Currency which when converted at the rate of exchange prevailing on the
date of payment is the amount then due under this Guaranty or any Other
Document in such other currency. Any additional amount due from Guarantor
under this Section 15.15 will be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due under or in
respect of this Agreement or any of the Other Documents.
15.16. Each Guarantor acknowledges receipt of a copy of each of this
Agreement and the Other Documents. Each Guarantor has made an independent
investigation of the Loan Parties and of the financial condition of the
Loan Parties. Neither Agent nor any Lender has made and neither Agent nor
any Lender does make any representations or warranties as to the income,
expense, operation, finances or any other matter or thing affecting any
Loan Party nor has Agent or any Lender made any representations or
warranties as to the amount or nature of the Obligations of any Loan Party
to which this Article XV applies as specifically herein set forth, nor has
Agent or any Lender or any officer, agent or employee of Agent or any
Lender or any representative thereof, made any other oral representations,
agreements or commitments of any kind or nature, and each Guarantor hereby
expressly acknowledges that no such representations or warranties have been
made and such Guarantor expressly disclaims reliance on any such
representations or warranties.
15.17. Notwithstanding any provision to the contrary contained in
this Article XV or elsewhere in this Agreement, so long as (x) Holdings has
no creditors other than with respect to (a) the Bahama Rock Transaction as
in effect on the date hereof and (b) surety bonds for workers compensation
insurance in an amount not in excess of $1,500,000 in the aggregate (the
"Permitted Creditors"), and (y) no creditor of Holdings (other than Agent
or Lenders pursuant to this Agreement or any Other Document and the
Permitted Creditors) is able to seek recourse against any assets of
Holdings other than on the shares of the capital stock of Borrowing Agent,
then the obligations of Holdings hereunder and under any Other Documents
shall be nonrecourse obligations secured by the Pledge Agreement of
Holdings.
15.18. The provisions of this Article XV shall remain in effect
until the indefeasible payment in full in cash of all Obligations and
irrevocable termination of this Agreement.
XVI. BORROWING AGENCY.
16.1. Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates Borrowing
Agent to be its attorney and agent and in such capacity to borrow, sign and
endorse notes, and execute and deliver all instruments, documents, writings
and further assurances now or hereafter required hereunder, on behalf of
such Borrower or Borrowers, and hereby authorizes Agent to pay over or
credit all loan proceeds hereunder in accordance with the request of
Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing
facility with a borrowing agent in the manner set forth in this Agreement
is solely as an accommodation to Borrowers and at their request. None of
Agent, any Issuer or any Lender shall incur liability to Borrowers as a
result thereof. To induce Agent and Lenders to do so and in consideration
thereof, each Borrower hereby indemnifies Agent, each Issuer and each
Lender and holds Agent, each Issuer and each Lender harmless from and
against any and all liabilities, expenses, losses, damages and claims of
damage or injury asserted against Agent, any Issuer or any Lender by any
Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Agent or any
Lender on any request or instruction from Borrowing Agent or any other
action taken by Agent or any Lender with respect to this Section 16.1
except due to willful misconduct or gross (not mere) negligence by the
indemnified party.
(c) All Obligations shall be joint and several, and each
Borrower shall make payment upon the maturity of the Obligations by
acceleration or otherwise, and such obligation and liability on the part of
each Borrower shall in no way be affected by any extensions, renewals and
forbearance granted by Agent or any Lender to any Loan Party, failure of
Agent or any Lender to give any Borrower notice of borrowing or any other
notice, any failure of Agent or any Lender to pursue or preserve its rights
against any Loan Party, the release by Agent or any Lender of any
Collateral now or thereafter acquired from any Loan Party, and such
agreement by each Loan Party to pay upon any notice issued pursuant thereto
is unconditional and unaffected by prior recourse by Agent or any Lender to
the other Loan Parties or any Collateral for such Loan Party's Obligations
or the lack thereof.
16.2. Waiver of Subrogation. Each Loan Party expressly waives any
and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution of any other claim which such Loan Party may now or hereafter
have against the other Loan Parties or other Person directly or
contingently liable for the Obligations hereunder, or against or with
respect to the other Loan Parties' property (including, without limitation,
any property which is Collateral for the Obligations), arising from the
existence or performance of this Agreement, until termination of this
Agreement and repayment in full of the Obligations.
XVII. MISCELLANEOUS.
17.1. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York. Any
judicial proceeding brought by or against any Loan Party with respect to
any of the Obligations, this Agreement or any related agreement may be
brought in any court of competent jurisdiction in the State of New York, by
execution and delivery of this Agreement, each Loan Party accepts for
itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts,
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. Each Loan Party hereby waives personal
service of any and all process upon it and consents that all such service
of process may be made by registered mail (return receipt requested)
directed to Borrowing Agent at its address set forth in Section 17.6 and
service so made shall be deemed completed five (5) days after the same
shall have been so deposited in the mails of the United States of America,
Canada or, at the Agent's and/or any Lender's option, by service upon
Borrowing Agent which each Loan Party irrevocably appoints as such Loan
Party's Agent for the purpose of accepting service within the State of New
York. Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Agent or any Lender to bring
proceedings against any Loan Party in the courts of any other jurisdiction.
Each Loan Party waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. Any judicial
proceeding by any Loan Party against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of,
related to or connected with this Agreement or any related agreement, shall
be brought only in a federal or state court located in the City of New
York, State of New York.
17.2. Entire Understanding. (a) This Agreement and the documents
executed concurrently herewith contain the entire understanding between
each Loan Party, Agent and each Lender and supersedes all prior agreements
and understandings, if any, relating to the subject matter hereof. Any
promises, representations, warranties or guarantees not herein contained
and hereinafter made shall have no force and effect unless in writing,
signed by each Loan Party's, Agent's and each ▇▇▇▇▇▇'s respective officers.
Neither this Agreement nor any portion or provisions hereof may be changed,
modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than
by an agreement in writing, signed by the party to be charged. Each Loan
Party acknowledges that it has been advised by counsel in connection with
the execution of this Agreement and Other Documents and is not relying upon
oral representations or statements inconsistent with the terms and
provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing
of the Required Lenders, and Borrowers may, subject to the provisions of
this Section 17.2 (b), from time to time enter into written supplemental
agreements to this Agreement or the Other Documents executed by Borrowers,
for the purpose of adding or deleting any provisions or otherwise changing,
varying or waiving in any manner the rights of Lenders, Agent or Loan
Parties thereunder or the conditions, provisions or terms thereof or
waiving any Event of Default thereunder, but only to the extent specified
in such written agreements; provided, however, that no such supplemental
agreement shall, without the consent of all Lenders:
(i) increase the Commitment Percentage of any Lender;
(ii) increase the Maximum Formula Amount or the Maximum
Revolving Advance Amount;
(iii) extend the maturity of any Note or the due date for
any amount payable hereunder, or decrease the rate of interest or reduce
any scheduled principal payment or fee payable by Borrowers to Lenders
pursuant to this Agreement;
(iv) alter the definition of the term Required Lenders
or alter, amend or modify this Section 17.2(b);
(v) release any Collateral during any calendar year
(other than in accordance with the provisions of this Agreement) having an
aggregate value in excess of $1,000,000;
(vi) change the rights and duties of Agent;
(vii) permit any Revolving Advance to be made if after
giving effect thereto the total of Revolving Advances outstanding hereunder
would exceed the Formula Amount for more than sixty (60) consecutive
Business Days or exceed one hundred and ten percent (110%) of the Formula
Amount;
(viii) increase the Advance Rates above the Advance
Rates in effect on the Closing Date; or
(ix) alter, amend or modify Section 6.9.
Any such supplemental agreement shall apply equally to each Lender and
shall be binding upon Loan Parties, Lenders and Agent and all future
holders of the Obligations. In the case of any waiver, Loan Parties, Agent
and Lenders shall be restored to their former positions and rights, and any
Event of Default waived shall be deemed to be cured and not continuing, but
no waiver of a specific Event of Default shall extend to any subsequent
Event of Default (whether or not the subsequent Event of Default is the
same as the Event of Default which was waived), or impair any right
consequent thereon.
(c) In the event that Agent requests the consent of a Lender
pursuant to this Section 17.2 and such consent is denied, then GMACBC may,
at its option, require such Lender to assign its interest in the Advances
to GMACBC or to another Lender or to any other Person designated by the
Agent (the "Designated Lender"), for a price equal to the then outstanding
principal amount thereof plus accrued and unpaid interest and fees due such
Lender, which interest and fees shall be paid when collected from
Borrowers. In the event that Agent requests the consent of a Lender
pursuant to this Section 17.2 and such Lender shall not respond or reply to
Agent in writing within twenty (20) days of delivery of such report, such
Lender shall be deemed to have denied giving its consent to the matter that
was the subject of the request. In the event GMACBC elects to require any
Lender to assign its interest to GMACBC or to the Designated Lender, GMACBC
will so notify such Lender in writing within forty five (45) days following
such ▇▇▇▇▇▇'s denial, and such Lender will assign its interest to GMACBC or
the Designated Lender no later than five (5) days following receipt of such
notice pursuant to a Commitment Transfer Supplement executed by such
Lender, GMACBC or the Designated Lender, as appropriate, and Agent.
Notwithstanding the foregoing, Agent may at its discretion and
without the consent of the Required Lenders, voluntarily permit the
outstanding Revolving Advances at any time to exceed the Formula Amount by
up to $1,000,000 for up to thirty (30) consecutive Business Days but not
more often than twice during any calendar year. For purposes of the
preceding sentence, the discretion granted to Agent hereunder shall not
preclude involuntary overadvances that may result from time to time due to
the fact that the Formula Amount was unintentionally exceeded for any
reason, including, but not limited to, Collateral previously deemed to be
either "Eligible North American Receivables" or "Eligible North American
Inventory", as applicable, becomes ineligible, collections of Receivables
applied to reduce outstanding Advances are thereafter returned for
insufficient funds or overadvances are made to protect or preserve the
Collateral. In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount by more than $1,000,000,
Agent shall decrease such excess in as expeditious a manner as is
practicable under the circumstances and not inconsistent with the reason
for such excess. Revolving Advances made after Agent has determined the
existence of involuntary overadvances shall be deemed to be involuntary
overadvances and shall be decreased in accordance with the preceding
sentence.
17.3. Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and inure to the
benefit of Loan Parties, Agent, each Lender, all future holders of the
Obligations and their respective successors and assigns, except that no
Loan Party may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of Agent and each Lender.
(b) Each Loan Party acknowledges that in the regular course
of commercial banking business one or more Lenders may at any time and from
time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a
participating interest, a " Transferee"). Each Transferee may exercise all
rights of payment (including without limitation rights of set-off) with
respect to the portion of such Advances held by it or other Obligations
payable hereunder as fully as if such Transferee were the direct holder
thereof provided that Loan Parties shall not be required to pay to any
Transferee more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations
payable hereunder to such Transferee had such Lender retained such interest
in the Advances hereunder or other Obligations payable hereunder and in no
event shall Loan Parties be required to pay any such amount arising from
the same circumstances and with respect to the same Advances or other
Obligations payable hereunder to both such ▇▇▇▇▇▇ and such Transferee.
Each Loan Party hereby grants to any Transferee a continuing security
interest in any deposits, moneys or other property actually or
constructively held by such Transferee as security for the Transferee's
interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not
be unreasonably withheld or delayed sell, assign or transfer all or any
part of its rights under this Agreement and the Other Documents to one or
more additional banks or financial institutions and one or more additional
banks or financial institutions may commit to make Advances hereunder (each
a "Purchasing Lender"), in minimum amounts of not less than $5,000,000,
pursuant to a Commitment Transfer Supplement, executed by a Purchasing
Lender, the transferor ▇▇▇▇▇▇, and Agent and delivered to Agent for
recording. Upon such execution, delivery, acceptance and recording, from
and after the transfer effective date determined pursuant to such
Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender thereunder with a
Commitment Percentage as set forth therein, and (ii) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. Loan Parties hereby consent to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Other Documents. Loan Parties shall execute
and deliver such further documents and do such further acts and things in
order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each
Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Advances
owing to each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and Loan Parties, Agent
and ▇▇▇▇▇▇▇ may treat each Person whose name is recorded in the Register as
the owner of the Advance recorded therein for the purposes of this
Agreement. The Register shall be available for inspection by Loan Parties
or any Lender at any reasonable time and from time to time upon reasonable
prior notice. Agent shall receive a fee in the amount of $3,500 payable by
the applicable Purchasing Lender upon the effective date of each transfer
or assignment to such Purchasing Lender.
(e) Loan Parties authorize each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or
Purchasing Lender (provided that any such prospective Transferee or
Purchasing Lender first agrees in writing to be bound by the provisions of
Section 17.15) any and all financial information in such ▇▇▇▇▇▇'s
possession concerning Loan Parties which has been delivered to such Lender
by or on behalf of Loan Parties pursuant to this Agreement or in connection
with such Lender's credit evaluation of Loan Parties.
(f) Each Lender or participant organized under the laws of a
jurisdiction outside the United States, and from time to time thereafter if
either requested by Borrowing Agent or the Agent or upon the obsolescence
or expiration of any previously delivered form, shall provide the Agent and
the Borrowing Agent with two (2) original executed copies of a correct and
completed Internal Revenue Service Form W-8ECI or W-8BEN, as appropriate,
or any successor or other form prescribed by the Internal Revenue Service,
certifying that payments to such Lender or participant are not subject to
United States federal withholding tax under the Code because such payment
is either effectively connected with the conduct by such Lender or
participant of a trade or business in the United States or totally exempt
from United States federal withholding tax by reason of the application of
an income tax treaty to which the United States is a party or such Lender
is otherwise exempt. Each such Lender further agrees to complete and
deliver to Borrowing Agent, upon its request, such other forms or other
documentation as may be appropriate to minimize any withholding tax on
payments pursuant to this Agreement under the laws of any other
jurisdiction unless such completion and delivery may in any event be
disadvantageous for such Lender. For purposes of this subsection (b), the
term "United States" shall have the meaning specified in Section 7701 of
the Code.
17.4. Application of Payments. Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any payment and any and
all proceeds of Collateral to any portion of the Obligations. To the
extent that any Loan Party makes a payment or Agent or any Lender receives
any payment or proceeds of the Collateral for any Loan Party's benefit,
which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy
law, common law or equitable cause, then, to such extent, the Obligations
or part thereof intended to be satisfied shall be revived and continue as
if such payment or proceeds had not been received by Agent or such Lender.
17.5. Indemnity. Each Loan Party shall indemnify Agent, each
Issuer, each Lender and each of their respective officers, directors,
Affiliates, employees and agents from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed
on, incurred by, or asserted against Agent, such Issuer or any Lender in
any litigation, proceeding or investigation instituted or conducted by any
governmental agency or instrumentality or any other Person with respect to
any aspect of, or any transaction contemplated by, or referred to in, or
any matter related to, this Agreement or the Other Documents, whether or
not Agent, any Issuer or any Lender is a party thereto, except to the
extent that any of the foregoing arises out of the willful misconduct of
the party being indemnified.
17.6. Notice. Any notice or request hereunder may be given to any
Loan Party or to Agent or any Lender at their respective addresses set
forth below or at such other address as may hereafter be specified in a
notice designated as a notice of change of address under this Section. Any
notice or request hereunder shall be given by (a) hand delivery, (b)
overnight courier, (c) registered or certified mail, return receipt
requested, or (d) telecopy to the number set out below (or such other
number as may hereafter be specified in a notice designated as a notice of
change of address) with electronic confirmation of its receipt. Any notice
or other communication required or permitted pursuant to this Agreement
shall be deemed given (a) when personally delivered to any officer of the
party to whom it is addressed, (b) on the earlier of actual receipt thereof
or three (3) days following posting thereof by certified or registered
mail, postage prepaid, or (c) upon actual receipt thereof when sent by a
recognized overnight delivery service or (d) upon actual receipt thereof
when sent by telecopier to the number set forth below with electronic
confirmation of its receipt, in each case addressed to each party at its
address set forth below or at such other address as has been furnished in
writing by a party to the other by like notice:
(A) If to Agent or to
GMACBC as Lender at: GMAC BUSINESS CREDIT, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ & Hessen LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-0075
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to a Lender other than Agent or GMACBC, as specified on the
signature pages hereof.
(C) If to Borrowing Agent
or any Loan Party, at: Bucyrus International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, S.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-4861
Attention: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
17.7. Survival. The obligations of Loan Parties under Sections
2.2(f), 3.7, 3.8, 3.9, 4.19(h), 14.7 and 17.5 shall survive termination of
this Agreement and the Other Documents and payment in full of the
Obligations.
17.8. Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, but the remainder hereof shall not be
invalidated thereby and shall be given effect so far as possible.
17.9. Expenses. All costs and expenses including, without
limitation, (i) reasonable attorneys' fees and disbursements incurred by
Agent, and/or Agent on behalf of Lenders (a) in all efforts made to enforce
payment of any Obligation or effect collection of any Collateral, or (b) in
connection with the entering into, modification, amendment, administration
and enforcement of this Agreement or any consents or waivers hereunder and
all related agreements, documents and instruments, or (c) in instituting,
maintaining, preserving, enforcing and foreclosing on Agent's security
interest in or Lien on any of the Collateral, whether through judicial
proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent's or any Lender's
transactions with any Loan Party, or (e) in connection with any advice
given to Agent or any Lender with respect to its rights and obligations
under this Agreement and all related agreements, and (ii) reasonable fees
and disbursements incurred by Agent, and/or Agent on behalf of Lenders, in
connection with any appraisals of Inventory or other Collateral, field
examinations, collateral analysis or monitoring or other business analysis
conducted by outside Persons in connection with this Agreement and all
related agreements, all of which may be charged to Borrowers' Account and
shall be part of the Obligations.
17.10. Injunctive Relief. Each Loan Party recognizes that, in the
event any Loan Party fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy at law may
prove to be inadequate relief to Lenders; therefore, Agent, if Agent so
requests, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving that actual damages are not
an adequate remedy.
17.11. Consequential Damages. None of Agent, any Issuer, any
Lender, nor any agent or attorney for any of them, shall be liable to any
Loan Party for consequential damages arising from any breach of contract,
tort or other wrong relating to the establishment, administration or
collection of the Obligations.
17.12. Captions. The captions at various places in this Agreement
are intended for convenience only and do not constitute and shall not be
interpreted as part of this Agreement.
17.13. Counterparts; Telecopied Signatures. This Agreement may be
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original,
but all such counterparts shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto.
17.14. Construction. The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.
17.15. Confidentiality; Sharing Information. (a) Agent, each Lender
and each Transferee shall hold all non-public information obtained by
Agent, such Lender or such Transferee pursuant to the requirements of this
Agreement in accordance with Agent's, such Lender's and such Transferee's
customary procedures for handling confidential information of this nature;
provided, however, Agent, each Lender and each Transferee may disclose such
confidential information (a) to its examiners, affiliates, outside
auditors, counsel and other professional advisors, (b) to Agent, any Lender
or to any prospective Transferees and Purchasing Lenders (provided that
any such prospective Transferee or Purchasing Lender first agrees in
writing to be bound by the provisions of this Section 17.15), and (c) as
required or requested by any Governmental Body or representative thereof or
pursuant to legal process; provided, further that (i) unless specifically
prohibited by applicable law or court order, Agent, each Lender and each
Transferee shall use reasonable efforts prior to disclosure thereof, to
notify the Borrowing Agent of the applicable request for disclosure of such
non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the
financial condition of a Lender or a Transferee by such Governmental Body)
or (B) pursuant to legal process and (ii) in no event shall Agent, any
Lender or any Transferee be obligated to return any materials furnished by
any Loan Party other than those documents and instruments in possession of
Agent or any Lender in order to perfect its Lien on the Collateral once the
Obligations have been paid in full and this Agreement has been terminated.
(b) Each Loan Party acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to such
Loan Party or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each Loan Party hereby authorizes each Lender
to share any information delivered to such Lender by such Loan Party and
its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such
Subsidiary or Affiliate of such Lender, it being understood that any such
Subsidiary or Affiliate of any Lender receiving such information shall be
bound by the provision of this Section 17.15 as if it were a Lender
hereunder. Such authorization shall survive the repayment of the
Obligations and the termination of this Agreement.
17.16. Publicity. Each Loan Party hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among
Loan Parties, Agent and Lenders, including, without limitation,
announcements which are commonly known as tombstones, in such publications
and to such selected parties as Agent shall in its sole and absolute
discretion deem appropriate.
Each of the parties has signed this Agreement as of the day and year
first above written.
ATTEST: BUCYRUS INTERNATIONAL, INC.
By: /s/▇. ▇. ▇▇▇▇▇▇▇▇
/s/▇. ▇. ▇▇▇▇▇▇
[SEAL] ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Operating Officer
Address
ATTEST: MINSERCO, INC.
By: /s/▇. ▇. ▇▇▇▇▇▇▇▇
/s/▇. ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[SEAL] Chairman of the Board, Chief Executive
Officer and President
Address
ATTEST: BOONVILLE MINING SERVICES, INC.
By: /s/▇. ▇. ▇▇▇▇▇▇▇▇
/s/▇. ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[SEAL] Chairman of the Board, Chief Executive
Officer and President
Address
ATTEST: BUCYRUS CANADA LIMITED
(as Guarantor)
By: /s/▇. ▇. ▇▇▇▇▇▇▇▇
/s/▇. ▇. ▇▇▇▇▇
[SEAL] ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board and President
Address
ATTEST: BUCYRUS HOLDINGS, LLC
(as Guarantor)
By: /s/▇. ▇. ▇▇▇▇▇▇
_____________________ Name:_____________________________
Title:______________________________
[SEAL]
___________________________________
Address
ATTEST: GMAC BUSINESS CREDIT, LLC, as a Lender
and as Agent
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name:_____________________________
Title:____________________________
[SEAL]
___________________________________
Address
Commitment Percentage: 29.4118%
ATTEST: BANK ONE, WISCONSIN
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇. ▇. ▇▇▇▇▇▇▇▇, FVP Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
[SEAL]
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇▇,▇▇
Address
Commitment Percentage: 23.5294%
ATTEST: THE BANK OF NOVA SCOTIA
By: /s/▇. ▇. ▇▇▇▇▇
____________________ Name: ▇. ▇. ▇▇▇▇▇
Title: Agent Operations
[SEAL]
___________________________________
Address
Commitment Percentage: 14.6541%
ATTEST: MARINE BANK
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
[SEAL]
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
Address
Commitment Percentage: 11.7647%
ATTEST: FLEET CAPITAL CORPORATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr VP
[SEAL] ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address
Commitment Percentage: 6.8800%
ATTEST: LASALLE BANK NATIONAL ASSOCIATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
[SEAL]
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
Address
Commitment Percentage: 6.8800%
ATTEST: BANK OF SCOTLAND
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VICE PRESIDENT
[SEAL]
___________________________________
Address
Commitment Percentage: 6.8800%
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
On this _____ day of ______________, _____, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose
and say that he is the President & COO of Bucyrus International, Inc., the
corporation described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation, and that he signed his name thereto
by like order.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NOTARY PUBLIC
10/10/2004
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
On this _____ day of ______________, _____, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose
and say that he is the Chairman, CEO & President of Minserco, Inc., the
corporation described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation, and that he signed his name thereto
by like order.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NOTARY PUBLIC
10/10/2004
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
On this _____ day of ______________, _____, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose
and say that he is the Chairman, CEO & President of Booville Mining
Services, Inc., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the board of directors of said corporation, and that he
signed his name thereto by like order.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NOTARY PUBLIC
10/10/2004
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
On this _____ day of ______________, _____, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose
and say that he is the Chairman & President of Bucyrus Canada Limited, the
corporation described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation, and that he signed his name thereto
by like order.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NOTARY PUBLIC
10/10/2004
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
On this _____ day of ______________, _____, before me personally came
_______________________________, to me known, who, being by me duly sworn,
did depose and say that he is the ____________________ of Bucyrus Holdings,
LLC, the corporation described in and which executed the foregoing
instrument and that he signed his name thereto by order of the board of
directors of said corporation.
_____________________________
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 6th day of March, 2002, before me personally came ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that
he is the Director of GMAC BUSINESS CREDIT, LLC, the limited liability
company described in and which executed the foregoing instrument and that
he signed his name thereto by on behalf of said _____________________.
/s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
NOTARY PUBLIC
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. 01AS5053925
Qualified in New York County
Commission Expires Jan. 2, 2006
List of Exhibits and Schedules
Exhibits
Exhibit A Borrowing Base Certificate
Exhibit 2.1(a) Revolving Credit Note
Exhibit 2.1(c) Swingline Loan Note
Exhibit 5.5(b) Financial Projections
Exhibit 8.1(j) Financial Condition Certificate
Exhibit 17.3 Commitment Transfer Supplement
Schedules
Schedule 1.2 Permitted Encumbrances
Schedule 4.5 Equipment and Inventory Locations
Schedule 4.15(c) Location of Executive Offices
Schedule 4.19 Real Property
Schedule 5.2(a) States of Qualification and Good Standing
Schedule 5.2(b) Subsidiaries
Schedule 5.4 Federal Tax Identification Number
Schedule 5.6 Prior Names
Schedule 5.6 Environmental
Schedule 5.8(b) Litigation
Schedule 5.8(d) Plans
Schedule 5.9 Intellectual Property, Source Code Escrow Agreements
Schedule 5.10 Licenses and Permits
Schedule 5.14 Labor Disputes
Schedule 5.23 Material Contracts
Schedule 7.3 Guarantees
Schedule 7.8 Existing Indebtedness
"REGISTRANT HEREBY UNDERTAKES TO FURNISH TO THE COMMISSION COPIES
OF ANY OF THE ABOVE-LISTED SCHEDULES AND EXHIBITS UPON REQUEST."
TABLE OF CONTENTS
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. Accounting Terms. . . . . . . . . . . . . . . . . . . . . . .1
1.2. General Terms . . . . . . . . . . . . . . . . . . . . . . . .1
1.3. Uniform Commercial Code Terms . . . . . . . . . . . . . . . 24
1.4. Certain Matters of Construction . . . . . . . . . . . . . . 24
II. ADVANCES, PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . 24
2.1. (a) Revolving Advances. . . . . . . . . . . . . . . . . . . 24
(b) Discretionary Rights. . . . . . . . . . . . . . . . . . 25
(c) Swingline Loans . . . . . . . . . . . . . . . . . . . . 25
2.2. Procedure for Borrowing . . . . . . . . . . . . . . . . . . 26
2.3. Disbursement of Advance Proceeds. . . . . . . . . . . . . . 28
2.4. Maximum Revolving Advances. . . . . . . . . . . . . . . . . 29
2.5. Repayment of Advances . . . . . . . . . . . . . . . . . . . 29
2.6. Repayment of Excess Advances. . . . . . . . . . . . . . . . 29
2.7. Statement of Account. . . . . . . . . . . . . . . . . . . . 30
2.8. Letters of Credit . . . . . . . . . . . . . . . . . . . . . 30
2.9. Issuance of Letters of Credit . . . . . . . . . . . . . . . 30
2.10. Requirements For Issuance of Letters of Credit. . . . . . . 31
2.11. Additional Payments . . . . . . . . . . . . . . . . . . . . 32
2.12. Manner of Borrowing and Payment . . . . . . . . . . . . . . 32
2.13. Mandatory Prepayments . . . . . . . . . . . . . . . . . . . 34
2.14. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 34
2.15. Defaulting Lender . . . . . . . . . . . . . . . . . . . . . 34
III. INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . . . . 35
3.1. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2. Letter of Credit Fees . . . . . . . . . . . . . . . . . . . 36
3.3. Unused Line Fee . . . . . . . . . . . . . . . . . . . . . . 37
3.4. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.5. Computation of Interest and Fees. . . . . . . . . . . . . . 37
3.6. Maximum Charges . . . . . . . . . . . . . . . . . . . . . . 37
3.7. Increased Costs . . . . . . . . . . . . . . . . . . . . . . 37
3.8. Basis For Determining Interest Rate Inadequate or Unfair. . 38
3.9. Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . 39
IV. COLLATERAL: GENERAL TERMS. . . . . . . . . . . . . . . . . . . . 39
4.1. Security Interest in the Collateral . . . . . . . . . . . . 39
4.2. Perfection of Security Interest . . . . . . . . . . . . . . 40
4.3. Disposition of Collateral . . . . . . . . . . . . . . . . . 41
4.4. Preservation of Collateral. . . . . . . . . . . . . . . . . 41
4.5. Ownership of Collateral . . . . . . . . . . . . . . . . . . 41
4.6. Defense of Agent's and Lenders' Interests . . . . . . . . . 42
4.7. Books and Records . . . . . . . . . . . . . . . . . . . . . 42
4.8. Financial Disclosure. . . . . . . . . . . . . . . . . . . . 42
4.9. Compliance with Laws. . . . . . . . . . . . . . . . . . . . 43
4.10. Inspection of Premises. . . . . . . . . . . . . . . . . . . 43
4.11. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.12. Failure to Pay Insurance. . . . . . . . . . . . . . . . . . 44
4.13. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 44
4.14. Payment of Leasehold Obligations. . . . . . . . . . . . . . 44
4.15. Receivables . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Nature of Receivables . . . . . . . . . . . . . . . . . 45
(b) Solvency of Customers . . . . . . . . . . . . . . . . . 45
(c) Locations of Loan Party . . . . . . . . . . . . . . . . 45
(d) Collection of Receivables . . . . . . . . . . . . . . . 45
(e) Notification of Assignment of Receivables . . . . . . . 45
(f) Power of Agent to Act on Loan Parties' Behalf . . . . . 45
(g) No Liability. . . . . . . . . . . . . . . . . . . . . . 46
(h) Establishment of a Lockbox Account, Dominion Account. . 46
(i) Adjustments. . . . . . . . . . . . . . . . . . . . . . 47
4.16. Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.17. Maintenance of Equipment. . . . . . . . . . . . . . . . . . 47
4.18. Exculpation of Liability. . . . . . . . . . . . . . . . . . 47
4.19. Environmental Matters . . . . . . . . . . . . . . . . . . . 47
4.20. Financing Statements. . . . . . . . . . . . . . . . . . . . 50
V. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 50
5.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.2. Formation and Qualification . . . . . . . . . . . . . . . . 50
5.3. Survival of Representations and Warranties. . . . . . . . . 50
5.4. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . 50
5.5. Financial Statements. . . . . . . . . . . . . . . . . . . . 51
5.6. Corporate Name. . . . . . . . . . . . . . . . . . . . . . . 52
5.7. O.S.H.A. and Environmental Compliance . . . . . . . . . . . 52
5.8. Solvency; No Litigation, Violation, Indebtedness or Default 52
5.9. Patents, Trademarks, Copyrights and Licenses. . . . . . . . 54
5.10. Licenses and Permits . . . . . . . . . . . . . . . . . 54
5.11. Default of Indebtedness . . . . . . . . . . . . . . . . . . 55
5.12. No Default. . . . . . . . . . . . . . . . . . . . . . . . . 55
5.13. No Burdensome Restrictions. . . . . . . . . . . . . . . . . 55
5.14. No Labor Disputes . . . . . . . . . . . . . . . . . . . . . 55
5.15. Margin Regulations. . . . . . . . . . . . . . . . . . . . . 55
5.16. Investment Company Act. . . . . . . . . . . . . . . . . . . 55
5.17. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 55
5.18. Delivery of Documentation . . . . . . . . . . . . . . . . . 55
5.19. Swap Obligations. . . . . . . . . . . . . . . . . . . . . . 56
5.20. Conflicting Agreements. . . . . . . . . . . . . . . . . . . 56
5.21. Application of Certain Laws and Regulations . . . . . . . . 56
5.22. Business and Property of Loan Parties . . . . . . . . . . . 56
5.23. Material Contracts. . . . . . . . . . . . . . . . . . . . . 56
VI. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 56
6.1. Payment of Fees . . . . . . . . . . . . . . . . . . . . . . 56
6.2. Conduct of Business and Maintenance of Existence and Assets 57
6.3. Violations. . . . . . . . . . . . . . . . . . . . . . . . . 57
6.4. Government Receivables. . . . . . . . . . . . . . . . . . . 57
6.5. Execution of Supplemental Instruments . . . . . . . . . . . 57
6.6. Payment of Indebtedness . . . . . . . . . . . . . . . . . . 57
6.7. Standards of Financial Statements . . . . . . . . . . . . . 57
6.9. Financial Covenants . . . . . . . . . . . . . . . . . . . . 58
(a) EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . 58
(b) Leverage Ratio. . . . . . . . . . . . . . . . . . . . . 58
(c) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . 58
6.9. Minimum Undrawn Availability. . . . . . . . . . . . . . . . 59
6.10. Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.11. Canadian Pension Plans. . . . . . . . . . . . . . . . . . . 59
VII. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 60
7.1. Merger, Consolidation, Acquisition and Sale of Assets . . . 60
7.2. Creation of Liens . . . . . . . . . . . . . . . . . . . . . 60
7.3. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 60
7.4. Investments . . . . . . . . . . . . . . . . . . . . . . . . 60
7.5. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.6. Capital Expenditures. . . . . . . . . . . . . . . . . . . . 61
7.7. Dividends and Distributions . . . . . . . . . . . . . . . . 61
7.8. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 61
7.9. Nature of Business. . . . . . . . . . . . . . . . . . . . . 62
7.10. Transactions with Affiliates. . . . . . . . . . . . . . . . 62
7.11. Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.12. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 63
7.13. Fiscal Year and Accounting Changes. . . . . . . . . . . . . 63
7.14. Pledge of Credit. . . . . . . . . . . . . . . . . . . . . . 63
7.15. Amendment of Articles of Formation, LLC Agreement,
Certificate of Incorporation and By-Laws. . . . . . . . . . 63
7.16. Compliance with ERISA . . . . . . . . . . . . . . . . . . . 63
7.17. Prepayment of Indebtedness for Money Borrowed . . . . . . . 64
7.18. Senior Unsecured Notes. . . . . . . . . . . . . . . . . . . 64
7.19. UCC Article 9 Location. . . . . . . . . . . . . . . . . . . 64
7.20. Retention of Cash; Payment of Foreign Loan. . . . . . . . . 64
7.21. Performance Bonds . . . . . . . . . . . . . . . . . . . . . 64
7.22. Letters of Credit . . . . . . . . . . . . . . . . . . . . . 64
7.23. Swap Obligations. . . . . . . . . . . . . . . . . . . . . . 65
7.24. Foreign Subsidiary Indebtedness . . . . . . . . . . . . . . 65
VIII. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . 65
8.1. Conditions to Initial Advances. . . . . . . . . . . . . . . 65
(a) Note. . . . . . . . . . . . . . . . . . . . . . . . . . 65
(b) Filings, Registrations, Recordings and Searches . . . . 65
(c) Corporate Proceedings of Loan Parties . . . . . . . . . 65
(d) Capital Structure; Other Indebtedness . . . . . . . . . 66
(e) Incumbency Certificates of Loan Parties . . . . . . . . 66
(f) Certificates. . . . . . . . . . . . . . . . . . . . . . 66
(g) Good Standing Certificates. . . . . . . . . . . . . . . 66
(h) Legal Opinion . . . . . . . . . . . . . . . . . . . . . 66
(i) No Litigation . . . . . . . . . . . . . . . . . . . . . 66
(j) Financial Condition Certificates. . . . . . . . . . . . 66
(k) Collateral Examination; Appraisals. . . . . . . . . . . 67
(l) Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 67
(m) Pro Forma Financial Statements. . . . . . . . . . . . . 67
(n) Canadian Documentation. . . . . . . . . . . . . . . . . 67
(o) Deferral Agreement. . . . . . . . . . . . . . . . . . . 67
(p) Pledge Agreement, Other Documents . . . . . . . . . . . 68
(q) Insurance . . . . . . . . . . . . . . . . . . . . . . . 68
(r) Environmental Reports . . . . . . . . . . . . . . . . . 68
(s) Payment Instructions. . . . . . . . . . . . . . . . . . 68
(t) Depository Accounts . . . . . . . . . . . . . . . . . . 68
(u) Consents. . . . . . . . . . . . . . . . . . . . . . . . 68
(v) No Adverse Material Change. . . . . . . . . . . . . . . 68
(w) Leasehold Agreements. . . . . . . . . . . . . . . . . . 68
(x) Contract Review . . . . . . . . . . . . . . . . . . . . 68
(y) Closing Certificate . . . . . . . . . . . . . . . . . . 69
(z) Borrowing Base. . . . . . . . . . . . . . . . . . . . . 69
(aa) Undrawn Availability . . . . . . . . . . . . . . . . . 69
(bb) Control Agreements . . . . . . . . . . . . . . . . . . 69
(cc) Intercompany Notes . . . . . . . . . . . . . . . . . . 69
(dd) Other. . . . . . . . . . . . . . . . . . . . . . . . . 69
8.2. Conditions to Each Advance. . . . . . . . . . . . . . . . . 69
(a) Representations and Warranties. . . . . . . . . . . . . 69
(b) No Default. . . . . . . . . . . . . . . . . . . . . . . 69
(c) Maximum Advances. . . . . . . . . . . . . . . . . . . . 70
(d) Maximum Letters of Credit . . . . . . . . . . . . . . . 70
IX. INFORMATION AS TO LOAN PARTIES. . . . . . . . . . . . . . . . . . 70
9.1. Disclosure of Material Matters. . . . . . . . . . . . . . . 70
9.2. Schedules . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.3. Environmental Reports . . . . . . . . . . . . . . . . . . . 71
9.4. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 71
9.5. Material Occurrences. . . . . . . . . . . . . . . . . . . . 71
9.6. Government Receivables. . . . . . . . . . . . . . . . . . . 71
9.7. Annual Financial Statements . . . . . . . . . . . . . . . . 71
9.8. Quarterly Financial Statements. . . . . . . . . . . . . . . 72
9.9. Monthly Financial Statements. . . . . . . . . . . . . . . . 72
9.10. Other Reports . . . . . . . . . . . . . . . . . . . . . . . 73
9.11. Additional Information. . . . . . . . . . . . . . . . . . . 73
9.12. Projected Operating Budget. . . . . . . . . . . . . . . . . 73
9.13. Variances From Operating Budget . . . . . . . . . . . . . . 73
9.14. Notice of Suits, Adverse Events . . . . . . . . . . . . . . 74
9.15. ▇▇▇▇▇ Notices and Requests. . . . . . . . . . . . . . . . . 74
9.16. Additional Documents. . . . . . . . . . . . . . . . . . . . 74
X. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 75
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT. . . . . . . . . . . . 77
11.1. Rights and Remedies . . . . . . . . . . . . . . . . . . . . 77
11.2. Application of Proceeds . . . . . . . . . . . . . . . . . . 78
11.3. Agent's Discretion. . . . . . . . . . . . . . . . . . . . . 79
11.4. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.5. Rights and Remedies not Exclusive . . . . . . . . . . . . . 79
XII. ▇▇▇▇▇▇▇ AND JUDICIAL PROCEEDINGS. . . . . . . . . . . . . . . . . 79
12.1. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . 79
12.2. Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.3. Jury Waiver . . . . . . . . . . . . . . . . . . . . . . . . 79
XIII. EFFECTIVE DATE AND TERMINATION. . . . . . . . . . . . . . . . . . 80
13.1. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.2. Termination . . . . . . . . . . . . . . . . . . . . . . . . 80
XIV. REGARDING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 80
14.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . 80
14.2. Nature of Duties. . . . . . . . . . . . . . . . . . . . . . 81
14.3. Lack of Reliance on Agent and Resignation . . . . . . . . . 81
14.4. Certain Rights of Agent . . . . . . . . . . . . . . . . . . 82
14.5. Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.6. Notice of Default . . . . . . . . . . . . . . . . . . . . . 82
14.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . 82
14.8. Agent in its Individual Capacity. . . . . . . . . . . . . . 83
14.9. Delivery of Documents . . . . . . . . . . . . . . . . . . . 83
▇▇.▇▇.▇▇▇▇ Parties' Undertaking to Agent. . . . . . . . . . . . . 83
14.11.Syndication Agent . . . . . . . . . . . . . . . . . . . . . 83
XV. GUARANTEE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
XVI. BORROWING AGENCY. . . . . . . . . . . . . . . . . . . . . . . . . 89
16.1. Borrowing Agency Provisions . . . . . . . . . . . . . . . . 89
16.2. Waiver of Subrogation . . . . . . . . . . . . . . . . . . . 90
XVII. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 90
17.1. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 90
17.2. Entire Understanding. . . . . . . . . . . . . . . . . . . . 91
17.3. Successors and Assigns; Participations; New Lenders . . . . 93
17.4. Application of Payments . . . . . . . . . . . . . . . . . . 95
17.5. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 95
17.6. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 95
17.7. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 96
17.8. Severability. . . . . . . . . . . . . . . . . . . . . . . . 96
17.9. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 96
17.10.Injunctive Relief . . . . . . . . . . . . . . . . . . . . . 97
17.11.Consequential Damages . . . . . . . . . . . . . . . . . . . 97
17.12.Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 97
17.13.Counterparts; Telecopied Signatures . . . . . . . . . . . . 97
▇▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . . 97
17.15.Confidentiality . . . . . . . . . . . . . . . . . . . . . . 97
17.16.Publicity . . . . . . . . . . . . . . . . . . . . . . . . . 98