EXHIBIT 10.36
FINANCING AGREEMENT
DATED AS OF JUNE 10, 2004
BY AND AMONG
MILACRON INC.
AND
CERTAIN SUBSIDIARIES OF MILACRON INC. LISTED AS A BORROWER
ON THE SIGNATURE PAGES HERETO,
AS BORROWERS,
CERTAIN SUBSIDIARIES OF MILACRON INC. LISTED AS A GUARANTOR
ON THE SIGNATURE PAGES HERETO,
AS GUARANTORS,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
▇▇▇▇▇ FARGO FOOTHILL, LLC,
AS DOCUMENTATION AGENT
AND
▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP.,
AS SOLE LEAD ARRANGER AND BOOK MANAGER
ARTICLE I DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions................................................................................... 1
Section 1.02 Terms Generally............................................................................... 34
Section 1.03 Accounting and Other Terms.................................................................... 34
Section 1.04 Time References............................................................................... 34
ARTICLE II THE LOANS
Section 2.01(a) Commitments................................................................................... 34
Section 2.02(a) Making the Loans.............................................................................. 35
Section 2.03 Repayment of Loans; Evidence of Debt.......................................................... 35
Section 2.04 Interest...................................................................................... 36
Section 2.05 Reduction of Commitment; Prepayment of Loans.................................................. 37
Section 2.06 Fees.......................................................................................... 40
Section 2.07 [Reserved].................................................................................... 40
Section 2.08 Taxes......................................................................................... 40
Section 2.09 LIBO Rate Not Determinable; Illegality or Impropriety......................................... 43
Section 2.10 Indemnity..................................................................................... 43
Section 2.11 Continuation and Conversion of Loans.......................................................... 44
Section 2.12 Conversion to Dollars......................................................................... 45
Section 2.13 Uncollected Funds Compensation................................................................ 45
Section 2.14 Extension of Final Maturity Date.............................................................. 45
ARTICLE III LETTERS OF CREDIT AND OTHER MATTERS
Section 3.01 Letters of Credit............................................................................. 46
Section 3.02 Collection of Accounts........................................................................ 51
Section 3.03 Payments...................................................................................... 51
Section 3.04 Settlement Procedures......................................................................... 51
Section 3.05 Overadvances.................................................................................. 53
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees.......................................................... 54
Section 4.02 Payments; Computations and Statements......................................................... 54
Section 4.03 Sharing of Payments, Etc...................................................................... 55
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Section 4.04 Apportionment of Payments..................................................................... 55
Section 4.05 Increased Costs and Reduced Return............................................................ 56
Section 4.06 Joint and Several Liability of the Borrowers.................................................. 58
ARTICLE V CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness of this Agreement....................................... 59
Section 5.02 Conditions Precedent to All Loans and Letters of Credit....................................... 64
ARTICLE VI REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties................................................................ 65
(a) Organization, Good Standing, Etc.............................................................. 65
(b) Authorization, Etc............................................................................ 65
(c) Governmental Approvals........................................................................ 65
(d) Enforceability of Loan Documents.............................................................. 65
(e) Subsidiaries.................................................................................. 66
(f) Litigation; Commercial Tort Claims............................................................ 66
(g) Financial Condition........................................................................... 66
(h) Compliance with Law, Etc...................................................................... 66
(i) ERISA......................................................................................... 67
(j) Taxes, Etc.................................................................................... 67
(k) Regulations T, U and X........................................................................ 67
(l) Nature of Business............................................................................ 67
(m) Adverse Agreements, Etc....................................................................... 68
(n) Permits, Etc.................................................................................. 68
(o) Properties.................................................................................... 68
(p) Full Disclosure............................................................................... 69
(q) Operating Lease Obligations................................................................... 69
(r) Environmental Matters......................................................................... 69
(s) Insurance..................................................................................... 71
(t) Use of Proceeds............................................................................... 71
(u) Location of Bank Accounts..................................................................... 71
(v) Intellectual Property......................................................................... 71
(w) Material Contracts............................................................................ 72
(x) Holding Company and Investment Company Acts................................................... 72
(y) Employee and Labor Matters.................................................................... 72
(z) Customers and Suppliers....................................................................... 72
(aa) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN..................................................... 73
(bb) Tradenames.................................................................................... 73
(cc) Locations of Collateral....................................................................... 73
(dd) Security Interests............................................................................ 73
(ee) [Reserved].................................................................................... 73
(ff) Financial Assistance.......................................................................... 74
(gg) Schedules..................................................................................... 74
(hh) Canadian Pension and Benefit Plan Matters..................................................... 74
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ARTICLE VII COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants......................................................................... 74
(a) Reporting Requirements........................................................................ 74
(b) Additional Guaranties and Collateral Security................................................. 78
(c) Compliance with Laws, Etc..................................................................... 79
(d) Preservation of Existence, Etc................................................................ 79
(e) Keeping of Records and Books of Account....................................................... 79
(f) Inspection Rights............................................................................. 79
(g) Maintenance of Properties, Etc................................................................ 80
(h) Maintenance of Insurance...................................................................... 80
(i) Obtaining of Permits, Etc..................................................................... 80
(j) Environmental................................................................................. 80
(k) Further Assurances............................................................................ 82
(l) Change in Collateral; Collateral Records...................................................... 82
(m) Landlord Waivers; Collateral Access Agreements................................................ 82
(o) Fiscal Year................................................................................... 83
(p) Borrowing Base................................................................................ 83
(q) Use of Proceeds............................................................................... 83
(r) Post-Closing Matters.......................................................................... 83
(s) Conference Calls.............................................................................. 84
(t) Misplaced Notes............................................................................... 84
(u) Canadian Pension and Benefit Plans............................................................ 84
(v) After Acquired Real Property.................................................................. 85
(w) Senior Secured Priority Collateral............................................................ 85
Section 7.02 Negative Covenants............................................................................ 86
(a) Liens, Etc.................................................................................... 86
(b) Indebtedness.................................................................................. 86
(c) Fundamental Changes; Dispositions............................................................. 86
(d) Change in Nature of Business.................................................................. 88
(e) Loans, Advances, Investments, Etc............................................................. 88
(f) Lease Obligations............................................................................. 90
(g) [Reserved].................................................................................... 90
(h) Restricted Payments........................................................................... 90
(i) Federal Reserve Regulations................................................................... 91
(j) Transactions with Affiliates.................................................................. 91
(k) Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries................ 91
(l) Limitation on Issuance of Capital Stock....................................................... 92
(m) Modifications of Indebtedness, Organizational Documents and Certain Other Agreements; Etc..... 92
(n) Investment Company Act of 1940................................................................ 94
(o) Compromise of Accounts........................................................................ 94
(p) ERISA......................................................................................... 94
(q) Environmental................................................................................. 95
(r) Certain Agreements............................................................................ 95
(s) Misplaced Notes............................................................................... 95
(t) Wholly-Owned Subsidiaries..................................................................... 95
Section 7.03 Financial Covenants........................................................................... 95
(a) Minimum Fixed Charge Coverage Ratio........................................................... 95
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(b) Cumulative Consolidated EBITDA................................................................ 96
(c) Capital Expenditures.......................................................................... 96
ARTICLE VIII MANAGEMENT, COLLECTION AND
STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 Collection of Accounts; Management of Collateral.............................................. 97
Section 8.02 Accounts Documentation........................................................................ 100
Section 8.03 Status of Accounts and Other Collateral....................................................... 100
Section 8.04 Collateral Custodian.......................................................................... 101
Section 8.05 Collateral Reporting.......................................................................... 101
Section 8.06 Accounts Covenants............................................................................ 102
Section 8.07 Inventory Covenants........................................................................... 102
ARTICLE IX EVENTS OF DEFAULT
Section 9.01 Events of Default............................................................................. 103
ARTICLE X AGENT
Section 10.01 Appointment................................................................................... 106
Section 10.02 Nature of Duties.............................................................................. 106
Section 10.03 Rights, Exculpation, Etc...................................................................... 107
Section 10.04 Reliance...................................................................................... 108
Section 10.05 Indemnification............................................................................... 108
Section 10.06 Agent Individually............................................................................ 109
Section 10.07 Successor Agent............................................................................... 109
Section 10.08 Collateral Matters............................................................................ 109
ARTICLE XI GUARANTY
Section 11.01 Guaranty...................................................................................... 111
Section 11.02 Guaranty Absolute............................................................................. 111
Section 11.03 Waiver........................................................................................ 112
Section 11.04 Continuing Guaranty; Assignments.............................................................. 112
Section 11.05 Subrogation................................................................................... 113
Section 11.06 Judgment...................................................................................... 113
Section 11.07 General Limitation on Guarantee Obligations................................................... 114
Section 11.08 Dutch Financial Assistance Rules.............................................................. 114
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ARTICLE XII MISCELLANEOUS
Section 12.01 Notices, Etc.................................................................................. 114
Section 12.02 Amendments, Etc............................................................................... 115
Section 12.03 No Waiver; Remedies, Etc...................................................................... 116
Section 12.04 Expenses; Taxes; Attorneys' Fees.............................................................. 116
Section 12.05 Right of Set-off.............................................................................. 117
Section 12.06 Severability.................................................................................. 117
Section 12.07 Assignments and Participations................................................................ 117
Section 12.08 Counterparts.................................................................................. 120
Section 12.09 GOVERNING LAW................................................................................. 120
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE......................................... 120
Section 12.11 WAIVER OF JURY TRIAL, ETC..................................................................... 120
Section 12.12 Consent by the Agents and Lenders............................................................. 121
Section 12.13 No Party Deemed Drafter....................................................................... 121
Section 12.14 Reinstatement; Certain Payments............................................................... 121
Section 12.15 Indemnification............................................................................... 121
Section 12.16 Parent as Agent for Borrowers................................................................. 123
Section 12.17 Records....................................................................................... 123
Section 12.18 Binding Effect................................................................................ 123
Section 12.19 Interest...................................................................................... 124
Section 12.20 Confidentiality............................................................................... 124
Section 12.21 Integration................................................................................... 125
Section 12.22 Replacement of Lenders........................................................................ 125
Section 12.23 Dutch Parallel Debt........................................................................... 125
Section 12.24 USA PATRIOT Act............................................................................... 127
Section 12.25 Interest Act Disclosure....................................................................... 127
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SCHEDULE AND EXHIBITS
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Initial Inventory Categories
Schedule 1.01(C) [Reserved]
Schedule 1.01(D) Disbursement Accounts
Schedule 6.01(e) Subsidiaries
Schedule 6.01(f) Litigation; Commercial Tort Claims
Schedule 6.01(i) ERISA
Schedule 6.01(o) Real Property
Schedule 6.01(q) Operating Lease Obligations
Schedule 6.01(r) Environmental Matters
Schedule 6.01(s) Insurance
Schedule 6.01(u) Bank Accounts
Schedule 6.01(v) Intellectual Property
Schedule 6.01(w) Material Contracts
Schedule 6.01(aa) Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office;
FEIN
Schedule 6.01(bb) Tradenames
Schedule 6.01(cc) Collateral Locations
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(c)(i) Permitted Dispositions
Schedule 7.02(e) Existing Investments
Schedule 7.02(k) Limitations on Dividends and Other Payment Restrictions
Schedule 8.01 Cash Management Banks and Cash Management Accounts
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit D-2 Form of Notice of Conversion/Confirmation
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Intercompany Subordination Agreement
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Contribution Agreement
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FINANCING AGREEMENT
Financing Agreement, dated as of June 10, 2004, by and among
Milacron Inc., a Delaware corporation (the "Parent"), each subsidiary of the
Parent listed as a "Borrower" on the signature pages hereto (together with the
Parent, each a "Borrower" and collectively, the "Borrowers"), each subsidiary of
the Parent listed as a "Guarantor" on the signature pages hereto (each, an
"Initial Guarantor" and collectively, the "Initial Guarantors"), the lenders
from time to time party hereto (each, a "Lender" and collectively, the
"Lenders"), JPMorgan Chase Bank ("JPMorgan"), as administrative agent and
collateral agent for the Lenders (in each such capacity, the "Administrative
Agent" and the "Collateral Agent", respectively) and ▇▇▇▇▇ Fargo Foothill, LLC,
as documentation agent (in such capacity, the "Documentation Agent").
RECITALS
The Borrowers have requested the Lenders to extend credit to the
Borrowers consisting of a $75,000,000 secured revolving credit facility. The
revolving credit facility will include a $25,000,000 subfacility for the
issuance of letters of credit. The proceeds of the loans made under the credit
facilities shall be used to refinance existing indebtedness of the Borrowers and
the Guarantors, to pay fees and expenses related thereto and for general
corporate purposes of the Borrowers and their Subsidiaries. The letters of
credit will be used for general corporate and working capital purposes. The
Lenders are severally, and not jointly, willing to extend such credit to the
Borrowers subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"ABL Priority Collateral" shall have the meaning specified therefor
in the Intercreditor Agreement.
"ABR Loan" means a Loan bearing interest based upon the Alternate
Base Rate.
"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account.
"Accounts" means, as to each Domestic Loan Party and each Canadian
Borrowing Base Guarantor, all present and future rights of such Person to
payment of a monetary obligation, whether or not earned by performance, (a) for
property that has been or is to be sold, leased, assigned or otherwise disposed
of, (b) for services rendered or to be rendered, or (c) for a secondary
obligation incurred or to be incurred.
"Action" has the meaning specified therefor in Section 12.12.
"Activation Notice" has the meaning specified therefor in Section
8.01(b).
"Additional Commitment Lender" has the meaning specified therefor in
Section 2.14.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Loan for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" has the meaning specified therefor in the
preamble hereto.
"Administrative Agent's Account" means an account at a bank
designated by the Administrative Agent from time to time as the account into
which the Loan Parties shall make all payments to the Administrative Agent for
the benefit of the Agents and the Lenders under this Agreement and the other
Loan Documents.
"Administrative Borrower" has the meaning specified therefor in
Section 12.16.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender be considered an "Affiliate" of any Loan Party.
"Agent" means the Collateral Agent or the Administrative Agent, and
"Agents" means the Collateral Agent and the Administrative Agent, collectively.
"Agent Advances" has the meaning specified therefor in Section
10.08(a).
"Agreement" means this Financing Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Rate" means, for any day, with respect to any ABR Loan
or Eurodollar Loan, the applicable rate per annum set forth below under the
caption "ABR Spread" or "Eurodollar Spread", as the case may be, based upon the
Trailing Average Availability as of the last day of the immediately preceding
calendar month as set forth in the most recent Borrowing Base Certificate
delivered by the Borrowers pursuant to Section 7.01(a)(vi):
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ABR SPREAD IN EURODOLLAR SPREAD IN
TRAILING AVERAGE BASIS POINTS BASIS POINTS
PRICING LEVEL AVAILABILITY PER YEAR PER YEAR
Greater than or equal to
1 $50,000,000 75 250
2 Greater than or equal to
$35,000,000 but less than
$50,000,000 100 275
3 Greater than or equal to
$20,000,000 but less than
$35,000,000 125 300
4 Less than $20,000,000 150 325
Any increase or decrease in the Applicable Rate resulting from a change in the
Trailing Average Availability shall become effective as of the fifth Business
Day immediately following the date on which the Borrowers deliver the Borrowing
Base Certificate pursuant to Section 7.01(a)(vi); provided, however, that (i) if
a Borrowing Base Certificate is not delivered when due in accordance with
Section 7.01(a)(vi), then Pricing Level 4 shall apply as of the first Business
Day after the date on which such Borrowing Base Certificate was required to have
been delivered and shall remain in effect until the fifth Business Day
immediately following the date such Borrowing Base Certificate is delivered in
accordance with such Section; and (ii) the Applicable Rate in effect from the
Effective Date through delivery of the Borrowing Base Certificate for the
calendar month ending December 31, 2004 shall be 275 basis points per year for
Eurodollar Loans and 100 basis points for ABR Loans.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be reasonably determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the
Collateral Agent or the Administrative Agent, in each case, to the extent
applicable, in accordance with Section 12.07 hereof and substantially in the
form of Exhibit H hereto or such other form acceptable to the Collateral Agent.
"Authorized Officer" means, with respect to any Person, the chief
executive officer, the chief financial officer, the president, any executive
vice president, the treasurer, any assistant treasurer, any vice president, the
secretary or the general counsel of such Person.
"Availability" means, at any time, an amount equal to the difference
between (i) the lesser of (A) the Borrowing Base and (B) the Total Revolving
Credit Commitment and (ii) the sum of (A) the aggregate outstanding principal
amount of all Revolving Credit Loans and (B) the LC Exposure.
"Availability Reserve" means $10,000,000.
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"Available Funds" means all deposits in the Administrative Agent's
Account which shall have been made by 2:00 p.m. on a Business Day, or such later
time in any Business Day as the Administrative Agent shall have expressly
consented to.
"Bailee's Letter" means a letter in form and substance reasonably
acceptable to the Collateral Agent and executed by any Person (other than a Loan
Party) that is in possession of any Collateral on behalf of such Loan Party
pursuant to which such Person acknowledges the Lien of the Collateral Agent for
the benefit of the Collateral Agent and the Lenders with respect thereto.
"Banking Services" means the provision to any Loan Party by a Lender
or any of its Affiliates (in each case with the consent of the Administrative
Agent) of treasury management services (including, without limitation,
controlled disbursement, automated clearinghouse transactions, return items,
overdrafts and interstate depository network services).
"Banking Services Obligations" of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
"Bankruptcy Code" means the United States Bankruptcy Code (11
U.S.C. Section 101, et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal Reserve System
of the United States.
"Board of Directors" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"Book Value" means, with respect to any Inventory of any Person, the
lower of (i) cost (as reflected in the general ledger of such Person in
accordance with GAAP) and (ii) market value, in each case, determined in
accordance with GAAP calculated on a first-in first-out basis.
"Borrower" and "Borrowers" have the respective meanings specified
therefor in the preamble hereto.
"Borrowing Base" means, at any time, the sum of (i) the sum of (A)
85% of the value of the Net Amount of Eligible Accounts at such time; provided,
however, that the aggregate amount of this clause (A) attributable to Eligible
Accounts of the Canadian Borrowing Base Guarantors shall not exceed $5,000,000,
plus (B) the least of (x) 35% of the Book Value of the Eligible Inventory at
such time; provided, however, that the aggregate amount of this clause (x)
attributable to consigned Eligible Inventory shall not exceed $500,000, (y) 85%
of the aggregate Net Liquidation Values for all Inventory Categories and (z)
$30,000,000 minus (ii) Reserves.
"Borrowing Base Certificate" means a certificate signed by the chief
executive officer, chief financial officer, treasurer or controller of the
Administrative Borrower and setting forth the calculation of the Borrowing Base
in compliance with Section 7.01(a)(vi), substantially in the form of Exhibit E.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City or Chicago, Illinois are
authorized or required by law to remain
4
closed; provided that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Business Trade Secrets" has the meaning specified therefor in
Section 6.01(v)(ii).
"Canadian Benefit Plans" means all material employee benefit plans
of any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by any Loan Party having employees in Canada.
"Canadian Dollars" and the sign "Cdn.$" shall mean lawful currency
of Canada.
"Canadian Pension Plans" means each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to by
any Loan Party for its employees or former employees and shall not mean the
Canadian Pension Plan that is maintained by the Government of Canada.
"Canadian Borrowing Base Guarantor" means any wholly-owned Canadian
Subsidiary of Parent (a) which is able to prepare all collateral reports in a
comparable manner to the Borrowers' reporting procedures; (b) which has granted
to the Collateral Agent a first priority perfected Lien (subject to Permitted
Liens and other Liens acceptable to the Collateral Agent) on all or
substantially all of its personal property constituting ABL Priority Collateral
(as defined in the Intercreditor Agreement) and a first priority perfected Lien
(or, prior to the Discharge of Term Obligations, a second priority perfected
Lien) on all or substantially all of its remaining personal property to secure
payment and performance of the Obligations; (c) with respect to which the
Administrative Agent has received all customary opinions, Uniform Commercial
Code and Personal Property Security Act search reports, certificates and other
documents reasonably requested by the Administrative Agent and such joinder
agreements to this Agreement, guaranties, contribution and set-off agreements
and such security agreements, pledge agreements, account control agreements and
other Loan Documents reasonably requested by the Administrative Agent in form
and substance reasonably satisfactory to the Administrative Agent; (d) whose
outstanding equity interests are subject to a first priority pledge (or, prior
to the Discharge of Term Obligations, a second priority pledge) in favor of the
Collateral Agent to secure payment and performance of the Obligations; and (e)
with respect to which the Collateral Agent has received and approved, in its
reasonable discretion, a collateral audit conducted by an independent audit firm
designated by Collateral Agent.
"Canadian Subsidiary" means any Subsidiary of a Loan Party that is
created or organized under the laws of Canada or a Province or territory of
Canada.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of all expenditures by such Person and its Subsidiaries
during such period that in accordance with GAAP are or should be included in
"property, plant and equipment" or in a similar fixed asset account on its
balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
other than expenditures made from the insurance proceeds or condemnation awards.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender, any Person controlling any Lender, or the
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Issuing Bank or the manner in which any Lender, any Person controlling any
Lender, or the Issuing Bank allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances, commitments,
assets or liabilities.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is (i) required under
GAAP to be capitalized on the balance sheet of such Person or (ii) a transaction
of a type commonly known as a "synthetic lease" (i.e., a lease transaction that
is treated as an operating lease for accounting purposes but with respect to
which payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Cash Management Accounts" means those bank accounts of each Loan
Party listed on Schedule 8.01 that are maintained at one or more Cash Management
Banks listed on Schedule 8.01.
"Cash Management Agreements" means those certain cash management
service agreements, in form and substance reasonably satisfactory to the
Administrative Agent, each of which is among the applicable Loan Party, the
Administrative Agent and one of the Cash Management Banks, and which agreements
shall also be Control Agreements.
"Cash Management Bank" has the meaning specified therefor in Section
8.01(a).
"Cash Management Date" has the meaning set forth in Section 8.01(a).
"Change in Law" has the meaning specified therefor in Section
4.05(a).
"Change of Control" means each occurrence of any of the following:
(a) other than pursuant to the Mizuho/Glencore Transactions, (i) the
acquisition, directly or indirectly, by any Person or group (within the meaning
of Section 13(d)(3) of the Exchange Act), other than any Permitted Holder
described in clause (i) of the definition thereof, of beneficial ownership of
more than 20% of the aggregate outstanding ordinary voting power of the Capital
Stock of the Parent; or (ii) the acquisition, directly or indirectly, by any
Permitted Holder described in clause (ii) of the definition thereof, of
beneficial ownership of more than 50% of the aggregate outstanding ordinary
voting power of the Capital Stock of the Parent;
(b) other than pursuant to the Mizuho/Glencore Transactions, during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Parent (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Parent was approved by a vote of at least a
majority the directors of the Parent then still in office who were either
directors at the beginning of such period, or whose election or nomination for
election was previously approved) cease for any reason to constitute a majority
of the Board of Directors of the Parent;
6
(c) the Parent shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 100% of the
aggregate voting power of the Capital Stock of each other Loan Party, free and
clear of all Liens (other than any Liens granted under the Loan Documents and
Permitted Liens), except to the extent resulting from a transaction specifically
permitted under Section 7.02(c);
(d) (i) any Loan Party consolidates or amalgamates with or merges
into another entity or conveys, transfers or leases all or substantially all of
its property and assets to another Person, or (ii) any entity consolidates or
amalgamates with or merges into any Loan Party in a transaction pursuant to
which the outstanding voting Capital Stock of such Loan Party is reclassified or
changed into or exchanged for cash, securities or other property, other than any
such transaction described in this clause (ii) in which either (A) in the case
of any such transaction involving the Parent, (1) no Person or group (within the
meaning of Section 13(d)(3) of the Exchange Act), other than a Permitted Holder
described in clause (i) of the definition thereof, has, directly or indirectly,
acquired beneficial ownership of more than 20% of the aggregate outstanding
ordinary voting Capital Stock of the Parent or (2) no Permitted Holder described
in clause (ii) of the definition thereof, has, directly or indirectly, acquired
beneficial ownership of more than 50% of the aggregate outstanding ordinary
voting Capital Stock of the Parent or (B) in the case of any such transaction
involving a Loan Party other than the Parent, the Parent has beneficial
ownership, directly or indirectly, of 100% of the aggregate voting power of all
Capital Stock of the resulting, surviving or transferee entity; or
(e) any "Change of Control" (or any similar term) as set forth in
the Senior Secured Notes Indenture.
"China JV" means Milacron Plastics Machinery (Jiangyin) Co. LTD, a
limited liability company and an enterprise legal person under the laws of
China, to be formed as a joint venture between Jiangnan Mould & Plastic
Technology Co., LTD. (30%) and Milacron Plastics Technologies Group Inc. (70%)
for the purpose of research and development, design, manufacture, import
processing, processing and assembly and sale of plastics processing machinery
and supplies, molds for non-metallic articles, dies for motor vehicles, and
jigs, provision of related after-sales services, training, technical support and
technical consulting services.
"Collateral" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.
"Collateral Agent" has the meaning specified therefor in the
preamble hereto.
"Collections" means all cash, checks, notes, instruments and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds and tax refunds) of the Domestic Loan Parties and the Canadian
Borrowing Base Guarantors.
"Commitment" means, with respect to each Lender, such Lender's
Revolving Credit Commitment.
"Consent Date" has the meaning specified therefor in Section 2.14.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income of Parent and its Consolidated Subsidiaries for such period, plus (a)
without duplication and to the extent deducted in determining such Consolidated
Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii)
consolidated income tax expense for such period, (iii) all amounts attributable
to depreciation
7
and amortization for such period, (iv) other non-cash, non-operating expenses
for such period, (v) any extraordinary losses for such period, plus (vi) any
cash restructuring charges incurred from and after the first day of the first
complete fiscal quarter to occur after the Effective Date through December 31,
2005 in an amount not to exceed $2,000,000 and minus (b) without duplication and
to the extent included in determining such Consolidated Net Income, (i) any
extraordinary gains for such period and (ii) any non-operating income for such
period.
"Consolidated Interest Expense" means, for any period, the excess of
(a) the sum of (i) the interest expense (including imputed interest expense in
respect of Capitalized Lease Obligations) of the Parent and its Consolidated
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, (ii) any interest accrued during such period in respect of
Indebtedness of the Parent or any Consolidated Subsidiary of the Parent that is
required to be capitalized rather than included in consolidated interest expense
for such period in accordance with GAAP, (iii) any cash payments made during
such period in respect of obligations referred to in clause (b) below that were
amortized or accrued in a previous period, minus (b) the sum of (i) to the
extent included in such consolidated interest expense for such period, non-cash
amounts attributable to amortization of financing costs paid in a previous
period, plus (ii) to the extent included in such consolidated interest expense
for such period, non-cash amounts attributable to amortization of debt discounts
or accrued interest payable in kind for such period.
"Consolidated Net Income" means, for any period, the net income of
Parent and its Consolidated Subsidiaries, for such period calculated in
accordance with GAAP.
"Consolidated Subsidiaries" means, with respect to Parent, each
subsidiary consolidated with Parent in its financial statements prepared in
accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (D) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"Contribution Agreement" means the Contribution Agreement, dated as
of the Effective Date, among the Loan Parties, substantially in the form of
Exhibit I.
8
"Control Agreement" means a control agreement, in form and substance
reasonably satisfactory to the Administrative Agent, executed and delivered by
the applicable Loan Party, the Administrative Agent, and the applicable bank or
securities intermediary with respect to a deposit or securities account.
"Default" means an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default.
"Defaulting Lender" has the meaning specified therefor in Section
3.04(d).
"Designated Real Property" means the real property identified as the
"Designated Real Property" in Part B of Schedule 7.02(c)(i).
"Designated Real Property Disposition" has the meaning specified
therefor in Section 7.02(c)(i).
"Disbursement Account" mean each of the bank accounts listed on
Schedule 1.01(D) hereto.
"Discharge of Term Obligations" has the meaning set forth in the
Intercreditor Agreement.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding any (x) sales of Inventory in the ordinary
course of business on ordinary business terms and (y) dispositions of cash or
sales or liquidations of Permitted Investments or other similar cash equivalents
that are not otherwise in violation of the terms of this Agreement.
"Dollar," "Dollars" and the symbol "$" each means lawful money of
the United States of America.
"Dollar Equivalent" means, at any time, (a) with respect to any
amount denominated in Dollars, such amount of Dollars, and (b) with respect to
any amount denominated in any currency other than Dollars, the amount of Dollars
as reasonably determined by the Administrative Agent at such time on the basis
of the Spot Rate for the purchase of Dollars with such other currency.
"Domestic Loan Party" means any Loan Party that is organized under
the laws of the United States or any state thereof.
"Domestic Subsidiary" means any Subsidiary of a Loan Party that is
organized under the laws of the United States or any state thereof.
"Effective Date" means June 10, 2004.
"Eligible Accounts" means, at any time, Accounts of a Domestic Loan
Party or a Canadian Borrowing Base Guarantor which at such time meet all of the
following specifications; provided that such specifications may be revised from
time to time by the Administrative Agent in the exercise of its reasonable
credit judgment to account for events, conditions, contingencies or risks which
adversely affect or could reasonably be expected to adversely affect any
Accounts in the reasonable credit
9
judgment of the Administrative Agent: (i) delivery of the merchandise or the
rendition of the services has been completed with respect to such Account and
the Account Debtor has been invoiced therefor and the Inventory sold or
transferred in connection with such Account is not subject to repurchase or
similar agreement; (ii) no return, rejection, repossession or dispute has
occurred with respect to such Account, the Account Debtor has not asserted any
setoff, defense or counterclaim with respect to such Account, and there has not
occurred any extension of the time for payment with respect to such Account
without the consent of the Administrative Agent, provided that, in the case of
any return, rejection, repossession, dispute, setoff, defense or counterclaim
with respect to an Account, the portion of such Account not subject to such
dispute, setoff, defense or counterclaim will not be ineligible solely by reason
of this clause (ii); (iii) such Account is lawfully owned by a Domestic Loan
Party or a Canadian Borrowing Base Guarantor free and clear of any Lien other
than Liens permitted by Section 8.03 (including Prior Claims that are
unregistered and secure amounts that are not yet due and payable) and otherwise
continues to be in conformity in all material respects with all representations
and warranties made by a Domestic Loan Party and a Canadian Borrowing Base
Guarantor, as the case may be, to the Agents and the Lenders with respect
thereto in the Loan Documents; (iv) such Account is unconditionally payable in
Dollars or Canadian Dollars, as applicable, within 90 days from the invoice date
and is not evidenced by a promissory note, chattel paper or any other instrument
or other document; provided, however, that Accounts which are payable in
Japanese Yen and which otherwise satisfy the criteria set forth in this
definition (the "Yen Receivables") shall not be deemed ineligible by virtue of
the fact that such Accounts are payable in Japanese Yen, provided that (a)
solely for purposes of calculating the Borrowing Base, the amount of Yen
Receivables included within the calculation of the Borrowing Base shall be the
equivalent amount of Dollars (calculated based on the exchange rate for Dollars
on such date evidenced by a nationally published index for Japanese Yen) of such
Yen Receivables and (b) the aggregate amount of Yen Receivables included in the
Borrowing Base as Eligible Accounts shall not exceed $5,000,000; (v) no more
than 60 days have elapsed from the invoice due date, no more than 120 days have
elapsed from the invoice date with respect to such Account and any extension of
time for payment of such invoice has not extended such payment beyond 30 days
from the original invoice due date; (vi) such Account is not due from an
Affiliate of a Domestic Loan Party or a Canadian Borrowing Base Guarantor; (vii)
such Account does not constitute an obligation of the United States or any other
Governmental Authority (unless all steps reasonably required by the
Administrative Agent in connection therewith, including notice to the United
States Government under the Federal Assignment of Claims Act or any action under
any state statute comparable to the Federal Assignment of Claims Act, have been
duly taken in a manner reasonably satisfactory to the Administrative Agent);
(viii) the Account Debtor (or the applicable office of the Account Debtor) with
respect to such Account is located in the continental United States or Canada,
unless such Account is supported by a letter of credit, export insurance or
other similar obligation the terms and conditions of which are reasonably
satisfactory to the Administrative Agent; (ix) the Account Debtor with respect
to such Account is not also a supplier to or creditor of a Domestic Loan Party
or a Canadian Borrowing Base Guarantor, unless such Account Debtor has executed
a no-offset letter satisfactory to the Administrative Agent; (x) not more than
50% of the aggregate amount of all Accounts of the Account Debtor with respect
to such Account are not Eligible Accounts; (xi) to the knowledge of the
Borrowers, the Account Debtor with respect to such Account (A) has not filed a
petition for bankruptcy or any other relief under the Bankruptcy Code or any
other law relating to bankruptcy, insolvency, reorganization or relief of
debtors, made an assignment for the benefit of creditors, had filed against it
any petition or other application for relief under the Bankruptcy Code or any
such other law, (B) has not failed, suspended business operations or become
insolvent or (C) has not had or suffered to be appointed a receiver or a trustee
for all or a significant portion of its assets or affairs; (xii) such Accounts
are not subject to collection by an outside claims processor; (xiii) the
otherwise Eligible Accounts of any Account Debtor do not exceed 10% of all
Eligible Accounts; (xiv) such Account does not arise in a transaction wherein
goods are placed on consignment or are sold pursuant to a guaranteed sale, a
sale or return, a sale on approval, a ▇▇▇▇ and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional; (xv) such
Account is not from an Account Debtor that is located in a
10
state or jurisdiction (e.g., New Jersey, Minnesota, and West Virginia) that
requires, as a condition to access to the courts of such jurisdiction, that a
creditor qualify to transact business, file a business activities report or
other report or form, or take one or more other actions, unless the applicable
Domestic Loan Party or the applicable Canadian Borrowing Base Guarantor has so
qualified, filed such reports or forms, or taken such actions (and, in each
case, paid any required fees or other charges), except to the extent such
Domestic Loan Party or a Canadian Borrowing Base Guarantor may qualify
subsequently as a foreign entity authorized to transact business in such state
or jurisdiction and gain access to such courts, without incurring any cost or
penalty reasonably viewed by the Administrative Agent to be material in amount,
and such later qualification cures any access to such courts to enforce payment
of such Account; (xvi) such Accounts do not consist of progress ▇▇▇▇▇▇▇▇ (such
that the obligation of the Account Debtors with respect to such Accounts is
conditioned upon the applicable Domestic Loan Party's satisfactory completion of
any further performance under the agreement giving rise thereto), ▇▇▇▇ and hold
invoices or retainage invoices , except as to ▇▇▇▇ and hold invoices, if the
Administrative Agent shall have received an agreement in writing from the
Account Debtor, in form and substance satisfactory to the Administrative Agent,
confirming the unconditional obligation of the Account Debtor to take the goods
related thereto and pay such invoice; and (xvii) the Administrative Agent is,
and continues to be, reasonably satisfied with the credit standing of the
Account Debtor in relation to the amount of credit extended and the
Administrative Agent does not believe, in its reasonable discretion, that the
prospect of collection of such Account is impaired for any reason.
"Eligible Inventory" means all finished goods, machine
work-in-process and raw materials Inventory of a Domestic Loan Party which at
any time meets all of the following specifications, provided that such
specifications may be fixed and revised from time to time by the Administrative
Agent in the exercise of its reasonable credit judgment to account for events,
conditions, contingencies or risks which adversely affect or could reasonably be
expected to adversely affect any Inventory in the reasonable credit judgment of
the Administrative Agent: (i) such Inventory is lawfully owned by a Domestic
Loan Party free and clear of any existing Lien and otherwise continues to be in
full conformity in all material respects with all representations and warranties
made by a Domestic Loan Party to the Agents and the Lenders with respect thereto
in the Loan Documents; (ii) such Inventory is not held on consignment and may be
lawfully sold; (iii) a Domestic Loan Party has the right to grant Liens on such
Inventory; (iv) such Inventory arose or was acquired in the ordinary course of
the business of a Domestic Loan Party and does not represent damaged, obsolete
or unsalable goods; (v) no Account or document of title has been created or
issued with respect to such Inventory; (vi) such Inventory is located in one of
the locations in one of the continental United States that is either owned by a
Domestic Loan Party or listed on Schedule 6.01(cc) or such other locations in
the continental United States as the Administrative Agent may approve in writing
from time to time (such approval not to be unreasonably withheld), provided,
that with respect to any such Inventory located on any single property that is
not owned by a Domestic Loan Party and that is not subject to a Landlord Waiver,
which Inventory has (a) an aggregate book value in excess of $500,000 (when
aggregated with other Inventory located at the same location) or (b) an
aggregate book value in excess of $2,000,000 (when aggregated with other
Inventory on other properties that are not owned by a Domestic Loan Party and
that are not subject to a Landlord Waiver), such Inventory in excess of the
dollar amounts in clauses (a) and (b) of this subsection (vi) may be excluded
from Eligible Inventory in the discretion of the Administrative Agent; (vii)
such Inventory does not consist of goods returned or rejected by a Domestic Loan
Party's customers (other than goods that are undamaged and resalable in the
normal course of business); (viii) such Inventory is not in-transit (except
between locations specified on Schedule 6.01(cc)); (ix) such Inventory does not
consist of goods that are slow moving, work-in-process (including, without
limitation, machines in the process of completion), supplies or goods that
constitute packaging and shipping materials, ▇▇▇▇ and hold goods or defective
goods; (x) in the case of raw materials used in the manufacture of finished
goods, such raw materials have been acquired by the Domestic Loan Parties during
the previous twelve months; (xi) such Inventory has not been consigned to a
Domestic Loan Party's customer, unless (a) such consigned Inventory with such
11
customer at a particular location has an aggregate Book Value in excess of
$100,000, (b) such consigned Inventory has been delivered to a customer location
in respect of which a satisfactory access agreement has been executed in favor
of and received by the Collateral Agent, (c) such consigned Inventory is
segregated or otherwise separately identifiable from any goods of any other
Person at the applicable customer location, (d) a UCC-1 financing statement has
been filed in the jurisdiction of the applicable customer's organization, which
names such customer as debtor, the applicable Domestic Loan Party as secured
party and the Collateral Agent as assignee of secured party and which identifies
such consigned Inventory in the possession of such customer as the collateral
and (e) a notice that complies with the terms of Section 9-324 of the Uniform
Commercial Code has been delivered to the secured creditors, if any, of the
applicable customer that have a perfected Lien in the Inventory of such
customer; (xii) such machine work-in-process Inventory is at least 95% complete,
does not require any further manufacturing process other than cosmetic process,
is subject to a firm order and is designated to be shipped within 60 days, in
each case as detailed in the Administrative Borrower's internal work-in-process
report, provided that the aggregate Book Value of machine work-in-process
Inventory to be included in Eligible Inventory at any one time shall not exceed
$5,000,000; and (xiii) if such Inventory consists of finished goods Inventory
sold under a licensed trademark or if such Inventory contains or uses a medium
subject to a copyright (A) the Collateral Agent shall have entered into a waiver
letter, in form and substance satisfactory to the Collateral Agent, with the
licensor with respect to the rights of the Collateral Agent to use the licensed
trademark or copyright to sell or otherwise dispose of such Inventory or (B) the
Collateral Agent shall otherwise be satisfied, in its reasonable discretion,
that the Collateral Agent has rights to sell or dispose of such Inventory.
"Employee Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) (other than a Multiemployer Plan) maintained (or that was
maintained at any time during the five (5) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates or was contributed to (or was required to be contributed to at any
time during the five (5) calendar years preceding the date of any borrowing
hereunder) by a Loan Party or any of its ERISA Affiliates.
"Environmental Actions" means any complaint, summons, citation,
written notice of violation, directive, order, claim, litigation, investigation,
judicial or administrative proceeding or judgment by or letter or other written
communication from any Person or Governmental Authority resulting or arising
from any violations of Environmental Laws or Releases of Hazardous Materials (i)
from any assets, properties or businesses owned or operated by any Loan Party or
any of its Subsidiaries or any predecessor in interest; (ii) from adjoining
properties; or (iii) onto any facilities which received Hazardous Materials
generated by any Loan Party or any of its Subsidiaries or any predecessor in
interest.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., as amended; Toxic
Substances Control Act ("TOSCA"), 15 U.S.C. 2601 et seq., as amended; Hazardous
Materials Transportation Act, 49 U.S.C. 5101 et seq., as amended; the Federal
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. 136-136y et
seq., as amended; the Emergency Planning and Community Right-to-Know Act of 1986
(Title III of ▇▇▇▇ or "EPCRA"), 42 U.S.C. 11001, et seq., as amended; and any
other foreign, federal, state, local or municipal laws, statutes, regulations,
guidance documents, rules having the force of law or ordinances imposing
liability or establishing standards of conduct for the Release or Handling of
Hazardous Materials and the protection of the health, safety and the environment
and, to the extent relating to the Release or Handling of Hazardous Materials,
healthy and safety.
12
"Environmental Liabilities and Costs" means any monetary
obligations, losses, liabilities (including strict liability), damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Action filed by any Governmental Authority, Person or any third
party which relate to any violations of Environmental Laws, Handling of
Hazardous Materials, Remedial Actions or Releases or threatened Releases of
Hazardous Materials from or onto (i) any property presently or, during the
period of ownership or operation by any Loan Party, formerly owned by any Loan
Party or any of its Subsidiaries or a predecessor in interest, or (ii) any
facility that received Hazardous Materials that were generated or Handled by any
Loan Party or any of its Subsidiaries or a predecessor in interest.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Environmental Permits" means any permits, licenses, certificates,
exemptions, authorizations, registrations or approvals required by any
Governmental Authority or under Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute and regulations thereunder, in each case,
as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is treated as a single employer
with such Person and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code.
"Euro" or "E" means the single currency of participating member
states of the European Union.
"Euro Note Indenture" means the Fiscal Agency Agreement, dated as of
April 6, 2000, by and among Milacron Capital, as issuer, the Parent, as
guarantor, Deutsche Bank AG London, as fiscal agent and Deutsche Bank Luxembourg
S.A., as paying agent, as the same may be amended, restated or otherwise
modified in accordance with the terms hereof.
"Euro Note Transactions" means (i) the tender offer for the Euro
Notes commenced by Milacron Capital on April 27, 2004 and the connected proxy
solicitation of holders of the Euro Notes to approve amendments to the terms of
the Euro Notes and the guarantee thereof, as such offer or solicitation may be
amended, modified or supplemented from time to time, (ii) the purchase of the
Euro Notes pursuant to such tender offer or otherwise and the payment of accrued
interest and premiums in connection therewith and the amendment to the terms of
the Euro Note Indenture and the guarantee thereof as contemplated by such proxy
solicitation and the payment of fees in connection therewith, (iii) the deposit
into an escrow account of an amount in cash or in cash equivalents sufficient to
repay, repurchase, refinance, redeem, exchange or otherwise retire the aggregate
principal amount of Euro Notes outstanding after the closing of the tender offer
on the stated maturity date thereof and (iv) use of proceeds from such escrow
account to repay, repurchase, refinance, redeem, exchange or otherwise retire
the Euro Notes outstanding after the closing of the tender offer in accordance
with the terms thereof.
"Euro Notes" means, collectively, the 7.625% Guaranteed Fixed Rate
Bonds due 2005 of Milacron Capital in the original aggregate principal amount of
E115,000,000 issued pursuant to the Fiscal
13
Agency Agreement, dated as of April 6, 2000, by and among Milacron Capital, as
issuer, the Parent, as guarantor, Deutsche Bank AG London, as fiscal agent and
Deutsche Bank Luxembourg S.A., as paying agent, as amended, restated or
otherwise modified.
"Eurodollar Loan" means a Loan bearing interest calculated based
upon the Adjusted LIBO Rate.
"Event of Default" means any of the events set forth in Section
9.01.
"Excess Availability" means, at any time, an amount equal to the
difference between (i) the lesser of (A) the Borrowing Base (before deducting
the Availability Reserve) and (B) the Total Revolving Credit Commitment and (ii)
the sum of (A) the aggregate outstanding principal amount of all Revolving
Credit Loans and (B) the LC Exposure.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facility" means the Amended and Restated Financing
Agreement, dated as of March 31, 2004, among the Parent, certain Subsidiaries of
the Parent, as additional borrowers thereunder, certain Subsidiaries of the
Parent, as guarantors thereunder, the lenders party thereto and Credit Suisse
First Boston, acting through its Cayman Islands Branch, as administrative agent,
collateral agent, sole lead arranger and sole book runner, as amended,
supplemented or otherwise modified.
"Extraordinary Receipts" means any Net Cash Proceeds, received by
any Loan Party or any of its Domestic Subsidiaries not in the ordinary course of
business (and not consisting of proceeds described in Section 2.05(c)(iii) or
(iv) hereof), including, without limitation, (i) foreign, United States, state
or local tax refunds, (ii) pension plan reversions, (iii) proceeds of insurance,
(iv) judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (v) condemnation awards (and payments in
lieu thereof), (vi) indemnity payments and (vii) any purchase price adjustment
received in connection with any purchase agreement; provided that "Extraordinary
Receipts" shall not mean any proceeds from the approximately $4,500,000 to be
received by Parent or any of its Subsidiaries in connection with the
contemplated termination of the Milacron Compensation Deferral Plan, of which
approximately $3,800,000 shall be used to pay all accounts under the Milacron
Compensation Deferral Plan and approximately $700,000 shall be transferred to
the Milacron SERP Trust, provided that the Parent provides written notice of the
receipt of such proceeds and such application thereof to the Administrative
Agent.
"Facility" means each parcel of real property identified as a
"Facility" on Schedule 6.01(o) that is owned by a Loan Party on the Effective
Date, including, without limitation, the land on which such facility is located,
all buildings and other improvements thereon, all fixtures located at or used in
connection with such facility, all whether now or hereafter existing.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means that certain Fee Letter dated as of April 27,
2004 by and between JPMorgan and the Parent.
14
"Field Survey and Audit" means a field survey and audit of the Loan
Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Collateral Agent, at the sole cost and expense
of the Borrowers.
"Final Maturity Date" means the earliest to occur of (i) June 10,
2008 (as the same may be extended pursuant to Section 2.14), (ii) the date of
termination or reduction to zero of the Total Revolving Credit Commitment
pursuant to Section 2.05(a) or (iii) the date of termination of the Commitments
of the Lenders to make Loans and the Issuing Bank to issue Letters of Credit
pursuant to Section 9.01.
"Financial Statements" means (i) the audited consolidated balance
sheet of the Parent and its Subsidiaries for the Fiscal Year ended December 31,
2003, and the related consolidated statement of operations, shareholders' equity
and cash flows for the Fiscal Year then ended, and (ii) the most recent
unaudited consolidated and consolidating balance sheet of the Parent and its
Subsidiaries, and the related consolidated statement of operations,
shareholder's equity and cash flows, in each case, for each quarterly period
ended subsequent to the Parent's Fiscal Year ended December 31, 2003, and in the
case of each of the foregoing clauses (i) and (ii), delivered to the
Administrative Agent on the Effective Date pursuant to Section 5.01(b)(xvi).
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, as of any date, the ratio of
(in each case determined on a consolidated basis, without duplication, in
accordance with GAAP) (a) (i) Consolidated EBITDA for the period of twelve
months most recently ended on or prior to such date, minus (ii) the aggregate
amount of all Non-Financed Capital Expenditures of the Parent and its
consolidated Subsidiaries during such period, minus (iii) the aggregate amount
paid by the Parent and its consolidated Subsidiaries in cash in respect of the
current portion of all income taxes for such period, minus (iv) the aggregate
amount of all cash dividends paid by the Parent and its consolidated
Subsidiaries during such period, to (b) the sum of (i) Consolidated Interest
Expense for such period, plus (ii) the aggregate amount of regularly scheduled
payments of principal in respect of long-term Indebtedness for borrowed money
(including the principal component of any payments in respect of Capitalized
Lease Obligations) paid or required to be paid by the Parent and its
consolidated Subsidiaries during such period, plus (iii) the aggregate amount of
all cash dividends paid by the Parent and its Consolidated Subsidiaries to
holders of their respective preferred stock during such period.
"Foreign Insurance Repayment" has the meaning specified therefor in
clause (j) of the definition of Permitted Indebtedness.
"Foreign Subsidiary" means any Subsidiary of a Loan Party that is
not a Domestic Subsidiary (other than Milacron Capital). For purposes of this
Agreement, no Loan Party shall be deemed to be a Foreign Subsidiary.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis, provided that
for the purpose of Section 7.03 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the date hereof
and consistent with those used in the preparation of the Financial Statements,
provided, further, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03 hereof, the Administrative Agent and the
Administrative Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective
15
positions of the Lenders and the Borrowers after such change in GAAP conform as
nearly as possible to their respective positions as of the date of this
Agreement and, until any such amendments have been agreed upon, the covenants in
Section 7.03 hereof shall be calculated as if no such change in GAAP has
occurred.
"Glencore" means Glencore Finance AG.
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranteed Obligations" has the meaning specified therefor in
Section 11.01.
"Guarantor" means (i) each Subsidiary of the Parent listed as an
"Initial Guarantor" on the signature pages hereto, and (ii) each other Person
which guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of
the Obligations.
"Guaranty" means (i) the guaranty of each Guarantor party hereto
contained in ARTICLE XI hereof, and (ii) each guaranty substantially in the form
of Exhibit A, made by any other Guarantor in favor of the Collateral Agent for
the benefit of the Agents and the Lenders pursuant to Section 7.01(b) or
otherwise.
"Handle" means any manner of generating, accumulating, storing,
treating, disposing of, transporting, transferring, handling, manufacturing or
using, as any of such terms may further be defined in any Environmental Law, any
Hazardous Materials.
"Hazardous Material" means (a) any element, compound or chemical
that is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic under any Environmental Law, including, without
limitation, corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any asbestos-containing materials
and manufactured products containing hazardous substances listed or classified
as such under Environmental Laws.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Hedging Obligations" means obligations owed by any Borrower or any
Guarantor to any Lender or any Affiliate of any Lender (in each case with the
consent of the Administrative Agent) with respect to any Hedging Agreement.
16
"Hedging Reserve" means, as of any date of determination, an amount
determined by the Administrative Agent in its reasonable credit judgment to
reflect as of such date, the aggregate termination values of all Hedging
Agreements then in effect which constitute Hedging Obligations in the event such
Hedging Agreements were to be terminated on such date after taking into account
the effect of any legally enforceable netting agreement relating to such Hedging
Agreements.
"Highest Lawful Rate" means, with respect to the Administrative
Agent or any Lender, the maximum non-usurious interest rate, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or
received on the Obligations under laws applicable to the Administrative Agent or
such Lender which are currently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now allow.
"Hilco" means Hilco Appraisal Services, LLC.
"Inactive Subsidiaries" means Amertool Services Corp., Amertool
Services Inc., Cincinnati Milacron DISC Corp., Cincinnati Milacron International
Sales Co., Cincinnati Grinders Inc., Cincinnati Milling and Grinding, Cincinnati
Milling Machine Co., Milacron Commercial Corp., Cincinnati Milacron UK Holdings
Co. and Cincinnati Holding Company.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other accounts payable incurred in the
ordinary course of such Person's business and not outstanding for more than 120
days after the date such payable was due, unless if outstanding more than 120
days after the date such payable was due, they are being contested in good faith
and by appropriate proceedings promptly initiated and diligently conducted);
(iii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments or upon which interest payments are customarily made;
(iv) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
may be limited to repossession or sale of such property; (v) all Capitalized
Lease Obligations of such Person; (vi) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit,
acceptances and similar facilities; (vii) all obligations and liabilities,
calculated on a basis satisfactory to the Collateral Agent and in accordance
with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; and (ix) all obligations referred to in clauses (i)
through (viii) of this definition of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien upon property owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
The Indebtedness of any Person shall include the Indebtedness of any partnership
of or joint venture in which such Person is a general partner or a joint venture
except to the extent such Person is not liable for such Indebtedness.
"Indemnified Matters" has the meaning specified therefor in Section
12.15.
"Indemnitees" has the meaning specified therefor in Section 12.15.
"Initial Maturity Date" has the meaning specified therefor in
Section 2.14.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law,
17
assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
"Intercompany Subordination Agreement" means an Intercompany
Subordination Agreement made by a Loan Party or any Subsidiary of a Loan Party
in favor of the Collateral Agent, for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit G.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of the Effective Date by and among the Administrative Agent, the
Administrative Borrower, and U.S. Bank National Association, as trustee.
"Interest Period" means with respect to any Eurodollar Loan, the
period commencing on the date of such Loan and ending on the numerically
corresponding day in the calendar month that is one, two or three months
thereafter, as the Administrative Borrower may elect pursuant to Sections 2.02
or 2.11; provided, that (i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) any Interest Period pertaining to a Eurodollar Loan
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period, (iii) no Interest Period for any Eurodollar Loan
shall end after the Final Maturity Date, and (iv) no more than eight (8)
Interest Periods in the aggregate for the Borrowers may exist at any one time.
For purposes hereof, the date of a Loan initially shall be the date on which
such Loan is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Loan.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account or cash.
"Inventory Category" means a category of Inventory consisting of raw
materials or finished goods that has been established by the Administrative
Agent in its reasonable credit judgment; it being agreed and understood that the
initial Inventory Categories shall be as set forth on Schedule 1.01(B) hereto.
"Issuing Bank" means JPMorgan, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 3.01(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"ITA" means the Income Tax Act (Canada), as the same may, from time
to time, be in effect.
"JPMorgan" has the meaning specified therefor in the preamble
hereto.
"Judgment Currency" has the meaning specified therefor in Section
11.06.
18
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Collateral Agent and executed by a landlord or mortgagee in
respect of Collateral of the Loan Parties located at any leased premises of the
Loan Parties, pursuant to which such landlord or mortgagee, as the case may be,
among other things, waives or subordinates any Lien such landlord or mortgagee
may have in respect of any Collateral.
"LC Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC Dropdead Date" has the meaning specified therefor in Section
3.01(c).
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrowers at such time. The LC Exposure of any Lender at any
time shall be its Pro Rata Share of the total LC Exposure at such time.
"Lease" means any lease of real property to which any Loan Party or
any of its Subsidiaries is a party as lessor or lessee.
"Lender" and "Lenders" have the respective meanings specified
therefor in the preamble hereto.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"Letter of Credit Collateral Account" means a deposit account with a
bank reasonably acceptable to the Administrative Agent, which account shall be
under the sole dominion and control of the Collateral Agent or the
Administrative Agent and subject to a perfected, first priority security
interest in favor of the Collateral Agent or the Administrative Agent, for the
benefit of the Agents and the Lenders.
"Letter of Credit Fees" have the meaning specified therefor in
Section 3.01(k).
"LIBO Rate" means, with respect to any Eurodollar Loan for any
Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Loan for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
19
"Loan" means a Revolving Credit Loan.
"Loan Account" means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the Borrowers, in which the Borrowers will be charged with all Loans
made to, and all other Obligations incurred by, the Borrowers.
"Loan Document" means this Agreement, any Guaranty, the Fee Letter,
any Security Agreement, any Pledge Agreement, any Cash Management Agreement, any
Control Agreement, any UCC Filing Authorization Letter, the Contribution
Agreement, the Intercompany Subordination Agreement, any Letter of Credit and
any other agreement, promissory note, other instrument and other document
executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing any Loan, any Obligation in respect of any Letter of Credit or any
other Obligation.
"Loan Party" means any Borrower and any Guarantor.
"Material Adverse Effect" means a material adverse effect on any of
(i) the operations, business, assets, properties, condition (financial or
otherwise) or liabilities of the Loan Parties taken as a whole, (ii) the ability
of any Loan Party to perform any of its obligations under any Loan Document to
which it is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Loan Document, (iv) the rights and remedies of any Agent
or any Lender under any Loan Document, or (v) the validity, perfection or
priority of any and all Liens in favor of the Collateral Agent for the benefit
of the Agents and the Lenders on any of the Collateral with an aggregate fair
market value in excess of $3,000,000.
"Material Contract" means, with respect to any Person, (i) each
contract or agreement to which such Person or any of its Subsidiaries is a party
involving aggregate annual consideration payable to or by such Person or such
Subsidiary of $1,000,000 or more (other than purchase orders in the ordinary
course of the business of such Person or such Subsidiary and other than
contracts that by their terms may be terminated by such Person or Subsidiary in
the ordinary course of its business upon less than 60 days' notice without
penalty or premium) and (ii) all other contracts or agreements material to the
business, operations, condition (financial or otherwise), performance,
properties or liabilities of such Person or any of its Subsidiaries, taken as a
whole, and, in the case of any Loan Party, of the Loan Parties, taken as a
whole.
"Milacron Assurance" means Milacron Assurance Ltd., a Bermuda
company.
"Milacron Capital" means Milacron Capital Holdings B.V., a Dutch
private company with limited liability.
"Milacron Escrow" means Milacron Escrow Corporation, and any
successors thereto.
"Misplaced Note Holder" has the meaning specified therefor in
Section 6.01(o)(iii).
"Misplaced Notes" has the meaning specified therefor in Section
6.01(o)(iii).
"Mizuho" means Mizuho International plc.
"Mizuho/Glencore Transaction Documents" means the Note Purchase
Agreement, dated as of March 12, 2004, by and among Milacron Inc., Mizuho and
Glencore, the securities to be sold by Milacron Inc. pursuant to the terms of
such agreement, the securities into which or for which such securities may be
converted or exchanged and/or
20
further exchanged pursuant to the terms thereof and/or of such agreement, the
security documents, registration rights agreement and other documents and
instruments related thereto and the Subordination and Intercreditor Agreement of
even date therewith by and among Mizuho, Glencore, Milacron Inc. and Credit
Suisse First Boston, acting through its Cayman Islands Branch.
"Mizuho/Glencore Transactions" means the transactions contemplated
by the Mizuho/Glencore Transaction Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Mortgage" means a mortgage (including, without limitation, a
leasehold mortgage), deed of trust or deed to secure debt, in form and substance
reasonably satisfactory to the Collateral Agent, made by a Loan Party in favor
of the Collateral Agent for the benefit of the Agents and the Lenders, securing
the Obligations and delivered to the Collateral Agent pursuant to Section
5.01(d), Section 7.01(b), Section 7.01(v) or otherwise.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) calendar years.
"Net Amount of Eligible Accounts" means the aggregate unpaid invoice
amount of Eligible Accounts less, without duplication, sales, excise or similar
taxes, returns, discounts, chargebacks, claims, advance payments, credits and
allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed with respect to such Eligible Accounts.
"Net Cash Proceeds" means, (i) with respect to any Disposition by
any Loan Party or any of its Domestic Subsidiaries, the amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary, in connection therewith after deducting
therefrom only (A) the amount of any Indebtedness secured by any Lien permitted
by Section 7.02(a) on any asset (other than Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such Disposition (other than Indebtedness under this Agreement), (B)
expenses related thereto incurred by such Person or such Subsidiary in
connection therewith, (C) transfer taxes paid to any taxing authorities by such
Person or such Subsidiary in connection therewith, (D) net income taxes to be
paid in connection with such Disposition (after taking into account any tax
credits or deductions and any tax sharing arrangements), (E) any reserves for
adjustments in respect of the sale price of such assets and for future
liabilities established in accordance with GAAP and (F) prior to the Discharge
of Term Obligations, in the case of Senior Secured Priority Collateral, amounts
payable to the holders of the Senior Secured Notes or to be held as Senior
Secured Priority Collateral or otherwise applied, in each case in accordance
with the terms of the Senior Secured Notes Indenture and the Intercreditor
Agreement, provided that (1) the Administrative Borrower shall certify to the
Administrative Agent that all such proceeds of Senior Secured Priority
Collateral have been deposited into a Senior Secured Priority Account in
accordance with Section 7.01(w) and as otherwise required by the Senior Secured
Notes Indenture, the Intercreditor Agreement or the Loan Documents and (2) the
Administrative Borrower shall notify the Administrative Agent in accordance with
Section 7.01(w) prior to any withdrawal from or deposits to any such account,
(ii) with respect to the issuance or incurrence of any Indebtedness by any Loan
Party or any of its Domestic Subsidiaries, or the sale or issuance by any Loan
Party or any of its Domestic Subsidiaries of any shares of its Capital Stock,
the aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (A) expenses related
thereto incurred by such Person or such Subsidiary in
21
connection therewith, (B) transfer taxes paid by such Person or such Subsidiary
in connection therewith, (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements and (D) prior to the Discharge of Term Obligations, amounts
constituting proceeds of the Senior Secured Priority Collateral used to prepay
the Senior Secured Notes pursuant to Section 3.07 of the Senior Secured Notes
Indenture), and (iii) with respect to Extraordinary Receipts received by any
Loan Party or any of its Domestic Subsidiaries, the amount of cash proceeds
received (directly or indirectly) from time to time by or on behalf of such Loan
Party or such Domestic Subsidiary after deducting therefrom only (A) expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, (B) transfer taxes paid by such Person or such Subsidiary in
connection therewith, (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements); in each case of clauses (i), (ii) and (iii) to the extent, but
only to the extent, that the amounts so deducted are (x) actually paid to a
Person that, except in the case of out-of-pocket expenses, is not an Affiliate
of such Person or any of its Subsidiaries and (y) properly attributable to such
transaction or to the asset that is the subject thereof and (D) prior to the
Discharge of Term Obligations, proceeds of Senior Secured Priority Collateral to
the extent payable to the holders of the Senior Secured Notes or to be held as
Senior Secured Priority Collateral or otherwise applied, in each case in
accordance with the terms of the Senior Secured Notes Indenture and the
Intercreditor Agreement, provided that (1) the Administrative Borrower shall
certify to the Administrative Agent that all such proceeds of Senior Secured
Priority Collateral have been deposited into a Senior Secured Priority Account
in accordance with Section 7.01(w) and otherwise as required by the Senior
Secured Notes Indenture, the Intercreditor Agreement or the Loan Documents and
(2) the Administrative Borrower shall notify the Administrative Agent in
accordance with Section 7.01(w) prior to any withdrawal from or deposits to any
such account.
"Net Liquidation Percentage" means, for each Inventory Category, the
percentage of the Book Value of Eligible Inventory included in such Inventory
Category that is estimated to be recoverable in an orderly liquidation of such
Eligible Inventory, net of liquidation expenses and commissions, such percentage
to be as determined from time to time by the most recent appraisal conducted by
an appraiser reasonably acceptable to the Collateral Agent.
"Net Liquidation Value" means, for each Inventory Category at any
time, the Net Liquidation Percentage for such Inventory Category times the Book
Value of Eligible Inventory included in such Inventory Category at such time.
"New Lending Office" has the meaning specified therefor in Section
2.08(d).
"New US Securities" means the convertible equity securities
contemplated by the Mizuho/Glencore Transactions.
"Non-extending Lender" has the meaning specified therefore in
Section 2.14.
"Non-Financed Capital Expenditures" means Capital Expenditures paid
in cash and not financed with Indebtedness for borrowed money; provided that
Capital Expenditures financed with the proceeds of Revolving Credit Loans shall
be deemed to constitute "Non-Financed Capital Expenditures" for purposes of this
Agreement.
"Non-U.S. Lender" has the meaning specified therefor in Section
2.08(d).
"Notice of Borrowing" has the meaning specified therefor in Section
2.02(a).
22
"Notice of Conversion/Continuation" has the meaning specified
therefor in Section 2.11(e).
"Obligation Currency" has the meaning specified therefor in Section
11.06.
"Obligations" means all present and future (i) Banking Services
Obligations, (ii) Hedging Obligations and (iii) indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders or any Affiliate of
the Agents or Lenders, whether or not the right of payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit or any
other document, made, delivered or given in connection herewith or therewith.
Without limiting the generality of the foregoing, the Obligations of each Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding of any Loan Party, whether or not a
claim for post-filing interest is allowed in such proceeding), charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Person under the Loan Documents, and (b) the obligation of such
Person to reimburse any amount in respect of any of the foregoing that the
Agents or any Lender (in its sole discretion) may elect to pay or advance on
behalf of such Person.
"Opening Availability Loan" means an unsecured loan made on or prior
to the Effective Date by a Subsidiary of the Parent that is not a Loan Party to
a Loan Party in a maximum principal amount that does not exceed $5,000,000.
"Operating Lease Obligations" means all obligations for the payment
of rent for any real or personal property under leases or agreements to lease,
other than Capitalized Lease Obligations.
"Other Taxes" has the meaning specified therefor in Section 2.08(b).
"Overadvance" has the meaning set forth in Section 3.05.
"Paid in Full" means (i) the Total Revolving Credit Commitments
shall have been terminated, (ii) all principal of the Loans, interest thereon
and all other Obligations shall have been paid in full in cash (other than
contingent obligations or indemnification obligations for which no claim has
been asserted), and (iii) the Administrative Agent shall have received cash
collateral (or, at the Administrative Agent's option, a letter of credit issued
for the account of the relevant Borrower and at such Borrower's expense in form
and substance reasonably satisfactory to the Administrative Agent, by an issuer
reasonably acceptable to the Administrative Agent and payable to the
Administrative Agent as beneficiary) in such amounts as the Administrative Agent
determines are reasonably necessary to secure the Agents, the Issuing Bank and
the Lenders from loss, cost, damage or expense, including reasonable attorneys'
fees and expenses, in connection with outstanding Letters of Credit and checks,
remittances or other similar payments provisionally credited to the Obligations
and/or as to which the Administrative Agent or any Lender has not yet received
final payment in full and in cash. All Letters of Credit shall be cash
collateralized (or supported by a letter of credit as described in the preceding
sentence) by an amount equal to one hundred five percent (105%) of the amount of
the Letters of Credit then existing.
"Parent" has the meaning specified therefor in the preamble hereto.
"Payment Office" means the Administrative Agent's office located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, or at such other
office or offices of the Administrative
23
Agent as may be designated in writing from time to time by the Administrative
Agent to the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Holder" means (i) each of Mizuho and Glencore and (A) any
controlling equity holder, majority-owned Subsidiary, or immediate family member
(in the case of an individual) of either Mizuho or Glencore, and (B) any trust,
corporation, partnership, limited liability company or other entity, the
beneficiaries, stockholders, partners, members, owners or Persons beneficially
holding a majority controlling interest of which consist of any or more of
Mizuho, Glencore and/or such Persons referred to in the immediately preceding
clause (A) and (ii) each officer and director of the Parent as of the Effective
Date and their spouses and lineal descendants.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to any of the Agents or Lenders under
this Agreement and the other Loan Documents;
(b) any other Indebtedness existing on the Effective Date and listed
on Schedule 7.02(b), and the extension of maturity, refinancing or modification
of the terms thereof; provided, however, that (i) such extension, refinancing or
modification is pursuant to terms that, taken as a whole, are not less favorable
to the Loan Parties and the Lenders than the terms of the Indebtedness being
extended, refinanced or modified or are otherwise reasonably satisfactory to the
Agents and (ii) after giving effect to such extension, refinancing or
modification, the amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;
(c) Indebtedness evidenced by Capitalized Lease Obligations entered
into in order to finance Capital Expenditures made by the Loan Parties in
accordance with the provisions of Section 7.02(g), which Indebtedness, when
aggregated with the principal amount of all indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed $10,000,000 at any
time outstanding;
(d) Indebtedness secured by a Lien permitted by clause (e) of the
definition of "Permitted Lien";
(e) Indebtedness permitted under Section 7.02(e);
(f) Indebtedness evidenced by the Senior Secured Notes or the Senior
Secured Notes Guarantees, and the extensions of maturity, refinancing or
modification of the terms thereof, but only to the extent permitted by Section
7.02(m);
(g) [Reserved];
(h) [Reserved];
(i) Indebtedness of the Foreign Subsidiaries under any financing,
factoring or similar arrangements under non-U.S. law, (but not including
Indebtedness of the Foreign Subsidiaries permitted under clause (o) of this
definition) the aggregate outstanding principal amount not at any time exceeding
$30,000,000 and the extension of maturity, refinancing or modification of the
terms thereof; provided however, that the terms and conditions of such
arrangements, taken as a whole, are not less
24
favorable to the Loan Parties and the Lenders than the terms and conditions of
such Indebtedness existing on the Effective Date, or are otherwise reasonably
acceptable to the Administrative Agent and the Required Lenders; and
(j) the following intercompany Indebtedness: (i) (x) Indebtedness of
Milacron Capital to Parent existing on the Effective Date and incurred in
connection with the refinancing of Euro Notes and (y) Indebtedness of any
Domestic Loan Party to any other Domestic Loan Party, in each case to the extent
such Indebtedness is (A) evidenced by a promissory note with terms and
provisions reasonably acceptable to the Collateral Agent, (B) promptly pledged
to the Collateral Agent pursuant to a Pledge Agreement, and (C) subject to an
Intercompany Subordination Agreement or such other subordination provisions
acceptable to the Collateral Agent; (ii) Indebtedness of any Foreign Subsidiary
of Milacron Capital to any other Foreign Subsidiary of Milacron Capital; (iii)
Indebtedness of any Foreign Subsidiary (other than any Subsidiary of Milacron
Capital) to any other Foreign Subsidiary (other than any Subsidiary of Milacron
Capital); (iv) Indebtedness of any Domestic Subsidiary that is not a Loan Party
to any other Domestic Subsidiary that is not a Loan Party to the extent that the
aggregate principal amount of such Indebtedness outstanding at any time does not
exceed $250,000; (v) unsecured Indebtedness of any Loan Party owing to any
Foreign Subsidiary resulting from loans or advances made by a Foreign Subsidiary
to a Loan Party, to the extent such Indebtedness is subject to an Intercompany
Subordination Agreement or such other subordination provisions acceptable to the
Collateral Agent; (vi) unsecured Indebtedness of the Parent owing to Milacron
Assurance in connection with the self-insurance program of the Parent and its
Subsidiaries to the extent such Indebtedness (A) is evidenced by a promissory
note with terms and provisions reasonably acceptable to the Collateral Agent,
(B) is subject to an Intercompany Subordination Agreement or such other
subordination provisions acceptable to the Collateral Agent, (C) will not be
repaid in amounts in excess of the amounts necessary to pay the obligations of
Milacron Assurance under the self-insurance program for the benefit of the
Parent and the Subsidiaries permitted under Section 7.01(h) and (D) to the
extent repaid by the Parent to Milacron Assurance for Milacron Assurance to make
available to a Foreign Subsidiary in respect of such self-insurance program,
will result, prior to or concurrently with such repayment, in Foreign
Subsidiaries remitting, transferring or otherwise repatriating funds to a Loan
Party in an aggregate US dollar amount equal to the amount repaid by the Parent
for such purpose (the "Foreign Insurance Repayment"); (vii) Indebtedness of any
Foreign Subsidiary owing to any Loan Party existing as of the Effective Date and
listed on Schedule 7.02(b) (but not the increase, extension of maturity,
refinancing or other modification thereof); and (viii) the Opening Availability
Loan, provided that such Indebtedness shall require no amortization, sinking
fund payment or any other scheduled maturity of the principal amount thereof on
any date which is earlier than the Final Maturity Date and such Indebtedness is
subject to an Intercompany Subordination Agreement or such other subordination
provisions acceptable to the Collateral Agent;
(k) (i) Indebtedness (whether or not secured) incurred by any Loan
Party under Hedging Agreements provided by any Agent, any Lender or any
Affiliate of any Agent or any Lender entered into the ordinary course of
financial management and not for speculative purposes; and (ii) unsecured
Indebtedness incurred by any Loan Party under Hedging Agreements entered into
the ordinary course of financial management and not for speculative purposes;
(l) Indebtedness arising from judgments, orders or other awards to
the extent not constituting an Event of Default;
(m) Contingent Obligations to the extent the "primary obligations"
of the "primary obligor" are not prohibited by this Agreement or any other Loan
Document, but excluding Contingent Obligations with respect to the New US
Securities;
25
(n) letters of credit existing as of the Effective Date and listed
on Schedule 7.02(b);
(o) unsecured Indebtedness in respect of customer financing programs
(including lease transactions) in an aggregate principal amount outstanding not
at any time exceeding $20,000,000;
(p) additional unsecured Indebtedness of the Loan Parties and any of
their Subsidiaries not otherwise permitted pursuant to this definition of
Permitted Indebtedness, so long as the aggregate principal amount of all
Indebtedness permitted by this clause (p) does not exceed $5,000,000; and
(q) Indebtedness arising out of and in connection with the terms and
conditions of the sale of notes receivable permitted pursuant to Section
7.02(c)(i)(G).
"Permitted Investments" means (i) 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 months from the date of acquisition
thereof; (ii) commercial paper, maturing not more than 270 days after the date
of issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of
deposit maturing not more than 270 days after the date of issue, issued by
commercial banking institutions and money market or demand deposit accounts
maintained at commercial banking institutions, each of which is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000; (iv) repurchase agreements having
maturities of not more than 90 days from the date of acquisition which are
entered into with major money center banks included in the commercial banking
institutions described in clause (iii) above and which are secured by readily
marketable direct obligations of the United States Government or any agency
thereof, (v) money market accounts maintained with mutual funds having assets in
excess of $2,500,000,000; and (vi) tax exempt securities rated A or higher by
Moody's or A+ or higher by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the
payment of which is not required under Section 7.01(c);
(c) Liens imposed by law (other than any such Lien imposed pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), such
as carriers', warehousemen's, mechanics', materialmen's and other similar Liens
arising in the ordinary course of business and securing obligations (other than
Indebtedness for borrowed money) that are not overdue by more than 30 days or
are being contested in good faith and by appropriate proceedings promptly
initiated and diligently conducted, and a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor;
(d) Liens existing on the Effective Date and listed on Schedule
7.02(a), and the extension of maturity, refinancing or other modification of the
terms thereof, but not the extension of coverage thereof to other property or
the extension, refinancing or other modification of the terms thereof to
increase the amount of the Indebtedness secured thereby;
(e) (i) purchase money Liens (including precautionary Lien filings
made under the Uniform Commercial Code of any jurisdiction) on equipment
acquired or held by any Loan Party or any of its Subsidiaries in the ordinary
course of its business to secure the purchase price of such equipment or
26
Indebtedness incurred solely for the purpose of financing the acquisition of
such equipment or (ii) Liens existing on such equipment at the time of its
acquisition; provided, however, that in the case of each of clauses (i) and
(ii), (A) no such Lien shall extend to or cover any other property of any Loan
Party or any of its Subsidiaries, and (B) the aggregate principal amount of
Indebtedness secured by any or all such Liens shall not exceed at any one time
outstanding $3,000,000;
(f) deposits and pledges of cash securing (i) obligations incurred
in respect of workers' compensation, unemployment insurance, automobile
liability or other forms of governmental insurance or benefits, (ii) the
performance of bids, tenders, leases, contracts (other than for the payment of
money) and statutory obligations, (iii) obligations on surety or appeal bonds,
but only to the extent such deposits or pledges are made or otherwise arise in
the ordinary course of business and secure obligations not past due, (iv) the
letters of credit permitted under clause (n) of the definition of Permitted
Indebtedness, or (v) obligations to suppliers and service providers (including
lessors in respect of operating leases) of the Loan Parties made in the ordinary
course of business and securing obligations not past due, to the extent the
aggregate amount of all such cash deposited or pledged at any time does not
exceed $2,500,000;
(g) easements, zoning restrictions, rights of way, survey
exceptions, leases and subleases and similar encumbrances on real property and
minor irregularities in the title thereto that do not (x) secure obligations for
the payment of money or (y) materially impair the value of such property or its
use by any Loan Party or any of its Subsidiaries in the normal conduct of such
Person's business, and any other Lien described in a Title Insurance Policy with
respect to any real property subject to a Mortgage and (ii) Liens limited to the
real property subject to a Lease of any Loan Party affecting the interest of the
landlord of any such Lease (and any underlying landlord in the case of a ground
lease);
(h) Liens securing Indebtedness permitted by clause (c) of the
definition of Permitted Indebtedness, and Liens securing Hedging Agreements
permitted by clause (k)(i) of the definition of Permitted Indebtedness, to the
extent permitted therein, to the extent such Hedging Agreements are with an
Agent, a Lender or any Affiliates of the foregoing;
(i) Liens of landlords arising under real property Leases to the
extent (x) the real property subject to such Liens is subject to a Landlord
Waiver to the extent required pursuant to Section 7.01(m), and (y) such Liens
arise in the ordinary course of business and do not serve and do not secure any
past due obligation for the payment of money;
(j) bankers' Liens with respect to depository account arrangements
entered into in the ordinary course of business securing obligations not past
due;
(k) Liens in favor of any Loan Party in the assets or property of a
Subsidiary of the Parent that is not a Loan Party;
(l) Liens arising from judgments, orders, or other awards not
constituting an Event of Default;
(m) [Reserved];
(n) Liens of the Issuing Bank required to be granted in connection
with Letters of Credit;
(o) Liens securing indebtedness permitted by clause (f) of the
definition of Permitted Indebtedness, but only so long as the Intercreditor
Agreement shall be in full force and effect;
27
(p) [Reserved];
(q) to the extent not included in clause (c) above, solely with
respect to Eligible Accounts owned by a Canadian Borrowing Base Guarantor, Prior
Claims that are unregistered and secure amounts that are not yet due and
payable;
(r) Liens constituting precautionary Lien filings made under the
Uniform Commercial Code of any jurisdiction by PNC Bank, National Association,
pursuant to the Purchase Agreement, dated as of September 24, 1999, between PNC
Bank, National Association and the Parent with respect to notes receivable sold
thereunder prior to the Effective Date and securing obligations not more than
$5,000,000 in the aggregate;
(s) other Liens of the Loan Parties securing obligations not
exceeding $1,000,000 in the aggregate; provided that, to the extent that such
Liens are consensual, such Liens do not encumber any ABL Priority Collateral;
and
(t) Liens arising out of and in connection with the terms and
conditions of the sale of notes receivable permitted pursuant to Section
7.02(c)(i)(G).
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
"Pledge Agreement" means (i) a Pledge and Security Agreement made by
a Loan Party in favor of the Collateral Agent for the benefit of the Agents and
the Lenders, substantially in the form of Exhibit C, securing the Obligations
and delivered to the Collateral Agent and (ii) any pledge agreement or similar
agreement or instrument made by a Loan Party in favor of the Collateral Agent
for the benefit of the Agents and the Lenders providing for the pledge of the
Capital Stock of any Foreign Subsidiary in accordance with the requirements of
law of a foreign jurisdiction.
"Post-Default Rate" means a rate of interest per annum equal to (i)
in the case of any Loan, the rate otherwise applicable to such Loan (assuming
that the Trailing Average Availability is less than $20,000,000) plus 2.0% and
(ii) in the case of any other amount, the sum of (A) the Alternate Base Rate,
plus (B) the Applicable Rate for ABR Loans (assuming that the Trailing Average
Availability is less than $20,000,000), plus 2.0%.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Prior Claims" means all liens created by applicable law (in
contrast with liens voluntarily granted) which rank or are capable of ranking
prior or pari passu with the Collateral Agent's security interests (or similar
liens under applicable laws), against all or part of the assets of a Canadian
Borrowing Base Guarantor, including for amounts owing for vacation pay, employee
source deductions and contributions, goods and services taxes, sales taxes,
harmonized sales taxes, Quebec corporate income taxes, municipal taxes, workers'
compensation, pension plan or fund obligations and overdue rents.
28
"Pro Rata Share" means, with respect to a Lender's obligation to
make Revolving Credit Loans and receive payments of interest, fees, and
principal with respect thereto, the percentage obtained by dividing (i) such
Lender's Revolving Credit Commitment, by (ii) the Total Revolving Credit
Commitment, provided, that, if the Total Revolving Credit Commitment has been
reduced to zero, the numerator shall be the aggregate unpaid principal amount of
such Lender's Revolving Credit Loans (including Agent Advances) and its interest
in the LC Exposure and the denominator shall be the aggregate unpaid principal
amount of all Revolving Credit Loans (including Agent Advances) and LC Exposure.
"Receivables" means all of the following now owned or hereafter
arising or acquired property of each Loan Party: (i) all Accounts; (ii) all
interest, fees, late charges, penalties, collection fees and other amounts due
or to become due or otherwise payable in connection with any Account; (iii) all
payment intangibles of such Loan Party; (iv) letters of credit, indemnities,
guarantees, security or other deposits and proceeds thereof issued payable to
any Loan Party or otherwise in favor of or delivered to any Loan Party in
connection with any Account; or (v) all other accounts, contract rights, chattel
paper, instruments, notes, general intangibles and other forms of obligations
owing to any Loan Party, whether from the sale and lease of goods or other
property, licensing of any property (including intellectual property or other
general intangibles), rendition of services or from loans or advances by any
Loan Party or to or for the benefit of any third person (including loans or
advances to any Affiliates or Subsidiaries of any Loan Party) or otherwise
associated with any Accounts, Inventory or general intangibles of any Loan Party
(including, without limitation, chooses in action, causes of action, tax
refunds, tax refund claims, any funds which may become payable to any Loan Party
in connection with the termination of any Plan or other employee benefit plan
and any other amounts payable to any Loan Party from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, casualty
or any similar types of insurance and any proceeds thereof and proceeds of
insurance covering the lives of employees on which any Loan Party is a
beneficiary); provided that "Receivables" shall not mean any proceeds from the
approximately $4,500,000 to be received by Parent or any of its Subsidiaries in
connection with the contemplated termination of the Milacron Compensation
Deferral Plan, of which approximately $3,800,000 shall be used to pay all
accounts under the Milacron Compensation Deferral Plan and approximately
$700,000 shall be transferred to the Milacron SERP Trust, provided that the
Parent provides written notice of the receipt of such proceeds and such
application thereof to the Administrative Agent..
"Register" has the meaning specified therefor in Section 12.07(d).
"Regulation T", "Regulation U" and "Regulation X" mean,
respectively, Regulations T, U and X of the Board or any successor, as the same
may be amended or supplemented from time to time.
"Related Lender Assignment" means an assignment by a Lender to an
Affiliate of such Lender with respect to such Lender of all or a portion of its
rights and obligations under the Loan Documents.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, trustees, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil or surface or ground water.
29
"Remedial Action" means all actions taken pursuant to Environmental
Laws to (i) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate or in any other way address Hazardous Materials in the indoor or
outdoor environment; (ii) prevent or minimize a Release or threatened Release of
Hazardous Materials so they do not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations and post-remedial operation and
maintenance activities; or (iv) perform any other actions authorized by 42
U.S.C. Section 9601.
"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event for which notice to the PBGC is waived under the
regulations promulgated under such Section).
"Required Availability" means an amount equal to $25,000,000.
"Required Lenders" means (i) in the event that there are less than
four Lenders at the time of determination, two Lenders and (ii) otherwise, the
Lenders whose Pro Rata Share of the Revolving Credit Commitments constitute a
majority of the aggregate Revolving Credit Commitments (or if the Revolving
Credit Commitments have expired or terminated, the Lenders whose Pro Rata Share
of the Total Exposure constitute a majority of the Total Exposure).
"Reserves" means as of any date of determination, the Availability
Reserve, the Hedging Reserve and such other amounts as the Administrative Agent
may from time to time establish and revise in its reasonable credit judgment
reducing the amount of Revolving Credit Loans and Letters of Credit which would
otherwise be available to the Borrowers under the lending formula(s) provided
for herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by the Administrative Agent in its reasonable credit judgment,
adversely affect, or have a reasonable likelihood of adversely affecting, either
(i) the Collateral or any other property which is security for the Obligations
or its value, (ii) the assets or business of any Loan Party or (iii) the
security interests and other rights of the Agents and the Lenders in the
Collateral (including the enforceability, perfection and priority (including,
without limitation, in respect of any Liens (including Prior Claims), whether or
not permitted by Section 8.03, which may have priority over the Liens securing
the Obligations) thereof), (b) to reflect the Administrative Agent's reasonable
belief that any collateral report or financial information furnished by or on
behalf of any Borrower to the Administrative Agent is incomplete, inaccurate or
misleading in any material respect, (c) if the dilution with respect to the
Accounts for any period has increased or may be reasonably anticipated to
increase above historical levels, or (d) in respect of unpaid medical claims
associated with the Borrowers' self-insurance program in excess of historical
amounts. To the extent the Administrative Agent may establish new criteria or
revise existing criteria for Eligible Accounts or Eligible Inventory so as to
address any circumstances, condition, event or contingency in a manner
reasonably satisfactory to the Administrative Agent, the Administrative Agent
shall not establish a Reserve for the same purpose. The amount of any Reserve
established by the Administrative Agent shall have a reasonable relationship to
the event, condition or other matter which is the basis for such reserve as
determined by the Administrative Agent in its reasonable credit judgment and
shall promptly be reduced or eliminated to the extent such event, condition or
other matter no longer reasonably justifies such reserve.
"Revolving Credit Commitment" means, with respect to each Lender,
the commitment of such Lender to make Revolving Credit Loans to the Borrowers in
the amount set forth opposite such Lender's name in Schedule 1.01(A) hereto, as
such amount may be terminated or reduced from time to time in accordance with
the terms of this Agreement.
"Revolving Credit Loan" means a loan made by a Lender to the
Borrowers pursuant to Section 2.01(a)(i).
30
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Account" means any securities account or other
investment account of a Loan Party.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Security Agreement" means a Security Agreement made by a Loan Party
in favor of the Collateral Agent for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit B, securing the Obligations and delivered
to the Collateral Agent.
"Senior Secured Exchange Notes" means the 11 1/2% senior secured
notes of the Parent due May 15, 2011 issued in an exchange offer pursuant to the
Senior Secured Notes Indenture.
"Senior Secured Notes" means the 11 1/2% secured notes of the Parent
due May 15, 2011 in an aggregate principal amount of $225,000,000 issued and
sold on the Effective Date pursuant to the Senior Secured Notes Indenture and
the Senior Secured Exchange Notes.
"Senior Secured Notes Collateral Agent" means U.S. Bank National
Association, in its capacity as collateral agent under the Senior Secured Notes
Security Documents, together with its successors in such capacity.
"Senior Secured Notes Documents" means the Senior Secured Notes
Indenture, the Senior Secured Notes, the Senior Secured Notes Guarantees, the
Senior Secured Notes Security Documents and all other agreements, instruments
and other documents pursuant to which the Senior Secured Notes have been or will
be issued or otherwise setting forth the terms of the Senior Secured Notes, in
each case as such agreement, instrument or other document may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, but to the extent permitted under the terms of the Loan
Documents.
"Senior Secured Notes Guarantees" means the guarantee by each
guarantor of Parent's obligations under the Senior Secured Notes Indenture and
the Senior Secured Notes, executed pursuant to the provisions of the Senior
Secured Notes Indenture.
"Senior Secured Notes Indenture" means the Indenture dated as of the
Effective Date by and among U.S. Bank National Association, as trustee, Milacron
Escrow, as issuer, to be merged with and into the Parent, and the guarantors
party thereto, as may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof, but only to the extent permitted
under the terms of the Loan Documents.
"Senior Secured Notes Security Documents" means all security
agreements, pledge agreements, collateral assignments, mortgages, collateral
agency agreements, control agreements, deeds of trust or other grants or
transfers for security executed and delivered by Milacron Escrow, any guarantor
of the Senior Secured Notes or any Subsidiary of Milacron Escrow creating (or
purporting to create) a Lien upon "Collateral" (as such term is defined in the
Senior Secured Notes Indenture) in favor of the Senior Secured Notes Collateral
Agent or the Collateral Agent, as applicable, in each case, as amended,
modified, renewed, restated or replaced, in whole or in part, from time to time,
in accordance with its terms.
31
"Senior Secured Priority Account" means each deposit account of any
Loan Party to which solely proceeds of Senior Secured Priority Collateral are
deposited and which are segregated and identified in writing to the
Administrative Agent in accordance with Section 7.01(w).
"Senior Secured Priority Collateral" means the Term Priority
Collateral as such term is defined in the Intercreditor Agreement.
"Settlement Period" has the meaning specified therefor in Section
3.04(b) hereof.
"Spot Rate" means, with respect to Dollars or Canadian Dollars, as
the case may be, the rate quoted by JPMorgan as the spot rate for the purchase
by JPMorgan of Dollars with Canadian Dollars or other currency or for the
purchase by JPMorgan of Canadian Dollars with Dollars or other currency (as the
context may require) at approximately 10:00 A.M. (New York City time) on the
date two (2) Business Days prior to the date as of which the foreign exchange
computation is made.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Stockholder Approval" has the meaning specified in the
Mizuho/Glencore Transaction Documents.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"Super Majority Required Lenders" means (i) in the event that there
are less than four Lenders at the time of determination, all of the Lenders and
(ii) otherwise, the Lenders whose Pro Rata Share of the Revolving Credit
Commitments constitute at least 75% of the aggregate Revolving Credit
Commitments (or if the Revolving Credit Commitments have expired or terminated,
the Lenders whose Pro Rata Share of the Total Exposure constitute a majority of
the Total Exposure).
32
"Taxes" has the meaning specified therefor in Section 2.08(a).
"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
Internal Revenue Code, (iii) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.
"Title Insurance Policy" means a mortgagee's loan policy, in form
and substance satisfactory to the Collateral Agent, together with all
endorsements made from time to time thereto, issued by or on behalf of First
American Title Insurance Company, insuring the Lien created by a Mortgage in an
amount and on terms reasonably satisfactory to the Collateral Agent, delivered
to the Collateral Agent.
"Total Exposure" means, at any time, the sum of the aggregate
outstanding principal amount of Revolving Credit Loans and LC Exposure, owing
from the Loan Parties to the Lenders (or any Affiliate thereof) and the Agents
at such time.
"Total Revolving Credit Commitment" means the sum of the amounts of
the Lenders' Revolving Credit Commitments.
"Trailing Average Availability" means, as of any date of
determination thereof, the amount by which (a) the Borrowing Base on a daily
average basis over the period of three months most recently ended on or prior to
such date (calculated without deducting the Availability Reserve) exceeds (b)
the Total Exposure on a daily average basis over the period of three months most
recently ended on or prior to such date; provided, that for purposes of the
first such calculation to be made hereunder, Total Exposure shall be measured
over the period commencing on, and including, October 1, 2004 and ending on
December 31, 2004.
"Transferee" has the meaning specified therefor in Section 2.08(a).
"UCC Filing Authorization Letter" means a letter duly executed by
each Loan Party authorizing the Collateral Agent to file appropriate financing
statements on Form UCC without the signature of such Loan Party in such office
or offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each
Security Agreement and each Pledge Agreement and each Mortgage.
"Uncollected Funds" means all deposits of items which shall be on
deposit in the Administrative Agent's Account from time to time during the
period from the date on which such deposits became Available Funds to the
beginning of the following Business Day.
"Uncollected Funds Compensation" means the compensation payable to
the Administrative Agent pursuant to Section 2.13.
"Uniform Commercial Code" has the meaning specified therefor in
Section 1.03.
"Unused Line Fee" has the meaning specified therefor in Section
2.06(b).
"WARN" has the meaning specified therefor in Section 6.01(y).
33
Section 1.02 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
permitted assigns, (c) the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any right or interest in or to assets and properties of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible. References in this Agreement to "determination" by any Agent include
good faith estimates by such Agent (in the case of quantitative determinations)
and good faith beliefs by such Agent (in the case of qualitative
determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in the
Uniform Commercial Code (including, without limitation, Article 8 or Article 9
thereof) as in effect from time to time in the State of New York (the "Uniform
Commercial Code") and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the Issuing Bank, such
period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 (a) Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth:
(i) each Lender severally agrees to make Revolving
Credit Loans to the Borrowers at any time and from time to time from the
Effective Date to the Final Maturity Date, or until the earlier reduction
of its Revolving Credit Commitment to zero in accordance with the terms
hereof, in an aggregate principal amount of Revolving Credit Loans at any
time outstanding not to exceed the amount of such Lender's Revolving
Credit Commitment.
(ii) [Reserved].
(b) Notwithstanding the foregoing:
34
(i) The aggregate principal amount of the Revolving
Credit Loans outstanding at any time to the Borrowers shall not exceed the
difference between (A) the lesser of (x) the Total Revolving Credit
Commitment and (y) the then current Borrowing Base and (B) the LC
Exposure.
(ii) [Reserved].
(iii) [Reserved].
(iv) The Revolving Credit Commitments shall
automatically and permanently be reduced to zero on the Final Maturity
Date. Within the foregoing limits, the Borrowers may borrow, repay and
reborrow the Revolving Credit Loans, on or after the Effective Date and
prior to the Final Maturity Date, subject to the terms, provisions and
limitations set forth herein.
Section 2.02 (a) Making the Loans. The Administrative Borrower shall
give the Administrative Agent prior telephonic notice (promptly confirmed in
writing, in substantially the form of Exhibit D hereto (a "Notice of
Borrowing")), not later than (i) in the case of a borrowing consisting of ABR
Loans, 12:00 noon (New York City time) on the borrowing date of the proposed ABR
Loan and (ii) in the case of a borrowing consisting of Eurodollar Loans, 12:00
noon (New York City time) on the date that is three Business Days prior to the
proposed borrowing. Such Notice of Borrowing shall be irrevocable and shall
specify (i) the principal amount of the proposed Loan, (ii) whether such Loan is
requested to be an ABR Loan or a Eurodollar Loan and, in the case of a
Eurodollar Loan, the initial Interest Period with respect thereto, and (iii) the
proposed borrowing date, which must be a Business Day. The Administrative Agent
and the Lenders may act without liability upon the basis of written, telecopied
or telephonic notice believed by the Administrative Agent in good faith to be
from the Administrative Borrower (or from any Authorized Officer thereof
designated in writing purportedly from the Administrative Borrower to the
Administrative Agent). Each Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of any such telephonic Notice of
Borrowing absent manifest error. The Administrative Agent and each Lender shall
be entitled to rely conclusively on any Authorized Officer's authority to
request a Loan on behalf of the Borrowers until the Administrative Agent
receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing. Notwithstanding the foregoing, so long as
any Disbursement Account is subject to a Control Agreement, the Administrative
Agent may, subject to the conditions of this agreement (but without any further
written notice required), make available to the Borrowers by a credit to an
account of the Borrowers maintained with the Administrative Agent, the proceeds
of ABR Loans to the extent necessary to pay items to be drawn on such
Disbursement Account that day after giving effect to all Available Funds to be
deposited to the Administrative Agent's Account on that day.
(b) Each Notice of Borrowing pursuant to this Section 2.02
shall be irrevocable and the Borrowers shall be bound to make a borrowing in
accordance therewith. Each Revolving Credit Loan that is a Eurodollar Loan shall
be made in a minimum amount of $1,000,000 and in integral multiples of $500,000
in excess thereof; it being agreed and understood that no such minimum amounts
shall apply with respect to Revolving Credit Loans that are ABR Loans.
Section 2.03 Repayment of Loans; Evidence of Debt.
(a) The outstanding principal of all Loans shall be due and
payable on the Final Maturity Date.
35
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrowers shall execute and deliver to
such Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) in a form furnished by the
Administrative Agent and reasonably acceptable to the Administrative Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 12.07) be
represented by one or more promissory notes in such form payable to the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
Section 2.04 Interest.
(a) Loans. Subject to the terms of this Agreement, at the
option of the Borrowers, each Revolving Credit Loan will either be a Eurodollar
Loan or an ABR Loan. Each Revolving Credit Loan that is a Eurodollar Loan shall
bear interest on the principal amount thereof from time to time outstanding from
the date of such Loan until such principal amount becomes due, at a rate per
annum equal to the sum of the Adjusted LIBO Rate for the Interest Period in
effect for such Revolving Credit Loan plus the Applicable Rate for Eurodollar
Loans then in effect. Each Revolving Credit Loan which is an ABR Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of such Loan until such principal amount becomes due, at a rate per annum
equal to the sum of the Alternate Base Rate plus the Applicable Rate for ABR
Loans then in effect.
(b) Default Interest. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, and following a
written demand of the Agent in its sole discretion, the principal of, and all
accrued and unpaid interest on, all Loans, fees, indemnities or any other
Obligations of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.
(c) Interest Payment. Interest on each Loan shall be payable
monthly, in arrears, on the first day of each month, commencing on the first day
of the month following the month in which such Loan is made, on the date of any
prepayment pursuant to Section 2.05 and at maturity (whether upon demand, by
acceleration or otherwise). Interest at the Post-Default Rate shall be payable
on demand. Each Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, from
36
time to time, charge the Loan Account pursuant to Section 4.02 with the amount
of any interest payment due hereunder.
(d) General. All interest shall be computed on the basis of a
year of 360 days for the actual number of days, including the first day but
excluding the last day, elapsed (except that Revolving Credit Loans based on the
Alternate Base Rate shall be calculated on a 365-day basis)
Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) The Total Revolving Credit Commitment shall
terminate on the Final Maturity Date. The Borrowers may, without premium
or penalty (except as provided in Section 2.05(a)(iv)), reduce the Total
Revolving Credit Commitment to an amount (which may be zero) not less than
the sum of (I) the aggregate unpaid principal amount of all Revolving
Credit Loans then outstanding, (II) the aggregate principal amount of all
Revolving Credit Loans not yet made as to which a Notice of Borrowing has
been given by the Administrative Borrower under Section 2.02, (III) the LC
Exposure at such time and (IV) the stated amount of all Letters of Credit
not yet issued as to which a request has been made and not withdrawn.
(ii) Each such reduction shall be in an amount which is
an integral multiple of $1,000,000 (unless the Total Revolving Credit
Commitment in effect immediately prior to such reduction is less than
$1,000,000, in which case the reduction shall be in the entire amount of
such Total Revolving Credit Commitment), shall be made by providing not
less than three (3) Business Days' prior written notice to the
Administrative Agent and shall be irrevocable. Once reduced, the
applicable Total Revolving Credit Commitment may not be increased.
(iii) Each such reduction of the Total Revolving Credit
Commitment shall reduce the applicable Commitment of each Lender
proportionately in accordance with its Pro Rata Share thereof.
(iv) If prior to the one year anniversary of the
Effective Date, either (a) this Agreement is terminated or (b) the Total
Revolving Credit Commitment is reduced pursuant to Section 2.05(a) to an
amount that is 50% or less of the amount of the Total Revolving Credit
Commitment as in effect on the Effective Date, then at the effective date
of such termination or reduction, the Borrowers shall pay to the
Administrative Agent, for the ratable benefit of Lenders (in addition to
the then outstanding principal, accrued interest and other charges then
due and payable under the terms of this Agreement and any of the other
Loan Documents) and any amounts owing pursuant to Section 2.10, as
liquidated damages for the loss of the bargain and not as a penalty, an
amount equal to 1.0% of the amount of the Total Revolving Credit
Commitment (as such amount is calculated as of the date of termination or
reduction). If any such termination or reduction occurs on or after the
one year anniversary of the Effective Date, no such liquidated damages
shall be payable.
(b) Optional Prepayment.
(i) Revolving Credit Loans. Subject to subsection
(iii) below, the Borrowers may prepay, without penalty or premium, the
principal of any Revolving Credit Loan, in whole or in part, at any time.
Each such prepayment (A) shall be in a minimum amount of $500,000 and in
integral multiples of $100,000 in excess thereof (unless the outstanding
principal
37
balance of the Revolving Credit Loan immediately prior to such reduction
is less than $500,000 or any such integral multiple in which case the
prepayment shall be in the entire amount of such outstanding principal
balance), (B) shall be made pursuant to a written or telephonic (confirmed
by telecopy) notice to the Administrative Agent received by the
Administrative Agent no later than 9:00 a.m. (New York City Time) on the
date of such prepayment and (C) shall be made no later than 12:00 noon
(New York City Time) on the date such notice is given. Each such notice
shall be irrevocable (provided that a notice of a refinancing of the
entirety of the Loans delivered by any Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which
case such notice may be revoked by such Borrower by notice to the
Administrative Agent on or prior to the effective date if such condition
is not satisfied) and shall specify the prepayment date and the principal
amount of each Revolving Credit Loan or portion thereof to be prepaid.
(ii) [Reserved].
(iii) Prepayment In Full. The Borrowers may, upon at
least three (3) days prior written notice to the Administrative Agent,
terminate this Agreement by paying to the Administrative Agent, in cash,
the Obligations (including any amounts payable pursuant to Section
2.05(a)(iv) and including either (A) providing cash collateral to be held
by the Administrative Agent in an amount equal to 105% of the aggregate
undrawn amount of all outstanding Letters of Credit or (B) causing the
original Letters of Credit to be returned to the Administrative Agent), in
full. If the Administrative Borrower has sent a notice of termination
pursuant to this clause (iii), then the Lenders' obligations to extend
credit hereunder shall terminate and the Borrowers shall be obligated to
repay the Obligations (including any amounts payable pursuant to Section
2.05(a)(iv)) and including either (A) providing cash collateral to be held
by the Administrative Agent in an amount equal to 105% of the aggregate
undrawn amount of all outstanding Letters of Credit or (B) causing the
original Letters of Credit to be returned to the Administrative Agent, in
full (other than contingent indemnifications and contingent obligations)
(including, without limitation, fees and expenses with respect to which
the Borrowers have not received an invoice) for which no claim has been
asserted hereunder which survive the termination hereof, on the date set
forth as the date of termination of this Agreement in such notice.
(c) Mandatory Prepayment.
(i) The Borrowers will immediately prepay the
Revolving Credit Loans at any time when the aggregate principal amount of
all Revolving Credit Loans plus the outstanding LC Exposure exceeds the
Borrowing Base, to the full extent of any such excess. On each day that
any Revolving Credit Loans or LC Exposure are outstanding, the Borrowers
shall hereby be deemed to represent and warrant to the Agents and the
Lenders that the Borrowing Base calculated as of such day equals or
exceeds the aggregate principal amount of all Revolving Credit Loans and
LC Exposure outstanding on such day. If at any time after the Borrowers
have complied with the first sentence of this Section 2.05(c)(i), the LC
Exposure is greater than the then current Borrowing Base, the Borrowers
shall provide cash collateral to the Administrative Agent in an amount
equal to 105% of such excess, which cash collateral shall be deposited in
the Letter of Credit Collateral Account and if no Event of Default shall
have occurred and be continuing, all or a portion of such cash collateral
shall be returned to the Borrowers at such time as the LC Exposure plus
the aggregate principal amount of all outstanding Revolving Credit Loans
no longer exceeds the then current Borrowing Base.
38
(ii) On each Business Day the Administrative Agent
shall apply all funds transferred to or deposited in the Administrative
Agent's Account that are Available Funds, to the payment, in whole or in
part, of the outstanding principal amount of the Revolving Credit Loans;
provided that, if no Revolving Credit Loans remain outstanding after the
application of such funds to repay any outstanding Revolving Credit Loans,
the Borrowers shall be permitted to use the funds received in the
Administrative Agent's Account or any other account subject to the control
of the Administrative Agent for general corporate and working capital
purposes of the Loan Parties and their Subsidiaries subject to Section
6.01(t). In addition, if on any Business Day (x) the closing balance of
cash and cash equivalents on deposit in bank accounts (after deducting the
amount of all outstanding checks) plus (y) investments in money market
funds and Securities Accounts whose assets are substantially comprised of
securities that consist of cash equivalents of the Domestic Loan Parties
and their Domestic Subsidiaries (in each case other than (i) the funds on
deposit in the Excluded Deposit Accounts (as defined in the Security
Agreement, (ii) funds on deposit in the Senior Secured Priority Accounts;
provided that such amounts are held and applied in accordance with the
Senior Secured Notes Indenture and the Intercreditor Agreement and (iii)
Net Cash Proceeds which are required to be applied to the prepayment of
the Loans in accordance with Section 2.05(c)) exceeds $4,000,000 in the
aggregate, the Borrowers shall prepay the Revolving Credit Loans in the
amount of such excess no later than 12:00 noon (New York City Time) on the
immediately succeeding Business Day. It is understood and agreed that,
upon prior written notice to the Administrative Agent received by
Administrative Agent no later than 9:00 a.m. (New York City Time) on the
date that a prepayment pursuant to the second sentence of this Section
2.05(c)(ii) is due, no such prepayment shall be required if the
Administrative Borrower reasonably believes that such prepayment will be
in the amount of less than $100,000 after giving effect to disbursements
to third parties to be made prior to 12:00 noon (New York City Time) on
the date such prepayment is due. Upon request of the Administrative Agent,
the Administrative Borrower shall promptly provide to the Administrative
Agent a list of such third parties and amounts of such disbursements.
(iii) Upon any Disposition by any Loan Party or any of
its Domestic Subsidiaries, the Borrowers shall promptly (and, in no event,
later than one (1) Business Day after any such Disposition) prepay the
Loans in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such Disposition. Nothing contained in this
subsection (iii) shall permit any Loan Party or any of its Subsidiaries to
make a Disposition of any asset or property other than in accordance with
Section 7.02(c). Any payments required to be made under this subsection
(c)(iii) shall be applied as set forth in Section 2.05(d).
(iv) Upon the issuance or incurrence by any Loan Party
or any of its Domestic Subsidiaries of any Indebtedness (other than
Permitted Indebtedness), or the sale or issuance by the Administrative
Borrower of any shares of its Capital Stock, in each case, other than
issuances contemplated by the Mizuho/Glencore Transactions, the Borrowers
shall promptly (and, in no event, later than one (1) Business Day after
any such issuance or incurrence) prepay the outstanding amount of the
Loans in an amount equal to, (x) in the case of a "Rights Offering" (as
such term is defined in the Mizuho/Glencore Transaction Documents), the
lesser of (1) 65% of the Net Cash Proceeds received by such Person in
connection therewith and (2) the Net Cash Proceeds received by such Person
in connection therewith minus the lesser of (A) $31,500,000 and (B) the
amount of such Net Cash Proceeds used to redeem preferred stock in
accordance with the Mizuho/Glencore Transaction Documents and (y) in all
other cases, 100% of the Net Cash Proceeds received by such Person in
connection therewith. The provisions of this subsection (iv) shall not be
deemed to be implied consent to any such issuance, incurrence or sale
otherwise prohibited by the terms and conditions of this Agreement. Any
payments required to be made under this subsection (c)(iv) shall be
applied as set forth in Section 2.05(d).
39
(v) Upon the receipt by any Loan Party or any of its
Domestic Subsidiaries of any Extraordinary Receipts, the Borrowers shall
promptly (and in no event, later than one (1) Business Day after the
receipt thereof) prepay the outstanding principal of the Loans in an
amount equal to 100% of the Net Cash Proceeds received by such Person in
connection with such Extraordinary Receipts. Any payments required to be
made under this subsection (c)(v) shall be applied as set forth in Section
2.05(d).
(vi) [Reserved].
(vii) [Reserved].
(viii) Immediately upon the receipt of a Foreign
Insurance Repayment, the Borrowers shall pay to the Administrative Agent
an amount equal to such Foreign Insurance Repayment to be applied to the
outstanding principal amount of the Loans. Any payments required to be
made under this subsection (c)(viii) shall be applied as set forth in
Section 2.05(d).
(ix) Immediately prior to the making of any payment in
cash by any Loan Party in respect of its guaranties of the Indebtedness of
any Foreign Subsidiary, the Borrowers shall prepay the outstanding
principal amount of the Loans in an amount equal to the amount of such
payment. Any payments required to be made under this subsection (c)(ix)
shall be applied as set forth in Section 2.05(d).
(d) Application of Payments. At any time when no Event of
Default exists, the proceeds of the prepayments required under Section 2.05(c)
shall be applied as follows (it being agreed and understood that if an Event of
Default does exist then prepayments shall be applied in the manner set forth in
Section 4.04(b)): first, to the payment of accrued and unpaid interest then due
and payable in respect of outstanding ABR Loans, second, to the principal amount
of outstanding ABR Loans, third, to accrued and unpaid interest then due and
payable in respect of outstanding Eurodollar Loans, fourth, to the principal
amount of outstanding Eurodollar Loans, and fifth, to all other accrued and
unpaid Obligations then due and payable, provided, that except upon the
occurrence and during the continuance of an Event of Default, no payment of a
Eurodollar Loan shall be made under this Section 2.05(d) on a date other than
the last day of an Interest Period or the Final Maturity Date;
(e) Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to payments made or required to be made under any
other subsection of this Section 2.05, and, in no event, shall proceeds be
required to be applied under more than one subsection of Section 2.05(d).
Section 2.06 Fees. From and after the Effective Date and until the
Final Maturity Date, the Borrowers shall pay to the Administrative Agent (a) for
the account of the Lenders, in accordance with a written agreement among the
Agents and the Lenders, an unused line fee (the "Unused Line Fee"), which shall
accrue at the rate per annum of 0.50% on the daily amount of the excess, if any,
of the Total Revolving Credit Commitment over the sum of the average principal
amount of all Loans and LC Exposure outstanding from time to time and shall be
payable monthly in arrears on the first day of each month hereafter, and (b)
such other fees as may be specified in the Fee Letter when and as due in
accordance with the terms thereof.
Section 2.07 [Reserved].
Section 2.08 Taxes
40
(a) Any and all payments by any Loan Party hereunder or under
any other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (i) taxes
imposed on (or measured by) the net income of any Agent, any Lender or the
Issuing Bank (or any transferee or assignee thereof, including a participation
holder (any such entity, a "Transferee")) solely as a result of any present or
former connection between such Agent, such Lender or the Issuing Bank (or
Transferee) and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision thereof or therein (other than as a result of
entering into this Agreement or any other Loan Document), performing any
obligations hereunder or under any other Loan Document, receiving any payments
hereunder or under any other Loan Document, taking any other action in
connection with this Agreement or any other Loan Document or enforcing any
rights hereunder or under any other Loan Document) and (ii) any branch profits
taxes or any similar tax imposed by the United States of America or by the
jurisdiction in which such Agent, such Lender or the Issuing Bank is organized
or has its principal lending office (all such non-excluded taxes, levies,
imposts, deductions, charges withholdings and liabilities, collectively or
individually, "Taxes"). If any Loan Party shall be required to deduct any Taxes
from or in respect of any sum payable hereunder or under any other Loan Document
to any Agent, any Lender or the Issuing Bank (or any Transferee), (A) the sum
payable shall be increased by the amount (an "additional amount") necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08) such Agent, such Lender or the
Issuing Bank (or such Transferee) shall receive an amount equal to the sum it
would have received had no such deductions been made, (B) such Loan Party shall
make such deductions and (C) such Loan Party shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Letters of Credit or any other Loan Document ("Other Taxes"). Each Loan Party
shall deliver to the Administrative Agent official receipts or other evidence of
such payment reasonably satisfactory to the Administrative Agent in respect of
any Taxes or Other Taxes payable hereunder promptly after payment of such Taxes
or Other Taxes.
(c) The Loan Parties hereby jointly and severally indemnify
and agree to hold each Agent, each Lender and the Issuing Bank (or Transferee)
harmless from and against Taxes and Other Taxes (including, without limitation,
Taxes and Other Taxes imposed on any amounts payable under this Section 2.08)
and any penalties, interest and reasonable expenses arising therefrom, or with
respect thereto, paid by such Lender, such Agent or the Issuing Bank (or such
Transferee), whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be paid within 10 days from the date on
which such Lender, such Agent or the Issuing Bank (or such Transferee) makes
written demand therefor specifying in reasonable detail the nature and amount of
such Taxes or Other Taxes. A certificate specifying in reasonable detail the
nature and amount of such payment delivered to the applicable Loan Party by a
Lender, the Issuing Bank, or by any Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Administrative
Agent and the Administrative Borrower two properly completed and duly executed
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, and,
in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code with
respect to payments of "portfolio interest", a Form W-8BEN, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form
41
W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of any Borrower and is not a controlled foreign corporation related to a
Borrower (within the meaning of Section 864(d)(4) of the Internal Revenue
Code)), in each case claiming complete exemption from U.S. Federal withholding
tax on payments by the Loan Parties under this Agreement. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee that is a participation holder,
on or before the date such participation holder becomes a Transferee hereunder)
and on or before the date, if any, such Non-U.S. Lender changes its applicable
lending office by designating a different lending office (a "New Lending
Office"). In addition, each Non-U.S. Lender shall deliver such forms within 20
days after receipt of a written request therefor from the Administrative
Borrower or the Administrative Agent. Notwithstanding any other provision of
this Section 2.08, a Non-U.S. Lender shall not be required to deliver after the
date hereof or, if applicable, the date a Transferee becomes a party to this
Agreement or the Non-U.S. Lender designates a New Lending Office, any form
pursuant to this Section 2.08 that such Non-U.S. Lender is not legally able to
deliver.
(e) The Loan Parties shall not be required to indemnify any
Non-U.S. Lender, or pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to this Agreement to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to the extent the indemnity payment or
additional amounts any Transferee, or any Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the Person making
the assignment, participation or transfer to such Transferee, or such Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (d) above or (iii) the obligation to pay such additional
amounts does not result from a change in applicable tax law (including, without
limitation, applicable judicial decisions, statutes, regulations or other
administrative interpretations) occurring after the date hereof.
(f) Any Lender, any Agent or the Issuing Bank (or Transferee)
claiming any indemnity payment or additional payment amounts payable pursuant to
this Section 2.08 shall use its reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonably
requested in writing by the Administrative Borrower or to change the
jurisdiction of its applicable lending office or assign its rights and
obligations hereunder to another of its offices, branches or affiliates if the
making of such a filing, change or assignment would avoid the need for or reduce
the amount of any such indemnity payment or additional amount which may
thereafter accrue, would not require such Lender, such Agent or the Issuing Bank
(or Transferee) to disclose any information such Lender, such Agent or the
Issuing Bank (or Transferee) deems confidential and would not, in the sole
determination of such Lender, such Agent or the Issuing Bank (or Transferee), be
otherwise disadvantageous to such Lender, such Agent or the Issuing Bank (or
Transferee).
(g) If any Lender, any Agent or the Issuing Bank (or a
Transferee) receives a refund (including pursuant to a claim for refund made
pursuant to the preceding sentence) in respect of any Taxes or Other Taxes with
respect to which any Loan Party has paid additional amounts pursuant to this
Section 2.08, it shall within 30 days from the date of such receipt pay over
such refund to the
42
Administrative Borrower, net of all out-of-pocket expenses of such Lender, such
Agent or the Issuing Bank (or Transferee).
(h) The obligations of the Loan Parties under this Section
2.08 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
Section 2.09 LIBO Rate Not Determinable; Illegality or Impropriety.
(a) In the event, and on each occasion, that on or before the day on which LIBO
Rate is to be determined for a borrowing that is to include Eurodollar Loans,
the Administrative Agent has determined in good faith that, or has been advised
by the Collateral Agent or the Required Lenders that, (i) LIBO Rate cannot be
reasonably determined for any reason, (ii) LIBO Rate will not adequately and
fairly reflect the cost of making or maintaining Eurodollar Loans or (iii)
Dollar deposits in the principal amount of the applicable Eurodollar Loans are
not available in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of the Lenders' Eurodollar
Loans are then being conducted, the Administrative Agent shall, as soon as
practicable thereafter, give written notice of such determination to the
Administrative Borrower and the other Lenders. In the event of any such
determination, any request by the Administrative Borrower for a Eurodollar Loan
pursuant to Section 2.02 or Section 2.11 shall, until, the Administrative Agent
has advised the Administrative Borrower and the other Lenders that the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for an ABR Loan. Each determination by the Administrative Agent
hereunder shall be conclusive and binding absent manifest error.
(b) In the event that, as a result of any Change in Law, it
shall be unlawful or improper for any Lender to make, maintain or fund any
Eurodollar Loan as contemplated by this Agreement, then such Lender shall
forthwith give notice thereof to the Administrative Agent and the Administrative
Borrower describing such illegality or impropriety in reasonable detail.
Effective immediately upon the giving of such notice, the obligation of such
Lender to make Eurodollar Loans shall be suspended for the duration of such
illegality or impropriety and, if and when such illegality or impropriety ceases
to exist, such suspension shall cease, and such Lender shall notify the
Administrative Agent and the Administrative Borrower. If any such Change in Law
shall make it unlawful or improper for any Lender to maintain any outstanding
Eurodollar Loan as a Eurodollar Loan, such Lender shall, upon the happening of
such Change in Law, notify the Administrative Agent and the Administrative
Borrower, and the Administrative Borrower shall immediately, or if permitted by
applicable law, rule, regulation, order, decree, interpretation, request or
directive, at the end of the then current Interest Period for such Eurodollar
Loan, convert each such Eurodollar Loan into an ABR Loan.
Section 2.10 Indemnity.
(a) The Borrowers hereby jointly and severally indemnify each
Lender against any loss, cost or expense that such Lender actually sustains or
incurs or is deemed to sustain or incur in accordance with this Section 2.10(a)
(including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain any Eurodollar Loan, but excluding loss of
anticipated profits) as a consequence of (i) any failure by the Borrowers to
fulfill on the date of any borrowing hereunder the applicable conditions set
forth in Article V, (ii) any failure by the Borrowers to borrow any Eurodollar
Loan hereunder, to convert any ABR Loan into a Eurodollar Loan or to continue a
Eurodollar Loan as such after notice of such borrowing, conversion or
continuation has been given pursuant to Section 2.02 or 2.11 hereof, (iii) any
payment, prepayment (mandatory or optional) or conversion of a Eurodollar Loan
required by any provision of this Agreement or otherwise made on a date other
than the last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any Eurodollar Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof,
43
by notice of prepayment or otherwise), or (v) the occurrence of any Event of
Default, including, in each such case, any loss (but excluding loss of
anticipated profits) or reasonable expense sustained or incurred in liquidating
or employing deposits from third parties acquired to effect or maintain such
Loan or any part thereof as a Eurodollar Loan. Such loss or reasonable expense
shall be deemed to include but not be limited to an amount equal to the excess,
if any, as reasonably determined by such Lender, of (i) the amount of interest
which would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Loan, for the period from the date of such payment, prepayment, conversion,
continuation or failure to borrow, convert or continue on the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the last day of the Interest Period for such Loan that would have
commenced on the date of such failure to borrow, convert or continue) over (ii)
the amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in re-employing the funds so paid, prepaid, converted or
continued or not borrowed, converted or continued for such Interest Period. A
certificate of any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.10
and the basis for the determination of such amount or amounts shall be delivered
to the Administrative Borrower and shall be conclusive and binding absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(b) Notwithstanding paragraph (a) of this Section 2.10, the
Administrative Agent will use reasonable efforts to minimize or reduce any such
loss or expense resulting from the mandatory prepayments required by Section
2.05 of this Agreement by applying all payments and prepayments to ABR Loans
prior to any application of payments to Eurodollar Loans before the last day of
the Interest Period therefor.
Section 2.11 Continuation and Conversion of Loans. Subject to
Section 2.09 hereof, the Borrowers shall have the right, at any time, on three
(3) Business Days' prior irrevocable written or telecopy notice to the
Administrative Agent, to continue any Eurodollar Loan, or any portion thereof,
into a subsequent Interest Period or to convert any ABR Loan or portion thereof
(other than any Overadvance) to a Eurodollar Loan, or on one (1) Business Day's
prior irrevocable written or telecopy notice to the Administrative Agent, to
convert any Eurodollar Loan or portion thereof into an ABR Loan, subject to the
following:
(a) no Eurodollar Loan may be continued as such and no ABR
Loan may be converted into a Eurodollar Loan, when any Event of Default or
Default shall have occurred and be continuing at such time;
(b) in the case of a continuation of a Eurodollar Loan as such
or a conversion of an ABR Loan into a Eurodollar Loan, the aggregate principal
amount of such Eurodollar Loan shall not be less than $1,000,000 and in
multiples of $500,000 if in excess thereof;
(c) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar Loan;
(d) if any conversion of a Eurodollar Loan shall be effected
on a day other than the last day of an Interest Period, the Borrowers shall
reimburse each Lender on demand for any loss incurred or to be incurred or to be
incurred by it in the reemployment of the funds released by such conversion as
provided in Section 2.10 hereof; and
(e) in the case of any conversion or continuation, such
election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit D-2.
44
In the event that the Administrative Borrower shall not give notice
to continue any Eurodollar Loan into a subsequent Interest Period, such Loan
shall automatically become an ABR Loan at the expiration of the then current
Interest Period.
Section 2.12 Conversion to Dollars. All valuations or computations
of monetary amounts set forth in this Agreement or the Loan Documents shall
include the Dollar Equivalent of amounts of currencies other than Dollars. In
connection with all such Dollar Equivalent amounts set forth in this Agreement
and the Loan Documents (including for the purpose of calculation of
Availability, the Borrowing Base and Excess Availability), currencies other than
Dollars shall be converted to Dollars on the basis of the Spot Rate for the
purchase of Dollars with such other currency in each case as determined by the
Administrative Agent in its reasonable discretion, on the date of determination.
Section 2.13 Uncollected Funds Compensation. Any credit extended by
the Administrative Agent to the Borrowers by allowing the Uncollected Funds in
the Administrative Agent's Account to be immediately available funds to the
Borrowers shall not be deemed to be Loans hereunder. Uncollected Funds
Compensation to the Administrative Agent shall accrue on the amount of the
Uncollected Funds in existence from time to time at a variable rate per annum
equal to the Alternate Base Rate plus the Applicable Rate for ABR Loans for one
(1) full day. Upon making such computation, the Administrative Agent is
authorized to make a Revolving Credit Loan to the Borrowers for the amount
thereof (or during the continuance of an Event of Default, debit the
Administrative Agent's Account) for the payment thereof to the Administrative
Agent. The Administrative Agent shall notify the Borrowers of the amount of the
Uncollected Funds Compensation for the preceding calendar month in the next
monthly statement rendered by the Administrative Agent to the Borrowers.
Section 2.14 Extension of Final Maturity Date.
(a) Request for Extension. The Administrative Borrower may, by
notice to the Administrative Agent, which shall promptly notify the Lenders, not
less than 60 days and not more than 90 days prior to the Final Maturity Date
(the "Initial Maturity Date"), request that the Lenders extend the Final
Maturity Date for an additional 364 days from the Consent Date (as defined
below); provided that the Administrative Borrower may request only one extension
pursuant to this Section 2.14. Each Lender, acting in its sole discretion,
shall, by notice to the Administrative Borrower and the Administrative Agent
given on or before the date that is 30 days prior to the Initial Maturity Date
or, if such date is not a Business Day, the Business Day next succeeding such
date (such date or Business Day, as the case may be, the "Consent Date"), advise
the Administrative Borrower and the Administrative Agent whether or not such
Lender agrees to such extension; provided that each Lender that determines not
to extend the Initial Maturity Date (a "Non-extending Lender") shall notify the
Administrative Borrower and the Administrative Agent (which shall notify the
Lenders) of such fact promptly after such determination (but in any event no
later than the Consent Date) and any Lender that does not advise the
Administrative Borrower on or before the Consent Date shall be deemed to be a
Non-extending Lender; provided further that any such consent given before the
Consent Date shall be revocable (unless such consent is expressly stated by the
applicable Lender to be irrevocable) until the opening of business of the
Administrative Agent on the Consent Date and any such consent given after, or
not revoked before, the opening of business of the Administrative Agent on the
Consent Date shall be irrevocable. The election of any Lender to agree to such
extension shall not obligate any other Lender to so agree.
(b) Replacement of Non-extending Lenders. The Borrowers shall
have the right upon not less than five Business Days' prior written notice to
the Administrative Agent, to (i) replace any Non-extending Lender with, and
otherwise add to this Agreement, one or more other banks (which may include any
Lender, each such bank, prior to the Initial Maturity Date, an "Additional
Commitment Lender") with the approval of the Administrative Agent (which
approval shall not be unreasonably
45
withheld), each of which Additional Commitment Lenders shall have entered into
an agreement in form and substance satisfactory to the Administrative Borrower
and the Administrative Agent pursuant to which such Additional Commitment Lender
shall, effective as of the Initial Maturity Date, undertake a Commitment (or, in
the case of any such Additional Commitment Lender that is already a Lender,
undertake to increase its Commitment in an amount equal to the Commitment of the
applicable Non-extending Lender hereunder on such date) or (ii) repay all Loans,
together with accrued and unpaid interest, fees, any amounts payable pursuant to
Section 2.10 and all other amounts owing to any Non-extending Lender.
(c) Effectiveness of Extension. If (and only if) (i) as of the
Consent Date the total of the Commitments of the Lenders that have agreed to
extend the Initial Maturity Date and the additional Commitments of the
Additional Commitment Lenders shall equal at least $35,000,000, (ii) the
Administrative Borrower shall have delivered to the Administrative Agent
consolidating monthly projections through the proposed new Final Maturity Date
as extended, (iii) no Event of Default shall have occurred and be continuing on
the Initial Maturity Date, and the Administrative Agent shall have received a
certification to such effect in a certificate dated the Initial Maturity Date
and signed by an Authorized Officer of the Administrative Borrower, (iv) each of
the representations and warranties made by the Loan Parties in this Agreement,
and in each of the other Loan Documents, shall be true and complete on and as of
the Initial Maturity Date with the same force and effect as if made on and as of
such date (except to the extent any such representation or warranty by its terms
is made as of a specified date in which event such representation and warranty
shall be true and correct in all respects as of such specified date), and the
Administrative Agent shall have received a certification to such effect in a
certificate dated the Initial Maturity Date and signed by an Authorized Officer
of the Administrative Borrower; and (v) each Non-extending Lender shall have
been paid in full by the Administrative Borrower or by the Additional Commitment
Lender all amounts owing to such Non-extending Lender hereunder on or before the
Initial Maturity Date, then effective as of the Initial Maturity Date, the Final
Maturity Date shall be extended to the date falling 364 days after the Consent
Date (except that, if such date is not a Business Day, such Final Maturity Date
as so extended shall be the next preceding Business Day) and each Additional
Commitment Lender shall thereupon become a "Lender" for all purposes of this
Agreement.
Even if the Initial Maturity Date is extended as aforesaid, the
Commitment of each Non-extending Lender shall terminate on the Initial Maturity
Date.
ARTICLE III
LETTERS OF CREDIT AND OTHER MATTERS
Section 3.01 Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein, the Administrative Borrower on behalf of a Borrower may request the
issuance of Letters of Credit for the account of such Borrower, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time prior to the Final Maturity Date. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Administrative Borrower to, or entered into by the
Administrative Borrower with, the Issuing Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding
46
Letter of Credit), the Administrative Borrower shall hand deliver or telecopy
(or transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Administrative Borrower also
shall submit a letter of credit application on the Issuing Bank's standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrowers shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $25,000,000 and (ii)
the sum of the total Revolving Credit Loans plus the LC Exposure shall not
exceed the lesser of (x) the Borrowing Base and (y) the Total Revolving Credit
Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) unless
cash collateralized in an amount equal to 105% of the undrawn face amount of
such Letter of Credit prior to the date that is 10 Business Days prior to the
Final Maturity Date (such date the "LC Dropdead Date"), the LC Dropdead Date,
provided that, any Letter of Credit with a one-year term may provide for renewal
thereof for an additional one-year period (which shall in no event extend beyond
the date referred to in the foregoing clause (ii)); provided, further, however
that the Issuing Bank may elect not to renew any such Letter of Credit by notice
to the beneficiary thereof at least 30 days prior to the expiry thereof.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Pro Rata Share of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender's Pro Rata Share of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrowers for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, New York City time, on the date
that such LC Disbursement is made, if the Administrative Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York City time,
on such date, or, if such notice has not been received by the Administrative
Borrower prior to such time on such date, then not later than 12:00 noon, New
York City time, on (i) the Business Day that the Administrative Borrower
receives such notice, if such notice is received prior to 10:00 a.m., New York
City time, on the day of
47
receipt, or (ii) the Business Day immediately following the day that the
Administrative Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that unless the
Administrative Borrower elects otherwise, each LC Disbursement shall be deemed a
timely request in accordance with Section 2.02 (and subject to the conditions to
borrowing set forth in Section 5.02) that such payment be financed at or prior
to the time due with an ABR Loan in an equivalent amount and the Borrowers'
obligation to make such payment shall be discharged and replaced by the
resulting ABR Loan. If the Borrowers fail to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrowers in respect thereof and such Lender's Pro
Rata Share thereof. Promptly following receipt of such notice, each Lender shall
pay to the Administrative Agent its Pro Rata Share of the payment then due from
the Borrowers, in the same manner as provided in Section 3.04 with respect to
Loans made by such Lender (and Section 3.04 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrowers of their obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers' obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers' obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrowers to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by each Borrower to the extent permitted by applicable law) suffered by
the Borrowers that are caused by the Issuing Bank's failure to exercise care
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to
48
the contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Administrative Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrowers fail to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, interest shall accrue on such unreimbursed amount
at the rate of interest then applicable to ABR Loans and shall be payable on
demand, provided that if the Post-Default Rate of interest is otherwise in
effect at such time, then interest shall accrue on such unreimbursed amount at
the Post-Default Rate. Interest accrued pursuant to this paragraph shall be for
the account of the Issuing Bank, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (e) of this Section to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrowers, the
Administrative Agent, the replaced Issuing Bank (only if, as of the date of such
written agreement, JPMorgan Chase Bank is the Issuing Bank but is not the
Administrative Agent) and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrowers shall pay all
unpaid Letter of Credit Fees accrued for the account of the replaced Issuing
Bank pursuant to Section 3.01(k). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term "Issuing
Bank" shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Administrative Borrower
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral pursuant to this paragraph, the Borrowers shall
deposit in the Letter of Credit Collateral Account for the benefit of the
Lenders, an amount in cash equal to 105% of the LC Exposure as of such date plus
any accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default described in clause (f) or (g) of
Section 9.01. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrowers
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the
49
option and sole discretion of the Administrative Agent and at the Borrowers'
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated, be applied to satisfy other
obligations of the Borrowers under this Agreement. If the Borrowers are required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrowers within three Business Days after all Events
of Default have been cured or waived. Notwithstanding the foregoing, to the
extent required by the Senior Secured Notes Indenture, the Borrowers shall be
permitted to grant a security interest in, for the benefit of the holders of the
Senior Secured Notes, the cash to be deposited in the Letter of Credit
Collateral Account pursuant to this paragraph, subject to the terms of the
Intercreditor Agreement.
(k) Letter of Credit Fees. The Borrowers agree to pay
(collectively, the "Letter of Credit Fees") (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.25% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(l) Agent Advances. The Administrative Agent shall not make
any Revolving Credit Loan (other than Overadvances) or provide any Letter of
Credit to the Borrowers on behalf of the Lenders intentionally and with actual
knowledge that such Revolving Credit Loan or Letter of Credit would cause the
aggregate amount of the total outstanding Revolving Credit Loans and LC Exposure
to the Borrowers to exceed the Borrowing Base, except that the Administrative
Agent may, pursuant to the terms set forth in Section 10.08(a), make such
additional Revolving Credit Loans or provide such additional Letters of Credit
on behalf of the Lenders, intentionally and with actual knowledge that such
Revolving Credit Loans or Letters of Credit will cause the total outstanding
Revolving Credit Loans and LC Exposure to the Borrowers to exceed the Borrowing
Base, as the Administrative Agent may deem necessary or advisable in its
discretion, provided that: (i) the aggregate principal amount of the additional
Revolving Credit Loans or additional Letters of Credit to any Borrower which the
Administrative Agent may make or provide (after obtaining such actual knowledge
that the aggregate principal amount of the Revolving Credit Loans plus the LC
Exposure equal or exceed the Borrowing Base), plus the amount of Agent Advances
made pursuant to Section 10.08(a) then outstanding, shall not at any time exceed
the amount set forth in a separate written agreement among the Agents and the
Lenders and shall not cause
50
the total principal amount of the Revolving Credit Loans, LC Exposure and the
Agent Advances to exceed the Total Revolving Credit Commitment and (ii) no such
additional Revolving Credit Loan or Letters of Credit shall be outstanding more
than ninety (90) days after the date such additional Revolving Credit Loan or
Letter of Credit is made or issued (as the case may be), except as the Lenders
may otherwise agree. Each Lender shall be obligated to pay the Administrative
Agent the amount of its Pro Rata Share of any such additional Revolving Credit
Loans or Letters of Credit.
Section 3.02 Collection of Accounts. (a) The Borrowers shall
establish and maintain, at their expense, Cash Management Accounts pursuant to
Section 8.01(a) into which the Borrowers shall promptly deposit and shall direct
their respective Account Debtors to directly remit all payments on Receivables
and all payments constituting proceeds of Inventory or other Collateral in the
identical form in which such payments are made, whether by cash, check or other
manner.
(b) For purposes of calculating the amount of Loans available
to the Borrowers, subject to Section 4.04, such payments will be applied
(conditional upon final collection) to the Obligations on the Business Day of
receipt by the Administrative Agent of immediately available funds in the
Administrative Agent's Account, provided such payments and notice thereof are
received in accordance with the Administrative Agent's usual and customary
practices as in effect from time to time and within sufficient time to credit
the Borrowers' Loan Account on such day, and if not, then on the next Business
Day.
(c) Each Loan Party and its respective directors, employees,
agents or Subsidiaries shall, acting as trustee for the Administrative Agent,
receive, as the property of the Administrative Agent, any monies, checks, notes,
drafts or any other payment relating to and/or proceeds of Accounts or Inventory
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Cash
Management Accounts, or remit the same or cause the same to be remitted, in
kind, to the Administrative Agent. In no event shall the same be commingled with
any Loan Party's own funds. The Borrowers agree to reimburse the Administrative
Agent on demand for any amounts owed or paid to any bank or other financial
institution at which a Cash Management Account or any other deposit account or
investment account is established or any other bank, financial institution or
other Person involved in the transfer of funds to or from the Cash Management
Accounts arising out of the Administrative Agent's payments to or
indemnification of such bank, financial institution or other Person. The
obligations of the Borrowers to reimburse the Administrative Agent for such
amounts pursuant to this Section 3.02 shall survive the termination of this
Agreement.
Section 3.03 Payments. All Obligations shall be payable to the
Administrative Agent's Payment Office or such other place as the Administrative
Agent may designate from time to time.
Section 3.04 Settlement Procedures. (a) In order to administer the
financing facility under this Agreement in an efficient manner and to minimize
the transfer of funds between the Administrative Agent and the Lenders, the
Administrative Agent may, at its option, subject to the terms of this Section,
make available, on behalf of the Lenders, the full amount of the Revolving
Credit Loans requested or charged to the Borrowers' Loan Account(s) or otherwise
to be advanced by the Lenders pursuant to the terms hereof, without requirement
of prior notice to the Lenders of the proposed Revolving Credit Loans.
(b) With respect to all Revolving Credit Loans made by the
Administrative Agent on behalf of the Lenders as provided in this Section, the
amount of each Lender's Pro Rata Share of the outstanding Revolving Credit Loans
shall be computed weekly, and shall be adjusted upward or
51
downward on the basis of the amount of the outstanding Revolving Credit Loans as
of 5:00 p.m. New York time on the Business Day immediately preceding the date of
each settlement computation; provided, that, the Administrative Agent retains
the absolute right at any time or from time to time to make the above described
adjustments at intervals more frequent than weekly, but in no event more than
twice in any week. The Administrative Agent shall deliver to each of the Lenders
after the end of each week, or at such lesser period or periods as the
Administrative Agent shall determine, a summary statement of the amount of
outstanding Revolving Credit Loans for such period (such week or lesser period
or periods being hereinafter referred to as a "Settlement Period"). If the
summary statement is sent by the Administrative Agent and received by a Lender
prior to 12:00 noon New York time, then such Lender shall make the settlement
transfer described in this Section by no later than 3:00 p.m. New York time on
the same Business Day and if received by a Lender after 12:00 noon New York
time, then such Lender shall make the settlement transfer by not later than 3:00
p.m. New York time on the next Business Day following the date of receipt. If,
as of the end of any Settlement Period, the dollar amount of a Lender's Pro Rata
Share of the outstanding Revolving Credit Loans is more than the dollar amount
of such Lender's Pro Rata Share of the outstanding Revolving Credit Loans as of
the end of the previous Settlement Period, then such Lender shall forthwith (but
in no event later than the time set forth in the preceding sentence) transfer to
the Administrative Agent by wire transfer in immediately available funds the
amount of the increase. Alternatively, if the dollar amount of a Lender's Pro
Rata Share of the outstanding Revolving Credit Loans in any Settlement Period is
less than the dollar amount of such Lender's Pro Rata Share of the outstanding
Revolving Credit Loans for the previous Settlement Period, the Administrative
Agent shall forthwith transfer to such Lender by wire transfer in immediately
available funds the amount of the decrease. The obligation of each of the
Lenders to transfer such funds and effect such settlement shall be irrevocable
and unconditional and without recourse to or warranty by the Administrative
Agent. The Administrative Agent and each Lender agrees to ▇▇▇▇ its books and
records at the end of each Settlement Period to show at all times the dollar
amount of its Pro Rata Share of the outstanding Revolving Credit Loans and
Letters of Credit. Each Lender shall only be entitled to receive interest on its
Pro Rata Share of the Revolving Credit Loans to the extent such Revolving Credit
Loans have been funded by such Lender. Because the Administrative Agent on
behalf of Lenders may be advancing and/or may be repaid Revolving Credit Loans
prior to the time when such Lenders will actually make Revolving Credit Loans
and/or be repaid such Revolving Credit Loans, interest with respect to Revolving
Credit Loans shall be allocated by the Administrative Agent in accordance with
the amount of Revolving Credit Loans actually advanced by and repaid to each
Lender and the Administrative Agent and shall accrue from and including the date
such Revolving Credit Loans are so advanced to but excluding the date such
Revolving Credit Loans are either repaid by the Borrowers or actually settled
with the applicable Lender as described in this Section.
(c) To the extent that the Administrative Agent has made any
such amounts available and the settlement described above shall not yet have
occurred, upon repayment of any Revolving Credit Loans by a Borrower, the
Administrative Agent may apply such amounts repaid directly to any amounts made
available by the Administrative Agent pursuant to this Section. In lieu of
weekly or more frequent settlements, the Administrative Agent may, at its
option, at any time require each Lender to provide the Administrative Agent with
immediately available funds representing its Pro Rata Share of each Revolving
Credit Loans, prior to the Administrative Agent's disbursement of such Revolving
Credit Loans to such Borrower. In such event, all Revolving Credit Loans shall
be made by the Lenders simultaneously and proportionately to their Pro Rata
Shares. No Lender shall be responsible for any default by any other Lender in
the other Lender's obligation to make any Revolving Credit Loans requested
hereunder nor shall the Revolving Credit Commitment of any Lender be increased
or decreased as a result of the default by any other Lender in the other
Lender's obligation to make any Revolving Credit Loans hereunder.
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(d) If the Administrative Agent is not funding a particular
Revolving Credit Loan to the Borrowers (or to the Administrative Borrower for
the benefit of such Borrowers) pursuant to this Section on any day, the
Administrative Agent may assume that each Lender will make available to the
Administrative Agent such Lender's Pro Rata Share of the Revolving Credit Loan
requested or otherwise made on such day and the Administrative Agent may, in its
discretion, but shall not be obligated to, cause a corresponding amount to be
made available to or for the benefit of such Borrowers on such day. If the
Administrative Agent makes such corresponding amount available to the Borrowers
and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to the Administrative Agent at the Federal Funds Effective
Rate for each day during such period and if such amounts are not paid within
three (3) days of the Administrative Agent's demand, at the interest rate then
applicable to Revolving Credit Loans that are ABR Loans. During the period in
which such Lender has not paid such corresponding amount to the Administrative
Agent, notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, the amount of the Revolving Credit Loans so
advanced by the Administrative Agent to or for the benefit of any Borrower
shall, for all purposes hereof, be deemed a Revolving Credit Loan made by the
Administrative Agent for its own account. Upon any such failure by a Lender to
pay the Administrative Agent, the Administrative Agent shall promptly thereafter
notify the Administrative Borrower of such failure and the Borrowers shall pay
such corresponding amount to the Administrative Agent for its own account within
five (5) Business Days of the Administrative Borrower's receipt of such notice.
A Lender who fails to pay the Administrative Agent its Pro Rata Share of any
Revolving Credit Loans made available by the Administrative Agent on such
Lender's behalf, or any Lender who fails to pay any other amount owing by it to
the Administrative Agent, is a "Defaulting Lender". The Administrative Agent
shall not be obligated to transfer to a Defaulting Lender any payments received
by the Administrative Agent for the Defaulting Lender's benefit, nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder
(including any principal, interest or fees). Amounts payable to a Defaulting
Lender shall instead be paid to, or retained by, the Administrative Agent. The
Administrative Agent may hold and, in its discretion, re-lend to a Borrower the
amount of all such payments received or retained by it for the account of such
Defaulting Lender. For purposes of voting or consenting to matters with respect
to this Agreement and the other Loan Documents, and determining Pro Rata Shares,
such Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Revolving Credit Commitment shall be deemed to be zero. This Section shall
remain effective with respect to a Defaulting Lender until such default is
cured. The operation of this Section shall not be construed to increase or
otherwise affect the Revolving Credit Commitment of any Lender, or relieve or
excuse the performance by any Loan Party of its duties and obligations
hereunder.
(e) Nothing in this Section or elsewhere in this Agreement or
the other Loan Documents, shall be deemed to require the Administrative Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Revolving Credit Commitment hereunder or to prejudice
any rights that the Borrowers may have against any Lender as a result of any
default by any Lender hereunder in fulfilling its Revolving Credit Commitment.
Section 3.05 Overadvances. Insofar as the Borrowers may request, and
the Administrative Agent may be willing in its sole and absolute discretion to
make, on behalf of the Lenders, Revolving Credit Loans to the Borrowers at a
time when the unpaid balance, without duplication, of the sum of the outstanding
Revolving Credit Loans, plus the LC Exposure, plus Agent Advances exceeds, or
would exceed with the making of any such Revolving Credit Loan, the Borrowing
Base (and such Loan or Loans being herein referred to individually as an
"Overadvance" and collectively, as "Overadvances"), the Administrative Agent
shall enter such Overadvances as debits in the Loan Account. Any Overadvance
made pursuant to the terms hereof shall be deemed to be a Loan made by all
Lenders ratably
53
in accordance with their respective Pro Rata Shares and shall be subject to the
provisions of Section 3.04. All Overadvances shall be repaid on demand, shall be
secured by the Collateral and shall bear interest as provided in this Agreement
for Revolving Credit Loans generally. The foregoing notwithstanding, in no
event, unless otherwise consented to by all Lenders, (v) shall the aggregate
amount of Overadvances exceed $5,000,000 at any one time outstanding, (w) shall
any Overadvances be outstanding for more than fifteen (15) consecutive days, (x)
after all outstanding Overadvances have been repaid, shall Administrative Agent
make any additional Overadvances unless thirty (30) days or more have expired
since the last date on which any Overadvances were outstanding or, (y) shall
Agent make Revolving Credit Loans on behalf of Lenders under this subsection
1.1.2 to the extent such Revolving Credit Loans would cause a Lender's Pro Rata
Share of the Revolving Credit Loans to exceed such Lender's Revolving Credit
Commitment minus such Lender's Pro Rata Share of the LC Exposure and the Agent
Advances.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. The Borrowers
acknowledge that pursuant to Section 7.01(f), representatives of any Agent may
visit any or all of the Loan Parties and/or conduct audits, inspections,
valuations and/or field examinations of any or all of the Loan Parties at any
time and from time to time in a manner so as to not unduly disrupt the business
of the Loan Parties. The Borrowers agree to pay (i) the Administrative Agent's
prevailing daily rates for each such examiner plus the examiner's reasonable
out-of-pocket costs and expenses incurred in connection with all such visits,
audits, inspections, valuations and field examinations and (ii) the reasonable
cost of all visits, audits, inspections, valuations and field examinations
conducted by a third party on behalf of the Collateral Agent.
Section 4.02 Payments; Computations and Statements.
(a) The Borrowers will make each payment under this Agreement
not later than 12:00 noon (New York City time) on the day when due, in lawful
money of the United States of America and in immediately available funds, to the
Administrative Agent's Account. All payments received by the Administrative
Agent after 12:00 noon (New York City time) on any Business Day will be credited
to the Loan Account on the next succeeding Business Day. All payments shall be
made by the Borrowers without set-off, counterclaim, deduction or other defense
to the Agents and the Lenders. Except as provided in Section 3.04, after
receipt, the Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal ratably to the
Lenders in accordance with their Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement, provided that the
Administrative Agent will cause to be distributed all interest and fees received
from or for the account of the Borrowers not less than once each month and in
any event promptly after receipt thereof. The Lenders and the Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent may, from
time to time, charge the Loan Account of the Borrowers with any amount due and
payable by the Borrowers under any Loan Document. Each of the Lenders and the
Borrowers agrees that the Administrative Agent shall have the right to make such
charges whether or not any Default or Event of Default shall have occurred and
be continuing or whether any of the conditions precedent in Section 5.02 have
been satisfied. Any amount charged to the Loan Account of the Borrowers shall be
deemed a Revolving Credit Loan hereunder made by the Lenders to the Borrowers,
funded by the Administrative Agent on behalf of the Lenders and subject to
Section 3.04 of this Agreement. The Lenders and the Borrowers confirm that any
charges which the Administrative Agent may so make to the Loan Account of the
Borrowers as herein provided will be made as an accommodation to the Borrowers
and solely at the Administrative Agent's discretion, provided that the
Administrative Agent shall from time to time upon
54
the request of the Collateral Agent (to the extent that (i) there exists no
Event of Default, (ii) such charge does not exceed the current Availability and
(iii) the applicable amount is otherwise permitted to be made in accordance with
the terms of this Agreement or any other Loan Document), charge the Loan Account
of the Borrowers with any amount due and payable under any Loan Document. The
Administrative Agent will give the Administrative Borrower notice of any charge
to the Loan Account made in accordance with this Section 4.02(a) promptly after
such charge is made. Whenever any payment to be made under any such Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be. All computations of fees shall be made by the Administrative
Agent on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fees are payable. Each determination by the Administrative Agent of
an interest rate or fees hereunder shall be conclusive and binding for all
purposes in the absence of manifest error.
(b) The Administrative Agent shall provide the Administrative
Borrower, promptly after the end of each calendar month, a summary statement (in
the form from time to time used by the Administrative Agent) of the opening and
closing daily balances in the Loan Account of the Borrowers during such month,
the amounts and dates of all Loans made to the Borrowers during such month, the
amounts and dates of all payments on account of the Loans to the Borrowers
during such month and the Loans to which such payments were applied, the amount
of interest accrued on the Loans to the Borrowers during such month, any Letters
of Credit issued by the Issuing Bank for the account of the Borrowers during
such month, specifying the face amount thereof, the amount of charges to the
Loan Account and/or Loans made to the Borrowers during such month to reimburse
the Lenders for drawings made under Letters of Credit, and the amount and nature
of any charges to the Loan Account made during such month on account of fees,
commissions, expenses and other Obligations. All entries on any such statement
shall be presumed to be correct and, thirty (30) days after the same is sent,
shall be final and conclusive absent manifest error.
Section 4.03 Sharing of Payments, Etc. Except as provided in Section
3.04 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender of any interest or other
amount paid by the purchasing Lender in respect of the total amount so
recovered). The Borrowers agree that any Lender so purchasing a participation
from another Lender pursuant to this Section 4.03 may, to the fullest extent
permitted by law, exercise all of its rights (including the Lender's right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation.
Section 4.04 Apportionment of Payments. Subject to Section 3.04
hereof and to any written agreement among the Administrative Agent and/or the
Lenders:
(a) All payments of principal and interest in respect of
outstanding Loans, all payments in respect of the Letters of Credit, all
payments of fees (other than the fees set forth in Section 2.06 hereof, fees
with respect to Letters of Credit provided for in Section 3.01(k) and the audit
and collateral monitoring fee provided for in Section 4.01, in each case, to the
extent set forth in a written
55
agreement among the Administrative Agent and the Lenders) and all other payments
in respect of any other Obligations, shall be allocated by the Administrative
Agent among such of the Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein or, in respect of
payments not made on account of Loans or LC Exposure, as designated by the
Person making payment when the payment is made.
(b) After the occurrence and during the continuance of an
Event of Default, the Administrative Agent may, and upon the direction of the
Required Lenders shall, notwithstanding any terms to the contrary set forth in
this Agreement or any other Loan Document apply all payments in respect of any
Obligations and all proceeds of the Collateral, (i) first, ratably to pay the
Obligations in respect of any fees (including any fees or charges assessed by
the Issuing Bank), expense reimbursements, indemnities and other amounts then
due to the Administrative Agent, the Collateral Agent or the Issuing Bank until
paid in full; (ii) second, ratably to pay the Obligations in respect of any fees
(including Letter of Credit Fees payable to the Lenders), expense reimbursements
and indemnities then due to the Lenders until paid in full; (iii) third, ratably
to pay interest due in respect of the Agent Advances until paid in full; (iv)
fourth, ratably to pay principal of the Agent Advances until paid in full; (v)
fifth, ratably to pay interest due in respect of the Revolving Credit Loans and
LC Exposure until paid in full; (vi) sixth, ratably to pay principal of the
Revolving Credit Loans and LC Exposure (or, to the extent such LC Exposure are
contingent to provide cash collateral in an amount up to 105% of such LC
Exposure which collateral shall be released upon all such Events of Default
ceasing to continue) until paid in full; and (vii) seventh, to the ratable
payment of all other Obligations then due and payable.
(c) For purposes of Section 4.04(b) (other than clause (vii)
of Section 4.04(b)), "paid in full" means payment of all amounts owing under the
Loan Documents according to the terms thereof, including loan fees, service
fees, professional fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default interest, interest
on interest, and expense reimbursements, except to the extent that default or
overdue interest (but not any other interest), loan fees, service fees,
professional fees, expense reimbursements, or other fees and expenses, each
arising from or related to a default are disallowed in any Insolvency
Proceeding, and, for purposes of clause (vii) of Section 4.04(b), "paid in full"
means payment of all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, whether or not any of the foregoing would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.
Section 4.05 Increased Costs and Reduced Return. (a) If any Lender,
any Agent or the Issuing Bank shall have determined that the adoption or
implementation of, or any change in, any law, rule, treaty or regulation, or any
policy, guideline or directive of, or any change in, the interpretation or
administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by any Lender, any Agent or the Issuing
Bank or any Person controlling any such Lender, such Agent or the Issuing Bank
with any directive of, or guideline from, any central bank or other Governmental
Authority or the introduction of, or change in, any accounting principles
applicable to any Lender, such Agent or the Issuing Bank or any Person
controlling any such Lender, such Agent or the Issuing Bank (in each case,
whether or not having the force of law) (each, a "Change in Law"), shall (i)
subject such Lender, such Agent or the Issuing Bank, or any Person controlling
such Lender, such Agent or the Issuing Bank to any tax, duty or other charge
with respect to this Agreement or any Loan made by such Lender or such Agent or
any Letter of Credit issued by the Issuing Bank, or change the basis of taxation
of payments to such Lender, such Agent or the Issuing Bank or any Person
controlling any such Lender, such Agent or the Issuing Bank of any amounts
payable hereunder (except for taxes on the overall net income of such Lender,
such Agent or the Issuing Bank or any Person controlling such Lender, such Agent
or the Issuing Bank), (ii) impose, modify or deem applicable any reserve,
special
56
deposit or similar requirement against any Loan, any Letter of Credit or against
assets of or held by, or deposits with or for the account of, or credit extended
by, such Lender, such Agent or the Issuing Bank or any Person controlling such
Lender, such Agent or the Issuing Bank or (iii) impose on such Lender, such
Agent or the Issuing Bank or any Person controlling such Lender, such Agent or
the Issuing Bank any other condition regarding this Agreement or any Loan or
Letter of Credit, and the result of any event referred to in clauses (i), (ii)
or (iii) above shall be to increase the cost to such Lender, such Agent or the
Issuing Bank of making or maintaining any Loan (or of maintaining its obligation
to make any such Loan), issuing, guaranteeing, maintaining or participating in
any Letter of Credit, or agreeing to make any Loan or issue, guaranty, maintain
or participate in any Letter of Credit, or to reduce any amount received or
receivable by such Lender, such Agent or the Issuing Bank hereunder, then, upon
demand by such Lender, such Agent or the Issuing Bank, the Borrowers shall pay
to such Lender, such Agent or the Issuing Bank such additional amounts as will
compensate such Lender, such Agent or the Issuing Bank for such increased costs
or reductions in amount.
(b) If any Lender, any Agent or the Issuing Bank shall have
determined that any Change in Law related to any Capital Guideline, either (i)
affects or would affect the amount of capital required or expected to be
maintained by such Lender, such Agent or the Issuing Bank or any Person
controlling such Lender, such Agent or the Issuing Bank, and such Lender, such
Agent or the Issuing Bank determines that the amount of such capital is
increased as a direct or indirect consequence of any Loans made or maintained,
Letters of Credit issued or any guaranty or participation with respect thereto,
such Lender's, such Agent's or the Issuing Bank's or any such other controlling
Person's other obligations hereunder, or (ii) has or would have the effect of
reducing the rate of return on such Lender's, such Agent's or the Issuing Bank's
any such other controlling Person's capital to a level below that which such
Lender, such Agent or the Issuing Bank or such controlling Person could have
achieved but for such circumstances as a consequence of any Loans made or
maintained, Letters of Credit issued, or any participation with respect thereto
or any agreement to make Loans, to issue or participate in Letters of Credit or
such Lender's, such Agent's or the Issuing Bank's or such other controlling
Person's other obligations hereunder (in each case taking into consideration
such Lender's, such Agent's or the Issuing Bank's or such other controlling
Person's policies with respect to capital adequacy), then, upon demand by such
Lender, such Agent or the Issuing Bank, the Borrowers shall pay to such Lender,
such Agent or the Issuing Bank from time to time such additional amounts as will
compensate such Lender, such Agent or the Issuing Bank for such cost of
maintaining such increased capital or such reduction in the rate of return on
such Lender's, such Agent's or the Issuing Bank's or such other controlling
Person's capital.
(c) All amounts payable under this Section 4.05 shall bear
interest from the date that is ten (10) days after the date of demand by any
Lender, any Agent or the Issuing Bank until payment in full to such Lender, such
Agent or the Issuing Bank at the Alternate Base Rate. A certificate of such
Lender, such Agent or the Issuing Bank claiming compensation under this Section
4.05, specifying the event herein above described and the nature of such event
shall be submitted by such Lender, such Agent or the Issuing Bank to the
Administrative Borrower, setting forth the additional amount due (the
calculation thereof to be in reasonable detail) and an explanation of the
calculation thereof, and such Lender's, such Agent's or the Issuing Bank's
reasons for invoking the provisions of this Section 4.05, and shall be final and
conclusive absent manifest error.
(d) If any Lender, any Agent or the Issuing Bank requests
compensation under this Section 4.05, or if the Borrowers are or would be
required to pay any additional amount to any Lender, any Agent or the Issuing
Bank pursuant to this Section 4.05, then such Lender, such Agent or the Issuing
Bank shall use commercially reasonable efforts to designate a different lending
office for funding or booking its Loans and/or Letters of Credit hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such Agent or the Issuing
Bank, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to this
57
Section 4.05 in the future and (ii) would not subject such Lender, such Agent or
the Issuing Bank to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender, such Agent or the Issuing Bank. The Borrowers
hereby agree to pay all reasonable cost and expenses incurred by any Lender, any
Agent or the Issuing Bank in connection with any such designation or assignment.
(e) Failure or delay on the part of any Lender, any Agent or
the Issuing Bank to demand compensation pursuant to this Section 4.05 shall not
constitute a waiver of such Lender's, such Agent's or the Issuing Bank's right
to demand such compensation.
Section 4.06 Joint and Several Liability of the Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agents and the Lenders under this Agreement
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the Obligations. Each of the
Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 4.06), it being the intention of the parties hereto
that all of the Obligations shall be the joint and several obligations of each
of the Borrowers without preferences or distinction among them. If and to the
extent that any of the Borrowers shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event, the other Borrowers
will make such payment with respect to, or perform, such Obligation. Subject to
the terms and conditions hereof, the Obligations of each of the Borrowers under
the provisions of this Section 4.06 constitute the absolute and unconditional,
full recourse Obligations of each of the Borrowers, enforceable against each
such Person to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other circumstances whatsoever.
(b) The provisions of this Section 4.06 are made for the
benefit of the Agents, the Lenders and their successors and assigns, and may be
enforced by them from time to time against any or all of the Borrowers as often
as occasion therefor may arise and without requirement on the part of the
Agents, the Lenders or such successors or assigns first to marshal any of its or
their claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.06 shall remain in effect until all of the Obligations shall
have been Paid in Full.
(c) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the other
Borrowers with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to the Agents or the Lenders
with respect to any of the Obligations or any Collateral, until such time as all
of the Obligations have been Paid in Full in cash and this Agreement shall have
been terminated. Any claim which any Borrower may have against any other
Borrower with respect to any payments to the Agents or the Lenders hereunder or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations.
58
ARTICLE V
CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness of this
Agreement. This Agreement shall become effective as of the Effective Date upon
concurrent satisfaction of each of the following conditions precedent in a
manner satisfactory to the Agents or upon waiver by the Agents thereof:
(a) Payment of Fees, Etc. The Agents and the Lenders shall
have received all fees and other amounts due and payable to such Persons at or
prior to the Effective Date, including, to the extent invoiced and presented to
the Administrative Borrower on or prior to the Effective Date, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrowers hereunder.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct on and as of the Effective Date:
(i) the representations and warranties contained in ARTICLE VI and in each other
Loan Document, certificate or other writing delivered to any Agent, any Lender
or the Issuing Bank pursuant hereto or thereto on or prior to the Effective Date
are true and correct on and as of the Effective Date as though made on and as of
such date and (ii) no Default or Event of Default shall have occurred and be
continuing on the Effective Date or would result from this Agreement or the
other Loan Documents becoming effective in accordance with its or their
respective terms.
(c) Legality. The making of the initial Loans or the issuance
of any Letter of Credit on the Effective Date will not contravene any law, rule
or regulation applicable to any Agent, any Lender or the Issuing Bank.
(d) Delivery of Documents. The Agents shall have received on
or before the Effective Date the following, each in form and substance
reasonably satisfactory to the Agents and, unless indicated otherwise, dated the
Effective Date:
(i) (A) a Security Agreement, duly executed by each
Domestic Loan Party (which shall include a grant of a Lien on all of the
Domestic Loan Parties' joint venture, partnership or limited liability
company interests of such Domestic Loan Party in Persons that are not its
Subsidiaries directly owned by such Domestic Loan Party, in each case to
the extent such Lien is permitted taking into account applicable law,
including, without limitation, the Uniform Commercial Code), (B) a
Canadian Security Agreement(s), duly executed by each Canadian Borrowing
Base Guarantor and (C) a Canadian Guaranty, duly executed by each Canadian
Borrowing Base Guarantor;
(ii) a Pledge Agreement(s), duly executed by each Loan
Party, creating a pledge in favor of the Collateral Agent in (x) all of
the Capital Stock of (I) such Loan Party's wholly-owned Domestic
Subsidiaries (other than Inactive Subsidiaries), (II) Milacron Capital and
(III) Milacron Canada Inc. and D-M-E of Canada Limited and (y) 65% of the
voting Capital Stock of such Loan Party's (other than the Canadian
Borrowing Base Guarantors') directly owned Foreign Subsidiaries (to the
extent permissible taking into account applicable law), other than D-M-E
(Hong Kong) Limited, Japan D-M-E Corporation, the China JV and Ferromatik
Milacron India Limited, and all intercompany promissory notes of such Loan
Parties (other than of the Canadian Borrowing Base Guarantors);
59
(iii) a Mortgage, duly executed by the applicable Loan
Party, with respect to each Facility and in a suitable form for recording
in an appropriate office;
(iv) a Title Insurance Policy with respect to each
Mortgage, dated as of the Effective Date;
(v) any survey of a Facility subject to a Mortgage
that is delivered to the trustee for the holders of the Senior Secured
Notes, in form and substance reasonably satisfactory to the Agents;
provided that a survey shall not be required for the Facilities located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇;
(vi) Control Agreements for each deposit or securities
account maintained by the Loan Parties as of the Effective Date (other
than for (i) the one deposit account held by D-M-E Company with Comerica
Bank, the three deposit accounts held by the Parent with Bank of America,
the one deposit account held by Milacron Marketing Company at Bank One
(the "Bank One Account") and the one deposit account held by Uniloy
Milacron Inc. at Bank of America, in each case, as identified on Schedule
6.01(u) and (ii) the securities accounts held by the Parent at Fifth Third
Securities, Inc. and Blackrock Securities, respectively, and the
securities account held by the Parent at Deutsche Asset Management (the
"Deutsche Securities Account") in each case, as identified on Schedule
6.01(u);
(vii) a UCC Filing Authorization Letter, duly executed
by each Loan Party, together with appropriate financing statements on Form
UCC (or similar financing statements or filings in any foreign
jurisdiction) duly filed in such office or offices as may be necessary or,
in the opinion of the Agents, desirable to perfect the security interests
purported to be created by each Security Agreement and each Pledge
Agreement;
(viii) certified copies of information listing all
effective financing statements which name as debtor any Loan Party and
which are filed in the offices referred to in paragraph (iv) above,
together with copies of such financing statements (or similar filings in
any foreign jurisdiction), none of which, except as otherwise agreed in
writing by the Agents, shall cover any of the Collateral and the results
of searches for any tax Lien and judgment Lien filed against such Person
or its property, which results, except as otherwise agreed to in writing
by the Agents, shall not show any such Liens other than Permitted Liens;
(ix) a copy of the resolutions of each Loan Party,
certified as of the Effective Date by an Authorized Officer thereof,
authorizing (A) the borrowings hereunder (in the case of the Borrowers)
and the transactions contemplated by the Loan Documents to which such Loan
Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan
Party is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and
therewith;
(x) a certificate of an Authorized Officer of each
Loan Party, certifying the names and true signatures of the
representatives of such Loan Party authorized to sign each Loan Document
to which such Loan Party is or will be a party and the other documents to
be executed and delivered by such Loan Party in connection herewith and
therewith, together with evidence of the incumbency of such authorized
officers;
(xi) a certificate of the appropriate official(s) of
the state or other applicable jurisdiction of organization certifying as
to the good standing of, and the payment of
60
taxes by (if issued by such state or other applicable jurisdiction), such
Loan Party in such state or other applicable jurisdiction, and each
material state of foreign qualification of each Loan Party certifying as
to the qualification of such Loan Party to do business in each such state
and, in each case, certified as of a recent date not more than 30 days
prior to the Effective Date, together, if requested by the Agents, with
confirmation by telephone or telecopy (where available) on the Effective
Date from such official(s) as to such matters;
(xii) a true and complete copy (or abstract, as
applicable) of the charter, certificate of formation, certificate of
limited partnership or other publicly filed organizational document of
each Loan Party certified as of a recent date not more than 30 days prior
to the Effective Date by an appropriate official of the state or other
applicable jurisdiction of organization of such Loan Party which shall set
forth the same complete name of such Person as is set forth herein and the
organizational number of such Person, if an organizational number is
issued in such jurisdiction;
(xiii) a copy of the charter and by-laws, limited
liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together
with all amendments thereto, certified as of the Effective Date by an
Authorized Officer of such Loan Party;
(xiv) (A) an opinion of Cravath, Swaine & ▇▇▇▇▇ LLP,
special New York counsel to the Administrative Borrower, substantially in
the form of Exhibit F, (B) an opinion of ▇▇▇▇ ▇'▇▇▇▇▇▇▇, general counsel
of the Administrative Borrower, (C) an opinion of ▇▇▇▇ ▇▇▇▇▇, patent
counsel of the Administrative Borrower, (D) an opinion of local counsel in
respect of UCC filings to be made pursuant to Section 5.01(d)(vii) and
other appropriate matters in Delaware, Illinois, Michigan, Minnesota and
Ohio, (E) an opinion of ▇▇▇▇▇▇ P.C., counsel to the applicable Loan
Parties in respect of the Pledge Agreement to be executed and delivered
pursuant to Section 5.01(d)(ii)(II), (F) an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to the applicable Loan Parties in respect of the Canadian Security
Agreement to be executed and delivered pursuant to Section 5.01(d)(i)(B)
and the Canadian Guaranty to be executed and delivered pursuant to Section
5.01(d)(i)(C) and (G) an opinion of local counsel to the applicable Loan
Parties in the local jurisdictions where any real property is owned by
such Loan Party and which is subject to a Mortgage thereon in favor of the
Administrative Agent, in each case as to such other customary matters as
the Agents may reasonably request;
(xv) a certificate of an Authorized Officer of each
Loan Party, certifying as to the matters set forth in subsection (b) of
this Section 5.01;
(xvi) a copy of the Financial Statements and the
financial projections described in Section 6.01(g)(ii) hereof, certified
as of the Effective Date as true and correct, in all material respects, by
the chief financial officer of the Parent, and, in the case of such
financial projections, that such projections are believed at the time to
be reasonable, are prepared in good faith and are based on assumptions,
methods and tests stated therein which were believed to be reasonable at
the time prepared and upon information believed to have been accurate
based upon the information available at the time such projections were
prepared and that there are no facts or information that would lead the
Person certifying to such projections, to believe that such projections
are in correct or misleading in any material respect;
(xvii) evidence of the insurance coverage required by
Section 7.01(h) and the terms of each Security Agreement and such other
insurance coverage with respect to the business and operations of the Loan
Parties as the Agents may reasonably request, in each case,
61
where requested by the Agents, with such endorsements as to the named
insureds or loss payees thereunder (in the case of liability and property
insurance) as the Agents may request and providing that such policy may be
terminated or canceled (by the insurer or the insured thereunder) only
upon 30 days' prior written notice to the Agents and each such named
insured or loss payee, together with evidence of the payment of all
premiums due in respect thereof for such period as the Agents may request;
(xviii) a certificate of an Authorized Officer of the
Administrative Borrower, certifying the names and true signatures of the
persons that are authorized to provide Notices of Borrowing and all other
notices under this Agreement and the other Loan Documents;
(xix) Landlord Waiver, Bailee Letter and/or similar
collateral access agreements, in each case, in form and substance
reasonably satisfactory to the Agents and which may be included as a
provision contained in the relevant Lease or other agreement, executed by
each landlord and/or bailee with respect to each of the Leases set forth
on Schedule 6.01(o), it being understood that (A) the failure to obtain
such waivers, letters and/or agreements on or prior to the Effective Date
will not result in a failure to satisfy a condition precedent to the
effectiveness of this Agreement or an Event of Default, provided, that the
Borrowers have used reasonable efforts to obtain such waivers, letters
and/or agreements, and (B) the Administrative Agent shall have the right
to establish customary Reserves for the failure to obtain such waivers,
letters and/or agreements;
(xx) copies of the Material Contracts as in effect on
the Effective Date, certified as true and correct copies thereof by an
Authorized Officer of the Administrative Borrower, together with a
certificate of an Authorized Officer of the Administrative Borrower
stating that such agreements remain in full force and effect, have not
been otherwise amended or modified, and that none of the Loan Parties is
in breach or default in any of its obligations under such agreements,
other than breaches or defaults that, individually and in the aggregate,
are of immaterial obligations thereunder;
(xxi) a termination and release agreement with respect
to the Existing Credit Facility and all related documents, duly executed
by the applicable Loan Parties and the existing agent thereunder (the
"Existing Agent"), on behalf of itself and the lenders thereunder and
authorization by the Existing Agent to the Agents to file UCC termination
statements for all UCC financing statements filed by the Existing Agent,
on behalf of such lenders, and covering any portion of the Collateral;
(xxii) evidence satisfactory to the Agents of the
conversion of the Series A Notes and Series B Notes issued pursuant to the
Mizuho/Glencore Transaction Documents into 6.0% Series B Convertible
Preferred Stock of the Parent in accordance with the terms thereof, and
all related agreements, instruments or other documents, duly executed by
the parties necessary to effect such conversion;
(xxiii) the Intercompany Subordination Agreement, duly
executed by each Loan Party and its Subsidiaries;
(xxiv) copies of all of the Senior Secured Notes
Documents as in effect on the Effective Date, certified as true and
correct copies thereof by an Authorized Officer of the Administrative
Borrower, together with a certificate of an Authorized Officer of the
Administrative Borrower stating that such agreements remain in full force
and effect, have not been otherwise amended or modified, and that, to the
knowledge of such Authorized Officer,
62
none of the Loan Parties is in breach or default in any of its obligations
under such agreements, other than breaches or defaults that, individually
and in the aggregate, are of immaterial obligations thereunder;
(xxv) the Intercreditor Agreement, duly executed by each
of the parties thereto and acknowledged by the Administrative Borrower;
(xxvi) a Borrowing Base Certificate in form and
substance reasonably satisfactory to the Agents;
(xxvii) [Reserved];
(xxviii) an appraisal or appraisals of the Accounts and
Inventory of the Loan Parties reasonably satisfactory to the Agents
performed by Hilco or such other appraiser reasonably acceptable to the
Agents after consulting with the Administrative Borrower; and
(xxix) such other agreements, instruments, approvals,
opinions and other documents, each reasonably satisfactory to the Agents
in form and substance, as the Agents may reasonably request.
(e) Availability. After giving effect to all Loans to be made
on the Effective Date and the Letters of Credit to be issued on the Effective
Date, the sum of, without duplication, (i) Availability plus (ii) the Opening
Availability Loan shall not be less than $30,000,000, provided that this
calculation shall not deduct the Availability Reserve. The Parent shall deliver
to the Agents a certificate of the chief financial officer of the Parent
certifying as to the matters set forth in this clause (e) and containing the
calculation of Availability.
(f) Material Adverse Effect. The Agents shall have determined,
in their reasonable discretion, that since December 31, 2003, there has not
occurred and is not reasonably expected to occur any material adverse condition
or material adverse change in or affecting the business, operations, property,
condition (financial or otherwise) or prospects of the Parent and its
subsidiaries, taken as a whole.
(g) Approvals. (i) All necessary consents, authorizations and
approvals of, and filings and registrations with, and all other actions in
respect of, any Governmental Authority or other Person required in connection
with the making of the Loans and the granting of the Liens contemplated by the
Loan Documents shall have been obtained and shall be in full force and effect
(other than, in connection with the granting of a Lien only, consents,
authorizations and approvals of, and filings and registrations with, and all
other actions in respect of any Person with respect to immaterial (A) joint
venture interests, (B) intellectual property licenses and (C) other contractual
rights of the Loan Parties) and (ii) all necessary consents, authorizations and
approvals of, and filings and registrations with, and all other actions in
respect of, any Governmental Authority and all material consents, authorizations
and approvals of, and filings and registrations with, and all other actions in
respect of, any other Person required in connection with the conduct of the Loan
Parties' business shall be in full force and effect.
(h) Proceedings; Receipt of Documents. All proceedings in
connection with the making of the initial Loans or the issuance of the initial
Letters of Credit and the other transactions contemplated by this Agreement and
the other Loan Documents, and all documents incidental hereto and thereto, shall
be reasonably satisfactory to the Agents and their counsel, and the Agents and
such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Agents or such
counsel may reasonably request.
63
(i) Due Diligence. The Agents shall have completed their legal
and collateral due diligence with respect to each Loan Party and the results
thereof shall be reasonably satisfactory to the Agents.
(j) Financial Assistance. The Administrative Borrower shall
deliver to the Agents a certificate of an Authorized Officer of the
Administrative Borrower certifying that (i) the Loans are not being used to
subscribe for or acquire shares of Milacron Capital or Milacron B.V. or to
refinance existing Indebtedness used for such purpose. The Agents shall be
reasonably satisfied that the Dutch financial assistance rules do not apply to
the pledge of the Capital Stock of Milacron Capital or Milacron B.V.
(k) [Reserved];
(l) Senior Secured Notes Transactions. The Parent shall have
issued the Senior Secured Notes on terms and conditions substantially similar to
those set forth in that certain confidential information memorandum dated as of
May 12, 2004 (the "Offering Memorandum") or otherwise reasonably satisfactory to
the Agents and (A) shall have received gross proceeds from such issuance in an
amount no less than $215,000,000 or (B) in the event that the gross proceeds of
such issuance are less than $215,00,000, shall have drawn funds from sources
other than the proceeds of Loans in the amount that the gross proceeds of such
issuance are less than $215,000,000 to complete the refinancing transactions
contemplated thereby.
(m) The "Escrow Period" described in the Offering Memorandum
shall have terminated and the proceeds of the Senior Secured Notes shall have
been released from escrow, and, in each case, all conditions precedent set forth
in the Offering Memorandum with respect to such event shall have been satisfied.
Section 5.02 Conditions Precedent to All Loans and Letters of
Credit. The obligation of any Agent or any Lender to make any Loan or of the
Issuing Bank to issue any Letter of Credit on or after the Effective Date is
subject to the fulfillment, in a manner satisfactory to the Administrative
Agent, of each of the following conditions precedent:
(a) Senior Secured Notes. The making of such Loan or the
issuance of such Letter of Credit shall not contravene, violate or result in a
default under the Senior Secured Note Documents.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Administrative Borrower to the Administrative Agent of a Notice of Borrowing
with respect to each such Loan, and the Borrowers' acceptance of the proceeds of
such Loan, and the issuance of each Letter of Credit, shall each be deemed to be
a representation and warranty by each Loan Party on the date of such Loan or the
date of issuance of such Letter of Credit that: (i) the representations and
warranties contained in ARTICLE VI and in each other Loan Document, certificate
or other writing delivered to any Agent, the Issuing Bank or any Lender pursuant
hereto or thereto on or prior to the date of such Loan or such Letter of Credit
are true and correct on and as of such date as though made on and as of such
date, (ii) at the time of and after giving effect to the making of such Loan and
the application of the proceeds thereof or at the time of issuance of such
Letter of Credit, no Default or Event of Default has occurred and is continuing
or would result from the making of the Loan to be made, or the issuance of such
Letter of Credit to be issued, on such date and (iii) the conditions set forth
in this Section 5.02 have been satisfied as of the date of such request.
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(c) Legality. The making of such Loan or the issuance of such
Letter of Credit shall not contravene any law, rule or regulation applicable to
any Agent, any Lender or the Issuing Bank.
(d) Notices. The Administrative Agent shall have received a
Notice of Borrowing to the extent required by Section 2.02 hereof.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents, the Lenders and the Issuing Bank as
follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state, province or
other applicable jurisdiction of its organization, (ii) has all requisite power
and authority to conduct its business as now conducted and as presently
contemplated and, in the case of the Borrowers, to make the borrowings
hereunder, and to execute and deliver each Loan Document to which it is a party,
and to consummate the transactions contemplated thereby, and (iii) is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except where the
absence of any such qualification could not reasonably be expected to result in
a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is or will be a
party, (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene its (x) charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or (y) any material applicable law, rule or regulation, any
applicable order, judgment or decree of any Governmental Authority or any
material contractual restriction binding on or otherwise affecting it or any of
its properties (including, without limitation, the Senior Secured Notes
Documents), (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Loan Document) upon or with respect to any of
its properties, other than Liens securing obligations in an aggregate amount not
exceeding $100,000, and (iv) do not and will not result in any default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) Governmental Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of any Loan Document to which it is or will be a party, other than
(i) those that have been obtained or made and are in full force and effect and
(ii) filings necessary to perfect Liens on the Collateral.
(d) Enforceability of Loan Documents. This Agreement is, and
each other Loan Document to which any Loan Party is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
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(e) Subsidiaries. Schedule 6.01(e) is a complete and correct
description of the name, jurisdiction of organization and ownership of the
outstanding Capital Stock of the Subsidiaries of the Parent in existence on the
date of this Agreement. Except as described in Schedule 6.01(e), all of the
issued and outstanding shares of Capital Stock of such Subsidiaries have been
validly issued and are fully paid and nonassessable, and the holders thereof are
not entitled to any preemptive, first refusal or other similar rights. Except as
indicated on such Schedule, all such Capital Stock is owned by the Parent or one
or more of its wholly-owned Subsidiaries, free and clear of all Liens and there
are no outstanding debt or equity securities of the Parent or any of its
Subsidiaries and no outstanding obligations of the Parent or any of its
Subsidiaries convertible into or exchangeable for, or warrants, options or other
rights for the purchase or acquisition from the Parent or any of its
Subsidiaries, or other obligations of any Subsidiary to issue, directly or
indirectly, any shares of Capital Stock of any Subsidiary of the Parent.
(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the best knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party or its
properties before any court or other Governmental Authority or any arbitrator
(except with respect to any action, suit or proceeding expressly addressed in
Section 6.01(r)) that (A) could reasonably be expected to have a Material
Adverse Effect or (B) relates to this Agreement or any other Loan Document or
any transaction contemplated hereby or thereby and (ii) as of the Effective
Date, none of the Loan Parties holds any commercial tort claims, with a claim
exceeding $100,000, in respect of which a claim has been filed in a court of law
or a written notice by an attorney has been given to a potential defendant.
(g) Financial Condition.
(i) The Financial Statements, copies of which have
been delivered to each of the Agents and each Lender, fairly present, in
all material respects, the consolidated financial condition of the Parent
and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations of the Parent and its Subsidiaries for
the fiscal periods ended on such respective dates, all in accordance with
GAAP, and since December 31, 2003, no event or development has occurred
that has had or could reasonably be expected to have a Material Adverse
Effect.
(ii) The Parent has heretofore furnished to each Agent
and each Lender (A) projected monthly balance sheets, income statements
and statements of cash flows of the Parent and its Subsidiaries for the
period from October 2003 through December 2004, and (B) projected annual
balance sheets, income statements and statements of cash flows of the
Parent and its Subsidiaries for the Fiscal Year ending in 2005. Such
projections were believed by the Loan Parties at the time furnished to be
reasonable, were prepared and in good faith by the Loan Parties, and were
based on assumptions, methods and tests stated therein which were believed
by the Loan Parties to be reasonable at the time prepared and upon
information believed by the Loan Parties to have been accurate based upon
the information available to the Loan Parties at the time such projections
were prepared, and the Parent is not aware of any facts or information
that would lead it to believe that such projections are incorrect or
misleading in any material respect.
(h) Compliance with Law, Etc. No Loan Party is in violation of
its organizational documents, any law, rule, regulation, judgment or order of
any Governmental Authority applicable to it or any of its property or assets, or
any material term of any material agreement or instrument (excluding any
agreement or instrument in respect of Indebtedness but including any agreement
or instrument in respect of Indebtedness in excess of $4,000,000 and any other
Material Contract) binding on or otherwise affecting it or any of its
properties, and no Default or Event of Default has occurred and is continuing.
Notwithstanding the foregoing, this Section shall not be deemed to
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address any matters expressly addressed in Sections 6.01(i), 6.01(j), 6.01(n) or
6.01(r), such matters being subject solely to such Sections.
(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each
Employee Plan is in substantial compliance in all substantial respects with
ERISA and the Internal Revenue Code, (ii) no Termination Event has occurred nor
is reasonably expected to occur with respect to any Employee Plan, (iii) since
the date of the most recent annual report (Form 5500 Series) with respect to
each Employee Plan, including any required Schedule B (Actuarial Information)
thereto, copies of which have been filed with the Internal Revenue Service and
delivered or made available upon request to the Administrative Agent, there has
been no material adverse change in such funding status, (iv) copies of each
agreement entered into with the PBGC, the U.S. Department of Labor or the
Internal Revenue Service with respect to any Employee Plan have been delivered
to the Administrative Agent, (v) no Employee Plan had an accumulated funding
deficiency (whether or not waived) or has applied for an extension of any
amortization period within the meaning of Section 412 of the Internal Revenue
Code at any time during the previous 60 months, and (vi) no Lien imposed under
Section 412 of the Internal Revenue Code or Section 4068 of ERISA exists or is
reasonably expected to arise on account of any Employee Plan. Except as set
forth on Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates has
incurred any withdrawal liability under ERISA with respect to any Multiemployer
Plan, or is reasonably expected in the future to incur any such withdrawal
liability. No Loan Party or any of its ERISA Affiliates or any fiduciary of any
Employee Plan has (i) engaged in a nonexempt prohibited transaction described in
Sections 406 of ERISA or 4975 of the Internal Revenue Code, (ii) failed to pay
any required installment or other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such required installment or
payment, (iii) engaged in a transaction within the meaning of Section 4069 of
ERISA or (iv) incurred any material liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no such premium
payments which have become due which are unpaid. There are no pending or, to the
best knowledge of any Loan Party, threatened material claims, actions,
proceedings or lawsuits (other than claims for benefits in the normal course)
asserted or instituted against (i) any Employee Plan or its assets, (ii) any
fiduciary with respect to any Employee Plan, or (iii) any Loan Party or any of
its ERISA Affiliates with respect to any Employee Plan. Except as set forth on
Schedule 6.01(i) and except as required by Section 4980B of the Internal Revenue
Code, no Loan Party or any of its ERISA Affiliates maintains an employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of any Loan Party or any of its ERISA Affiliates or
coverage after a participant's termination of employment.
(j) Taxes, Etc. All Federal and material foreign, state and
local tax returns and other reports required by applicable law to be filed by
any Loan Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
property of any Loan Party and which have become due and payable have been paid,
except such taxes, assessments and governmental charges in an aggregate amount
not exceeding $100,000 or to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from the non-payment thereof and with respect to which adequate reserves, if
any, have been set aside for the payment thereof on the most recently available
consolidated financial statements of the Parent to the extent required by and in
accordance with GAAP.
(k) Regulations T, U and X. No Loan Party is or will be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation T, U or X), and no
proceeds of any Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(l) Nature of Business.
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(i) As of the Effective Date, except with respect to
Milacron Capital, no Loan Party is engaged in any business other than as
described in the Parent's Form 10-K for the period ending December 31,
2003 with the SEC.
(ii) Immediately prior to the Effective Date, Milacron
Capital (x) does not conduct and is not engaged in any business or
operations other than such business and operations related to the
ownership of the Capital Stock of its Subsidiaries and the performance of
any other business and operations customarily performed by a holding
company, (y) has an aggregate book value of its assets and properties
(other than its Subsidiaries) of not greater than $1,000,000 and has
aggregate liabilities (other than liabilities (i) related to the Euro
Notes, (ii) in connection with the Mizuho/Glencore Transactions and (iii)
related to the Existing Credit Facility) of not greater than $100,000, and
(z) has revenues (on a non-consolidated basis) for the four fiscal
quarters ending immediately prior to the Effective Date of not greater
than $0.
(iii) As of the Effective Date, with respect to the
Domestic Subsidiaries that are not a Loan Party, (x) no such Domestic
Subsidiary conducts or engages in any business or operations, and (y) the
aggregate book value of their assets and properties is not greater than
$0, the aggregate amount of their liabilities is not greater than $0 and
(z) the aggregate amount of their revenues for the four fiscal quarters
ending immediately prior to the Effective Date is not greater than $0.
(iv) As of the Effective Date, Milacron Assurance has
no assets or liabilities other than those associated with the provision of
self-insurance to the Parent and its other Subsidiaries and services
related thereto, and does not conduct and is not engaged in any business
or operations other than such business and operations related to the
provision of such insurance and services related thereto all of which
insurance and related services are provided solely for the benefit of the
Parent or its Subsidiaries.
(m) Adverse Agreements, Etc. No Loan Party is a party to any
agreement or instrument, or subject to any charter, limited liability company
agreement, partnership agreement or other corporate, partnership or limited
liability company restriction or any judgment, order, regulation, ruling or
other requirement of a court or other Governmental Authority, which has, or in
the future could reasonably be expected to have, a Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in compliance
with all permits, licenses, authorizations, approvals, entitlements and
accreditations required for such Person lawfully to own, lease, manage or
operate, or to acquire, each business currently owned, leased, managed or
operated, or to be acquired, by such Person, which, if not obtained, could not
reasonably be expected to have a Material Adverse Effect. No condition exists or
event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization, approval, entitlement
or accreditation, and there is no claim that any thereof is not in full force
and effect, except, to the extent any such condition, event or claim could not
be reasonably be expected to have a Material Adverse Effect.
(o) Properties.
(i) Each Loan Party has good and marketable title to,
valid leasehold interests in, or valid licenses to use, all property and
assets material to its business, free and clear of all Liens, except
Permitted Liens. All such properties and assets are in working order and
condition, ordinary wear and tear excepted.
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(ii) Schedule 6.01(o) sets forth a complete and
accurate list, as of the Effective Date, of the location, by state and
street address, of all real property owned or leased by each Loan Party.
As of the Effective Date, each Loan Party has valid leasehold interests in
the Leases described on Schedule 6.01(o) to which it is a party. Schedule
6.01(o) sets forth with respect to each such Lease, termination date and
annual base rents. Each such Lease is valid and enforceable in accordance
with its terms in all material respects and is in full force and effect.
No consent or approval of any landlord or other third party in connection
with any such Lease is necessary for any Loan Party to enter into and
execute the Loan Documents to which it is a party, except as set forth on
Schedule 6.01(o). To the best knowledge of any Loan Party, no other party
to any such Lease is in default of its material obligations thereunder,
and no Loan Party (or any other party to any such Lease) has at any time
delivered or received any notice of default which remains uncured under
any such Lease and, as of the Effective Date, no event has occurred which,
with the giving of notice or the passage of time or both, would constitute
a default under any such Lease.
(iii) Except with respect to transfers made in
compliance with this Agreement and other than a Permitted Lien that is an
inchoate Lien securing obligations for the payment of money not overdue or
not otherwise due and payable, Milacron Marketing Company (the "Misplaced
Note Holder") is the legal and beneficial owner of certain originals of
notes identified by an asterisk as missing in Schedule I to the Pledge
Agreement (the "Misplaced Notes") free and clear of all Liens, except for
the Lien created by the Loan Documents. As of the Effective Date, the
Misplaced Notes are lost, destroyed or misplaced through inadvertence or
otherwise and after conducting a diligent search of its records, no Loan
Party has been able to locate the Misplaced Notes.
(p) Full Disclosure. Each Loan Party has disclosed to the
Administrative Agent all agreements, instruments and corporate or other
restrictions to which it is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent, the Collateral Agent or any Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which it was made,
not misleading; provided that, with respect to projected financial information,
each Loan Party represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time prepared. There is
no contingent liability or fact that could reasonably be expected to have a
Material Adverse Effect which has not been set forth in a footnote included in
the Financial Statements or a Schedule hereto.
(q) Operating Lease Obligations. On the Effective Date, none
of the Loan Parties has any Operating Lease Obligations with annual payments
exceeding $100,000 other than the Operating Lease Obligations set forth on
Schedule 6.01(q).
(r) Environmental Matters. Except as set forth on Schedule
6.01(r), specific to each of the following subsections:
(i) each Loan Party's businesses, Facilities,
operations, properties and assets are in material compliance with all
Environmental Laws;
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(ii) each Loan Party has obtained and is in material
compliance with all material Environmental Permits necessary to operate,
use or occupy all of such Loan Party's businesses, Facilities, operations,
properties and assets;
(iii) each Loan Party has obtained and is in material
compliance with any applicable financial assurance requirements under RCRA
and any similar Environmental Law, as specifically set forth but not
limited to 40 C.F.R. 264 and 265, necessary, to operate, use or occupy all
of such Loan Party's businesses, or occupy all of such Loan Party's
Facilities and properties;
(iv) each Loan Party is in material compliance with all
applicable writs, orders, consent decrees, judgments, and injunctions,
decrees, informational requests or demands issued by any Governmental
Authority or Person pursuant to, or under, any Environmental Laws;
(v) there are no material Environmental Liens
associated or, to the best knowledge of each Loan Party, threatened to be
associated with any Loan Parties' businesses, Facilities, operations,
properties and assets;
(vi) there has been no Release at any of the properties
currently or, during the period of ownership or operation by any Loan
Party, previously owned or operated by any Loan Party or a predecessor in
interest which could reasonably be expected to have a Material Adverse
Effect;
(vii) to the knowledge of any Loan Party, there has been
no Release at any disposal or treatment facility which received Hazardous
Materials Handled by any Loan Party or any predecessor in interest which
could reasonably be expected to have a Material Adverse Effect;
(viii) no Environmental Action has been asserted against
any Loan Party or any predecessor in interest nor does any Loan Party have
knowledge or notice of any threatened or pending Environmental Action
against any Loan Party or any predecessor in interest which, in any case,
could reasonably be expected to have a Material Adverse Effect;
(ix) to the knowledge of any Loan Party, no
Environmental Actions have been asserted against any facilities that may
have received Hazardous Materials Handled by any Loan Party or any
predecessor in interest which could reasonably be expected to have a
Material Adverse Effect;
(x) no property now or, during the period of ownership
or operation by any Loan Party, formerly owned or operated by a Loan Party
has been used as a treatment, storage or disposal site for any Hazardous
Material, except as could not reasonably be expected to have a Material
Adverse Effect;
(xi) during the past 3 years, no Loan Party has failed
to report to the proper Governmental Authority any Release which is
required to be so reported by any Environmental Laws, except as could not
reasonably be expected to have a Material Adverse Effect; and
(xii) no Loan Party has received any written
notification pursuant to any Environmental Laws that (A) any work,
repairs, construction or Capital Expenditures are
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required to be made in respect as a condition of continued compliance with
any Environmental Law or Environmental Permit or (B) any Environmental
Permit referred to above is about to be reviewed, made, subject to
limitations or conditions, revoked, withdrawn or terminated, in each case,
except as could not reasonably be expected to have a Material Adverse
Effect.
(s) Insurance. Each Loan Party keeps its property adequately
insured and maintains (i) insurance to such extent and against such risks,
including fire, as is customary with companies of similar size and in the same
or similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies of
similar size and in the same or similar business against claims for personal
injury or death on properties owned, occupied or controlled by it, and (iv) such
other insurance as may be required by law. Schedule 6.01(s) sets forth a list of
all insurance maintained by each Loan Party on the Effective Date.
(t) Use of Proceeds.
(i) On the Effective Date, the proceeds of the Loans,
together with cash and cash equivalents of the Parent and its Subsidiaries
in the United States, shall be used to (A) refinance existing Indebtedness
of the Loan Parties under the Existing Credit Facility, and (B) pay fees
and expenses in connection with the transactions contemplated hereby.
(ii) After the Effective Date, the proceeds of the
Loans will be used to fund general corporate purposes of the Loan Parties
and their Subsidiaries, including without limitation to pay interest on
the Senior Secured Notes, provided, however, no proceeds of any Loan or
proceeds of any ABL Priority Collateral shall be used to repay, acquire,
redeem, or retire any Senior Secured Notes. The Letters of Credit will be
used for general corporate and working capital purposes of the Loan
Parties and their Subsidiaries.
(u) Location of Bank Accounts. Schedule 6.01(u), as amended
from time to time by the Administrative Borrower (by delivery of a revised
Schedule 6.01(u) to the Administrative Agent), sets forth a complete and
accurate list of all deposit, checking and other bank accounts, all securities
and other accounts maintained with any broker dealer and all other similar
accounts maintained by each Loan Party, together with a description thereof
(i.e., the bank or broker dealer at which such deposit or other account is
maintained and the account number and the purpose thereof). No Loan Party
maintains any other accounts other than those set forth on Schedule 6.01(u).
(v) Intellectual Property.
(i) Except as set forth on Schedule 6.01(v) each Loan
Party owns or licenses or otherwise has the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, tradenames, trade secrets, copyrights,
copyright applications, franchises, authorizations and other intellectual
property rights that are necessary for the operation of its business,
without infringement upon or conflict with the rights of any other Person
with respect thereto. Set forth on Schedule 6.01(v) is a complete and
accurate list as of the Effective Date of all material licenses, patents,
patent applications, trademark and servicemark registrations and
applications, tradenames, copyright registrations and applications and
internet domain names. Except as set forth on Schedule 6.01(v), no slogan
or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Loan Party infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is
pending or threatened in writing. To the best knowledge of each Loan
Party, no
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third-party intellectual property, statute, law, rule, regulation,
standard or code is pending or proposed, which, individually or in the
aggregate, could have a Material Adverse Effect.
(ii) Each Loan Party has taken reasonable measures to
protect the secrecy, confidentiality and value of all trade secrets used
in its business (collectively, the "Business Trade Secrets"). To the best
knowledge of any Loan Party, none of the Business Trade Secrets have been
disclosed to any Person other than employees or contractors of the Loan
Parties who had a need to know and use such Business Trade Secrets in the
ordinary course of employment or contract performance and who executed
appropriate confidentiality agreements prohibiting the unauthorized use or
disclosure of such Business Trade Secrets and containing other terms
reasonably necessary or appropriate for the protection and maintenance of
such Business Trade Secrets. To the best knowledge of any Loan Party, no
unauthorized disclosure of any Business Trade Secrets has been made.
(w) Material Contracts. Set forth on Schedule 6.01(w) is a
complete and accurate list as of the Effective Date of all Material Contracts of
each Loan Party, showing the parties and subject matter thereof and amendments
and modifications thereto. Each such Material Contract (i) is in full force and
effect and is binding upon and enforceable against each Loan Party that is a
party thereto and, to the best knowledge of such Loan Party, all other parties
thereto in accordance with its terms, (ii) has not been otherwise amended or
modified (other than pursuant to the Euro Note Transactions with respect to the
Euro Notes and the Euro Note Indenture), and (iii) is not in default due to the
action of any Loan Party or, to the best knowledge of any Loan Party, any other
party thereto.
(x) Holding Company and Investment Company Acts. None of the
Loan Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended.
(y) Employee and Labor Matters. There is (i) no unfair labor
practice complaint pending or, to the best knowledge of any Loan Party,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or, to the best knowledge of any
Loan Party, threatened against any Loan Party which arises out of or under any
collective bargaining agreement that would affect a material portion of the
business of any Loan Party, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened against any Loan Party or
(iii) to the best knowledge of any Loan Party, no union representation question
existing with respect to the employees of any Loan Party and no union organizing
activity taking place with respect to any of the employees of any Loan Party. No
Loan Party or any of its ERISA Affiliates has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act ("WARN")
or similar state or foreign law, which remains unpaid or unsatisfied. The hours
worked and payments made to employees of any Loan Party have not been in
violation of the Fair Labor Standards Act or any other applicable legal
requirements other than violations of immaterial obligations of any Loan Party
resulting in immaterial liability incurred by any Loan Party. All material
payments due from any Loan Party on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as a liability on
the books of such Loan Party.
(z) Customers and Suppliers. There exists no actual or
threatened termination, cancellation or limitation of, or modification to or
change in, the business relationship between (i) any Loan Party, on the one
hand, and any customer or any group thereof, on the other hand, whose agreements
with any Loan Party are individually or in the aggregate material to the
business or operations of the Loan Parties taken as a whole, or (ii) any Loan
Party, on the one hand, and any supplier thereof, on
72
the other hand, whose agreements with any Loan Party are individually or in the
aggregate material to the business or operations of the Loan Parties taken as a
whole, and there exists no present state of facts or circumstances that could
give rise to or result in any such termination, cancellation, limitation,
modification or change which would, individually or in the aggregate, be
material to the business or operations of the Loan Parties taken as a whole.
(aa) Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(aa)
sets forth a complete and accurate list as of the Effective Date of (i) the full
and correct legal name of each Loan Party, (ii) the jurisdiction of organization
of each Loan Party, (iii) the organizational identification number of each Loan
Party (or indicates that such Loan Party has no organizational identification
number), (iv) each place of business of each Loan Party, (v) the chief executive
office of each Loan Party and (vi) the federal employer identification number of
each Loan Party.
(bb) Tradenames. Schedule 6.01(bb) hereto sets forth a
complete and accurate list as of the Effective Date of all tradenames, business
names or similar appellations used by each Loan Party or any of its divisions or
other business units during the past five years.
(cc) Locations of Collateral. There is no location at which
any Loan Party has any Collateral (except for Inventory in transit and Inventory
in locations not within the United States with an aggregate Book Value not
exceeding $650,000) other than (i) those locations listed on Schedule 6.01(cc)
and (ii) any other locations approved in writing by the Collateral Agent (and
with respect to Inventory, the Administrative Agent) from time to time. Schedule
6.01(cc) hereto contains a true, correct and complete list, as of the Effective
Date, of the legal names and addresses of each warehouse at which Collateral of
each Loan Party is stored. None of the receipts received by any Loan Party from
any warehouse states that the goods covered thereby are to be delivered to
bearer or to the order of a named Person or to a named Person and such named
Person's assigns.
(dd) Security Interests. Each Security Agreement creates in
favor of the Collateral Agent, for the benefit of the Agents and the Lenders, a
legal, valid and enforceable security interest in the Collateral secured
thereby. To the extent governed by the Uniform Commercial Code, upon the filing
of the UCC financing statements described in Section 5.01(d)(vii) and, to the
extent governed by United States federal law, upon the recording of the Patent
Security Agreements, Trademark Security Agreements and Copyright Security
Agreements, each as defined in and referred to in each Security Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, such security interests in and Liens on the Collateral
granted thereby that may be perfected by such aforementioned filings or
recordings shall be perfected, first priority security interests (subject, as to
priority, only to the Permitted Liens that, as a matter of law (including,
without limitation, the priority rules of the Uniform Commercial Code), would be
prior to the Liens of the Collateral Agent and, with respect to Senior Secured
Priority Collateral only, Liens in favor of the Senior Secured Notes), and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than (i) the filing of continuation statements in accordance with applicable
law, (ii) the recording of the Collateral Assignments for Security pursuant to
each Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, with respect to after-acquired
U.S. patent, trademark and copyright applications and registrations and (iii)
the recordation of appropriate evidence of the security interest in the
appropriate foreign registry with respect to all foreign intellectual property.
(ee) [Reserved].
73
(ff) Financial Assistance. (i) No proceeds of any Loan have
been made or will be used to subscribe for or acquire Capital Stock of Milacron
Capital or Milacron B.V. or to refinance existing Indebtedness used for such
purpose and (ii) the Dutch financial assistance rules do not apply to the pledge
of the Capital Stock of Milacron Capital or Milacron B.V.
(gg) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
(hh) Canadian Pension and Benefit Plan Matters. The Canadian
Pension Plans are duly registered under the ITA 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 statutory obligations
of any 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 are no outstanding suits 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 authorities and which are consistent with generally accepted
actuarial principles). None of the Canadian Borrowing Base Guarantor employs any
employees outside of Canada.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants. So long as any principal of or
interest on any Loan, LC Exposure (other than any LC Exposure that is cash
collateralized in accordance with the terms of this Agreement) or any other
Obligation (whether or not due), other than contingent obligations and
indemnification obligations for which no claim has been asserted, shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party will,
unless the Required Lenders shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to each Agent and each
Lender:
(i) as soon as available and in any event within 45
days after the end of each fiscal quarter of the Parent and its
Subsidiaries (or, if earlier, the date five Business Days after the Parent
files its Form 10-Q with the SEC) commencing with the first fiscal quarter
of the Parent and its Subsidiaries ending after the Effective Date,
balance sheets, statements of operations and retained earnings and
statements of cash flow of the Parent and its Subsidiaries as at the end
of such quarter, in each case, on a consolidated and, to the extent
prepared, consolidating basis (on a basis consistent with the business
unit financial projections provided to the Administrative Agent on the
Effective Date), and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year, all
in reasonable detail and, in the case of consolidated information,
certified by an Authorized Officer of the Parent as fairly presenting, in
all material respects, the financial position of the Parent and its
Subsidiaries as of the end of such quarter and the results of operations
and cash flows of the Parent and its Subsidiaries for such quarter, in
accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements of the Parent and its Subsidiaries
furnished to the Administrative Agent and the Lenders, subject to normal
year-end adjustments and the absence of footnotes;
74
(ii) as soon as available, and in any event within 90
days after the end of each Fiscal Year of the Parent and its Subsidiaries
(or, if earlier, the date five Business Days after the Parent files its
form 10-K with the SEC), balance sheets, statements of operations and
retained earnings and statements of cash flow of the Parent and its
Subsidiaries as at the end of such Fiscal Year, in each case, on a
consolidated and, to the extent prepared in connection with the audit
thereof, consolidating basis (on a basis consistent with the business unit
financial projections provided to the Administrative Agent on the
Effective Date), and setting forth in each case in comparative form the
corresponding figures for the immediately preceding Fiscal Year, all in
reasonable detail and, in the case of consolidated information, prepared
in accordance with GAAP, and accompanied by a report and an unqualified
opinion, prepared in accordance with generally accepted auditing
standards, of independent certified public accountants of recognized
standing selected by the Parent and satisfactory to the Administrative
Agent (which opinion on such consolidated information shall be without (A)
a "going concern" or like qualification or exception, (B) any
qualification or exception as to the scope of such audit, or (C) any
qualification which relates to the treatment or classification of any item
and which, as a condition to the removal of such qualification, would
require an adjustment to such item, the effect of which would be to cause
any noncompliance with the provisions of Section 7.03), together with a
written statement of such accountants (1) to the effect that, in making
the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of an
Event of Default or a Default and (2) if such accountants shall have
obtained any knowledge of the existence of an Event of Default or such
Default, describing the nature thereof;
(iii) as soon as available, and in any event within 30
days after the end of each fiscal month of the Parent and its Subsidiaries
commencing with the first fiscal month of the Parent and its Subsidiaries
ending after the Effective Date, internally prepared consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating
statements of cash flows as at the end of such fiscal month, and for the
period commencing at the end of the immediately preceding Fiscal Year and
ending with the end of such fiscal month, all in reasonable detail and
certified by an Authorized Officer of the Parent as fairly presenting, in
all material respects, the financial position of the Parent and its
Subsidiaries as at the end of such fiscal month and the results of
operations, retained earnings and cash flows of the Parent and its
Subsidiaries for such fiscal month, in accordance with GAAP applied in a
manner consistent with that of the most recent audited financial
statements furnished to the Administrative Agent and the Lenders, subject
to normal year-end adjustments and the absence of footnotes;
(iv) simultaneously with the delivery of the financial
statements of the Parent and its Subsidiaries required by clauses (i),
(ii) and (iii) of this Section 7.01(a), a certificate of an Authorized
Officer of the Parent (A) stating that such Authorized Officer has
reviewed the provisions of this Agreement and the other Loan Documents and
has made or caused to be made under his or her supervision a review of the
condition and operations of the Parent and its Subsidiaries with a view to
determining whether the Parent and its Subsidiaries are in compliance with
all of the provisions of this Agreement and such Loan Documents at the
time of such review, and that such review has not disclosed, and such
Authorized Officer has no knowledge of, the existence at the date of such
certification of an Event of Default or Default or, if an Event of Default
or Default existed, describing the nature and period of existence thereof
and the action which the Parent and its Subsidiaries propose to take or
have taken with respect thereto and (B) attaching a schedule showing the
calculations specified in Section 7.03;
(v) upon the Administrative Agent's reasonable
request, reports as required by Section 8.05(a)(ii), in form and detail
reasonably satisfactory to the Administrative
75
Agent and certified by an Authorized Officer of the Administrative
Borrower as being accurate and complete in all material respects;
(vi) (A) as soon as available and in any event within
15 days after the end of each month commencing with the first month ending
after the Effective Date, or (B) no later than 12:00 noon (New York time)
Thursday of each calendar week, if requested by the Administrative Agent
when Availability (before deducting the Availability Reserve) would be
less than Required Availability, a Borrowing Base Certificate, current as
of the close of business on Friday of the immediately preceding week,
supported by schedules showing the derivation thereof and containing such
detail and other information as the Administrative Agent may reasonably
request from time to time, provided that (I) the Borrowing Base set forth
in the Borrowing Base Certificate shall be effective from and including
the date such Borrowing Base Certificate is duly received by the
Administrative Agent but not including the date on which a subsequent
Borrowing Base Certificate is received by the Administrative Agent, unless
the Administrative Agent disputes the eligibility of any property included
in the calculation of the Borrowing Base or the valuation thereof by
notice of such dispute to the Administrative Borrower, (II) in the event
of any dispute about the eligibility of any property included in the
calculation of the Borrowing Base or the valuation thereof, the
Administrative Agent's reasonable judgment shall control until such
dispute is resolved and (III) in the case of Borrowing Base Certificates
delivered on a weekly basis, the Inventory component may be updated on a
monthly basis;
(vii) promptly after submission to any Governmental
Authority, all documents and information furnished to such Governmental
Authority in connection with any investigation of any Loan Party other
than routine inquiries by such Governmental Authority;
(viii) as soon as possible, and in any event within 3
Business Days after any Authorized Officer has knowledge of the occurrence
of an Event of Default or Default that is continuing or the occurrence of
any event or development that could reasonably be expected have a Material
Adverse Effect, the written statement of an Authorized Officer of the
Administrative Borrower setting forth the details of such Event of Default
or Default or other event or development having a Material Adverse Effect
and the action which the affected Loan Party proposes to take with respect
thereto;
(ix) (A) as soon as possible and in any event within 15
days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that (1) any Reportable Event with respect to any Employee
Plan has occurred, (2) any other Termination Event with respect to any
Employee Plan has occurred, or (3) an accumulated funding deficiency has
been incurred or an application has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including installment payments) or an extension of any amortization
period under Section 412 of the Internal Revenue Code with respect to an
Employee Plan, a statement of an Authorized Officer of the Administrative
Borrower setting forth the details of such occurrence and the action, if
any, which such Loan Party or such ERISA Affiliate proposes to take with
respect thereto, (B) promptly and in any event within 10 days after
receipt thereof by any Loan Party or any ERISA Affiliate thereof from the
PBGC, copies of each notice received by any Loan Party or any ERISA
Affiliate thereof of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in any event
within 15 days after the filing thereof with the Internal Revenue Service
if requested by the Administrative Agent, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Employee Plan and Multiemployer Plan, (D) promptly and in
any event within 15 days after any Loan Party or any ERISA Affiliate
thereof knows or
76
has reason to know that a required installment within the meaning of
Section 412 of the Internal Revenue Code has not been made when due with
respect to an Employee Plan, (E) promptly and in any event within 10 days
after receipt thereof by any Loan Party or any ERISA Affiliate thereof
from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by any Loan Party or any ERISA Affiliate thereof
concerning the imposition or amount of withdrawal liability under Section
4202 of ERISA or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA and (F) promptly and in
any event within 15 days after any Loan Party or any ERISA Affiliate
thereof sends notice of a plant closing or mass layoff (as defined in
WARN) to employees, copies of each such notice sent by such Loan Party or
such ERISA Affiliate thereof, in each case under the immediately preceding
clauses (A) through (F), to the extent any such event or occurrence would
reasonably be expected to result in liability of any Loan Party or any
ERISA Affiliate thereof in an amount in excess of $500,000;
(x) promptly after the commencement thereof but in any
event not later than 5 Business Days after service of process with respect
thereto on, or the obtaining of knowledge thereof by, any Loan Party,
notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which,
if adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(xi) as soon as possible and in any event within 5
Business Days after any Authorized Officer has knowledge of the execution,
receipt or delivery thereof, copies of any notices that any Loan Party
executes or receives in connection with any Material Contract (other than
Indebtedness) that such Loan Party determines in good faith to be material
to the Administrative Agent of the Lenders;
(xii) as soon as possible and in any event within 5
Business Days after execution, receipt or delivery thereof, copies of any
notices that any Loan Party executes or receives in connection with the
sale or other Disposition of the Capital Stock of, or all or substantially
all of the assets of, any Loan Party that, in each case, such Loan Party
determines in good faith to be material to such transaction or to the
Administrative Agent or the Lenders; provided that nothing in this clause
(xii) shall be deemed to permit any such Disposition;
(xiii) as soon as possible and in any event within 5
Business Days after execution, receipt or delivery thereof, copies of all
statements, reports and other information any Loan Party sends to or
receives from any the holder of the Senior Secured Notes or files with the
SEC or any national (domestic or foreign) securities exchange;
(xiv) promptly upon receipt thereof, copies of all
financial reports (including, without limitation, management letters), if
any, submitted to any Loan Party by its auditors in connection with any
annual or interim audit of the books thereof;
(xv) not later than 30 days prior to the end of each
Fiscal Year of the Parent and its Subsidiaries, a copy of the annual
operating plan of the Parent and its Subsidiaries, which shall include
without limitation, a forecast of the balance sheet, income statement and
statement of cash flows for the subsequent Fiscal Year of the Parent and
its Subsidiaries in a form reasonably acceptable to the Administrative
Agent and prepared on a monthly basis by management;
77
(xvi) promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of any
Loan Party as any Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security. Cause:
(i) each wholly owned Subsidiary of any Loan Party not
in existence on the Effective Date, to execute and deliver to the
Collateral Agent promptly and in any event within 3 Business Days after
the formation, acquisition or change in status thereof (A) a Guaranty
guaranteeing the Obligations, (B) a Security Agreement, (C) if such
Subsidiary has any Subsidiaries, a Pledge Agreement together with (x)
certificates evidencing all of the Capital Stock of any Person owned by
such Subsidiary (other than a Foreign Subsidiary) and, in the case of a
Foreign Subsidiary, all of the non-voting Capital Stock and 65% of the
voting Capital Stock of such Foreign Subsidiary, (y) undated stock powers
executed in blank with signature guaranteed, and (z) such opinion of
counsel and such approving certificate of such Subsidiary as the
Collateral Agent may reasonably request in respect of complying with any
legend on any such certificate or any other matter relating to such
shares; provided that (i) the provisions contained in clauses (x) and (y)
of this clause (C) shall not apply until the date upon which the Discharge
of Term Obligations has occurred, and (ii) until the date upon which the
Discharge of Term Obligations has occurred, the opinion and certificate
referred to in clause (z) of this clause (C) shall be, in each case,
limited in scope and substance to the opinion and certificate, if any,
delivered to the trustee for the holders of the Senior Secured Notes in
connection with such Subsidiary becoming party to any Senior Secured Notes
Document, (D) (1) prior to the Discharge of Term Obligations, to the
extent mortgages are delivered creating on the owned real property of such
Subsidiary a perfected first priority security interest securing the
Senior Secured Notes, one or more Mortgages creating on such real property
a perfected second priority Lien on such property, and thereafter, at the
request of the Collateral Agent, one or more Mortgages creating on such
real property a perfected, first priority Lien on such real property and
(2) prior to the Discharge of Term Obligations, to the extent delivered to
the trustee for the holders of the Senior Secured Notes, and thereafter,
at the request of the Collateral Agent, a Title Insurance Policy covering
such real property, a current ALTA survey thereof and a surveyor's
certificate, each in form and substance reasonably satisfactory to the
Collateral Agent, together with such other agreements, instruments and
documents as the Collateral Agent may require whether comparable to the
documents required under Section 7.01(v) or otherwise, (E) such other
agreements, instruments, approvals, legal opinions or other documents
reasonably requested by the Collateral Agent in order to create, perfect,
establish the first priority of or otherwise protect any Lien purported to
be covered by any such Security Agreement or Pledge Agreement or otherwise
to effect the intent that such Subsidiary shall become bound by all of the
terms, covenants and agreements contained in the Loan Documents and that
all property and assets of such Subsidiary shall become Collateral for the
Obligations; provided, however, that in no event shall (a) any Loan Party
be required to ▇▇▇▇▇ ▇ ▇▇▇▇ on any Excluded Assets or (b) any Foreign
Subsidiary be required to guaranty the Obligations or ▇▇▇▇▇ ▇ ▇▇▇▇ on any
of its assets to secure the Obligations if such guaranty or Lien shall
result in a "deemed dividend" to any of the Loan Parties; and
(ii) each owner of the Capital Stock of any such
Subsidiary to execute and deliver promptly and in any event within 3
Business Days after the formation or acquisition of such Subsidiary a
Pledge Agreement, together with (A) certificates evidencing, (x) in the
case such Subsidiary is a Domestic Subsidiary, all of the Capital Stock of
such Subsidiary, and (y) in the case such Subsidiary is a directly owned
Foreign Subsidiary, all of the non-voting Capital Stock and 65% of the
voting Capital Stock of such Subsidiary, (B) undated stock powers or other
appropriate instruments of assignment executed in blank with signature
guaranteed,
78
(C) such opinion of counsel and such approving certificate of such
Subsidiary as the Collateral Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter
relating to such shares, and (D) prior to the Discharge of Term
Obligations, to the extent delivered to the trustee for the holders of the
Senior Secured Notes, and thereafter, at the request of the Collateral
Agent, such other agreements, instruments, approvals, legal opinions or
other documents reasonably requested by the Collateral Agent; provided
that (i) the provisions contained in clauses (A) and (B) of this paragraph
shall not apply until the date upon which the Discharge of Term
Obligations has occurred, (ii) until the date upon which the Discharge of
Term Obligations has occurred, the opinion and certificate referred to in
clause (C) of this paragraph shall be, in each case, limited in scope and
substance to the opinion and certificate, if any, delivered to the trustee
for the holders of the Senior Secured Notes in connection with any pledge
of such Subsidiary pursuant to the Senior Secured Notes Documents and
(iii) in no event shall any Loan Party be required to ▇▇▇▇▇ ▇ ▇▇▇▇ on any
Excluded Assets,
(c) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders (including, without limitation, all Environmental
Laws) and with all material agreements, (excluding agreements in respect of
Indebtedness), such compliance to include, without limitation, (i) paying before
the same become delinquent all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any of its
properties, and (ii) paying all lawful claims which if unpaid might become a
Lien or charge upon any of its properties, except to the extent contested in
good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof in accordance with
GAAP, other than in the case of clauses (i) and (ii) above, taxes, assessments
and governmental charges and levies and other lawful claims described therein,
the aggregate amount of which does not at any time exceed $100,000.
(d) Preservation of Existence, Etc. Except as permitted by
Section 7.02(c), maintain and preserve, and cause each of its Subsidiaries to
maintain and preserve, its existence, rights and privileges in all material
respects, and become or remain, and cause each of its Subsidiaries to become or
remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, except where the absence of any
such qualification could not reasonably be expected to result in a Material
Adverse Effect.
(e) Keeping of Records and Books of Account. Keep, and cause
each of its Subsidiaries to keep, adequate records and books of account, with
adequate and sufficient entries made to permit the preparation by the Parent of
its financial statements in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the agents and representatives of any Agent at any time
and from time to time during normal business hours, at the expense of the
Borrowers, to examine and make copies of and abstracts from its records and
books of account, to visit and inspect its properties, to verify materials,
leases, notes, accounts receivable, deposit accounts and its other assets, to
conduct audits, physical counts, valuations, appraisals, Phase I Environmental
Site Assessments reasonably necessary to determine compliance with or
liabilities under Environmental Laws or examinations and to discuss its affairs,
finances and accounts with any of its directors, officers, managerial employees,
independent accountants or any of its other representatives. In furtherance of
the foregoing, each Loan Party hereby authorizes its independent accountants,
and the independent accountants of each of its Subsidiaries, to discuss the
affairs, finances and accounts of such Person (independently or together with
representatives of such Person) with the agents and representatives of any Agent
in accordance with this Section 7.01(f).
79
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are, in any material respects, necessary or useful in the proper conduct
of its business in working order and condition, ordinary wear and tear excepted,
and comply, and cause each of its Subsidiaries to comply, at all times with the
provisions of all material leases to which it is a party as lessee or under
which it occupies property, so as to prevent any loss or forfeiture thereof or
thereunder.
(h) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any Governmental
Authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies of similar size and in
similar businesses similarly situated and in any event in amount, adequacy and
scope reasonably satisfactory to the Collateral Agent; provided, however, the
Parent and its Subsidiaries may maintain self-insurance (which shall include
insurance maintained through Milacron Assurance) in connection with the
insurance requirements set forth above to the extent reasonably prudent and
consistent with past practices. All policies covering the Collateral are to be
made payable to the Collateral Agent for the benefit of the Agents and the
Lenders, as its interests may appear, in case of loss, under a standard
non-contributory "lender" or "secured party" clause and are to contain such
other provisions as the Collateral Agent may require to fully protect the
Lenders' interest in the Collateral and to any payments to be made under such
policies. All certificates of insurance are to be delivered to the Collateral
Agent and the policies are to be premium prepaid, with the loss payable and
additional insured endorsement in favor of the Collateral Agent and such other
Persons as the Collateral Agent may designate from time to time, and shall use
reasonable efforts to cause its insurance providers to provide for not less than
30 days' prior written notice to the Collateral Agent of the exercise of any
right of cancellation. If any Loan Party or any of its Subsidiaries fails to
maintain such insurance, the Collateral Agent may arrange for such insurance,
but at the Borrowers' expense and without any responsibility on the Collateral
Agent's part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of claims. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the sole right, in the name of the Lenders, any Loan Party and
its Subsidiaries, to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies.
(i) Obtaining of Permits, Etc. Obtain, maintain and preserve,
and cause each of its Subsidiaries to obtain, maintain and preserve, and take
all necessary action to timely renew, all material permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business.
(j) Environmental. (i) Keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens; (ii)
comply, and cause each of its Subsidiaries to comply, in all material respects
with Environmental Laws and provide to the Collateral Agent any documentation of
such compliance which the Collateral Agent may reasonably request; (iii) provide
the Collateral Agent written notice within ten (10) days of any Loan Party
obtaining knowledge of any Release of a Hazardous Material in excess of any
reportable quantity from or onto property currently or during the period of
ownership or operation by any Loan Party, formerly owned or operated by it or
any of its Subsidiaries and take any Remedial Actions required under
Environmental Laws to ▇▇▇▇▇ said Release; provided, however, that no Loan Party
shall be required to undertake any Remedial Action required by Environmental
Laws to the extent that its obligation to do so is being contested in good faith
80
and by proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-performance thereof and adequate reserves, if any, are
being maintained with respect to such circumstances in accordance with GAAP;
(iv) provide the Collateral Agent with written notice within ten (10) days of
the receipt of any of the following: (A) notice that an Environmental Lien has
been filed against any property of any Loan Party or any of its Subsidiaries;
(B) commencement of any Environmental Action, or written notice that an
Environmental Action will be filed, against any Loan Party or any of its
Subsidiaries which, if adversely determined, could be reasonably expected to
have a Material Adverse Effect; and (C) notice of a violation, citation or other
administrative order which could have a Material Adverse Effect; (v) defend,
indemnify and hold harmless the Collateral Agent and the Lenders and their
transferees, and their respective employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation, attorney
and consultant fees, investigation and laboratory fees, court costs and
litigation expenses) arising out of (A) the Handling, presence, disposal,
Release or threatened Release of any Hazardous Materials on, under, in,
originating or emanating from any property presently or, during the period of
ownership or operation by any Loan Party or any of its Subsidiaries, formerly
owned or operated by any Loan Party or any of its Subsidiaries (or its
predecessors in interest or title), (B) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to the
presence, Handling or Release of such Hazardous Materials, (C) any request for
information, investigation, lawsuit brought or threatened, settlement reached or
order by a Governmental Authority relating to the presence, Handling or Release
of such Hazardous Materials, (D) any violation of any Environmental Law by any
Loan Party or any of its Subsidiaries and/or (E) any Environmental Action
relating to any Loan Party or any of its Subsidiaries filed against the
Collateral Agent or any Lender; provided that, the Loan Parties shall not have
any obligation to indemnify and hold harmless the Collateral Agent, Lender or
other party under this subsection 7.01(j)(v) regarding any environmental matter
covered hereunder which is caused by the gross negligence or willful misconduct
of the Collateral Agent or Lender as determined by a final judgment of a court
of competent jurisdiction; (vi) maintain and preserve, in all material respects,
all Environmental Permits necessary to operate, use or occupy each of the Loan
Parties' businesses, Facilities, operations, properties and assets; (vii)
maintain and comply, in all material respects, with any applicable financial
assurance requirements under RCRA and any similar Environmental Law, as
specifically set forth but not limited to 40 C.F.R. 264 and 265, necessary to
operate, use or occupy each of the Loan Parties' businesses, Facilities,
operations, properties and assets; (viii) comply, in all material respects, with
all applicable writs, orders, consent decrees, judgments, injunctions,
communications by any Governmental Authority, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws; (ix)
provide the Collateral Agent with prompt written notice in the event any Loan
Party is required to spend more than $100,000 individually or $500,000 in the
aggregate to comply with any Environmental Laws that have been promulgated and
enacted by a Governmental Authority throughout the term of this Agreement; and
(x) file and submit truthful and complete representations, including, without
limitation, applications, warranty statements and accompanying materials
provided in support of such representations, submitted by the Loan Parties to
obtain insurance.
Without limiting the generality of the foregoing, whenever the
Collateral Agent reasonably determine that there is non-compliance, or any
condition which requires any action by or on behalf of any Loan Party in order
to avoid any material non-compliance, with any Environmental Law which could
reasonably be expected to result in the imposition of material fines or
penalties or otherwise materially and adversely affect the business, assets or
prospects of the Loan Parties on a consolidated basis, the Loan Parties shall,
at the Collateral Agent's request and Borrowers' expense: (i) cause an
independent environmental engineer reasonably acceptable to the Collateral Agent
to conduct, as applicable, such reasonable assessments, investigations or tests
of the site where any Loan Party's non-compliance or alleged non-compliance with
such Environmental Laws has occurred as to such non-compliance and prepare and
deliver to the Collateral Agent a report as to such non-compliance setting
81
forth the results of such assessments, investigations or tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (ii) provide to the Collateral Agent a supplemental
report of such engineer whenever the scope of such non-compliance, or the
applicable Loan Party's response thereto or the estimated costs thereof, shall
change in any material respect.
The Loan Parties acknowledge and agree that neither the Loan
Documents nor the actions of the Collateral Agent or any Lender pursuant thereto
shall operate or be deemed (i) to place upon the Collateral Agent or any Lender
any responsibility for the operation, control, care, service, management,
maintenance or repair of property or facilities of the Loan Parties or (ii) to
make the Collateral Agent or any Lender the "owner" or "operator" of any
property or facilities of the Loan Parties or a "responsible party" within the
meaning of applicable Environmental Laws. The indemnification provisions of this
Section 7.01(j) shall survive the repayment of the Obligations and discharge of
any Liens granted under the Loan Documents.
(k) Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of its Subsidiaries to take such action
and execute, acknowledge and deliver, at its sole cost and expense, such
agreements, instruments or other documents as the Administrative Agent may
reasonably require from time to time in order (i) to carry out more effectively
the purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected first priority Liens any of the Collateral or any other
property of any Loan Party and its Subsidiaries (subject to the limitations
contained in Section 7.01(b)), but, in the case of the common stock (or other
equity interests) of a Foreign Subsidiary, such Liens shall be limited to all of
the non-voting Capital Stock and 65% of the voting Capital Stock of such Foreign
Subsidiary, (iii) to establish and maintain the validity and effectiveness of
any of the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer and confirm unto the Administrative Agent, the Collateral
Agent, each Lender and the Issuing Bank the rights now or hereafter intended to
be granted to it under this Agreement or any other Loan Document. In furtherance
of the foregoing, to the maximum extent permitted by applicable law, each Loan
Party (i) authorizes the Administrative Agent and the Collateral Agent to
execute any such agreements, instruments or other documents in such Loan Party's
name and to file such agreements, instruments or other documents in any
appropriate filing office and, (ii) authorizes the Administrative Agent and the
Collateral Agent to file any financing statement required hereunder or under any
other Loan Document, and any continuation statement or amendment with respect
thereto, in any appropriate filing office without the signature of such Loan
Party (including, without limitation, any such financing statements that
indicate the Collateral as "all assets" or words of similar import).
(l) Change in Collateral; Collateral Records. (i) Give the
Collateral Agent not less than 30 days' prior written notice of any change in
the location of any Collateral with an aggregate book value exceeding $500,000,
other than to locations set forth on Schedule 6.01(cc) and with respect to which
the Collateral Agent has filed financing statements and otherwise fully
perfected its Liens thereon, (ii) advise the Collateral Agent promptly, in
sufficient detail, of any material adverse change relating to the type, quantity
or quality of the Collateral or the Lien granted thereon and (iii) execute and
deliver, and cause each of its Subsidiaries to execute and deliver, to the
Collateral Agent for the benefit of the Agents and the Lenders from time to
time, solely for the Collateral Agent's convenience in maintaining a record of
Collateral, such written statements and schedules as the Collateral Agent may
reasonably require, designating, identifying or describing the Collateral.
(m) Landlord Waivers; Collateral Access Agreements.
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(i) At any time any Collateral with a book value in
excess of $500,000 (when aggregated with all other Collateral at the same
location) is located on any real property of a Loan Party (whether such
real property is now existing or acquired after the Effective Date) which
is not owned by a Loan Party, use reasonable efforts to obtain a Landlord
Waiver; provided, that in the event the Loan Parties are unable to obtain
any such Landlord Waiver the Administrative Agent may establish Reserves
to the Borrowing Base as it deems necessary with respect to any such
Collateral; and
(ii) Use reasonable efforts to obtain Bailee Letters or
similar collateral access agreements, in form and substance reasonably
satisfactory to the Collateral Agent, providing access to Collateral
located on any premises not owned by a Loan Party in order to remove such
Collateral from such premises during an Event of Default; provided, that
in the event the Loan Parties are unable to obtain any such written access
agreements, the Administrative Agent may establish Reserves to the
Borrowing Base as it deems necessary with respect to any such Collateral.
(n) [Reserved].
(o) Fiscal Year. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on December 31 of each calendar year unless the
Administrative Agent consents to a change in such Fiscal Year (and appropriate
related changes to this Agreement).
(p) Borrowing Base. Maintain all Revolving Credit Loans and LC
Exposure in compliance with the then current Borrowing Base.
(q) Use of Proceeds. Use the proceeds of the Loans and the
Letters of Credit in accordance with Section 6.01(t).
(r) Post-Closing Matters.
(i) Cash Management System. On or prior to the Cash
Management Date, establish and maintain a cash management system
reasonably acceptable to the Administrative Agent that provides for the
Loan Parties' account debtors to remit all payments in respect of
receivables and other amounts due to the Loan Parties to lockbox and
accounts maintained by the Loan Parties with the Administrative Agent, an
Affiliate of the Administrative Agent, any Lender or any bank providing
cash management services to the Loan Parties on the Effective Date.
(ii) Inactive Subsidiaries. On or prior to the date
that is 90 days after the Effective Date, either (i) dissolve each of the
Inactive Subsidiaries (other than Cincinnati Milacron UK Holdings Co.) or
(ii) (A) cause each such Inactive Subsidiary (other than Cincinnati
Milacron UK Holdings Co.) to execute and deliver to the Collateral Agent,
a Guaranty, Security Agreement, Pledge Agreement and Mortgage in
accordance with the terms of Section 7.01(b) (notwithstanding the fact
that such Subsidiary was in existence on the Effective Date) and (B) cause
the owner of the Capital Stock of such Subsidiary to execute and deliver
to the Collateral Agent a Pledge Agreement pledging the shares of such
Subsidiary in accordance with the terms of Section 7.01(b)
(notwithstanding the fact that such Subsidiary was in existence on the
Effective Date); provided, however, that, in the case of Cincinnati
Milacron UK Holdings Co., on or prior to the date that is 90 days after
the Effective Date, the Loan Parties shall have filed with the appropriate
governmental authorities all filings, recordations or other documents
necessary for dissolving or terminating the existence of such company in
accordance with the laws of the
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and shall have provided evidence thereof to the
Administrative Agent which shall be reasonably satisfactory to the
Administrative Agent.
(iii) Comerica and Bank of America Accounts. On or prior
to the date that is 180 days after the Effective Date, close all accounts
held by any Loan Party at Comerica Bank or Bank of America as of the
Effective Date and, in each case, cause all payments in respect of
receivables and other amounts due to the Loan Parties being remitted to
such accounts to be remitted to another account at a bank which is subject
to a Control Agreement in favor of the Collateral Agent.
(iv) Control Agreements for the Bank One Account and
the Deutsche Securities Account. On or prior to the date that is 5
Business Days after the Effective Date (or such later date as is
acceptable to the Collateral Agent in its sole discretion), deliver
Control Agreements to the Collateral Agent, duly executed by the
applicable parties, with respect to each of the Bank One Account and the
Deutsche Securities Account (as each such term is defined in Section
5.01(d)(vi).
(s) Conference Calls. If requested by the Administrative Agent
upon reasonable advance notice, conduct a monthly conference call to update the
Administrative Agent and the Lenders the Borrowers' and their Subsidiaries'
consolidated financial condition, operations, prospects and respective
businesses.
(t) Misplaced Notes. If found, the Misplaced Note Holder
agrees to promptly pledge, or cause to be pledged, the Misplaced Notes in favor
of the Collateral Agent, for the benefit of Lenders, as required under the
Pledge Agreement.
(u) Canadian Pension and Benefit Plans.
(i) For each existing Canadian Pension Plan of any
Canadian Borrowing Base Guarantor, such Canadian Borrowing Base Guarantor
shall ensure that such plan retains its registered status under and is
administered in all material respects in accordance with the applicable
pension plan text, funding agreement, the ITA and all other applicable
laws.
(ii) For each Canadian Pension Plan hereafter adopted
by any Canadian Borrowing Base Guarantor that is required to be registered
under the ITA or any other applicable laws, that Canadian Borrowing Base
Guarantor shall use its best efforts to seek and receive confirmation in
writing from the applicable governmental authorities to the effect that
such plan is unconditionally registered under the ITA and such other
applicable laws.
(iii) For each existing and hereafter adopted Canadian
Pension Plan and Canadian Benefit Plan of any Canadian Borrowing Base
Guarantor, such Canadian Borrowing Base Guarantor shall in a timely
fashion perform in all material respects all statutory obligations
(including fiduciary, funding, investment and administration obligations)
required to be performed in connection with such plan and the funding
media therefor.
(iv) Each Canadian Borrowing Base Guarantor shall
deliver to the Administrative Agent if requested by the Administrative
Agent, promptly after the filing thereof by such Canadian Borrowing Base
Guarantor with any applicable governmental authority, (i) copies of each
annual and other return, report or valuation with respect to each Canadian
Pension Plan of such Canadian Borrowing Base Guarantor; (ii) promptly
after receipt thereof, a copy of any direction, order, notice, ruling or
opinion that such Canadian Borrowing Base Guarantor may
84
receive from any applicable governmental authority with respect to any
Canadian Pension Plan of such Canadian Borrowing Base Guarantor; and (iii)
notification within 30 days of any increases having a cost to such
Canadian Borrowing Base Guarantor in excess of Cdn.$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 such Canadian Borrowing Base Guarantor was not previously
contributing.
(v) After Acquired Real Property. Upon the acquisition by it
or any of its Domestic Subsidiaries after the Effective Date of any interest
(whether fee or leasehold) in any real property (wherever located), but
excluding any Excluded Assets (each such interest being an "After Acquired
Property") (x) with a Current Value (as defined below) in excess of $750,000 in
the case of a fee interest, or (y) requiring the payment of annual rent
exceeding in the aggregate $100,000 in the case of a leasehold interest,
promptly so notify the Collateral Agent, setting forth with specificity a
description of the interest acquired, the location of the real property, any
structures or improvements thereon and either an appraisal or such Loan Party's
good-faith estimate of the current value of such real property (for purposes of
this Section, the "Current Value"). The Collateral Agent shall notify such Loan
Party whether it intends to require a Mortgage and the other documents referred
to below (subject to the limitations contained in Section 7.01(b)) or in the
case of leasehold, a leasehold Mortgage or Landlord's Waiver (pursuant to
Section 7.01(m) hereof). Upon receipt of such notice requesting a Mortgage, the
Person which has acquired such After Acquired Property shall promptly furnish to
the Collateral Agent the following, in each case, prior to the Discharge of Term
Obligations, to the extent delivered to the trustee for the holders of the
Senior Secured Notes, and thereafter, at the request of the Collateral Agent,
and each in form and substance reasonably satisfactory to the Collateral Agent:
(i) a Mortgage with respect to such real property and related assets located at
the After Acquired Property, each duly executed by such Person and in recordable
form, (ii) evidence of the recording of the Mortgage referred to in clause (i)
above in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to create and perfect a valid and enforceable second
priority (or, in the event that the Senior Secured Notes have been paid in full,
first priority) lien on the property purported to be covered thereby or to
otherwise protect the rights of the Collateral Agent and the Lenders thereunder,
(iii) a Title Insurance Policy, (iv) a survey of such real property, certified
to the Collateral Agent and to the issuer of the Title Insurance Policy by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent,
(v) at the Collateral Agent's reasonable request, Phase I Environmental Site
Assessments, or such other non-intrusive and non-Phase II environmental
assessment as the Collateral Agent may reasonably request, with respect to such
real property, by a consultant reasonably satisfactory to the Collateral Agent,
(vi) in the case of a leasehold interest, a certified copy of the lease between
the landlord and such Person with respect to such real property in which such
Person has a leasehold interest, and the certificate of occupancy with respect
thereto, (vii) in the case of a leasehold interest, an attornment and
nondisturbance agreement between the landlord (and any fee mortgagee) with
respect to such real property and the Collateral Agent, and (viii) such other
documents or instruments (including guarantees and opinions of counsel) as the
Collateral Agent may reasonably require. The Borrowers shall pay all reasonable
fees and expenses, including reasonable attorneys' fees and expenses, and all
title insurance charges and premiums, in connection with each Loan Party's
obligations under this Section 7.01(v).
(w) Senior Secured Priority Collateral. (i) Cause any and all
proceeds of a Sale of Senior Secured Note Priority Collateral (as defined in the
Senior Secured Notes Indenture) received by such Loan Party or any of its
Subsidiaries or any other amounts payable to the holders of the Senior Secured
Notes or required to be held as Senior Secured Priority Collateral or otherwise
applied in accordance with the Senior Secured Notes Indentures to be deposited
into a Senior Secured Priority Account in accordance with the terms of Section
4.10(3) of the Senior Secured Notes Indenture, (ii) promptly after such deposit,
deliver (or cause to be delivered) to the Administrative Agent an officer's
85
certificate of an Authorized Officer of the Administrative Borrower certifying
that all such amounts have been deposited into a Senior Secured Priority
Account, provided that, at no time shall any of such amounts be deposited to any
other deposit or securities account maintained by the Loan Parties and (iii)
within 5 Business Days after the date upon which the Discharge of Term
Obligations has occurred, transfer (or cause to be transferred) all amounts
deposited to any Senior Secured Priority Account to a deposit account subject to
a Control Agreement in favor of the Collateral Agent. The Administrative
Borrower shall give the Administrative Agent prompt written notice of any
withdrawal from any Senior Secured Priority Account.
Section 7.02 Negative Covenants. So long as any principal of or
interest on any Loan, LC Exposure (other than any LC Exposure that is cash
collateralized in accordance with the terms of this Agreement) or any other
Obligation (whether or not due), other than contingent obligations or
indemnification obligations for which no claim has been asserted, shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired; file or suffer to exist under the Uniform Commercial Code or
any similar law or statute of any jurisdiction, an effective financing statement
(or the equivalent thereof) creating an effective Lien thereto that names it or
any of its Subsidiaries as debtor; sign or suffer to exist any security
agreement authorizing any secured party thereunder to file such financing
statement (or the equivalent thereof); sell any of its property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of Accounts) with recourse to it or any
of its Subsidiaries or assign or otherwise transfer, or permit any of its
Subsidiaries to assign or otherwise transfer, any account or other right to
receive income; other than, as to all of the above, Permitted Liens.
(b) Indebtedness. Create, incur, assume, guarantee or suffer
to exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.
(c) Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell,
lease or sublease, license or sublicense, transfer or otherwise dispose of,
whether in one transaction or a series of related transactions, all or any part
of its business, property or assets, whether now owned or hereafter acquired (or
agree to do any of the foregoing), or purchase or otherwise acquire, whether in
one transaction or a series of related transactions, all or substantially all of
the assets of any Person (or any division thereof) (or agree to do any of the
foregoing), or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that
(i) any Loan Party and its Subsidiaries may (A) sell
Inventory in the ordinary course of business, (B) dispose of excess,
obsolete or worn-out equipment in the ordinary course of business, (C)
sell or otherwise dispose of other property or assets (excluding Accounts
and Inventory) for cash in an aggregate amount not less than the fair
market value of such property or assets, (D) sell or otherwise dispose of
the Designated Real Property to a third party (the "Designated Real
Property Disposition"), (E) dispose of cash or sell or liquidate Permitted
Investments or other cash equivalents, (F) enter, in the ordinary course
of business and consistent with past practices, into operating leases and
subleases or licenses or sublicenses of any property and (G) sell notes
receivable with a maturity of not less than 2 years to PNC Bank, National
Association on term and conditions and pursuant to documentation
satisfactory to the
86
Administrative Agent in its sole discretion, provided that the Net Cash
Proceeds of any disposition (x) in the case of clause (B) above, do not
exceed $3,000,000 in the aggregate, (y) in the case of clauses (C) and (G)
above, respectively, do not exceed $10,000,000 in the aggregate for each
such clause and (z) in all cases, are paid to the Administrative Agent for
the benefit of the Agents and the Lenders to be applied, to the extent
required, pursuant to the terms of Section 2.05(c)(iii); and provided,
further however, that in the case of any Sale of Senior Secured Note
Priority Collateral (as defined in the Senior Secured Notes Indenture),
the Loan Parties shall (A) give the Administrative Agent prior notice of
all such sales or dispositions, (B) certify that all proceeds thereof
shall be deposited into a Senior Secured Priority Account in accordance
with Section 7.01(w) and as otherwise required by the Senior Secured Notes
Indenture, the Intercreditor Agreement or the Loan Documents and (C)
notify the Administrative Agent in accordance with Section 7.01(w) prior
to any withdrawals from or deposits to any such account.
(ii) any Guarantor (x) may be merged into any Loan
Party, or may be consolidated or amalgamated with another Loan Party, so
long as (A) no other provision of this Agreement would be violated
thereby, (B) such Guarantor gives the Administrative Agent at least 30
days' prior written notice of such merger, consolidation or amalgamation,
(C) no Default or Event of Default shall have occurred and be continuing
either before or after giving effect to such transaction, (D) the Lenders'
rights in any Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by
such merger, consolidation or amalgamation and (E) the surviving Person's
Capital Stock is the subject of a Pledge Agreement, in each case, which is
in full force and effect on the date of and immediately after giving
effect to such merger, consolidation or amalgamation, or (y) may sell or
otherwise dispose of, all or any part of its business, property or assets,
whether now owned or hereafter acquired to any other Loan Party so long as
(A) no other provision of this Agreement would be violated thereby, (B) no
Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such transaction and (C) the Lenders'
rights in any Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by
such sale or other disposition;
(iii) any wholly-owned Domestic Subsidiary that is not a
Loan Party (x) may be merged into any other wholly-owned Domestic
Subsidiary, or may be consolidated or amalgamated with another
wholly-owned Domestic Subsidiary, so long as (A) no other provision of
this Agreement would be violated thereby, (B) such Loan Party gives the
Administrative Agent at least 30 days' prior written notice of such
merger, consolidation or amalgamation, (C) no Default or Event of Default
shall have occurred and be continuing either before or after giving effect
to such transaction, (D) the Lenders' rights in any Collateral, including,
without limitation, the existence, perfection and priority of any Lien
thereon, are not adversely affected by such merger, consolidation or
amalgamation and (E) the surviving Domestic Subsidiary, if any, is joined
as a Loan Party hereunder and is a party to a Guaranty and a Security
Agreement and the Capital Stock of such surviving Domestic Subsidiary is
the subject of a Pledge Agreement, in each case, which is in full force
and effect on the date of and immediately after giving effect to such
merger, consolidation or amalgamation, or (y) may sell or otherwise
dispose of, all or any part of its business, property or assets, whether
now owned or hereafter acquired to any other wholly-owned Domestic
Subsidiary so long as (A) no other provision of this Agreement would be
violated thereby, (B) no Default or Event of Default shall have occurred
and be continuing either before or after giving effect to such transaction
and (C) the Lenders' rights in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon,
are not adversely affected by such sale or other disposition;
87
(iv) any Foreign Subsidiary (other than any Foreign
Subsidiary of Milacron Capital ) (x) may be merged into any other Foreign
Subsidiary (other than any Foreign Subsidiary of Milacron Capital), or may
be consolidated or amalgamated with another Foreign Subsidiary (other than
any Foreign Subsidiary of Milacron Capital), so long as (A) no other
provision of this Agreement would be violated thereby, (B) no Default or
Event of Default shall have occurred and be continuing either before or
after giving effect to such transaction, and (C) to the extent such
Foreign Subsidiary is owned directly by a Loan Party, all of the
non-voting Capital Stock and 65% of the voting Capital Stock of the
surviving Foreign Subsidiary is the subject of a Pledge Agreement, which
is in full force and effect on the date of and immediately after giving
effect to such merger, consolidation or amalgamation or (y) may sell or
otherwise dispose of, all or any part of its business, property or assets,
whether now owned or hereafter acquired to any other Foreign Subsidiary
(other than any Foreign Subsidiary of Milacron Capital) so long as (A) no
other provision of this Agreement would be violated thereby, and (B) no
Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such transaction; and
(v) any Foreign Subsidiary of Milacron Capital (other
than Milacron B.V.) (x) may be merged into any other Foreign Subsidiary of
Milacron Capital, or may be consolidated or amalgamated with another
Foreign Subsidiary of Milacron Capital, so long as (A) no other provision
of this Agreement would be violated thereby, (B) no Default or Event of
Default shall have occurred and be continuing either before or after
giving effect to such transaction, and (C) to the extent such Foreign
Subsidiary is owned directly by Milacron Capital, all of the non-voting
Capital Stock and 65% of the voting Capital Stock of the surviving Foreign
Subsidiary is the subject of a Pledge Agreement, which is in full force
and effect on the date of and immediately after giving effect to such
merger, consolidation or amalgamation or (y) may sell or otherwise dispose
of, all or any part of its business, property or assets, whether now owned
or hereafter acquired to any other Foreign Subsidiary of Milacron Capital
so long as (A) no other provision of this Agreement would be violated
thereby, and (B) no Default or Event of Default shall have occurred and be
continuing either before or after giving effect to such transaction.
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
Section 6.01(l).
(e) Loans, Advances, Investments, Etc. Make or commit or agree
to make any loan, advance, guarantee of obligations, other extensions of credit
or capital contributions to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for:
(i) investments existing on the Effective Date, as set
forth on Schedule 7.02(e) hereto, but not any increase in the amount
thereof as set forth in such Schedule or any other material modification
of the terms thereof,
(ii) investments permitted under clause (j) of the
definition of "Permitted Indebtedness",
(iii) Permitted Investments,
88
(iv) investments not constituting loans or advances by
any Domestic Loan Party in any other Domestic Loan Party,
(v) loans and advances to directors, officers and
employees of the Parent and its Subsidiaries in the ordinary course of
business in an aggregate principal amount not to exceed $1,000,000 at any
one time outstanding,
(vi) investments under Hedging Agreements entered into
in the ordinary course of financial management and not for speculative
purposes,
(vii) pledges and deposits permitted under clause (f) of
the definition of Permitted Liens,
(viii) investments in deposit accounts in the ordinary
course of business,
(ix) investments received in connection with an
Insolvency Proceeding of any supplier, customer or other Person having an
obligation in favor of any Loan Party as a result of a settlement of
delinquent accounts and deposits with, such customers, suppliers or other
Persons arising in the ordinary course of business,
(x) investments existing on the Effective Date not
constituting loans or advances in the Subsidiaries of the Loan Parties and
the creation of new Subsidiaries by any Loan Party so long as such
creation is in compliance with Section 7.01(b),
(xi) investments by the Parent the consideration of
which consists solely of the issuance of the Parent's common Capital Stock
to the third party to the extent (A) the aggregate market value of all
such issuances (measured at the time of each such issuance) does not
exceed $5,000,000, (B) immediately before and after the making of any such
investment, there shall exist no Event of Default, (C) the Loan Parties do
not incur any material liabilities related to such investment, (D) the
rights of the Administrative Agent and the Lenders are not adversely
affected by any such investment, (E) the Administrative Agent shall have
received at least 15 days' prior written notice of such investment and (F)
on the date of consummation of such investment, the Administrative Agent
shall have received a certificate of an Authorized Officer of the Parent
certifying, as of such date, that the conditions set forth in the
foregoing clauses (A) through (D) of this subsection (xi) have been
satisfied,
(xii) (A) investments in China JV by any Subsidiary of
the Parent that is not a Loan Party to the extent that such investment
will not involve, require, result in or otherwise obligate any cash or
cash consideration made or to be made by the Loan Parties in an aggregate
amount exceeding $1,000,000; and (B) investments in any joint venture to
which the Parent or any of its Subsidiaries is a party (other than the
China JV) by the Parent or any of its Subsidiaries to the extent that such
investment will not involve, require, result in or otherwise obligate any
cash or cash consideration made or to be made by the Loan Parties in an
aggregate amount not exceeding $3,500,000,
(xiii) investments in a wholly-owned Foreign Subsidiary
organized under the laws of China by the Parent or any Subsidiary of the
Parent in an aggregate amount not exceeding $500,000;
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(xiv) other investments not otherwise permitted under
clauses (i) through (xiii) above or (xv) through (xvii) below in an
aggregate amount not exceeding $1,500,000 and to the extent such
investments are made within the United States,
(xv) investments constituting Contingent Obligations to
the extent permitted under clause (m) of the definition of Permitted
Indebtedness,
(xvi) investments constituting Accounts arising in the
ordinary course of business, and
(xvii) the acquisition by D-M-E Company of all the
shares of Capital Stock owned by D-M-E U.S.A. Inc. in (x) Amalgamated
Diemold D-M-E Pty. Ltd. (Australia), (y) D-M-E Company (India) Pvt. Ltd.
and (z) D-M-E Engineering Pty. Ltd. (Singapore).
(f) Lease Obligations. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Effective Date owing by all Loan Parties and their Subsidiaries to exceed
the amounts set forth in subsection (g) of this Section 7.02, and (B) Operating
Lease Obligations which would not cause the aggregate amount of annual payments
under all Operating Lease Obligations owing by all Loan Parties and their
Subsidiaries to exceed $20,000,000 (exclusive of replacements, renewals and
extensions, no more than $3,000,000 of which, on an annualized basis, will be
incurred after the Effective Date).
(g) [Reserved].
(h) Restricted Payments. (i) Declare or pay any dividend or
other distribution, direct or indirect, on account of any Capital Stock of any
Loan Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make
any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Capital Stock of any Loan Party or any direct or indirect parent of any Loan
Party, now or hereafter outstanding, (iii) make any payment to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights for
the purchase or acquisition of shares of any class of Capital Stock of any Loan
Party, now or hereafter outstanding, (iv) return any Capital Stock to any
shareholders or other equity holders of any Loan Party or any of its
Subsidiaries, or make any other distribution of property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto as
such or (v) pay any management fees or any other fees or expenses (including the
reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to
any management, consulting or other services agreement to any of the
shareholders or other equityholders of any Loan Party or any of its Subsidiaries
or other Affiliates, or to any other Subsidiaries or Affiliates of any Loan
Party; provided, however, (A) any Subsidiary of any Loan Party may pay dividends
or make other distributions to any Loan Party, (B) the Parent may pay dividends
in the form of common Capital Stock, (C) the Parent may pay dividends or other
payments on its preferred stock issued and outstanding on the Effective Date,
(D) any Subsidiary that is not a Loan Party may pay dividends or make other
distributions to any Loan Party or any Subsidiary of a Loan Party, (E) any
non-wholly owned Subsidiary of a Loan Party may pay dividends or make other
distributions to its shareholders generally so long as the Loan Party or its
respective Subsidiary which owns Capital Stock in the Subsidiary paying such
dividends or making such other distributions receives at least its proportionate
share thereof (based upon its relative holdings of Capital Stock in the
Subsidiary paying such dividends and taking into account relative preferences,
if any, of the various classes of Capital Stock in such Subsidiary), (F) the
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Parent may retire, acquire or terminate any warrant, option or other right in
its Capital Stock upon exercise in a transaction in which neither Parent nor any
of its Subsidiaries makes any cash payment in respect of such exercise, (G) the
Parent may issue New US Securities in exchange for or upon conversion of New US
Securities to the extent required by the Mizuho/Glencore Transaction Documents,
(H) the Parent may use up to $31,500,000 of the Net Cash Proceeds of a "Rights
Offering" (as defined in the Mizuho/Glencore Transaction Documents as in effect
on the Effective Date) to redeem preferred stock in accordance with the terms of
the Mizuho/Glencore Transaction Documents (a "Rights Offer Redemption"), (I) the
Parent may make quarterly dividend payments on the New US Securities, if before
and after giving effect thereto, Excess Availability exceeds Required
Availability and (J) the Parent may at any time after the first anniversary of
the Effective Date redeem or repurchase shares of its preferred stock issued and
outstanding on the Effective Date, so long as: (i) immediately before and after
consummation of such redemption or repurchase, no Default or Event of Default
shall have occurred and be continuing, (ii) immediately before and after
consummation of such redemption or repurchase, the Borrowers and their
Subsidiaries shall have pro forma Availability (without deducting the
Availability Reserve) of not less than $35,000,000 for the 90 day period
preceding such transaction and no later than the date on which such redemption
or repurchase is to be consummated, the Administrative Borrower shall submit a
certificate of the chief financial officer of the Administrative Borrower
setting forth reasonably detailed calculations demonstrating compliance with
such required pro forma Availability and certifying that the other conditions
set forth in this clause (J) have been satisfied and (iii) the aggregate
purchase price paid for all redemptions and repurchases pursuant to this clause
(J) shall not exceed $6,300,000.
(i) Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose that would
cause such Loan to be a margin loan under the provisions of Regulation T, U or X
of the Board.
(j) Transactions with Affiliates. Enter into, renew, extend or
be a party to, or permit any of its Subsidiaries to enter into, renew, extend or
be a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party, (iii) transactions permitted by Section 7.02(e), (iv)
the Mizuho/Glencore Transactions (including any Rights Offering as defined
therein), and (v) compensation, retirement, expense reimbursement and
indemnification arrangements with directors, officers, employees or consultants
in the ordinary course of business, including the issuance of securities, or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of employment arrangements, stock options, retirement plans and
stock ownership plans approved by the Board of Directors of the Parent made in
the ordinary course of business consistent with past practices.
(k) Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Loan Party or any Subsidiary of any Loan Party
(i) to pay dividends or to make any other distribution on any shares of Capital
Stock of such Subsidiary owned by any Loan Party or any of its Subsidiaries,
(ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party
or any of its Subsidiaries, (iii) to make loans or advances to any Loan Party or
any of its Subsidiaries or (iv) to transfer any of its property or assets to any
Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do
any of the foregoing;
91
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this
Agreement and described on Schedule 7.02(k) and any renewal, extension,
refinance or replacement thereof that does not expand the scope of any
such encumbrance or restriction;
(C) any applicable law, rule or regulation (including,
without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);
(D) in the case of clause (iv) any agreement setting
forth customary restrictions on the subletting, assignment or transfer of
any property or asset that is a lease, license, conveyance or similar
contract in respect of such property or assets;
(E) in the case of clause (iv) any agreement,
instrument or other document evidencing a Permitted Lien described in
clause (e)(i) of the definition of "Permitted Lien" from restricting on
customary terms the transfer of any property or assets subject thereto;
(F) agreements related to the Indebtedness permitted
under clause (i) of the definition of Permitted Indebtedness to the extent
any such restrictions are limited to the Foreign Subsidiaries that are
parties to such agreements;
(G) the Mizuho/Glencore Transaction Documents and any
New US Securities; or
(H) the governing agreement and other agreements,
instruments or documents entered into in connection with the formation of
(i) the China JV or (ii) any other joint venture to which the Parent or
any of its Subsidiaries is a party and which is permitted pursuant to
Section 7.02(e)(xii)(B) and, in each case, any renewal, extension,
refinancing or replacement thereof that does not expand the scope of any
such encumbrance or restriction.
(l) Limitation on Issuance of Capital Stock. Issue or sell or
enter into any agreement or arrangement for the issuance or sale of, or permit
any of its Subsidiaries to issue or sell or enter into any agreement or
arrangement for the issuance or sale of, any shares of its Capital Stock, any
securities convertible into or exchangeable for its Capital Stock or any
warrants other than (x) the issuance of common Capital Stock of the Parent or
warrants or options to acquire any such common Capital Stock to the extent such
issuances are permitted pursuant to Section 7.02(e)(xi), Section 7.02(j)(v) or
Section 7.02(m)(iv) (including, without limitation, issuances pursuant to the
Mizuho/Glencore Transaction Documents) and (y) issuances by any joint venture
permitted by Section 7.02(e)(xii) of Capital Stock to the owners of such joint
venture.
(m) Modifications of Indebtedness, Organizational Documents
and Certain Other Agreements; Etc.
(i) Amend, modify or otherwise change (or permit the
amendment, modification or other change in any manner of) any of the
provisions of any of its or its
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Subsidiaries' Indebtedness or of any instrument or agreement (including,
without limitation, any purchase agreement, indenture, loan agreement,
guaranty or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or
average life to maturity of, or require any payment to be made earlier
than the date originally scheduled on, such Indebtedness, would increase
the interest rate applicable to such Indebtedness, would change the
subordination provision, if any, of such Indebtedness, or would otherwise
be adverse to the Agents or the Lenders or the issuer of such Indebtedness
in any respect, provided that, in the case of the Senior Secured Notes
Indenture and the Senior Secured Notes, any amendment, modification or
other change may be made to any of such documents, if after giving effect
to such amendment, modification or change (A) such Indebtedness shall
require no amortization, sinking fund payment or any other scheduled
maturity of the principal amount thereof on any date which is earlier than
the date occurring six months after the then latest Final Maturity Date,
(B) the interest rate applicable to the Senior Secured Notes shall not be
higher than such interest rate as in effect on the Effective Date, (C) the
defined terms "Credit Facility Document," "Credit Facility Liens," "Credit
Facility Priority Collateral," "Discharge of Credit Facility Obligations,"
and "Discharge of Senior Secured Note Obligations," appearing in the
Senior Secured Notes Indenture and Section 4.10(3) of the Senior Secured
Notes Indenture shall not be changed, in each case, from those appearing
in the Senior Secured Notes Indenture as in effect as of the Effective
Date and (D) the terms governing any such Indebtedness shall not contain
any provision (including, without limitation, covenants, mandatory
redemptions or offers to purchase or prepay, defaults and remedies) which,
in the reasonable judgment of the Administrative Agent is materially more
adverse to the Agents or the Lenders than the provisions in the Senior
Secured Notes Documents as of the Effective Date;
(ii) except for the Obligations and Indebtedness
permitted under clause (j) of the definition Permitted Indebtedness (but
excluding the Opening Availability Loan), make any voluntary or optional
payment, prepayment, redemption, defeasance, sinking fund payment or other
acquisition for value of, or otherwise voluntarily satisfy prior to the
scheduled maturity thereof in any manner, any of its or its Subsidiaries'
Indebtedness (including, without limitation, by way of depositing money or
securities with the trustee therefor before the date required for the
purpose of paying any portion of such Indebtedness when due), or refund,
refinance, replace or exchange any other Indebtedness for any such
Indebtedness (except to the extent any such optional payment, prepayment,
redemption, defeasance, sinking fund payment, acquisition, refund,
refinancing, replacement or exchange is pursuant to Section 3.07 of the
Senior Secured Notes Indenture or is otherwise expressly permitted by the
definition of Permitted Indebtedness, the Intercreditor Agreement or
referred to in Section 2.05(c)(ix)) (whether or not requiring a prepayment
of the Loans pursuant to either such section), or contemplated by the
Mizuho/Glencore Transactions or the Euro Note Transactions or make any
payment, prepayment, redemption, defeasance, sinking fund payment or
repurchase of any outstanding Indebtedness as a result of any asset sale,
change of control, issuance and sale of debt or equity securities or
similar event, or give any notice with respect to any of the foregoing;
provided, however, that the Loan Parties may prepay, defease or otherwise
voluntarily satisfy prior to the scheduled maturity thereof, the Opening
Availability Loan so long as: (1) immediately before and after
consummation of such repayment, defeasance or satisfaction, no Default or
Event of Default shall have occurred and be continuing, (2) immediately
before and after consummation of such repayment, defeasance or
satisfaction, the Borrowers and their Subsidiaries shall have pro forma
Availability (without deducting the Availability Reserve) of not less than
$30,000,000 for the 30 day period preceding such transaction and no later
than the date on which such transaction is to be consummated, the
Administrative Borrower shall submit a certificate of the chief financial
officer of the Administrative Borrower setting forth reasonably detailed
calculations demonstrating compliance with such required pro forma
Availability and certifying that the other
93
conditions set forth in this proviso have been satisfied and (3) the
aggregate amount of principal that may be so prepaid, defeased or
satisfied from and after the Effective Date shall not exceed $5,000,000;
(iii) except as permitted by Section 7.02(c), amend,
modify or otherwise change its name, jurisdiction of organization,
organizational identification number or FEIN; or
(iv) amend, modify or otherwise change its certificate
of incorporation or bylaws (or other similar organizational documents),
including, without limitation, by the filing or modification of any
certificate of designation, or any agreement or arrangement entered into
by it, with respect to any of its Capital Stock (including any
shareholders' agreement), or enter into any new agreement with respect to
any of its Capital Stock, except any such amendments, modifications or
changes or any such new agreements or arrangements pursuant to this clause
(iv) that (A) are in connection with the Mizuho/Glencore Transactions or
(B) either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; provided, however, that, in no
event shall Parent permit any Subsidiaries' certificate of incorporation,
bylaws or other similar organizational document (other than D-M-E U.S.A.
INC. or Uniloy Milacron U.S.A. Inc.) to contain any provision of the type,
or having the purpose of, clause Ninth of Parent's certificate of
incorporation as in effect on the Effective Date.
(n) Investment Company Act of 1940. Engage in any business,
enter into any transaction, use any securities or take any other action or
permit any of its Subsidiaries to do any of the foregoing, that would cause it
or any of its Subsidiaries to become subject to the registration requirements of
the Investment Company Act of 1940, as amended, by virtue of being an
"investment company" or a company "controlled" by an "investment company" not
entitled to an exemption within the meaning of such Act.
(o) Compromise of Accounts. Compromise or adjust any Account
(or extend the time of payment thereof) or grant any discounts, allowances or
credits or permit any of its Subsidiaries to do so unless (i) no Default or
Event of Default has occurred and is continuing and (ii) such compromise,
adjustment or grant is made in the ordinary course of its business in accordance
with its practices and policies.
(p) ERISA. (i) Engage, or permit any ERISA Affiliate to
intentionally engage, in any transaction described in Section 4069 of ERISA;
(ii) engage, or permit any ERISA Affiliate to intentionally engage, in any
prohibited transaction described in Section 406 of ERISA or 4975 of the Internal
Revenue Code for which a statutory or class exemption is not available or a
private exemption has not previously been obtained from the U.S. Department of
Labor; (iii) adopt or permit any ERISA Affiliate to adopt any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides benefits
to employees after termination of employment other than as (x) set forth in
Schedule 6.01(i) in accordance with the terms of such plans, (y) provided to
certain employees upon the termination of employment of any such employee in the
ordinary course of business, or (z) required by Section 601 of ERISA Section
4980B of the Internal Revenue Code or applicable law; (iv) fail to make any
contribution or payment to any Multiemployer Plan which it or any ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any
ERISA Affiliate to fail, to pay any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment.
94
(q) Environmental. Permit Handling, Release or disposal of
Hazardous Materials at any property owned or leased by it or any of its
Subsidiaries, except in compliance with Environmental Laws and except for such
Handling, Release or disposal of Hazardous Materials that could not reasonably
be expected to result in a Material Adverse Effect.
(r) Certain Agreements. Agree to any material amendment or
other material change to or material waiver of any of its rights under any
Material Contract if such amendment, change or waiver is adverse to the
interests of any Loan Party other than any such material amendment, change or
waiver to the Euro Notes or the Euro Indenture pursuant to the Euro Note
Transactions.
(s) Misplaced Notes. Create or suffer to exist any Lien upon
or with respect to any of the Misplaced Notes except for the Lien created by the
Loan Documents.
(t) Wholly-Owned Subsidiaries. Permit any Subsidiary that is a
wholly-owned, directly or indirectly, by the Parent or any of its other
Subsidiaries as of the Effective Date to cease to be wholly-owned, directly or
indirectly, by the Parent or any of such other Subsidiaries.
(u) Restrictions in Organizational Documents. None of Parent,
D-M-E U.S.A. INC. or Uniloy Milacron U.S.A. Inc. shall invoke or otherwise apply
the provisions of (i) in the case of the Parent, clause Ninth of its certificate
of incorporation, (ii) in the case of D-M-E U.S.A. INC., Article VI of its
restated articles of incorporation or (iii) in the case of Uniloy Milacron
U.S.A. Inc., Article VI of its articles of incorporation, in each case, as in
effect on the Effective Date, in any manner that would impair, compromise or
diminish the rights of the Agents, the Issuing Bank and the Lenders under the
Loan Documents.
Section 7.03 Financial Covenants. So long as any principal of or
interest on any Loan, LC Exposure (other than any LC Exposure that is cash
collateralized in accordance with the terms of this Agreement) or any other
Obligation (whether or not due), other than contingent obligations or
indemnification obligations for which no claim has been asserted, shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:
(a) Minimum Fixed Charge Coverage Ratio. Permit the Fixed
Charge Coverage Ratio as of the end of each fiscal quarter of the Parent ending
on the dates set forth in the table below to be less than the applicable
corresponding ratio set forth below:
Minimum Fixed Charge
Quarter End Coverage Ratio
----------- --------------
December 31, 2005 1.00 to 1.00
March 31, 2006 1.00 to 1.00
June 30, 2006 1.00 to 1.00
September 30, 2006 1.00 to 1.00
December 31, 2006 and each quarter end occurring thereafter 1.25 to 1.00
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(b) Cumulative Consolidated EBITDA. Permit Consolidated EBITDA
of the Parent on a cumulative basis for any period set forth in the table below
to be less than the applicable corresponding amount set forth below:
Cumulative Consolidated
Period EBITDA
------ ------
Three complete calendar months ending September 30, 2004 $ 11,600,000
Six complete calendar months ending December 31, 2004 $ 25,900,000
Nine complete calendar months ending March 31, 2005 $ 32, 300,000
Twelve complete calendar months ending June 30, 2005 $ 43,000,000
Twelve complete calendar months ending September 30, 2005 $ 48,400,000
(c) Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditure (by purchase or Capitalized Lease)
that would cause the aggregate amount of all Capital Expenditures made by the
Loan Parties and their Subsidiaries on a cumulative basis during any period set
forth in the table below to exceed the amount set forth opposite such period
below:
Period Cumulative Capital Expenditures
------ -------------------------------
Three complete calendar months ending September 30, 2004 $ 6,100,000
Six complete calendar months ending December 31, 2004 $ 11,300,000
Nine complete calendar months ending March 31, 2005 $ 15,900,000
Twelve complete calendar months ending June 30, 2005 $ 20,500,000
Twelve complete calendar months ending September 30, 2005 $ 20,500,000
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ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 Collection of Accounts; Management of Collateral.
(a) In accordance with Section 7.01(r), within 120 days after
the Effective Date (or such later time as may be agreed to by the Administrative
Agent), (the "Cash Management Date") the Domestic Loan Parties shall (i)
establish and maintain cash management services of a type and on terms
reasonably satisfactory to the Administrative Agent at the Administrative Agent,
an Affiliate thereof, any Lender or any bank providing cash management services
to the Loan Parties on the Effective Date (each, a "Cash Management Bank"), and
shall take such reasonable steps to enforce, collect, receive and cause all
amounts owing on the Accounts of the Domestic Loan Parties or any of their
Domestic Subsidiaries to be remitted directly to a Cash Management Account
(other than any payroll, operating, checking or disbursement account) or the
Administrative Agent's Account, and (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all proceeds in respect of any Collateral and all
Collections and other amounts received by any Domestic Loan Party (including
payments made by the Account Debtors directly to any Domestic Loan Party) into a
Cash Management Account or the Administrative Agent's Account; provided,
however, that, (A) at all times prior to the Cash Management Date, the Domestic
Loan Parties shall cause the amounts referred to in the foregoing clauses (i)
and (ii) to be remitted or deposited to one or more of the accounts listed on
Schedule 6.01(u) which shall be subject to a Control Agreement in favor of the
Administrative Agent as of the Effective Date and (B) subject to the limitations
set forth in this Agreement, the Domestic Loan Parties and their Domestic
Subsidiaries shall be permitted to maintain and fund (i) deposit accounts of
Domestic Loan Parties and their Domestic Subsidiaries other than Cash Management
Accounts in an aggregate amount not in excess of $4,000,000 at any one time and
(ii) the Excluded Deposit Accounts (as defined in the Security Agreement).
(b) Prior to the Cash Management Date (or such later time as
may be agreed to by the Administrative Agent), the Domestic Loan Parties shall,
with respect to each Cash Management Account, deliver to the Administrative
Agent a Cash Management Agreement with respect to such Cash Management Account.
Notwithstanding the foregoing, promptly upon the request of the Administrative
Agent, each Loan Party shall deliver a Cash Management Agreement to the
Administrative Agent with respect to any Cash Management Account identified by
the Administrative Agent. Each Cash Management Agreement shall provide, among
other things, that the Cash Management Bank shall, from and after the Effective
Date forward all cash deposited into the Cash Management Accounts covered
thereby by electronic funds transfer (including, but not limited to, ACH
transfers) on each Business Day to the Administrative Agent's Account; provided,
however any such agreement covering any Disbursement Account shall provide that
such amounts shall only be transferred to the Administrative Agent's account
following the Cash Management Bank's receipt of a notice (an "Activation
Notice") from the Administrative Agent which may only be given during the
occurrence and continuance of an Event of Default.
(c) So long as no Default or Event of Default has occurred and
is continuing, the Administrative Borrower may amend Schedule 8.01 to add or
replace a Cash Management Account Bank or Cash Management Account; provided,
however, that (i) such prospective Cash Management Bank shall be reasonably
satisfactory to the Administrative Agent and the Administrative Agent shall have
consented in writing in advance to the opening of such Cash Management Account
with the prospective Cash Management Bank, and (ii) prior to the time of the
opening of such Cash Management Account, each Domestic Loan Party and such
prospective Cash Management Bank shall have executed and
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delivered to the Administrative Agent a Cash Management Agreement. Each Domestic
Loan Party shall close any of its Cash Management Accounts (and establish
replacement cash management accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days of notice from the Administrative Agent
that the creditworthiness of any Cash Management Bank is no longer acceptable in
the Administrative Agent's reasonable judgment, or as promptly as practicable
and in any event within 60 days of notice from the Administrative Agent that the
operating performance, funds transfer, or availability procedures or performance
of the Cash Management Bank with respect to Cash Management Accounts or the
Administrative Agent's liability under any Cash Management Agreement with such
Cash Management Bank is no longer acceptable in the Administrative Agent's
reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which the Domestic Loan Parties are
hereby deemed to have granted a Lien to the Administrative Agent for the benefit
of the Administrative Agent and the Lenders. All checks, drafts, notes, money
orders, acceptances, cash and other evidences of Indebtedness received directly
by any Domestic Loan Party as proceeds of any Collateral shall be held by such
Loan Party in trust for the Administrative Agent and the Lenders and upon
receipt be deposited by such Loan Party in original form and no later than the
next Business Day after receipt thereof into the Administrative Agent's Account;
provided, however, all Net Cash Proceeds received directly by such Domestic Loan
Party pursuant to an event described in Section 2.05(c)(iii), (iv) or (v) shall
be held by such Loan Party in trust for the Administrative Agent and the Lenders
and upon receipt be deposited by the Loan Party in original form and no later
than the next Business Day after receipt thereof into the Administrative Agent's
Account. A Domestic Loan Party shall not commingle such collections with such
Loan Party's own funds or the funds of any Subsidiary or Affiliate of such Loan
Party or with the proceeds of any assets not included in the Collateral. No
checks, drafts or other instruments received by the Administrative Agent shall
constitute final payment to the Administrative Agent unless and until such
checks, drafts or other instruments have actually been collected.
(e) After the occurrence and during the continuance of an
Event of Default, the Collateral Agent may send a notice of assignment and/or
notice of the Lenders' security interest to any and all Account Debtors or third
parties holding or otherwise concerned with any of the Collateral, and
thereafter the Collateral Agent shall have the sole right to collect the
Accounts and/or take possession of the Collateral and the books and records
relating thereto. The Domestic Loan Parties shall not, without prior written
consent of the Collateral Agent, grant any extension of time of payment of any
Account, compromise or settle any Account for less than the full amount thereof,
release, in whole or in part, any Person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon, except, in the
absence of a continuing Event of Default, as permitted by Section 7.02(o).
(f) Each Domestic Loan Party hereby appoints the
Administrative Agent or its designee on behalf of such Administrative Agent as
the Domestic Loan Parties' attorney-in-fact with power exercisable only during
the continuance of an Event of Default to endorse any Domestic Loan Party's name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Accounts, to sign any Domestic Loan Party's name on any
invoice or ▇▇▇▇ of lading relating to any of the Accounts, drafts against
Account Debtors with respect to Accounts, assignments and verifications of
Accounts and notices to Account Debtors with respect to Accounts, to send
verification of Accounts, and to notify the Postal Service authorities to change
the address for delivery of mail addressed to any Domestic Loan Party to such
address as the Administrative Agent may designate and 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 (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction), or for any
error of
98
judgment or mistake of fact or law; this power being coupled with an interest is
irrevocable until all of the Loans, LC Exposure (other than LC Exposure that is
cash collateralized pursuant to the terms of this Agreement) and other
Obligations under the Loan Documents are Paid in Full and all of the Loan
Documents are terminated.
(g) Nothing herein contained shall be construed to constitute
the Administrative Agent as agent of any Loan Party for any purpose whatsoever,
and the Administrative Agent shall not 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 (other than
from acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction). The Administrative Agent shall not, under any circumstance 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
Accounts or any instrument received in payment thereof or for any damage
resulting therefrom (other than acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Administrative Agent, by anything herein
or in any assignment or otherwise, does not assume any of the obligations under
any contract or agreement assigned to the Administrative Agent and shall not be
responsible in any way for the performance by any Loan Party of any of the terms
and conditions thereof.
(h) If any Account includes a charge for any tax payable to
any Governmental Authority, the Administrative Agent is hereby authorized (but
in no event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Loan Parties' account and to charge the Loan Parties
therefor. The Borrowers shall notify the Administrative Agent if any Account
includes taxes due to such Governmental Authority and, in the absence of such
notice, the Administrative Agent shall have the right to retain the full
proceeds of such Account and shall not be liable for any taxes that may be due
by reason of the sale and delivery creating such Account.
(i) No Loan Party shall, or shall cause or permit any
Subsidiary thereof to, accumulate or maintain cash in Disbursement Accounts as
of any date of determination in excess of checks outstanding against such
accounts as of that date and amounts necessary to meet minimum balance
requirements. To the extent cash has accumulated in D-M-E Company's account no.
1XXXX01 at Comerica Bank as of any date of determination in excess of checks
outstanding against such account as of that date and amounts necessary to meet
minimum balance requirements, D-M-E Company shall, within one (1) Business Day,
transfer such excess cash out of such account and into an account subject to a
Control Agreement in favor of the Administrative Agent.
(j) Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Administrative Agent and the Lenders
herein provided, and the obligations of the Loan Parties set forth herein, are
cumulative of, may be exercised singly or concurrently with, and are not
exclusive of, any other rights, remedies or obligations set forth in any other
Loan Document or as provided by law.
(k) Notwithstanding any other terms set forth herein or in any
other Loan Document, the Administrative Agent shall have the right at any time
to require the Canadian Borrowing Base Guarantors to provide Control Agreements
and/or Cash Management Agreements with respect to any account into which the
proceeds of Accounts of the Canadian Borrowing Base Guarantors are deposited
and, each Canadian Borrowing Base Guarantor will so provide such agreements
within 120 days after receiving any such request. Without limiting the
provisions of this Section 8.01, the parties agree that the provisions of this
Section 8.01 shall apply to the Canadian Borrowing Base Guarantors to
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the same extent as the Domestic Loan Parties at any time when such Control
Agreements and/or Cash Management Agreements are in effect.
Section 8.02 Accounts Documentation. The Domestic Loan Parties and
Canadian Borrowing Base Guarantors will at such intervals as the Administrative
Agent may reasonably require, execute and deliver confirmatory written
assignments of the Accounts to the Administrative Agent and furnish such further
schedules and/or information as the Administrative Agent may reasonably require
relating to the Accounts, including, without limitation, sales invoices or the
equivalent, credit memos issued, remittance advices, reports and copies of
deposit slips and copies of original shipping or delivery receipts for all
merchandise sold. In addition, the Domestic Loan Parties shall notify the
Administrative Agent of any non-compliance in respect of the representations,
warranties and covenants contained in Section 8.03. The items to be provided
under this Section 8.02 are to be in form reasonably satisfactory to the
Administrative Agent and are to be executed and delivered to the Administrative
Agent from time to time solely for its convenience in maintaining records of the
Collateral. The Domestic Loan Parties' or Canadian Borrowing Base Guarantors'
failure to give any of such items to the Administrative Agent shall not affect,
terminate, modify or otherwise limit the Collateral Agent's Lien on the
Collateral. The Domestic Loan Parties and the Canadian Borrowing Base Guarantors
shall not re-date any invoice or sale or make sales on extended dating beyond
that customary in such Loan Parties' industry, and shall not re-▇▇▇▇ any
Accounts without promptly disclosing the same to the Administrative Agent and
providing the Administrative Agent with a copy of such re-billing, identifying
the same as such. If the Domestic Loan Parties or the Canadian Borrowing Base
Guarantors become aware of anything materially detrimental to any of such Loan
Parties' material customers' credit, such Loan Parties will promptly advise the
Administrative Agent thereof.
Section 8.03 Status of Accounts and Other Collateral. With respect
to any Account of any Domestic Loan Party or any Canadian Borrowing Base
Guarantor that is included by the Borrowers as an Eligible Account in the
calculation of the Borrowing Base, each Domestic Loan Party covenants,
represents and warrants: (a) such Loan Party shall be the sole owner, free and
clear of all Liens (except for the Liens granted in the favor of the Collateral
Agent for the benefit of the Collateral Agent and the Lenders and Permitted
Liens), and shall be fully authorized to sell, transfer, pledge and/or grant a
security interest in each and every item of said Collateral; (b) each such
Account shall be a good and valid account representing an undisputed bona fide
indebtedness incurred or an amount indisputably owed by the Account Debtor
therein named, for a fixed sum as set forth in the invoice relating thereto with
respect to an absolute sale and delivery upon the specified terms of goods sold
or services rendered by such Loan Party; (c) no such Account shall be subject to
any defense, offset, counterclaim, discount or allowance except as may be stated
in the invoice relating thereto, discounts and allowances as may be customary in
such Loan Party's business and as otherwise disclosed to the Collateral Agent;
(d) none of the transactions underlying or giving rise to any such Account shall
violate any applicable state or federal laws or regulations, and all documents
relating thereto shall be legally sufficient under such laws or regulations and
shall be legally enforceable in accordance with their terms; (e) no agreement
under which any deduction or offset of any kind, other than normal trade
discounts, may be granted or shall have been made by such Loan Party at or
before the time such Account is created; (f) all agreements, instruments and
other documents relating to any Account shall be true and correct and in all
material respects what they purport to be; (g) such Loan Party shall maintain
books and records pertaining to said Collateral in such detail, form and scope
as the Collateral Agent shall reasonably require; (h) such Loan Party shall
promptly notify the Collateral Agent if any Account arises out of contracts with
any Governmental Authority, and will execute any instruments and take any steps
reasonably required by the Collateral Agent in order that all monies due or to
become due under any such contract shall be assigned to the Collateral Agent and
notice thereof given to such Governmental Authority under the Federal Assignment
of Claims Act or any similar state or local law; (i) such Loan Party will,
immediately upon learning thereof, report to the Collateral Agent any material
loss or destruction of, or substantial damage to, any of
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the Collateral, and any other matters affecting the value, enforceability or
collectibility of any of the Collateral; (j) if any amount payable under or in
connection with any such Account is evidenced by a promissory note or other
instrument, such promissory note or instrument shall be promptly pledged,
endorsed, assigned and delivered to the Collateral Agent for the benefit of the
Collateral Agent and the Lenders as additional Collateral; and (k) such Loan
Party is not and shall not be entitled to pledge any Collateral Agent's or any
Lender's credit on any purchases or for any purpose whatsoever.
Section 8.04 Collateral Custodian. Upon the occurrence and during
the continuance of any Default or Event of Default, the Collateral Agent may at
any time and from time to time employ and maintain on the premises of any Loan
Party a custodian selected by the Collateral Agent who shall have full authority
to do all acts necessary to protect the Agent's and the Lenders' interests. Each
Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate with
any such custodian and to do whatever the Collateral Agent may reasonably
request to preserve the Collateral. All reasonable costs and expenses incurred
by the Collateral Agent by reason of the employment of the custodian shall be
the responsibility of the Borrowers and charged to the Loan Account. Section
8.05 Collateral Reporting. (a) The Borrowers shall provide the Administrative
Agent with the following documents in a form reasonably satisfactory to the
Administrative Agent:
(i) on a regular basis as required by the
Administrative Agent, schedules of sales made, credits issued and cash
received;
(ii) as soon as possible after the end of each fiscal
month (but in any event within fifteen (15) days after the end thereof),
on a monthly basis or more frequently as the Administrative Agent may
reasonably request: (A) perpetual inventory reports for each location of
Inventory of the Loan Parties, but only to the extent such Loan Parties
are capable of providing such reports for such location, and if not
capable, such other inventory reports in form and substance reasonably
acceptable to the Administrative Agent, (B) inventory reports by location
and Inventory Category (and including the amounts of Inventory and the
value thereof at any leased locations and at premises of warehouses,
processors or other third parties), (C) agings of Accounts (together with
a reconciliation to the previous month's aging and general ledger), (D)
agings of accounts payable (and including information indicating the
amounts owing to owners and lessors of leased premises, warehouses,
processors and other third parties from time to time in possession of any
Collateral), and (E) a report setting forth all issued and outstanding
letters of credit;
(iii) upon the Administrative Agent's request, (A)
copies of customer statements, purchase orders, sales invoices, credit
memos, remittance advices and reports, and copies of deposit slips and
bank statements, (B) copies of shipping and delivery documents, and (C)
copies of purchase orders, invoices and delivery documents for Inventory
and equipment acquired by any Borrower or Guarantor; and
(iv) such other reports as to the portion of the
Collateral comprised of Inventory, Accounts and Receivables of Domestic
Loan Parties and Accounts and Receivables of the Canadian Borrowing Base
Guarantors as the Administrative Agent shall reasonably request from time
to time.
(b) If any Loan Party's records or reports of the Collateral
are prepared or maintained by an accounting service, contractor, shipper or
other agent, such Loan Party hereby irrevocably authorizes such service,
contractor, shipper or agent to deliver such records, reports, and
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related documents to the Administrative Agent and to follow the Administrative
Agent's instructions with respect to further services at any time that an Event
of Default has occurred and is continuing.
Section 8.06 Accounts Covenants
(a) With respect to any Account of any Domestic Loan Party or
any Canadian Borrowing Base Guarantor that is included by the Borrowers as an
Eligible Account in the calculation of the Borrowing Base, the Borrowers shall
notify the Administrative Agent promptly of: (i) any material delay in any
Domestic Loan Party's or any Canadian Borrowing Base Guarantor's performance of
any of its material obligations to any Account Debtor or the assertion of any
material claims, offsets, defenses or counterclaims by any Account Debtor, or
any material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information known to any Borrower
or Guarantor relating to the financial condition of any Account Debtor and (iii)
any event or circumstance which, to the best of any Domestic Loan Party's or any
Canadian Borrowing Base Guarantor's knowledge, would cause the Administrative
Agent to consider any then existing Accounts as no longer constituting Eligible
Accounts. No credit, discount, allowance or extension or agreement for any of
the foregoing shall be granted to any Account Debtor without the Administrative
Agent's consent (which consent shall not be unreasonably withheld), except as
provided in Section 7.02(o). Subject to Section 7.02(o), as long as no Event of
Default has occurred and is continuing, Domestic Loan Parties and Canadian
Borrowing Base Guarantors shall settle, adjust or compromise any claim, offset,
counterclaim or dispute with any Account Debtor. At any time that an Event of
Default has occurred and is continuing, the Administrative Agent shall, at its
option, have the exclusive right to settle, adjust or compromise any claim,
offset, counterclaim or dispute with Account Debtors or grant any credits,
discounts or allowances.
(b) With respect to each Account of any Domestic Loan Party or
any Canadian Borrowing Base Guarantor that is included by the Borrowers as an
Eligible Account in the calculation of the Borrowing Base: (i) the amounts shown
on any invoice delivered to the Administrative Agent or schedule thereof
delivered to the Administrative Agent shall be true and complete in all material
respects, (ii) any payments made thereon shall be promptly delivered to the
Administrative Agent pursuant to the terms of this Agreement, (iii) no credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any Account Debtor except as provided in Section 7.02(o), (iv) there
shall be promptly reported to the Administrative Agent in accordance with the
terms of this Agreement any setoffs, deductions, contras, defenses,
counterclaims or disputes existing or asserted with respect thereto and (v) none
of the transactions giving rise thereto will violate any applicable foreign,
Federal, state or local laws or regulations, all documentation relating thereto
will be legally sufficient under such laws and regulations and all such
documentation will be legally enforceable in accordance with its terms.
(c) The Administrative Agent shall have the right at any time
or times, in the Administrative Agent's name or in the name of a nominee of the
Administrative Agent, to verify the validity, amount or any other matter
relating to any Receivables, Inventory or Accounts, by mail, telephone,
facsimile transmission or otherwise.
Section 8.07 Inventory Covenants. With respect to the Inventory of
any Domestic Loan Party that is included by the Borrowers as Eligible Inventory
in the calculation of the Borrowing Base: (a) each such Loan Party shall at all
times maintain inventory records reasonably satisfactory to the Administrative
Agent, keeping correct and accurate records itemizing and describing the kind,
type, quality and quantity of such Inventory, such Loan Party's cost therefor
and daily withdrawals therefrom and additions thereto; (b) such Loan Parties
shall conduct a physical count of such Inventory at any time the Administrative
Agent may reasonably request, and promptly following such physical inventory
shall supply the Administrative Agent with a report in the form and with such
specificity as may be reasonably satisfactory to the Administrative Agent
concerning such physical count; (c) such Loan Parties shall not
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remove any such Inventory from the locations set forth or permitted herein,
without the prior written consent of the Administrative Agent, except for sales
of such Inventory in the ordinary course of its business and except to move such
Inventory directly from one location set forth or permitted herein to another
such location and except for such Inventory shipped from the manufacturer
thereof to such Loan Party which is in transit to the locations set forth or
permitted herein; (d) upon the Administrative Agent's request, the Borrowers
shall, at their expense, deliver or cause to be delivered to the Administrative
Agent written appraisals as to such Inventory in form, scope and methodology
reasonably acceptable to the Administrative Agent (and consistent with the
methodology used by Hilco) by Hilco or an appraiser reasonably acceptable to the
Administrative Agent, addressed to Administrative Agent and Lenders and upon
which Administrative Agent and Lenders are expressly permitted to rely; (e) such
Loan Parties shall produce, use, store and maintain such Inventory with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (f) none of such Inventory shall
constitute farm products or the proceeds thereof; (g) each such Loan Party
assumes all responsibility and liability arising from or relating to the
production, use, sale or other disposition of such Inventory; (h) such Loan
Parties shall not sell such Inventory to any customer on approval, or any other
basis which entitles the customer to return or may obligate any such Loan Party
to repurchase such Inventory (unless such Inventory may be returned only if it
is not damaged and is resalable in the normal course of business); (i) such Loan
Parties shall keep such Inventory in good and marketable condition; and (j) such
Loan Parties shall not, without prior written notice to the Administrative Agent
or the specific identification of such Inventory in a report with respect
thereto provided by the Administrative Borrower to the Administrative Agent
pursuant to Section 8.05(a) hereof, acquire or accept any such Inventory on
consignment or approval.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) any Borrower shall fail to pay any principal of or
interest on any Loan, any Agent Advance or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);
(b) any representation or warranty made or deemed made by or
on behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate, or other document delivered to any Agent, any Lender or the Issuing
Bank pursuant to any Loan Document shall have been incorrect in any material
respect when made or deemed made;
(c) any Loan Party shall fail to perform or comply with any
covenant or agreement contained in:
(i) clauses (a)(vi) (at a time when Borrowing Base
Certificates are required to be delivered on a weekly basis), (d), (h),
(p), (q) or (r) of Section 7.01, Section 7.02, Section 7.03, Section 8.01,
Section 8.02, Section 8.03, Section 8.04, Section 8.06 and Section 8.07,
or any Loan Party shall fail to perform or comply with any covenant or
agreement contained in any Security Agreement to which it is a party or
any Pledge Agreement to which it is a party,
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(ii) clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) or
(a)(vii) of Section 7.01 and such failure shall remain unremedied for 5
Business Days,
(iii) clauses (a)(v), (a)(vi) (at a time when Borrowing
Base Certificates are required to be delivered on a monthly basis),
(a)(viii), (a)(ix), (a)(x), (a)(xi), (a)(xii), (a)(xiii) and (a)(xiv) of
Section 7.01 or Section 8.05(a)(ii) and such failure shall remain
unremedied for 3 Business Days and
(iv) clause (j) of Section 7.01, and such failure shall
continue for more than 10 days without any Loan Party commencing
activities reasonably likely to cure the environmental matter which is the
subject of such failure, provided that, in the case of any Loan Party
commencing such activities, such Loan Party shall provide Administrative
Agent, as and to the extent Administrative Agent reasonably requests, with
regular updates or other supporting documentation regarding such
activities for so long as such activities are conducted or until such
environmental matter is otherwise cured or resolved;
(d) any Loan Party shall fail to perform or comply with any
other term, covenant or agreement contained in any Loan Document to be performed
or observed by it and, except as set forth in subsections (a), (b) and (c) of
this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 15 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by the Administrative Agent to the Administrative
Borrower;
(e) the Parent or any of its Subsidiaries shall fail to pay
any principal of or interest on any of its Indebtedness (excluding Indebtedness
evidenced by this Agreement in excess of $2,500,000, or any interest or premium
thereon, when due) (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or any other default under any agreement or
instrument relating to any such Indebtedness, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to the stated
maturity thereof;
(f) any Loan Party , any Subsidiary of any Loan Party or any
Subsidiary of Milacron Capital (i) shall institute any proceeding or voluntary
case seeking to adjudicate it bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for any such Person or for any substantial part of its
property, (ii) shall be generally not paying its debts as such debts become due
or shall admit in writing its inability to pay its debts generally, (iii) shall
make a general assignment for the benefit of creditors, or (iv) shall take any
action to authorize or effect any of the actions set forth above in this
subsection (f);
(g) any proceeding shall be instituted against any Loan Party,
any Subsidiary of any Loan Party or any Subsidiary of Milacron Capital seeking
to adjudicate it bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, and either such
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proceeding shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against any such Person or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur;
(h) any provision of any Loan Document shall at any time for
any reason (other than pursuant to the express terms thereof) cease to be valid
and binding on or enforceable against any Loan Party intended to be a party
thereto other than the Agents or the Lenders, or the validity or enforceability
thereof shall be contested by any party thereto, or a proceeding shall be
commenced by any Loan Party or any Governmental Authority having jurisdiction
over any of them, seeking to establish the invalidity or unenforceability
thereof, or any Loan Party shall deny in writing that it has any liability or
obligation purported to be created under any Loan Document;
(i) any Security Agreement, any Pledge Agreement, any Cash
Management Agreement , Control Agreement or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien in favor of the Collateral Agent for the benefit of
the Agents and the Lenders on any Collateral purported to be covered thereby;
(j) one or more judgments, orders or awards for the payment of
money exceeding $2,500,000 in the aggregate shall be rendered against the Parent
or any of its Subsidiaries and remain unsatisfied and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order or award, or (ii) there shall be a period of 30 consecutive days after
entry thereof during which a stay of enforcement of any such judgment, order or
award, by reason of a pending appeal or otherwise, shall not be in effect;
provided, however, that any such judgment, order or award shall not give rise to
an Event of Default under this subsection (j) if and for so long as (A) the
amount of such judgment, award or order is covered by a valid and binding policy
of insurance between the defendant and the insurer covering full payment thereof
and (B) such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment, order or award;
(k) any Loan Party or any of its ERISA Affiliates shall have
made a complete or partial withdrawal from a Multiemployer Plan, and, as a
result of such complete or partial withdrawal, any Loan Party or any of its
ERISA Affiliates incurs a withdrawal liability in an annual amount exceeding
$500,000; or a Multiemployer Plan enters reorganization status under Section
4241 of ERISA, and, as a result thereof any Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $500,000;
(l) (i) any Termination Event with respect to any Employee
Plan shall have occurred which could reasonably be expected to have a Material
Adverse Effect or (ii) there exists any fact or circumstance that reasonably
could be expected to result in the imposition of a Lien under Section 412(n) of
the Internal Revenue Code or under ERISA; or
(m) a Change of Control shall have occurred;
(n) an event or development occurs which could reasonably be
expected to have a Material Adverse Effect; or
(o) (i) any of the Obligations of any Loan Party under the
Loan Documents for any reason shall cease to qualify as a part of a "Qualified
Credit Facility" (or any similar term) under, and as defined in, the Senior
Secured Notes Indenture or in any agreement evidencing any refinancing thereof
as permitted under the terms of the Loan Documents, other than as a result,
directly or indirectly, of any
105
acts or omissions of the Agents or the Lenders or (ii) the Intercreditor
Agreement shall, in whole or in part, cease to be effective or cease to be
legally valid, binding and enforceable against the holders of the Senior Secured
Notes or any refinanced Indebtedness thereof as permitted under the terms of the
Loan Documents other than as a result, directly or indirectly, of any acts or
omissions of the Administrative Agent;
then, and in any such event, the Collateral Agent may, and shall at the request
of the Required Lenders, by notice to the Administrative Borrower, (i) terminate
or reduce all Commitments, whereupon all Commitments shall immediately be so
terminated or reduced, (ii) declare all or any portion of the Loans then
outstanding to be due and payable, whereupon all or such portion of the
aggregate principal of all Loans, all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement and the other Loan
Documents shall become due and payable immediately, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Loan Party and (iii) exercise any and all of its other rights and
remedies under applicable law, hereunder and under the other Loan Documents;
provided, however, that upon the occurrence of any Event of Default described in
subsection (f) or (g) of this Section 9.01 with respect to any Loan Party,
without any notice to any Loan Party or any other Person or any act by any Agent
or any Lender, all Commitments shall automatically terminate and all Loans then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party. Subject to Section 4.04(b), the Administrative Agent may, after the
occurrence and during the continuation of any Event of Default, require the
Borrowers to deposit with the Administrative Agent with respect to each Letter
of Credit then outstanding cash in an amount equal to 105% of the greatest
amount for which such Letter of Credit may be drawn. Such deposits shall be held
by the Administrative Agent in the Letter of Credit Collateral Account as
security for, and to provide for the payment of, the LC Exposure.
ARTICLE X
AGENT
Section 10.01 Appointment. Each Lender (and each subsequent maker of
any Loan by its making thereof) hereby irrevocably appoints JPMorgan (and its
successors and assigns) as its agent under the Loan Documents and authorizes
JPMorgan (and its successors and assigns) to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent or the
Collateral Agent by the terms of the Loan Documents, together with such actions
and powers as are reasonably incidental thereto. Without limiting the generality
of the foregoing, the Administrative Agent or the Collateral Agent, as the case
may be, is hereby expressly authorized by the Lenders to execute any and all
documents (including releases, the Cash Management Agreements and the
Intercreditor Agreement) with respect to the Collateral and the rights of the
Lenders with respect thereto. Each of the Lenders and the Issuing Bank hereby
agrees to be bound by the priority of the security interests and allocation of
the benefits of the Collateral and proceeds thereof set forth in this Agreement
and the Intercreditor Agreement.
Section 10.02 Nature of Duties. Neither Agent shall have any duties
or obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) no Agent shall have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent or the Collateral Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall
106
be necessary under the circumstances as provided in Section 12.02), and (c)
except as expressly set forth in the Loan Documents, no Agent shall have any
duty to disclose, nor shall it be liable for the failure to disclose, any
information relating to the Company or any of the Subsidiaries that is
communicated to or obtained by the bank serving as any Agent or any of its
Affiliates in any capacity. No Agent shall be liable for any action taken or not
taken by it with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02), in each case, in the absence of its
own gross negligence or willful misconduct. No Agent shall be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to such Agent by any Loan Party or a Lender, and such Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article V or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to such Agent.
Section 10.03 Rights, Exculpation, Etc.
(a) Neither Agent nor its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by them
under or in connection with this Agreement or the other Loan Documents, except
for their own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. Without limiting the generality
of the foregoing, each Agent (i) may treat the payee of any Loan as the owner
thereof until the Administrative Agent receives written notice of the assignment
or transfer thereof, pursuant to Section 12.07 hereof, signed by such payee and
in form satisfactory to the Administrative Agent; (ii) may consult with legal
counsel (including, without limitation, counsel to such Agent or counsel to the
Loan Parties), independent public accountants, and other experts selected by any
of them and shall not be liable for any action taken or omitted to be taken in
good faith by any of them in accordance with the advice of such counsel or
experts; (iii) make no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of the
Administrative Agent's Lien thereon, or any certificate prepared by any Loan
Party in connection therewith, nor shall any Agent be responsible or liable to
the Lenders for any failure to monitor or maintain any portion of the
Collateral. No Agent shall be liable for any apportionment or distribution of
payments made in good faith pursuant to Sections 2.05 or 4.04, and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount which
they are determined to be entitled. Each Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the other Loan Documents such Agent are
permitted or required to take or to grant, and if such instructions are promptly
requested, such Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the Loan Documents until they
shall have received such instructions from the Required Lenders. Without
limiting the foregoing, no Lender
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shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of the Required Lenders. Each
Lender acknowledges that it has, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
(b) To the extent required by any applicable law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any other Governmental Authority asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender because the appropriate form was not delivered or was
not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstance which rendered the exemption from, or
reduction of, withholding tax ineffective or for any other reason, such Lender
shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including any
penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.
Section 10.04 Reliance. Each Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper person. Each
Agent may also rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper person, and shall not incur any
liability for relying thereon. Each Agent may consult with legal counsel
(including, without limitation, counsel to such Agent or counsel to the Loan
Parties), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. Each Agent may perform any
and all its duties and exercise its rights and powers by or through any one or
more sub-agents appointed by it. In addition, each Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of the
preceding subsections of this Article X shall apply to any such sub-agent and to
the Related Parties of such Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent or
Collateral Agent, as the case may be.
Section 10.05 Indemnification. To the extent that any Agent or the
Issuing Bank is not reimbursed and indemnified by any Loan Party, the Lenders
will reimburse and indemnify such Agent and the Issuing Bank from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against such
Agent or the Issuing Bank in any way relating to or arising out of this
Agreement or any of the other Loan Documents or any action taken or omitted by
such Agent or the Issuing Bank under this Agreement or any of the other Loan
Documents, in proportion to each Lender's Pro Rata Share, including, without
limitation, advances and disbursements made pursuant to Section 10.08; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements for which there has been a final judicial
determination that such liability resulted from such Agent's or the Issuing
Bank's gross negligence or willful misconduct. The obligations of the Lenders
under this Section 10.05 shall survive the payment in full of the Loans and the
termination of this Agreement.
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Section 10.06 Agent Individually. With respect to its Pro Rata Share
of the Total Revolving Credit Commitment hereunder and the Loans made by it,
each Agent shall have and may exercise the same rights and powers hereunder and
is subject to the same obligations and liabilities as and to the extent set
forth herein for any other Lender or maker of a Loan. The terms "Lenders" or
"Required Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include such Agent in its individual capacity as a Lender
or one of the Required Lenders. Each Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with any Borrower as if it were not acting as an Agent
pursuant hereto without any duty to account to the other Lenders.
Section 10.07 Successor Agent.
(a) Each Agent may resign from the performance of all its
functions and duties hereunder and under the other Loan Documents at any time by
giving at least thirty (30) Business Days' prior written notice to the
Administrative Borrower and each Lender. Such resignation shall take effect upon
the acceptance by a successor Administrative Agent or Collateral Agent, as the
case may be, of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Agent with the consent of the Administrative Borrower
(which consent shall not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as any Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After the resignation of the Administrative Agent
or Collateral Agent, as the case may be, hereunder as an Agent, the provisions
of this ARTICLE X shall inure to the benefit of such Agent, its sub-agents and
their respective Related Parties as to any actions taken or omitted to be taken
by any of them while it was an Agent under this Agreement and the other Loan
Documents.
(c) If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring Agent shall then
appoint a successor Agent (with the consent of the Administrative Borrower,
which consent shall not be unreasonably withheld or delayed), who shall serve as
an Agent until such time, if any, as the Required Lenders appoint a successor
Agent as provided above.
Section 10.08 Collateral Matters.
(a) Subject to the terms of a separate written agreement among
the Administrative Agent and the Lenders, the Administrative Agent may from time
to time make such disbursements and advances ("Agent Advances") which the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve, protect, prepare for sale or lease or dispose of the Collateral or any
portion thereof, to enhance the likelihood or maximize the amount of repayment
by the Borrowers of the Loans, LC Exposure and other Obligations or to pay any
other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as described
in Section 12.04. The Agent Advances shall bear interest at the maximum rate set
forth in this Agreement and shall be repayable on demand and be secured by the
Collateral. The Agent Advances shall constitute Obligations hereunder which may
be charged to the Loan Account in accordance with Section 4.02. The
Administrative Agent making an Agent Advance shall notify each Lender and the
Administrative Borrower in writing of each such Agent Advance, which notice
shall include a description of the purpose of such Agent Advance. Without
limitation to its obligations pursuant to Section 10.05, each Lender agrees that
it shall make available to the Administrative Agent making the Agent Advance,
upon such Administrative Agent's demand, in Dollars in immediately available
funds, the amount equal
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to such Lender's Pro Rata Share of each such Agent Advance. If such funds are
not made available to the Administrative Agent making an Agent Advance by such
Lender, the Administrative Agent shall be entitled to recover such funds on
demand from such Lender, together with interest thereon for each day from the
date such payment was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Effective Rate for three Business
Days and thereafter at the Alternate Base Rate.
(b) The Lenders hereby irrevocably authorize the Collateral
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Collateral Agent upon any Collateral upon termination of the Total
Revolving Credit Commitment and payment and satisfaction of all Loans, LC
Exposure, and all other Obligations which have matured and which the Collateral
Agent has been notified in writing are then due and payable; or constituting
property being sold or disposed of in the ordinary course of any Loan Party's
business and in compliance with the terms of this Agreement and the other Loan
Documents; or constituting property in which the Loan Parties owned no interest
at the time the Lien was granted or at any time thereafter; or if approved,
authorized or ratified in writing by the Lenders; or constituting property that
is Senior Secured Priority Collateral and which is being released from the lien
securing the Senior Secured Notes in accordance with the terms of the Senior
Secured Notes Indenture, provided that the Collateral Agent receives a
certification by the trustee for the holders of the Senior Secured Notes to the
effect that such Senior Secured Priority Collateral has been released in
accordance with the terms of the Senior Secured Notes Indenture, and provided,
further, that at the time of such release (and immediately after giving effect
thereto) the aggregate principal amount of Senior Secured Notes outstanding (or
issued in replacement thereof) exceeds $112,000,000. Upon request by the
Collateral Agent at any time, the Lenders will confirm in writing the Collateral
Agent's authority to release particular types or items of Collateral pursuant to
this Section 10.08(b).
(c) Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in
writing, upon request by the Collateral Agent, the authority to release
Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon
receipt by the Collateral Agent of confirmation from the Lenders of its
authority to release any particular item or types of Collateral, and upon prior
written request by any Loan Party, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Agents and the Lenders upon such Collateral; provided,
however, that (i) the Collateral Agent shall not be required to execute any such
document on terms which, in the Collateral Agent's opinion, would expose the
Collateral Agent to liability or create any obligations or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Lien upon (or obligations of any Loan Party in respect of)
all interests in the Collateral retained by any Loan Party.
(d) The Collateral Agent shall have no obligation whatsoever
to any Lender to assure that the Collateral exists or is owned by the Loan
Parties or is cared for, protected or insured or has been encumbered or that the
Lien granted to the Collateral Agent pursuant to this Agreement or any other
Loan Document has been properly or sufficiently or lawfully created, perfected,
protected or enforced or is entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Collateral Agent in this Section 10.08 or in any
other Loan Document, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Collateral Agent
may act in any manner it may deem appropriate, in its sole discretion, given the
Collateral Agent's own interest in the Collateral as one of the Lenders and that
the Collateral Agent shall have no duty or liability whatsoever to any other
Lender, except as otherwise provided herein.
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(e) Agency for Perfection. Each Agent and each Lender hereby
appoints each other Lender as agent and bailee for the purpose of perfecting the
security interests in and liens upon the Collateral in assets which, in
accordance with Article 9 of the Uniform Commercial Code, can be perfected only
by possession or control (or where the security interest of a secured party with
possession or control has priority over the security interest of another secured
party) and each Agent and each Lender hereby acknowledges that it holds
possession of or otherwise controls any such Collateral for the benefit of the
Agents and the Lenders as secured party. Should the Administrative Agent or any
Lender obtain possession or control of any such Collateral, the Administrative
Agent or such Lender shall notify the Collateral Agent thereof, and, promptly
upon the Collateral Agent's request therefor shall deliver such Collateral to
the Collateral Agent or in accordance with the Collateral Agent's instructions.
In addition, the Collateral Agent shall also have the power and authority
hereunder to appoint such other sub agents as may be necessary or required under
applicable state law or otherwise to perform its duties and enforce its rights
with respect to the collateral and under the Loan Documents. Each Loan Party by
its execution and delivery of this Agreement hereby consents to the foregoing.
ARTICLE XI
GUARANTY
Section 11.01 Guaranty. Each Guarantor hereby jointly and severally
and unconditionally and irrevocably guarantees, as primary obligor and not
merely as a surety, the punctual payment when due, whether at stated maturity,
by acceleration or otherwise, of all Obligations of the Borrowers (and any one
or more of them) now or hereafter existing under any Loan Document, whether for
principal, interest (including, without limitation, all interest that accrues
after the commencement of any Insolvency Proceeding of any Borrower, whether or
not a claim for post-filing interest is allowed in such proceeding), LC
Exposure, fees, commissions, expense reimbursements, indemnifications or
otherwise (such obligations being the "Guaranteed Obligations"), and agrees to
pay any and all reasonable out-of-pocket expenses (including reasonable counsel
fees and expenses) incurred by the Agents, the Lenders and the Issuing Bank in
protecting or enforcing any rights under the guaranty set forth in this ARTICLE
XI. Without limiting the generality of the foregoing, each Guarantor's liability
shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by the Borrowers to the Agents, the Lenders and the Issuing
Bank under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Borrower.
Section 11.02 Guaranty Absolute. Each Guarantor, jointly and
severally, guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agents, the Lenders or the Issuing Bank with
respect thereto. Each Guarantor agrees that this ARTICLE XI constitutes a
guaranty of payment when due and not of collection and waives any right to
require that any resort be made by any Agent or any Lender to any Borrower or
any Collateral. The obligations of each Guarantor under this ARTICLE XI are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against each Guarantor to enforce such obligations,
irrespective of whether any action is brought against any Loan Party or whether
any Loan Party is joined in any such action or actions. The liability of each
Guarantor under this ARTICLE XI shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now or hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
111
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or
otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any security interest therein, or any taking, release or amendment
or waiver of or consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense or other
right that the Guarantors may have at any time against any Person, including,
without limitation, any Agent, any Lender or the Issuing Bank;
(e) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agents, the Lenders or the Issuing Bank that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor
or surety.
This ARTICLE XI shall continue to be effective or be reinstated, as the case may
be, if and to the extent that for any reason any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the Agents
the Lenders, the Issuing Bank or any other Person, whether as a result of the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.
Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness
and diligence, (ii) notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this ARTICLE XI and any requirement that
the Agents, the Lenders or the Issuing Bank exhaust any right or take any action
against any Loan Party or any other Person or any Collateral (iii) any right to
compel or direct any Agent, any Lender or the Issuing Bank to seek payment or
recovery of any amounts owed under this ARTICLE XI from any one particular fund
or source or to exhaust any right or take any action against any other Loan
Party or any other Person or any Collateral, (iv) any requirement that any
Agent, any Lender or the Issuing Bank protect, secure, perfect or insure any
security interest or Lien on any property subject thereto or exhaust any right
to take any action against any Loan Party or any other Person or any Collateral,
and (v) any other defense available to the Guarantors. The Guarantors agree that
the Agents, the Lenders and the Issuing Bank shall have no obligation to marshal
any assets in favor of the Guarantors or against, or in payment of, any or all
of the Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 11.03 is knowingly made in contemplation of
such benefits. Each Guarantor hereby waives any right to revoke this ARTICLE XI,
and acknowledges that this ARTICLE XI is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
Section 11.04 Continuing Guaranty; Assignments. This ARTICLE XI is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the date on which all of the Guaranteed Obligations and all other
amounts payable under this ARTICLE XI shall have been Paid in Full in cash, (b)
be binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents, the Lenders and the Issuing Bank
and their successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement
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(including, without limitation, all or any portion of its Commitments, its Loans
and the LC Exposure owing to it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 12.07.
Notwithstanding the foregoing, the Administrative Borrower shall have the right
to release Milacron Capital from its Guarantees at any time so long as any of
the proceeds of the Revolving Credit Loans or ABL Priority Collateral that have
been invested in or loaned to Milacron Capital after the Effective Date have
been repaid or returned.
Section 11.05 Subrogation. No Guarantor will exercise any rights
that it may now or hereafter acquire against any Loan Party or any other
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's obligations under this ARTICLE XI, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Agents, the Lenders and the Issuing Bank against any Loan Party or any other
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Loan Party or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this ARTICLE XI shall have been Paid in Full in cash. If any
amount shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the later of the date on which all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XI shall
have been Paid in Full in cash and the Final Maturity Date, such amount shall be
held in trust for the benefit of the Agents, the Lenders and the Issuing Bank
and shall forthwith be paid to the Agents, the Lenders and the Issuing Bank to
be credited and applied to the Guaranteed Obligations and all other amounts
payable under this ARTICLE XI, whether matured or unmatured, in accordance with
the terms of this Agreement, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this ARTICLE XI thereafter arising.
If (i) any Guarantor shall make payment to the Agents, the Lenders and the
Issuing Bank of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XI shall
be Paid in Full in cash and (iii) the Final Maturity Date shall have occurred,
the Agents, the Lenders and the Issuing Bank will, at such Guarantor's request
and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
Section 11.06 Judgment. The specification under the Loan Documents
of Dollars and payment in New York City is of the essence. Each Loan Party's
obligations hereunder and under the other Loan Documents to make payments in
Dollars (the "Obligation Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Agents, the Lenders
or the Issuing Bank of the full amount of the Obligation Currency expressed to
be payable to the Agents, the Lenders or the Issuing Bank under this Agreement
or the other Loan Documents. If, for the purpose of obtaining or enforcing
judgment in any court, it is necessary to convert into or from any currency
other than the Obligation Currency (such other currency being hereinafter
referred to as the "Judgment Currency") an amount due in the Obligation
Currency, the rate of exchange used shall be that at which the Agents, the
Lenders or the Issuing Bank could, in accordance with normal banking procedures,
purchase Dollars with the Judgment Currency on the Business Day preceding that
on which final judgment is given. The obligation of a Loan Party in respect of
any such sum due from it to the Agents, the Lenders or the Issuing Bank
hereunder shall, notwithstanding any judgment in such Judgment Currency, be
discharged only to the extent that, on the Business Day immediately following
the date on which the Agents, the Lenders or the Issuing Bank receives any sum
adjudged to be so due in the Judgment Currency, the Agents, the Lenders or the
Issuing
113
Bank may, in accordance with normal banking procedures, purchase Dollars with
the Judgment Currency. If the Dollars so purchased are less than the sum
originally due to the Agents, the Lenders or the Issuing Bank in Dollars, such
Loan Party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Agents, the Lenders or the Issuing Bank against such
loss, and if the Dollars so purchased exceed the sum originally due to the
Agents, the Lenders or the Issuing Bank in Dollars, the Agents, the Lenders or
the Issuing Bank agrees to remit to such Loan Party such excess.
Section 11.07 General Limitation on Guarantee Obligations. In any
Insolvency Proceeding, if the obligations of any Guarantor under Section 11.01
would otherwise, taking into account the provisions of Section 11.07, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section
11.01, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by any Guarantor, the
Agents, the Lenders, the Issuing Bank or any other Person, be automatically
limited and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such Insolvency
Proceeding.
Section 11.08 Dutch Financial Assistance Rules. Notwithstanding any
other provision of this ARTICLE XI, the guarantee, indemnity and other
obligations of any Guarantor incorporated in The Netherlands ("Dutch Guarantor")
expressed to be assumed in this ARTICLE XI or elsewhere in the Loan Documents
shall be deemed not to be assumed by such Dutch Guarantor to the extent that the
same would constitute unlawful financial assistance within the meaning of
Section 2:207(c) or 2:98(c) of the Dutch Civil Code and the provisions of the
Loan Documents shall be construed accordingly.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered:
if to any Loan Party, at the following address:
Milacron Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 212-474-3700
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
if to JPMorgan, to it at the following address:
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JPMorgan Chase Bank
c/o ▇.▇. ▇▇▇▇▇▇ Business Credit Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone:
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Milacron Relationship Manager
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇- ▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed, when received or three days after deposited in the
mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation is received, or (iii) if delivered, upon delivery, except that
notices to the Agents or the Issuing Bank pursuant to ARTICLE II and ARTICLE III
shall not be effective until received by the Agents or the Issuing Bank, as the
case may be.
Section 12.02 Amendments, Etc. Except as provided in Section 6.01(u)
of this Agreement, no amendment or waiver of any provision of this Agreement,
and no consent to any departure by any Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Agents and
the Required Lenders or by the Agents with the consent of the Required Lenders,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given, provided, however, that no
amendment, waiver or consent shall (i) increase the Revolving Credit Commitment
of any Lender, reduce the principal of, or interest on, the Loans payable to any
Lender without the written consent of such Lender and the Agents, (ii), reduce
the amount of any fee payable for the account of any Lender, or postpone or
extend the Final Maturity Date or any date fixed for any payment of principal
of, or interest or fees on, the Loans or LC Exposure payable to any Lender, in
each case without the written consent of each Lender directly affected thereby,
(iii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that is required for the Lenders or any of them to
take any action hereunder without the written consent of each Lender, (iv) amend
the definition of "Required Lenders" or "Pro Rata Share" without the written
consent of each Lender, (v) release all or substantially all of the Collateral
(except as otherwise provided in this Agreement and the other Loan Documents),
subordinate any Lien granted in favor of the Collateral Agent for the benefit of
the Agents and the Lenders, or release any Borrower or any Guarantor (except as
provided in Section 11.04 of this Agreement) without the written consent of each
Lender, (vi) amend, modify or waive Section 4.04 or this Section 12.02 of this
Agreement without the written consent of each Lender, or (vii) modify the
Borrowing Base to increase the advance rate percentages applicable to any
category of Collateral included therein, to add new categories of eligible
Collateral or to make less restrictive in any material respect the eligibility
criteria applicable to any category of Collateral (other than the adjustment or
elimination of Reserves in the Administrative Agent's reasonable discretion),
without the written consent of each Lender and the Administrative Agent;
provided, further, that no amendment, waiver or consent shall reduce the
Availability Reserve without the written consent of the Super Majority Required
Lenders. Notwithstanding the foregoing, no amendment, waiver or consent
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shall, unless in writing and signed by the Administrative Agent affect the
rights or duties of the Administrative Agent (but not in its capacity as a
Lender) under this Agreement or the other Loan Documents and no amendment,
waiver or consent shall, unless in writing and signed by the Collateral Agent
affect the rights or duties of the Collateral Agent (but not in its capacity as
a Lender) under this Agreement or the other Loan Documents. To the extent
permitted by applicable law, the parties agree that, notwithstanding any of the
terms of clause Ninth of the certificate of incorporation of the Parent, Article
VI of the restated articles of incorporation of D-M-E U.S.A. INC. or Article VI
of the articles of incorporation of Uniloy Milacron U.S.A. Inc., in each case,
as in effect on the Effective Date, in no event shall any amendment to this
Agreement or any other Loan Document be effective unless entered into in
accordance with the terms of this Section 12.02.
Section 12.03 No Waiver; Remedies, Etc. No failure on the part of
any Agent or any Lender to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agents and the Lenders provided herein and
in the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of the Agents
and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Agents and the Lenders to
exercise any of their rights under any other Loan Document against such party or
against any other Person.
Section 12.04 Expenses; Taxes; Attorneys' Fees. The Borrowers will
pay on demand, all reasonable out-of-pocket costs and expenses incurred by or on
behalf of the Agents (and, in the case of clauses (b) through (j) below, each
Lender), regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client
charges and expenses of counsel for any Agent (and, in the case of clauses (b)
through (j) below, each Lender), accounting, due diligence, periodic field
audits, physical counts, valuations, investigations, searches and filings,
monitoring of assets, appraisals of Collateral, title searches and reviewing
environmental assessments, miscellaneous disbursements, examination, travel,
lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including, without limitation, the
preparation of any additional Loan Documents pursuant to Section 7.01(b) or the
review of any of the agreements, instruments and documents referred to in
Section 7.01(f)), (b) any requested amendments, waivers or consents to this
Agreement or the other Loan Documents whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Agents' or the Lenders' rights under this Agreement or the other Loan Documents,
(d) the defense of any claim or action asserted or brought against any Agent or
any Lender by any Person that arises from or relates to this Agreement, any
other Loan Document, the Agents' or the Lenders' claims against any Loan Party,
or any and all matters in connection therewith to the extent not otherwise
provided in Section 12.15, (e) the commencement or defense of, or intervention
or participation in, any court or judicial proceeding arising from or related to
this Agreement or any other Loan Document, including, without limitation, in
connection with any Insolvency Proceeding related to any Loan Party or the
Collateral, including in any adversary proceeding or contested matter commenced
or continued by, on behalf of, or against any Loan Party or its estate, and any
appeal or review thereof, (f) the filing of any petition, complaint, answer,
motion or other pleading by any Agent or any Lender, or the taking of any action
in respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (g) the protection, collection, lease,
sale, taking possession of or liquidation of, any Collateral or other security
in connection with this Agreement or any other Loan Document, (h) any attempt to
enforce any Lien or security interest in any Collateral or other security in
connection with this Agreement or any other Loan Document, (i) any attempt to
collect from any Loan Party, or (j) the receipt by any Agent or any Lender of
any advice from professionals with respect to any of the foregoing.
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Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrowers agree to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by any
Agent or any Lender to be payable in connection with this Agreement or any other
Loan Document, and the Borrowers agree to save each Agent and each Lender
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions, (y) the Borrowers agree to pay all broker
fees that may become due in connection with the transactions contemplated by
this Agreement and the other Loan Documents, of which, on the Effective Date,
there are none, and (z) if the Borrowers fail to perform any covenant or
agreement contained herein or in any other Loan Document, any Agent may itself
perform or cause performance of such covenant or agreement in accordance with
the terms of this Agreement or any other Loan Document, and the expenses of the
Agents incurred in connection therewith shall be reimbursed on demand by the
Borrowers.
Section 12.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not such Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. Each
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by such Agent or such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agents and the Lenders under this Section 12.05
are in addition to the other rights and remedies (including, without limitation,
other rights of set-off) which the Agents and the Lenders may have under this
Agreement or any other Loan Documents in law or otherwise.
Section 12.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.07 Assignments and Participations.
(a) Whenever in this Agreement or any of the Loan Documents a
party hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Loan Parties, the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Lenders that are contained in this
Agreement and any of the Loan Documents shall bind and inure to the benefit of
their respective successors and assigns; provided, however, that none of the
Loan Parties may assign or transfer any of its rights hereunder without the
prior written consent of each of the Agents and Lenders, and any such assignment
without such unanimous prior written consent shall be null and void.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment(s) and the Loans at the time owing to it);
provided, however, that: (i) in the case of any assignment of a Revolving Credit
Commitment, each of the Administrative Agent and the Issuing Bank must give its
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of Related Lender
Assignment, the amount of the Revolving Credit Commitment of the assigning
Lender subject to any such assignment (determined as of the date the Assignment
and
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Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 (or, if less, the entire remaining
amount of such Lender's Commitment), and (iii) the Borrowers and the
Administrative Agent shall be entitled to deal solely with the assigning Lender
unless and until the parties to such assignment execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with (in the
Administrative Agent's discretion) a processing and recordation fee of $5,000
and, unless the assignee is an existing Lender, an administrative questionnaire.
Upon acceptance and recording by the Administrative Agent of an Assignment and
Acceptance pursuant to Section 12.07(e), from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.08, 2.10, 4.05, 12.14 and
12.15, as well as to any fees accrued for its account and not yet paid).
(c) By executing and delivering to the Administrative Agent an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim and that its Revolving Credit Commitment, and the
outstanding balances of its Revolving Credit Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrowers or any Subsidiary or the
performance or observance by the Borrowers or any Subsidiary of any of their
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 6.01(g) or delivered pursuant to Section 7.01(a) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment(s)
of, and principal amount of the Loans and LC Exposure owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of clearly demonstrable error
and the Borrowers, the Administrative Agent, the Issuing Bank, the Collateral
Agent and the Lenders may treat each Person whose name is recorded in the
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Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank, any Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an administrative
questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder) and the written consent of the Issuing Bank and
the Administrative Agent (to the extent required) to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, and (ii)
record the information contained therein in the Register. No assignment shall be
effective unless it has been recorded in the Register, as provided in this
Section 12.07.
(f) Each Lender may without the consent of the Borrowers, the
Issuing Bank or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment(s) and the Loans);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.08 and 4.05 with respect to its participation
interest to the same extent as if they were Lenders (but, with respect to any
particular participant, to no greater extent than the Lender that sold the
participation to such participant) and (iv) the Borrowers, the Administrative
Agent, the Issuing Bank and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans or LC Exposure
and to approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest is
payable on the Loans or extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans, in each case, to the extent
related to its participation interest.
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 12.07, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrowers furnished to such
Lender by or on behalf of the Borrowers; provided that, prior to any such
disclosure of information designated by the Borrowers as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 12.20.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to secure extensions of credit to such Lender or
in support of obligations owed by such Lender; provided that no such assignment
shall release a Lender from any of its obligations hereunder or substitute or
permit the substitution of any such assignee for such Lender as a party hereto.
(i) [Intentionally Omitted.]
(j) No Borrower shall assign or delegate any of its rights or
duties hereunder without the prior written consent of the Administrative Agent,
the Issuing Bank and each Lender, and any attempted assignment without such
consent shall be null and void.
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Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopier also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY HEREBY IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM, LOCATED AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01
AND TO CT CORPORATION SYSTEM, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE
LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY
OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT
AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
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AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE
DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION,
PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT
OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM,
SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING
INTO THIS AGREEMENT.
Section 12.12 Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of any Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which any Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
such Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.
Section 12.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 12.14 Reinstatement; Certain Payments. If any claim is ever
made upon any Agent, any Lender or the Issuing Bank for repayment or recovery of
any amount or amounts received by such Agent, such Lender or the Issuing Bank in
payment or on account of any of the Obligations, such Agent, such Lender or the
Issuing Bank shall give prompt notice of such claim to each other Lender and the
Administrative Borrower, and if such Agent, such Lender or the Issuing Bank
repays all or part of such amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over such Agent, such
Lender or the Issuing Bank or any of its property, or (ii) any good faith
settlement or compromise of any such claim effected by such Agent, such Lender
or the Issuing Bank with any such claimant, then and in such event each Loan
Party agrees that (A) any such judgment, decree, order, settlement or compromise
shall be binding upon it notwithstanding the cancellation of any Indebtedness
hereunder or under the other Loan Documents or the termination of this Agreement
or the other Loan Documents, and (B) it shall be and remain liable to such
Agent, such Lender or the Issuing Bank hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by such Agent, such Lender or the Issuing Bank.
Section 12.15 Indemnification. (a) The Loan Parties agree, jointly
and severally, to pay all reasonable out-of-pocket expenses incurred by the
Agents and the Issuing Bank, including the reasonable fees, charges and
disbursements of counsel for the Agents, in connection with the syndication of
the credit facilities provided for herein and the preparation and administration
of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated); provided that the Loan Parties shall not be responsible for the
reasonable fees, charges and disbursements of more than one separate law firm
(in addition to Dutch counsel, local counsel or other special counsel, including
special workout counsel) pursuant to its obligations under this sentence only.
The Loan Parties also agree, jointly and severally, to pay all reasonable
out-of-pocket expenses incurred by any Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection
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of its rights in connection with this Agreement and the other Loan Documents or
in connection with the Loans made or Letters of Credit issued hereunder,
including the reasonable fees, charges and disbursements of counsel for the
Agents, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of any other counsel (including
special workout counsel) for any Agent, the Issuing Bank or any Lender.
(b) The Borrowers agree, jointly and severally, to indemnify
each Agent, each Lender, the Issuing Bank and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related reasonable out-of-pocket expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the proceeds of the Loans or
issuance of Letters of Credit, and (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (collectively, "Indemnified Matters"); provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent permitted by applicable law, no Loan Party
shall assert, and each hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, any Loan or Letter of Credit or the use of the proceeds thereof.
(d) Without limiting any other subsection of this Section
12.15, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless each Indemnitee against any and all Environmental Liabilities and
Costs and all other claims, demands, penalties, fines, liability (including
strict liability), losses, damages, costs and expenses (including without
limitation, reasonable legal fees and expenses, consultant fees and laboratory
fees), arising out of (i) any Releases or threatened Releases (x) at any
property presently or, during the period of ownership or operation by any Loan
Party or any Subsidiary of any Loan Party, formerly owned or operated by any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest,
or (y) of any Hazardous Materials Handled by any Loan Party or any Subsidiary of
any Loan Party, or any predecessor in interest; (ii) any violations of
Environmental Laws relating to any Loan Party or any Subsidiary of any Loan
Party or for which any Loan Party or any Subsidiary of any Loan Party may
legally be held liable; (iii) any Environmental Action relating to any Loan
Party or any Subsidiary of any Loan Party, or any predecessor in interest; (iv)
any personal injury (including wrongful death) or property damage (real or
personal) arising out of exposure to Hazardous Materials Handled by any Loan
Party or any Subsidiary of any Loan Party, or any predecessor in interest; and
(v) any breach of any warranty or representation regarding environmental matters
made by the Loan Parties in Section 6.01(r) or the breach of any covenant made
by the Loan Parties in Section 7.01(j). Notwithstanding the foregoing, the Loan
Parties shall not have any obligation to any Indemnitee under this subsection
(b) regarding any potential environmental matter covered hereunder which is
caused by the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction.
(e) The provisions of this Section 12.15 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Revolving
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Credit Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of any Agent, any Lender or
the Issuing Bank. All amounts due under this Section 12.15 shall be payable on
written demand therefor.
(f) The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 12.15 may be unenforceable because it is
violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
Section 12.16 Parent as Agent for Borrowers. Each Borrower hereby
irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for
the Borrowers (the "Administrative Borrower") which appointment shall remain in
full force and effect unless and until the Administrative Agent shall have
received prior written notice signed by all of the Borrowers that such
appointment has been revoked and that another Borrower has been appointed
Administrative Borrower. Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (i) to provide to each of the Agents and
receive from each of the Agents all notices with respect to Loans obtained for
the benefit of any Borrower and all other notices and instructions under the
Loan Documents and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Loans and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this Agreement.
It is understood that the handling of the Loan Account and Collateral of the
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to the Borrowers in order to utilize the collective
borrowing powers of the Borrowers in the most efficient and economical manner
and at their request, and that none of the Agents nor the Lenders shall incur
liability to the Borrowers as a result hereof. Each of the Borrowers expects to
derive benefit, directly or indirectly, from the handling of the Loan Account
and the Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group. To induce the Agents and the Lenders to do so, and in consideration
thereof, each of the Borrowers hereby jointly and severally agrees to indemnify
the Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by any
of the Borrowers or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of the Borrowers
as herein provided, (b) the Agents and the Lenders relying on any instructions
of the Administrative Borrower, or (c) any other action taken by any Agent or
any Lender hereunder or under the other Loan Documents.
Section 12.17 Records. The unpaid principal of and interest on the
Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees (including, without limitation, the Unused Line Fee and Letter
of Credit Fees) payable pursuant to the terms hereof, shall at all times be
ascertained from the records of the Administrative Agent, which shall be
conclusive and binding absent manifest error.
Section 12.18 Binding Effect. This Agreement shall become effective
as of the Effective Date when it shall have been executed by each Loan Party,
each Agent and each Lender and when the conditions precedent set forth in
Section 5.01 hereof have been satisfied or waived in writing by the
Administrative Agent, and thereafter shall be binding upon and inure to the
benefit of each Loan Party, each Agent and each Lender, and their respective
successors and assigns, except that the Loan Parties shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of each Lender, and any assignment by any Lender shall be governed by
Section 12.07 hereof.
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Section 12.19 Interest. It is the intention of the parties hereto
that each Agent and each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be Paid in Full, refunded by such Agent or such Lender, as applicable,
to the Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Agent or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be Paid in Full, refunded by such Agent or such
Lender to the Borrowers). All sums paid or agreed to be paid to any Agent or
such Lender for the use, forbearance or detention of sums due hereunder shall,
to the extent permitted by law applicable to such Agent or such Lender, be
amortized, prorated, allocated and spread throughout the full term of the Loans
until payment in full so that the rate or amount of interest on account of any
Loans hereunder does not exceed the maximum amount allowed by such applicable
law. If at any time and from time to time (x) the amount of interest payable to
any Agent or such Lender on any date shall be computed at the Highest Lawful
Rate applicable to such Agent or such Lender pursuant to this Section 12.19 and
(y) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.19.
For purposes of this Section 12.19, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrowers, on the one hand, and the Agents and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
Section 12.20 Confidentiality. Each Agent and each Lender agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable
124
precautions to keep confidential, in accordance with its customary procedures
for handling confidential information of this nature and in accordance with safe
and sound practices of comparable commercial finance companies, any non-public
information supplied to it by the Loan Parties pursuant to this Agreement or the
other Loan Documents which, in the case of information provided after the
Effective Date, is identified in writing by the Loan Parties as being
confidential at the time the same is delivered to such Person (and which at the
time is not, and does not thereafter become, publicly available or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any Agent or such Lender on a confidential basis, (iii) to
examiners, auditors or accountants on a confidential basis, (iv) in connection
with any litigation to which any Agent or such Lender is a party or (v) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant or party (or prospective assignee or participant) first
agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.20. Each Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the Loan
Parties informed of such request or identification; provided that each Loan
Party acknowledges that each Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that each Agent and each Lender may be subject to review by or other
regulatory agencies and may be required to provide to, or otherwise make
available for review by, the representatives of such parties or agencies any
such non-public information.
Section 12.21 Integration. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.
Section 12.22 Replacement of Lenders. If any Lender, any Agent or
the Issuing Bank requests compensation under Section 4.05, or if the Borrowers
are required to pay any additional amount to any Lender or any Agent or any
Governmental Authority for the account of any Lender pursuant to Section 2.08,
or if any Lender defaults in its obligation to fund Revolving Credit Loans
hereunder, then the Borrowers may, at their sole expense and effort, upon notice
by the Administrative Borrower to such Lender or such Agent, as applicable, and
the Administrative Agent, require such Lender or such Agent, as applicable, to
assign and delegate without recourse (in accordance with and subject to the
restrictions contained in Section 12.07) all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender if such Lender or such Agent
accepts such assignment, or any other Person); provided that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender or such Agent or
the Issuing Bank shall have received payment of an amount equal to the
outstanding principal of its Loans and Pro Rata Share of LC Exposure, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrowers (in the case of all other amounts), (iii) in
the case of any such assignment resulting from a claim for compensation under
Section 4.05 or payments required to be made pursuant to Section 2.08, such
assignment will result in a reduction in such compensation or payments, and (iv)
such assignee shall be subject to Section 12.07.
Section 12.23 Dutch Parallel Debt. Solely for purposes of the Loan
Documents governed by the laws of The Netherlands:
(a) Each of the Loan Parties hereby irrevocably and
unconditionally agrees to pay to the Collateral Agent an amount equal to the
aggregate amount of obligations payable by each such Loan Party in respect of
its Corresponding Obligations as they may exist from time to time (each
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obligation undertaken by any Loan Party being referred to herein as "Parallel
Debt"). The Parallel Debt of each Loan Party will be payable in US Dollars.
(b) The Parallel Debt of each Loan Party will become due and
payable (opeisbaar) as and when one or more of the Corresponding Obligations of
such Loan Party become due and payable under the Loan Documents.
(c) Each of the Loan Parties hereby acknowledges that:
(i) its Parallel Debt constitutes an undertaking,
obligation and liability of the relevant Loan Party to the Collateral
Agent which is separate and independent from, and without prejudice to,
the Corresponding Obligations; and
(ii) its Parallel Debt represents the Collateral
Agent's own separate and independent claim (eigen en zelfstandige
vordering) to receive payment of such Parallel Debt from such Loan Party,
it being understood, in each case, that pursuant to this Section 12.23, the
amount which may become payable by any Loan Party as its Parallel Debt shall not
exceed the total of the amounts which are payable under the Corresponding
Obligations of such Loan Party.
(d) For the avoidance of doubt, the parties confirm that the
claim of the Collateral Agent against any Loan Party in respect of its Parallel
Debt and the claims of any one or more of the Agents or the Lenders against such
Loan Party in respect of the Corresponding Obligations payable by such Loan
Party to the Agents or Lenders do not constitute common property (gemeenschap)
within the meaning of article 3:166 of the Netherlands Civil Code and that the
provisions relating to common property shall not apply to the Corresponding
Obligations. If, however, the claim of the Collateral Agent and the claims of
any one or more of the Agents and the Lenders constitute common property and the
provisions of common property are applicable, the parties agree that this
Section 12.23 shall constitute the administration agreement (beheersregeling)
within the meaning of article 3:168 of the Netherlands Civil Code.
(e) To the extent the Collateral Agent irrevocably
(onaantastbaar) receives any amount in payment of the Parallel Debt of any Loan
Party, the Collateral Agent shall distribute that amount among the Agents and
the Lenders in accordance with the other provisions of the Loan Documents. Upon
irrevocable receipt by the Collateral Agent of any amount so distributed to it
in payment of such Parallel Debt (a "Received Amount"), the Corresponding
Obligations of such Loan Party to the Agents and Lenders shall be reduced on the
date of receipt by the Collateral Agent by an amount equal to the Received
Amount in a manner as if the Deductible Amount were received as payment of the
Corresponding Obligations.
(f) Solely for purposes of this Section 12.23, a
"Corresponding Obligation" means the Obligations.
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Section 12.24 USA PATRIOT Act. Each Lender hereby notifies the
Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify such Borrower in accordance with the
Act.
Section 12.25 Interest Act Disclosure. For purposes of the Interest
Act (Canada) it is expressly stated that whenever interest is calculated
pursuant to this agreement at a rate or percentage per 360 day year, the yearly
rate or percentage of interest to which such interest rate is equivalent, is the
rate obtained by multiplying such rate by the actual number of days in the
relevant year and dividing by 360.
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BORROWERS:
MILACRON INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: Vice-President-Finance and Chief
Financial Officer
CIMCOOL INDUSTRIAL PRODUCTS INC.
D-M-E MANUFACTURING INC.
D-M-E U.S.A. INC.
MILACRON INDUSTRIAL PRODUCTS, INC.
MILACRON MARKETING COMPANY
MILACRON PLASTICS TECHNOLOGIES GROUP INC.
▇▇▇▇▇▇▇▇▇ MACHINERY CHICAGO, INC.
NORTHERN SUPPLY COMPANY, INC.
OAK INTERNATIONAL, INC.
PLIERS INTERNATIONAL INC.
UNILOY MILACRON INC.
UNILOY MILACRON U.S.A. INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
S-2
INITIAL GUARANTORS:
D-M-E COMPANY
MILACRON RESIN ABRASIVES INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: Vice President
S-3
MILACRON CAPITAL HOLDINGS B.V.
By: /s/ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇. ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
S-4
MILACRON INTERNATIONAL MARKETING COMPANY
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: Treasurer and Assistant Secretary
S-5
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND
LENDER:
JPMORGAN CHASE BANK, as Administrative Agent,
as Collateral Agent, and individually
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Vice President
S-6
DOCUMENTATION AGENT AND LENDER:
▇▇▇▇▇ FARGO FOOTHILL, LLC, as Documentation
Agent and individually
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP
S-7
LENDER:
PNC BANK, NATIONAL ASSOCIATION, individually
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-8