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$40,000,000
CREDIT AGREEMENT
DATED AS OF
MAY 24, 1996
AMONG
ATCHISON CASTING CORPORATION,
THE BANKS PARTY HERETO,
AND
HARRIS TRUST AND SAVINGS BANK
AS AGENT
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TABLE OF CONTENTS
(This Table of Contents is not part of the Agreement)
PAGE
SECTION 1. THE CREDIT FACILITIES. . . . . . . . . . . . . . . . . . . 1
Section 1.1. The Commitments. . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Letters of Credit. . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Applicable Interest Rates. . . . . . . . . . . . . . . . 4
Section 1.4. Minimum Borrowing Amounts. . . . . . . . . . . . . . . . 6
Section 1.5. Manner of Borrowing. . . . . . . . . . . . . . . . . . . 6
Section 1.6. Interest Periods . . . . . . . . . . . . . . . . . . . . 7
Section 1.7. Maturity of Loans. . . . . . . . . . . . . . . . . . . . 8
Section 1.8. Optional Prepayments.. . . . . . . . . . . . . . . . . . 8
Section 1.9. Default Rate . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.10. The Notes. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.11. Funding Indemnity. . . . . . . . . . . . . . . . . . . . 9
Section 1.12. Commitment Terminations. . . . . . . . . . . . . . . . . 9
SECTION 2. FEES AND EXTENSIONS. . . . . . . . . . . . . . . . . . . . 10
Section 2.1. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.2. Agent Fees . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.3. Extension of Termination Date. . . . . . . . . . . . . . 10
SECTION 3. PLACE AND APPLICATION OF PAYMENTS. . . . . . . . . . . . . 11
Section 3.1. Place and Application of Payments. . . . . . . . . . . . 11
SECTION 4. DEFINITIONS; INTERPRETATION. . . . . . . . . . . . . . . . 11
Section 4.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.2. Interpretation . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 24
Section 5.1. Corporate Organization and Authority . . . . . . . . . . 24
Section 5.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.3. Corporate Authority and Validity of Obligations. . . . . 25
Section 5.4. Financial Statements . . . . . . . . . . . . . . . . . . 25
Section 5.5. No Material Adverse Change . . . . . . . . . . . . . . . 26
Section 5.6. No Litigation; No Labor Controversies. . . . . . . . . . 26
Section 5.7. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.8. Approvals. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 26
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Section 5.10. Government Regulation. . . . . . . . . . . . . . . . . . 26
Section 5.11. Margin Stock . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.12. Licenses and Authorizations; Compliance with Laws. . . . 27
Section 5.13. Ownership of Property; Liens . . . . . . . . . . . . . . 27
Section 5.14. No Burdensome Restrictions; Compliance with
Agreements . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.15. Full Disclosure. . . . . . . . . . . . . . . . . . . . . 28
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 28
Section 6.1. Initial Credit Event . . . . . . . . . . . . . . . . . . 28
Section 6.2. All Credit Events. . . . . . . . . . . . . . . . . . . . 29
SECTION 7. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.1. Corporate Existence; Subsidiaries. . . . . . . . . . . . 30
Section 7.2. Maintenance. . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.3. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.4. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.5. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.6. Financial Reports and Other Information. . . . . . . . . 31
Section 7.7. Bank Inspection Rights . . . . . . . . . . . . . . . . . 34
Section 7.8. Conduct of Business. . . . . . . . . . . . . . . . . . . 35
Section 7.9. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.10. Use of Proceeds; Regulation U. . . . . . . . . . . . . . 36
Section 7.11. Sales and Leasebacks . . . . . . . . . . . . . . . . . . 37
Section 7.12. Consolidation, Merger, Sale of Assets, etc.. . . . . . . 37
Section 7.13. Subsidiary Stock and Debt. . . . . . . . . . . . . . . . 38
Section 7.14. Use of Property and Facilities; Environmental,
Health and Safety Laws . . . . . . . . . . . . . . . . . 38
Section 7.15. Maintenance of Certain Financial Conditions. . . . . . . 38
Section 7.16. Short-Term Working Capital Debt. . . . . . . . . . . . . 39
Section 7.17. Subsidiary Debt. . . . . . . . . . . . . . . . . . . . . 39
Section 7.18. Investments, etc.. . . . . . . . . . . . . . . . . . . . 40
Section 7.19. Restricted Payments. . . . . . . . . . . . . . . . . . . 41
Section 7.20. Transactions with Affiliates . . . . . . . . . . . . . . 42
Section 7.21. Compliance with Laws . . . . . . . . . . . . . . . . . . 42
Section 7.22. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.23. Intercreditor Agreement. . . . . . . . . . . . . . . . . 43
SECTION 8. EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . 43
Section 8.1. Events of Default. . . . . . . . . . . . . . . . . . . . 43
Section 8.2. Non-Bankruptcy Defaults. . . . . . . . . . . . . . . . . 44
Section 8.3. Bankruptcy Defaults. . . . . . . . . . . . . . . . . . . 45
Section 8.4. Collateral for Undrawn Letters of Credit . . . . . . . . 45
Section 8.5. Notice of Default. . . . . . . . . . . . . . . . . . . . 46
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Section 8.6. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9. CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . 46
Section 9.1. Change of Law. . . . . . . . . . . . . . . . . . . . . . 46
Section 9.2. Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of, LIBOR. . . . . . . . . . . . . . . . . 47
Section 9.3. Increased Cost and Reduced Return. . . . . . . . . . . . 47
Section 9.4. Lending Offices. . . . . . . . . . . . . . . . . . . . . 48
Section 9.5. Discretion of Bank as to Manner of Funding . . . . . . . 49
SECTION 10. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.1. Appointment and Authorization of Agent . . . . . . . . . 49
Section 10.2. Agent and its Affiliates . . . . . . . . . . . . . . . . 49
Section 10.3. Action by Agent. . . . . . . . . . . . . . . . . . . . . 49
Section 10.4. Consultation with Experts. . . . . . . . . . . . . . . . 50
Section 10.5. Liability of Agent; Credit Decision. . . . . . . . . . . 50
Section 10.6. Costs and Expenses . . . . . . . . . . . . . . . . . . . 50
Section 10.7. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.8. Resignation of Agent and Successor Agent . . . . . . . . 51
SECTION 11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.1. Withholding Taxes. . . . . . . . . . . . . . . . . . . . 51
Section 11.2. No Waiver of Rights. . . . . . . . . . . . . . . . . . . 52
Section 11.3. Non-Business Day . . . . . . . . . . . . . . . . . . . . 52
Section 11.4. Documentary Taxes. . . . . . . . . . . . . . . . . . . . 53
Section 11.5. Survival of Representations. . . . . . . . . . . . . . . 53
Section 11.6. Survival of Indemnities. . . . . . . . . . . . . . . . . 53
Section 11.7. Sharing of Set-Off . . . . . . . . . . . . . . . . . . . 53
Section 11.8. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.10. Successors and Assigns . . . . . . . . . . . . . . . . . 54
Section 11.11. Participants and Note Assignees. . . . . . . . . . . . . 54
Section 11.12. Assignment of Commitments by Banks . . . . . . . . . . . 55
Section 11.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . 55
Section 11.14. Headings . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 11.15. Legal Fees, Other Costs and Indemnification. . . . . . . 56
Section 11.16. Set Off. . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 11.17. Entire Agreement . . . . . . . . . . . . . . . . . . . . 56
Section 11.18. Governing Law. . . . . . . . . . . . . . . . . . . . . . 56
Section 11.19. Submission to Jurisdiction . . . . . . . . . . . . . . . 56
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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EXHIBITS
A - Form of Note
B - Form of Notice of Payment Request
C - Form of Compliance Certificate
D - Form of Legal Opinion of Counsel to the Borrower
E - Form of Guaranty Agreement
SCHEDULE 1.2(a) Existing Letters of Credit
SCHEDULE 5.2 Existing Subsidiaries
SCHEDULE 5.6(a) Litigation
SCHEDULE 5.13 Real Property
SCHEDULE 7.17(a) Existing Subsidiary Debt
SCHEDULE 7.18(c) Existing Investments
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CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, Atchison Casting Corporation, a Kansas corporation (the
"BORROWER"), applies to you for your several commitments, subject to all the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make available a revolving credit providing
for loans and letters of credit, as described herein. Each of you is
hereinafter referred to individually as a "BANK," all of you are hereinafter
referred to collectively as the "BANKS," and Harris Trust and Savings Bank in
its capacity as agent for the Banks hereunder is hereinafter referred to as the
"AGENT."
SECTION 1. THE CREDIT FACILITIES.
SECTION 1.1. THE COMMITMENTS. Subject to the terms and conditions
hereof, each Bank, by its acceptance hereof, severally agrees to make a loan or
loans (individually a "LOAN" and collectively "LOANS") to the Borrower from time
to time on a revolving basis up to the amount of its commitment set forth on the
applicable signature page hereof or pursuant to Section 11.12 hereof (its
"COMMITMENT" and, cumulatively for all the Banks, the "COMMITMENTS"), subject to
any reductions thereof pursuant to the terms hereof, before the Termination
Date. The sum of the aggregate principal amount of Loans, the aggregate undrawn
face amount of Letters of Credit (which, in the case of Letters of Credit
payable in an Alternative Currency, means the U.S. Dollar Equivalent thereof as
determined pursuant to Section 1.2(f) hereof) and the aggregate unpaid
Reimbursement Obligations at any time outstanding shall not exceed the
Commitments in effect at such time. Each Borrowing of Loans shall be made
ratably from the Banks in proportion to their respective Percentages. As
provided in Section 1.5(a) hereof, the Borrower may elect that each Borrowing of
Loans be made available by means of either Domestic Rate Loans or Eurodollar
Loans, which Loans may be repaid and the principal amount thereof reborrowed
before the Termination Date, subject to all the terms and conditions hereof.
SECTION 1.2. LETTERS OF CREDIT. (a) GENERAL TERMS. Subject to all of
the terms and conditions hereof, the Agent shall issue standby letters of credit
(each a "LETTER OF CREDIT") for the Borrower's account in an aggregate undrawn
face amount up to $15,000,000 (the "L/C COMMITMENT"), provided that the
aggregate undrawn face amount of Letters of Credit and the aggregate
Reimbursement Obligations at any time outstanding shall not exceed the
difference between the Commitments in effect at such time and the aggregate
principal amount of Loans then outstanding. Notwithstanding anything herein to
the contrary, each of those certain letters of credit issued by Harris Trust and
Savings Bank for the account of the Borrower listed on Schedule 1.2(a) hereto
shall each constitute a "LETTER OF CREDIT" herein
for all purposes of this Agreement to the same extent, and with the same force
and effect as if each such letter of credit had been issued at the request of
the Borrower hereunder. Each Letter of Credit shall be issued by the Agent, but
each Bank shall be obligated to reimburse the Agent for its Percentage of the
amount of each drawing thereunder and, accordingly, the face amount of each
Letter of Credit shall constitute usage of the Commitment of each Bank PRO RATA
in accordance with each Bank's Percentage.
(b) APPLICATIONS. At any time before the Termination Date, the Agent
shall, at the request of the Borrower, issue one or more Letters of Credit, in a
form satisfactory to the Agent, with expiration dates no later than the
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of a duly executed application for the relevant Letter of Credit in the
form customarily prescribed by the Agent for a special purpose, or "standby",
letter of credit (each an "APPLICATION"). Notwithstanding anything contained in
any Application to the contrary (i) the Borrower shall pay fees in connection
with each Letter of Credit as set forth in Sections 2.1(b) hereof, (ii) before
the occurrence of an Event of Default, the Agent will not call for (A) the
funding by the Borrower of any amount under a Letter of Credit before being
presented with a drawing thereunder or (B) any collateral security for any
obligations of the Borrower under an Application, and (iii) in the event the
Agent is not timely reimbursed for the amount of any drawing under a Letter of
Credit on the date such drawing is paid, the Borrower's obligation to reimburse
the Agent for the amount of such drawing shall bear interest (which the Borrower
hereby promises to pay) from and after the date such drawing is paid at a rate
per annum equal to the sum of 2% plus the Domestic Rate from time to time in
effect. In the event the Agent issues any Letters of Credit with expiration
dates that are automatically extended unless the Agent gives notice that the
expiration date will not so extend beyond its then scheduled expiration date,
the Agent will give such notice of non-renewal before the time necessary to
prevent such automatic extension if before such required notice date (i) the
expiration date of such Letter of Credit if so extended would be after the
Termination Date, (ii) the Commitments have terminated or (iii) an Event of
Default exists and the Required Banks have given the Agent instructions not to
so permit the extension of the expiration date of such Letter of Credit. The
Agent agrees to issue amendments to the Letter(s) of Credit increasing the
amount, or extending the expiration date, thereof at the request of the Borrower
subject to the conditions of Section 6.2 and the other terms of this
Section 1.2.
(c) THE REIMBURSEMENT OBLIGATIONS. Subject to Section 1.2(b) hereof, the
obligation of the Borrower to reimburse the Agent for all drawings under a
Letter of Credit (a "REIMBURSEMENT OBLIGATION") shall be governed by the
Application related to such Letter of Credit, except that (i) reimbursement
shall be made by no later than 12:00 Noon (Chicago time) on the date when each
drawing is paid in immediately available funds at the Agent's principal office
in Chicago, Illinois and (ii) any payments by the Agent of drawings under any
Letter of Credit payable in an Alternative Currency shall be reimbursed by the
Borrower in U.S. Dollars at the rate of exchange for cable transfers in effect
on the date of payment by the Agent to the place of payment in the currency in
which such drawing was made. If the Borrower does not make any such
reimbursement payment on the date due and the Participating Banks fund their
participations therein in the manner set forth in Section 1.2(d) below, then all
payments thereafter received by the Agent in discharge of any
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of the relevant Reimbursement Obligations shall be distributed ratably to the
Banks in accordance with their respective Percentages.
(d) THE PARTICIPATING INTERESTS. Each Bank (other than the Bank then
acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each such Bank (a "PARTICIPATING BANK"), an undivided percentage
participating interest (a "PARTICIPATING INTEREST"), to the extent of its
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Each Participating Bank acknowledges that,
because certain Letters of Credit issued to support tax exempt municipal bonds
may be reinstated by an amount equal to drawings thereunder (the proceeds of
which are used to pay up to 58 days of accrued interest on such bonds) at a time
when the Borrower has not reimbursed the Agent in full for a drawing thereunder,
the L/C Obligations may exceed the L/C Commitment from time to time and each
Participating Bank agrees to pay the Agent its Percentage of each drawing under
each Letter of Credit notwithstanding that any such payment may result in the
aggregate Loans and Reimbursement Obligations owing such Participating Bank
exceeding such Participating Bank's Commitment. Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is paid, as set forth in Section 1.2(c) above, or in the
event the Agent is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Bank shall, not
later than the Business Day it receives a certificate in the form of Exhibit B
hereto from the Agent to such effect, if such certificate is received before
1:00 p.m. (Chicago time), or not later than the following Business Day, if such
certificate is received after such time, pay to the Agent an amount equal to its
Percentage of such unpaid or recaptured Reimbursement Obligation together with
interest on such amount accrued from the date the related payment was made by
the Agent to the date of such payment by such Participating Bank at a rate per
annum equal to (i) from the date the related payment was made by the Agent to
the date two (2) Business Days after payment by such Participating Bank is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date two
(2) Business Days after the date such payment is due from such Participating
Bank to the date such payment is made by such Participating Bank, the Domestic
Rate in effect for each such day. Each such Participating Bank shall thereafter
be entitled to receive its Percentage of each payment received in respect of the
relevant Reimbursement Obligation and of interest paid thereon, with the Agent
retaining its Percentage as a Bank hereunder.
The several obligations of the Participating Banks to the Agent under this
Section 1.2 shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and shall not be subject to any set-off, counterclaim
or defense to payment which any Participating Bank may have or have had against
the Borrower, the Agent, any other Bank or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
Commitment of any Bank, and each payment by a Participating Bank under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Agent shall be entitled to offset amounts received
for the account of a
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Bank under this Agreement against unpaid amounts due from such Bank to the Agent
hereunder (whether as fundings of participations, indemnities or otherwise), but
shall not be entitled to offset against amounts owed to the Agent by any Bank
arising outside this Agreement.
(e) INDEMNIFICATION. The Participating Banks shall, to the extent of
their respective Percentages, indemnify the Agent (to the extent not reimbursed
by the Borrower) against any cost, expense (including reasonable counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with any Letter of Credit. The obligations of
the Participating Banks under this Section 1.2(e) and all other parts of this
Section 1.2 shall survive termination of this Agreement and of all other L/C
Documents.
(f) FOREIGN CURRENCY EQUIVALENCY. For all purposes of determining the
outstanding amount of Letters of Credit hereunder, Letters of Credit payable in
an Alternative Currency shall be converted into their U.S. Dollar Equivalent as
of the time issued and shall be reconverted into their U.S. Dollar Equivalent as
of the first day of each month (and as of any other time any Bank deems
appropriate), with each such determination to apply until the next
redetermination.
SECTION 1.3. APPLICABLE INTEREST RATES. (a) DOMESTIC RATE LOANS. Each
Domestic Rate Loan made by a Bank shall bear interest (computed on the basis of
a year of 360 days and actual days elapsed) on the unpaid principal amount
thereof from the date such Loan is made until maturity (whether by acceleration
or otherwise) at a rate per annum equal to the Domestic Rate from time to time
in effect, payable on the last day of its Interest Period and at maturity
(whether by acceleration or otherwise).
"DOMESTIC RATE" means for any day the greater of:
(i) the rate of interest announced by the Agent from time to time as
its prime commercial rate, or equivalent, as in effect on such day, with
any change in the Domestic Rate resulting from a change in said prime
commercial rate to be effective as of the date of the relevant change in
said prime commercial rate; and
(ii) the sum of (x) the rate determined by the Agent to be the
prevailing rate per annum (rounded upwards, if necessary, to the next
higher 1/100 of 1%) at approximately 10:00 a.m. (Chicago time) (or as soon
thereafter as is practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) for the purchase
at face value of overnight Federal funds in an amount comparable to the
principal amount owed to the Agent for which such rate is being determined,
plus (y) 1/2 of 1% (0.50%).
(b) EURODOLLAR LOANS. Each Eurodollar Loan made by a Bank shall bear
interest (computed on the basis of a year of 360 days and actual days elapsed)
on the unpaid principal amount thereof from the date such Loan is made until
maturity (whether by acceleration or
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otherwise) at a rate per annum equal to the sum of the applicable Eurodollar
Margin plus the Adjusted LIBOR applicable to such Loan, payable on the last day
of its Interest Period and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than three months, on each day
occurring every three months after the date such Loan is made.
"ADJUSTED LIBOR" means, for any Borrowing of Eurodollar Loans, a rate per
annum determined in accordance with the following formula:
Adjusted LIBOR = L I B O R
------------------------------------
100% - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the average rate of
interest per annum (rounded upwards, if necessary, to nearest 1/100 of 1%) at
which deposits in U.S. Dollars in immediately available funds are offered to the
Agent at 11:00 a.m. (London, England time) two (2) Business Days before the
beginning of such Interest Period by major banks in the interbank eurodollar
market for delivery on the first day of and for a period equal to such Interest
Period in an amount equal or comparable to the principal amount of the
Eurodollar Loan scheduled to be made by the Agent as part of such Borrowing.
"LIBOR INDEX RATE" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day two (2) Business Days before the commencement
of such Interest Period.
"TELERATE PAGE 3750" means the display designated as "PAGE 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for U.S. Dollar deposits).
"EURODOLLAR RESERVE PERCENTAGE" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate
at which reserves (including, without limitation, any supplemental, marginal and
emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) on "EUROCURRENCY
LIABILITIES", as defined in such Board's Regulation D (or in respect of any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets that include loans by non-United States offices of any
Bank to United States residents), subject to any amendments of such reserve
requirement by such Board or its successor, taking into account any transitional
adjustments thereto. For purposes of this definition, the Eurodollar Loans
shall be deemed to be "EUROCURRENCY
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LIABILITIES" as defined in Regulation D without benefit or credit for any
prorations, exemptions or offsets under Regulation D.
"EURODOLLAR MARGIN" means 1.50% per annum until the commencement of the
first Pricing Period and thereafter (A) 1.00% per annum for any Pricing Period
for which Level I Status exists, (B) 1.25% per annum for any Pricing Period for
which Level II Status exists, and (C) 1.50% per annum for any Pricing Period for
which Level III Status exists.
(c) RATE DETERMINATIONS. The Agent shall determine each interest rate
applicable to the Loans and Reimbursement Obligations hereunder, and its
determination thereof shall be conclusive and binding except in the case of
manifest error or willful misconduct.
SECTION 1.4. MINIMUM BORROWING AMOUNTS. Each Borrowing of Eurodollar
Loans shall be in an amount not less than $1,000,000 and in integral multiples
of $100,000, and each Borrowing of Domestic Rate Loans shall be in an amount not
less than $100,000.
SECTION 1.5. MANNER OF BORROWING. (a) NOTICE TO THE AGENT. The Borrower
shall give telephonic, telex or telecopy notice to the Agent (which notice shall
be irrevocable once given and, if by telephone, shall be promptly confirmed in
writing) (i) by no later than 10:30 A.M. (Chicago time) on the date at least
three (3) Business Days before the date of each requested Borrowing of
Eurodollar Loans, and (ii) by no later than 10:00 A.M. (Chicago time) on the
date of each requested Borrowing of Domestic Rate Loans. Each such notice from
the Borrower shall specify (A) the date of the requested Borrowing (which shall
be a Business Day), (B) the amount of the requested Borrowing, (C) the type of
Loans to comprise such Borrowing, and (D) if such Borrowing is to be comprised
of Eurodollar Loans, the Interest Period selected by the Borrower to be
applicable thereto. The Borrower agrees that the Agent may rely on any such
telephonic, telex or telecopy notice given by any person it in good faith
believes is an Authorized Representative of the Borrower without the necessity
of independent investigation and in the event any notice by telephone conflicts
with its written confirmation, such telephone notice shall govern if the Agent
has acted in reliance thereon.
(b) NOTICE TO THE BANKS. The Agent shall give prompt telephonic, telex or
telecopy notice to each Bank of any borrowing request received pursuant to
Section 1.5(a) above and, if such notice requests the Banks to make Eurodollar
Loans, the Agent shall give notice to the Borrower and each Bank by any such
means of the interest rate applicable thereto (but, if such notice is given by
telephone, the Agent shall confirm such rate in writing) promptly after the
Agent has made such determination.
(c) BORROWER'S FAILURE TO NOTIFY. If the Borrower fails to give notice
pursuant to Section 1.5(a) above of the reborrowing of the principal amount of
any maturing Borrowing of Loans or of a Borrowing of Loans equal to the amount
of a Reimbursement Obligation and has not notified the Agent by 10:30 A.M.
(Chicago time) on the day such Borrowing matures or such Reimbursement
Obligation becomes due that it intends to repay such Borrowing or such
Reimbursement Obligation with funds not borrowed hereunder, the Borrower shall
be deemed to have requested a Borrowing of Domestic Rate Loans on such
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day in the amount of the maturing Borrowing of Loans or of the Reimbursement
Obligation then due, subject to Section 6.2 hereof, which Borrowing shall be
applied to pay the maturing Borrowing of Loans or Reimbursement Obligation then
due.
(d) DISBURSEMENT OF LOANS. Not later than 1:00 p.m. (Chicago time) on the
date of any Borrowing of Loans, each Bank, subject to Section 6 hereof and all
other provisions hereof, shall make available its Loan comprising its Percentage
of such Borrowing in funds immediately available in Chicago, Illinois at the
principal office of the Agent, except to the extent such Borrowing is a
reborrowing, in whole or in part, of the principal amount of a maturing
Borrowing of Loans (a "REFUNDING BORROWING"), in which case each Bank shall
record the Loan made by it as a part of such Refunding Borrowing on its books
and records or on a schedule to its appropriate Note, as provided in
Section 1.10(b) hereof, and shall effect the repayment, in whole or in part, as
appropriate, of its maturing Loan through the proceeds of such new Loan. The
Agent shall make the proceeds of each non-Refunding Borrowing available to the
Borrower at the Agent's principal office in Chicago, Illinois.
(e) AGENT RELIANCE ON BANK FUNDING. Unless the Agent shall have been
notified by a Bank prior to (or, in the case of a Borrowing of Domestic Rate
Loans, by 11:00 a.m. (Chicago time) on) the date on which such Bank is scheduled
to make payment to the Agent of the proceeds of a Loan (which notice shall be
effective upon receipt) that such Bank does not intend to make such payment, the
Agent may assume that such Bank has made such payment when due and the Agent may
in reliance upon such assumption (but shall not be required to) make available
to the Borrower the proceeds of the Loan to be made by such Bank and, if any
Bank has not in fact made such payment to the Agent, such Bank shall, on demand,
pay to the Agent the amount made available to the Borrower attributable to such
Bank together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Borrower and ending
on (but excluding) the date such Bank pays such amount to the Agent at a rate
per annum equal to the Federal Funds Rate. If such amount is not received from
such Bank by the Agent immediately upon demand, the Borrower will, on demand,
repay to the Agent the proceeds of the Loan attributable to such Bank with
interest thereon at a rate per annum equal to the interest rate applicable to
the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan under Section 1.11 hereof, so that the Borrower will have
no liability under such Section with respect to such payment.
SECTION 1.6. INTEREST PERIODS. As provided in Sections 1.5(a) hereof, at
the time of each request for the Borrowing of Eurodollar Loans hereunder, the
Borrower shall select an Interest Period applicable to such Loans from among the
available options. The term "INTEREST PERIOD" means the period commencing on
the date a Borrowing of Loans is made and ending on the date: (a) in the case
of Domestic Rate Loans, that is the last day of the calendar month in which such
Borrowing is made, and (b) in the case of Eurodollar Loans, 1, 2, 3, or 6 months
thereafter; PROVIDED, HOWEVER, that:
(a) for any Borrowing of Eurodollar Loans, the Borrower may not
select an Interest Period that extends beyond the Termination Date;
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(b) whenever the last day of any Interest Period would otherwise be a
day that is not a Business Day, the last day of such Interest Period shall
be extended to the next succeeding Business Day, PROVIDED THAT, in the case
of an Interest Period for a Borrowing of Eurodollar Loans, if such
extension would cause the last day of such Interest Period to occur in the
following calendar month, the last day of such Interest Period shall be the
immediately preceding Business Day; and
(c) for purposes of determining the Interest Period for a Borrowing
of Eurodollar Loans, a month means a period starting on one day in a
calendar month and ending on the numerically corresponding day in the next
calendar month; PROVIDED, HOWEVER, that if there is no numerically
corresponding day in the month in which such an Interest Period is to end
or if such an Interest Period begins on the last Business Day of a calendar
month, then such Interest Period shall end on the last Business Day of the
calendar month in which such Interest Period is to end.
SECTION 1.7. MATURITY OF LOANS. Each Loan shall mature and become due
and payable by the Borrower on the last day of the Interest Period applicable
thereto or, if earlier, on the Termination Date.
SECTION 1.8. OPTIONAL PREPAYMENTS. The Borrower shall have the privilege
of prepaying Domestic Rate Loans at any time without premium or penalty and in
whole or in part (but, if in part, then in an amount (i) which is an integral
multiple of $100,000, and (ii) such that the minimum amount required pursuant to
Section 1.4 hereof remains outstanding); PROVIDED, HOWEVER, that the Borrower
shall have given prior notice of such prepayment to the Agent by no later than
10:30 A.M. on the date of such prepayment. Subject to Section 1.11 hereof, any
Borrowing of Eurodollar Loans may be prepaid in full, but not in part, upon
three (3) Business Days' notice to the Agent.
SECTION 1.9. DEFAULT RATE. If any payment of principal on any Loan is
not made when due (whether by acceleration or otherwise), such Loan shall bear
interest (computed on the basis of a year of 360 days and actual days elapsed)
from the date such payment was due until paid in full, payable on demand, at a
rate per annum equal to:
(a) for any Domestic Rate Loan, the sum of one percent (1%) per annum
PLUS the Domestic Rate from time to time in effect; and
(b) for any Eurodollar Loan, the sum of one percent (1%) per annum
PLUS the rate of interest in effect thereon at the time of such default
until the end of the Interest Period applicable thereto and, thereafter, at
a rate per annum equal to the sum of one percent (1%) per annum PLUS the
Domestic Rate from time to time in effect.
SECTION 1.10. THE NOTES. (a) All Loans made to the Borrower by a Bank
shall be evidenced by a single promissory note of the Borrower payable to the
order of such Bank in the form of Exhibit A hereto (each a "NOTE" and
collectively the "NOTES").
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(b) Each Bank shall record on its books and records or on a schedule to
its Note the amount of each Loan made by it to the Borrower, the Interest Period
thereof, all payments of principal and interest and the principal balance from
time to time outstanding thereon, the type of such Loan and, if a Eurodollar
Loan, the interest rate applicable thereto; PROVIDED THAT prior to the transfer
of any Note such matters for each then outstanding Loan evidenced by such Note
shall be recorded on a schedule to the Note. The record thereof, whether shown
on such books and records of a Bank or on a schedule to any Note, shall be PRIMA
FACIE evidence as to all such matters; PROVIDED, HOWEVER, that the failure of
any Bank to record any of the foregoing or any error in any such record shall
not limit or otherwise affect the obligation of the Borrower to repay all Loans
made to it hereunder together with accrued interest thereon. At the request of
any Bank and upon such Bank tendering to the Borrower the Note to be replaced,
the Borrower shall furnish a new Note to such Bank to replace any outstanding
Note and at such time the first notation appearing on the schedule on the
reverse side of, or attached to, such Note shall set forth the aggregate unpaid
principal amount of all Loans, if any, then outstanding thereon.
SECTION 1.11. FUNDING INDEMNITY. If any Bank incurs any loss, cost or
expense (including, without limitation, any loss of profit and any loss, cost,
expense or premium incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by such Bank to fund or maintain any Eurodollar
Loan or the relending or reinvesting of such deposits or amounts paid or prepaid
to such Bank) as a result of:
(a) any payment or prepayment of a Eurodollar Loan on a date other
than the last day of its Interest Period (whether as a result of
acceleration, mandatory prepayment or otherwise),
(b) any failure (because of a failure to meet the conditions of
Section 6 or otherwise) by the Borrower to borrow a Eurodollar Loan on the
date specified in a notice given pursuant to Section 1.5(a) hereof, or
(c) the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrower a
certificate executed by an officer of such Bank setting forth the amount of such
loss, cost or expense in reasonable detail (including an explanation of the
basis for and the computation of such loss, cost or expense), and the amounts
shown on such certificate shall be conclusive and binding absent manifest error.
SECTION 1.12. COMMITMENT TERMINATIONS. The Borrower shall have the right
at any time and from time to time, upon five (5) Business Days' prior written
notice to the Agent, to terminate the Commitments without premium or penalty, in
whole or in part, any partial termination to be (i) in an amount not less than
$1,000,000, and in integral multiples of $1,000,000, and (ii) allocated ratably
among the Banks in proportion to their respective Percentages, PROVIDED that the
Commitments may not be reduced to an amount less than the sum of the aggregate
principal amount of Loans, the aggregate undrawn face amount of
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Letters of Credit and the aggregate Reimbursement Obligations then outstanding.
The Agent shall give prompt notice to each Bank of any such termination of
Commitments. Any termination of Commitments pursuant to this Section 1.12 may
not be reinstated. All reductions of Commitments under any provision of this
Agreement shall reduce ratably the Commitment of each Bank in accordance with
its Percentage.
SECTION 2. FEES AND EXTENSIONS.
SECTION 2.1. FEES. (a) COMMITMENT FEE. For the period from the date
hereof to and including the Termination Date, the Borrower shall pay to the
Agent for the ratable account of the Banks in accordance with their Percentages
a commitment fee accruing at the rate of three-eighths of one percent (3/8 of
1%) per annum on the average daily unused amount of the Commitments, such fees
being payable in arrears on June 30, 1996, on the last day of each calendar
quarter thereafter and on the Termination Date, unless the Commitments are
terminated in whole on an earlier date, in which event the fee for the period to
but not including the date of such termination shall be paid in whole on the
date of such termination.
(b) LETTER OF CREDIT FEES. On the date of issuance or extension of any
Letter of Credit, the Borrower shall pay to the Agent for the ratable account of
the Banks in accordance with their Percentages a fee equal to the then
applicable Eurodollar Margin minus 1/4 of 1% per annum on the face amount of
such Letter of Credit, calculated based on the scheduled expiration date of the
Letter of Credit. Such letter of credit fees shall be non-refundable in the
event of an early termination or cancellation of a Letter of Credit and in all
other circumstances.
SECTION 2.2. AGENT FEES; FEE CALCULATIONS. (a) AGENT FEES. The
Borrower shall pay to the Agent the fees agreed to between the Agent and the
Borrower in a letter dated February 23, 1996, or as otherwise agreed between
them, at any time the Agent is not the only Bank hereunder.
(b) FEE CALCULATIONS. All fees payable under Section 2.1(a) and (b) and
Section 2.2(a) shall be computed on the basis of a year of 360 days for the
actual number of days elapsed.
SECTION 2.3. EXTENSION OF TERMINATION DATE. No earlier than ninety (90)
days before the second anniversary date and any subsequent anniversary date
hereof the Borrower may make separate requests for one year extensions of the
Termination Date in written notices to the Agent. The Agent will promptly
inform the Banks of any such request, and each Bank shall notify the Agent in
writing within forty-five (45) days whether it agrees to such a requested
extension. If a Bank fails to so notify the Agent whether it agrees to such
extension, such Bank shall be deemed to have refused to grant the requested
extension. Upon receipt by the Agent of the written consent of all the Banks,
the Termination Date shall be automatically extended an additional year.
Otherwise, the Termination Date will remain as then scheduled.
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SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
SECTION 3.1. PLACE AND APPLICATION OF PAYMENTS. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other amounts payable by the Borrower under this Agreement, shall be made by
the Borrower to the Agent by no later than 12:00 Noon (Chicago time) on the due
date thereof at the principal office of the Agent in Chicago, Illinois (or such
other location in the State of Illinois as the Agent may designate to the
Borrower) for the benefit of the Bank or Banks entitled to such payments. Any
payments received by the Agent from the Borrower after 12:00 Noon (Chicago time)
shall be deemed to have been received on the next Business Day. Such payments
shall be made in lawful money of the United States of America, in immediately
available funds at the place of payment without setoff or counterclaim. The
Agent will, on the same day such payments are received or deemed to have been
received in accordance with this Section 3.1, cause to be distributed like funds
relating to the payment of fees and of principal or interest on Loans and on
Reimbursement Obligations in which the Banks have purchased participating
interests ratably to the Banks and like funds relating to the payment of any
other amount payable to any Bank to such Bank, in each case to be applied in
accordance with the terms of this Agreement.
SECTION 4. DEFINITIONS; INTERPRETATION.
SECTION 4.1. DEFINITIONS. The following terms when used herein have the
following meanings:
"ACCOUNT" is defined in Section 8.4(b) hereof.
"ADJUSTED LIBOR" is defined in Section 1.3(b) hereof.
"AFFILIATE" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "CONTROL" (including, with their
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies of a Person (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise), PROVIDED that, in any event for purposes of this definition:
(i) any Person which owns directly or indirectly 5% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 5% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person; and
(ii) each director and officer of the Borrower or any Subsidiary shall be deemed
to be an Affiliate of the Borrower and each Subsidiary.
"AGENT" means Harris Trust and Savings Bank and any successor pursuant to
Section 10.8 hereof.
"APPLICATION" is defined in Section 1.2(b) hereof.
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"ALTERNATIVE CURRENCY" means any currency, other than U.S. Dollars,
requested by the Borrower and acceptable to the Agent in its reasonable
discretion.
"AUTHORIZED REPRESENTATIVE" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 6.1(g) hereof, or on any
updated such list provided by the Borrower to the Agent, or any further or
different officer of the Borrower so named by any Authorized Representative of
the Borrower in a written notice to the Agent.
"BANK" means Harris Trust and Savings Bank and any replacement or
additional Bank pursuant to Section 11.12 hereof.
"BOARD OF DIRECTORS" means the Board of Directors of the Borrower or a duly
authorized committee of directors lawfully exercising the relevant powers of
such Board of Directors.
"BORROWER" means Atchison Casting Corporation, a Kansas corporation.
"BORROWER GROUP MEMBER" means the Borrower, each Subsidiary, and each of
their respective predecessors and (a) each corporation that is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Code) as the Borrower or any Subsidiary, or any of
their respective predecessors, (b) each trade or business, whether or not
incorporated, that is or was at any time under common control (within the
meaning of Section 414(c) of the Code) with the Borrower or any Subsidiary, or
any of their respective predecessors, and (c) each trade or business, whether or
not incorporated, that is or was at any time a member of the same affiliated
service group (within the meaning of Section 414(m) and (o) of the Code) as the
Borrower or any Subsidiary, or any of their respective predecessors.
"BORROWER PREMISES" means real property in which the Borrower, any
Subsidiary, or any Person which has been a Subsidiary at any time has or ever
had any direct or indirect interest, including, without limitation, ownership
thereof, or any arrangement for the lease, rental or other use thereof, or the
retention or claim of any mortgage or security interest therein or thereon.
"BORROWING" means the total of Loans of a single type made by the Banks to
the Borrower on a single date and for a single Interest Period. Borrowings are
made ratably from each of the Banks according to their Percentages.
"BUSINESS OR CONDITION" means for any Person, the business, operations,
assets, properties, earnings, condition (financial or other) or reasonably
foreseeable prospects of such Person, PROVIDED that such term, when used without
reference to any particular Person, shall mean the Business or Condition of the
Borrower and of the Borrower and its Subsidiaries taken as a whole.
-12-
"BUSINESS DAY" means any day other than a Saturday or Sunday on which banks
are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the borrowing or payment of a Eurodollar
Loan, on which banks are dealing in U.S. Dollar deposits in the interbank market
in London, England and Nassau, Bahamas.
"CAPITAL LEASE" means at any date any lease of Property which in accordance
with GAAP would be required to be capitalized on the balance sheet (including
the notes thereto) of the lessee, other than (in the case of the Borrower or any
of its Subsidiaries) any such lease under which the Borrower or a Wholly Owned
Subsidiary is the lessor.
"CAPITAL LEASE OBLIGATIONS" means for any Person the amount of the
liability required to be shown on the balance sheet (including the notes
thereto) of such Person in respect of Capital Leases as determined at any date
in accordance with GAAP.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITMENT" is defined in Section 1.1 hereof.
"COMPENSATION PAYMENTS" is defined in Section 7.20(b).
"COMPLIANCE CERTIFICATE" means a certificate in the form of Exhibit C
hereto.
"COMPUTATION PERIOD" is defined in Section 7.19.
"CONSOLIDATED CURRENT ASSETS", "CONSOLIDATED CURRENT DEBT", "CONSOLIDATED
CURRENT LIABILITIES", "CONSOLIDATED FIXED CHARGES", "CONSOLIDATED FUNDED DEBT",
"CONSOLIDATED INTEREST EXPENSE", "CONSOLIDATED NET INCOME", "CONSOLIDATED NET
INCOME AVAILABLE FOR FIXED CHARGES", "CONSOLIDATED TOTAL ASSETS" and
"CONSOLIDATED TOTAL DEBT" mean Current Assets, Current Debt, Current
Liabilities, Fixed Charges, Funded Debt, Interest Expense, Net Income, Net
Income Available for Fixed Charges, Total Assets and Total Debt, as the case may
be, of the Borrower and its Subsidiaries, all consolidated in accordance with
GAAP, after eliminating all intercompany items and, in determining Consolidated
Net Income, after deducting portions of income properly attributable to outside
minority interests, if any, in the stock and surplus of any Subsidiary;
PROVIDED, HOWEVER, that in determining Consolidated Net Income, portions of
income properly attributable to outside minority interests, if any, in the stock
and surplus of any Subsidiary shall be deducted, and there shall be excluded (1)
the income (or deficit) of any Person accrued prior to the date it is acquired
in any manner (whether by consolidation, merger, purchase of assets, purchase of
stock or otherwise) and (2) any portion of the Net Income of a Subsidiary which
for any reason is unavailable for payment of dividends or distributions to the
Borrower.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
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"CREDIT DOCUMENTS" means this Agreement, the Notes, each Guaranty
Agreement, the Applications, and the Letters of Credit.
"CREDIT EVENT" means the making of any Loan or the issuance of, or
extension of the expiration date (including any automatic extension by failure
to give notice of non-renewal) or increase in the amount of, any Letter of
Credit.
"CURRENT ASSETS" means, as applied to any Person as of any date of
determination, the total assets of such Person which would be properly
classified as current assets on a balance sheet of such Person prepared in
accordance with GAAP as of such date.
"CURRENT DEBT" means, as applied to any Person as of any date of
determination, all Debt of such Person for borrowed money other than any such
Debt which constitutes Funded Debt as of such date.
"CURRENT LIABILITIES" means, as applied to any Person as of any date of
determination, the total liabilities of such Person which would be properly
classified as current liabilities on a balance sheet of such Person prepared in
accordance with GAAP as of such date, including in any event (but without
duplication) all Debt of such Person payable on demand or having a final
maturity of not more than one year after such date, and all fixed or contingent
payments maturing or required to be made by such Person not more than one year
after such date in respect of the principal or premium (if any) of any Debt.
"CURRENT MATURITIES" means, as applied to any Person as of any date of
determination, all payments in respect of Funded Debt of such Person that are
required to be made within one year.
"CURRENT RATIO" means, as of any date, the number obtained by dividing (a)
Consolidated Current Assets as of such date by (b) Consolidated Current
Liabilities as of such date.
"DEBT" means, as applied to any Person as of any date of determination, all
obligations of such Person (other than capital, surplus, reserves for deferred
income taxes and, to the extent not constituting obligations, other deferred
credits and reserves) which would be classified on a balance sheet of such
Person prepared in accordance with GAAP as of such date as indebtedness,
including in any event (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by
bonds, debentures, notes, drafts or similar instruments;
(b) all obligations of such Person for all or any part of the
deferred purchase price of property or services or for the cost of property
constructed or of improvements;
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(c) all obligations secured by any Lien on or payable out of the
proceeds of production from property owned or held by such Person even
though such Person has not assumed or become liable for the payment of such
obligations;
(d) all Capital Lease Obligations of such Person;
(e) all obligations of such Person, contingent or otherwise, in
respect of any letter of credit facilities, bankers' acceptance facilities
or other similar credit facilities (but only to the extent, in the case of
any of the foregoing obligations referred to in this clause, the same does
not support another obligation of such Person which either is otherwise
included in Debt or consists of current accounts payable incurred in the
ordinary course of business); and
(f) all Guaranties by such Person of or with respect to obligations
of the character referred to in the foregoing clauses (a) through (e) of
another Person;
PROVIDED, HOWEVER, that in determining the Debt of any Person, (i) all
liabilities for which such Person is jointly and severally liable with one or
more other Persons (including, without limitation, all liabilities of any
partnership or joint venture of which such Person is a general partner or co-
venturer) shall be included at the full amount thereof without regard to any
right such Person may have against any such other Persons for contribution or
indemnity, and (ii) no effect shall be given to deposits, trust arrangements or
similar arrangements which, in accordance with GAAP, extinguish Debt for which
such Person remains legally liable.
"DEFAULT" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"DOMESTIC RATE" is defined in Section 1.3(a) hereof.
"DOMESTIC RATE LOAN" means a Loan bearing interest prior to maturity at a
rate specified in Section 1.3(a) hereof.
"ENVIRONMENTAL CLAIMS" is defined in Section 5.12(c).
"ENVIRONMENTAL LAW" means any past, present or future Federal, state, local
or foreign statutory or common law, or any regulation, ordinance, code, plan,
Order, permit, grant, franchise, concession, restriction or agreement issued,
entered, promulgated or approved thereunder, relating to (a) the environment,
human health or safety, including, without limitation, emissions, discharges,
release or threatened releases of Hazardous Substances into the environment, or
(b) the manufacture, generation, refining, processing, distribution, use, sale,
treatment, receipt, storage, disposal, transport, arranging for transport, or
handling of Hazardous Substances.
-15-
"ENVIRONMENTAL PERMITS" means, collectively, any and all permits, consents,
licenses, approvals and registrations of any nature at any time required
pursuant to or in order to comply with any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same may be in effect from time to time.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated as of
July 29, 1994 among Atchison Casting Corporation, the Banks party thereto, and
Harris Trust and Savings Bank, as Agent, as amended through the date hereof.
"EURODOLLAR LOAN" means a Loan bearing interest prior to maturity at the
rate specified in Section 1.3(b) hereof.
"EURODOLLAR MARGIN" is defined in Section 1.3(b) hereof.
"EURODOLLAR RESERVE PERCENTAGE" is defined in Section 1.3(b) hereof.
"EVENT OF DEFAULT" means any of the events or circumstances specified in
Section 8.1 hereof.
"FEDERAL FUNDS RATE" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Domestic Rate in
Section 1.3(a) hereof.
"FIXED CHARGE COVERAGE RATIO" means as of any date, the number obtained by
dividing (a) Consolidated Net Income Available for Fixed Charges for the period
of four consecutive fiscal quarters of the Borrower ended on or most recently
prior to such date by (b) Consolidated Fixed Charges for such period of four
consecutive fiscal quarters.
"FIXED CHARGES" means, as applied to any Person for any period, the sum of
(a) Interest Expense of such Person for such period, PLUS (b) the aggregate
amount of Rentals payable by such Person during such period.
"FUNDED DEBT" means, as applied to any Person as of any date of
determination thereof, all Debt of such Person which would be classified upon a
balance sheet of such Person prepared as of such date in accordance with GAAP as
long term or funded debt, including in any event (without duplication) all Debt
of such Person, whether secured or unsecured, having a final maturity (or which,
pursuant to the terms of a revolving credit agreement or otherwise, is renewable
or extendable at the option of such Person for a period ending) more than one
year after the date as of which Funded Debt is being determined;
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PROVIDED, HOWEVER, that in no event shall the term Funded Debt include with
respect to any Person any fixed or contingent payments maturing or required to
be made by such Person not more than one year after such date of determination
in respect of the principal or premium (if any) of any Debt.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Borrower and its Subsidiaries on a basis consistent
with the preparation of the Borrower's financial statements furnished to the
Banks pursuant to Section 5.4 hereof.
"GOVERNMENTAL BODY" means any Federal, state, municipal, local or other
governmental department, commission, board, bureau, agency, instrumentality,
political subdivision or taxing authority, of any country.
"GUARANTY" means as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise in any manner directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to (a) purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or (b) maintain
the solvency or any balance sheet or other financial condition of the obligor of
such obligation, or (c) make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent of such agreement
is to provide assurance that such obligation will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected against loss in respect thereof. For purposes
of all computations made under this Agreement the amount of any Guaranty shall
be equal to the amount of the obligation guaranteed or, if not stated or
determined, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"GUARANTY AGREEMENT" means the Guaranty Agreement in the form of Exhibit E
hereto.
"HAZARDOUS SUBSTANCES" means and includes those substances included within
the definitions of "HAZARDOUS SUBSTANCES," "HAZARDOUS MATERIALS," "TOXIC
SUBSTANCES" or "SOLID WASTE" in the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 ET SEQ.), as
amended by Superfund Amendments and Reauthorization Act of 1986 (Pub. L. 99-499
100 Stat. 1613), the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 ET SEQ.) and the Hazardous Materials Transportation Act, (49 U.S.C.
Section 1801 ET SEQ.), and in the regulations promulgated pursuant to said laws,
all as
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amended; and in any event shall include medical wastes, infectious wastes,
asbestos, paint containing lead, and urea formaldehyde.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as of
May 24, 1996 by and among the Agent, the Bank and Teachers Insurance and Annuity
Association of America.
"INTEREST EXPENSE" means, as applied to any Person for any period, the sum
of (a) the aggregate amount of all interest accrued (whether or not actually
paid and whether deducted or capitalized) during such period on Debt of such
Person (including, without limitation, imputed interest on Capital Lease
Obligations), PLUS, (b) amortization by such Person of debt discount and expense
during such period, PLUS (c) all fees or commission payable by such Person in
connection with any letters of credit during such period.
"INTEREST PERIOD" is defined in Section 1.6 hereof.
"INVESTMENT" means, as applied to any designated Person, any direct or
indirect purchase or other acquisition by such designated Person for cash or
other property of stock, debt or other securities of any other Person, or any
direct or indirect loan, advance, extension of credit or capital contribution by
such designated Person to any other Person or any Guaranty by such designated
Person with respect to the Debt of such other Person, including all Debt of and
accounts receivable from any such other Person which are not current assets or
did not arise from sales to such other Person in the ordinary course of
business. In computing the amount involved in any Investment, (i) undistributed
earnings of, and interest accrued in respect of Debt owing by, any such other
Person accrued after the date of such Investment shall be included, (ii) there
shall not be deducted from the amounts invested in any such other Person any
amounts received as earnings (in the form of dividends, interest or otherwise)
on such Investment or as loans or advances from such other Person, and (iii)
unrealized increases or decreases in value, or write-ups, write-downs or write-
offs, of Investments in any such other Person shall be disregarded.
"L/C DOCUMENTS" means the Letters of Credit, any draft or other document
presented in connection with a drawing thereunder, the Applications and this
Agreement.
"LENDING OFFICE" is defined in Section 9.4 hereof.
"LETTER OF CREDIT" is defined in Section 1.2(a) hereof.
"LEVEL I STATUS" means, for any Pricing Period, the Compliance Certificate
delivered by the Borrower for the most recently completed fiscal month shows a
ratio of Total Debt of the Borrower on a consolidated basis to Total
Capitalization of not more than 25%.
"LEVEL II STATUS" means, for any Pricing Period, Level I Status does not
exist, but the Compliance Certificate delivered by the Borrower for the most
recently completed fiscal month shows a ratio of Total Debt of the Borrower on a
consolidated basis to Total Capitalization of not more than 35%.
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"LEVEL III STATUS" means, for any Pricing Period, neither Level I Status
nor Level II Status exists either because the Compliance Certificate for a month
has not been delivered by the Borrower by the end of the following month or
because such Compliance Certificate does not show compliance with the
requirements of either Level I Status or Level II Status
"LIBOR" is defined in Section 1.3(b) hereof.
"LIEN" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, including, but not limited to,
the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale, security agreement or trust receipt, or a lease, consignment
or bailment for security purposes. The term "LIEN" shall also include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this definition, a Person shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement, Capital Lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes, and such retention of title shall constitute a "LIEN."
"LOAN" is defined in Section 1.1 hereof and includes a Domestic Rate Loan
or Eurodollar Loan, each of which is a "TYPE" of Loan hereunder.
"MATERIAL ADVERSE CHANGE; MATERIAL ADVERSE EFFECT; MATERIALLY ADVERSE"
means in, on or to, as appropriate, any Person, a material adverse change in
such Person's Business or Condition, a material adverse effect on such Person's
Business or Condition or an event which is materially adverse to such Person's
Business or Condition; PROVIDED that (a) any such term, when used without
reference to any particular Person, shall mean such change in or effect on or
event adverse to, as the case may be, the Borrower or the Borrower and its
Subsidiaries taken as a whole, and (b) any impairment in a material respect of
the ability of the Borrower (i) to pay the principal of and interest on the
Notes in accordance with the terms thereof and hereof or (ii) to perform its
other obligations under the Notes or this Agreement, shall in any case be deemed
to have resulted in a material adverse change in, to have a material adverse
effect on, and to be materially adverse to, the Borrower's Business or
Condition.
"MULTIEMPLOYER PLAN" means a plan defined as such in Section 3 (37) of
ERISA to which any Borrower Group Member is making or incurring an obligation to
make, or has made or incurred an obligation to make, contributions.
"MULTIPLE EMPLOYER PLAN" means a Plan subject to Title IV of ERISA to which
any Borrower Group Member, and at least one employer other than a Borrower Group
Member, is making or incurring an obligation to make contributions or has made
or incurred an obligation to make contributions.
"NET INCOME" means, as applied to any Person for any period, the net income
(or deficit) of such Person for such period (taken as a cumulative whole) after
deducting without
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duplication, operating expenses, provisions for all taxes and reserves
(including reserves for deferred income taxes) and all other proper deductions,
all determined in accordance with GAAP; PROVIDED, HOWEVER, that there shall in
any event be excluded from Net Income (without duplication):
(a) any amount representing the interest of such Person in the
earnings of any other Person, except to the extent that any such earnings
have been actually received by such Person in the form of cash dividends or
similar distributions;
(b) any deferred credit or amortization thereof from the acquisition
of any properties or assets of any Person;
(c) any gain or loss exceeding $50,000 in the aggregate during such
period arising from (i) the sale, exchange or other disposition of capital
assets (such term to include all fixed assets, whether tangible or
intangible, and all securities), (ii) any reappraisal, revaluation or
write-up of assets after the date of the most recent audited financial
statements referred to in Section 5.4, (iii) the acquisition of any
securities of such Person or (iv) the termination of the Plan;
(d) the proceeds of any life insurance policy; and
(e) any item properly classified as extraordinary in accordance with
GAAP.
"NET INCOME AVAILABLE FOR FIXED CHARGES" means, as applied to any Person
for any period, Net Income of such Person for such period, plus all amounts
deducted in arriving at such Net Income in respect of (a) provisions for taxes
imposed on or measured by income or excess profits, (b) amortization of
intangibles, and (c) Fixed Charges.
"NOTE" is defined in Section 1.10 hereof.
"OFFICER'S CERTIFICATE" means a certificate executed on behalf of the
Borrower by its Chairman of the Board of Directors (if an officer), Chief
Executive Officer, Chief Operating Officer, President, Chief Financial Officer
or Treasurer.
"OPERATING LEASE" means any lease or property (real, personal or mixed)
other than (a) a Capital Lease and (b) in the case of any Subsidiary, any such
lease under which the Borrower or a Wholly Owned Subsidiary is the lessor.
"ORDER" means any order, writ, injunction, decree, judgment, award,
determination, direction or demand.
"OBLIGATIONS" means all fees payable hereunder, all obligations of the
Borrower to pay principal or interest on Loans and Reimbursement Obligations,
and all other payment obligations of the Borrower arising under or in relation
to any Credit Document.
"PARTICIPATING BANK" is defined in Section 1.2(d) hereof.
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"PBGC" is defined in Section 5.9 hereof.
"PERCENTAGE" means, for each Bank, the percentage of the Commitments
represented by such Bank's Commitment or, if the Commitments have been
terminated, the percentage of the outstanding principal amount of Obligations
held by such Bank.
"PERSON" means an individual, partnership, corporation, association, trust,
unincorporated organization or any other entity or organization, including a
government or any agency or political subdivision thereof.
"PLAN" means any employee pension benefit plan (as defined in Section 3(2)
of ERISA) maintained or contributed to at any time by any Borrower Group Member.
"PRICING PERIOD" means, for purposes of determining Level I Status, Level
II Status, and Level III Status, each period commencing on the date 50 days
after the end of a fiscal quarter of the Borrower, beginning with the fiscal
quarter ending on June 30, 1996, and terminating on, but not including, the day
occurring 50 days after the end of the following fiscal quarter of the Borrower.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, whether now owned or
hereafter acquired.
"RATING AGENCIES" is defined in Section 7.18(a).
"REFUNDING BORROWING" means any Borrowing of Loans that refunds in whole or
in part outstanding Loans at their maturity and does not increase the aggregate
outstanding amount of Loans, as further defined in Section 1.5(d) hereof.
"REIMBURSEMENT OBLIGATION" is defined in Section 1.2(c) hereof.
"RENTALS" means, as applied to any Person for any period, the total amount
(whether designated as rentals or additional or supplemental rentals or
otherwise) payable by such Person as lessee under all Operating Leases during
such period, including amounts so payable during such periods by reason of a
lease termination or a surrender of property but excluding amounts so payable on
account of maintenance, ordinary repairs, insurance taxes, assessment and other
similar charges.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than those events (a) as to which the
thirty-day notice requirements of such section or such regulations is waived
under subsection .13, .14, .15, .18, .19 or .20 of PBGC Reg. Section 2615 or (b)
as to which the penalty for failing to satisfy the notice requirements of such
section or regulations is waived under PBGC Technical Update 95-1.
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"REQUIRED BANKS" means, as of the date of determination thereof: (i) at any
time there are fewer than three Banks party to this Agreement, all the Banks and
(ii) at all other times, Banks holding at least 66-2/3% of the Percentages.
"RESPONSIBLE OFFICER" means any officer of the Borrower who shall be
permitted to sign an Officer's Certificate (as provided in the definition of
that term set forth in this Section) and any other officer of the Borrower,
regardless of title, who shall either (a) at any time hereafter perform
substantially the same duties as are performed on the date hereof by any such
officer permitted to sign an Officer's Certificate or (b) be charged with
responsibility for monitoring or administering the Borrower's compliance with
any of the provisions of this Agreement.
"RESTRICTED INVESTMENT" means any Investment other than an Investment
permitted by clause (a), (b), (c) or (d) of Section 7.18.
"RESTRICTED PAYMENT" means any payment or distribution or the incurrence of
any liability to make any payment or distribution, in cash, property or other
assets (other than shares of common stock of the Borrower) upon or in respect of
any share of any class of capital stock of the Borrower or any warrants, rights
or options evidencing a right to purchase or acquire any securities of the
Borrower, including, without limiting the generality of the foregoing, payments
or distributions as dividends and payments or distributions for the purpose of
purchasing, acquiring, retiring or redeeming any such shares of stock (or any
warrants, rights or options to purchase or acquire any such securities) or the
making of any other distribution in respect of any such shares of stock (or any
warrants, rights or options evidencing a right to purchase or acquire any such
securities).
"SEC" means the Securities and Exchange Commission and any successor.
"SECURITY" has the same meaning as in Section 2(l) of the Securities Act of
1933, as amended.
"SECURITIES ACT" means the Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect from time to time.
"SET-OFF" is defined in Section 11.7 hereof as any of the same may be
amended, supplemented or otherwise modified from time to time.
"SHORT-TERM WORKING CAPITAL DEBT" means as applied to any Person, as of any
date of determination, the total Current Debt less Current Maturities of such
Person.
"STOCKHOLDERS' EQUITY" means, as at any date of determination, the sum of
the capital stock(but excluding redeemable preferred stock, treasury stock and
capital stock subscribed but unissued), additional paid-in capital, and retained
earnings accounts of the Borrower and its Subsidiaries which would appear on a
consolidated balance sheet of the Borrower and its
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Subsidiaries prepared in accordance with GAAP as of such date, after eliminating
all amounts properly attributable to outside minority interests, if any, in the
stock and surplus of Subsidiaries.
"SUBSIDIARY" means, with respect to any Person, any corporation more than
50% (or, for purposes of Section 7.18 only, 60%) of the Voting Stock of which is
at the time owned by, and the managerial and operational control of which is
maintained by, such Person and/or one or more of its other Subsidiaries. Unless
otherwise specified, any reference to a Subsidiary is intended as a reference to
a Subsidiary of the Borrower.
"TERMINATION DATE" means July 29, 1998, subject to extension pursuant to
Section 2.3 hereof.
"TERMINATION EVENT" means (a) with respect to any Plan, the occurrence of a
Reportable Event or an event described in Section 4062(e) of ERISA, or (b) the
withdrawal of any Borrower Group Member from a Multiple Employer Plan during a
plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan, or
(c) the distribution of a notice of intent to terminate a Plan or Multiemployer
Plan pursuant to Section 4041(a)(2) or 4041A of ERISA, or (d) the institution of
proceedings to terminate a Plan or Multiemployer Plan by the PBGC under Section
4042 of ERISA, or (e) any other event or condition which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan or Multiemployer
Plan of (f) the complete or partial withdrawal of any Borrower Group Member from
a Multiemployer Plan.
"TOTAL ASSETS" means, as of any date for any Person, the net book value of
the assets of such Person (exclusive of assets deemed intangible in accordance
with GAAP) as of the end of the fiscal quarter ended on such date or (if such
date is not the last day of a fiscal quarter), as of the end of the fiscal
quarter ended most recently prior to such date.
"TOTAL CAPITALIZATION" means, for any date of determination, the sum as of
such date of (a) Consolidated Funded Debt PLUS (b) Stockholders' Equity.
"TOTAL DEBT" means, as applied to any Person for any date of determination,
the sum of Current Debt and Funded Debt of such Person as at such date.
"UNFUNDED CURRENT LIABILITY" of any Plan means the amount, if any, by which
the present value of the accrued benefits under such Plan (based on those
assumptions used to fund such Plan) as of the close of its most recent plan year
exceeds the then current value of the assets of such plan allocable to such
benefits.
"U.S. DOLLARS" and "$" each means the lawful currency of the United States
of America.
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"U.S. DOLLAR EQUIVALENT" means the amount of U.S. Dollars which would be
realized by converting an Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent, at approximately 11:00 a.m.
(London time) two Business Days prior to the date on which a computation thereof
is required to be made, to major banks in the interbank foreign exchange market
for the purchase of U.S. Dollars for such Alternative Currency.
"VOTING STOCK" means capital stock of a corporation the holders of which
are ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directions (or persons performing similar functions) of such
corporation.
"WELFARE PLAN" means a "WELFARE PLAN", as defined in Section 3(1) of ERISA.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of the Borrower all of the
outstanding shares of capital stock and other equity securities of any class or
classes of which, other than directors' qualifying shares, shall at the time be
owned by the Borrower either directly or through one or more Wholly Owned
Subsidiaries.
SECTION 4.2. INTERPRETATION. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to Chicago,
Illinois time unless otherwise specifically provided. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the specific provisions of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to each Bank as to itself and,
where the following representations and warranties apply to Subsidiaries, as to
each of its Subsidiaries, as follows:
SECTION 5.1. CORPORATE ORGANIZATION AND AUTHORITY. The Borrower is duly
organized and existing in good standing under the laws of the State of Kansas;
has all necessary corporate power to carry on its present business; and is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business transacted by it or the nature of the Property owned or
leased by it makes such licensing or qualification necessary and in which the
failure to be so licensed or qualified would have a Material Adverse Effect.
SECTION 5.2. SUBSIDIARIES. Schedule 5.2 hereto (as updated from time to
time) identifies each Subsidiary, the jurisdiction of its incorporation or
organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interest owned by the
Borrower and the Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law and small amounts of
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shares owned by management), a description of each class of its authorized
capital stock and other equity interests and the number of shares of each class
issued and outstanding. From the date any Subsidiary exists, each Subsidiary is
duly incorporated and existing in good standing as a corporation under the laws
of the jurisdiction of its incorporation, has all necessary corporate power to
carry on its present business, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business transacted by
it or the nature of the Property owned or leased by it makes such licensing or
qualification necessary and in which the failure to be so licensed or qualified
would have a Material Adverse Effect. All of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and outstanding and fully
paid and nonassessable (except with respect to common stock of Kramer
International, Inc. for certain statutory liabilities which may be imposed by
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for unpaid
employee wages) and all such shares owned by the Borrower are owned beneficially
and of record, free of any Lien.
SECTION 5.3. CORPORATE AUTHORITY AND VALIDITY OF OBLIGATIONS. The
Borrower and each Subsidiary has full right and authority to enter into this
Agreement and the other Credit Documents to which it is a party, to make the
borrowings herein provided for, to issue its Notes in evidence thereof, to apply
for the issuance of the Letters of Credit and to perform all of its obligations
in connection therewith and to perform all of its obligations under the Credit
Documents to which it is a party; each Credit Document to which it is a party
has been duly authorized, executed and delivered by the Borrower or Subsidiary,
as applicable, and constitutes valid and binding obligations of the Borrower or
Subsidiary, as applicable, enforceable in accordance with its terms; and no
Credit Document, nor the performance or observance by the Borrower or any
Subsidiary of any of the matters or things therein provided for, contravenes any
provision of law or any charter or by-law provision of the Borrower or
(individually or in the aggregate) any material covenant, indenture or agreement
of or affecting the Borrower or any of its Properties or results in or requires
the creation or imposition of any Lien on any of the Properties or revenues of
the Borrower.
SECTION 5.4. FINANCIAL STATEMENTS. All financial statements heretofore
delivered to the Banks and showing historical performance of the Borrower
(i) for each of the Borrower's fiscal years ending on or before June 30, 1995,
have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent, except as otherwise noted therein, with that of
the previous fiscal year, and (ii) for periods ending on or after June 30, 1995,
have been prepared in accordance with generally accepted accounting principles,
except as otherwise noted therein and except for year-end audit adjustments,
applied on a basis consistent with the Borrower's financial statements for their
fiscal year ending June 30, 1995 as heretofore delivered to the Banks. Each of
such annual and other financial statements fairly presents on a consolidated
basis the financial position of the Borrower and its Consolidated Subsidiaries,
as of the dates thereof, and the results of operations for the periods covered
thereby. The Borrower and its Consolidated Subsidiaries have no material
contingent liabilities other than those disclosed in such financial statements
referred to in this Section 5.4 or in comments or footnotes thereto or in any
supplemental report thereto heretofore furnished to the Banks.
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SECTION 5.5. NO MATERIAL ADVERSE CHANGE. There has been no Material
Adverse Change since June 30, 1995.
SECTION 5.6. NO LITIGATION; NO LABOR CONTROVERSIES. (a) Except as
disclosed on Schedule 5.6(a), there is no litigation or governmental proceeding
pending, or to the knowledge of the Borrower or any Subsidiary threatened,
against the Borrower or any Subsidiary which, if adversely determined, would
(individually or in the aggregate) have a Material Adverse Effect, and it is the
Borrower's good faith judgment that the litigation disclosed on Schedule 5.6(a)
is not expected to have a Material Adverse Effect.
(b) There are no labor controversies pending or, to the best knowledge of
the Borrower or any Subsidiary, threatened against the Borrower or any
Subsidiary which could (insofar as the Borrower may reasonably foresee) have a
Material Adverse Effect.
SECTION 5.7. TAXES. The Borrower and Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided. No tax liens have been filed and no claims are being asserted
with respect to any such taxes, which liens or claims are material to the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
taken as a whole. The charges, accruals and reserves on the books of the
Borrower and the Subsidiaries in respect of any taxes or other governmental
charges are adequate.
SECTION 5.8. APPROVALS. No authorization, consent, license, exemption or
filing or registration with any court or governmental department, agency or
instrumentality, nor any approval or consent of the stockholders of the Borrower
or any Subsidiary or from any other Person, is necessary to the valid execution,
delivery or performance by the Borrower of any Credit Document to which it is a
party.
SECTION 5.9. ERISA. Each Borrower Group Member has fulfilled its
obligations under the minimum funding standards of and is in compliance in all
material respects with ERISA, and with the Code to the extent applicable to it
and has not incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") or a Plan under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA. Neither the Borrower nor any
Subsidiary has any contingent liabilities with respect to any post-retirement
benefits under a Welfare Plan, other than liability for continuation coverage
described in article 6 of Title I of ERISA.
SECTION 5.10. GOVERNMENT REGULATION. Neither the Borrower nor any
Subsidiary is an "INVESTMENT COMPANY" within the meaning of the Investment
Company Act of 1940, as amended, or a "HOLDING COMPANY", or a "SUBSIDIARY
COMPANY" of a "HOLDING COMPANY", or an "AFFILIATE" of a "HOLDING COMPANY" or of
a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
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SECTION 5.11. MARGIN STOCK. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its primary activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock ("MARGIN
STOCK" to have the same meaning herein as in Regulation U of the Board of
Governors of the Federal Reserve System). The Borrower will not use the
proceeds of any Loan or Letter of Credit in a manner that violates any provision
of Regulation G, U or X of the Board of Governors of the Federal Reserve System.
SECTION 5.12. LICENSES AND AUTHORIZATIONS; COMPLIANCE WITH LAWS. (a) The
Borrower and each Subsidiary has all necessary licenses, permits and
governmental authorizations (including, without limitation, all Environmental
Permits) to own and operate its Properties and to carry on its business as
currently conducted and contemplated.
(b) To the best of the Borrower's knowledge, the business and operations
of the Borrower and each Subsidiary comply in all respects with all
Environmental Laws and Environmental Permits received thereunder, except where
the failure to so comply would not (individually or in the aggregate) have a
Material Adverse Effect.
(c) Neither the Borrower nor any Subsidiary has given, nor is it required
to give, nor has it received, any notice, letter, citation, order, warning,
complaint, inquiry, claim or demand to or from any governmental entity or in
connection with any court proceeding that: (i) the Borrower or any Subsidiary
has violated, or is about to violate, any Environmental Law or Environmental
Permit; (ii) there has been a release, or there is a threat of release, of
Hazardous Substances from the Borrower's or any Subsidiary's Property,
facilities, equipment or vehicles; (iii) the Borrower or any Subsidiary may be
or is liable, in whole or in part, for the costs of cleaning up, remediating or
responding to a release of Hazardous Substances; or (iv) any of the Borrower's
or any Subsidiary's property or assets are subject to a Lien in favor of any
governmental entity for any liability, costs or damages, under any Environmental
Law arising from, or costs incurred by such governmental entity in response to,
a release of a Hazardous Substance (all such matters described in clauses (i)-
(iv) above being collectively "ENVIRONMENTAL CLAIMS"), to the extent any of the
foregoing could have a Material Adverse Effect.
SECTION 5.13. OWNERSHIP OF PROPERTY; LIENS. The attached Schedule 5.13
Lists all principal real property locations used by the Borrower or any
Subsidiary in the conduct of their respective businesses. The Borrower and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all such real property, as specified in Schedule 5.13,
And good title to or valid leasehold interests in all its other Property. None
of the real property listed on Schedule 5.13 is subject to any Lien or
Capitalized Lease Obligation except as set forth therein, and none of the
Borrower's or any Subsidiary's other Property is subject to any Lien, except as
permitted in Section 7.9.
SECTION 5.14. NO BURDENSOME RESTRICTIONS; COMPLIANCE WITH AGREEMENTS.
Neither the Borrower nor any Subsidiary is (a) party or subject to any law,
regulation, rule or order, or any Contractual Obligation that (individually or
in the aggregate) Materially Adversely affects, or (insofar as the Borrower or
any Subsidiary may reasonably foresee)
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may so affect, the Borrower and its Subsidiaries taken as a whole or (b) in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party, which
default Materially Adversely affects, or (insofar as the Borrower or any
Subsidiary may reasonably foresee) may so affect, the Borrower and its
Subsidiaries taken as a whole.
SECTION 5.15. FULL DISCLOSURE. All information heretofore furnished by
the Borrower or any Subsidiary to the Agent or any Bank for purposes of or in
connection with the Credit Documents or any transaction contemplated thereby is,
and all such information hereafter furnished by the Borrower or any Subsidiary
to the Agent or any Bank will be, true and accurate in all material respects and
not misleading on the date as of which such information is stated or certified.
The Borrower has disclosed to the Banks in writing any and all facts which
materially and adversely affect the business, operations or financial condition
of the Borrower and its Consolidated Subsidiaries taken as a whole, or the
ability of the Borrower to perform its obligations under the Credit Documents.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Bank to make any Loan hereunder, or of the Agent to
issue, extend the expiration date of or increase the amount of any Letter of
Credit, shall be subject to the following conditions precedent unless waived by
the Banks:
SECTION 6.1. INITIAL CREDIT EVENT. Before or concurrently with the
initial Credit Event:
(a) The Agent shall have received for each Bank the favorable written
opinion of Blackwell, Sanders, Matheny, Weary & Lombardi, legal counsel to
the Borrower, in the form attached hereto as Exhibit D;
(b) The Agent shall have received for each Bank copies (executed or
certified as may be appropriate) of all legal documents or proceedings
taken by the Borrower in connection with the execution and delivery of this
Agreement and the Notes to the extent the Agent or the Required Banks may
reasonably request;
(c) The Agent shall have received for each Bank copies of the
Borrower's and each Subsidiaries' Articles of Incorporation and bylaws and
any amendments thereto, certified in each instance by its Secretary or
Assistant Secretary;
(d) The Agent shall have received for each Bank copies of resolutions
of the Borrower's and each Subsidiaries' Board of Directors authorizing the
execution and delivery of the Credit Documents to which it is a party and
the consummation of the transactions contemplated thereby together with
specimen signatures of the persons authorized to execute such documents on
the Borrower's or Subsidiaries' behalf, as applicable, all certified in
each instance by its Secretary or Assistant Secretary;
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(e) The Agent shall have received for each Bank such Bank's duly
executed Note of the Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 1.10(a) hereof;
(f) The Agent shall have received a duly executed and delivered
Guaranty Agreement from each Subsidiary listed on Schedule 5.2 hereto;
(g) The Agent shall have received for each Bank a list of the
Borrower's Authorized Representatives;
(h) The Agent shall have received a list of all Subsidiary Debt
outstanding on the date hereof;
(i) The Agent shall have received evidence satisfactory to it of the
payment of all principal of and interest on any "LOANS" outstanding under,
and all other amounts payable under, the Existing Credit Agreement;
PROVIDED that the Banks parties to the Existing Credit Agreement and the
Borrower agree that the "COMMITMENTS" under the Existing Credit Agreement
shall terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the Borrower shall be obligated to
pay the accrued commitment fees thereunder to but excluding the date of
such effectiveness; and
(j) All legal matters incident to the execution and delivery of the
Credit Documents shall be satisfactory to the Banks.
SECTION 6.2. ALL CREDIT EVENTS. As of the time of each Credit Event
hereunder:
(a) In the case of a Borrowing, the Agent shall have received the
notice required by Section 1.5 hereof, and in the case of the issuance of
any Letter of Credit the Agent shall have received a duly completed
Application for a Letter of Credit and, in the case of an extension or
increase in the amount of a Letter of Credit, a written request therefor,
in a form acceptable to the Agent;
(b) Each of the representations and warranties of the Borrower set
forth in Section 5 hereof shall be and remain true and correct in all
material respects as of said time, except to the extent that any such
representation or warranty relates solely to an earlier date;
(c) The Borrower shall be in full compliance with all of the terms
and conditions hereof, and no Default or Event of Default shall have
occurred and be continuing or would occur as a result of such Credit Event;
(d) The sum of the aggregate outstanding principal amount of Loans,
the aggregate undrawn face amount of Letters of Credit, and the unpaid
Reimbursement Obligations outstanding after giving effect to such Credit
Event shall not exceed the Commitments then in effect;
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(e) In the case of the issuance of, or the increase in the amount of,
or the extension of the expiration date of, a Letter of Credit the
restrictions set forth in Section 1.2(a) shall be met; and
(f) Such Credit Event shall not violate any order, judgment or decree
of any court or other authority or any provision of law or regulation
applicable to any Bank (including, without limitation, Regulation U of the
Board of Governors of the Federal Reserve System) as then in effect.
Each request for a Borrowing hereunder and each request for the issuance
of, increase in the amount of, or extension of the expiration date of, a Letter
of Credit shall be deemed to be a representation and warranty by the Borrower on
the date of such Borrowing, issuance of, increase in the amount of, or extension
of the expiration date of, such Letter of Credit as to the facts specified in
paragraphs (b) through (g) of this Section 6.2.
SECTION 7. COVENANTS.
The Borrower covenants and agrees that, so long as any Note, any Letter of
Credit or any Reimbursement Obligation is outstanding hereunder or any
Commitment is available to or in use by the Borrower hereunder, except to the
extent compliance in any case is waived in writing by the Required Banks:
SECTION 7.1. CORPORATE EXISTENCE; SUBSIDIARIES. The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its corporate
existence, subject to the provisions of Section 7.12 hereof. As a condition to
establishing or acquiring any Subsidiary, the Borrower shall (i) cause such
Subsidiary to execute and deliver to the Agent a Guaranty Agreement, (ii)
deliver documentation similar to that described in Section 6.1(c) and (d)
relating to the authorization for, execution and delivery of, and validity of
such Subsidiary's obligations under the Guaranty Agreement, in form and
substance satisfactory to the Required Banks and (iv) deliver an updated
Schedule 5.2 to reflect the new Subsidiary.
SECTION 7.2. MAINTENANCE. The Borrower will maintain, preserve and keep
its plants, properties and equipment deemed by it necessary to the proper
conduct of its business in reasonably good repair, working order and condition
and will from time to time make all reasonably necessary repairs, renewals,
replacements, additions and betterments thereto so that at all times such
plants, properties and equipment shall be reasonably preserved and maintained,
and the Borrower will cause each of its Subsidiaries to do so in respect of
Property owned or used by it; PROVIDED, HOWEVER, that nothing in this
Section 7.2 shall prevent the Borrower or a Subsidiary from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its business or the
business of its Subsidiary and not disadvantageous to the Banks or the holders
of the Notes.
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SECTION 7.3. TAXES. The Borrower will duly pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against it or against its
Properties, in each case before the same becomes delinquent and before penalties
accrue thereon, unless and to the extent that the same is being contested in
good faith and by appropriate proceedings and reserves in conformity with GAAP
have been provided therefor on the books of the Borrower.
SECTION 7.4. ERISA. The Borrower will, and will cause each of its
Subsidiaries to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed might result
in the imposition of a Lien against any of its properties or assets and will
promptly notify each Bank of (i) the occurrence of any Reportable Event with
respect to a Plan, (ii) receipt of any notice from PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (iii) its or any
of its Subsidiaries' intention to terminate or withdraw from any Plan, and
(iv) the occurrence of any event with respect to any Plan which could result in
the incurrence by the Borrower or any of its Subsidiaries of any material
liability, fine or penalty, or any material increase in the contingent liability
of the Borrower, or any of its Subsidiaries with respect to any post-retirement
Welfare Plan benefit.
SECTION 7.5. INSURANCE. The Borrower will insure, and keep insured, and
will cause each of its Subsidiaries to insure, and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by companies similarly situated and operating like
Property; and to the extent usually insured (subject to self-insured retentions)
by companies similarly situated and conducting similar businesses, the Borrower
will also insure, and cause each of its Subsidiaries to insure, employers' and
public and product liability risks with good and responsible insurance
companies. The Borrower will upon request of any Bank furnish to such Bank a
summary setting forth the nature and extent of the insurance maintained pursuant
to this Section 7.5.
SECTION 7.6. FINANCIAL REPORTS AND OTHER INFORMATION. The Borrower will
maintain a system of accounting in accordance with GAAP and will furnish to the
Banks and to their respective duly authorized representatives such information
respecting the business and financial condition of the Borrower and its
Subsidiaries as any Bank may reasonably request; and without any request will
furnish each of the following to each Bank:
(a) QUARTERLY STATEMENTS. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period in each fiscal
year of the Borrower, a consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such quarterly fiscal period
and the related consolidated and consolidating statements of income and
cash flows of the Borrower and its Subsidiaries for such quarterly fiscal
period and (except in the case of the first such quarterly fiscal period in
each fiscal year) for the portion of the fiscal year ended with the last
day of such quarterly fiscal period, setting forth in comparative form the
respective figures for the corresponding period of the previous fiscal year
together with fiscal year to date comparisons to the Borrower's current
operating budget, all in reasonable detail and certified by the principal
financial officer of the Borrower as
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complete and correct in all material respects, subject to changes resulting
from normal year-end audit adjustments;
(b) ANNUAL STATEMENTS. As soon as available and in any event within
90 days after the end of each fiscal year of the Borrower, a consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as of
the end of such fiscal year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of the Borrower
and its Subsidiaries for such fiscal year, setting forth in each case in
comparative form the respective figures as of the end of and for the
previous fiscal year, all in reasonable detail and (i) in the case of the
consolidated financial statements, accompanied by an opinion thereon of
Deloitte & Touche or other independent certified public accountants of
recognized national standing selected by the Borrower and reasonably
satisfactory to the Required Banks, which opinion shall not be made in
reliance upon the opinion of any other accountant, shall be made without
qualification or modification, shall comply with generally accepted
auditing standards at the time in effect and shall state that such
consolidated financial statements present fairly, in all material respects,
the financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP, that the audits of such
accountants were conducted in accordance with generally accepted auditing
standards and that such accountants believe such audits provide a
reasonable basis for their opinion, and (ii) in the case of such
consolidating financial statements, certified by the principal financial
officer of the Borrower as complete and correct in all material respects;
(c) ANNUAL BUDGET. As soon as available, and in any event within
thirty (30) days prior to the end of each fiscal year, a copy of the
Borrower's consolidated and consolidating operating budget for the
following fiscal year, such budget to show the Borrower's projected
consolidated and consolidating revenues, expenses, and balance sheet on a
month-by-month basis, such budget to be in reasonable detail prepared by
the Borrower and in form reasonably satisfactory to the Required Banks;
(d) COMPLIANCE CERTIFICATES. Concurrently with each delivery of
financial statements pursuant to clause (a) or (b) of this Section 7.6, a
Compliance Certificate in the form of Exhibit C hereto signed by the
Borrower's Chief Financial Officer, Controller or Treasurer.
(e) ACCOUNTANT'S CERTIFICATES. Together with each delivery of annual
consolidated financial statements pursuant to clause (b) of this Section
7.6, a written statement addressed to the Banks from the independent
certified public accountants referred to in said clause (b) who have
reported on such financial statements:
(i) stating whether, in the course of their audit examination,
anything has come to their attention concerning the existence during
the fiscal year covered by such financial statements (and whether they
have knowledge of the existence as of the date of such written
statement) of any condition or event
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which constitutes a Default or an Event of Default and, if so,
specifying the nature and period of existence thereof; and
(ii) stating that they have examined the Compliance Certificate
delivered in connection with such annual financial statements pursuant
to clause (d) of this Section 7.6 for such fiscal year and, based upon
their annual audit examination, nothing has come to their attention
which causes them to believe that the information contained in such
Compliance Certificate is not correct or that the matters set forth in
such Compliance Certificate have not been properly stated in
accordance with the terms of this Agreement;
(f) SEC AND OTHER REPORTS. Promptly upon their becoming available
(and in any event within ten Business Days thereafter), copies of (i) all
financial statements, reports, notices, proxy statements and other
information sent or made available generally to the Borrower to any class
of its security holders or by any Subsidiary to any class of its security
holders other than the Borrower or another Subsidiary, (ii) all regular and
periodic reports (including reports on Form 8-K) and all registration
statements (other than those on Form S-8 or a successor form relating to
the registration of securities pursuant to an employee benefit plan) and
prospectuses filed by the Borrower or any of its Subsidiaries with any
securities exchange or with the SEC, and (iii) all press releases and other
statements made available generally by the Borrower or any of its
Subsidiaries to the public concerning material developments in the business
of the Borrower or any of its Subsidiaries;
(g) AUDIT REPORTS. Promptly upon receipt thereof (and in any event
within ten Business Days thereafter), copies of reports submitted to the
Borrower or any of its Subsidiaries by independent certified public
accountants in connection with any annual, interim or special audit of the
Borrower or any Subsidiary made by such accountants;
(h) DEFAULTS, ETC. Promptly (and in any event within five Business
Days) after any Responsible Officer of the Borrower obtains knowledge of
any condition or event which constitutes a Default or an Event of Default
or becomes aware that any Person has given any notice to the Borrower or
any of its Subsidiaries or taken any other action with respect to a claimed
default under or in respect of any Debt referred to in Section 8.1(d) or
with respect to the occurrence or existence of any event or condition of
the type referred to in Section 8.1(f) or 8.1(g), an Officer's Certificate
specifying in reasonable detail the nature and period of existence thereof
and what action the Borrower has taken or its taking or proposes to take
with respect thereto;
(i) ERISA. Promptly (and in any event within ten Business Days)
after any Borrower Group Member or any plan administrator of any Plan (i)
knows of the occurrence of any Termination Event, (ii) receives with
respect to any Multiemployer Plan notice as prescribed in ERISA of any
withdrawal liability assessed against any Borrower Group Member or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA), (iii)
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knows that a prohibited transaction (as defined in Section 406 of ERISA or
Section 4975 of the Code) for which a statutory or administrative exemption
is not available or a breach of fiduciary responsibility has occurred in
connection with which any Borrower Group Member could reasonably be subject
to any material liability under Section 406, 409, 502(i) or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which such Borrower Group Member has agreed or is required to
indemnify any Person against any such liability or (iv) knows that there
has been a material adverse change in the funding status of any Plan, a
description of such event or a copy of such notice and a statement by the
principal financial officer of the Borrower of the action which has been or
is being taken or is proposed to be taken by the Borrower with respect
thereto;
(j) LITIGATION, ETC. Promptly (and in any event within ten Business
Days) after any Responsible Officer of the Borrower obtains knowledge of
any litigation, administrative proceeding or judgment (i) relating to the
Borrower or any of its Subsidiaries (whether or not considered by the
Borrower to be covered by insurance) and which could, if adversely
determined, reasonably be expected to have a Material Adverse Effect, or
(ii) relating in any way to this Agreement, an Officer's Certificate
specifying in each case in reasonable detail the facts and circumstances
surrounding such litigation, proceeding or judgment; and
(k) ENVIRONMENTAL NOTICES. Promptly (and in any event within five
Business Days) after any Responsible Officer obtains knowledge that (i) the
Borrower or any of its Subsidiaries is not in compliance in any material
respect with any Environmental Law or (ii) that any Environmental Claim has
been made against the Borrower or any Subsidiary and such non-compliance or
Environmental Claim could reasonably be expected to have a Material Adverse
Effect on the Borrower, an Officer's Certificate specifying the nature and
period of existence of such non-compliance or the substance of such
Environmental Claim and, in either case, what action the Borrower has taken
or is taking or proposes to take with respect thereto.
SECTION 7.7. BANK INSPECTION RIGHTS. Upon reasonable notice from any
Bank, the Borrower will permit such Bank (and such Persons as any Bank may
designate) during normal business hours at the Borrower's expense (excluding,
however, salary and other overhead expenses of such Bank and the travel, lodging
and related expenses of such Banks representative, all of which shall, except as
hereinafter provided, be borne by such Banks) to visit and inspect, under the
Borrower's guidance, any of the properties of the Borrower or any of its
Subsidiaries, to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Borrower
authorizes such accountants to discuss with the Banks (and such Persons as any
Bank may designate) the finances and affairs of the Borrower and its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested; PROVIDED that, during the continuance of any Default or Event of
Default, all reasonable travel, lodging costs and related expenses relating to
any such visit or inspection
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which would otherwise be required by the foregoing provisions of this Section
7.7 to be borne by a Bank shall be borne by the Borrower.
SECTION 7.8. CONDUCT OF BUSINESS. The Borrower and each Subsidiary will
not abandon or engage in any line of business if, as a result, the general
nature of its business would be substantially changed from the general nature of
the business engaged in thereby on the date of this Agreement.
SECTION 7.9. LIENS. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, or permit to exist or to be incurred any
Lien of any kind on any Property owned by the Borrower or any Subsidiary;
PROVIDED, HOWEVER, that this Section 7.9 shall not apply to nor operate to
prevent:
(a) Liens arising by operation of law in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges, good faith deposits, pledges or Liens in connection with bids,
tenders, contracts or leases to which the Borrower or any Subsidiary of the
Borrower is a party (other than contracts for borrowed money), or other
deposits required to be made in the ordinary course of business; PROVIDED
that in each case the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings and for which
reserves in conformity with GAAP have been provided on the books of the
Borrower or such Subsidiary, as the case may be;
(b) mechanics', workmen's, materialmen's, landlords', carriers' or
other similar Liens arising in the ordinary course of business (or deposits
to obtain the release of such Liens) with respect to obligations which are
not due or, if due, are being contested in good faith by appropriate
proceedings and for which reserves in conformity with GAAP have been
provided on the books of the Borrower or such Subsidiary, as the case may
be;
(c) Liens for taxes or assessments or other government charges or
levies on the Borrower or any Subsidiary of the Borrower or their
respective Properties, not yet due or delinquent, or which can thereafter
be paid without penalty, or which are being contested in good faith by
appropriate proceedings and for which reserves in conformity with GAAP have
been provided on the books of the Borrower or such Subsidiary, as the case
may be;
(d) Liens arising out of judgments or awards against the Borrower or
any Subsidiary of the Borrower, or in connection with surety or appeal
bonds in connection with bonding such judgments or awards, the time for
appeal from which or petition for rehearing of which shall not have expired
or with respect to which the Borrower or such Subsidiary shall be
prosecuting an appeal or proceeding for review, and with respect to which
it shall have obtained a stay of execution pending such appeal or
proceeding for review; PROVIDED that the aggregate amount of liabilities
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(including interest and penalties, if any) of the Borrower and the
Subsidiaries secured by such Liens shall not exceed $2,500,000 at any one
time outstanding;
(e) Liens upon any Property acquired by the Borrower or any
Subsidiary of the Borrower (A) to secure the payment of up to 90% of the
purchase price of such Property upon the acquisition thereof by the
Borrower or such Subsidiary, (B) to secure any Debt issued, assumed or
guaranteed by the Borrower or any Subsidiary of the Borrower prior to, at
the time of, or within 90 days after the acquisition of such Property,
which Debt is issued, assumed or guaranteed for the purpose of financing up
to 90% of the purchase price of such Property, or (C) existing on Property
of a Subsidiary at the time such Person becomes a Subsidiary and not
created in contemplation of such acquisition; PROVIDED that any such Lien
under clause (A), (B) or (C) above shall apply only to the Property that
was so acquired or purchased, and the aggregate amount of Debt secured by
all such Liens, does not exceed $3,500,000;
(f) Minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties which are necessary for the conduct of the activities of the
Borrower and any Subsidiary of the Borrower or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the Borrower or any Subsidiary of the
Borrower; and
(g) Any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in
the foregoing paragraphs (a) through (f), inclusive, PROVIDED, HOWEVER,
that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal
or replacement, and that such extension, renewal or replacement shall be
limited to the Property which was subject to the Lien so extended, renewed
or replaced.
SECTION 7.10. USE OF PROCEEDS; REGULATION U. The proceeds of each
Borrowing shall be used by the Borrower for working capital and other general
corporate purposes including acquisitions of businesses substantially in the
same line of business as the Borrower; PROVIDED, THAT immediately prior to any
acquisition (regardless whether or not funded in whole or in part by Borrowings
hereunder), the Borrower shall have provided the Banks with such information as
may be reasonably requested by the Banks concerning the terms of such
transaction (including sources and uses of funds therefor) and the entity or
business being acquired, as well as historic and PRO FORMA financial information
and compliance calculations reasonably satisfactory to the Banks demonstrating
that no Default or Event of Default exists or would occur after giving effect to
such transaction. The Letters of Credit will be used to secure the Borrower's
or any Subsidiaries' obligations in connection with the Borrower's or such
Subsidiaries' self-insured portion of workman's compensation and property &
casualty insurance claims. The Borrower shall not use any part of the proceeds
of any of the Borrowings or of the Letters of Credit directly or indirectly to
purchase or
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carry any margin stock (as defined in Section 5.11 hereof) or to extend credit
to others for the purpose of purchasing or carrying any such margin stock.
SECTION 7.11. SALES AND LEASEBACKS. The Borrower will not, nor will it
permit any Subsidiary to, enter into any arrangement with any bank, insurance
company or any other lender or investor providing for the leasing by the
Borrower or any Subsidiary of any Property theretofore owned by it and which has
been or is to be sold or transferred by such owner to such lender or investor;
PROVIDED THAT the foregoing shall not prevent the Borrower or any Subsidiary
from entering into a sale and leaseback transaction for any real property of the
Borrower or such Subsidiary in connection with the issuance of industrial
revenue bonds the proceeds of which will be used to finance the acquisition of
or improvements to such property so long as (a) the sale of such real property
is at the time permitted pursuant to Section 7.12 hereof and (b) at the time of
and after giving effect to such transaction, no Default or Event of Default
shall have occurred and be continuing.
SECTION 7.12. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, voluntarily liquidate
or dissolve, or consolidate or merge with or into any other Person, or permit
any other Person to consolidate with or merge with or into it, or participate in
a share exchange with or sell, lease, transfer, contribute or otherwise dispose
of any of its assets to any other Person (other than sales of inventory and worn
out and obsolete assets in the ordinary course of business as such business is
conducted in compliance with Section 7.8), except that, subject in any event to
compliance with the last paragraph of this Section 7.12:
(a) any Subsidiary may (i) consolidate with or merge into the
Borrower or any Wholly Owned Subsidiary if the Borrower or a Wholly Owned
Subsidiary shall be the continuing or surviving corporation or (ii)
consolidate or merge with any other corporation if such Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell, lease, transfer, contribute or otherwise
dispose of its assets in whole or in part to the Borrower or any Wholly
Owned Subsidiary, and may, following any such disposition in whole,
liquidate and dissolve;
(c) the Borrower may consolidate or merge with any other corporation
if the Borrower shall be the continuing or surviving corporation; and
(d) the Borrower or any Subsidiary, in addition to making any sale,
lease, transfer or other disposition permitted by the foregoing provisions
of this Section 7.12, may sell any of its assets for a consideration at
least equal to the fair market value thereof (as determined in good faith
by the Board of Directors) at the time of such sale but only if,
immediately after giving effect to such sale, the aggregate net book value
of all assets sold as permitted by this clause (d) (including all deemed
dispositions pursuant to Section 7.13) during the period of twelve
consecutive months ending on (and including) the date of such proposed sale
shall not exceed 10% of Consolidated Total Assets determined as of such
date.
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No consolidation, merger, sale, lease, transfer, contribution or other
disposition referred to in clauses (a) through (d) of this Section 7.12 shall be
permitted unless at the time of and immediately after giving effect to any such
transaction, no Default or Event of Default shall have occurred and be
continuing. Nothing contained in this Section 7.12 shall permit the disposition
of assets consisting of Debt, stock or similar interests or other securities (or
warrants, rights or options to acquire stock or other securities) of any
Subsidiary unless such disposition is also made in compliance with Section 7.13.
SECTION 7.13. SUBSIDIARY STOCK AND DEBT. The Borrower will not, and will
not permit any Subsidiary to, issue, sell or otherwise dispose or part with
control of any shares of stock or any other securities (or warrants, rights or
options to acquire stock or other securities) of any Subsidiary, except to the
Borrower, another Wholly Owned Subsidiary or employees of any Subsidiary
(PROVIDED that employee ownership of the shares of stock of any given Subsidiary
does not in any event exceed 19% of the outstanding stock of such Subsidiary),
and except that all shares of stock and all Debt and other securities of any
Subsidiary at the time owned by or owed to the Borrower and all Subsidiaries may
be sold as an entirety for a consideration which represents the fair value (as
determined in good faith by the Board of Directors) at the time of sale of the
shares of stock and Debt and other securities so sold, PROVIDED that, (i) such
Subsidiary being sold does not at that time own, directly or indirectly, any
Debt or stock or other security of any other Subsidiary which is not also being
simultaneously sold as an entirety as permitted by this proviso or any Debt of
the Borrower, (ii) the assets of such Subsidiary represented by the equity
interest to be so transferred are such that the sale of such assets would then
be permitted by Section 7.12 (in which case such transaction shall be considered
and deemed a disposition of assets for the purposes of Section 7.12), and (iii)
at the time of the consummation of such transaction and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing;
provided further that this Section 7.13 shall not prevent a Subsidiary from
incurring or maintaining outstanding Debt to a Person other than the Borrower or
a Subsidiary to the extent permitted by Section 7.17.
SECTION 7.14. USE OF PROPERTY AND FACILITIES; ENVIRONMENTAL, HEALTH AND
SAFETY LAWS. The Borrower will, and will cause each of its Subsidiaries to,
comply in all material respects with the requirements of all Environmental Laws,
Environmental Permits and federal, state and local health and safety laws,
rules, regulations and orders applicable to or pertaining to the Properties or
business operations of the Borrower or any Subsidiary of the Borrower. Without
limiting the foregoing, the Borrower will not, and will not permit any Person
to, except in accordance with applicable law, dispose of any Hazardous Substance
into, onto or from any real property owned or operated by the Borrower or any of
its Subsidiaries.
SECTION 7.15. MAINTENANCE OF CERTAIN FINANCIAL CONDITIONS.
(a) CURRENT RATIO. The Borrower will not on any date permit the
Current Ratio to be less than 1.50.
(b) STOCKHOLDERS' EQUITY. The Borrower will not on any date permit
Stockholders' Equity to be less than the sum of $31,000,000 PLUS 50% (or 0%
in the
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case of a deficit) of Consolidated Net Income for the period (taken as one
accounting period) from March 31, 1994 to such date.
(c) RATIO OF CONSOLIDATED FUNDED DEBT TO TOTAL CAPITALIZATION. The
Borrower will not on any date permit Consolidated Funded Debt to exceed 50%
of Total Capitalization.
(d) RATIO OF CONSOLIDATED TOTAL DEBT TO STOCKHOLDERS' EQUITY. The
Borrower will not on any date permit Consolidated Total Debt to exceed 125%
of Stockholders' Equity.
(e) FIXED CHARGE COVERAGE RATIO. The Borrower will not, as of the
last day of any fiscal quarter of the Borrower, permit the Fixed Charge
Coverage Ratio to be less than 2.00.
SECTION 7.16. SHORT-TERM WORKING CAPITAL DEBT. The Borrower will not, and
will not permit any Subsidiary to, have any Short-Term Working Capital Debt
outstanding on any date unless, during the period of twelve consecutive months
preceding such date, there shall have been a period of at least 45 consecutive
days during which the average daily level of Short-Term Working Capital Debt of
the Borrower and its Subsidiaries outstanding during such period shall not have
exceeded $3,000,000.
SECTION 7.17. SUBSIDIARY DEBT. The Borrower will not permit any
Subsidiary to directly or indirectly create, assume, incur or otherwise become
or remain liable with respect to, by way of Guaranty or otherwise, any Debt,
except that:
(a) any Subsidiary may become and remain liable in respect of the
Debt of such Subsidiary described in Schedule 7.17(a), but may not extend,
renew, refund or refinance any thereof except as otherwise permitted by
another clause of this Section 7.17;
(b) any Subsidiary may become and remain liable with respect to Debt
of such Subsidiary owing to the Borrower or any Wholly Owned Subsidiary;
(c) subject to compliance with clauses (c) and (d) of Section 7.15,
any Subsidiary may become and remain liable in respect of Debt secured by
Liens permitted under Section 7.9;
(d) The G&C Foundry Company may pay change of control benefits
pursuant to the certain Employment Agreements with four of its employees
and a Change of Control Agreement with one of its employees not to exceed
$2,000,000 in the aggregate for all such employees to be paid over a 3 year
period commencing 90 days after the acquisition of the issued and
outstanding common stock of The G&C Foundry Company by the Borrower;
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(e) La Grange Foundry Inc. may become and remain liable on up to
$5,100,000 of Debt to the Missouri Development Finance Board in connection
with the issuance by the Missouri Development Finance Board of its
$5,100,000 Industrial Development Revenue Bonds Series 1996 (La Grange
Foundry Inc. Project);
(f) each Subsidiary may become and remain liable in respect of the
Obligations hereunder pursuant to separate Guaranty Agreements; and
(g) each Subsidiary may become and remain liable in respect of the
Borrower's obligations under the Note Agreement dated as of July 29, 1994
between the Borrower and the purchasers identified therein pursuant to a
Guaranty substantially in the form of the Guaranty Agreement.
SECTION 7.18. INVESTMENTS, ETC. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly (through a Subsidiary
or otherwise), make or own any Investments except:
(a) the Borrower and its Subsidiaries may make and own Investments in
(i) readily marketable direct obligations of the United States of America
or of any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America or
readily marketable obligations unconditionally guaranteed by the United
States of America or by any such agency or instrumentality, in each case
maturing within one year from the date of acquisition thereof; (ii)
certificates of deposit, time deposits or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by, or demand
deposit accounts maintained with, any commercial bank or trust company
organized under the laws of the United States of America or any state
thereof or the District of Columbia, each having combined capital and
surplus of at least $250,000,000 and having a rating of A or better from at
least one of Standard and Poor's Ratings Group, a division of The McGraw-
Hill Companies, Inc. or Moody's Investors Service, Inc. (collectively, the
"RATING AGENCIES") or, if both Rating Agencies have issued ratings with
respect to such commercial bank or trust company, from both of the Rating
Agencies; and (iii) open market commercial paper of United States
corporations maturing not later than 270 days after the issuance thereof
and currently having the highest rating obtainable from at least one of or,
if both Rating Agencies have issued ratings with respect to such commercial
paper, both of the Rating Agencies;
(b) the Borrower and its Subsidiaries may make and own Investments in
any money market mutual fund registered under the Investment Company Act of
1940, as amended, having assets in excess of $2,500,000,000;
(c) the Borrower and its Subsidiaries may continue to own the
Investments described in Schedule 7.18(c);
(d) the Borrower and its Subsidiaries may make and own Investments in
any Subsidiary of the Borrower or in any Person which simultaneously
therewith becomes
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a Subsidiary provided that such Person is engaged primarily in the foundry
business or in businesses reasonably related thereto; and
(e) in addition to the Investments permitted by the foregoing
subdivisions (a) through (d) of this Section, the Borrower may make and own
Restricted Investments to the extent permitted by Section 7.19.
For purposes of this Section 7.18, Investments owned by any Person or for
which it is obligated at the time it becomes a Subsidiary shall be deemed to be
made at the time such Person becomes such a Subsidiary.
SECTION 7.19. RESTRICTED PAYMENTS; RESTRICTED INVESTMENTS. The Borrower
will not, directly or indirectly (through a Subsidiary or otherwise), declare,
order, pay, distribute, make, or set apart any sum or property for any
Restricted Payment, and the Borrower will not and will not permit any of its
Subsidiaries to make or become obligated to make any Restricted Investment
unless, both at the time of and immediately after effect has been given to such
proposed action:
(a) no Default or Event of Default shall have occurred and be
continuing; and
(b) the aggregate amount of
(i) all sums and property included in all Restricted Payments
directly or indirectly declared, ordered, paid, made or set apart by
the Borrower or any Subsidiary during the period from and including
March 31, 1994 to and including the date of such proposed action (the
"COMPUTATION PERIOD"), plus
(ii) the aggregate amount of all Restricted Investments (at
original cost) made during the Computation Period (less any net return
of capital through sale or other liquidation thereof or other return
of capital thereon) and all commitments for Restricted Investments
made by the Borrower or any of its Subsidiaries outstanding on such
date
shall not exceed the sum of (x) $8,000,000, PLUS (y) 50% of Consolidated
Net Income for the Computation Period (or minus 100% of Consolidated Net
Income in the case of a deficit) PLUS (z) the net cash proceeds received by
the Borrower from the issuance or sale during the Computation Period of
shares of its capital stock (other than any mandatorily redeemable
preferred stock); and, in any event, the aggregate amount of Restricted
Payments made during any fiscal year shall not exceed 25% of Consolidated
Net Income for the immediately preceding fiscal year.
For all purposes of this Section 7.19, the amount involved in any
Restricted Payment directly or indirectly declared, ordered, paid, distributed,
made or set apart in property, and the amount of any Restricted Investment made
through the transfer of property, shall be deemed to be the greater of (1) the
fair value of such property (as determined in good faith
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by the Board of Directors) and (2) the net book value thereof on the books of
the Borrower or any of its Subsidiaries (as determined in accordance with GAAP),
in each case as determined on the date such Restricted Payment is declared,
ordered, paid, distributed, made or set apart or the date such Restricted
Investment is made or committed to be made, as the case may be.
The Borrower will not pay any dividend which it has not declared nor will
it declare any dividend (other than dividends payable solely in shares of its
common stock) on any shares of any class of its capital stock which is payable
more than 60 days after the date of declaration thereof.
SECTION 7.20. TRANSACTIONS WITH AFFILIATES; REMUNERATION. (a) The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into or be a party to any transaction or arrangement
(including, without limitation, the contribution, transfer, purchase, sale or
exchange of property, or the rendering of any service, or the payment of
management or other service fees) with any Affiliate unless such transaction or
arrangement is otherwise permitted under this Agreement and is entered into
pursuant to the reasonable requirements and in the ordinary course of the
Borrower's or such Subsidiary's business and upon terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary, as the case
may be, than those which might be obtained at the time on an arm's-length basis
from any Person which is not such an Affiliate, PROVIDED that nothing in this
Section 7.20(a) shall prevent the Borrower or any of its Subsidiaries from
making Compensation Payments as and to the extent permitted by Section 7.20(b).
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
make payments, directly or indirectly, of any form of compensation or
remuneration to any of its officers, directors, employees or stockholders,
whether by way of salaries, bonuses, participations in pension or profit sharing
plans, fees under management contracts or for professional services, grants of
stock options, or otherwise, and whether in cash or other property (any of the
foregoing, "COMPENSATION PAYMENTS"), except for Compensation Payments in amounts
which represent, in the Borrower's reasonable business judgment, no more than
reasonable compensation for services actually performed for the benefit of the
Borrower or one of its Subsidiaries.
SECTION 7.21. COMPLIANCE WITH LAWS. Without limiting any of the other
covenants of the Borrower in this Section 7, the Borrower will, and will cause
each of its Subsidiaries to, conduct its business, and otherwise be, in
compliance with all applicable laws, regulations, ordinances and orders of any
governmental or judicial authorities; PROVIDED, HOWEVER, that the Borrower or
any Subsidiary of the Borrower shall not be required to comply with any such
law, regulation, ordinance or order if (x) it shall be contesting such law,
regulation, ordinance or order in good faith by appropriate proceedings and
reserves in conformity with GAAP have been provided therefor on the books of the
Borrower or such Subsidiary, as the case may be, or (y) the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
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SECTION 7.22. FISCAL YEAR. The Borrower shall not have a fiscal year end
on any day other than June 30 without the prior written consent of the Required
Banks.
SECTION 7.23. INTERCREDITOR AGREEMENT. If the Intercreditor Agreement is
terminated as provided therein and the Borrower has incurred any indebtedness in
favor of any bank, financial institution or institutional investor ("NEW
CREDITOR") in connection with the refinancing of any indebtedness subject to the
Intercreditor Agreement, the Borrower will, at its expense, upon the request of
any Bank, cause the New Creditor to enter into a new Intercreditor Agreement,
substantially in the form of the Intercreditor Agreement and otherwise in all
respects reasonably satisfactory in form and substance to the Bank's.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
SECTION 8.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an Event of Default:
(a) default (x) in the payment when due of the principal amount of
any Loan or of any Reimbursement Obligation or (y) for a period of three
(3) days in the payment when due of interest or of any other Obligation;
(b) default by the Borrower in the observance or performance of any
covenant set forth in Section 7.1, 7.6(h), 7.9 through 7.20 or 7.22 hereof;
(c) default by the Borrower or any Subsidiary in the observance or
performance of any provision hereof or of any other Credit Document not
mentioned in (a) or (b) above, which is not remedied within thirty (30)
days after notice thereof to the Borrower or relevant Subsidiary by the
Agent;
(d) (i) failure to pay when due any amount payable under Debt in an
aggregate principal amount of $500,000 or more of the Borrower or any
Subsidiary and such default shall continue beyond any grace period
applicable thereto, or (ii) default shall occur under any indenture,
agreement or other instrument under which any amount payable under Debt in
an aggregate principal amount of $500,000 or more may be issued or created
and such default shall continue for a period of time sufficient to permit
the holder or beneficiary of such amount payable under Debt or a trustee
therefor to cause the acceleration of the maturity of any such amount
payable under Debt or any mandatory unscheduled prepayment, purchase or
funding thereof;
(e) any representation or warranty made herein or in any other Credit
Document by the Borrower or any Subsidiary, or in any statement or
certificate furnished pursuant hereto or pursuant to any other Credit
Document by the Borrower or any Subsidiary, or in connection with any
Credit Document, proves untrue in any material respect as of the date of
the issuance or making, or deemed making or issuance, thereof;
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(f) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i)-(v) above, or (vii) fail to contest in good faith
any appointment or proceeding described in Section 8.1(g) hereof;
(g) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any Subsidiary or any
substantial part of any of their Property, or a proceeding described in
Section 8.1(f)(v) shall be instituted against the Borrower or any
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty (60) days;
(h) the Borrower or any Subsidiary shall fail within thirty (30) days
to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $500,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith in a manner that stays
execution thereon; or
(i) any Borrower Group Member shall fail to pay when due an amount or
amounts aggregating in excess of $400,000 which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $400,000 (collectively, a "MATERIAL PLAN") shall
be filed under Title IV of ERISA by any Borrower Group Member, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding
shall be instituted by a fiduciary of any Material Plan against any
Borrower Group Member to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within thirty (30) days
thereafter; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated.
SECTION 8.2. NON-BANKRUPTCY DEFAULTS. When any Event of Default other
than those described in subsections (f) or (g) of Section 8.1 hereof has
occurred and is continuing, the Agent shall, by notice to the Borrower: (a) if
so directed by the Required Banks, terminate the remaining Commitments and all
other obligations of the Banks hereunder on the date stated in such notice
(which may be the date thereof); (b) if so directed by the Required
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Banks, declare the principal of and the accrued interest on all outstanding
Notes to be forthwith due and payable and thereupon all outstanding Notes,
including both principal and interest thereon, shall be and become immediately
due and payable together with all other amounts payable under the Credit
Documents without further demand, presentment, protest or notice of any kind ;
(c) if so directed by the Required Banks and if permitted by the terms of a
Letter of Credit, give notice of the occurrence of an Event of Default hereunder
to the beneficiary of such Letter of Credit directing such beneficiary to take
such action as may be permitted in order to draw up to the amount available to
be drawn under such Letter of Credit and terminate such Letter of Credit; and
(d) if so directed by the Required Banks, demand that the Borrower immediately
pay to the Agent the full amount then available for drawing under each or any
Letter of Credit, and the Borrower agrees to immediately make such payment and
acknowledges and agrees that the Banks would not have an adequate remedy at law
for failure by the Borrower to honor any such demand and that the Agent, for the
benefit of the Banks, shall have the right to require the Borrower to
specifically perform such undertaking whether or not any drawings or other
demands for payment have been made under any Letter of Credit. The Agent, after
giving notice to the Borrower pursuant to Section 8.1(c) or this Section 8.2,
shall also promptly send a copy of such notice to the other Banks, but the
failure to do so shall not impair or annul the effect of such notice.
SECTION 8.3. BANKRUPTCY DEFAULTS. When any Event of Default described in
subsections (f) or (g) of Section 8.1 hereof has occurred and is continuing, (a)
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Credit Documents without presentment,
demand, protest or notice of any kind, and the obligation of the Banks to extend
further credit pursuant to any of the terms hereof shall immediately terminate;
(b) the Borrower shall immediately pay to the Agent the full amount then
available for drawing under all outstanding Letters of Credit, the Borrower
acknowledging that the Banks would not have an adequate remedy at law for
failure by the Borrower to honor any such demand and that the Banks, and the
Agent on their behalf, shall have the right to require the Borrower to
specifically perform such undertaking whether or not any draws have been made
under any of the Letters of Credit; and (c) if so directed by the Required Banks
and if permitted by the terms of a Letter of Credit, the Agent shall give notice
of the occurrence of an Event of Default hereunder to the beneficiary of such
Letter of Credit directing such beneficiary to take such action as may be
permitted in order to draw up to the amount available to be drawn under such
Letter of Credit and terminate such Letter of Credit.
SECTION 8.4. COLLATERAL FOR UNDRAWN LETTERS OF CREDIT. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 8.2 or 8.3 above, the Borrower shall
forthwith pay the amount required to be so prepaid, to be held by the Agent as
provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held by
the Agent in a separate collateral account (such account, and the credit
balances, properties and any investments from time to time held therein, and any
substitutions for such account, any certificate of deposit or other instrument
evidencing any of the foregoing and all proceeds of
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and earnings on any of the foregoing being collectively called the "ACCOUNT") as
security for, and for application by the Agent (to the extent available) to, the
reimbursement of any payment under any Letter of Credit then or thereafter made
by the Agent, and to the payment of the unpaid balance of any Loans and all
other Obligations. The Account shall be held in the name of and subject to the
exclusive dominion and control of the Agent for the benefit of the Agent and the
Banks. If and when requested by the Borrower, the Agent shall invest funds held
in the Account from time to time in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America with a remaining maturity of one year or less, PROVIDED that
the Agent is irrevocably authorized to sell investments held in the Account when
and as required to make payments out of the Account for application to amounts
due and owing from the Borrower to the Agent or Banks; PROVIDED, HOWEVER, that
if (i) the Borrower shall have made payment of all such obligations referred to
in subsection (a) above, (ii) all relevant preference or other disgorgement
periods relating to the receipt of such payments have passed, and (iii) no
Letters of Credit, Commitments, Loans or other obligations remain outstanding
hereunder, then the Agent shall repay to the Borrower any remaining amounts held
in the Account.
SECTION 8.5. NOTICE OF DEFAULT. The Agent shall give notice to the
Borrower under Section 8.1(c) hereof promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
SECTION 8.6. EXPENSES. The Borrower agrees to pay to the Agent and each
Bank, and any other holder of any Note outstanding hereunder, all expenses
incurred or paid by the Agent and such Bank or any such holder, including
reasonable attorneys' fees and court costs, in connection with any Default or
Event of Default by the Borrower hereunder or in connection with the enforcement
of any of the Credit Documents.
SECTION 9. CHANGE IN CIRCUMSTANCES.
SECTION 9.1. CHANGE OF LAW. Notwithstanding any other provisions of this
Agreement or any Note, if at any time any change in applicable law or regulation
or in the interpretation thereof makes it unlawful for any Bank to make or
continue to maintain Eurodollar Loans or to give effect to its obligations as
contemplated hereby, such Bank shall promptly give notice thereof to the
Borrower and such Bank's obligations to make or maintain Eurodollar Loans under
this Agreement shall terminate until it is no longer unlawful for such Bank to
make or maintain Eurodollar Loans. The Borrower shall prepay on demand the
outstanding principal amount of any such affected Eurodollar Loans, together
with all interest accrued thereon and all other amounts then due and payable to
such Bank under this Agreement; PROVIDED, HOWEVER, subject to all of the terms
and conditions of this Agreement, the Borrower may then elect to borrow the
principal amount of the affected Eurodollar Loans from such Bank by means of
Domestic Rate Loans from such Bank that shall not be made ratably by the Banks
but only from such affected Bank.
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SECTION 9.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR
INADEQUACY OF, LIBOR. If on or prior to the first day of any Interest Period
for any Borrowing of Eurodollar Loans:
(a) the Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the eurodollar interbank
market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Agent that LIBOR as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Eurodollar Loans for such Interest Period,
then the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Eurodollar Loans shall be suspended.
SECTION 9.3. INCREASED COST AND REDUCED RETURN. (a) If, on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any tax, duty
or other charge with respect to its Eurodollar Loans, its Note, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement
Obligations owed to it or its obligation to make Eurodollar Loans, issue a
Letter of Credit, or to participate therein, or shall change the basis of
taxation of payments to any Bank (or its Lending Office) of the principal
of or interest on its Eurodollar Loans, Letter(s) of Credit, or
participations therein or any other amounts due under this Agreement in
respect of its Eurodollar Loans, Letter(s) of Credit, or participations
therein, any Reimbursement Obligations owed to it, or its obligation to
make Eurodollar Loans, issue a Letter of Credit, or acquire participations
therein (except for changes in the rate of tax on the overall net income of
such Bank or its Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurodollar Loans any such
requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, any Bank (or its Lending Office) or shall impose on any Bank (or its
Lending Office) or on the interbank market any other condition affecting
its Eurodollar Loans, its Note, its Letter(s) of Credit, or its
participation in any thereof,
-47-
any Reimbursement Obligation owed to it, or its obligation to make
Eurodollar Loans, to issue a Letter of Credit, or to participate therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Note with respect thereto, by an amount deemed
by such Bank to be material, then, within fifteen (15) days after demand by such
Bank (with a copy to the Agent), the Borrower shall be obligated to pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If, after the date hereof, any Bank or the Agent shall have determined
that the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein (including, without limitation, any revision in
the Final Risk-Based Capital Guidelines of the Board of Governors of the Federal
Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of
the Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in
any other applicable capital rules heretofore adopted and issued by any
governmental authority), or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital, or on the capital of any corporation controlling such
Bank, as a consequence of its obligations hereunder to a level below that which
such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time to
time, within fifteen (15) days after demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction.
(c) Each Bank that determines to seek compensation under this Section 9.3
shall notify the Borrower and the Agent of the circumstances that entitle the
Bank to such compensation pursuant to this Section 9.3 and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section 9.3 and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 9.4. LENDING OFFICES. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "LENDING OFFICE") for each type of
Loan available hereunder or at such other
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of its branches, offices or affiliates as it may from time to time elect and
designate in a written notice to the Borrower and the Agent.
SECTION 9.5. DISCRETION OF BANK AS TO MANNER OF FUNDING. Notwithstanding
any other provision of this Agreement, each Bank shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan through the purchase of deposits in the
eurodollar interbank market having a maturity corresponding to such Loan's
Interest Period and bearing an interest rate equal to LIBOR for such Interest
Period.
SECTION 10. THE AGENT.
SECTION 10.1. APPOINTMENT AND AUTHORIZATION OF AGENT. Each Bank hereby
appoints Harris Trust and Savings Bank as the Agent under the Credit Documents
and hereby authorizes the Agent to take such action as Agent on its behalf and
to exercise such powers under the Credit Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto.
SECTION 10.2. AGENT AND ITS AFFILIATES. The Agent shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Bank and may exercise or refrain from exercising 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 Affiliate of the Borrower as if it were not the Agent under the Credit
Documents. The term Bank as used herein and in all other Credit Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank. References in Section 1 hereof to the Agent's
Loans, or to the amount owing to the Agent for which an interest rate is being
determined, refer to the Agent in its individual capacity as a Bank.
SECTION 10.3. ACTION BY AGENT. In the event that the Agent receives from
the Borrower a written notice of an Event of Default pursuant to Section 7.6(h)
hereof, the Agent shall promptly give each of the Banks written notice thereof.
The obligations of the Agent under the Credit Documents are only those expressly
set forth therein. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action hereunder with respect to any Default
or Event of Default, except as expressly provided in Sections 8.2 and 8.5. In
no event, however, shall the Agent be required to take any action in violation
of applicable law or of any provision of any Credit Document, and the Agent
shall in all cases be fully justified in failing or refusing to act hereunder or
under any other Credit Document unless it shall be first indemnified to its
reasonable satisfaction by the Banks against any and all costs, expense, and
liability which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall be entitled to assume that no Default or Event
of Default exists unless notified to the contrary by a Bank or the Borrower. In
all cases in which this Agreement and the other Credit Documents do not
-49-
require the Agent to take certain actions, the Agent shall be fully justified in
using its discretion in failing to take or in taking any action hereunder and
thereunder.
SECTION 10.4. CONSULTATION WITH EXPERTS. The Agent may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 10.5. LIABILITY OF AGENT; CREDIT DECISION. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for any
action taken or not taken by it in connection with the Credit Documents (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement, any other Credit Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrower contained herein or in any other Credit Document;
(iii) the satisfaction of any condition specified in Section 6 hereof, except
receipt of items required to be delivered to the Agent; or (iv) the validity,
effectiveness, genuineness, enforceability, perfection, value, worth or
collectibility hereof or of any other Credit Document or of any other documents
or writing furnished in connection with any Credit Document; and the Agent makes
no representation of any kind or character with respect to any such matter
mentioned in this sentence. The Agent may execute any of its duties under any
of the Credit Documents by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Banks, the Borrower or any other Person for
the default or misconduct of any such agents or attorneys-in-fact selected with
reasonable care. The Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, other document or statement (whether
written or oral) believed by it to be genuine or to be sent by the proper party
or parties. In particular and without limiting any of the foregoing, the Agent
shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received by it under the Credit
Documents. The Agent may treat the owner of any Note as the holder thereof
until written notice of transfer shall have been filed with the Agent signed by
such owner in form satisfactory to the Agent. Each Bank acknowledges that it
has independently and without reliance on the Agent or any other Bank, and based
upon such information, investigations and inquiries as it deems appropriate,
made its own credit analysis and decision to extend credit to the Borrower in
the manner set forth in the Credit Documents. It shall be the responsibility of
each Bank to keep itself informed as to the creditworthiness of the Borrower,
and the Agent shall have no liability to any Bank with respect thereto.
SECTION 10.6. COSTS AND EXPENSES. Each Bank agrees to reimburse the Agent
for all out-of-pocket costs and expenses suffered or incurred by the Agent or
any security trustee in performing its duties hereunder and under the other
Credit Documents or in the exercise of any right or power imposed or conferred
upon the Agent hereby or thereby (except to the extent that such costs and
expenses arise out of the Agent's or such security trustee's gross negligence or
willful misconduct), to the extent that the Agent is not promptly reimbursed
-50-
for the same by the Borrower all such costs and expenses to be borne by the
Banks ratably in accordance with their respective Percentages.
SECTION 10.7. INDEMNITY. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by it or by any
security trustee under any Credit Document or in connection with the
transactions contemplated thereby, regardless of when asserted or arising,
except to the extent they are promptly reimbursed for the same by the Borrower
and except to the extent that any event giving rise to a claim was caused by the
gross negligence or willful misconduct of the party seeking to be indemnified.
The obligations of the Banks under this Section 10.7 and under Section 10.6
above shall survive termination of this Agreement.
SECTION 10.8. RESIGNATION OF AGENT AND SUCCESSOR AGENT. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of the Agent, the Required Banks shall have
the right to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Required Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be any Bank hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Agent under the Credit Documents, and the retiring Agent shall be
discharged from its duties and obligations thereunder. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 10 and
all protective provisions of the other Credit Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
SECTION 11. MISCELLANEOUS.
SECTION 11.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING.
Except as otherwise required by law and subject to Section 11.1(b) hereof, each
payment by the Borrower under this Agreement or the other Credit Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required,
the Borrower shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be necessary to
ensure that the net amount actually received by each Bank and the Agent free and
clear of such taxes (including such taxes on such additional amount) is equal to
the amount which that Bank or the Agent (as the case may be) would have received
had such withholding not been made. If the Agent or any Bank pays any amount in
respect of any such taxes, penalties or interest the Borrower shall reimburse
the Agent or that Bank for that payment on demand in the currency in which
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such payment was made. If the Borrower pays any such taxes, penalties or
interest, it shall deliver official tax receipts evidencing that payment or
certified copies thereof to the Bank or Agent on whose account such withholding
was made (with a copy to the Agent if not the recipient of the original) on or
before the thirtieth day after payment.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Agent on or before the earlier of the date the
initial Borrowing is made hereunder and thirty (30) days after the date hereof,
two duly completed and signed copies of either Form 1001 (relating to such Bank
and entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Bank, including fees, pursuant to the Credit
Documents and the Loans) or Form 4224 (relating to all amounts to be received by
such Bank, including fees, pursuant to the Credit Documents and the Loans) of
the United States Internal Revenue Service. Thereafter and from time to time,
each Bank shall submit to the Borrower and the Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) notified by the Borrower, directly or through the
Agent, to such Bank and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Bank, including fees, pursuant to
the Credit Documents or the Loans.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or Agent any form or certificate that such Bank is obligated to submit
pursuant to subsection (b) of this Section 11.1. or that such Bank is required
to withdraw or cancel any such form or certificate previously submitted or any
such form or certificate otherwise becomes ineffective or inaccurate, such Bank
shall promptly notify the Borrower and Agent of such fact and the Bank shall to
that extent not be obligated to provide any such form or certificate and will be
entitled to withdraw or cancel any affected form or certificate, as applicable.
SECTION 11.2. NO WAIVER OF RIGHTS. No delay or failure on the part of the
Agent or any Bank or on the part of the holder or holders of any Note in the
exercise of any power or right under any Credit Document shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
power or right, and the rights and remedies hereunder of the Agent, the Banks
and the holder or holders of any Notes are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
SECTION 11.3. NON-BUSINESS DAY. If any payment of principal or interest
on any Loan or of any other Obligation shall fall due on a day which is not a
Business Day, interest or fees (as applicable) at the rate, if any, such Loan or
other Obligation bears for the period prior to maturity shall continue to accrue
on such Obligation from the stated due date thereof to and including the next
succeeding Business Day, on which the same shall be payable.
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SECTION 11.4. DOCUMENTARY TAXES. The Borrower agrees that it will pay any
documentary, stamp or similar taxes payable in respect to any Credit Document,
including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made and whether or not any credit is
then in use or available hereunder.
SECTION 11.5. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Credit Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
SECTION 11.6. SURVIVAL OF INDEMNITIES. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 1.11, Section 9.3 and Section 11.15 hereof, shall survive
the termination of this Agreement and the other Credit Documents and the payment
of the Loans and all other Obligations.
SECTION 11.7. SHARING OF SET-OFF. Each Bank agrees with each other Bank a
party hereto that if such Bank shall receive and retain any payment, whether by
set-off or application of deposit balances or otherwise ("SET-OFF"), on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such obligations then outstanding to the Banks, then such Bank
shall purchase for cash at face value, but without recourse, ratably from each
of the other Banks such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Banks (or interest therein) as
shall be necessary to cause such Bank to share such excess payment ratably with
all the other Banks; PROVIDED, HOWEVER, that if any such purchase is made by any
Bank, and if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest. For purposes of this
Section 11.7, amounts owed to or recovered by, the Agent in connection with
Reimbursement Obligations in which Banks have been required to fund their
participation shall be treated as amounts owed to or recovered by the Agent as a
Bank hereunder.
SECTION 11.8. NOTICES. Except as otherwise specified herein, all notices
under the Credit Documents shall be in writing (including cable, telecopy or
telex) and shall be given to a party hereunder at its address, telecopier number
or telex numbers set forth below or such other address, telecopier number or
telex as such party may hereafter specify by notice to the Agent and the
Borrower, given by courier, by United States certified or registered mail, or by
other telecommunication device capable of creating a written record of such
notice and its receipt. Notices under the Credit Documents to the Banks and the
Agent shall be addressed to their respective addresses, telecopier, telex, or
telephone numbers set forth on the signature pages hereof, and to the Borrower
to:
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Atchison Casting Corporation
400 South 4th Street
Atchison, Kansas 66002-0188
Telecopier: (913) 367-2130
Attention: Chief Financial Officer
Each such notice, request or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 11.8 or on the signature pages hereof and a
confirmation of receipt of such telecopy has been received by the sender,
(ii) if given by telex, when such telex is transmitted to the telex number
specified in this Section 11.8 or on the signature pages hereof and the
answerback is received by sender, (iii) if given by courier, when delivered,
(iv) if given by mail, five (5) days after such communication is deposited in
the mail, registered with return receipt requested, addressed as aforesaid or
(v) if given by any other means, when delivered at the addresses specified in
this Section 11.8 or on the signature pages hereof; PROVIDED THAT any notice
given pursuant to Section 1 hereof shall be effective only upon receipt.
SECTION 11.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by the different parties on different counterparts, each of
which when executed shall be deemed an original but all such counterparts taken
together shall constitute one and the same instrument.
SECTION 11.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of each of the Banks and the benefit of their respective successors and assigns,
including any subsequent holder of any Note. The Borrower may not assign any of
its rights or obligations under any Credit Document without the written consent
of all of the Banks.
SECTION 11.11. PARTICIPANTS AND NOTE ASSIGNEES. Each Bank shall have the
right at its own cost to grant participations (to be evidenced by one or more
agreements or certificates of participation) in the Loans made and Reimbursement
Obligations and/or Commitment held by such Bank at any time and from time to
time, and to assign its rights under such Loans and Reimbursement Obligations,
or the Note evidencing such Loans, and under the other Credit Documents, to one
or more other Persons with the prior written consent of the Borrower, which
consent will not be unreasonably withheld; PROVIDED THAT no such participation
or assignment shall relieve any Bank of any of its obligations under this
Agreement, and, PROVIDED, FURTHER that no such assignee or participant shall
have any rights under this Agreement except as provided in this Section 11.11,
and the Agent shall have no obligation or responsibility to such participant or
assignee, except that nothing herein provided is intended to affect the rights
of an assignee of a Note to enforce the Note assigned. Any agreement pursuant
to which such participation or assignment of Obligations or a Note or the rights
thereunder is granted shall provide that the granting Bank shall retain the sole
right and responsibility to enforce the obligations of the Borrower under this
Agreement and the other Credit Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Credit Documents, except that such agreement may provide that such Bank will not
agree to any modification,
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amendment or waiver of the Credit Documents described in clause (i) of
Section 11.13 hereof without the consent of such participant or assignee. Any
party to which such a participation or assignment has been granted shall have
the benefits of Section 1.11 and Section 9.3 hereof. Any Bank assigning any
Note hereunder shall give prompt notice thereof to the Borrower and the Agent,
who shall in each case only be required to treat such assignee of a Note as the
holder thereof after receipt of such notice. The Borrower authorizes each Bank
to disclose to any purchaser or prospective purchaser of an interest in its
Loans, Reimbursement Obligations owed to it or its Commitment under this
Section 11.11 any financial or other information pertaining to the Borrower.
SECTION 11.12. ASSIGNMENT OF COMMITMENTS BY BANKS. Each Bank shall have
the right at any time, with the prior consent of the Borrower and Agent, which
shall not be unreasonably withheld, to sell, assign, transfer or negotiate all
or any part of its Commitment (including the same percentage of its Note,
outstanding Loans and Reimbursement Obligations owed to it) to one or more
Persons, provided that such assignment shall be of a fixed percentage (and not
by its terms a varying percentage) of the assigning Bank's Commitment, provided
further that each assignment shall be for an amount of at least $5,000,000. Any
such assignee shall become a Bank for all purposes hereunder to the extent of
the Commitment it assumes and agrees to be bound by the terms of this Agreement
and the Intercreditor Agreement and the assigning Bank shall be released from
its obligations, and will have released its rights, under the Credit Documents
to the extent of such assignment. The Borrower and each Guarantor authorizes
each Bank to disclose to any purchaser or prospective purchaser of an interest
in its Loans, Reimbursement Obligations owed to it or its Commitment under this
Section 11.12 any financial or other information pertaining to the Borrower and
each Subsidiary.
SECTION 11.13. AMENDMENTS. Any provision of the Credit Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrower, (b) the Required Banks, and (c) if the rights or
duties of the Agent are affected thereby, the Agent; provided that:
(i) no amendment or waiver pursuant to this Section shall
(A) increase the Commitment of any Bank without the consent of such Bank,
or (B) reduce the amount of or postpone any fixed date for payment of any
principal of or interest on any Loan or Reimbursement Obligation or of any
fee payable hereunder without the consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section shall, unless
signed by each Bank, change the provisions of this Section, the definition
of Required Banks, or any condition precedent set forth in Section 6 hereof
or the provisions of Sections 8.1(f), 8.1(g) or 8.3, or 9, or release any
Subsidiary from its obligations under a Guaranty Agreement, or affect the
number of Banks required to take any action hereunder.
SECTION 11.14. HEADINGS. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
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SECTION 11.15. LEGAL FEES, OTHER COSTS AND INDEMNIFICATION. The Borrower
agrees to pay the reasonable fees and disbursements of Messrs. Chapman and
Cutler, counsel to the Agent, in connection with the preparation and execution
of the Credit Documents, and any amendment, waiver or consent related hereto,
whether or not the transactions contemplated herein are consummated. The
Borrower further agrees to indemnify each Bank, the Agent, and any security
trustee and their respective directors, officers and employees, against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor, whether or not the indemnified Person is a party thereto) which any of
them may pay or incur arising out of or relating to any Credit Document or any
of the transactions contemplated thereby or the direct or indirect application
or proposed application of the proceeds of any Loan, other than those which
arise from the gross negligence or willful misconduct of the party claiming
indemnification. The Borrower, upon demand by the Agent or a Bank at any time,
shall reimburse the Agent or Bank for any legal or other expenses incurred in
connection with investigating or defending against any of the foregoing except
if the same is directly due to the gross negligence or willful misconduct of the
party to be indemnified.
SECTION 11.16. SET OFF. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Bank and each subsequent holder of any
Note is hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts, and in whatever currency denominated) and any other
Indebtedness at any time held or owing by that Bank or that subsequent holder to
or for the credit or the account of the Borrower, whether or not matured,
against and on account of the obligations and liabilities of the Borrower to
that Bank or that subsequent holder under the Credit Documents, including, but
not limited to, all claims of any nature or description arising out of or
connected with the Credit Documents, irrespective of whether or not (a) that
Bank or that subsequent holder shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or Notes and other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
SECTION 11.17. ENTIRE AGREEMENT. The Credit Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior or contemporaneous agreements, whether written or oral,
with respect thereto are superseded hereby.
SECTION 11.18. GOVERNING LAW. This Agreement and the other Credit
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois.
SECTION 11.19. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THE
BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
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DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE
COURT SITTING IN THE CITY OF CHICAGO FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER, THE AGENT, AND EACH BANK HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of May 24, 1996
ATCHISON CASTING CORPORATION
By /s/ Kevin T. McDermed
---------------------------------
Name KEVIN T. MCDERMED
-------------------------------
Title V.P. & Treasurer
------------------------------
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Accepted and Agreed to as of the day and year last above written.
Address and Amount of Commitments:
Address: HARRIS TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as
Agent
111 West Monroe Street
Chicago, Illinois 60690
Attn: Mr. Len Meyer
Telecopy: (312) 461-2591 By /s/ Len E. Meyer
Telephone: (312) 461-7611 ----------------------------
Name LEN E. MEYER
--------------------------
Title Vice President
-------------------------
Commitment: $30,000,000
Lending Offices:
Domestic Rate Loans:
111 West Monroe Street
Chicago, Illinois 60690
Attn: Mr. Len Meyer
Eurodollar Loans:
111 West Monroe Street
Chicago, Illinois 60690
Attn: Mr. Len Meyer
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Address: COMMERCE BANK, N.A.
1000 Walnut Street
Kansas City, Missouri 64141
Mail Stop BB 17-1
Attn: Marty King
By /s/ Jeffrey R. Gray
Telecopy: (816) 234-7290 ----------------------------
Telephone: (816) 234-2079 Name JEFFREY R. GRAY
--------------------------
Title VICE PRESIDENT
-------------------------
Commitment: $10,000,000
Lending Offices:
Domestic Rate Loans:
1000 Walnut
Kansas City, Missouri 64141
Eurodollar Loans:
1000 Walnut
Kansas City, Missouri 64141
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