EXHIBIT 10.3
EXECUTION COPY
CREDIT AGREEMENT
Among
BAYOU STEEL CORPORATION
The Lenders Named Herein
And
CHEMICAL BANK,
as Agent
Dated as of June 28, 1989, as amended
and restated through June 1, 1995
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS.............................................. 1
SECTION 1.01. DEFINED TERMS................................... 1
SECTION 1.02. TERMS GENERALLY................................. 26
ARTICLE II. THE CREDITS............................................. 27
SECTION 2.01. COMMITMENTS..................................... 27
SECTION 2.02. LOANS........................................... 28
SECTION 2.03. NOTICE OF BORROWINGS............................ 29
SECTION 2.04. NOTES; REPAYMENT OF LOANS....................... 30
SECTION 2.05. FEES............................................ 30
SECTION 2.06. INTEREST ON LOANS............................... 31
SECTION 2.07. DEFAULT INTEREST................................ 31
SECTION 2.08. ALTERNATE RATE OF INTEREST...................... 32
SECTION 2.09. TERMINATION AND REDUCTION OF
COMMITMENTS.............................................. 32
SECTION 2.10. PREPAYMENT...................................... 32
SECTION 2.11. RESERVE REQUIREMENTS; CHANGE IN
CIRCUMSTANCES............................................ 33
SECTION 2.12. CHANGE IN LEGALITY.............................. 35
SECTION 2.13. INDEMNITY....................................... 36
SECTION 2.14. PRO RATA TREATMENT.............................. 36
SECTION 2.15. SHARING OF SETOFFS.............................. 37
SECTION 2.16. PAYMENTS........................................ 37
SECTION 2.17. TAXES........................................... 38
ARTICLE III. LETTERS OF CREDIT...................................... 40
SECTION 3.01. ISSUANCE OF LETTERS OF CREDIT;
LENDER PARTICIPANTS...................................... 40
SECTION 3.02. REQUEST FOR ISSUANCE............................ 42
SECTION 3.03. PAYMENT; REIMBURSEMENT.......................... 42
SECTION 3.04. PAYMENTS IN RESPECT OF INCREASED
COSTS.................................................... 44
SECTION 3.05. FEES............................................ 46
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................... 47
SECTION 4.01. ORGANIZATION; POWERS............................ 47
SECTION 4.02. AUTHORIZATION................................... 47
SECTION 4.03. ENFORCEABILITY.................................. 47
SECTION 4.04. GOVERNMENTAL APPROVALS.......................... 47
SECTION 4.05. FINANCIAL STATEMENTS............................ 48
SECTION 4.06. NO MATERIAL ADVERSE CHANGE...................... 48
SECTION 4.07. TITLE TO PROPERTIES; POSSESSION
UNDER LEASES............................................. 48
SECTION 4.08. SUBSIDIARIES.................................... 49
SECTION 4.09. LITIGATION; COMPLIANCE WITH LAWS................ 49
SECTION 4.10. AGREEMENTS...................................... 50
SECTION 4.11. FEDERAL RESERVE REGULATIONS..................... 50
SECTION 4.12. INVESTMENT COMPANY ACT; PUBLIC
UTILITY HOLDING COMPANY ACT.............................. 50
SECTION 4.13. USE OF PROCEEDS................................. 50
SECTION 4.14. TAX RETURNS..................................... 51
(i)
SECTION 4.15. NO MATERIAL MISSTATEMENTS....................... 51
SECTION 4.16. EMPLOYEE BENEFIT PLANS.......................... 51
SECTION 4.17. ENVIRONMENTAL AND SAFETY MATTERS................ 51
SECTION 4.18. SECURITY AGREEMENT.............................. 52
ARTICLE V. CONDITIONS OF LENDING.................................... 52
SECTION 5.01. ALL BORROWINGS.................................. 52
SECTION 5.02. FIRST BORROWING................................. 53
ARTICLE VI. AFFIRMATIVE COVENANTS................................... 56
SECTION 6.01. EXISTENCE; BUSINESSES AND
PROPERTIES............................................... 56
SECTION 6.02. INSURANCE....................................... 56
SECTION 6.03. OBLIGATIONS AND TAXES........................... 57
SECTION 6.04. FINANCIAL STATEMENTS, REPORTS,
ETC...................................................... 57
SECTION 6.05. LITIGATION AND OTHER NOTICES.................... 59
SECTION 6.06. ERISA........................................... 60
SECTION 6.07. MAINTAINING RECORDS; ACCESS TO
PROPERTIES AND INSPECTIONS............................... 60
SECTION 6.08. USE OF PROCEEDS................................. 61
SECTION 6.09. FISCAL YEAR-END................................. 61
SECTION 6.10. FURTHER ASSURANCES.............................. 61
SECTION 6.11. BAYOU (TENNESSEE) INDEBTEDNESS TO
CASH FLOW................................................ 61
SECTION 6.12. BAYOU (TENNESSEE) CASH FLOW TO
PRINCIPAL DUE............................................ 61
SECTION 6.13. MAINTENANCE OF BAYOU (TENNESSEE)
BORROWING BASE........................................... 62
SECTION 6.14. LANDLORD'S WAIVER AND CONSENT................... 62
SECTION 6.15. LITIGATION SCHEDULE............................. 62
ARTICLE VII. NEGATIVE COVENANTS..................................... 62
SECTION 7.01. INDEBTEDNESS.................................... 62
SECTION 7.02. LIENS........................................... 63
SECTION 7.03. SALE AND LEASE-BACK TRANSACTIONS................ 65
SECTION 7.04. INVESTMENTS, LOANS AND ADVANCES................. 65
SECTION 7.05. MERGERS, CONSOLIDATIONS AND SALES
OF ASSETS................................................ 66
SECTION 7.06. DIVIDENDS AND DISTRIBUTIONS..................... 66
SECTION 7.07. TRANSACTIONS WITH AFFILIATES.................... 67
SECTION 7.08. BUSINESS OF BORROWER AND RECOURSE
SUBSIDIARIES............................................. 67
SECTION 7.09. RESTRICTED EXPENDITURES......................... 68
SECTION 7.10. ACQUISITION EXPENDITURES........................ 68
SECTION 7.11. CURRENT RATIO................................... 68
SECTION 7.12. TANGIBLE NET WORTH.............................. 68
SECTION 7.13. DEBT TO CAPITALIZATION.......................... 68
SECTION 7.14. INTEREST EXPENSE COVERAGE RATIO................. 69
SECTION 7.15. AMENDMENTS...................................... 69
SECTION 7.16. INDEMNITY....................................... 70
ARTICLE VIII. EVENTS OF DEFAULT..................................... 70
ARTICLE IX. THE AGENT............................................... 75
(ii)
ARTICLE X. MISCELLANEOUS............................................ 78
SECTION 10.01. NOTICES........................................ 78
SECTION 10.02. SURVIVAL OF AGREEMENT.......................... 79
SECTION 10.03. BINDING EFFECT................................. 79
SECTION 10.04. SUCCESSORS AND ASSIGNS......................... 80
SECTION 10.05. EXPENSES; INDEMNITY............................ 83
SECTION 10.06. RIGHT OF SETOFF................................ 84
SECTION 10.07. APPLICABLE LAW................................. 85
SECTION 10.08. WAIVERS; AMENDMENT............................. 85
SECTION 10.09. INTEREST RATE LIMITATION....................... 86
SECTION 10.10. ENTIRE AGREEMENT............................... 86
SECTION 10.11. WAIVER OF JURY TRIAL........................... 86
SECTION 10.12. SEVERABILITY................................... 87
SECTION 10.13. COUNTERPARTS................................... 87
SECTION 10.14. HEADINGS....................................... 87
SECTION 10.15. JURISDICTION; CONSENT TO SERVICE
OF PROCESS............................................... 87
SECTION 10.16. CONFIDENTIALITY................................ 88
(iii)
References
Schedule 2.01 Lenders and Commitments
Schedule 4.04 Government Approvals
Schedule 4.09 Litigation
Schedule 4.16 Employee Benefit Plans
Schedule 4.17(a) Environmental Litigation
Schedule 4.17(b) Environmental Liabilities
Schedule 5.01(d) Form of Borrowing Base Certificate
Schedule 7.01 Indebtedness
Schedule 7.02 Liens
Schedule 7.09 Budgeted Capital Expenditures
Exhibit A Form of Promissory Note
Exhibit B Form of Revolving Credit Guarantee
Exhibit C Form of Security Agreement
Exhibit D Form of Opinion
Exhibit E Form of Opinion
Exhibit F Form of Opinion
Exhibit G-1 Form of First Mortgage Indenture
Intercreditor Agreement
Exhibit G-2 Form of Hibernia Facility Intercreditor
Agreement
Exhibit H Form of Subordination Provisions
Exhibit I Form of Landlord Waiver and Consent
Exhibit J Assignment and Acceptance
(iv)
CREDIT AGREEMENT dated as of June 28, 1989, as amended and restated
through June 1, 1995, among BAYOU STEEL CORPORATION, a Delaware corporation (the
"BORROWER"), the several banks and other financial institutions from time to
time parties to this Agreement (the "LENDERS") and CHEMICAL BANK, a New York
banking corporation, as agent for the Lenders hereunder (in such capacity, the
"AGENT").
WHEREAS, the Borrower, the Lenders (the "ORIGINAL LENDERS") party to
this Agreement on June 1, 1995 and the Agent are parties to the Credit Agreement
dated as of June 28, 1989, as amended and restated through November 23, 1993 and
as in effect immediately prior to the effectiveness of this Agreement (the
"ORIGINAL CREDIT AGREEMENT");
WHEREAS, the parties to the Original Credit Agreement wish to amend
and restate the Original Credit Agreement pursuant to this Agreement in order,
INTER ALIA, to increase the aggregate Commitments to $45,000,000, to extend the
Maturity Date and to amend certain covenants; and
WHEREAS, the parties hereto have elected to amend and restate the
Original Credit Agreement pursuant to this Agreement rather than amend the
Original Credit Agreement or enter into a new credit agreement for their
convenience and intend that all indebtedness, obligations and liens created
under the Original Credit Agreement and the other Loan Documents be continued
hereunder and thereunder and remain in full force and effect and not be
discharged, paid, satisfied or cancelled;
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"ACCOUNT DEBTOR" shall mean any Person who is obligated to the
Borrower under, with respect to or on account of an Account.
"ACCOUNTS" shall mean any and all rights of the Borrower to payment
for goods and services sold, leased or otherwise provided by the Borrower,
including any such right evidenced by chattel paper, whether due or to become
due,
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whether or not it has been earned by performance, and whether now or hereafter
acquired or arising in the future, including, without limitation, accounts
receivable from Affiliates or employees of the Borrower.
"ACCOUNTS RECEIVABLE" shall mean all Accounts and all rights in any
returned goods, together with all rights, titles, securities and guarantees with
respect thereto, including any rights to stoppage in transit, replevin,
reclamation and resales, and all related security interests, liens and pledges,
whether voluntary or involuntary.
"ACQUISITION" shall mean the acquisition by the Borrower of
substantially all of the assets of Tennessee Valley Steel Corporation, a
Tennessee corporation, pursuant to the TVS Asset Purchase Agreement.
"ACQUISITION EXPENDITURES" shall mean, for the Borrower in respect
of any period, the aggregate of all expenditures by the Borrower during such
period to acquire, by purchase or otherwise, either (a) the assets of any Person
other than any Subsidiary which constitute substantially all of an operating
unit or business of such Person or (b) all the capital stock of or other
beneficial ownership interests in another Person other than any Subsidiary.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves. For purposes
hereof, the term "LIBO Rate" shall mean the rate (rounded upwards, if necessary,
to the next 1/16 of 1%) at which dollar deposits approximately equal in
principal amount to Chemical's portion of such Eurodollar Borrowing and for a
maturity comparable to such Interest Period are offered to the principal London
office of the 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.
"AFFILIATE" shall mean, with respect to a corporation, any person
(including any member of the immediate family of any natural person) which
directly or indirectly beneficially owns or controls 5% or more of the total
voting power of shares of capital stock of such corporation having the right to
vote for directors under ordinary circumstances, any person controlling,
controlled by or under common control with any such corporation (within the
meaning of Rule 405 under the Securities Act of 1933), and any director or
executive officer of any such corporation.
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"AGGREGATE AMOUNT" shall be as defined in Section 5.01(d).
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1-1/8% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof, "PRIME RATE" shall mean the rate of
interest per annum publicly announced from time to time by Chemical as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly announced.
"BASE CD RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate.
"THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it. "FEDERAL FUNDS EFFECTIVE
RATE" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for the day of
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate
or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds
3
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"APPLICABLE MARGIN": for each Type of Loan at any time, the Leverage
Ratio as set forth under the relevant column heading below:
EURODOLLAR
LEVERAGE RATIO LOANS ABR LOANS
- -------------- ---------- ---------
Less than 2.0 1.50% 0.25%
2.0 and above but less than 3.0 1.75% 0.50%
3.0 and above but less than 4.0 2.00% 0.75%
4.0 and above but less than 5.0 2.25% 1.00%
5.0 and above but less than 6.0 2.50% 1.25%
6.0 and above 3.00% 1.75%
The Applicable Margin for any date shall be determined by reference to the
Leverage Ratio as of the last day of the fiscal quarter most recently ended, and
any change in the Applicable Margin shall become effective upon the delivery to
the Agent of a certificate of a Responsible Officer of the Borrower (which
certificate may be delivered prior to delivery of the relevant financial
statements) with respect to the financial statements to be delivered pursuant to
Section 6.04 for the most recently ended fiscal quarter (a) setting forth in
reasonable detail the calculation of the Leverage Ratio at the end of such
fiscal quarter and (b) stating that the signer has reviewed the terms of this
Agreement and other Loan Documents and has made, or caused to be made under his
or her supervision, a review in reasonable detail of the transactions and
condition of the Borrower and its Subsidiaries during the applicable fiscal
quarter, and that the signer does not have knowledge of the existence as of the
date of such officers' certificate of any Event of Default or Default and any
such change in the Applicable Margin shall apply (i) in the case of the ABR
Loans, to ABR Loans outstanding on such delivery date or made on and after such
delivery date and (ii) in the case of the Eurodollar Loans, to Eurodollar Loans
outstanding on such delivery date or made on and after such delivery date. It is
understood that the foregoing certificate of a Responsible Officer shall be
permitted to be delivered prior to, but in no event later than, the time of the
actual delivery of the financial statements required to be delivered pursuant to
Section 6.04. Notwithstanding the foregoing, (i) at all times from the Closing
Date to the date on which the first certificate required under Section 6.04(d)
is delivered, the Applicable Margin shall be (x) for
4
Eurodollar Loans, 2.25% and (y) for ABR Loans, 1.00% and (ii) if the Borrower
fails to deliver the certificate required under Section 6.04(d) with respect to
a fiscal quarter, then at all times from and including the date the delivery
thereof is due until such certificate is delivered, the Leverage Ratio shall be
deemed, solely for the purposes of this definition, to be greater than 6.0 to
1.0.
"ASSESSMENT RATE" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent (in good faith, but in no event in excess of statutory or regulatory
maximums) as the then current net annual assessment rate that will be employed
in determining amounts payable by Chemical to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or such
successor) of time deposits made in dollars at the Agent's domestic offices.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Agent, in the form
of Exhibit J or such other form as shall be approved by the Agent.
"BAYOU SCRAP" shall mean Bayou Steel Scrap Corporation, a Delaware
corporation and a subsidiary of the Borrower.
"BAYOU (TENNESSEE)" shall mean Bayou Steel Corporation (Tennessee),
a Delaware corporation.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"BORROWING" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"BORROWING BASE" shall mean (x) the sum of 80% of the Eligible
Accounts Receivable and 55% of the Eligible Inventory (excluding any Eligible
Inventory located in Tennessee (unless there shall have been created in favor of
the Collateral Agent for the benefit of the Lenders a first priority perfected
security interest in such Eligible Inventory)) MINUS (y) the sum of (i) the
aggregate principal amount of the Term Loans outstanding at any time PLUS (ii)
interest payable on such Term Loans for the next fiscal quarter.
"BORROWING BASE CERTIFICATE" shall mean a certificate in the form of
Schedule 5.01(d), duly completed and executed by a Financial Officer.
5
"BUDGETED CAPITAL EXPENDITURES" shall mean the Capital Expenditures
set forth on Schedule 7.09 hereto.
"BUSINESS DAY" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which lenders are
open for business in New York City; PROVIDED, HOWEVER, that, when used in
connection with a Eurodollar Loan, the term "BUSINESS DAY" shall also exclude
any day on which lenders are not open for dealings in dollar deposits in the
London interbank market.
"CAPITAL EXPENDITURES" shall mean, for the Borrower and its Recourse
Subsidiaries in respect of any period, the aggregate of all expenditures by the
Borrower and its Recourse Subsidiaries during such period that, in accordance
with GAAP, are or should be included in "additions to property, plant or
equipment" or similar items reflected in the consolidated statement of cash
flows of the Borrower, excluding therefrom any such expenditures constituting
Acquisition Expenditures.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITALIZATION" for any person shall mean the sum of (i) such
person's Funded Indebtedness plus (ii) such person's Tangible Net Worth.
"CASH FLOW" for Bayou (Tennessee) shall mean, for any period, (i)
EBITDA of Bayou (Tennessee) for such period PLUS (ii) cash equity contributed by
the Borrower to Bayou (Tennessee) during such period (excluding cash equity used
to repay, on the Closing Date, amounts outstanding under all loans from the
Borrower to Bayou (Tennessee) as of the Closing Date (such amounts not to be
reborrowed by Bayou (Tennessee)) PLUS (iii) without duplication, cash on hand of
Bayou (Tennessee) on the last day of such period.
A "CHANGE IN CONTROL" shall be deemed to have occurred if the Owners
shall cease to beneficially own securities of the Borrower representing in the
aggregate at least 51% of the combined voting power of the Borrower's then
outstanding securities. For purposes of this definition, a person shall be
deemed to "beneficially own" a security if such person, directly or indirectly,
has the power to vote, or to direct the voting of, such security.
6
"CHEMICAL" shall mean Chemical Bank.
"CLOSING DATE" shall mean the date on which the conditions precedent
set forth in Section 5.02 shall be satisfied.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"COLLATERAL" shall mean all Collateral as defined in the Security
Agreement.
"COLLATERAL AGENT" shall mean the Agent, as collateral agent for the
Lenders and the Term Loan Lenders under the Security Agreement.
"COMMITMENT" shall mean, with respect to each Lender, the commitment
of such Lender to make Loans hereunder as set forth in Section 2.01, as the same
may be reduced from time to time pursuant to Section 2.09.
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"COMMITMENT PERCENTAGE" shall mean, with respect to any Lender, the
ratio (expressed as a percentage) of such Lender's Commitment to the Total
Commitment.
"CONSOLIDATED" shall mean, as to any Person, as applied to any
financial or accounting term, such term determined on a consolidated basis for
such Person and its recourse subsidiaries in accordance with GAAP (except as
otherwise required herein). When used in connection with the Borrower,
"Consolidated" shall mean, as applied to any financial or accounting term, such
term determined on a consolidated basis for the Borrower and its Recourse
Subsidiaries in accordance with GAAP (except as otherwise required herein).
"CONSOLIDATED EBITDA" shall mean, with respect to the Borrower and
its Recourse Subsidiaries, computed on a Consolidated basis for any period, the
sum of (i) Net Income for such period, (ii) Interest Expense for such period,
(iii) Federal, state and local income and franchise taxes deducted from revenue
in determining such Net Income and (iv) depreciation and amortization deducted
from revenue in determining such Net Income.
"CONSOLIDATED FIXED CHARGES" shall mean, with respect to the
Borrower and its Recourse Subsidiaries, computed on a Consolidated basis for any
period, the Interest Expense incurred in such period.
7
"CURRENT ASSETS" shall mean, with respect to any person at any date,
the aggregate amount of all assets of such person which would be classified as
current assets at such date, computed and calculated in accordance with GAAP.
"CURRENT LIABILITIES" shall mean, with respect to any person at any
date, the aggregate amount of all liabilities of such person (including tax and
other proper accruals) which would be classified as current liabilities at such
date, computed and calculated in accordance with GAAP, but, for purposes of this
Agreement, excluding the current portion of long-term Indebtedness.
"DEFAULT" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"DETERMINATION DATE" shall have the meaning assigned such term in
Section 6.04(c).
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"DUE DATE" shall mean the date on which payment is due with respect
to an Account.
"EBITDA" shall mean, for any Person, for any period, the sum of (i)
Net Income for such period, (ii) Interest Expense for such period, (iii)
Federal, state and local income and franchise taxes deducted from revenue in
determining such Net Income and (iv) depreciation and amortization deducted from
revenue in determining such Net Income.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean Accounts of the Borrower
payable in United States Dollars reduced by the aggregate amount of all limits
and deductions provided for in this definition and elsewhere in this Agreement.
Unless otherwise approved in writing by the Agent, no Account shall be deemed to
be an Eligible Account Receivable if and to the extent:
(a) it arises out of a sale made by the Borrower to an Affiliate or
an administrative charge to an Affiliate; or
(b) the Account is unpaid more than 90 days after the original
invoice date; PROVIDED, HOWEVER, that Accounts may remain unpaid up to 180 days
after the original invoice date if (i) such Accounts are supported and secured
by an irrevocable letter of credit or other credit insurance, in a form or
forms, and issued or confirmed by a financial institution, meeting criteria
reasonably specified from time to time by the Agent after consultation with the
Borrower
8
(together with sufficient documentation to permit direct draws by the Agent) and
(ii) such Accounts do not exceed in the aggregate 15% of all Eligible Accounts
Receivable in the then current Borrowing Base; or
(c) it is from an Account Debtor (or any Affiliate thereof) and 25%
or more, in face amount, of all Accounts from such Account Debtor (or any
Affiliate thereof) are ineligible pursuant to (b) above; or
(d) the Account does not satisfy the Borrower's credit and
collection policies or has been or should have been charged off in conformity
with such credit and collection policies; or
(e) the Account from such Account Debtor arises subsequent to a
decree or order for relief with respect to such Account Debtor under the federal
bankruptcy laws, as now or hereafter in effect, unless the Agent shall have
determined that the timely payment and collection of such Account will not be
impaired; or
(f) the Account, when aggregated with all other Accounts of the
Account Debtor and its Affiliates, exceeds 15% or, in the event that the Account
Debtor is Trinity Industries, Inc., 25%, in face value of all Eligible Accounts
Receivable of the Borrower then outstanding; PROVIDED, HOWEVER, that Accounts
which (i) have terms not exceeding 30 days and/or are payable within 30 days (or
in the event that the Account Debtor is Trinity Industries, Inc., have terms not
exceeding 60 days and/or are payable within 60 days) and (ii) are supported or
secured by an irrevocable letter of credit or other credit insurance, in a form
or forms, and issued or confirmed by a financial institution, meeting criteria
reasonably specified from time to time by the Agent after consultation with the
Borrower (together with sufficient documentation to permit direct draws by the
Agent) shall be excluded to the extent of the face amount of such letter of
credit or credit insurance for the purposes of such calculation; or
(g) (i) the Account Debtor is also a creditor of the Borrower, (ii)
the Account Debtor has disputed its liability on, or the Account Debtor has made
any claim or defense with respect to, such Account or any other Account due from
such Account Debtor to the Borrower, which has not been resolved or (iii) the
Account otherwise is or may become subject to any right of setoff by the Account
Debtor; PROVIDED, THAT any Account deemed ineligible pursuant to this clause (g)
shall only be ineligible to the extent of the amount owed by the Borrower to the
Account Debtor, the amount of such dispute, claim or defense, or the amount of
such setoff, as applicable; PROVIDED, FURTHER, that routine adjustments to an
Account common in the industry in which
9
the Borrower engages and common to the Borrower's business, such as for volume
or quantity differences, will be deemed not to constitute a dispute, claim,
defense to setoff; or
(h) any bankruptcy, insolvency or similar event or proceeding has
occurred or commenced and is continuing with respect to the Account Debtor,
unless the payment of Accounts from such Account Debtor is secured in a manner
satisfactory to the Agent or, if the Account from such Account Debtor arises
subsequent to a decree or order for relief with respect to such Account Debtor
under the federal bankruptcy laws, as now or hereafter in effect, the Agent
shall have determined that the timely payment and collection of such Account
will not be impaired; or
(i) the sale is to an Account Debtor outside the continental United
States or Canada, unless the Account Debtor thereon has supplied the Borrower
with an irrevocable letter of credit or other credit insurance, in a form or
forms, and issued or confirmed by a financial institution, meeting criteria
reasonably specified from time to time by the Agent after consultation with the
Borrower (together with sufficient documentation to permit direct draws by, or
payment to, the Agent, as the case may be); PROVIDED, HOWEVER, that
notwithstanding the foregoing, not more than $1,000,000 of Accounts resulting
from such sales to Account Debtors located in Mexico shall be included as
Eligible Accounts Receivable; or
(j) the sale to the Account Debtor is on a bill-and-hold (except
where the Account represents a final sale or transfer of title to the Account
Debtor pursuant to appropriate bill-and-hold acknowledgements, on terms and
conditions reasonably approved by the Agent), guaranteed sale, sale-and-return,
sale on approval or consignment basis or made pursuant to any other written
agreement providing for repurchase or return, PROVIDED, HOWEVER, that no Account
shall be excluded pursuant to this clause (j) solely as a result of the
Borrower's customary quality warranties that it provides to its customers; or
(k) the Account is the result of a charge-back or re-invoice of a
disputed or defaulted Account; or
(l) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless Borrower duly assigns its
rights to payment of such Account to the Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss. 3727 ET SEQ.); or
(m) the goods giving rise to such Account have not been shipped and
delivered to the Account Debtor or the services giving rise to such Account have
not been performed
10
or the Account otherwise does not represent a final sale or transfer of title to
the Account Debtor pursuant to appropriate bill and hold acknowledgements, on
terms and conditions reasonably approved by the Agent; or
(n) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board
of Governors of the Federal Reserve System, in each case as amended; or
(o) the Account is subject to any restrictions on the transfer,
assignability or sale thereof, enforceable against the assignee, except as
described in clause (l) above; or
(p) the Agent does not have a valid and perfected first priority
security interest in such Account or the Account does not otherwise conform to
the representations and warranties contained in the Loan Documents; or
(q) it is an Account which may be set-off or charged against any
adverse security deposit, progress payment or other similar advance or deposit
made by or for the benefit of the applicable Account Debtor; PROVIDED that any
Account deemed ineligible pursuant to this clause (q) shall only be ineligible
to the extent of the applicable security deposit, progress payment or other
advance or deposit.
"ELIGIBLE INVENTORY" shall mean Inventory of the Borrower that
consists of raw materials, billets and finished goods, valued at the lower of
cost (prior to the LIFO reserve) or market on a basis consistent with the
Borrower's current and historical accounting practice, LESS (i) any goods
returned or rejected by the Borrower's customers for reasons relating to the
quality of such goods and (ii) any goods in transit to third parties. The
valuation of Eligible Inventory shall also be reduced by the amount of
transportation costs. Unless otherwise approved in writing by the Agent, no
Inventory shall be deemed Eligible Inventory if:
(a) the Inventory is not owned solely by the Borrower or is leased
or on consignment or the Borrower does not have good, valid and marketable title
thereto; or
(b) the Inventory is not located at or is not in transit to property
that is either owned or leased by the Borrower; PROVIDED, HOWEVER, that where
such item of Inventory is located on a leasehold, such Inventory shall not be
deemed Eligible Inventory unless (i) the applicable lessor has been notified of
the Lien granted under the
11
Security Agreement and has entered into a written agreement, satisfactory in
form and substance to the Collateral Agent, acknowledging that such item of
Inventory is subject to the Lien granted under the Security Agreement and
waiving and releasing any applicable Lien held by it with respect to such item
of Inventory at any time upon the occurrence or during the continuance of a
Default or Event of Default and such other rights as may be reasonably required
by the Collateral Agent or (ii) the Collateral Agent shall have received (A) an
opinion, in form and substance acceptable to and from local counsel approved by
the Collateral Agent, and addressed to the Agent, the Issuing Bank, the Lenders,
the Term Loan Lenders and the Collateral Agent, to the effect that there is no
law in the jurisdiction where such Inventory is located that would allow
Inventory located on such leasehold to be subjected to any Lien in favor of the
applicable lessor and (B) a certificate of a Responsible Officer or the General
Counsel of the Borrower certifying that there is no term or condition of any
agreement or other document governing the relationship between the Borrower and
the applicable lessor that provides for any such Lien; PROVIDED FURTHER that
Inventory shall not be excluded which is consigned by the Borrower pursuant to
agreements which, among other things, (i) provide for such Inventory to be
segregated and clearly identified as the property of the Borrower, (ii) grant to
the Borrower a first priority Lien on and security interest in such consigned
Inventory (and as to which Uniform Commercial Code financing statements have
been filed in the appropriate locations by the Borrower) and (iii) permit the
Borrower reasonable access to the premises on which such Inventory is located
for the purpose of inspecting such Inventory, such agreements and copies of such
financing statements to be provided to the Agent; or
(c) the Inventory is not subject to a perfected first priority Lien
in favor of the Collateral Agent except, with respect to Eligible Inventory in
transit to sites described in clause (b) above, for liens for transportation and
processing charges; or
(d) the Inventory is not located in the United States of America; or
(e) the Inventory is more than 24 months old or is otherwise aged
according to the Borrower's accounting policies (other than Inventory that is
raw materials or semi-finished Inventory that, in accordance with such
accounting policies, is not aged) or the Inventory does not otherwise conform to
the representations and warranties contained in the Loan Documents; PROVIDED,
HOWEVER, that (i) the Borrower shall not be required to test the Inventory for
aging in accordance with such accounting policies more often than once in any
period of 12 consecutive months and (ii) if the results of such test reveal that
less than 2.5%
12
of the Borrower's Inventory is so aged, then all of such Inventory shall,
subject to the other provisions of this definition, be deemed Eligible
Inventory; or
(f) the Inventory is classified under the heading "miscellaneous" in
accordance with the accounting policies of the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Article VIII and in Article VII of the Term Loan Agreement.
"EXCESS CASH FLOW" of the Borrower shall mean, for any period, the
excess of (a) the sum, without duplication, of (i) Consolidated EBITDA for such
period, (ii) the amount of returned surplus assets of any pension plan during
such fiscal year to the extent not included in Consolidated Net Income to
determine Consolidated EBITDA for such period, (iii) extraordinary cash gains to
the extent subtracted or otherwise not included in Consolidated Net Income to
determine Consolidated EBITDA for such period and (iv) extraordinary non-cash
losses during such period subtracted in the determination of Consolidated Net
Income for such period, OVER (b) the sum, without duplication, of (i) the
aggregate amount of permitted cash Capital Expenditures made by the Borrower and
its Recourse Subsidiaries during such period, (ii) the aggregate amount of
payments of principal in respect of any Indebtedness (excluding Indebtedness
under this Agreement) not prohibited herein during such period, (iii) Interest
Expense of the Borrower determined on a Consolidated basis for such period, (iv)
taxes actually paid in such period or to be paid subsequently on account of such
period to the extent added to Consolidated Net Income to determine Consolidated
EBITDA for such period, (v) extraordinary cash losses to the extent added to
Consolidated Net Income to determine Consolidated EBITDA for such period, (vi)
non-cash currency exchange gains during such period included in Consolidated Net
Income of the
13
Borrower for such period, (vii) all expenses, costs and fees incurred for such
period in connection with the Acquisition (such expenses, costs and fees not to
exceed $1,200,000 for each of fiscal years 1995, 1996 and 1997) and (viii)
dividends actually paid by the Borrower in accordance with Section 7.06.
"FEES" shall mean the Letter of Credit Fees as defined in Section
3.05, and the Commitment Fees as defined in Section 2.05.
"FINANCIAL OFFICER" of the Borrower or any Subsidiary shall mean the
chairman, chief executive officer, president, vice-president, the chief
financial officer, principal accounting manager, treasurer or controller.
"FIRST MORTGAGE FINANCING" means Indebtedness in an aggregate
principal amount equal to $75,000,000 incurred by the Borrower under the First
Mortgage Indenture.
"FIRST MORTGAGE INDENTURE" means (i) the Indenture, dated April 2,
1994, between the Borrower and First National Bank of Commerce, as trustee
thereunder, relating to the First Mortgage Financing, (ii) the Notes issued
pursuant thereto and (iii) any mortgage, security agreement, guarantee or other
document securing or guaranteeing the First Mortgage Financing, as such may
hereafter be modified, renewed, substituted, replaced or reissued.
"FIRST MORTGAGE INDENTURE INTERCREDITOR AGREEMENT" shall mean the
Intercreditor Agreement dated as of November 23, 1993, as amended and restated
through June 1, 1995 between First National Bank of Commerce, as trustee, and
Chemical, as Agent and as Collateral Agent, on behalf of the Lenders, in the
form of Exhibit G-1 hereto.
"FUNDED INDEBTEDNESS" shall mean, as to any Person, the Indebtedness
of such Person other than Guarantees and Letters of Credit which by its terms or
by the terms of any instrument or agreement relating thereto matures one year or
more from the date of the initial creation thereof; PROVIDED that Funded
Indebtedness shall include any Indebtedness which does not otherwise come within
the foregoing definition but which is directly or indirectly renewable or
extendible at the option of such Person to a date of one year or more (including
an option of such Person under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more) from the date of the initial creation of such Indebtedness or which may be
payable out of the proceeds of a similar obligation pursuant to the terms of
such obligation or any such agreement; PROVIDED, FURTHER,
14
Funded Indebtedness shall include the then current maturities thereof.
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"GUARANTEE" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital,
available cash or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness;
PROVIDED, HOWEVER, that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of business.
"HIBERNIA FACILITY INTERCREDITOR AGREEMENT" shall mean the
Intercreditor Agreement, dated as of November 23, 1993, as amended and restated
through June 1, 1995, between Hibernia National Bank and Chemical, as Agent and
as Collateral Agent, for the benefit of the Lenders and the Term Loan Lenders,
in the form of Exhibit G-2 hereto.
"INDEBTEDNESS" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services (except
current accounts payable arising in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (g) all
15
Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
interest rate protection agreements, foreign currency exchange agreements or
other interest or exchange rate hedging arrangements and (j) all obligations of
such person as an account party in respect of letters of credit and bankers'
acceptances. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner.
"INTERCREDITOR AGREEMENTS" shall mean the First Mortgage Indenture
Intercreditor Agreement and the Hibernia Facility Intercreditor Agreement.
"INTEREST EXPENSE" shall mean, with respect to any Person and its
recourse subsidiaries, computed on a Consolidated basis for any period, the sum
(net of all Interest Income) of (a) gross interest expense for such period
determined in accordance with GAAP consistently applied, including (i) the
amortization of debt discounts, (ii) the amortization of all fees payable in
connection with the incurrence of Indebtedness to the extent included in
interest expense and (iii) the portion of any payments or accruals with respect
to Capital Lease Obligations allocable to interest expense and (b) Consolidated
capitalized interest of such Person and its recourse subsidiaries.
"INTEREST INCOME" of any Person shall mean all amounts that would be
included under interest income on a consolidated income statement of such Person
determined in accordance with GAAP, less accreted amounts attributable to
original issue discount securities prior to the receipt thereof and other
non-cash interest payments or accruals.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months duration been
applicable to such Borrowing, and, in addition, the date of any refinancing or
conversion of such Borrowing with or to a Borrowing of a different type.
"INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect and (b) as to any ABR
Borrowing, the period commencing on the date of such
16
Borrowing or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11 or 2.12; PROVIDED, HOWEVER, that 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, in the case of a
Eurodollar Borrowing only, 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. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"INVENTORY" shall mean all merchandise intended for sale by the
Borrower, or consumed in the Borrower's business, together with all raw
materials, including, without limitation, scrap, billets, shapes, additives,
alloys, fluxes, electrodes and refractories, whether now owned or hereafter
acquired or arising, and all such property the sale or other disposition of
which has given rise to Accounts and which has been returned to, repossessed or
stopped in transit by or on behalf of the Borrower; PROVIDED, HOWEVER, that
Inventory shall not include (i) all bearings, rolls, guides and stores that
relate to machinery and equipment mortgaged to First National Bank of Commerce,
as Trustee (the "Trustee"), pursuant to the First Mortgage Indenture, (ii) all
licenses, franchises, permits, patents, patent rights, formulae, processes,
compounds, drawings, designs, blueprints, surveys, reports, manuals and
operating standards relating to or used in the operation of the Borrower's
business and all trade secret rights, rights in works of authorship and contract
rights relating to computer software programs in whatever form created or
maintained, (iii) all proceeds of the properties, rights and interests referred
to in clauses (i) and (ii) above and (iv) any other properties, rights or
interests granted to the Trustee pursuant to the First Mortgage Indenture, and
thereafter assumed by the Borrower.
"INVESTMENT" in any person shall mean any loan or advance to, any
acquisition of capital stock, equity interest, obligation or other security of,
or capital contribution to, or other investment in such person PROVIDED that
"Investments" shall exclude Acquisition Expenditures.
"ISSUING BANK" shall mean Chemical.
"ISSUING BANK PAYMENT AMOUNT" shall mean, with respect to a Letter
of Credit Disbursement, an amount equal
17
to the amount of such Letter of Credit Disbursement less the amount of any
payment from the Borrower in partial satisfaction of the reimbursement
obligation of the Borrower with respect to such Letter of Credit Disbursement
received by the Issuing Bank by 12:00 Noon New York time, on the date of such
Letter of Credit Disbursement pursuant to Section 3.03.
"LETTERS OF CREDIT" shall mean the letters of credit issued by the
Issuing Bank pursuant to Article III, including any Scheduled Letters of Credit
deemed to have been issued hereunder pursuant to Section 3.01(b).
"LETTER OF CREDIT DISBURSEMENT" shall mean a disbursement by the
Issuing Bank to the beneficiary of a Letter of Credit in connection with a
drawing thereunder.
"LETTER OF CREDIT EXPOSURE" shall mean at any time the sum of (a)
the aggregate undrawn amount of Letters of Credit issued for the account of the
Borrower and outstanding and (b) the aggregate amount of all drawings under
Letters of Credit for which the Lenders shall not have been reimbursed as
provided in Section 3.03.
"LEVERAGE RATIO" shall mean, at any date, the ratio of Consolidated
Indebtedness of the Borrower and its Subsidiaries as of the last day of the
fiscal quarter most recently ended prior to such date to Consolidated EBITDA for
the four consecutive fiscal quarters ended as of such date.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LOANS" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to Section 2.01. Each Loan shall be a Eurodollar Loan or an
ABR Loan.
"LOAN DOCUMENTS" shall mean this Agreement, the Security Agreement,
the Notes, the Term Loan Agreement, the Term Notes, the Revolving Credit
Guarantee and the Term Loan Guarantee.
"LOAN PARTIES" shall mean the Borrower and Bayou (Tennessee).
"MARGIN STOCK" shall have the meaning given such term under
Regulation U.
18
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect
on the business, assets, operations or financial condition of the Borrower and
its Recourse Subsidiaries taken as a whole, (b) a material impairment of the
ability of the Borrower or any Subsidiary to perform any of its obligations
under any Loan Document to which it is or will be a party or (c) a material
impairment of the rights of or benefits available to the Lenders or Term Loan
Lenders under any Loan Document.
"MATURITY DATE" shall mean the fifth anniversary of the Closing Date
(or if such day is not a Business Day, the immediately preceding Business Day).
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing any obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"MEYERS" means Howard M. Meyers, an individual with a business
address on the Closing Date at 1111 W. Mockingbird Lane, Dallas, Texas 75247.
"NET INCOME" shall mean, with respect to any Person and its recourse
subsidiaries for any period, (a) net revenues and other proper income for such
period minus to the extent not counted in calculating net revenue (b) the
aggregate for such period of, without duplication, (i) cost of goods sold, (ii)
Interest Expense, (iii) operating expenses, (iv) selling, general and
administrative expenses, (v) taxes, (vi) depreciation and amortization, (vii)
any other items that are treated as expenses under GAAP, but excluding from the
definition of Net Income any non-cash extraordinary gains or losses (including
the effect of the adoption of Financial Accounting Standards No. 106 and 109)
and (viii) in the case of the Borrower, payments made with respect to any
premium upon the prepayment of Indebtedness outstanding under the First Mortgage
Indenture, all computed on a Consolidated basis in accordance with GAAP
consistently applied.
"NOTE" shall mean a promissory note of the Borrower, substantially
in the form of Exhibit A, evidencing Loans.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a non-recourse
subsidiary of a Person or any of its subsidiaries where (a) neither such Person
nor any subsidiary of such Person (other than such non-recourse subsidiary): (i)
provides any Guarantee or credit support
19
for such Indebtedness (including any undertaking, guaranty, indemnity, agreement
or instrument which would constitute Indebtedness); or (ii) is directly or
indirectly liable for such Indebtedness, (b) the holders of such Indebtedness
expressly waive any recourse which they may have, in law, equity or otherwise,
whether based on misrepresentation, control, ownership or otherwise, to such
Person and any subsidiary of such Person (other than such non-recourse
subsidiary) and (c) no default with respect to such Indebtedness (including any
rights which the holder thereof may have to take enforcement action against such
non-recourse subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of such Person or any subsidiary of such Person
(other than such non-recourse subsidiary) to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a Non-Recourse
Subsidiary of the Borrower or any of its Subsidiaries where (a) neither the
Borrower nor any Subsidiary (other than such Non-Recourse Subsidiary): (i)
provides any Guarantee or credit support for such Indebtedness (including any
undertaking, guaranty, indemnity, agreement or instrument which would constitute
Indebtedness); or (ii) is directly or indirectly liable for such Indebtedness,
(b) the holders of such Indebtedness expressly waive any recourse which they may
have, in law, equity or otherwise, whether based on misrepresentation, control,
ownership or otherwise, to the Borrower and any Subsidiary (other than such
Non-Recourse Subsidiary) and (c) no default with respect to such Indebtedness
(including any rights which the holder thereof may have to take enforcement
action against such Non-Recourse Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Borrower or any
Subsidiary of such Person (other than such Non-Recourse Subsidiary) to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"NON-RECOURSE SUBSIDIARY" of any Person means a special purpose
subsidiary of such Person or any of its subsidiaries formed to acquire
securities or assets of a third party and which (i) has no Indebtedness other
than Non-Recourse Indebtedness and (ii) does not, directly or indirectly, own
any Indebtedness, stock or securities of, and has no Investment in, such Person
or any recourse subsidiary of such Person.
"NON-RECOURSE SUBSIDIARY" shall mean any non- recourse subsidiary of
the Borrower or any of its Subsidiaries.
20
"ORIGINAL CREDIT AGREEMENT" shall have the meaning specified in the
recitals to this Agreement.
"OWNERS" means any or all of (i) Meyers, (ii) any son, daughter,
stepson, stepdaughter or spouse of Meyers, (iii) any lineal descendant of an
individual referred to in clause (i) or clause (ii), and (iv) any trust in which
one or more of the persons referred to in clause (i), (ii) or (iii) are
principal beneficiaries.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within 365 days from the date of acquisition thereof;
(b) Investments in commercial paper maturing within 365 days from
the date of acquisition thereof and having, at such date of acquisition, a
rating of A- 1 or better from Standard & Poor's Ratings Group or P-1 or
better from Moody's Investors Service, Inc. or any successor to either of
such rating services;
(c) Investments in certificates of deposit, banker's acceptances and
time deposits maturing within 365 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
lender organized under the laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided
profits of not less than $250,000,000;
(d) Investments pursuant to repurchase agreements and reverse
repurchase agreements relating to 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 of America or pursuant to repurchase agreements with nationally
recognized securities dealers having total capital funds in excess of
$200,000,000;
(e) other Investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined
capital and
21
surplus and undivided profits of not less than $250,000,000;
(f) loans or advances to employees in an aggregate
amount not to exceed $100,000;
(g) loans to, or Investments in, any Person, other than Non-Recourse
Subsidiaries, not to exceed at any time outstanding an aggregate amount
equal to $250,000 with respect to loans to, and Investments in, all such
Persons (the value of any such loans and Investments to be the original
amount of the loan or Investment less the amount repaid or otherwise
returned in cash);
(h) Investments of the Borrower in Bayou (Tennessee) pursuant to
Sections 6.11, 6.12 and 6.13;
(i) Cash equity investments of the Borrower in Bayou (Tennessee) not
to exceed at any time outstanding an aggregate amount equal to
$15,000,000, the proceeds of which shall be used by Bayou (Tennessee) for
working capital purposes only;
(j) Cash equity investments of the Borrower in Bayou (Tennessee)
from proceeds of the Preferred Stock, the proceeds of which investments
shall be used by Bayou (Tennessee) to repay, on the Closing Date, all
amounts outstanding under all loans from the Borrower to Bayou (Tennessee)
as of the Closing Date, such amounts not to be reborrowed by Bayou
(Tennessee), and for general corporate purposes;
(k) Cash equity investments of the Borrower in Bayou (Tennessee) the
proceeds of which shall be used by Bayou (Tennessee) to prepay the Term
Loans in accordance with subsection 2.5(b) of the Term Loan Agreement; and
(l) Cash equity investments of the Borrower in Non-Recourse
Subsidiaries of the Borrower PROVIDED that (i) at the time any such
Investment is made, there shall be (x) no Loans outstanding and (y) no
Letter of Credit Exposure in excess of $2,000,000, (ii) such Investments
shall be made solely with Unencumbered Cash of the Borrower, (iii) after
giving effect to such Investments, Unencumbered Cash owned and held by or
for the benefit of the Borrower shall be not less than $2,500,000 and (iv)
such Investments shall not exceed $15,000,000 in the aggregate at any
time.
"PERSON" OR "PERSON" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
22
"PLAN" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for employees of the Borrower or any ERISA Affiliate.
"PREFERRED STOCK" shall mean the fixed-rate preferred stock of the
Borrower to be issued on or before the Closing Date having an aggregate
liquidation value of $15,000,000.
"PREFERRED STOCK DOCUMENTS" shall mean (i) the Preferred Stock and
Warrant Purchase Agreement and (ii) the Shareholder Agreement.
"PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT" shall mean the
Preferred Stock and Warrant Purchase Agreement, made as of June , 1995, by and
between the Borrower and Rice.
"RECOURSE SUBSIDIARY" of a Person means any subsidiary of such
Person that is not a non-recourse subsidiary of such Person.
"RECOURSE SUBSIDIARY" shall mean any recourse subsidiary of the
Borrower.
"REGISTER" shall have the meaning given such term in Section
10.04(d).
"REGULATION G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REPORTABLE EVENT" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"REQUIRED LENDERS" shall mean, at any time, Lenders and Term Loan
Lenders holding Loans and Term Loans, respectively, representing at least
66-2/3% of the aggregate principal amount of the aggregate Loans and Term Loans
outstanding or, if no Loans or Term Loans are outstanding,
23
Lenders having Commitments representing at least 66-2/3% of the aggregate
Commitments.
"RESPONSIBLE OFFICER" of the Borrower or any Subsidiary shall mean
any executive officer or Financial Officer of such corporation and any other
officer or similar representative thereof responsible for the administration of
the obligations of such corporation in respect of this Agreement.
"REVOLVING CREDIT GUARANTEE" shall mean the Guarantee, dated as of
June 1, 1995, made by Bayou (Tennessee) in favor of the Agent, for the ratable
benefit of the Lenders, in substantially the form of Exhibit B.
"RICE" shall mean Rice Partners II, L.P., a Delaware limited
partnership.
"RIVER ROAD REALTY" shall mean River Road Realty Corporation, a
Louisiana corporation and a subsidiary of the Borrower.
"SCHEDULED LETTERS OF CREDIT" shall mean the letters of credit, if
any, issued under the Original Credit Agreement that are outstanding on the
Closing Date.
"SECURITY AGREEMENT" shall mean the Security Agreement, dated as of
June 28, 1989, as amended and restated through June 1, 1995, between the
Borrower and the Collateral Agent, on behalf of the Lenders and the Term Loan
Lenders, in substantially the form of Exhibit C hereto.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Revolving Credit Guarantee and the Term Loan Guarantee.
"SHAREHOLDER AGREEMENT" shall mean the Shareholder Agreement, made
as of June , 1995, by and between the Borrower, Howard M. Meyers, Bayou Steel
Properties Limited, a Delaware corporation, and Rice.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which Chemical is
subject (a) with respect to the Base CD Rate (as such term is used in the
definition of "Alternate Base Rate"), for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D of the
24
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
which may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"SUBORDINATED INDEBTEDNESS" shall mean, with respect to the
Borrower, Indebtedness subordinated in right of payment to the monetary
obligations of the Borrower under this Agreement and the Term Loan Guarantee
upon the terms set forth in Exhibit H hereto or upon other terms reasonably
satisfactory to and approved in writing by the Agent with the consent of the
Required Lenders, which by its terms shall not mature or be subject to any
prepayment, repurchase or any amortization of principal prior to the Maturity
Date.
"SUBSIDIARY" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"SUBSIDIARY" shall mean any subsidiary of the Borrower.
"TANGIBLE NET WORTH" shall mean, with respect to any person at any
time, (i) the sum of such person's capital stock, capital in excess of par or
stated value of shares of its capital stock, retained earnings and any other
account principles which, in accordance with GAAP, constitutes stockholders'
equity (such sum otherwise including, without duplication, the Preferred Stock),
less (ii) treasury stock and any minority interest in Subsidiaries, less (iii)
the amount of all assets reflected as goodwill, patents, research and
development and all other assets required to be classified as intangibles in
accordance with GAAP and less (iv) the amount of any write up in the value of
any asset above the cost or depreciated cost thereof to such person.
"TERM LOAN AGREEMENT" shall mean the Term Loan Agreement, dated as
of June 1, 1995, among Bayou (Tennessee), the Term Loan Lenders and the Agent,
as the same may be amended, modified or otherwise supplemented for time to time.
25
"TERM LOAN GUARANTEE" shall mean the Guarantee, dated as of June 1,
1995, made by the Borrower in favor of the Agent, for the ratable benefit of the
Term Loan Lenders, in substantially the form of Exhibit B to the Term Loan
Agreement.
"TERM LOANS" shall mean the term loans made to Bayou (Tennessee)
under the Term Loan Agreement.
"TERM LOAN LENDERS" shall mean the lenders from time to time holding
Term Loans under the Term Loan Agreement.
"TERM NOTES" shall mean the promissory notes executed and delivered
by Bayou (Tennessee) pursuant to subsection 2.2 of the Term Loan Agreement.
"TOTAL COMMITMENT" shall mean the sum of the Lenders' Commitments,
as the same may be reduced from time to time pursuant to Section 2.09.
"TRANSACTIONS" shall have the meaning assigned to such term in
Section 4.02.
"TVS ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement
dated as of January 30, 1995 among the Borrower, Bayou (Tennessee), Tennessee
Valley Steel Corporation, BT Commercial Corporation and NationsBank N.A.
(Carolinas), as the same may be amended, modified or supplemented from time to
time in accordance with Section 7.15.
"TYPE", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "RATE" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"UNENCUMBERED CASH" shall mean cash owned and held by or on behalf
of the Borrower which is not subject to the Lien of another Person, it being
agreed that any such cash subject to any depositary bank set-off rights or any
depositary agreements with such bank shall be deemed "unencumbered" for purposes
of this Agreement and the Term Loan Agreement.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. (a) The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever
26
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". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower notifies the Agent that the Borrower wishes to amend any
covenant in Article VII or any related definition to eliminate the effect of any
change in GAAP on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Lenders wish to amend Article VII or any related
definition for such purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.
(b) For purposes of the calculation of the Borrowing Base, the
determination of compliance with this Agreement and the other Loan Documents,
including the financial covenants contained herein, the interpretation of the
defined terms used in such financial covenants and the preparation of the
financial statements of the Borrower and its Subsidiaries delivered to the
Lenders pursuant to this Agreement, Inventory of the Borrower and its
Subsidiaries shall be valued on a FIFO basis, computed and consolidated in
accordance with GAAP, as consistently applied.
ARTICLE II. THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Loans to the Borrower, at any time
and from time to time on or after the Closing Date and until the earlier of the
Maturity Date and the termination of the Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
not to exceed, when added to such Lender's pro rata percentage, based upon its
Commitment, of the Letter of Credit Exposure at such time, the lesser of (a) the
Commitment set forth opposite its name in Schedule 2.01 hereto, as the same may
be reduced from time to time pursuant to Section 2.09 and (b) such Lender's pro
rata percentage, based upon its Commitment, of the Borrowing Base in effect at
such time.
27
Within the limits set forth in the preceding sentence, the Borrower
may borrow, pay or prepay and reborrow Loans on or after the Closing Date and
prior to the Maturity Date, subject to the terms, conditions and limitations set
forth herein.
SECTION 2.02. LOANS. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commit- ments; PROVIDED, HOWEVER, that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). The Loans comprising each Borrowing shall be in
an aggregate principal amount which is (a) if an ABR Loan, an integral multiple
of $100,000 and not less than $200,000 and (b) if a Eurodollar Loan, an integral
multiple of $250,000 and not less than $1,000,000 (or an aggregate principal
amount equal to the remaining balance of the Commitments); PROVIDED, HOWEVER,
that unless otherwise agreed in writing by all the Lenders, the Eurodollar Loans
made on any date must be in a minimum aggregate principal amount of $1,000,000.
(b) Each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans, as the Borrower may request pursuant to Section 2.03. Each
Lender may at its option fulfill its Commitment with respect to any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; PROVIDED that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and the applicable Note. Borrowings of more than one Type may be
outstanding at the same time; PROVIDED, HOWEVER, that the Borrower shall not be
entitled to request any Borrowing which, if made, would result in an aggregate
of more than five separate Eurodollar Loans of any Lender being outstanding
hereunder at any one time. For purposes of the foregoing, Loans having different
Interest Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a Loan in
the amount of its pro rata portion, as determined under Section 2.14, of each
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Agent in New York, New York, not later than 2:00 P.M.,
New York City time, and the Agent shall by 3:00 p.m., New York City time, credit
the amounts so received to the general deposit account of the Borrower with the
Agent or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the
28
respective Lenders. Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender's portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with this paragraph (c) and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have made
such portion available to the Agent, such Lender and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent at
(i) in the case of the Borrower the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, the Federal
Funds Effective Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount shall constitute such Lender's Loan as part of such
Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
(e) The Borrower may refinance all or any part of any Borrowing with
a Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with Section
2.04 or 2.10, as applicable, with the proceeds of a new Borrowing, and the
proceeds of the new Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid by the Lenders to
the Agent or by the Agent to the Borrower pursuant to paragraph (c) above.
SECTION 2.03. NOTICE OF BORROWINGS. The Borrower shall give the
Agent written or by telecopy notice (or telephone notice promptly confirmed in
writing or by telecopy) (a) in the case of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, three Business Days before a proposed
borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon,
New York City time, on the day of a proposed borrowing. Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify
(i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing;
(ii) the date of such Borrowing (which shall be a Business Day) and the amount
thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto. If no election as to the Type of Borrowing
is
29
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration. If the Borrower shall not have given
notice in accordance with this Section 2.03 of its election to refinance a
Borrowing prior to the end of the Interest Period in effect for such Borrowing,
then the Borrower shall (unless such Borrowing is repaid at the end of such
Interest Period) be deemed to have given notice of an election to refinance such
Borrowing with an ABR Borrowing. In order that each Lender may make a Loan
pursuant to the terms set forth in Section 2.02(c), the Agent shall promptly
advise the Lenders of any notice given pursuant to this Section 2.03 and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. NOTES; REPAYMENT OF LOANS. The Loans made by each
Lender shall be evidenced by a Note, duly executed on behalf of the Borrower,
dated the Closing Date, in substantially the form attached hereto as Exhibit A,
with the blanks appropriately filled, payable to the order of such Lender in a
principal amount equal to such Lender's Commitment. The outstanding principal
balance of each Loan, as evidenced by such a Note, shall be payable on the last
day of the Interest Period applicable to such Loan and on the Maturity Date.
Each Note shall bear interest from the date of the first borrowing hereunder on
the outstanding principal balance thereof as set forth in Section 2.06. Each
Lender shall, and is hereby authorized by the Borrower to, endorse on the
schedule attached to each Note delivered to such Lender (or on a continuation of
such schedule attached to such Note and made a part thereof), or otherwise to
record in such Lender's internal records, an appropriate notation evidencing the
date and amount of each Loan from such Lender, each payment and prepayment of
principal of any such Loan, each payment of interest on any such Loan and the
other information provided for on such schedule; PROVIDED, HOWEVER, that the
failure of any Lender to make such a notation or any error therein shall not
affect the obligation of the Borrower to repay the Loans made by such Lender in
accordance with the terms of this Agreement and the applicable Notes.
SECTION 2.05. FEES. (a) The Borrower agrees to pay to each Lender,
through the Agent, on the last day of March, June, September and December in
each year, and on the date on which the Commitment (including amounts available
for Letters of Credit) of such Lender shall be terminated as provided herein, a
commitment fee (a "Commitment Fee") of 1/2 of 1% per annum on the average daily
unused amount of the Commitment (including unused available amounts for Letters
of Credit) of such Lender during the preceding quarter (or shorter period
commencing with the Closing Date
30
or ending with the Maturity Date or the date on which the Commitment of such
Lender shall be terminated). All Commitment Fees shall be computed on the basis
of the actual number of days elapsed in a year of 365 days. The Commitment Fee
due to each Lender shall commence to accrue on the date of this Agreement and
shall cease to accrue on the date on which the Commitment of such Lender shall
be terminated as provided herein.
(b) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of (i)
365 or 366 days, as the case may be, during any period in which the Alternate
Base Rate is based on the Prime Rate and (ii) 360 days during any period in
which the Alternate Base Rate is based on the Base CD Rate or the Federal Funds
Effective Rate) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.07. DEFAULT INTEREST. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of (i) 365 or 366 days, as the case may be, during
any period in which the Alternate Base Rate is based on the Prime Rate and (ii)
360 days, during any period in which the Alternate base rate is based on the
Base CD rate or the Federal Funds Effective Rate) equal to the rate at the time
applicable to ABR Borrowings plus 2%.
31
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Agent shall have determined that
dollar deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available in the London interbank market, or that the rates at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Agent shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the
Borrower and the Lenders. In the event of any such determination, any request by
the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall, until
the Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, be deemed to be a request for an ABR
Borrowing. Each determination by the Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The
Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
PROVIDED, HOWEVER, that each partial reduction of the Commitments shall be in an
integral multiple of $500,000 and in a minimum principal amount of $1,000,000;
PROVIDED, FURTHER, that any prepayment pursuant to this Section 2.09 shall be
applied FIRST to prepay the Loans then outstanding and then to cash
collateralize any Letter of Credit Exposure on terms reasonably satisfactory to
the Agent.
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective applicable
Commitments. The Borrower shall pay to the Agent for the account of the Lenders,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced and accrued through the date of such
termination or reduction.
SECTION 2.10. PREPAYMENT. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
upon written (including by telecopy) notice (or telephone notice promptly
confirmed by written notice) to the Agent, which notice, in the case of a
prepayment of a Eurodollar Loan, shall be received by the Agent one Business Day
prior to such
32
prepayment; PROVIDED, HOWEVER, that each partial prepayment shall be in an
amount which is, if (a) an ABR Loan, an integral multiple of $100,000 and not
less than $200,000 and (b) if a Eurodollar Loan, an integral multiple of
$250,000 and not less than $1,000,000.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrower shall pay or prepay so much of the
Borrowings as shall be necessary in order that the aggregate principal amount of
the Loans outstanding will not exceed the aggregate Commitments after giving
effect to such termination or reduction.
(c) Not later than the Business Day next succeeding any date on
which the sum of the aggregate principal amount of the outstanding Borrowings
and the aggregate Letter of Credit Exposure exceeds the then current Borrowing
Base, the Borrower shall prepay the Borrowings in such amount as shall be
necessary so that after giving effect to such prepayment there shall be no such
excess.
(d) Each notice of prepayment shall specify the prepayment date, the
principal amount of each Borrowing (or portion thereof) to be prepaid, and the
Borrowing to be repaid, shall be irrevocable and shall commit the Borrower to
prepay such Borrowing by the amount stated therein on the date stated therein.
All prepayments under this Section 2.10 shall be subject to Section 2.13 but
otherwise without premium or penalty. All prepayments under this Section 2.10
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment. Any prepayment pursuant to this Section 2.10 shall be
applied FIRST to prepay the Loans then outstanding and then to cash
collateralize any Letter of Credit Exposure (such cash to be held in an
interest-bearing account) on terms reasonably satisfactory to the Agent.
SECTION 2.11. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision herein, if after November 23, 1993 any
change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any fees
or other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit
33
extended by such Lender (except any such reserve requirement which is reflected
in the Adjusted LIBO Rate) or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan or
to reduce the amount of any sum received or receivable by such Lender hereunder
or under the Notes (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
upon demand such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered. The Agent and each Lender
agree to give notice to the Borrower of any such change in law, regulation,
interpretation or administration with reasonable promptness after becoming
actually aware thereof and of the applicability thereof to the Transactions.
(b) If any Lender shall have determined that the applicability of
any law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central lender or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central lender or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's capital or on the
capital of such Lender's holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender pursuant hereto to a level below that
which such Lender or such Lender's holding company could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered. The Agent and each Lender agree to give notice to the
Borrower of any such change in law, regulation, interpretation or administration
with reasonable promptness after becoming actually aware thereof and of the
applicability to the transactions.
34
(c) A certificate of each Lender setting forth such amount or
amounts, supported by calculations in reasonable detail, as shall be necessary
to compensate such Lender or its holding company as specified in paragraph (a)
or (b) above, as the case may be, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay each Lender the
amount shown as due on any such certificate delivered by it within 10 days after
its receipt of the same.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand such compensation with respect to such period or
any other period. The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION 2.12. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
35
(b) For purposes of this Section 2.12, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.13. INDEMNITY. The Borrower shall indemnify each Lender
against any loss or reasonable expense which such Lender may sustain or incur as
a consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article V, (b) any
failure by the Borrower to borrow or to refinance, convert or continue any Loan
hereunder after irrevocable notice of such borrowing, refinancing, conversion or
continuation has been given pursuant to Section 2.03, (c) any payment,
prepayment or conversion of a Eurodollar Loan required by any other provision of
this Agreement or otherwise made on a date other than the last day of the
Interest Period applicable thereto, (d) any default in payment or prepayment of
the principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, by irrevocable
notice of prepayment or otherwise) or (e) the occurrence of any Event of
Default, including, in each such case, any loss or reasonable expense sustained
or incurred or to be 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 include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted or not
borrowed, converted or continued (based on the Adjusted LIBO Rate applicable
thereto) for the period from the date of such payment, prepayment, conversion or
failure to borrow, convert or continue to the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow, convert or continue, the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid, converted or not borrowed, converted or continued for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
any amount or amounts, supported by calculations in reasonable detail, which
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error.
SECTION 2.14. PRO RATA TREATMENT. Except as required under Section
2.12, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees,
36
each reduction of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender's portion
of any Borrowing to be made hereunder, the Agent may, in its discretion, round
each Lender's percentage of such Borrowing, computed in accordance with Section
2.01, to the next higher or lower whole dollar amount.
SECTION 2.15. SHARING OF SETOFFS. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loan or Loans as a
result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Lender, it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, a participation in the Loans of such other Lender, so that the
aggregate unpaid principal amount of the Loans and participation in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then outstanding as the principal amount of its Loans prior
to such exercise of banker's lien, setoff or counterclaim or other event
referred to above was to the principal amount of all Loans outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; PROVIDED,
HOWEVER, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower expressly consents to the foregoing arrangements
and agrees that any Lender holding a participation in a Loan deemed to have been
so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.
SECTION 2.16. PAYMENTS. (a) The Borrower shall make each payment
(including principal of or interest on any
37
Borrowing or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 (noon), New York City time, on the date when due
in dollars to the Agent at its offices at 270 Park Avenue, New York, New York,
in immediately available funds. Payments received by the Agent after such time
on such date shall be deemed to have been received on the next succeeding
Business Day (and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rates).
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts provided for in this Agreement) hereunder
or under any other Loan Document shall become due, or otherwise would occur, on
a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.17. TAXES. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.16, 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 taxes imposed on the Agent's or any Lender's income and franchise
taxes imposed on the Agent or any Lender by the United States or any
jurisdiction under the laws of which the Agent or any such Lender is organized
or any political subdivision thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "TAXES"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to the Lenders or the
Agent (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) such Lender or the Agent (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "OTHER TAXES").
38
(c) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.17) paid by such
Lender or the Agent, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be made within 30 days after the date any Lender or the
Agent, as the case may be, makes written demand therefor. If a Lender or the
Agent shall become aware that it is entitled to receive a refund in respect of
Taxes or Other Taxes, it shall promptly notify the Borrower of the availability
of such refund and shall, within 30 days after receipt of a request by the
Borrower, apply for such refund at the Borrower's expense. If any Lender or the
Agent receives a refund in respect of any Taxes or Other Taxes for which such
Lender or the Agent has received payment from the Borrower hereunder it shall
promptly notify the Borrower of such refund and shall, within 30 days after
receipt of a request by the Borrower (or promptly upon receipt, if the Borrower
has requested application for such refund pursuant hereto), repay such refund to
the Borrower without interest; PROVIDED that the Borrower, upon the request of
such Lender or the Agent, agrees to return such refund (plus penalties, interest
or other charges) to such Lender or the Agent in the event such Lender or the
Agent is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender or the
Agent, the Borrower will furnish to the Agent, at its address referred to in
Section 2.01, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.17
shall survive the payment in full of principal and interest hereunder and the
termination of this Agreement and the Term Loan Agreement.
(f) Each Lender which is organized outside the United States shall
promptly notify the Borrower of any change in its funding office and upon
written request of the Borrower shall, prior to the immediately following due
date of any payment by the Borrower hereunder, deliver to the Borrower such
certificates, documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including Internal Revenue Service Form
4224 and 1001 and any other certificate or statement or exemption required by
Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent
version thereof, properly completed and duly executed by such Lender
39
establishing that such payment is (i) not subject to withholding under the Code
because such payment is effectively connected with the conduct by such Lender of
a trade or business in the United States or (ii) totally exempt from United
States tax under a provision of an applicable tax treaty. Unless the Borrower
and the Agent have received forms or other documents satisfactory to them
indicating that payments hereunder or under the Notes are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for any
Lender or assignee organized under the laws of a jurisdiction outside the United
States.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.17 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce the amount
of any such additional amounts which may thereafter accrue and would not, in the
sole determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE III. LETTERS OF CREDIT
SECTION 3.01. ISSUANCE OF LETTERS OF CREDIT; LENDER PARTICIPANTS.
(a) Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, the Issuing Bank agrees to issue and deliver to the
Borrower, at any time and from time to time, Letters of Credit in an aggregate
undrawn amount at any time outstanding not to exceed the lesser of $10,000,000
and the amount by which the lower of the Total Commitment and the then current
Borrowing Base exceeds the sum of (i) the aggregate principal amount of all
outstanding Loans and (ii) the Letter of Credit Exposure. Each Letter of Credit
shall be in a form mutually agreed upon by the Borrower and the Issuing Bank,
shall permit drawings upon the presentation of one or more sight drafts
(provided that no draft shall be payable prior to the second Business Day
following the date on which the Agent notifies the Lenders and the applicable
Borrower of the presentment thereof pursuant to Section 3.03) and such other
documents as shall be specified by such Borrower in the applicable notice
delivered pursuant to Section 3.02 and shall expire on a date not later than the
date one year from the date of issuance of such Letter of Credit less one day
(provided, that any such Letter of Credit may provide for automatic annual
renewals of one year unless a notice of non-renewal is given to the beneficiary
thereof); PROVIDED, HOWEVER,
40
that the Borrower shall not be entitled to request the issuance of a Letter of
Credit hereunder if after such issuance (x) such Letter of Credit would expire
after the Maturity Date, (y) an aggregate of more than fifteen Letters of Credit
would be outstanding at any one time or (z) the sum of (i) the aggregate amount
of all Loans to the Borrower, and (ii) the Letter of Credit Exposure would
exceed the lesser of the Total Commitments and the Borrowing Base.
(b) By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or any of the Lenders in respect thereof,
the Issuing Bank hereby grants to each Lender and each Lender hereby agrees to
acquire from the Issuing Bank a participation in such Letter of Credit,
effective upon the issuance thereof, equal to such Lender's Commitment
Percentage of the amount of such Letter of Credit. In furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Issuing Bank, as and when required by Section 3.03, such Lender's Commitment
Percentage of each Letter of Credit Disbursement. Each Lender acknowledges and
agrees that its obligation to acquire a participation pursuant to this Section
3.01 in respect of each Letter of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including without limitation the
occurrence and continuance of an Event of Default or any event which with notice
or lapse of time, or both, would constitute an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. This agreement to grant and acquire a participation is an
agreement between the Issuing Bank and the Lenders, and neither the Borrower nor
any beneficiary of a Letter of Credit shall be entitled to rely thereon. The
Borrower agrees that each Lender purchasing a participation from an Issuing Bank
pursuant to this Section 3.01 may exercise all its rights to payment against the
Borrower, including the right of setoff, with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
The Issuing Bank agrees with each Lender that it shall transfer to
such Lender without any offset, abatement, withholding or reduction whatsoever,
such Lender's proportionate share of any payment of a reimbursement obligation
of the Borrower with respect to a Letter of Credit Disbursement including,
subject to the proviso below, interest payments made to the Issuing Bank
pursuant to Section 2.07 or Section 3.03 based upon the proportion that the
payment made by such Lender pursuant to Section 3.03 bears to the Issuing Bank
Payment Amount with respect to such Letter of Credit Disbursement; PROVIDED that
each Lender shall receive interest (as set forth in Section 2.07 and Section
3.03, as
41
applicable) on its participation in a Letter of Credit Disbursement from the
date on which the amount paid by such Lender pursuant to Section 3.03 is
received by the Issuing Bank and not from the date on which the Issuing Bank
makes such Letter of Credit Disbursement, unless such dates are the same.
On the Closing Date, all Scheduled Letters of Credit that satisfy
the requirements of Section 3.01(a) shall be deemed to have been issued
hereunder on such date for all purposes hereof, notwithstanding the requirements
of the following Sections of this Article III; PROVIDED, HOWEVER, that the
Borrower and the Issuing Bank shall prepare a schedule of all such Scheduled
Letters of Credit and deliver such schedule to the Agent and other Lenders
promptly following the Closing Date.
SECTION 3.02. REQUEST FOR ISSUANCE. The Borrower shall give the
Issuing Bank written or telex (or telephonic, promptly confirmed in writing)
notice not later than 12:00 noon, New York City time, two Business Days before
any proposed issuance of a Letter of Credit. Each such notice shall refer to
this Agreement and shall specify (a) the date on which such Letter of Credit is
to be issued (which shall be a Business Day) and the principal amount thereof,
(b) the name and address of the beneficiary, (c) whether such Letter of Credit
shall permit a single drawing or multiple drawings, (d) the form of the draft
and any other documents required to be presented at the time of any drawing
(including the exact wording of such documents or copies thereof) and (e) the
expiration date of such Letter of Credit. The Agent shall promptly notify each
Lender of any notice given by the Borrower pursuant to this Section 3.02 and of
each Lender's portion of the requested Letter of Credit.
SECTION 3.03. PAYMENT; REIMBURSEMENT. The Issuing Bank shall review
each draft and any accompanying documents presented under a Letter of Credit and
shall notify each Lender of any such presentment. Promptly after it shall have
ascertained that any draft and any accompanying documents presented under a
Letter of Credit appear on their face to be in substantial conformity with the
terms and conditions of such Letter of Credit, the Issuing Bank shall give
telephonic or telecopy notice to the Borrower of the receipt and amount of such
draft and the date on which payment thereon will be made, and the Lenders shall,
by 12:00 noon, New York City time on the date such payment is to be made, pay
the amounts required to the Issuing Bank in New York, New York in immediately
available funds, and the Issuing Bank, not later than 3:00 p.m., New York City
time on such day, shall make the appropriate payment to the beneficiary. If the
Lenders shall pay any draft presented under a Letter of Credit, then the Issuing
Bank, on behalf of the Lenders, shall charge the general deposit account of
42
the Borrower with the Issuing Bank for the amount thereof, together with the
Issuing Bank's customary overdraft fee in the event the funds available in such
account shall not be sufficient to reimburse the Lenders for such payment and
such Borrower shall not otherwise have discharged such reimbursement obligation
by 10:00 a.m., New York City time, on the date of such payment. The amount of
any drawing under a Letter of Credit for which the Lenders shall not have been
reimbursed as provided in the preceding sentence shall be paid by the Borrower
to the Issuing Bank, for the account of the Lenders, no later than 12:00 noon on
the date of such drawing. If the Lenders have not been reimbursed with respect
to such drawing as provided above, such Borrower shall pay to the Issuing Bank,
for the account of the Lenders, the amount of the drawing together with interest
on such amount at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 365 days) equal to the interest rate at the time
applicable to ABR Borrowings plus 2%. The obligations of the Borrower under this
Section 3.03 shall be absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms, irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, setoff, defense or other right which
any Borrower or any other person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank or any Lender or
any other person in connection with this Agreement or any other
transaction;
(c) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(d) payment by the Issuing Bank or any Lender under a Letter of
Credit against presentation of a draft or other document which does not
comply with the terms of such Letter of Credit; and
(e) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing.
Without limiting the generality of the foregoing, but subject to the
next sentence, it is expressly understood and agreed that the absolute and
unconditional obligation of the Borrower hereunder to reimburse Letter of Credit
disbursements will not be excused by the gross negligence or wilful misconduct
of the Issuing Bank. However, the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct
43
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's gross negligence
or wilful misconduct in determining whether drafts or other documents presented
under a Letter of Credit comply with the terms thereof. It is understood that in
making any payment under a Letter of Credit (i) the Issuing Bank's and any
Lender's exclusive reliance on the documents presented to it under such Letter
of Credit as to any and all matters set forth therein, including, without
limitation, reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary equals the amount of
such draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document on its face
appears to be in order, and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under a Letter of Credit with the terms thereof shall, in
each case, not be deemed willful misconduct or gross negligence of the Issuing
Bank or any Lender. The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the Issuing Bank's gross negligence or
willful misconduct.
SECTION 3.04. PAYMENTS IN RESPECT OF INCREASED COSTS. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) or any change in generally accepted accounting principles or regulatory
accounting principles applicable to the Issuing Bank or any Lender shall (a)
impose, modify or make applicable to the Issuing Bank or any Lender any reserve,
special deposit or similar requirement with respect to its obligations under
this Article III or the Letters of Credit, (b) impose on the Issuing Bank or any
Lender any other condition with respect to its obligations under this Article
III or the Letters of Credit, or (c) subject the Issuing Bank or any Lender to
any tax (other than (x) taxes imposed on the overall net income of the Issuing
Bank or such Lender and (y) franchise taxes imposed on the Issuing Bank or such
Lender, in either case by the country or other jurisdiction in which the Issuing
Bank or such Lender has its principal office or lending office or by any
political subdivision or taxing authority of either thereof), charge, fee,
deduction or withholding of any kind
44
whatsoever, and the result of any of the foregoing shall be to increase the cost
to the Issuing Bank or such Lender of maintaining any Letter of Credit or making
any payment under a Letter of Credit or this Article III or to reduce the amount
of principal, interest or any fee or compensation receivable by the Issuing Bank
or such Lender in respect of this Article III or any Letter of Credit, then such
additional amount or amounts as will compensate the Issuing Bank or such Lender
for such additional costs or reduction shall be paid to the Issuing Bank or such
Lender by the Borrowers upon demand. Each Lender agrees to give notice to the
Borrower of any such change in law, regulation, interpretation or administration
with reasonable promptness after becoming actually aware thereof and of the
applicability thereof to the Transactions.
(b) If, after the date of this Agreement, any Lender shall have
determined that the adoption of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central lender or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its lending office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) or any such authority, central lender or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's capital as
a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) then
from time to time, each Borrower shall pay to such Lender such additional amount
or amounts as will compensate the Issuing Bank or such Lender for such
reduction. Each Lender agrees to give notice to the Borrower of any adoption of,
change in, or change in interpretation or administration of any such law, rule,
regulation or guideline with reasonable promptness after becoming actually aware
thereof and of the applicability thereof to the Transactions.
(c) A certificate of the Issuing Bank or a Lender setting forth such
amount or amounts, supported by calculations in reasonable detail, as shall be
necessary to compensate the Issuing Bank or such Lender as specified in
paragraphs (a) and (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay the Issuing Bank or
such Lender the amount shown as due on any such certificate within 10 Business
Days after its receipt of the same. The protection of this Section 3.04 shall be
available to the Issuing Bank and each Lender regardless of any possible
contention of the invalidity or inapplicability of any law, regulation or other
45
condition which shall give rise to any demand by the Issuing Bank or any Lender
for compensation.
(d) Failure on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs, reduction in amounts received or
receivable with respect to any Interest Period or reduction in the rate of
return earned on such Lender's capital, shall not constitute a waiver of the
Agent's or such Lender's rights to demand compensation for any increased costs
or reduction in amounts received or receivable or reduction in rate of return.
The protection under this Section 3.04 shall be available to each Lender or the
Issuing Bank regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by such Lender or the Issuing Bank for compensation.
SECTION 3.05. FEES. (a) At the time each Letter of Credit is issued,
the Borrower shall pay to the Issuing Bank, in immediately available funds, the
Issuing Bank's customary fees and expenses in respect of the issuance,
negotiation, transfer and payment of such Letter of Credit.
(b) The Borrower agrees to pay (i) each Lender, through the Issuing
Bank, on the last day of each March, June, September and December and on the
Maturity Date, a per annum fee equal to (x) with respect to Letter of Credit
Nos. H368846, T231728 and T245256 (the sum of the undrawn amount of which
Letters of Credit PLUS the amount of all unreimbursed drawings under which
Letter of Credit shall not exceed $1,800,000), 3/4 of 1% per annum on such
Lender's portion of the face amount of such Letter of Credit so long as it
remains outstanding, and (y) with respect to all other Letters of Credit, the
Applicable Margin in effect on each date for Eurodollar Loans on such Lender's
portion of the face amount of the aggregate outstanding Letters of Credit from
time to time during the quarter (or shorter period commencing with the Closing
Date or ending with the Maturity Date) ending on such date, and (ii) the Agent,
on the last day of each March, June, September and December and on the Maturity
Date a fee of 1/8 of 1% per annum on the face amount of each Letter of Credit
outstanding from time to time during the quarter (or shorter period commencing
with the Closing Date or ending with the Maturity Date) and ending on such date.
All fees under this paragraph (b) shall be computed on the basis of the actual
number of days elapsed in a year of 365 days.
46
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders and each
of the Term Loan Lenders that:
SECTION 4.01. ORGANIZATION; POWERS. The Borrower and each Subsidiary
(a) other than Bayou Scrap, is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted, (c) is qualified to do business in every
jurisdiction where such qualification is required, except where the failure so
to qualify would not result in a Material Adverse Effect, and (d) in the case of
each Loan Party, has the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and to borrow hereunder.
SECTION 4.02. AUTHORIZATION. The execution, delivery and performance
by each Loan Party of each of the Loan Documents and the borrowings hereunder
(collectively, the "TRANSACTIONS") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of the Borrower or any Subsidiary, (B) any order of any Governmental
Authority which is binding upon the Borrower or any Subsidiary or (C) any
provision of the First Mortgage Indenture or any other indenture, agreement or
other instrument to which the Borrower or any Subsidiary is a party or by which
any of them or any of their property is or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon any property or assets of
the Borrower or any Subsidiary other than in favor of the Collateral Agent for
the benefit of the Lenders and/or the Term Loan Lenders.
SECTION 4.03. ENFORCEABILITY. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party party thereto will constitute, a
legal, valid and binding obligation of such Loan Party enforceable against such
Loan Party in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally.
SECTION 4.04. GOVERNMENTAL APPROVALS. No action, consent or approval
of, registration or filing with or any
47
other action by any Governmental Authority or any other person, including any
material permits, consents and filings required in connection with the
Borrower's construction and expansion plans (including start-up of the
Borrower's second furnace to 50% capacity, the increased production of billets
and the start-up and integration of the operations of Bayou (Tennessee)), other
than filings required to perfect the security interests of the Collateral Agent
on behalf of the Lenders and the Term Loan Lenders, is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect and except as listed on Schedule 4.04.
SECTION 4.05. FINANCIAL STATEMENTS. (a) The Borrower has heretofore
furnished to the Lenders and the Term Loan Lenders its consolidated and
consolidating balance sheets and statements of income and changes in cash flows
(a) as of and for the fiscal year ended September 30, 1994, audited by and
accompanied by the opinion of Arthur Anderson, independent public accountants,
and (b) as of and for the fiscal quarters and the portions of the fiscal year
ended December 31, 1994 and March 31, 1995, certified by a Financial Officer.
Such financial statements present fairly the financial condition and results of
operations of the Borrower and its consolidated subsidiaries as of such dates
and for such periods.
(b) The Borrower shall furnish not later than July 15, 1995 to the
Lenders and the Term Loan Lenders its PRO FORMA consolidated and consolidating
balance sheets as of April 30, 1995, giving PRO FORMA effect to the Acquisition,
the Term Loans and the other transactions contemplated to occur on or prior to
the Closing Date.
(c) Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis subject to normal year-end
adjustments.
SECTION 4.06. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, operations or financial condition of the
Borrower and the Recourse Subsidiaries, taken as a whole, since March 31, 1995.
SECTION 4.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) The
Borrower and each of the Recourse Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and assets, except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets
48
for their intended purposes and except for such properties as are no longer used
or useful in the conduct of their businesses or as have been disposed of in the
ordinary course of business. All such material properties and assets are free
and clear of Liens, other than Liens expressly permitted by Section 7.02.
(b) The Borrower and each of the Recourse Subsidiaries has complied
with all material obligations under all material leases to which it is a party
and all such leases are in full force and effect. The Borrower and each of the
Recourse Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases.
SECTION 4.08. SUBSIDIARIES. (a) As of the Closing Date, the only
Subsidiaries are Bayou (Tennessee), Bayou Scrap and River Road Realty.
(b) On and as of the Closing Date, Bayou (Tennessee) has assets
consisting of the "Assets" as such term is defined in the TVS Asset Purchase
Agreement (other than certain of such Assets which have been transferred to the
Borrower).
(c) On and as of the Closing Date, Bayou Scrap has no assets and no
liabilities and does not engage in any business or conduct any operations. If at
any time Bayou Scrap does have assets or liabilities or engages in business or
conducts any operations other than as set forth in the preceding sentence, the
provisions of Section 4.01(a) hereof shall be true and correct without giving
effect to the provisions thereof excluding Bayou Scrap.
(d) On and as of the Closing Date, River Road Realty has assets
consisting of properties in Chicago, Illinois and Knoxville, Tennessee, a
natural gas pipeline and some undeveloped land in La Place, Louisiana.
SECTION 4.09. LITIGATION; COMPLIANCE WITH LAWS. (a) Except as set
forth in Schedule 4.09 (to be provided to the Agent pursuant to Section 6.15),
there are not any actions, suits, proceedings or investigations at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any business, property or rights of any such person (i) which
involve any Loan Document or the Transactions or the Acquisition or (ii) which,
if adversely determined, could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; none of the matters set forth
on Schedule 4.09, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
49
(b) Neither the Borrower nor any of the Subsidiaries is in violation
of any law, rule or regulation, or in default with respect to any judgment,
writ, injunction or decree of any Governmental Authority, where such violation
or default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.10. AGREEMENTS. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restric- tion that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in default
in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.11. FEDERAL RESERVE REGULATIONS. (a) Neither the Borrower
nor any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Term Loan will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of the Regulations
of the Board, including Regulation G, U or X.
SECTION 4.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 4.13. USE OF PROCEEDS. The Borrower will use (i) the
proceeds of the Loans and (ii) the Letters of Credit for general corporate
purposes, PROVIDED that no more than $15,000,000 of the proceeds of the Loans
and Letters of Credit shall be used to fund Acquisition Expenditures. Bayou
(Tennessee) will use the proceeds of the Term Loans to repay, on the Closing
Date, amounts outstanding under all
50
loans from the Borrower to Bayou (Tennessee) as of the Closing Date, such
amounts not be reborrowed.
SECTION 4.14. TAX RETURNS. The Borrower and each Subsidiary has
filed or caused to be filed all Federal, state and local tax returns required to
have been filed by it and has paid or caused to be paid all taxes, including
without limitation, franchise taxes, shown to be due and payable on such returns
or on any assessments received by it, except taxes that are being contested in
accordance with Section 6.03.
SECTION 4.15. NO MATERIAL MISSTATEMENTS. No written information,
report, financial statement, exhibit or schedule furnished by or on behalf of
the Borrower to the Agent or any Lender or Term Loan Lender in connection with
the negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading.
SECTION 4.16. EMPLOYEE BENEFIT PLANS. Except as set forth in
Schedule 4.16 (which failure to file would not result in liabilities in excess
of $250,000), the Borrower and each of its ERISA Affiliates is in compliance in
all material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder. No Reportable Event has
occurred as to which the Borrower or any ERISA Affiliate was required to file a
report with the PBGC, and the present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $1,000,000
the value of the assets of such Plan. Neither the Borrower nor any ERISA
Affiliate has incurred any Withdrawal Liability that could result in a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated where such
reorganization or termination has resulted or could reasonably be expected to
result, through increases in the contributions required to be made to such Plan
or otherwise, in a Material Adverse Effect.
SECTION 4.17. ENVIRONMENTAL AND SAFETY MATTERS. The Borrower and
each Subsidiary complies, and, except with respect to such matters that gave
rise to those actions, suits, proceedings or investigations set forth in
Schedule 4.09 and that are also set forth on Schedule 4.17(a), has complied, in
all material respects, with all applicable
51
foreign, Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control or to employee health or safety
(collectively, "ENVIRONMENTAL LAWS"). Neither the Borrower nor any Subsidiary
has received notice of any failure so to comply which alone or together with any
other such notice could reasonably be expected to result in a Material Adverse
Effect. The Borrower and its Subsidiaries reasonably believe that they will be
able to continue to comply with all applicable Environmental Laws, and renew or
obtain all permits necessary under the Environmental Laws, except for such
compliance or permits the absence of which, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. The
Borrower's and the Subsidiaries' plants do not manage any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic pollutants,
as those terms are used in the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control Act, the
Clean Air Act, the Clean Water Act or any other Environmental Law in a manner
that could reasonably be expected to result, individually or together with other
such management, in a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has assumed, by contract or, to the best of its knowledge, by
operation of law, any liability, including contingent liability, under any
Environmental Law, except as set forth on Schedule 4.17(b). The Borrower is
aware of no events, conditions or circumstances involving environmental
pollution or contamination or employee health or safety that could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.18. SECURITY AGREEMENT. The security interests created in
favor of the Collateral Agent for the benefit of the Lenders and the Term Loan
Lenders under the Security Agreement constitute a first priority perfected
security interest in the Collateral (as defined in the Security Agreement).
ARTICLE V. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and to issue Letters of
Credit hereunder are subject to the satisfaction of the following conditions:
SECTION 5.01. ALL BORROWINGS. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.02(e):
52
(a) The Agent shall have received a notice of such borrowing as
required by Section 2.03.
(b) The representations and warranties set forth in Article IV
hereof (except, in the case of a refinancing that does not increase the
aggregate principal amount of Loans outstanding, the representations set
forth in Sections 4.06 and 4.09) shall be true and correct in all material
respects on and as of the date of such Borrowing with the same effect as
though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) Each Loan Party shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part to
be observed or performed, and at the time of and immediately after such
Borrowing no Event of Default or Default shall have occurred and be
continuing.
(d) At the time of such Borrowing the Borrower shall deliver to the
Agent (i) a certificate dated the date of such Borrowing and signed by a
Financial Officer of the Borrower, confirming (A) compliance with the
conditions precedent set forth in paragraphs (b) and (c) of this Section
5.01; and (B) to the best knowledge of the Borrower after due inquiry,
that the Borrowing Base on such date is equal to or greater than the sum
of (x) the amount of the Loans to be made on such date, (y) the aggregate
principal amount of Loans then outstanding and (z) the Letter of Credit
Exposure on such date (the sum of (x), (y) and (z) being herein referred
to as the "Aggregate Amount") and (ii) in the event that it shall not have
been delivered previously to the Agent, a Borrowing Base Certificate
computing the Borrowing Base as of the most recent Determination Date
(determined without regard to the first proviso in Section 6.04(c)) (and
the Borrowing Base as of such Determination Date shall be equal to or
greater than the Aggregate Amount).
SECTION 5.02. FIRST BORROWING. On the Closing Date:
(a) Each Lender shall have received a duly executed Note complying
with the provisions of Section 2.04.
(b) The Agent shall have received the favorable written opinions of
Kaye, Scholer, Fierman, Hays & Handler, counsel for the Borrower, Howard
B. Myers, Esq., General Counsel of the Borrower, and Jones, Walker and
Waechter, special Louisiana counsel, dated
53
the Closing Date and addressed to the Lenders and the Term Loan Lenders,
in the form of Exhibits D, E and F hereto.
(c) All legal matters incident to this Agreement and the borrowings
hereunder shall be satisfactory to the Lenders, the Term Loan Lenders and
their counsel.
(d) The Agent shall have received (i) a copy of the certificate or
articles of incorporation, including all amendments thereto, of each Loan
Party, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of
each Loan Party as of a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and the
borrowings under such Loan Documents, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Loan Party have
not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer or
representative executing any Loan Document or any other document delivered
in connection herewith on behalf of such Loan Party; (iii) a certificate
of another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as any Lender, any Term Loan
Lender or its respective counsel may reasonably request.
(e) The Agent shall have received a certificate, dated the Closing
Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 5.01.
(f) All Loan Documents and the Intercreditor Agreements shall have
been duly executed and delivered by the parties thereto and shall be in
full force and effect.
54
(g) The Lenders and Term Loan Lenders shall have received from the
Borrower all financing statements and other filings necessary to create a
first priority perfected security interest in the Collateral, which
financing statements and other filings shall be fully executed by a duly
authorized representative of the Borrower and in a form immediately
acceptable to all necessary filing offices, and upon filing with such
offices, together with the payment of all fees and taxes in connection
therewith, shall create such a perfected security interest.
(h) Bayou (Tennessee) shall borrow the Term Loans concurrently with
or shall have borrowed the Term Loans under the Term Loan Agreement on or
prior to the time on which all the other conditions to the initial
Borrowing hereunder shall have been satisfied.
(i) On the Closing Date, all Loans outstanding under the Original
Credit Agreement shall be repaid and the Original Credit Agreement shall
be amended and restated hereby PROVIDED THAT Scheduled Letters of Credit
shall remain outstanding as contemplated by Section 3.01.
(j) The Lenders and Term Loan Lenders shall have received a Phase I
environmental assessment and an update thereto from Environmental
Strategies Corporation, satisfactory to the Lenders and Term Loan Lenders
with respect to any environmental hazards, conditions or liabilities
(contingent or otherwise) to which Bayou (Tennessee) and the assets
acquired in the Acquisition may be subject.
(k) The Borrower shall have received at least $15,000,000 in gross
cash proceeds from the issuance of the Preferred Stock. All documents,
instruments and other matters relating to the issuance of the Preferred
Stock (including amount, dividends, redemption rights and voting rights)
shall be satisfactory to the Lenders and Term Loan Lenders in all
respects.
(l) The Lenders shall be reasonably satisfied with each of the other
documents relating to the Transactions, and the Acquisition, and the
transactions contemplated hereby and thereby.
(m) The Lenders shall be satisfied with the availability to the
Borrower of the Borrower's net operating losses.
(n) The Agent shall have received evidence, satisfactory to the
Agent, that credit facilities of Bayou (Tennessee) provided by the
Borrower shall have
55
been terminated and there shall exist no intercompany Indebtedness.
(o) The Borrower shall have paid to the Agent all fees due on the
Closing Date to the Agent, the Lenders and the Term Loan Lenders hereunder
and under the Term Loan Agreement.
ARTICLE VI. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so long as
this Agreement shall remain in effect or the principal of or interest on any
Loan, any Term Loan, any Fees or any other expenses or amounts payable under any
Loan Document shall be unpaid, unless the Required Lenders shall otherwise
consent in writing, the Borrower will, and will cause each Recourse Subsidiary
(and where indicated, each Subsidiary) to:
SECTION 6.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 7.05.
(b) In the case of the Borrower and each of the Subsidiaries, do or
cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names material to the
conduct of its business; maintain and operate such business in substantially the
manner in which it is presently conducted and operated; comply, and to the
extent reasonably possible ensure that any tenants or subtenants comply, in all
material respects with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted, the failure
to comply with which could reasonably be expected to have a Material Adverse
Effect; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; and ensure to the extent reasonably possible
that any tenants or subtenants do not cause or contribute to any condition,
including environmental pollution or contamination or employee health or safety,
that alone or together with other such conditions could reasonably be expected
to result in a Material Adverse Effect.
56
SECTION 6.02. INSURANCE. Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
SECTION 6.03. OBLIGATIONS AND TAXES. In the case of each Loan Party
and, with respect to taxes, assessments and governmental charges or levies, each
of the other Subsidiaries, pay its Indebtedness and other obligations promptly
and in accordance with their terms and pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; PROVIDED, HOWEVER, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings or where the failure to pay
such tax, assessment, charge, levy or claim would not (a) have a material
adverse effect on the business, assets, operations or financial condition of the
Borrower and the Recourse Subsidiaries taken as a whole or (b) result in the
imposition of any Lien securing a material amount in favor of any party
entitling such party to priority of payment over the Lenders or the Term Loan
Lenders, and the Borrower shall have set aside on its books adequate reserves
with respect thereto.
SECTION 6.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower, furnish to the Agent, each Lender and each Term Loan Lender:
(a) within 120 days after the end of each fiscal year, its
consolidated and consolidating (which shall include the Non-Recourse
Subsidiaries) balance sheets and related statements of income and changes
in cash flows, showing the financial condition of the Borrower and the
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year, all
audited by Arthur Andersen or other independent public accountants of
recognized national standing acceptable to the Required Lenders and
accompanied by an opinion of such accountants (which shall not be
qualified in
57
any material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of the Borrower on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated and consolidating balance
sheets (which shall include the Non-Recourse Subsidiaries) and related
statements of income and changes in cash flows, showing the financial
condition of the Borrower and the Subsidiaries as of the close of such
fiscal quarter and the results of its operations and the operations of
such subsidiaries during such fiscal quarter and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of the
Borrower on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end adjustments;
(c) within 15 Business Days after the last day of each fiscal month
(each such last day being called a "Determination Date"), (i) a Borrowing
Base Certificate setting forth the Borrowing Base as of such Determination
Date and (ii) a certificate of a Financial Officer setting forth in
reasonable detail the amounts and types of Inventory and Accounts of the
Borrower and its Subsidiaries as of such Determination Date and an aging
of the Accounts; PROVIDED, HOWEVER, that the Determination Date shall be
the last day of each fiscal quarter, and the foregoing certificates shall
be required only on a quarterly basis, as long as the aggregate amount of
all Loans or Letters of Credit outstanding on the date that would
otherwise be the Determination Date is less than $3,000,000; PROVIDED,
FURTHER, that, if the Borrower desires to request a Borrowing or the
issuance of a Letter of Credit at a time when the foregoing certificates
would have been required as of a more recent date but have not been
delivered because of the foregoing proviso, then the foregoing
certificates shall be delivered without regard to the foregoing proviso as
a condition to such Borrowing or issuance;
(d) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of the Financial Officer (i) certifying such
statements, (ii) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto and, (iii) setting forth
58
computations in reasonable detail satisfactory to the Agent (x)
demonstrating compliance with the covenants contained in Sections 6.11,
6.12, 6.13, 7.09, 7.10, 7.11, 7.12, 7.13 and 7.14 hereof and (y) setting
forth the Leverage Ratio as of the last day of such fiscal quarter or
fiscal year, as the case may be;
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it with the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all the functions of said Commission, or
with any national securities exchange, or distributed to its shareholders,
as the case may be;
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as
the Agent or any Lender or any Term Loan Lender may reasonably request;
(g) prior to entering into any commitment to acquire any ownership
or leasehold interest with a fair market value not less than $5,000,000 in
real property, an assessment, in form and substance reasonably acceptable
to the Agent, of the environmental compliance and liability issues
associated with such real property; and
(h) within 30 days after the last day of each of the first eighteen
fiscal months of Bayou (Tennessee) commencing with fiscal June, 1995, its
consolidated and consolidating (if applicable) balance sheets (which shall
include its Non-Recourse Subsidiaries, if any) and related statements of
income and changes in cash flows, showing the financial condition of Bayou
(Tennessee) and its subsidiaries, if any, as of the close of such fiscal
month and the results of its operations and the operations of such
subsidiaries, if any, during such fiscal month and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers
as fairly presenting the financial condition and results of operations of
Bayou (Tennessee) on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end adjustments.
SECTION 6.05. LITIGATION AND OTHER NOTICES. Furnish to the Agent,
each Lender and each Term Loan Lender prompt written notice of the following:
59
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Subsidiary thereof which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect; and
(d) 10 days prior to payment under any agreement by the Borrower or
any of its Subsidiaries to make any payment under Section 7.01 of the
Preferred Stock and Warrant Purchase Agreement or Section 5.13 of the
Shareholder Agreement.
SECTION 6.06. ERISA. (a) In the case of the Borrower and each
Subsidiary, comply in all material respects with the applicable provisions of
ERISA and (b) furnish to the Agent and each Lender and Term Loan Lender (i) as
soon as possible, and in any event within 30 days after any Responsible Officer
of the Borrower or any ERISA Affiliate either knows or has reason to know that
any Reportable Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in liability of the
Borrower to the PBGC in an aggregate amount exceeding $1,000,000, a statement of
a Financial Officer setting forth details as to such Reportable Event and the
action proposed to be taken with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after
receipt thereof, a copy of any notice the Borrower or any ERISA Affiliate may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code) or to appoint a trustee to administer any Plan or Plans, (iii)
within 10 days after the due date for filing with the PBGC pursuant to Section
412(n) of the Code of a notice of failure to make a required installment or
other payment with respect to a Plan, a statement of a Financial Officer setting
forth details as to such failure and the action proposed to be taken with
respect thereto, together with a copy of such notice given to the PBGC and (iv)
promptly and in any event within 30 days after receipt thereof by the Borrower
or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each
notice received by the
60
Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability or (B) a determination that a Multiemployer Plan is, or is expected to
be, terminated or in reorganization, in each case within the meaning of Title IV
of ERISA.
SECTION 6.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. In the case of the Borrower and each Subsidiary, maintain all
financial records in accordance with GAAP and permit any representatives
designated by any Lender or Term Loan Lender, upon reasonable prior notice and
at reasonable times, to visit and inspect the financial records and the
properties of the Borrower or any Subsidiary at reasonable times and as often as
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by any Lender to discuss the affairs,
finances and condition of the Borrower or any Subsidiary with the officers
thereof and independent accountants therefor (with a representative of the
Borrower present if the Borrower is not in default), and permit the Agent, or
any representatives of the Agent, to conduct, not more than once during any
fiscal year, an audit of the Collateral and the Borrowing Base on behalf of the
Lenders and the Term Loan Lenders PROVIDED that such audit may be conducted more
frequently at the request of the Required Lenders.
SECTION 6.08. USE OF PROCEEDS. Use (i) the proceeds of the Loans and
the Term Loans and (ii) the Letters of Credit only for the purposes set forth in
Section 4.13.
SECTION 6.09. FISCAL YEAR-END. Cause its fiscal year-end to be
September 30, in each year.
SECTION 6.10. FURTHER ASSURANCES. Execute any and all further
documents and take all further actions which may be required under applicable
law, or which the Agent may reasonably request on behalf of the Required
Lenders, to grant, preserve, protect and perfect the first priority security
interest in the Collateral created by the Security Agreement.
SECTION 6.11. BAYOU (TENNESSEE) INDEBTEDNESS TO CASH FLOW. In the
case of the Borrower, within 5 days of the earlier of (a) the delivery of
quarterly financial statements under Section 6.04(b) hereof and (b) the date
such quarterly financial statements are required to be delivered, contribute
cash equity to Bayou (Tennessee) in an amount such that as of the last day of
the fiscal quarter just ended, the ratio of (x) Indebtedness of Bayou
(Tennessee) on such last day of the fiscal quarter just ended to (y) Cash Flow
of Bayou (Tennessee) for the four
61
fiscal quarters ended on the last day of the fiscal quarter just ended would
have been equal to 4.0 to 1.0.
SECTION 6.12. BAYOU (TENNESSEE) CASH FLOW TO PRINCIPAL DUE. In the
case of the Borrower, within 5 days of the earlier of (a) the delivery of
quarterly financial statements under Section 6.04(b) hereof and (b) the date
such quarterly financial statements are required to be delivered, contribute
cash equity to Bayou (Tennessee) in an amount such that the ratio as at the last
day of the fiscal quarter just ended of (i) Cash Flow of Bayou (Tennessee) for
the fiscal quarter just ended to (ii) the sum of (x) regularly scheduled
payments, if any, of principal of the Term Loans required during such fiscal
quarter under the Term Loan Agreement PLUS (y) interest on the Term Loans due
for such fiscal quarter under the Term Loan Agreement, would have been equal to
1.25 to 1.0.
SECTION 6.13. MAINTENANCE OF BAYOU (TENNESSEE) BORROWING BASE. In
the case of the Borrower, upon delivery of the Term Loan Borrowing Base
Certificate under subsection 6.1(b) of the Term Loan Agreement, contribute cash
equity and/or Eligible Inventory to Bayou (Tennessee) in an amount such that
Bayou (Tennessee) would have been in compliance with the provisions of
subsection 6.1 of the Term Loan Agreement as of the last day of the applicable
month.
SECTION 6.14. LANDLORD'S WAIVER AND CONSENT. (a) Obtain a Landlord's
Waiver and Consent in the form of Exhibit I (the "LANDLORD'S WAIVER AND
CONSENT") in respect of the Collateral (as defined in the Security Agreement)
located at properties of the Borrower or its Subsidiaries in which such persons
have a valid leasehold interest.
(b) Within 45 days of the Closing Date, obtain a Landlord's Waiver
and Consent in respect of the Collateral (as defined in the Security Agreement)
located at the Borrower's Leetsdale, Pennsylvania leasehold property and at the
public warehouse at Leetsdale, Pennsylvania in which Inventory of the Borrower
is stored.
SECTION 6.15. LITIGATION SCHEDULE. Within 20 days of the Closing
Date, the Borrower shall furnish to the Agent Schedule 4.09 ("Litigation"),
which shall be satisfactory to the Agent in all respects and which in any event
shall not disclose any litigation not set forth in the written schedule
previously delivered to the Lenders.
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ARTICLE VII. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender and Term Loan
Lender that, so long as this Agreement shall remain in effect or the principal
of or interest on any Loan, any Term Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, unless the Required
Lenders shall otherwise consent in writing, the Borrower will not, and will not
cause or permit any Recourse Subsidiary (and where indicated each Subsidiary)
to:
SECTION 7.01. INDEBTEDNESS. In the case of the Borrower and each
Subsidiary, incur, create, assume or permit to exist any Indebtedness, except:
(a) Indebtedness of the Borrower and its Recourse Subsidiaries for
borrowed money or otherwise existing on the date hereof and set forth in
Schedule 7.01, but not any extensions, renewals, refinancings or replacements of
such Indebtedness except as permitted under the First Mortgage Indenture as in
effect on the date hereof (and regardless of whether the First Mortgage
Indenture is amended or the Indebtedness thereunder is repaid in the future)
PROVIDED that all credit facilities of Bayou (Tennessee) provided by the
Borrower shall have been terminated on the Closing Date;
(b) Indebtedness represented by the Notes and all other Indebtedness
incurred hereunder;
(c) Indebtedness of the Borrower and its Recourse Subsidiaries
incurred pursuant to Capital Lease Obligations in an aggregate amount not to
exceed $5,000,000 outstanding at any time;
(d) Subordinated Indebtedness of the Borrower in an aggregate amount
not to exceed $15,000,000 outstanding at any time;
(e) Non-Recourse Indebtedness incurred by Non- Recourse
Subsidiaries;
(f) Indebtedness secured by purchase money security interests
permitted by Section 7.02(i) hereof;
(g) Indebtedness secured by Industrial Development Bonds permitted
by Section 7.02(n) hereof;
(h) Indebtedness of Bayou (Tennessee) under the Term Loan Agreement;
and
(i) Indebtedness of the Borrower under the Term Loan Guarantee and
of Bayou (Tennessee) under the Revolving Credit Guarantee; and
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(j) Indebtedness incurred pursuant to Section 7.04.
SECTION 7.02. LIENS. Create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 7.02; PROVIDED that,
except as provided in clause (l) below, such Liens shall secure only those
obligations which they secure on the date hereof and may not be reinstated
if released at any time by the secured party;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Recourse Subsidiary; PROVIDED
that (i) such Lien is not created in contemplation of or in connection
with such acquisition and (ii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary;
(c) Liens for taxes not yet due or which are being contested in
compliance with Section 6.03;
(d) carriers', warehousemen's, mechanic's, vendor's, lessor's,
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business and securing obligations which are not due or which are
being contested in connection with Section 6.03;
(e) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(f) deposits to secure the performance of bids, tenders, trade
contracts (other than for Indebtedness), leases (other than Capital Lease
Obligations which are not permitted by paragraph (k) of this Section
7.02), statutory obligations, surety, customs and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) zoning restrictions, servitudes, easements, licenses,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract
from the value of the property subject thereto
64
or interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(h) Liens created in favor of the Agent for the benefit of the
Lenders pursuant to the Security Agreement;
(i) Liens on property hereafter acquired existing at the time of
acquisition thereof or to secure the payment of all or any part of the
purchase price or construction cost thereof or to secure any Indebtedness
incurred prior to, at the time of or within six months after, the
acquisition of such property or completion of such construction for the
purpose of financing all or any part of the purchase price or the
construction cost thereof; PROVIDED, HOWEVER, that no such Lien shall
extend to or cover any property or asset other than the property so
acquired or constructed and fixed improvements thereon;
(j) Liens on any Inventory consigned to the Borrower by others;
(k) Liens securing Indebtedness incurred pursuant to Capital Lease
Obligations; PROVIDED that such security interest secures Indebtedness
permitted by Section 7.01(c) hereof;
(l) Liens securing Non-Recourse Indebtedness incurred by
Non-Recourse Subsidiaries;
(m) Liens securing Indebtedness that constitutes an extension,
rearrangement, renewal or refunding (or any successive extension,
rearrangement, renewal or refunding) in whole or in part of Indebtedness
secured by any Lien referred to in clauses (a) through (l) above
(hereinafter referred to as a "Prior Lien"), if limited to the same
property (plus additions, extensions, improvements, repairs, replacements
and rebuildings) subject to, and securing no more Indebtedness than the
amount secured by, the Prior Lien;
(n) Liens securing Indebtedness which (i) has an aggregate principal
amount not in excess of $10,000,000 and (ii) is incurred in connection
with Industrial Development Bonds (including Pollution Control Bonds) as
such terms are defined in the Internal Revenue Code of 1986, as amended;
(o) Liens on assets of Bayou (Tennessee) in favor of the holders of
First Mortgage Notes issued under the First Mortgage Indenture pursuant to
Section 12.1(a) thereof; and
65
(p) Liens on property or assets of the Borrower and its Subsidiaries
other than the Collateral to the extent such Liens are permitted under the
First Mortgage Indenture.
SECTION 7.03. SALE AND LEASE-BACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 7.04. INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
Investment or any other interest in, any other person, except Permitted
Investments.
SECTION 7.05. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any substantial part
of its assets (whether now owned or hereafter acquired) or any capital stock of
any Recourse Subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that (a) the Borrower and any Recourse
Subsidiary may purchase and sell inventory, sell used and surplus equipment and
sell any one of the three warehouses it owns, in each case in the ordinary
course of business, (b) if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing (i) any wholly owned Recourse Subsidiary may merge into the Borrower
in a transaction in which the Borrower is the surviving corporation and (ii) any
wholly owned Recourse Subsidiary may merge into or consolidate with any other
wholly owned Recourse Subsidiary in a transaction in which the surviving entity
is a wholly owned Recourse Subsidiary and no person other than the Borrower or a
wholly owned Subsidiary receives any consideration, (c) another person may merge
into or consolidate with the Borrower if (i) the Borrower is the surviving
entity, (ii) 100% of the Lenders consent to such merger or consolidation, (iii)
at the time thereof and immediately after giving effect thereto, no Event of
Default or Default shall have occurred and be continuing and (iv) at the time
thereof and immediately after giving effect thereto the Borrower is in
compliance with the provisions of Articles IV, VI and VII hereof and two
Financial Officers of the Borrower provide certificates
66
of compliance therewith to the Lenders, (d) the Borrower may transfer Eligible
Inventory to Bayou (Tennessee) pursuant to Section 6.13 hereof and (e) the
Borrower may make Acquisition Expenditures in accordance with Section 7.10
hereof.
SECTION 7.06. DIVIDENDS AND DISTRIBUTIONS. (a) Declare or pay,
directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, with respect to any shares of its Preferred Stock or
directly or indirectly redeem, purchase, retire or otherwise acquire for value
(or permit any Subsidiary to purchase or acquire) any shares of the Preferred
Stock or set aside any amount for any such purpose unless, after giving effect
to such dividend or distribution, the Consolidated Tangible Net Worth of the
Borrower exceeds $63,000,000 and at the time thereof and immediately after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing; or
(b) Declare or pay, directly or indirectly, any dividend or make any
other distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, with respect to any shares of its
capital stock other than its Preferred Stock or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any Subsidiary to
purchase or acquire) any shares of its capital stock other than its Preferred
Stock or set aside any amount for any such purpose unless, after giving effect
to such dividend or distribution, the Consolidated Tangible Net Worth of the
Borrower exceeds $63,000,000 PLUS 50% of the Borrower's Consolidated Net Income
from the Closing Date (but excluding any fiscal quarter (or portion thereby) for
which Consolidated Net Income is negative) and at the time thereof and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing; PROVIDED, HOWEVER, such dividends,
distributions, redemptions, purchases, retirements, acquisitions or settings
aside shall not in the aggregate for any given fiscal year exceed 50% of the
Borrower's Consolidated Net Income for the immediately preceding fiscal year.
Notwithstanding the provisions set forth in this Section 7.06, any
Subsidiary may declare and pay dividends or make other distributions to the
Borrower.
SECTION 7.07. TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or purchase or acquire any property or assets of, or
otherwise engage in any other transactions with, any of its Affiliates, except
that as long as no Default or Event of Default shall have occurred and be
continuing, the Borrower or any Recourse
67
Subsidiary may engage in any of the foregoing transactions with persons in the
ordinary course of business at prices and on terms and conditions materially not
less favorable to the Borrower or such Recourse Subsidiary than could be
obtained on an arm's-length basis from an unrelated third party; PROVIDED,
HOWEVER, that the foregoing shall not restrict Investments by the Borrower or a
Subsidiary in a Subsidiary of the Borrower to the extent permitted by Section
7.04 hereof; PROVIDED, FURTHER, that the foregoing shall not restrict the
performance of the Loan Documents.
SECTION 7.08. BUSINESS OF BORROWER AND RECOURSE SUBSIDIARIES. Engage
at any time in any business or business activity other than the business
currently conducted by it and business activities reasonably incidental thereto.
SECTION 7.09. RESTRICTED EXPENDITURES. Incur Capital Expenditures in
any fiscal year in an aggregate amount in excess of (i) 125% of Budgeted Capital
Expenditures for such year PLUS (ii) the excess, if any, of the aggregate amount
of Capital Expenditures that would have been permitted in the immediately
preceding two fiscal years based solely on clause (i) above over the amount of
Capital Expenditures actually incurred during such immediately preceding two
fiscal years, provided that the amount determined pursuant to this clause (ii)
for any fiscal year shall not exceed $15,000,000.
SECTION 7.10. ACQUISITION EXPENDITURES. Only the Borrower can make
Acquisition Expenditures, such Acquisition Expenditures to be funded with (a)
100% of the proceeds from equity offerings of the Borrower after the Closing
Date (except for proceeds from the issuance of the Preferred Stock), (b) 100% of
the Indebtedness permitted under Section 7.01(d) hereof, (c) up to $15,000,000
of the Loans at any one time and (d) up to and including 50% of cumulative
Consolidated Net Income from and including October 1, 1994 to and including the
last day of the most recently ended fiscal quarter of the Borrower.
SECTION 7.11. CURRENT RATIO. In the case of the Borrower and its
Recourse Subsidiaries, permit the ratio of Current Assets to Current
Liabilities, computed on a Consolidated basis, at any time to be less than 2.0
to 1.0.
SECTION 7.12. TANGIBLE NET WORTH. In the case of the Borrower and
its Recourse Subsidiaries, permit Tangible Net Worth, computed on a Consolidated
basis, at any time to be less than the sum of (i) $63,000,000 PLUS (ii) 50% of
Net Income from the Closing Date to the date of any computation of Tangible Net
Worth (but excluding any fiscal quarter (or portion thereof) for which Net
Income is negative).
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SECTION 7.13. DEBT TO CAPITALIZATION. In the case of the Borrower
and its Recourse Subsidiaries, permit the ratio of (a) amounts outstanding under
this Agreement PLUS amounts outstanding under the Term Loan Agreement PLUS total
long-term Funded Indebtedness of the Borrower and its Subsidiaries (including
Bayou (Tennessee)), computed on a Consolidated basis, less Unencumbered Cash
owned and held by or on behalf of the Borrower to (b) Capitalization, computed
in each case on a Consolidated basis, at any time during each of the periods
specified below to exceed the ratio specified below for such period:
FISCAL
YEAR RATIO
------ -----
1995 0.65 to 1.00
1996 0.63 to 1.00
1997 0.60 to 1.00
1998 0.55 to 1.00
1999 0.53 to 1.00
SECTION 7.14. INTEREST EXPENSE COVERAGE RATIO. In the case of the
Borrower and its Recourse Subsidiaries, fail to maintain a ratio of Consolidated
EBITDA to Consolidated Fixed Charges ("Interest Expense Coverage Ratio") for any
period of four fiscal quarters (or shorter period referred to below) ending
during one of the periods specified below equal to or greater than the Interest
Expense Coverage Ratio specified below for such period:
PERIOD RATIO
------ -----
Second Quarter, Fiscal Year 1995
(computed on a rolling 2 quarter basis) 1.60 to 1.00
Third Quarter, Fiscal Year 1995
(computed on a rolling 3 quarter basis) 1.60 to 1.00
Fourth Quarter, Fiscal Year 1995
(computed on a rolling 4 quarter basis) 1.60 to 1.00
Each Quarter in Fiscal Year 1996
(computed on a rolling 4 quarter basis) 1.60 to 1.00
Each Quarter in Fiscal Year 1997
(computed on a rolling 4 quarter basis) 1.70 to 1.00
Each Quarter in Fiscal Year 1998
(computed on a rolling 4 quarter basis) 1.80 to 1.00
Each Quarter in Fiscal Year 1999
(computed on a rolling 4 quarter basis) 2.00 to 1.00
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Thereafter (computed on a rolling
4 quarter basis) 2.00 to 1.00
SECTION 7.15. AMENDMENTS. (a) Amend or modify the First Mortgage
Indenture or the Notes issued pursuant thereto or the TVS Asset Purchase
Agreement without the prior written consent of the Required Lenders if such
amendment or modification would adversely affect the interests of the Lenders
and the Term Loan Lenders; or (b) amend or modify any term of the Preferred
Stock or the certificate of designation therefor or any other Preferred Stock
Documents.
ARTICLE VIII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the Borrowings hereunder or the
borrowing under the Term Loan Agreement or in any Borrowing Base
Certificate delivered pursuant to Section 6.04(c) or in any Term Loan
Borrowing Base Certificate delivered pursuant to subsection 6.1 of the
Term Loan Agreement, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any
Loan or Term Loan when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise or default shall be made in the
due and punctual reimbursement of any drawing under any Letter of Credit,
when and as the same shall become due and payable and such default shall
continue unremedied for a period of three days;
(c) default shall be made in the payment of any interest on any Loan
or Term Loan or any Fee or any other amount (other than an amount referred
to in (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for a
period of three days;
(d) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any
covenant, condition or agreement contained in
Section 6.01(a);
70
(e) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Article VI or Section 6 of the Term Loan Agreement, other
than as specified in (d) above, and such default shall continue unremedied
for a period of 30 days; PROVIDED, HOWEVER, that if the Agent has actual
knowledge of the occurrence of a default specified in this paragraph (e)
and the Borrower does not have knowledge of such occurrence, the 30-day
period shall begin on the date on which the Agent sends notice of such
default to the Borrower;
(f) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Article VII or Section 7 of the Term Loan Agreement, and such
default shall continue unremedied for a period of 30 days; PROVIDED,
HOWEVER, that if the Agent has actual knowledge of the occurrence of a
default specified in this paragraph (f) and the Borrower does not have
knowledge of such occurrence, the 30-day period shall begin on the date on
which the Agent sends notice of such default to the Borrower;
(g) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c),
(d), (e) or (f) above) and such default shall continue unremedied for a
period of 15 days after notice thereof from the Agent or any Lender to the
Borrower;
(h) the Borrower or any Recourse Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in any principal amount, when and as the same shall become
due and payable and after giving effect to applicable grace periods, or
(ii) fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or governing
any such Indebtedness if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness
to become due prior to its stated maturity and after giving effect to
applicable grace periods;
(i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower or any Subsidiary, or of a substantial
part of the property or assets of the Borrower or a
71
Subsidiary, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part of
the property or assets of the Borrower or a Subsidiary or (iii) the
winding-up or liquidation of the Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for 30 days; PROVIDED, HOWEVER, that this provision
shall not apply to a Non-Recourse Subsidiary unless such action or
proceeding materially adversely affects the interests of the Borrower or a
Recourse Subsidiary;
(j) the Borrower or any Subsidiary (other than a Non-Recourse
Subsidiary unless such action or proceeding materially adversely affects
the interests of the Borrower or a Recourse Subsidiary) shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in (i) above, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for
a substantial part of the property or assets of the Borrower or any
Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the
foregoing;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $1,500,000 (after giving effect to reimbursement by
insurance carriers) shall be rendered against the Borrower, any Recourse
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of the Borrower or any
Recourse Subsidiary to enforce any such judgment;
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(l) a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section
412(n)(l) of the Code), shall have occurred with respect to any Plan or
Plans that reasonably could be expected to result in liability of the
Borrower to the PBGC or to a Plan in an aggregate amount exceeding
$1,000,000 and, within 30 days after the reporting of any such Reportable
Event to the Agent or after the receipt by the Agent of the statement
required pursuant to Section 6.06, the Agent shall have notified the
Borrower in writing that (i) the Required Lenders have made a
determination that, on the basis of such Reportable Event or Reportable
Events or the failure to make a required payment, there are reasonable
grounds (A) for the termination of such Plan or Plans by the PBGC, (B) for
the appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of a
Lien in favor of a Plan and (ii) as a result thereof an Event of Default
exists hereunder; or a trustee shall be appointed by a United States
District Court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;
(m) (i) the Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting such Withdrawal
Liability or is not in fact contesting such Withdrawal Liability in a
timely and appropriate manner and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date or dates of such notification),
exceeds $2,000,000 or requires payments exceeding $1,000,000 in any year;
(n) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its ERISA Affiliates to
all Multiemployer Plans that are then in reorganization or have been or
are being terminated have been or will be increased over the amounts
required to be contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding $1,000,000;
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(o) there shall have occurred a Change in Control;
(p) (i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert in
writing or (ii) the Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to
be created thereby;
or
(q) one or more Persons has demanded payment of amounts in excess of
$500,000 in the aggregate under Section 7.01 of the Preferred Stock and
Warrant Purchase Agreement or Section 5.13 of the Shareholder Agreement
and the Borrower or any of its Subsidiaries shall have made such
payment(s) or shall have agreed that such amounts are due;
then, and in every such event (other than an event with respect to any Loan
Party described in paragraph (i) or (j) above), and at any time thereafter
during the continuance of such event, the Agent may, and at the request of the
Required Lenders shall, by written notice to the Borrower, take any or all of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments, (ii) demand that the Borrower provide to the Lenders, and the
Borrower upon such demand agrees to provide, cash collateral in an amount equal
to the aggregate Letter of Credit Exposure then existing, such cash collateral
to be deposited in a special cash collateral account to be held by the Agent for
the benefit of the Lenders and (iii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event with respect to the Borrower or any Recourse Subsidiary described in
paragraph (i) or (j) above, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall automatically become
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the
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Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. The Borrower shall
be deemed to grant at such time to the Agent, for the benefit of the Issuing
Bank and Lenders, a security interest in such cash collateral (such cash to be
held in an interest-bearing account) to secure all obligations of the Borrower
in respect of such Letters of Credit under this Agreement and the other Loan
Documents. The Borrower shall execute and deliver to the Agent, for the account
of the Issuing Bank and the Lenders, such further documents and instruments as
the Agent may request to evidence the creation and perfection of such security
interest in such cash collateral account. Amounts held in such cash collateral
account shall be applied by the Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the Notes. After all
such Letters of Credit shall have expired or been fully drawn upon and there
shall be no Letter of Credit Exposure and all other obligations of the Borrower
hereunder and under the Notes and the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account (including
interest thereon, if any) shall be returned to the Borrower.
ARTICLE IX. THE AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical is hereby appointed to act as Agent on behalf of the
Lenders. Each of the Lenders, and each subsequent holder of any Note by its
acceptance thereof, hereby irrevocably authorizes the Agent to take such actions
on behalf of such Lender or holder and to exercise such powers as are
specifically delegated to the Agent by the terms and provisions of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Agent is hereby expressly authorized by the Lenders, without hereby
limiting any implied authority, (a) to receive on behalf of the Lenders all
payments of principal of and interest on the Loans and all other amounts due to
the Lenders hereunder and under the other Loan Documents, and promptly to
distribute to each Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrower of any
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Event of Default specified in this Agreement of which the Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received by
the Agent.
Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his own gross negligence or willful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower of
any of the terms, conditions, covenants or agreements contained in any Loan
Document. The Agent shall not be responsible to the Lenders or the holders of
the Notes for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement, the Notes or any other Loan Documents or other
instruments or agreements. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof until it shall have received from the
payee of such Note notice, given as provided herein, of the transfer thereof.
The Agent shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
(or when expressly required hereby, all the Lenders) and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders and each subsequent holder
of any Note. The Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrower on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance
or breach by any other Lender or the Borrower of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. The Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.
The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of
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the Loan Documents unless it shall be requested in writing to do so by the
Required Lenders (or when expressly required hereby, all the Lenders).
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders, the
Term Loan Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor which successor Agent shall
be acceptable to the Borrower. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and Term Loan Lenders, appoint a successor
Agent which shall be a lender with an office in New York, New York, having a
combined capital and surplus of at least $500,000,000 or an Affiliate of any
such lender. Upon the acceptance of any appointment as Agent hereunder by a
successor lender, such successor shall 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 hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 10.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, the Notes issued to
it and any Letter of Credit issued by it, the Agent in its individual capacity
and not as Agent shall have the same rights and powers as any other Lender and
may exercise the same as though it were not the Agent, and the Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Agent.
Each Lender agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder) (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans and the Term Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date) of any expenses incurred for the benefit of the Lenders by the Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which shall not have been reimbursed
by the Borrower and (ii) to indemnify and hold harmless the Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such pro
rata share, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
77
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against it in its capacity as the Agent or any of
them in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrower (including, without limitation, at any time following
the payment of the Notes and the Term Notes); PROVIDED that no Lender shall be
liable to the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent or any of
its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the 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 and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
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. In acting as Agent under the Loan Documents, Chemical is acting for
both the Lenders and the Term Loan Lenders.
The terms and conditions set forth in this Article IX shall apply
MUTATIS MUTANDIS to the Agent in its capacity as Collateral Agent under the
Security Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. NOTICES. Notices and other communications provided
for herein or in the Term Loan Agreement shall be in writing and shall be
delivered by telecopy, hand or overnight courier service, or mailed, as follows:
(a) if to the Borrower, to it at River Road, La Place, Louisiana
70068, Attention of Richard J. Gonzalez (Telecopy No. 504-652-0472), with
a copy to 2777 Stemmons Freeway, Suite 1800, Dallas, Texas 75207,
Attention of Howard M. Meyers (Telecopy No. 214-631- 6146);
(b) if to Bayou (Tennessee), to it at River Road, La Place,
Louisiana 70068, Attention of Richard J. Gonzalez (Telecopy No.
504-652-0472), with a copy to
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2777 Stemmons Freeway, Suite 1800, Dallas, Texas 75207, Attention of
Howard M. Meyers (Telecopy No. 214-631- 6146);;
(c) if to the Agent, to it at 140 E. 45th St. (29th Floor) New York,
NY 10017, Attention of Pamela Rivers (Telecopy No. 212-922-9695);
(d) if to the Issuing Bank, to it at 55 Water Street, New York, New
York 10041, Attention of Victor Marinaccio (Telecopy No. 212-363-5656);
and
(e) if to a Lender, to it at its address (or tele- copy number) set
forth in Schedule 2.01; and
(f) if a Term Loan Lender, to it at its address set forth in the
Term Loan Agreement.
All notices and other communications given to any party hereto or to the Term
Loan Lenders in accordance with the provisions of this Agreement and the other
Loan Documents shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telecopy equipment of
the sender, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 10.01 PROVIDED that any notice, request or demand to or upon the Agent
or the Lenders pursuant to Sections 2.03 and 3.02 shall not be effective until
received.
SECTION 10.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by each Loan Party in the Loan Documents and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and the Term Loan Lenders and
shall survive the making by the Lenders of the Loans and by the Term Loan
Lenders of the Term Loans, and the execution and delivery (i) to the Lenders of
the Notes evidencing such Loans and (ii) to the Term Loan Lenders of the Term
Notes evidencing such Term Loans, regardless of any investigation made by the
Lenders or Term Loan Lenders or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or Term Loan or any Fee or any other amount payable under this Agreement, the
Term Loan Agreement or any other Loan Document is outstanding and unpaid and so
long as the Commitments have not been terminated.
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SECTION 10.03. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent and the Borrower shall have received copies hereof which, when taken
together, bear the signatures of each Lender, and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Agent and each Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior consent of all the Lenders.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Agent or the
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.
(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 and the Loans at the time owing to it and the Notes
held by it); PROVIDED, HOWEVER, that (i) except in the case of an assignment to
a Lender or an Affiliate of a Lender, the Borrower and the Agent must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender's rights and obligations
under this Agreement, (iii) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Acceptance in the form of Exhibit J
hereto, together with the Note or Notes subject to such assignment and a
processing and recordation fee of $4,000 (which recordation fee shall be paid by
a person other than the Borrower), and (iv) no such assignment shall be
permitted or effective unless such Lender concurrently assigns a ratable
interest in the Term Loan Agreement to its assignee. Upon acceptance and
recording pursuant to paragraph (e) of this Section 10.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in 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
provided in such assignment, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
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(c) By executing and delivering 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) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, 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; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any Subsidiary or the performance or observance by the Borrower or
any Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the most recent financial statements delivered pursuant to
Section 6.04 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; (iv) such assignee will independently and without
reliance upon the 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; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) 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 Agent 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 of, and principal amount of the Loans 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 manifest error and the Borrower,
the Agent and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and
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from time to time upon reasonable prior notice and copies shall be made
available to the Borrower upon request.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment, the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Borrower to
such assignment, the Agent shall (subject to the consent of the Agent to such
assignment, if required), (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders. Within five Business Days after receipt of notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for the surrendered Note or Notes, a new Note or Notes to the order of
such assignee in a principal amount equal to the applicable Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment, a new Note to the order of such assigning Lender in a
principal amount equal to the applicable Commitment retained by it. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note; such new Notes shall be dated the
date of the surrendered Notes which they replace and shall otherwise be in
substantially the form of Exhibit A hereto. Canceled Notes shall be returned to
the Borrower.
(f) Each Lender may without the consent of the Borrower or the Agent
sell participations to one or more Lenders or other financial institutions in
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it and the Notes held
by it); 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 lenders or other entities shall be entitled to the
benefit of the cost protection provisions contained in Sections 2.11 and 2.13 to
the same extent that the Lender from which such participating lender or other
entity acquired its participation would be entitled to the benefit of such cost
protection provisions, (iv) no such participation shall be permitted or
effective unless such Lender concurrently sells a ratable participating interest
in the Term Loan Agreement to its participant, and (v) the Borrower, the Agent
and the other 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 Borrower relating to the Loans and their right to approve any
amendment, modification or waiver of any provision of
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this Agreement (other than amendments, modifications or waivers with respect to
any Fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, or the dates fixed for payments of principal
of or interest on the Loans).
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to either Loan Party furnished to such
Lender by or on behalf of such Loan Party; PROVIDED that, prior to any such
disclosure, 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
any confidential information relating to the Loan Parties received from such
Lender.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder.
SECTION 10.05. EXPENSES; INDEMNITY. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation of this Agreement, the Letters of Credit, the Term Loan
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 contemplated shall be consummated) or incurred by the Agent
or any Lender or any Term Loan Lender in connection with the enforcement or
protection of their rights in connection with this Agreement, the Letters of
Credit, the Term Loan Agreement and the other Loan Documents or in connection
with the Loans and Term Loans made or the Notes and Term Notes issued hereunder,
including the reasonable fees and disbursements of Simpson Thacher & Bartlett,
counsel for the Agent, and, in connection with any such amendment, modification
or waiver or any such enforcement or protection, the reasonable fees and
disbursements of any other counsel for the Agent or any Lender or any Term Loan
Lender. The Borrower further agrees that it shall indemnify the Lenders and the
Term Loan Lenders from and hold them harmless against any documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement, the Letters of Credit or any of the
other Loan Documents.
(b) The Borrower agrees to indemnify the Agent, each Lender each
Term Loan Lender and its respective
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directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities, obligations, actions, penalties,
judgments, suits, costs and related expenses or disbursements, including
reasonable counsel fees and expenses, 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, the Letters of Credit, the Term Loan
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 the Term Loans, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) the noncompliance or
asserted noncompliance with, or liability or asserted liability under, any
Environmental Law that is asserted to be applicable to the Borrower or any
Subsidiary, or to any property owned or operated by any of them; PROVIDED that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such indemnified party's losses are the result of any unexcused breach by an
indemnified party of its obligations under this Agreement or any other Loan
Document or the result of the gross negligence or willful misconduct of such
Indemnitee.
(c) The provisions of this Section 10.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement, the Letters of Credit, the Term Loan Agreement or
any other Loan Document, or any investigation made by or on behalf of the Agent
or any Lender. All amounts due under this Section 10.05 shall be payable on
written demand therefor.
SECTION 10.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing and any Lender shall have requested the Agent to
declare the Loans immediately due and payable pursuant to Article VIII, such
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan Documents held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such other Loan Document
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and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
SECTION 10.08. WAIVERS; AMENDMENT. (a) No failure or delay of the
Agent, any Lender or any Term Loan Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agent, the Term Loan Lenders and the Lenders hereunder and under the other
Loan Documents are cumulative and not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on either Loan
Party in any case shall entitle such Loan Party to any other or further notice
or demand in similar or other circumstances. Each holder of any of the Notes and
the Term Notes shall be bound by any amendment, modification, waiver or consent
authorized as provided herein, whether or not such Note or Term Note shall have
been marked to indicate such amendment, modification, waiver or consent.
(b) Neither this Agreement, any provision hereof nor any other Loan
Document may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the applicable Loan Party and the Required
Lenders; PROVIDED, HOWEVER, that no such agreement shall (i) change the
principal amount of, or extend or advance the maturity of or any date for the
payment of any principal of or interest on, any Loan or Term Loan, or waive or
excuse any such payment or any part thereof, or change the rate of interest on
any Loan or Term Loan, without the prior written consent of each Lender and each
Term Loan Lender, (ii) change the Commitment or Commitment Fees of any Lender
without the prior written consent of such Lender, or (iii) amend or modify the
provisions of Section 2.16 or subsection 2.15 of the Term Loan Agreement, the
provisions of this Section or the definitions of "Borrowing Base" or "Required
Lenders" or release at any time from the security interest created by the
Security Agreement any of the
85
Collateral in excess of 10% in the aggregate of the book value of the Collateral
at such time (other than as permitted under Section 7.05), in any such case,
without the prior written consent of each Lender and each Term Loan Lender;
PROVIDED FURTHER that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent hereunder without the prior written consent of
the Agent. Each Lender, each Term Loan Lender and each holder of a Note or a
Term Note shall be bound by any modification or amendment authorized by this
Section regardless of whether its Note or Term Note shall have been marked to
make reference thereto, and any consent by any Lender, Term Loan Lender or
holder of a Note or Term Note pursuant to this Section shall bind any person
subsequently acquiring a Note or Term Note from it, whether or not such Note or
Term Note shall have been so marked.
SECTION 10.09. INTEREST RATE LIMITATION. Notwithstanding anything
herein or in the Notes or in the Term Notes to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are treated
as interest under applicable law (collectively the "CHARGES"), as provided for
herein or in any Loan Document or in any other document executed in connection
herewith or therewith, or otherwise contracted for, charged, received, taken or
reserved by any Lender or Term Loan Lender, shall exceed the maximum lawful rate
(the "Maximum Rate") which may be contracted for, charged, taken, received or
reserved by such Lender in accordance with applicable law, the rate of interest
payable under the Note or the Term Note held by such Lender or Term Loan Lender,
as the case may be, together with all Charges payable to such Lender or Term
Loan Lender, shall be limited to the Maximum Rate.
SECTION 10.10. ENTIRE AGREEMENT. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
any rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.
SECTION 10.11. WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the
86
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.11.
SECTION 10.12. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10.13. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.14. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 10.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower or its properties in
the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and
87
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this agreement or the other Loan Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.16. CONFIDENTIALITY. The Agent and the Lenders agree to
keep confidential (and to cause their respective officers, directors, employees,
agents and representatives to keep confidential) all information, materials and
documents concerning the Loan Parties furnished to the Agent or any Lender (the
"Information"). Notwithstanding the foregoing, the Agent and each Lender shall
be permitted to disclose Information (i) to such of its officers, directors,
employees, agents and representatives as need to know such Information in
connection with its participation in any of the Transactions or the
administration of this Agreement; (ii) to the extent required by applicable laws
and regulations or by any subpoena or similar legal process, or requested by any
governmental agency or authority; (iii) to the extent such Information (A)
becomes publicly available other than as a breach of this Agreement, (B) becomes
available to the Agent or such Lender on a non-confidential basis from a source
other than the Borrower or Subsidiary or (C) was available to the Agent or such
Lender on a non-confidential basis prior to its disclosure to the Agent or such
Lender by the Borrower or a Subsidiary; (iv) to the extent the Borrower or a
Subsidiary shall have consented to such disclosure in writing, (v) in connection
with the sale of any Collateral pursuant to the provisions of the Security
Agreement or (vi) as necessary in connection with an assignment or participation
contemplated by Sections 10.04(b) and 10.04(f) hereof.
88
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
BAYOU STEEL CORPORATION
By: __________________________
Title:
CHEMICAL BANK, as Agent and as a
Lender
By: __________________________
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: __________________________
Title:
THE DAIWA BANK, LIMITED
By: __________________________
Title:
By: __________________________
Title:
FIRST INTERSTATE BANK OF TEXAS,
N.A.
By: __________________________
Title:
HIBERNIA NATIONAL BANK
By: __________________________
Title:
89
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of June 28, 1989, as amended and
restated through June 1, 1995, made by BAYOU STEEL CORPORATION, a Delaware
corporation (the "GRANTOR"), in favor of CHEMICAL BANK, a New York banking
corporation ("CHEMICAL"), as collateral agent (in such capacity, the "COLLATERAL
AGENT") for (i) the several banks and other financial institutions (the
"Lenders") from time to time parties to the Credit Agreement, dated as of June
28, 1989, as amended and restated through June 1, 1995 (as further amended,
supplemented or otherwise modified from time to time, the "REVOLVING CREDIT
AGREEMENT") among the Grantor, the Lenders and Chemical, as agent (in such
capacity, the "AGENT"), and (ii) the several banks and other financial
institutions (the "TERM LOAN LENDERS") from time to time parties to the Term
Loan Agreement, dated as of June 1, 1995 (as amended, supplemented or otherwise
modified from time to time, the "TERM LOAN AGREEMENT") among Bayou Steel
Corporation (Tennessee), a Delaware corporation ("BAYOU (TENNESSEE)"), the Term
Loan Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, the Grantor and the Collateral Agent are parties to the
Security Agreement dated as of June 28, 1989, as amended and restated through
November 23, 1993 and as in effect immediately prior to the effectiveness of
this Agreement (the "ORIGINAL SECURITY AGREEMENT");
WHEREAS, the Grantor and the Collateral Agent wish to amend and
restate the Original Security Agreement pursuant to this Agreement in accordance
with the terms and subject to the conditions set forth herein;
WHEREAS, the Grantor and the Collateral Agent have elected to amend
and restate the Original Security Agreement pursuant to this Agreement rather
than amend the Original Security Agreement or enter into a new security
agreement for their convenience and intend that all indebtedness, obligations
and liens created under the Original Security Agreement be continued hereunder
and remain in full force and effect and not be discharged, paid, satisfied or
cancelled;
WHEREAS, pursuant to the Revolving Credit Agreement, the Lenders
have agreed to make their respective Loans to, and the Issuing Bank has agreed
to issue letters of credit for the account of, the Grantor upon the terms and
subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and the Issuing
1
Bank to issue Letters of Credit for the account of, the Grantor under the
Revolving Credit Agreement that the Grantor shall have executed and delivered
this Agreement to the Collateral Agent for the ratable benefit of the Lenders;
WHEREAS, pursuant to the Term Loan Agreement, the Term Loan Lenders
have agreed to make their respective Term Loans (as defined in the Term Loan
Agreement) to Bayou (Tennessee) upon the terms and subject to the conditions set
forth therein;
WHEREAS, it is a condition precedent to the obligation of the Term
Loan Lenders to make their respective Term Loans to Bayou (Tennessee) under the
Term Loan Agreement that the Grantor guarantee payment and performance of the
obligations of Bayou (Tennessee) under the Term Loan Agreement and the Term
Notes (as defined in the Term Loan Agreement);
WHEREAS, in satisfaction of such condition, the Grantor has entered
into the Guarantee, dated as of June 1, 1995 (as amended, supplemented or
otherwise modified from time to time, the "TERM LOAN GUARANTEE"), for the
benefit of the Agent and the Term Loan Lenders; and
WHEREAS, it is a further condition precedent to the obligation of
the Term Loan Lenders to make their Term Loans to Bayou (Tennessee) under the
Term Loan Agreement that the Grantor shall have executed and delivered this
Agreement to the Collateral Agent to secure payment and performance of the
Grantor's obligations under the Term Loan Guarantee.
NOW, THEREFORE, in consideration of the premises and (i) to induce
the Agent and the Lenders to enter into the Revolving Credit Agreement and to
induce the Lenders to make their respective Loans to, and the Issuing Bank to
issue Letters of Credit for the account of, the Grantor thereunder and (ii) to
induce the Agent and the Term Loan Lenders to enter into the Term Loan Agreement
and to induce the Term Loan Lenders to make their respective Term Loans to Bayou
(Tennessee) thereunder, the Grantor hereby agrees with the Collateral Agent, for
the benefit of the Lenders and the Term Loan Lenders, as follows:
1. DEFINITION OF TERMS USED HEREIN. All capitalized terms used herein but
not defined herein shall have the meanings set forth in the Revolving Credit
Agreement. As used herein, the following terms shall have the following
meanings:
(a) "Accounts" shall mean any and all rights of the Grantor to
payment for goods and services sold, leased or otherwise provided, including any
such right evidenced by chattel paper, whether due or to become due, whether or
not it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including, without limitation, accounts receivable from
Affiliates or employees of the Grantor.
2
(b) "Accounts Receivable" shall mean all Accounts and all rights in
any returned goods, together with all rights, titles, securities and guarantees
with respect thereto, including any rights to stoppage in transit, replevin,
reclamation and resales, and all related security interests, liens and pledges,
whether voluntary or involuntary.
(c) "Collateral" shall mean all (i) Accounts Receivable, (ii)
Inventory and (iii) Proceeds.
(d) "Guarantee Collateral Amount" shall be as defined in Section
18(e).
(e) "Inventory" shall mean, subject to the provisions of Section 28,
all merchandise intended for sale by the Grantor, or consumed in the Grantor's
business, together with all raw materials, including, without limitation, scrap,
billets, shapes, additives, alloys, fluxes, electrodes and refractories, whether
now owned or hereafter acquired or arising, and all such property the sale or
other disposition of which has given rise to Accounts and which has been
returned to, repossessed or stopped in transit by or on behalf of the Grantor.
(f) "Obligations" shall mean the Revolving Credit Obligations and
the Term Loan Obligations.
(g) "Proceeds" shall mean any consideration received from the sale,
exchange, lease or other disposition of any asset or property that constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral.
(h) "Revolving Credit Obligations" shall mean (a) the collective
reference to the unpaid principal of and interest on the Notes and all other
obligations and liabilities of the Grantor to the Agent, the Collateral Agent or
the Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Revolving Credit Agreement after the maturity of
the Loans and interest accruing at the then applicable rate provided in the
Revolving Credit Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Grantor, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Revolving Credit Agreement, the
Notes or any other document made, delivered or given in connection therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and
3
disbursements of counsel to the Agent or to the Lenders that are required to be
paid by the Grantor pursuant to the terms of the Revolving Credit Agreement, and
(b) all obligations of the Grantor under this Agreement.
(i) "Term Loan Obligations" shall mean the collective reference to
obligations and liabilities of the Grantor to the Agent, the Collateral Agent
and the Term Loan Lenders (including, without limitation, interest accruing at
the then applicable rate provided in the Term Loan Agreement after the maturity
of the Term Loans and interest accruing at the then applicable rate provided in
the Term Loan Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Grantor, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Term Loan Guarantee (including, without
limitation, all fees and disbursements of counsel to the Agent or to the Term
Loan Lenders that are required to be paid by the Grantor, as guarantor, pursuant
to the terms of the Term Loan Guarantee.
2. SECURITY INTEREST. (a) As security for the payment or
performance, as the case may be, of the Revolving Credit Obligations, the
Grantor hereby creates and grants to the Collateral Agent, its successors and
its assigns, for the benefit of the Lenders, their successors and their assigns,
a security interest in the Collateral (the "REVOLVING CREDIT SECURITY
INTEREST").
(b) As security for the payment or performance, as the case may be,
of the Term Loan Obligations, the Grantor hereby creates and grants to the
Collateral Agent, its successors and its assigns, for the benefit of the Term
Loan Lenders, their successors and their assigns, a security interest in the
Accounts Receivable and Proceeds thereof and Proceeds of the Inventory
consisting of Accounts Receivable (the "TERM LOAN SECURITY INTEREST"; together
with the Revolving Credit Security Interest, the "SECURITY INTEREST").
(c) Without limiting the foregoing, the Collateral Agent is hereby
authorized to file one or more financing statements, continuation statements or
other documents for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest without the signature of the Grantor, naming
the Grantor as debtor and the Collateral Agent as secured party; PROVIDED,
HOWEVER, that the Collateral Agent will attempt in each instance to obtain the
signature of the Grantor before filing any such document and, in the event that
the Collateral Agent is unable to obtain such signature, it shall promptly
deliver to the Grantor copies of any such documents filed without the signature
of the Grantor.
4
The Grantor agrees at all times to keep accurate and complete
accounting records with respect to the Collateral, including, but not limited
to, a record of all payments and Proceeds received.
3. FURTHER ASSURANCES. The Grantor agrees, at its expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time request for the better assuring and preserving of the Security
Interest and the rights and remedies created hereby, including, without
limitation, the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the security interests
created hereby and the filing of any financing statements or other documents in
connection herewith. If any amount payable under or in connection with any of
the Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and delivered
to the Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent. The Grantor agrees promptly to notify the Collateral Agent of
any change (a) in its corporate name, (b) in the location of its chief executive
office, (c) in its chief place of business or (d) in the office where it keeps
its records relating to the Collateral owned by it. Grantor agrees not to change
its registered office in the State of Louisiana from 8550 United Plaza
Boulevard, Baton Rouge, Louisiana 70809 except following thirty days' prior
written notice to the Collateral Agent. The Grantor agrees promptly to notify
the Collateral Agent if any material portion of the Collateral is damaged or
destroyed.
4. INSPECTION AND VERIFICATION. The Collateral Agent and such
persons as the Collateral Agent may reasonably designate shall have the right,
at any reasonable time or times during the Grantor's usual business hours, to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records), and the premises upon which any of the Collateral is
located, to discuss the Grantor's affairs with the officers of the Grantor and
its independent accountants (with a representative of the Grantor present if the
Grantor is not in default) and to verify under reasonable procedures the
validity, amount, quality, quantity, value, and condition of, or any other
matter relating to, the Collateral, including, in the case of Accounts or
Collateral in the possession of a third person, upon not less than one business
day's notice to the Grantor contacting account debtors or a third person
possessing such Collateral for the purpose of making such a verification. The
Collateral Agent shall have the absolute right to share any information it gains
from such inspection or verification with any or all of the Lenders subject in
any event to the provisions of Section 10.16 of the Revolving Credit Agreement
and subsection 10.12 of the Term Loan Agreement.
5
5. TAXES; ENCUMBRANCES. At its option, the Collateral Agent, upon
one Business Day's notice to the Grantor, may discharge past due taxes, liens,
security interests or other encumbrances at any time levied or placed on the
Collateral and not permitted under the Revolving Credit Agreement, and may pay
for the maintenance and preservation of the Collateral to the extent the Grantor
fails to do so as required by the Revolving Credit Agreement, and the Grantor
agrees to reimburse the Collateral Agent on demand for any payment made or any
expense incurred by it pursuant to the foregoing authorization; PROVIDED,
HOWEVER, that nothing in this Section 5 shall be interpreted as excusing the
Grantor from the performance of any covenants or other promises with respect to
taxes, liens, security interests or other encumbrances and maintenance as set
forth herein or in the Revolving Credit Agreement.
6. ASSIGNMENT OF SECURITY INTEREST. If at any time the Grantor shall
take and perfect a security interest in any property of an account debtor or any
other person to secure payment and performance of an Account, the Grantor shall
promptly assign such security interest to the Collateral Agent. Such assignment
need not be filed of public record unless necessary to continue the perfected
status of the security interest against creditors of and transferees from the
account debtor or other person granting the security interest.
7. REPRESENTATIONS AND WARRANTIES. The Grantor represents and
warrants to the Collateral Agent that:
(a) TITLE AND AUTHORITY. The Grantor has rights in and good title to
the Collateral and has full corporate power and authority to grant to the
Collateral Agent the Security Interest in the Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained.
(b) FILINGS. Fully executed Uniform Commercial Code financing
statements containing a description of the Collateral have been filed of record
in every governmental, municipal or other office in every jurisdiction in which
any portion of the Collateral is located necessary to publish notice of and
protect the validity of and to establish a valid, legal and perfected security
interest in favor of the Collateral Agent in respect of the Collateral in which
a security interest may be perfected by filing in the United States and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(c) VALIDITY OF SECURITY INTEREST. The Security Interest constitutes
a valid, legal and perfected security interest in all of the Collateral for
payment and performance of
6
the Obligations and the Collateral is subject to no liens, other than liens
permitted by Section 7.02 of the Revolving Credit Agreement.
(d) INFORMATION REGARDING NAMES AND LOCATIONS. The Grantor has
disclosed in writing to the Collateral Agent any trade names used to identify it
in its business or in the ownership of its properties and each location where it
maintains any Collateral.
(e) ABSENCE OF OTHER LIENS. The Grantor has not filed any Financing
Statement under the Uniform Commercial Code covering any Collateral other than
as contemplated by the Revolving Credit Agreement or hereby, other than
Financing Statements of which copies have been delivered to the Collateral
Agent, and the Grantor has not filed any notices of assignment of any of the
Accounts Receivable located in Louisiana other than in favor of the Collateral
Agent.
(f) SCHEDULE OF ACCOUNTS. Each schedule of Accounts will be an
accurate description of the Accounts in all material respects.
(g) SCHEDULES. The information contained on Schedules I and II
hereof is accurate and complete in all respects.
(h) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Grantor contained in this Agreement shall survive the
execution, delivery and performance of this Agreement until the termination of
this Agreement pursuant to Section 33.
8. RECORDS AND SCHEDULES OF ACCOUNTS. The Grantor shall keep or
cause to be kept records of Accounts that are accurate in all material respects.
9. DOCUMENTS OF TITLE. The Grantor agrees, upon written request of
the Collateral Agent, immediately to deliver all documents of title (as such
term is defined in the Uniform Commercial Code) to the Collateral Agent or its
designee upon the creation and issuance of such documents of title to maintain a
valid, legal and perfected security interest in favor of the Collateral Agent in
respect of any and all Inventory. The Collateral Agent agrees immediately to
deliver, or cause to be delivered, such documents of title to the Grantor or
their designees upon the creation of Accounts Receivable relating to the
Inventory covered by such documents of title.
10. SUPPLEMENTAL DOCUMENTATION. In connection with the execution and
delivery of this Agreement, the Grantor shall furnish or cause to be furnished
to the Collateral Agent, on or prior to the Term Loan Closing Date (as defined
in the Term Loan Agreement), a certificate signed by an officer of the Grantor
dated the Term Loan Closing Date, certifying that, as of the date
7
of such certificate, all representations and warranties of the Grantor in
Section 7 are true and correct, and that the Grantor is in compliance with all
conditions, agreements and covenants to be observed or performed hereunder.
11. PROTECTION OF SECURITY. The Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral
against all persons and to defend the Security Interest of the Collateral Agent
in the Collateral and the priority thereof, against any adverse mortgage,
pledge, security interest, lien, charge or other encumbrance of any nature
whatsoever not permitted under the Revolving Credit Agreement.
12. INSURANCE. (a) The Grantor, at its own expense, shall maintain
insurance covering physical loss or damage to the Inventory in accordance with
the provisions of Section 6.02 of the Revolving Credit Agreement. All such
policies of insurance shall be endorsed or otherwise amended to include a
lender's loss payable endorsement, in form and substance satisfactory to the
Collateral Agent, which shall provide that from and after the date, if any, on
which the insurance carrier receives written notice from the Collateral Agent
that an Event of Default has occurred, all proceeds otherwise payable to the
Grantor under such policies shall be payable directly to the Collateral Agent.
Such endorsement or an independent instrument furnished to the Collateral Agent
shall provide that the insurance companies will give the Collateral Agent at
least 30 days' prior written notice before any such policy or policies of
insurance shall be materially altered or canceled and that no act or default of
the Grantor or any other person shall affect the right of the Collateral Agent
to recover under such policy or policies of insurance in case of loss or damage.
(b) Following the occurrence of and during the continuance of an
Event of Default, the Grantor irrevocably makes, constitutes, and appoints the
Collateral Agent (and all officers, employees, or agents designated by the
Collateral Agent) as the Grantor's true and lawful agent (and attorney-in-fact)
for the purpose of making, settling and adjusting claims under policies of
insurance, endorsing the name of the Grantor on any check, draft, instrument, or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
the Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantor hereunder or any Event of Default, in its
sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other action with respect thereto as the Collateral Agent
deems advisable. All such sums so disbursed by the Collateral Agent, including
reasonable attorney's fees, court costs, expenses and other charges
8
relating thereto, shall be payable, upon demand, by the Grantor to the
Collateral Agent and shall be additional obligations secured hereby.
13. CONTINUING OBLIGATIONS OF THE GRANTOR. The Grantor shall remain
liable to observe and perform in all material respects all the material
conditions and obligations to be observed and performed by it under each
contract, agreement, interest or obligation relating to the Collateral, all in
accordance with the terms and conditions thereof, and shall indemnify and hold
harmless the Collateral Agent and the Lenders and the Term Loan Lenders and each
of them severally, from any and all such liabilities.
14. USE AND DISPOSITION OF COLLATERAL. Except as permitted under
Sections 6.13 and 7.02 of the Revolving Credit Agreement, the Grantor (a) shall
not make or permit to be made an assignment, pledge or hypothecation of the
Collateral, and shall grant no other security interest in the Collateral, or (b)
shall not make or permit to be made any transfer of the Collateral, and shall
remain at all times in possession thereof other than transfers to the Collateral
Agent pursuant to the provisions hereof; except that so long as no Event of
Default shall have occurred and be continuing, the Grantor may use and dispose
of the Collateral in any lawful manner not inconsistent with the provisions of
this Agreement and of the Revolving Credit Agreement and in the event an Event
of Default has occurred and is continuing the Grantor may, unless it is
otherwise notified by the Collateral Agent, sell Inventory in the ordinary
course of business.
15. LIMITATION ON MODIFICATIONS OF ACCOUNTS. The Grantor will not,
without the Collateral Agent's prior written consent, grant any extension of the
time of payment of any of the Accounts Receivable, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof, or allow any credit or
discount whatsoever thereon other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business.
16. COLLECTIONS. So long as no Event of Default shall have occurred,
the Grantor shall have the right to collect its Accounts Receivable in the
ordinary course of its business. Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent shall have the right, as the true
and lawful agent of the Grantor, with power of substitution for the Grantor and
in the Grantor's name, the Collateral Agent's name or otherwise, for the use and
benefit of the Collateral Agent and the Lenders and the Term Loan Lenders (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges
9
and releases of all or any of the Collateral; (c) to sign the name of the
Grantor on any invoice or bill of lading relating to any of the Collateral; (d)
to send verifications of Accounts Receivable to any account debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to or pertaining to all or any of the Collateral;
(g) to notify, or to require the Grantor to notify, the account debtors
obligated on any or all of the Accounts Receivable to make payment thereof
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken by the Collateral
Agent or omitted to be taken with respect to the Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of the Grantor
or to any claim or action against the Collateral Agent except the gross
negligence or willful misconduct of the Collateral Agent. Upon taking of
possession of any Collateral hereunder, the Collateral Agent shall deal with
such Collateral in substantially the same manner as it deals with similar
property for its own account and shall account for property actually received by
it. It is understood and agreed that the appointment of the Collateral Agent as
the agent of the Grantor for the purposes set forth above in this Section 16 is
coupled with an interest and is irrevocable. The provisions of this Section 16
shall in no event relieve the Grantor of any of its obligations hereunder or
under the Revolving Credit Agreement with respect to the Collateral or any part
thereof or impose any obligation on the Collateral Agent or the Lenders or the
Term Loan Lenders to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by the
Collateral Agent or any Lender or Term Loan Lender of any other or further right
that it may have on the date of this Agreement or hereafter, whether hereunder,
under the Revolving Credit Agreement or the Term Loan Guarantee or by law or
otherwise.
17. REMEDIES UPON DEFAULT. (a) Upon the occurrence and during the
continuance of an Event of Default, the Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have
10
the right to take any or all of the following actions at the same or different
times: with or without legal process and with or without previous notice or
demand for performance, to take possession of the Collateral and without
liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, the Grantor agrees that the Collateral Agent shall have the
right, subject to the mandatory requirements of current law, to sell or
otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of the
Grantor, and the Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal that the Grantor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the Grantor 10 days' written notice
(which the Grantor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix and state in the notice (if any)
of such sale. At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such
11
sale may, without further notice, be made at the time and place to which the
same was so adjourned. In case any sale of all or any part of the Collateral is
made on credit or for future delivery, the Collateral so sold may be retained by
the Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public sale made pursuant to this Section 17, any Lender or Term
Loan Lender may bid for or purchase, free (to the extent permitted by law) from
any right of redemption, stay, valuation or appraisal on the part of the Grantor
(all said rights being also hereby waived and released to the extent permitted
by law), the Collateral or any part thereof offered for sale and may make
payment on account thereof by using any claim then due and payable to such
Lender or Term Loan Lender from the Grantor as a credit against the purchase
price, and such Lender or Term Loan Lender may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to the Grantor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement, and the Grantor shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
(b) For purposes of executory process under applicable Louisiana
law, the Grantor hereby acknowledges the indebtedness owed under the
Obligations, CONFESSES JUDGMENT thereon and consents that judgment be rendered
and signed, whether during the court's term or during vacation, in favor of the
Collateral Agent, for the benefit of the Lenders and Term Loan Lenders, for the
full amount of the Obligations in principal, interest, and attorneys' fees,
together with all charges and expenses whatsoever pursuant to this Agreement,
the Revolving Credit Agreement and the Term Loan Guarantee. Upon the occurrence
and during the continuance of an Event of Default, and in addition to all of its
rights, powers and remedies under this Agreement and applicable law, the
Collateral Agent may, at its option, cause all or any part of the Collateral to
be seized and sold under executory process or under writ of fieri facias issued
in execution of an ordinary judgment obtained upon the Obligations, without
appraisement to the highest bidder, for cash or under such terms as the
Collateral Agent deems acceptable. The Grantor
12
hereby waives all and every appraisement of the Collateral and waives and
renounces the benefit of appraisement and the benefit of all laws relative to
the appraisement of the Collateral seized and sold under executory or other
legal process. The Grantor agrees to waive, and does hereby specifically waive:
(i) the benefit of appraisement provided for in Articles 2332,
2336, 2723 and 2724, Louisiana Code of Civil Procedure, and
all other laws conferring such benefits;
(ii) the demand and three (3) days delay accorded by Articles 2639
and 2721, Louisiana Code of Civil Procedure;
(iii) the notice of seizure required by Articles 2293 and 2721,
Louisiana Code of Civil Procedure;
(iv) the three (3) days delivery provided by Articles 2331 and
2722, Louisiana Code of Civil Procedure;
(v) the benefit of the other provisions of Articles 2331, 2722 and
2723, Louisiana Code of Civil Procedure;
(vi) the benefit of the provisions of any other articles of the
Louisiana Code of Civil Procedure not specifically mentioned
above; and,
(vii) all rights of divisions and discussion with respect to the
Obligations.
In the event the Collateral Agent elects, at its option, to enter suit via
ordinaria on the Obligations, in addition to the foregoing confession of
judgment, the Grantor hereby waives citation, other legal process and legal
delays and hereby consents that judgment for the unpaid principal due on the
Obligations, together with interest, attorneys' fees, costs and other charges
that may be due on the Obligations, be rendered and signed immediately.
Pursuant to the authority contained in La.R.S. 9:5136 through
9:5140.1, the Grantor and the Collateral Agent do hereby expressly designate the
Collateral Agent or its designee to be keeper or receiver ("Keeper") for the
benefit of the Collateral Agent or any assignee of the Collateral Agent, such
designation to take effect immediately upon any seizure of any of the Collateral
under writ of executory process or under writ of sequestration or fieri facias
as an incident to an action brought by the Collateral Agent. The fees of the
Keeper are hereby fixed at 5% of the amount due or sued for or claimed or sought
to be protected, preserved or enforced in the proceeding for the
13
recognition of the Security Interest, and the payment of such fees shall be
secured by the Security Interest.
18. APPLICATION OF PROCEEDS. (a) The Collateral Agent shall apply
the proceeds of any collection or sale of the Accounts Receivable as follows:
FIRST, to the payment in full of the Term Loan Obligations, pro rata
as among the Term Loan Lenders in accordance with the amounts of the Term
Loans made by them and outstanding, to the extent that such proceeds equal
the then applicable Guarantee Collateral Amount.
SECOND, to the payment of all costs and reasonable expenses incurred
by the Collateral Agent in connection with such collection or sale or
otherwise in connection with this Agreement or any of the Revolving Credit
Obligations, including, but not limited to, all court costs and the
reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder on behalf
of the Grantor and any other costs or expenses incurred in connection with
the exercise of any right or remedy hereunder.
THIRD, to the payment in full of the Revolving Credit Obligations to
the extent such proceeds secure the Revolving Credit Obligations, pro rata
as among the Lenders in accordance with the amounts of the Loans made by
them and outstanding.
FOURTH, to the payment and discharge in full of the Revolving Credit
Obligations (other than those referred to above), pro rata as among the
Lenders in accordance with the amount of their respective Commitments.
FIFTH, to the Grantor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
(b) The Collateral Agent shall apply the proceeds of any collection
or sale of the Inventory as follows:
FIRST, to the payment of all costs and reasonable expenses incurred
by the Collateral Agent in connection with such collection or sale or
otherwise in connection with this Agreement or any of the Revolving Credit
Obligations, including, but not limited to, all court costs and the
reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder on behalf
of the Grantor and any other costs or expenses incurred in connection with
the exercise of any right or remedy hereunder.
14
SECOND, to the payment in full of the Revolving Credit Obligations,
pro rata as among the Lenders in accordance with the amounts of the Loans
made by them and outstanding.
THIRD, to the payment and discharge in full of the Revolving Credit
Obligations (other than those referred to above), pro rata as among the
Lenders in accordance with the amount of their respective Commitments.
FOURTH, to the Grantor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
(c) The Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by the Collateral Agent
(including, without limitation, pursuant to a power of sale granted by statute
or under a judicial proceeding), the receipt of the Collateral Agent or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
(d) Each Lender and Term Loan Lender may apply any such proceeds to
the Obligations owed to it in any manner it determines in its sole discretion.
(e) As used herein, "Guarantee Collateral Amount" means a dollar
amount equal to 5% of the aggregate book value of the Grantor's Consolidated
total assets as shown on the most recent Consolidated balance sheet prepared
after the Closing Date. As an example, immediately after giving effect to the
Acquisition it is expected that the Guarantee Collateral Amount will be
approximately $9,000,000.
(f) The Lenders agree to subordinate their Lien on the proceeds of
Inventory to the Term Loan Security Interest in the Accounts Receivable and the
Proceeds thereby to the extent, but only to the extent, necessary to permit the
application of proceeds contemplated by clause FIRST of paragraph (a) above.
(g) Notwithstanding any other provision of this Agreement or any
other Loan Document to the contrary, the Term Loan Lenders may waive or alter
the priority of their right to proceeds contemplated by clause FIRST of
paragraph (a) above in their sole discretion and without the consent of the
Grantor.
19. LOCATIONS OF COLLATERAL; PLACE OF BUSINESS. (a) The Grantor
hereby represents and warrants that all the Collateral is located at the
locations listed on Schedule I hereto. The Grantor agrees not to establish, or
permit to be established, any other location for Collateral, unless all
15
filings under the Uniform Commercial Code or otherwise that are required by the
Revolving Credit Agreement to be made with respect to the Collateral have been
made and the Collateral Agent has a valid, legal and perfected security interest
in the Collateral subject to no liens, other than liens permitted by Section
7.02 of the Revolving Credit Agreement.
(b) The Grantor agrees, at such time or times as the Collateral
Agent may request, promptly to prepare and deliver to the Collateral Agent a
duly certified schedule or schedules in form satisfactory to the Collateral
Agent, showing the identity, amount and location of any and all material
Collateral.
(c) The Grantor agrees that its chief executive office and its
registered office in Louisiana are located as indicated on Schedule II hereto
and that its federal employer identification number is as set forth on Schedule
II. The Grantor agrees not to change, or permit to be changed, the location of
its chief executive office or of its registered office in Louisiana or its
federal employer identification number unless all filings under the Uniform
Commercial Code or otherwise that are required by the Revolving Credit Agreement
to be made have been made and the Collateral Agent has a valid, legal and
perfected security interest in the Collateral subject to no liens, other than
liens permitted by Section 7.02 of the Revolving Credit Agreement.
20. SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Grantor hereunder,
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Revolving Credit Agreement or Term Loan Guarantee and any
other Loan Document, any other agreement with respect to any of the Obligations
or any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Revolving Credit Agreement or Term Loan Guarantee and any
other Loan Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any other Collateral, or any release or amendment
or waiver of or consent to or departure from any guaranty, for all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Grantor in respect of the
Obligations or in respect of this Agreement.
21. NO WAIVER. No failure on the part of the Collateral Agent to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy by the Collateral Agent preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are
16
not exclusive of any other remedies provided by law. The Collateral Agent and
the Lenders and the Term Loan Lenders shall not be deemed to have waived any
rights hereunder or under any other agreement or instrument unless such waiver
shall be in writing and signed by such parties.
22. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Except as otherwise
provided herein, the Grantor hereby appoints the Collateral Agent the
attorney-in-fact of the Grantor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest.
23. COLLATERAL AGENT'S FEES AND EXPENSES. The Grantor agrees to pay
upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the fees and expenses of its counsel and of any experts or
agents, that the Collateral Agent may incur in connection with (a) the
administration of this Agreement, (b) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral, (c)
the exercise or enforcement of any of the rights of the Collateral Agent
hereunder or (d) the failure by the Grantor to perform or observe any of the
provisions hereof. In addition, the Grantor will upon demand pay to the
Collateral Agent such reasonable fees (in addition to its expenses) for its
service as Collateral Agent as may be agreed from time to time between the
Collateral Agent and the Grantor. Any such amounts payable as provided hereunder
or thereunder shall be additional Obligations secured hereby.
24. Intentionally Omitted.
25. NEW SECURITY AGREEMENT. At the request of the Collateral Agent,
the Grantor shall enter into a separate security agreement pursuant to which the
Grantor shall create and grant a Term Loan Security Interest to the Collateral
Agent, for the benefit of the Term Loan Lenders, to secure the payment or
performance of the Term Loan Obligations.
26. BINDING AGREEMENT; ASSIGNMENTS. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
the Grantor shall not be permitted to assign this Agreement or any interest
herein or in the Collateral, or any part thereof, or otherwise pledge, encumber
or grant any option with respect to the Collateral, or any part thereof, or any
cash or property held by the Collateral Agent as Collateral under this
Agreement, except as contemplated by this Agreement or the Revolving Credit
Agreement and the Term Loan Guarantee.
17
27. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.
28. LIMITATIONS ON INVENTORY. The Grantor and the Collateral Agent
agree that the term, Inventory, as used herein, does not include, and shall
never be deemed or construed to include, any of the properties, rights or
interests (a) that have been mortgaged to First National Bank of Commerce, as
Trustee (the "Trustee"), pursuant to the First Mortgage Indenture, including (i)
all bearings, rolls, guides and stores that relate to machinery and equipment
mortgaged to the Trustee pursuant to the First Mortgage Indenture, (ii) all
licenses, franchises, permits, patents, patent rights, formulae, processes,
compounds, drawings, designs, blueprints, surveys, reports, manuals and
operating standards relating to or used in the operation of the Grantor's
business and all trade secret rights, rights in works of authorship and contract
rights relating to computer software programs in whatever form created or
maintained, and (iii) all proceeds of the properties, rights and interests
referred to in clauses (i) and (ii) above, or (b) that have been granted to the
Trustee pursuant to the First Mortgage Indenture.
29. NOTICES. All communications and notices hereunder shall be in
writing and given as provided in Section 10.01 of the Revolving Credit Agreement
and Section 11 of the Term Loan Guarantee.
30. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, no party hereto shall be required to comply with such provision for so
long as such provision is held to be invalid, illegal or unenforceable and the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
31. SECTION HEADINGS. Section headings used herein are for
convenience only and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
32. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Agreement shall be
effective when a counterpart which bears the signature of the Grantor shall have
been delivered to the Collateral Agent.
33. TERMINATION. This Agreement and the Security Interest shall
terminate when all the Obligations have been indefeasibly paid in full, when the
Lenders have no further
18
commitment to lend under the Revolving Credit Agreement and the Term Loan
Guarantee is no longer in effect and all amounts payable under the Term Loan
Guarantee have been indefeasibly paid in full, at which time the Collateral
Agent shall execute and deliver to the Grantor all Uniform Commercial Code
termination statements and similar documents prepared by the Grantor which the
Grantor shall reasonably request to evidence such termination.
19
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BAYOU STEEL CORPORATION
By: ____________________________
Name:
Title:
CHEMICAL BANK, as Collateral
Agent
By: ____________________________
Name:
Title:
Schedule I
LOCATIONS OF COLLATERAL
River Road Receivables and
La Place, LA 70069 Inventory
108 & The Calumet River Inventory
Chicago, IL 60617
Leetsdale Industrial Park Inventory
Leetsdale, PA 15056
790 Ft.Gibson Road Inventory
Catoosa, OK 74015
Schedule II
CHIEF EXECUTIVE OFFICES
P.O. Box 5000
La Place, LA 70069-1156
River Road
La Place, LA 70069
REGISTERED OFFICE
8550 United Plaza Boulevard
Baton Rouge, Louisiana 70809