EXHIBIT 4.11
CREDIT AGREEMENT
Dated as of December 16, 1997
among
HOWMET CORPORATION,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
ABN AMRO BANK, N.V.
and
BANKERS TRUST COMPANY
As Co-Documentation Agents
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Swing Line Lender, LC Issuer and Agent
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS 1
ARTICLE II: THE CREDITS 18
2.1. Commitment 18
2.2 Swing Line Loans 19
2.3. Required Payments; Termination 20
2.4. Ratable Loans 21
2.5. Types of Advances 21
2.6. Facility Fee; Reductions in Aggregate
Commitment 21
2.7. Minimum Amount of Each Advance 21
2.8. Optional Principal Payments 21
2.9. Method of Selecting Types and Interest
Periods for New Advances 21
2.10. Conversion and Continuation of Outstanding
Advances 22
2.11. Changes in Interest Rate, Etc. 22
2.12. Rates Applicable After Default 23
2.13. Method of Payment 23
2.14. Noteless Agreement; Evidence of Indebtedness 24
2.15. Telephonic Notices 24
2.16. Interest Payment Dates; Interest and Fee
Basis 24
2.17. Notification of Advances, Interest Rates,
Prepayments and Commitment
Reductions 25
2.18. Lending Installations 25
2.19. Non-Receipt of Funds by the Agent 25
2.20 Replacement of Certain Lenders 26
ARTICLE III: THE LETTER OF CREDIT FACILITY 27
3.1 Obligation to Issue 27
3.2 Transitional Provision 27
3.3 Types and Amounts 27
3.4 Conditions. 27
3.5 Procedure for Issuance of Facility LCs 28
3.6 Facility LC Participation 28
3.7 Reimbursement Obligation 29
3.8 Cash Collateral 29
3.9 Facility LC Fees 30
3.10 LC Issuer Reporting Requirements. 30
3.11 Indemnification; Exoneration 30
ARTICLE IV: YIELD PROTECTION; TAXES 32
4.1. Yield Protection 32
4.2. Changes in Capital Adequacy Regulations 32
4.3. Availability of Types of Advances 33
4.4. Funding Indemnification 33
4.5. Taxes 34
4.6. Lender Statements; Survival of Indemnity 35
ARTICLE V: CONDITIONS PRECEDENT 36
5.1. Initial Credit Extensions 36
5.2. Each Credit Extension 37
ARTICLE VI: REPRESENTATIONS AND WARRANTIES 38
6.1. Existence and Standing 38
6.2. Authorization and Validity 38
6.3. No Conflict; Government Consent 39
6.4. Financial Statements 39
6.5. Material Adverse Change 39
6.6. Taxes 39
6.7. Litigation and Contingent Obligations 40
6.8. Subsidiaries 40
6.9. ERISA; Foreign Pension Plan Matters 40
6.10. Accuracy of Information 40
6.11. Regulation U 41
6.12. Material Agreements 41
6.13. Compliance With Laws 41
6.14. Ownership of Properties 41
6.15. Plan Assets; Prohibited Transactions 41
6.16. Environmental Matters. 42
6.17. Investment Company Act 42
6.18. Public Utility Holding Company Act 42
ARTICLE VII: COVENANTS 42
7.1. Financial Reporting 42
7.2. Use of Proceeds 44
7.3. Notice of Default 44
7.4. Conduct of Business 44
7.5. Taxes 45
7.6. Insurance 45
7.7. Compliance with Laws 45
7.8. Maintenance of Properties 45
7.9. Inspection 45
7.10. Indebtedness 45
7.11. Merger 46
7.12. Sale of Assets 46
7.13. Investments and Acquisitions; New Subsidiaries 47
7.14. Liens 49
7.15. Affiliates 53
7.16. Incorporation of Senior Subordinated Note
Indenture Restrictions 53
7.17. Subordinated Indebtedness 53
7.18. Financial Contracts 53
7.19. Pledge Agreements 54
7.20. Financial Covenants 54
7.20.1. Interest Coverage Ratio 54
7.20.2. Leverage Ratio 54
7.20.3. Minimum Net Worth 54
7.21 Subsidiary Covenants 54
ARTICLE VIII: DEFAULTS 55
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND
REMEDIES 57
9.1. Acceleration 57
9.2. Amendments 58
9.3. Preservation of Rights 59
ARTICLE X: GENERAL PROVISIONS 59
10.1. Survival of Representations 59
10.2. Governmental Regulation 60
10.3. Headings 60
10.4. Entire Agreement 60
10.5. Several Obligations; Benefits of this
Agreement 60
10.6. Expenses; Indemnification 60
10.7. Numbers of Documents 61
10.8. Accounting 61
10.9. Severability of Provisions 61
10.10. Nonliability of Lenders 61
10.11. Confidentiality 62
10.12. Nonreliance 62
ARTICLE XI: THE AGENT 62
11.1. Appointment; Nature of Relationship 62
11.2. Powers 63
11.3. General Immunity 63
11.4. No Responsibility for Loans, Recitals, etc. 63
11.5. Action on Instructions of Lenders 63
11.6. Employment of Agents and Counsel 64
11.7. Reliance on Documents; Counsel 64
11.8. Agent's Reimbursement and Indemnification 64
11.9. Notice of Default 65
11.10. Rights as a Lender 65
11.11. Lender Credit Decision 65
11.12. Successor Agent 65
11.13. Agent's Fee. 66
11.14. Delegation to Affiliates. 66
11.15. Execution of Collateral Documents 66
11.16. Collateral and Guaranty Releases 66
ARTICLE XII: SETOFF; RATABLE PAYMENTS 67
12.1. Setoff 67
12.2. Ratable Payments 67
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS
13.1. Successors and Assigns 67
13.2. Participations 68
13.2.1 Permitted Participants; Effect 68
13.2.2. Voting Rights 68
13.2.3. Benefit of Setoff 68
13.3. Assignments 68
13.3.1. Permitted Assignments 69
13.3.2. Effect; Effective Date 69
13.4. Dissemination of Information 69
13.5. Tax Treatment 70
ARTICLE XIV: NOTICES 70
14.1. Notices 70
14.2. Change of Address 70
ARTICLE XV: COUNTERPARTS 70
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OFJURY TRIAL 70
16.1. CHOICE OF LAW 71
16.2. CONSENT TO JURISDICTION 71
(A) EXCLUSIVE JURISDICTION 71
(B) OTHER JURISDICTIONS 71
16.3. WAIVER OF JURY TRIAL 71
SCHEDULES AND EXHIBITS
PRICING SCHEDULE
COMMITMENT SCHEDULE
SCHEDULE 1 Existing LCs
SCHEDULE 2 Litigation and Contingent Obligations
SCHEDULE 3 Subsidiaries
SCHEDULE 4 Indebtedness and Liens
SCHEDULE 5 Investments
SCHEDULE 6 Transactions with Affiliates
EXHIBIT A Form of Note
EXHIBIT B Form of Pledge Agreement
EXHIBIT C Form of Subsidiary Guaranty
EXHIBIT D Form of Swing Line Note
EXHIBIT E Form of Assignment Agreement
EXHIBIT F Money Transfer Instructions
EXHIBIT G Form of Compliance Certificate
CREDIT AGREEMENT
This Agreement, dated as of December 16, 1997, is among Howmet Corporation,
a Delaware corporation, the Lenders and The First National Bank of Chicago, as a
LC Issuer, the Swing Line Lender, and the Agent. The parties hereto agree as
follows:
ARTICLE I: DEFINITIONS
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business concern or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"ADVANCE" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Syndicated Loans made
on the same Borrowing Date (or date of conversion or continuation) by the
Lenders to the Borrower of the same Type and, in the case of Eurodollar
Advances, for the same Interest Period.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"AGENT" means The First National Bank of Chicago in its capacity as
contractual representative of the Lenders pursuant to Article XI, and not in its
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individual capacity as a Lender, and any successor Agent appointed pursuant to
Article XI.
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"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"AGGREGATE OUTSTANDING LC EXPOSURE" means, as of any day, the aggregate of
the Outstanding LC Exposure of all the Lenders.
"AGGREGATE OUTSTANDING CREDIT EXPOSURE" means, as of any day, the aggregate
of the Outstanding Credit Exposure of all the Lenders.
"AGREEMENT" means this credit agreement, as it may be amended, modified,
supplemented or restated and in effect from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"APPLICABLE FACILITY FEE RATE" means, at any time, the percentage rate per
annum at which facility fees are accruing on the Aggregate Commitment (without
regard to usage) at such time as set forth in the Pricing Schedule.
"APPLICABLE LC FEE PERCENTAGE" means, at any time, the percentage rate per
annum equal to the Applicable Margin with respect to Eurodollar Advances in
effect on such date as set forth in the Pricing Schedule.
"APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"ARRANGER" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"AUTHORIZED OFFICER" means any of the President, any Vice President, the
Chief Financial Officer or the Treasurer of the Borrower, acting singly.
"AVAILABLE AGGREGATE COMMITMENT" means, for any day, the Aggregate
Commitment then in effect minus the sum of (i) the aggregate outstanding
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principal amount of the Advances; (ii) the aggregate outstanding principal
amount of the Swing Line Loans; and (iii) the Aggregate Outstanding LC
Exposure.
"BLADE" means, Blade Receivables Corporation, a Nevada corporation, and its
successors and assigns.
"BORROWER" means Howmet Corporation, a Delaware corporation, and its
successors and assigns.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING NOTICE" is defined in Section 2.9.
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"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"CAPITALIZED LEASE" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"CASH EQUIVALENT INVESTMENTS" means, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
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the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) time deposits and certificates
of deposit of any investment grade commercial bank having, or which is the
principal banking subsidiary of an investment grade bank holding company
organized under the laws of the United States, any State thereof, the District
of Columbia or any foreign jurisdiction having capital, surplus and undivided
profits aggregating in excess of $200,000,000, with maturities of not more than
one year from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, provided that such repurchase
obligations are secured by a first priority security interest in such underlying
securities which have, on the date of purchase thereof, a fair market value of
at least 100% of the amount of the repurchase obligations, (iv) commercial paper
issued by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Group or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc. and in each case maturing
not more than one year after the date of acquisition by such Person, (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv) above
and (vi) demand deposit accounts maintained in the ordinary course of business.
"CHANGE" is defined in Section 4.2.
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"CHANGE IN CONTROL" means:
(i) Thiokol Corporation shall cease to own, free and clear of
all Liens or other encumbrances, on a fully diluted basis, at least 51% of
the combined voting power of the outstanding capital stock of Howmet
International, Inc. ordinarily having the right to vote at an election of
directors, or shall not have the right to elect, or shall for any reason
not have elected, a majority of the directors of Howmet International,
Inc.;
(ii) during any period of twelve consecutive calendar months,
individuals (a) who were directors of Howmet International, Inc. on the
first day of such period, or (b) whose election or nomination for election
to the board of directors of Howmet International, Inc. was recommended or
approved by at least a majority of the directors then still in office who
were directors of Howmet International, Inc. on the first day of such
period, or whose election or nomination for election was so approved, shall
cease to constitute a majority of the board of directors of Howmet
International, Inc. ;
(iii) Howmet International, Inc. shall cease to own, free and
clear of all Liens or other encumbrances, on a fully diluted basis, 100% of
the outstanding capital stock of Howmet Holdings Corporation;
(iv) Howmet Holdings Corporation shall cease to own, free and
clear of all Liens or other encumbrances, on a fully diluted basis, 100% of
the outstanding capital stock of the Borrower; or
(v) for so long as Senior Subordinated Notes in an amount
aggregating at least $10,000,000 are outstanding, any "Change of Control"
under and as defined in the Senior Subordinated Note Indenture shall occur
provided the effect of such "Change of Control" thereunder is to cause, or
to permit the holder or holders of such Senior Subordinated Notes cause,
the Indebtedness evidenced by the Senior Subordinated Notes or any part
thereof to become due prior to its stated maturity or any such Indebtedness
shall as a result thereof be declared to be due and payable or required to
be prepaid or repurchased prior to the stated maturity thereof.
"CLOSING DATE" means the date on which the initial Loans are advanced
hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means, collectively, each of the Pledge Agreements,
together with the documents, instruments and agreements executed in connection
therewith.
"COMMITMENT" means, for each Lender, the obligation of such Lender to make
Syndicated Loans, participate in Facility LCs and participate in Swing Line
Loans in the aggregate not exceeding the amount set forth opposite its name on
the Commitment Schedule attached hereto and made a part hereof or as set forth
in any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 13.3.2, as such amount may be modified from time to time
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pursuant to the terms hereof.
"CONSOLIDATED EBIT" means, for any period, Consolidated Net Income plus,
(a) to the extent deducted from revenues in determining Consolidated Net Income,
(i) Consolidated Interest Expense and (ii) expense for income taxes paid or
accrued, adjusted by adding thereto (b) the amount of all Receivables Facility
Financing Costs (to the extent not otherwise included), all calculated for the
Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED EBITDA" means, for any period, Consolidated EBIT plus, to the
extent deducted from revenues in determining Consolidated Net Income, all
amortization of intangibles and depreciation, all calculated for the Borrower
and its Consolidated Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period, the
interest expense of the Borrower and its Consolidated Subsidiaries for such
period, all calculated for the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
after-tax income (or loss) of the Borrower and its Consolidated Subsidiaries
calculated on a consolidated basis for such period; provided, that there shall
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be excluded (i) the income (or loss) of any Affiliate of the Borrower or other
Person (other than the Borrower's Consolidated Subsidiaries) in which any Person
(other than the Borrower or any of its Consolidated Subsidiaries) has a joint
interest or which is not consolidated with the Borrower for financial reporting
purposes in accordance with GAAP, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Consolidated Subsidiaries by such affiliate or other Person during such period
and (ii) the income (or loss) of any Person accrued prior to the date it becomes
a Consolidated Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Consolidated Subsidiaries or that Person's assets are
acquired by the Borrower or any of its Consolidated Subsidiaries, all calculated
for the Borrower and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET WORTH" means at any time the consolidated stockholders'
equity of the Borrower and its Consolidated Subsidiaries calculated on a
consolidated basis as of such time in accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary that is consolidated on a
balance sheet of the Borrower in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT" means the sum, without duplication, of (a) all
Indebtedness of the Borrower and its Consolidated Subsidiaries which, on the
date of determination, would be required to be shown on the Borrower's
consolidated balance sheet prepared in accordance with GAAP, plus (b) all
Receivables Facility Attributed Indebtedness of the Borrower and its
Consolidated Subsidiaries on the date of determination regardless of its
treatment under GAAP, plus (c) all Off Balance Sheet Liabilities of the Borrower
and its Consolidated Subsidiaries on the date of determination regardless of its
treatment under GAAP.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.10.
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"CONTROLLED GROUP" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
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Code.
"CORPORATE BASE RATE" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"CREDIT EXTENSION" means either the funding of an Advance or Swing Line
Loan or the issuance of a Facility LC hereunder.
"CREDIT EXTENSION DATE" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"DEFAULT" means an event described in Article VIII.
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"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"EURODOLLAR ADVANCE" means an Advance which bears interest at the
applicable Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable London interbank offered rate for
deposits in U.S. dollars appearing on Dow Jones Markets (Telerate) Page 3750 as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity approximately equal to such Interest
Period. If no London interbank offered rate of such maturity then appears on
Dow Jones Markets (Telerate) Page 3750, then the Eurodollar Base Rate shall be
equal to the London interbank offered rate for deposits in U.S. dollars maturing
immediately before or immediately after such maturity, whichever is higher, as
determined by the Agent from Dow Jones Markets (Telerate) Page 3750. If Dow
Jones Markets (Telerate) Page 3750 is not available, the applicable Eurodollar
Base Rate for the relevant Interest Period shall be the rate determined by the
Agent to be the rate at which First Chicago offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of First Chicago's relevant portion
of the Eurodollar Advance and having a maturity approximately equal to such
Interest Period.
"EURODOLLAR LOAN" means a Syndicated Loan which bears interest at the
applicable Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal), if any, applicable to such Interest
Period, plus the Applicable Margin. The Eurodollar Rate shall be rounded to the
next higher multiple of 1/100 of 1% if the rate is not such a multiple.
"EXCLUDED TAXES" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its net income, and franchise taxes
imposed on it, by (i) the jurisdiction under the laws of which such Lender or
the Agent is incorporated or organized or any political combination or
subdivision or taxing authority thereof or (ii) any jurisdiction in which the
Agent's or such Lender's principal executive office or such Lender's applicable
Lending Installation is located or in which, other than as a result of the
transaction evidenced by this Agreement, the Agent or such Lender otherwise is,
or at any time was, engaged in business.
"EXHIBIT" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"EXISTING CREDIT AGREEMENT" means that certain Amended and Restated Credit
Agreement dated as of December 13, 1995 as amended and restated as of December
5, 1996, among the Borrower, the lenders named therein and The First National
Bank of Chicago, as agent for said lenders (as it may have been amended,
restated, supplemented or otherwise modified from time to time) and including
any and all related guaranties and collateral documents.
"EXISTING LCS" means each of the Letters of Credit issued under and
pursuant to the Existing Credit Agreement and which are described in Schedule 1
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hereto.
"FACILITY LC" means each Existing LC and each Letter of Credit issued under
Article III.
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"FACILITY TERMINATION DATE" means December 16, 2002 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FINANCIAL CONTRACT" of a Person means (i) any exchange-traded or over-the-
counter futures, forward, swap or option contract or other financial instrument
with similar characteristics or (ii) any agreements, devices or arrangements
providing for payments related to fluctuations of interest rates, exchange rates
or forward rates, including, but not limited to, interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency, interest rate options or other
Rate Hedging Agreements.
"FIRST CHICAGO" means The First National Bank of Chicago in its individual
capacity, and its successors.
"FLOATING RATE" means, for any day, a rate per annum equal to the Alternate
Base Rate for such day, in each case changing when and as the Alternate Base
Rate changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means (a) the Swing Line Loans and (b) a Syndicated
Loan which bears interest at the Floating Rate.
"FOREIGN PENSION PLAN" means any employee pension benefit plan (as defined
in Section 3(2) of ERISA) which (i) is maintained or contributed to for the
benefit of employees of the Borrower or any other member of the Controlled
Group, (ii) is not covered by ERISA pursuant to Section 4(b)(4) thereof and
(iii) under applicable local law, is required to be funded through a trust or
other funding vehicle.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a manner consistent with that used in preparing the
financial statements referred to in Section 6.4.
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"GOVERNMENTAL ACTS" is defined in Section 3.11.
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"GUARANTY" of any Person means any agreement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes liable upon, the obligation of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assure any creditor of such
other Person against loss, and shall include, without limitation, the contingent
liability or reimbursement obligation of such Person under or with respect to
any Letter of Credit.
"INDEBTEDNESS" of any Person means, without duplication, (a) the
obligations of such Person (i) for borrowed money, (ii) under or with respect to
notes payable and drafts accepted which represent extensions of credit (whether
or not representing obligations for borrowed money) to such Person, (iii)
reimbursement obligations with respect to letters of credit issued for the
account of such Person or (iv) for the deferred purchase price of property or
services other than current accounts payable arising in the ordinary course of
business on terms customary in the trade, (b) the obligations of others, whether
or not assumed, secured by Liens on property of such Person or payable out of
the proceeds of or production from property now or hereafter owned or acquired
by such Person, (c) the Capitalized Lease Obligations of such Person, (d) the
obligations of such Person under Guaranties by such Person of any Indebtedness
(other than obligations for borrowed money incurred to finance the purchase of
property leased to such Person pursuant to a Capitalized Lease of such Person)
of any other Person, (e) all Receivables Facility Attributed Indebtedness of
such Person on the date of determination and (f) Off Balance Sheet Liabilities
of such Person.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a period of
one, two, three, six or (in either case, subject to availability) nine or twelve
months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three, six, nine or twelve months thereafter,
provided, however, that if there is no such numerically corresponding day in
such next, second, third, sixth, ninth or twelve succeeding month, such Interest
Period shall end on the last Business Day of such next,
second, third, sixth, ninth or twelfth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVESTMENT" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, Financial Contracts, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"JOINT VENTURE" means any Affiliate of the Borrower which is accounted for
by the Borrower on the equity method of accounting.
"LC DOCUMENTS" is defined in Section 3.4(i).
--------------
"LC DRAFT" means a draft, or other form of demand, drawn or made on an LC
Issuer pursuant to a Facility LC.
"LC INTEREST" is defined in Section 3.6.
-----------
"LC ISSUER" means (i) First Chicago in its capacity as LC Issuer hereunder
with respect to each Facility LC issued by First Chicago and (ii) any Lender
(other than First Chicago) reasonably acceptable to the Agent, in such Lender's
capacity as LC Issuer hereunder with respect to any and all Facility LCs issued
by such Lender in its sole discretion upon the Borrower's request. All
references contained in this Agreement and the other Loan Documents to the "LC
Issuer" shall be deemed to apply equally to each of the institutions referred to
in clauses (i) and (ii) of this definition in their respective capacities as LC
----------- ----
Issuer of any and all Facility LCs issued by each such institution.
"LC OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under each of the
Facility LCs, (ii) the face amount of all outstanding LC Drafts corresponding to
the Facility LCs, which drafts have been accepted by the applicable LC Issuer,
(iii) the aggregate outstanding amount of all Reimbursement Obligations at such
time and (iv) the aggregate face amount of all Facility LCs requested by the
Borrower but not yet issued (unless the request for an unissued Facility LC has
been denied).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender, LC Issuer or the
Agent, the office, branch, subsidiary or affiliate of such Lender or LC Issuer
or the Agent listed on the signature pages hereof or on a Schedule or otherwise
selected by such Lender or LC Issuer or the Agent pursuant to Section 2.18.
------------
"LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LEVERAGE RATIO" means, as of any date of calculation, the ratio of (i)
Consolidated Total Debt outstanding on such date to (ii) Consolidated EBITDA for
the Borrower's then most-recently ended four fiscal quarters.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's Syndicated Loan,
and in the case of the Swing Line Lender, any Swing Line Loan made pursuant to
Section 2.2 hereof, and collectively all Syndicated Loans and Swing Line Loans,
- -----------
whether made or continued as or converted to Floating Rate Loans or Eurodollar
Loans.
"LOAN DOCUMENTS" means this Agreement and Notes, if any, issued pursuant to
Section 2.14, the Pledge Agreements and the Subsidiary Guaranties.
- ------------
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower and its Subsidiaries taken as a whole to perform their
respective obligations under the Loan Documents to which it is a party, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent, the LC Issuers or the Lenders thereunder.
"MATERIAL FOREIGN SUBSIDIARY(IES)" means each Consolidated Subsidiary of
the Borrower (a) incorporated under the laws of any foreign jurisdiction and (b)
the total assets of which exceed, at any time, three percent (3.0%) of the
consolidated total assets of the Borrower and its Consolidated Subsidiaries;
provided, however, in the event that one or more of such Consolidated
Subsidiaries are owned through another foreign Subsidiary, then the Agent shall
notify the Borrower whether the "Material Foreign Subsidiary" shall be the
holding company foreign Subsidiary or such holding company's Subsidiary or
Subsidiaries, it being the intention of the parties that the Agent and the
Lenders shall be provided with the maximum collateral protection without
resulting in the
net income of any foreign subsidiary being deemed to have been repatriated under
the provisions of the Code.
"MATERIAL INDEBTEDNESS" is defined in Section 8.5.
-----------
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"NEW SUBSIDIARY" is defined in Section 7.13.
------------
"NON-U.S. LENDER" is defined in Section 4.5(iv).
---------------
"NOTE" means any promissory note issued at the request of a Lender pursuant
to Section 2.14 in the form of Exhibit A and the Swing Line Note.
------------ ---------
"NOTICE OF ASSIGNMENT" is defined in Section 13.3.2.
--------------
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Agent, any Lender, any
affiliate of the Agent or any Lender, the Swing Line Lender, any LC Issuer, or
any indemnitee under the provisions of Section 10.6 or any other provisions of
------------
the Loan Documents, in each case of any kind or nature, present or future,
arising under this Agreement, any Facility LC application agreements, the
Collateral Documents or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.
"OBLIGOR GROUP" shall mean (a) the Borrower, (b) the Subsidiary Guarantors,
and (c) each Subsidiary the stock of which is subject to a Pledge Agreement and
its respective Consolidated Subsidiaries.
"OFF-BALANCE SHEET LIABILITY" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which does not create a liability on the balance sheet of such
Person, (iii) any liability under any financing lease or so-called "synthetic
lease" transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheets of such Person, but excluding Operating Leases.
"OPERATING LEASE" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"OTHER TAXES" is defined in Section 4.5(ii).
---------------
"OUTSTANDING CREDIT EXPOSURE" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Loans outstanding at such time plus
(ii) its Outstanding LC Exposure at such time.
"OUTSTANDING LC EXPOSURE" means, as to any Lender at any time, an amount
equal to its Percentage of the LC Obligations at such time.
"PARTICIPANTS" is defined in Section 13.2.1.
--------------
"PAYMENT DATE" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERCENTAGE" means, with respect to each Lender, the percentage that such
Lender's Commitment constitutes of the Aggregate Commitment.
"PERMITTED ACQUIRED DEBT" shall mean Indebtedness of any Subsidiary of the
Borrower acquired pursuant to a Permitted Acquisition, which Indebtedness
existed at the time of the consummation of the Permitted Acquisition and was not
created in contemplation thereof (and the provisions of which were not altered
in contemplation thereof), so long as (i) the Borrower and its other
Subsidiaries shall have no liability with respect to such Indebtedness and (ii)
any Liens securing such Indebtedness apply only to assets of the Subsidiary so
acquired (and so long as additional assets of such Subsidiary are not granted as
security following, or in contemplation of, the respective Permitted
Acquisition; provided, however if a floating Lien on any category of after-
acquired property of such Subsidiary was in existence at the time of the
Permitted Acquisition and was not created in contemplation thereof, then such
Lien may apply to such after-acquired property).
"PERMITTED ACQUISITION" is defined in Section 7.13.
------------
"PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by the
Borrower or its Subsidiaries to Blade of "Receivables" and "Related Security"
under and
as such terms are defined in the Receivables Purchase Agreement, in accordance
with the terms thereof and/or (ii) a sale by Blade to purchasers in accordance
with the terms of the Receivables Purchase Documents.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PLAN" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
-----------
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"PLEDGE AGREEMENT" means a Pledge Agreement, containing substantially the
terms set forth in Exhibit B hereto, duly executed and delivered by the Borrower
---------
to and in favor of the Agent, the LC Issuers and the Lenders, as it may from
time to time be amended, supplemented or otherwise modified with respect to
sixty-five percent (65%) of the outstanding capital stock of each of the
Borrower's Material Foreign Subsidiaries, modified as deemed reasonably
acceptable by the Agent to reflect foreign law provisions, customs and
practices, in each case as amended, modified, supplemented or restated from time
to time.
"PRICING SCHEDULE" means the Schedule attached hereto identified as such.
"PROPERTY" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"PURCHASERS" is defined in Section 13.3.1.
--------------
"RATE HEDGING AGREEMENT" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, dollar-
denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"RATE HEDGING OBLIGATIONS" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Hedging Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of
obligations outstanding under a receivables purchase facility on any date of
determination that would be characterized as principal if such facility were
structured as a secured lending transaction rather than as a purchase.
"RECEIVABLES FACILITY FINANCING COSTS" means all cash fees, service
charges, and other costs, as well as all collections or other amounts retained
by purchasers of receivables pursuant to a receivables purchase facility, which
are in excess of amounts paid to the Borrower and its Consolidated Subsidiaries
under any receivables purchase facility for the purchase of receivables pursuant
to such facility.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement dated as of December 13, 1995, among the Borrower, certain
Subsidiaries of the Borrower and Blade, pursuant to which the Borrower and such
Subsidiaries sell to Blade certain of their "Receivables" and "Related Security"
(as such terms are defined therein), as such agreement has been or may hereafter
be amended, restated or otherwise modified from time to time, or any replacement
or substitution therefor.
"RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Purchase Agreement
and the other documents, instruments and agreements executed in connection
therewith.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Article III to reimburse the
-----------
LC Issuers for amounts paid by the LC Issuers in respect of any one or more
drawings under Facility LCs.
"REPLACEMENT LENDER" is defined in Section 2.20 hereof.
------------
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
------------
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
---------------
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
----------- -----------
shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"REPORTS" is defined in Section 10.6.
------------
"REQUIRED LENDERS" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the Aggregate Outstanding
Credit Exposure.
"RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 4.2.
-----------
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SCHEDULE" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Rate Hedging Obligations owing to one or more Lenders.
"SENIOR SUBORDINATED NOTES" means those certain 10% Senior Subordinated
Notes due 2003 issued by the Borrower in the aggregate principal of $125,000,000
pursuant to the Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means that certain Indenture dated as
of December 7, 1995 between the Borrower and Marine Midland Bank, as Trustee.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBORDINATED INDEBTEDNESS" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders, and shall include the Indebtedness
of the Borrower under the Senior Subordinated Notes.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTORS" means all of the Borrower's domestic Consolidated
Subsidiaries as of the Closing Date and any other New Subsidiaries (other than
foreign corporations) which have satisfied the provisions of the final
paragraph of Section 7.13(v) hereof, and their respective successors and
---------------
assigns.
"SUBSIDIARY GUARANTY" means a Subsidiary Guaranty, substantially in the
form of Exhibit C hereto, duly executed by the Subsidiary Guarantors in favor of
---------
the Agent, for the ratable benefit of the Agent, the Swing Line Lender, the LC
Issuers and the Lenders, as it may be amended, modified, supplemented and/or
restated (including to add new Subsidiary Guarantors), and as in effect from
time to time.
"SUBSIDIARY GUARANTY SUPPLEMENT" means a supplement to the Subsidiary
Guaranty, substantially in the form of Annex I attached to the Subsidiary
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Guaranty.
"SUBSTANTIAL PORTION" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries as would
be shown in the consolidated financial statements of the Borrower and its
Consolidated Subsidiaries as at the beginning of the twelve-month period ending
with the month in which such determination is made.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"SWING LINE LENDER" means First Chicago or any other Lender as a successor
Swing Line Lender.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.2 hereof.
-----------
"SWING LINE NOTE" means a promissory note, in substantially the form of
Exhibit D hereto, duly executed by the Borrower and payable to the order of the
- ----------
Swing Line Lender in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"SYNDICATED LOAN(S)" means, with respect to a Lender, that portion of any
Advance made by such Lender pursuant to Section 2.1 hereof, as applicable.
-----------
"TAXES" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"TRANSFEREE" is defined in Section 13.4.
------------
"TYPE" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"UNMATURED DEFAULT" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Consolidated Subsidiary
all of the outstanding voting securities of which (other than directors'
qualifying shares) shall at the time be owned or controlled, directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or (ii) any partnership, limited liability company, association, joint
venture or similar business organization 100% of the ownership interests of
which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II: THE CREDITS
2.1. Commitment. From and including the date of this Agreement and prior
----------
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Syndicated Loans to the Borrower
from time to time; provided, that upon giving effect to each such Syndicated
--------
Loan, the sum of (i) the aggregate outstanding principal amount of all
Syndicated Loans made by such Lender plus (ii) such Lender's Outstanding LC
Exposure, shall not exceed such Lender's Commitment. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time prior to
the Facility Termination Date. The Commitments to lend hereunder shall expire
automatically on the Facility Termination Date.
2.2 Swing Line Loans. (a) Amount of Swing Line Loans. Upon the
---------------- --------------------------
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, from
----------- ---
and including the date of this Agreement and prior to the Facility Termination
Date, the Swing Line Lender agrees, on the terms and conditions set forth in
this Agreement, to make swing line loans to the Borrower from time to time, in
Dollars, in an aggregate amount outstanding at any time not to exceed the Swing
Line Commitment (each, individually, a "SWING LINE LOAN" and collectively, the
"SWING LINE LOANS"); provided, however, at no time shall the Aggregate
-------- -------
Outstanding Credit Exposure exceed the Aggregate Commitments; and provided,
--------
further, that at no time shall the sum of (a) the outstanding amount of the
- -------
Swing Line Loans, plus (b) the outstanding amount of Syndicated Loans made by
----
the Swing Line Lender pursuant to Section 2.1 (after giving effect to any
-----------
concurrent repayment of Loans) plus (c) the Swing Line Lender's Outstanding LC
----
Exposure, exceed the Swing Line Lender's Commitment at such time. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow Swing
Line Loans at any time prior to the Facility Termination Date.
(b) Borrowing Notice. The Borrower shall deliver to the Agent and the
----------------
Swing Line Lender a notice of borrowing, signed by it, not later than 11:00 a.m.
(Chicago time) on the Borrowing Date of each Swing Line Loan, specifying (i) the
applicable Credit Extension Date (which shall be a Business Day), and (ii) the
aggregate amount of the requested Swing Line Loan. The Swing Line Loans shall
at all times be Floating Rate Loans, which shall be in an amount not less than
$1,000,000 and multiples of $100,000 in excess thereof. The Agent shall
promptly notify each Lender of such request.
(c) Making of Swing Line Loans. Promptly after receipt of the Borrowing
--------------------------
Notice under Section 2.2(b) in respect of Swing Line Loans, the Agent shall
--------------
notify each Lender by telex or telecopy, or other similar form of transmission,
of the requested Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on
the applicable Borrowing Date, the Swing Line Lender shall make available its
Swing Line Loan, in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. The Agent will promptly make the
-----------
funds so received from the Swing Line Lender available to the Borrower at the
Agent's aforesaid address.
(d) Repayment of Swing Line Loans. The Swing Line Loans shall be
-----------------------------
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in full
by the Borrower on or before the fifth Business Day after the Borrowing Date for
such Swing Line Loan. The Borrower may at any time repay or prepay, without
penalty or premium, all outstanding Swing Line Loans or, in a minimum amount of
$1,000,000 (with increments of $100,000 in excess thereof), any portion of the
outstanding Swing Line Loans, upon notice to the Agent and the Swing Line
Lender. In addition, the Agent (i) may at any time in its sole discretion with
respect to any outstanding Swing Line Loan, or (ii) shall on the fifth Business
Day after the Borrowing Date of any Swing Line Loan, require each Lender
(including the Swing Line Lender in its capacity as a Lender) to make a
Syndicated Loan under Section 2.1 in the amount of such Lender's Percentage of
-----------
such Swing Line Loan, for the purpose of repaying such Swing Line Loan. Not
later than 3:00
p.m. (Chicago time) on the date of any notice received pursuant to this Section
-------
2.2(d), each Lender shall make available its required Syndicated Loan or
- ------
Syndicated Loans, in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. Syndicated Loans made pursuant to
-----------
this Section 2.2(d) shall initially be Floating Rate Loans and thereafter may be
--------------
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
------------
limitations therein set forth and set forth in this Article II. Unless a Lender
shall have notified the Swing Line Lender, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 5.1 and 5.2
------------ ---
had not then been satisfied, such Lender's obligation to make Syndicated Loans
pursuant to this Section 2.2(d) to repay Swing Line Loans shall be
--------------
unconditional, continuing, irrevocable and absolute and shall not be affected by
any circumstances, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Lender or any other Person, (B) the occurrence or continuance of
a Default or Unmatured Default, (C) any adverse change in the condition
(financial or otherwise) of the Borrower or any of its Subsidiaries, or (D) any
other circumstances, happening or event whatsoever. In the event that any Lender
fails to make payment to the Agent of any amount due under this Section 2.2(d),
--------------
the Agent shall be entitled to receive, retain and apply against such obligation
the principal and interest otherwise payable to such Lender hereunder until the
Agent receives such payment from such Lender or such obligation is otherwise
fully satisfied. In addition to the foregoing, if for any reason any Lender
fails to make payment to the Agent of any amount due under this Section 2.2(d),
--------------
such Lender shall be deemed, at the option of the Agent, to have unconditionally
and irrevocably purchased from the Swing Line Lender, without recourse or
warranty, an undivided interest and participation in the applicable Swing Line
Loan in the amount of such Syndicated Loan, and such interest and participation
may be recovered from such Lender together with interest thereon at the Federal
Funds Effective Rate for each day during the period commencing on the date of
demand and ending on the date such amount is received. On the Termination Date,
the Borrower shall repay in full the outstanding principal balance of the Swing
Line Loans.
2.3. Required Payments; Termination. This Agreement shall be effective
------------------------------
until the Facility Termination Date. Any outstanding Loans and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility Termination
Date and the Borrower shall cause the beneficiaries to cancel all Facility LCs
or shall otherwise provide cash collateral or other credit support therefor on
terms and conditions acceptable to the LC Issuers and the Required Lenders.
Notwithstanding the termination of this Agreement on the Facility Termination
Date, until all of the Obligations (other than contingent indemnity obligations)
shall have been fully paid and satisfied, all financing arrangements among the
Borrower and the Lenders shall have been terminated and all of the Letters of
Credit shall have expired, been canceled or terminated (or credit support
provided therefor as set forth above), all of the rights and remedies under this
Agreement and the other Loan Documents shall survive and the Agent shall be
entitled to retain its security interest in and to all existing and future
collateral.
2.4. Ratable Loans. Each Advance hereunder shall consist of Syndicated
-------------
Loans made from the several Lenders ratably in proportion to the ratio that
their respective Commitments bear to the Aggregate Commitment.
2.5. Types of Advances. The Advances may be Floating Rate Advances or
-----------------
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10.
------------ ----
2.6. Facility Fee; Reductions in Aggregate Commitment. The Borrower
------------------------------------------------
agrees to pay to the Agent for the ratable benefit of the Lenders a facility fee
at a per annum rate equal to the Applicable Facility Fee Rate multiplied by the
Aggregate Commitment from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on the Facility
Termination Date. The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$5,000,000, upon at least three Business Days' written notice to the Agent,
which notice shall specify the amount of any such reduction, provided, however,
that the amount of the Aggregate Commitment may not be reduced below the
aggregate principal amount of the Aggregate Outstanding Credit Exposures. All
accrued facility fees shall be payable on the effective date of any termination
of the obligations of the Lenders to make Syndicated Loans hereunder.
2.7. Minimum Amount of Each Advance. Each Advance (other than an Advance
------------------------------
to repay Swing Line Loans pursuant to Section 2.2(d) or a Reimbursement
--------------
Obligation pursuant to Section 3.7) shall be in the minimum amount of $5,000,000
-----------
(and in multiples of $1,000,000 if in excess thereof), provided, however, that
any Floating Rate Advance may be in the amount of the Available Aggregate
Commitment.
2.8. Optional Principal Payments. The Borrower may from time to time pay,
---------------------------
without penalty or premium, all outstanding Floating Rate Advances, or, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification and breakage cost
amounts required by Section 4.4 but without penalty or premium, any or all
-----------
outstanding Eurodollar Advances upon three Business Days' prior notice to the
Agent.
2.9. Method of Selecting Types and Interest Periods for New Advances. The
---------------------------------------------------------------
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. The Borrower
shall give the Agent irrevocable notice (a "BORROWING NOTICE") not later than
11:00 a.m. (Chicago time) at least one Business Day before the Borrowing Date of
each Floating Rate Advance and three Business Days before the Borrowing Date for
each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) Schedule
Promptly after receipt of any Borrowing Notice, the Agent shall provide the
Lenders with notice thereof. Not later than 1:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Syndicated Loan or
Syndicated Loans in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. The Agent will make the funds so
-----------
received from the Lenders available to the Borrower at the Agent's aforesaid
address.
2.10. Conversion and Continuation of Outstanding Advances. Floating Rate
---------------------------------------------------
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
-------
2.10 or are repaid in accordance with Section 2.8. Each Eurodollar Advance
- ---- -----------
shall continue as a Eurodollar Advance until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar
Advance is or was repaid in accordance with Section 2.8 or (y) the Borrower
-----------
shall have given the Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period.
Subject to the terms of Section 2.10, the Borrower may elect from time to time
------------
to convert all or any part of a Floating Rate Advance into a Eurodollar Advance.
The Borrower shall give the Agent irrevocable notice (a "CONVERSION/CONTINUATION
NOTICE") of each conversion of a Floating Rate Advance into a Eurodollar Advance
or continuation of a Eurodollar Advance not later than 11:00 a.m. (Chicago time)
at least three Business Days prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date, which shall be a Business Day, of such conversion
or continuation,
(ii) the aggregate amount and Type of the Advance which is to be converted
or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
Promptly after receipt of any Conversion/Continuation Notice, the Agent shall
provide the Lenders with notice thereof.
2.11. Changes in Interest Rate, Etc. Each Floating Rate Advance and Swing
------------------------------
Line Loan shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance or Swing Line Loan is made or
is automatically converted from a Eurodollar Advance into a Floating Rate
Advance pursuant to Section 2.10, to but excluding the date it is paid or, for
------------
Floating Rate Advances, is converted into a Eurodollar Advance pursuant to
Section 2.10 hereof, at a rate per annum equal to the Floating Rate for such
- ------------
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance and each Swing Line Loan will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
by the Agent as applicable to such Eurodollar Advance based upon the Borrower's
selections under Section 2.9 and 2.10 and otherwise in accordance with the terms
----------- ----
hereof. No Interest Period may end after the Facility Termination Date.
2.12. Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
----------- ----
the Agent or the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
-----------
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of
a Default, the Agent or the Required Lenders may, at their option, by notice to
the Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
-----------
Lenders to changes in interest rates), declare that (i) each Advance shall bear
interest at a rate per annum equal to the Floating Rate in effect from time to
time plus 2% per annum and (ii) the fees payable with respect to Letters of
Credit pursuant to Section 3.9 shall be increased by 2% per annum, provided
-----------
that, during the continuance of a Default under Sections 8.2, 8.6 or 8.7, the
------------ --- ---
interest rate described in clause (i) above and the letter of credit fee
----------
described in clause (ii) above shall be applicable without any election or
-----------
action on the part of the Agent or any Lender.
2.13. Method of Payment. All payments of the Obligations hereunder shall
-----------------
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Agent at the Agent's address specified pursuant to Article XIV, or
-----------
at any other Lending Installation of the Agent specified in writing by the Agent
to the Borrower, by noon (local time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Each payment delivered to the Agent for
the account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIV or at any Lending Installation specified in a
-----------
notice received by the Agent from such Lender. The Agent is hereby
authorized to charge the account of the Borrower maintained with First Chicago
for each payment of principal, interest and fees as it becomes due hereunder.
Each reference to the Agent in this Section 2.13 shall also be deemed to refer,
------------
and shall apply equally, to a LC Issuer, in the case of payments required to be
made by the Borrower to such LC Issuer pursuant to Article III.
-----------
2.14. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
--------------------------------------------
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (c) the amount of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note (a "NOTE"). In such event, the Borrower shall prepare, execute and deliver
to such Lender a Note payable to the order of such Lender in a form supplied by
the Agent. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 13.3) be
------------
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 13.3, except to the extent that any such
------------
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above.
2.15. Telephonic Notices. The Borrower hereby authorizes the Lenders, the
------------------
Swing Line Lender and the Agent to extend, convert or continue Advances and
Swing Line Loans, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Agent, the Swing
Line Lender or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent, the Swing Line
Lender or any Lender, of each telephonic notice signed by an Authorized Officer.
If the written confirmation differs in any material respect from the action
taken by the Agent, the Swing Line Lender and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.
2.16. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
----------------------------------------------
each Floating Rate Advance and Swing Line Loan shall be payable on each Payment
Date, commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest accrued on Eurodollar Advances,
fees payable with respect to Facility LCs and facility fees shall be calculated
for actual days elapsed on the basis of a year of 360 days, and interest accrued
on Floating Rate Advances and Swing Line Loans shall be calculated for actual
days elapsed on the basis of a year or 365, or when appropriate 366, days.
Interest shall be payable for the day an Advance or Swing Line Loan is made but
not for the day of any payment on the amount paid if payment is received prior
to noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance or Swing Line Loan or any fee shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.17. Notification of Advances, Interest Rates, Prepayments and Commitment
--------------------------------------------------------------------
Reductions. Promptly after receipt thereof, the Agent will notify each Lender
- ----------
of the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify each Lender of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Alternate Base Rate.
2.18. Lending Installations. Each Lender may book its Loans at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written notice to the Agent and the Borrower in accordance with
Article XIV, designate replacement or additional Lending Installations through
- -----------
which Loans will be made by it and for whose account Loan payments are to be
made.
2.19. Non-Receipt of Funds by the Agent-. Unless the Borrower or a
---------------------------------
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Swing Line Lender or any of
the Lenders, that it does not intend to make such payment, the Agent may assume
that such payment has been made. The Agent may, but shall not be obligated to,
make the amount of such payment available to the intended recipient in reliance
upon such assumption. If such Lender or the Borrower, as the case
may be, has not in fact made such payment to the Agent, the recipient of such
payment shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to (x)
in the case of payment by a Lender, the Federal Funds Effective Rate for such
day or (y) in the case of payment by the Borrower, the interest rate applicable
to the relevant Loan.
2.20 Replacement of Certain Lenders. In the event a Lender ("AFFECTED
------------------------------
LENDER") shall have: (i) failed to fund its pro rata share of any Advance
requested by the Borrower, or to fund a Syndicated Loan in order to repay Swing
Line Loans pursuant to Section 2.2(d) or Reimbursement Obligations or
--------------
participations with respect to Letters of Credit pursuant to Section 3.6 or
-----------
Section 3.7, which such Lender is obligated to fund under the terms of this
- -----------
Agreement and which failure has not been cured, (ii) requested compensation from
the Borrower under Sections 4.1, 4.2 or 4.5 to recover Taxes, Other Taxes or
------------ --- ---
other additional costs incurred by such Lender which are not being incurred
generally by the other Lenders, (iii) delivered a notice pursuant to Section 4.3
-----------
claiming that such Lender is unable to extend Eurodollar Rate Loans to the
Borrower for reasons not generally applicable to the other Lenders or (iv) has
invoked Section 10.2, then, in any such case, the Borrower or the Agent may make
------------
written demand on such Affected Lender (with a copy to the Agent in the case of
a demand by the Borrower and a copy to the Borrower in the case of a demand by
the Agent) for the Affected Lender to assign, and such Affected Lender shall
assign pursuant to one or more duly executed assignments and acceptances in
substantially the form of Exhibit E five (5) Business Days after the date of
---------
such demand, to one or more financial institutions that comply with the
provisions of Section 13.3.1 which the Borrower or the Agent, as the case may
--------------
be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such
Affected Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment, all Loans owing to it,
all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with Section 13.3. With respect to such assignment, the Affected
------------
Lender shall not be obligated to effect such an assignment unless it has
concurrently received, in cash, all amounts due and owing to the Affected Lender
hereunder or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Lender,
together with accrued interest thereon through the date of such assignment,
amounts payable under Sections 4.1, 4.2 and 4.5 with respect to such Affected
------------ --- ---
Lender and compensation payable under Section 2.6 in the event of any
-----------
replacement of any Affected Lender under clause (ii) or clause (iii) of this
----------- ------------
Section 2.20; provided that upon such Affected Lender's replacement, such
- ------------ --------
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 4.1, 4.2, 4.4, 4.5 and 10.6, as well as to
------------ --- --- --- ----
any fees accrued for its account hereunder and not yet paid, and shall continue
to be obligated under Section 11.8 with respect to amounts not reimbursed by the
------------
Borrower, expenses or other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements imposed
on, incurred by or asserted against the Agent in any
way relating to matters which occurred prior to such assignment. The Agent
agrees, upon the occurrence of such events with respect to an Affected Lender
and upon the written request of the Borrower, to use its reasonable efforts to
obtain commitments from one or more financial institutions to act as a
Replacement Lender.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue. Subject to the terms and conditions of this
-------------------
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each LC Issuer hereby agrees to issue for the
account of the Borrower through such LC Issuer's branches as it and the Borrower
may jointly agree, one or more Letters of Credit as Facility LCs in accordance
with this Article III, from time to time during the period, commencing on the
-----------
date hereof and ending on the Business Day prior to the Termination Date.
3.2 Transitional Provision. Schedule 1 contains a schedule of certain
---------------------- ----------
letters of credit issued for the account of the Borrower prior to the Closing
Date. Subject to the satisfaction of the conditions contained in Sections 5.1
------------
and 5.2, from and after the Closing Date such letters of credit shall be deemed
---
to be Facility LCs issued pursuant to this Article III.
-----------
3.3 Types and Amounts. No LC Issuer shall have any obligation to and no
-----------------
LC Issuer shall:
(i) issue any Facility LC if on the date of issuance, before or
after giving effect to the Facility LC requested hereunder, (a) Aggregate
Outstanding Credit Exposure at such time would exceed the Commitments at
such time, or (b) the Aggregate Outstanding LC Exposure would exceed
$50,000,000;
(ii) issue any Facility LC which has an expiration date later than
the date which is one (1) year after the date of issuance thereof; provided
that any Facility LC with a one-year tenor may provide for the automatic
extension of the expiration date for successive periods of up to one-year
(which shall in no event extend beyond the date set forth in clause (iii)
below);
(iii) issue any Facility LC which has an expiration date later than
five (5) Business Days immediately preceding the Termination Date; or
(iv) issue any Facility LC denominated in any currency other than
U.S. Dollars
3.4 Conditions. In addition to being subject to the satisfaction of the
----------
conditions contained in Sections 5.1 and 5.2, the obligation of a LC Issuer to
------------ ---
issue any Facility LC is subject to the satisfaction in full of the following
conditions:
(i) the Borrower shall have delivered to the applicable LC Issuer at
such times and in such manner as such LC Issuer may reasonably prescribe, a
request for issuance of such Facility LC in such form as shall be
reasonably required by such LC Issuer, duly executed applications for such
Facility LC, and such other customary documents, instructions and
agreements as may be required pursuant to the terms thereof (all such
applications, documents, instructions, and agreements being referred to
herein as the "LC DOCUMENTS"), and the proposed Facility LC shall be
reasonably satisfactory to such LC Issuer as to form and content; and
(ii) as of the date of issuance no order, judgment or decree of any
court, arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain the applicable LC Issuer from issuing such Facility LC
and no law, rule or regulation applicable to such LC Issuer and no request
or directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over such LC Issuer shall prohibit or request
that such LC Issuer refrain from the issuance of Facility LCs generally or
the issuance of that Facility LC.
To the extent that any provision of any LC Document cannot reasonably be
construed to be consistent with this Agreement, requires greater collateral
security or imposes additional obligations not reasonably related to customary
letter of credit arrangements, such provision shall be invalid and this
Agreement shall control.
3.5 Procedure for Issuance of Facility LCs. (a) Subject to the terms and
--------------------------------------
conditions of this Article III and provided that the applicable conditions set
-----------
forth in Sections 5.1 and 5.2 hereof have been satisfied, the applicable LC
------------ ---
Issuer shall, on the requested date, issue a Facility LC on behalf of the
Borrower in accordance with such LC Issuer's usual and customary business
practices and, in this connection, such LC Issuer may assume that the applicable
conditions set forth in Section 5.2 hereof have been satisfied unless it shall
-----------
have received notice to the contrary from the Agent or a Lender or has knowledge
that the applicable conditions have not been met.
(b) The applicable LC Issuer shall give the Agent written or telex notice,
or telephonic notice confirmed promptly thereafter in writing, of the issuance
of a Facility LC, provided, however, that the failure to provide such notice
-------- -------
shall not result in any liability on the part of such LC Issuer. Promptly after
receipt thereof, the Agent shall provide the Lenders with any such notice from
any LC Issuer.
(c) No LC Issuer shall extend or amend or otherwise modify any Facility LC
unless the requirements of this Article III are met as though a new Facility LC
-----------
was being requested and issued.
3.6 Facility LC Participation. On the Closing Date with respect to each
-------------------------
Existing LC and immediately upon the issuance of each Facility LC hereunder,
each Lender shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable LC Issuer an
undivided interest and participation in and to such Facility LC, the obligations
of the Borrower in respect thereof, and the liability of such LC Issuer
thereunder (collectively, an "LC INTEREST") in an amount equal to the amount
available for drawing under such Facility LC multiplied by such Lender's
Percentage. Each LC Issuer will notify each Lender promptly upon presentation
to it of an LC Draft or upon any other draw under a Facility LC. On or before
the Business Day on which a LC Issuer makes payment of each such LC Draft or, in
the case of any other draw on a Facility LC, on demand by the Agent, each Lender
shall make payment to the Agent, for the account of the applicable LC Issuer, in
immediately available funds in an amount equal to such Lender's Percentage of
the amount of such payment or draw. The obligation of each Lender to reimburse
the LC Issuers under this Section 3.6 shall be unconditional, continuing,
-----------
irrevocable and absolute. In the event that any Lender fails to make payment to
the Agent of any amount due under this Section 3.6, the Agent shall be entitled
-----------
to receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied; provided,
--------
however, that nothing contained in this sentence shall relieve such Lender of
- -------
its obligation to reimburse the applicable LC Issuer for such amount in
accordance with this Section 3.6.
-----------
3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
------------------------
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Facility LC or an LC Draft related thereto (such obligation of the Borrower to
reimburse the Agent for an advance made under a Facility LC or LC Draft being
hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to such
Facility LC or LC Draft). If the Borrower at any time fails to repay a
Reimbursement Obligation pursuant to this Section 3.7, the Borrower shall be
-----------
deemed to have elected to borrow Syndicated Loans from the Lenders, as of the
date of the advance giving rise to the Reimbursement Obligation, equal in amount
to the amount of the unpaid Reimbursement Obligation. Such Syndicated Loans
shall be made as of the date of the payment giving rise to such Reimbursement
Obligation, automatically, without notice and without any requirement to satisfy
the conditions precedent otherwise applicable to an Advance. Such Syndicated
Loans shall constitute a Floating Rate Advance, the proceeds of which Advance
shall be used to repay such Reimbursement Obligation. If, for any reason, the
Borrower fails to repay a Reimbursement Obligation on the day such
Reimbursement Obligation arises and, for any reason, the Lenders are unable to
make or have no obligation to make Syndicated Loans, then such Reimbursement
Obligation shall bear interest from and after such day, until paid in full, at
the interest rate applicable to a Floating Rate Advance.
3.8 Cash Collateral. Notwithstanding anything to the contrary herein or
---------------
in any application for a Facility LC, after acceleration of the Obligations
pursuant to Section 9.1, the Borrower shall, upon the Agent's demand, deliver to
-----------
the Agent for the benefit of the Lenders and the LC Issuers, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding LC Obligations.
Any such collateral shall be held by the Agent in a separate interest bearing
account appropriately designated as a cash collateral account in relation to
this Agreement and the Facility LCs and retained by the Agent for the benefit of
the Lenders and the LC Issuers as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Facility LCs and LC
Drafts. Such amounts shall be applied to reimburse the LC Issuers for drawings
or payments under or pursuant to Facility LCs or LC Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Agent shall determine. If such acceleration of the Obligations shall be
rescinded, amounts (including interest income) remaining in any cash collateral
account established pursuant to this Section 3.8 which are not to be applied to
-----------
reimburse a LC Issuer for amounts actually paid or to be paid by such LC Issuer
in respect of a Facility LC or LC Draft, shall be returned to the Borrower
(after deduction of the Agent's expenses incurred in connection with such cash
collateral account).
3.9 Facility LC Fees. The Borrower agrees to pay (i) on each Payment Date
----------------
and on the Termination Date, in arrears, to the Agent for the ratable benefit of
the Lenders, a letter of credit fee at a rate per annum equal to the Applicable
LC Fee Percentage on the weighted average daily outstanding face amount
available for drawing under all standby Facility LCs, (ii) on each Payment Date
and on the Termination Date, in arrears, to the Agent for the sole account of
each LC Issuer, a letter of credit fronting fee on the weighted average daily
outstanding face amount available for drawing under all Facility LCs issued by
such LC Issuer in an amount or at a rate as agreed to between the Borrower and
such LC Issuer, (iii) at the time of invoice of such amounts by the applicable
Issuing Bank, to the Agent for the ratable benefit of the Lenders, standard
commissions (as established by the applicable Issuing Bank) with respect to
commercial Facility LCs, and (iv) to the Agent for the benefit of each LC
Issuer, all customary fees and other issuance, amendment, document examination,
negotiation and presentment expenses and related charges in connection with the
issuance, amendment, presentation of LC Drafts, and the like customarily charged
by such LC Issuer with respect to standby and commercial Facility LCs, payable
at the time of invoice of such amounts.
3.10 LC Issuer Reporting Requirements. In addition to the notices
--------------------------------
required by Section 3.5(b), each LC Issuer shall, no later than the tenth
--------------
Business Day following the last day of each month, provide to the Agent, upon
the Agent's or any Lender's request, schedules, in form and substance reasonably
satisfactory to the Agent, showing the date of issue, account party, amount,
expiration date and the reference number of each Facility LC issued by it
outstanding at any time during such month and the aggregate amount payable by
the Borrower during such month. In addition, upon the request of the Agent,
each LC Issuer shall furnish to the Agent copies of any Facility LC and any
application for or reimbursement agreement with respect to a Facility LC to
which the LC Issuer is party and such other documentation as may reasonably be
requested by the Agent. Upon the request of any Lender, the Agent will provide
to such Lender information concerning such Facility LCs.
3.11 Indemnification; Exoneration. (a) In addition to amounts payable as
----------------------------
elsewhere provided in this Article III, the Borrower hereby agrees to protect,
-----------
indemnify, pay and save harmless the Agent, each LC Issuer and each Lender from
and against any and all liabilities and costs which the Agent, such LC Issuer or
such Lender may incur or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Facility LC other than, in the case of the applicable LC
Issuer, as a result of its gross negligence or willful misconduct, as determined
by the final judgment of a court of competent jurisdiction, or (ii) the failure
of the applicable LC Issuer to honor a drawing under a Facility LC as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto governmental authority (all such acts or omissions herein
- ------- --------
called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Agent and the LC Issuers, the
Borrower assumes all risks of the acts and omissions of, or misuse of such
Facility LC by, the beneficiary of any Facility LCs. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Facility LC
applications and Facility LC reimbursement agreements executed by the Borrower
at the time of request for any Facility LC, neither the Agent, any LC Issuer nor
any Lender shall be responsible (in the absence of gross negligence or willful
misconduct in connection therewith, as determined by the final judgment of a
court of competent jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Facility LCs, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Facility LC or the rights or benefits thereunder or proceeds thereof, in whole
or in part, which may prove to be invalid or ineffective for any reason; (iii)
for failure of the beneficiary of a Facility LC to comply duly with conditions
required in order to draw upon such Facility LC; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, or other similar form of teletransmission or otherwise;
(v) for errors in interpretation of technical trade terms; (vi) for any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Facility LC or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Facility LC of the proceeds of any
drawing under such Facility LC; and (viii) for any consequences arising from
causes beyond the control of the Agent, the LC Issuers and the Lenders,
including, without limitation, any Governmental Acts. None of the above shall
affect, impair, or prevent the vesting of any LC Issuer's rights or powers under
this Section 3.11.
------------
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any LC Issuer
under or in connection with the Facility LCs or any related certificates shall
not, in the absence of gross negligence or willful misconduct, as determined by
the final judgment of a court of competent jurisdiction, put the applicable LC
Issuer, the Agent or any Lender under any resulting liability to the Borrower or
relieve the Borrower of any of its obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.11 shall survive the payment in full of principal and interest
------------
hereunder, the termination of the Facility LCs and the termination of this
Agreement.
ARTICLE IV: YIELD PROTECTION; TAXES
4.1. Yield Protection. If, on or after the date of this Agreement, the
----------------
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender, LC Issuer
or applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or LC Issuer or any applicable Lending
Installation to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender in
respect of its Loans, its LC Interests, the Facility LCs or other
amounts due hereunder or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender, Swing Line Lender, LC Issuer or any applicable Lending
Installation (other than reserves and assessments taken into account
in determining the interest rate applicable to Eurodollar Advances),
or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender, Swing Line Lender, LC Issuer or any applicable
Lending Installation of making, funding or maintaining its Loans, LC
Interests or the Facility LCs or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with its
Loans, LC Interests or the Facility LCs or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of Loans, LC Interests or Facility LCs held or
interest received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Loans, LC
Interests, Facility LCs or Commitment or to reduce the return received by such
Lender or applicable Lending Installation in connection with such Loans, LC
Interests, Facility LCs or Commitment, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction in amount
received.
4.2. Changes in Capital Adequacy Regulations. If a Lender, LC Issuer or
---------------------------------------
the Swing Line Lender determines the amount of capital required or expected to
be maintained by such Lender, LC Issuer or the Swing Line Lender, any Lending
Installation of such Lender or any corporation controlling such Lender, LC
Issuer or Swing Line Lender is increased as a result of a Change, then, within
15 days of demand by such Lender, LC Issuer or Swing Line Lender, the Borrower
shall pay such Lender, LC Issuer or Swing Line Lenders the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender, LC Issuer or Swing Line Lenders determines
is attributable to this Agreement, its Loans, LC Interests, Facility LCs or its
Commitment to make Loans hereunder (after taking into account such Lender's, LC
Issuer's or Swing Line Lender's policies as to capital adequacy). No Lender, LC
Issuer or Swing Line Lender shall be entitled to demand payment under this
Section 4.2 to the extent that such payment relates to a period of time more
- -----------
than 90 days prior to the date upon which such Lender, LC Issuer or Swing Line
Lender first notified the Borrower of the occurrence of the event entitling such
Bank to such payment. "CHANGE" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender, the LC Issuers, the Swing Line Lenders
or any Lending Installation or any corporation controlling any Lender, LC Issuer
or Swing Line Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
4.3. Availability of Types of Advances. If any Lender determines that
---------------------------------
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to
match fund Eurodollar Advances are not available or (ii) the interest rate
applicable to a Type of Advance does not adequately or fairly reflect the cost
of making or maintaining such Advance and the Borrower, the Agent and the
Lenders shall not have entered into a written agreement providing to the Lenders
compensation satisfactory to the Lenders for such inadequate or unfairly
reflected cost, then the Agent shall suspend the availability of the affected
Type of Advance and require any affected Eurodollar Advances to be repaid or
converted to Floating Rate Advances, subject to the payment of any funding
indemnification amounts required by Section 4.4.
-----------
4.4. Funding Indemnification. If any payment of a Eurodollar Advance
-----------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
4.5. Taxes. (i) All payments by the Borrower to or for the account of
-----
any Lender, LC Issuer, the Swing Line Lender or the Agent hereunder or under any
Note shall be made free and clear of and without deduction for any and all
Taxes. If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, any LC Issuer, the Swing
Line Lenders or the Agent, (a) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.5) such Lender, LC Issuer, Swing
-----------
Line Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (b) the Borrower
shall make such deductions, (c) the Borrower shall pay the full amount deducted
to the relevant authority in accordance with applicable law and (d) the Borrower
shall furnish to the Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise taxes, charges or similar
levies, in each case other than Excluded Taxes, which arise from any payment
made hereunder or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note ("OTHER TAXES").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuers,
the Swing Line Lenders and each Lender for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 4.5) paid by the Agent or such Lender and any
-----------
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
30 days of the date the Agent, the Swing Line Lenders, such LC Issuer or such
Lender makes demand therefor pursuant to Section 4.6.
-----------
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it
will, not less than ten Business Days after the date of this Agreement or the
date it becomes a Lender hereunder, (i) deliver to each of the Borrower and the
Agent two duly completed copies of United States Internal Revenue Service Form
1001 or 4224, certifying in either case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, and (ii) deliver to each of the Borrower and the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Agent. All forms
or amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless a change in
treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and
the Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
-----------
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 4.5 with respect to Taxes imposed by the United States; provided
-----------
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
-----------
such steps as such Non-U.S. Lender shall reasonably request to assist such Non-
U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
4.6. Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 4.1, 4.2 and 4.5 or to avoid the unavailability of
------------ --- ---
Eurodollar Advances under Section 4.3, so long as such designation is not, in
-----------
the judgment of such Lender, disadvantageous to such Lender. Each Lender, Swing
Line Lender or LC Issuer, as applicable, shall deliver a written statement of
such Lender, LC Issuer or Swing Line Lenders to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 4.1, 4.2, 4.4 or 4.5. Such
----------- --- --- ---
written statement shall set forth in reasonable detail the calculations upon
which such Lender, LC Issuer or Swing Line Lender determined such amount and
shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender, Swing Line Lender or LC Issuer shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 4.1, 4.2, 4.4 and 4.5 shall survive payment of
------------ --- --- ---
the Obligations, termination or expiration of the Facility LCs and termination
of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1. Initial Credit Extensions. The Lenders shall not be required to make
-------------------------
the initial Advance hereunder, the Swing Line Lender shall not be required to
make the initial Swing Line Loan and the LC Issuers shall not be required to
issue the initial Facility LC hereunder, unless (a) the representation and
warranty contained in Section 6.5 is true and correct as of such date and (b)
-----------
the Borrower has furnished to the Agent (with sufficient copies for the
Lenders):
(i) Copies of the articles or certificate of incorporation of each of
the Borrower, each of its "Significant Subsidiaries" (as defined in
Regulation S-X issued pursuant to the Securities Act and the Exchange
Act) and each Subsidiary the stock of which is being pledged pursuant
to a Pledge Agreement, together, in each case, with all amendments,
and certificates of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and its Consolidated Subsidiaries, of its by-laws, articles
or certificate of incorporation and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the Borrower
or any Consolidated Subsidiary is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and its Consolidated Subsidiaries,
which shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers of the Borrower and its
Consolidated Subsidiaries authorized to sign the Loan Documents to
which the Borrower or any of its Consolidated Subsidiaries is a party,
upon which certificate the Agent, the LC Issuers, the Swing Line
Lender and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date no Default or
Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's and its Consolidated
Subsidiaries' general counsel, addressed to the Agent, the Swing Line
Lender, the LC Issuers and the Lenders in form and substance
reasonably acceptable to the Agent and the Lenders.
(vi) Any Notes requested by any Lender pursuant to Section 2.14
payable to the order of each such requesting Lender and the Swing Line
Note.
(vii) Written money transfer instructions, in substantially the form
of Exhibit F, addressed to the Agent and signed by an Authorized
---------
Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
(viii) The Subsidiary Guaranty executed by each of the Borrower's
domestic Consolidated Subsidiaries.
(ix) Documentation evidencing the arrangement for the termination of
the Existing Credit Agreement among the Borrower, the lenders party
thereto and the agents named therein and repayment of all obligations,
indebtedness and liabilities outstanding thereunder from the proceeds
of the initial Loans hereunder.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
5.2. Each Credit Extension. The Lenders shall not be required to make any
---------------------
Advance, the Swing Line Lender shall not be required to make any Swing Line Loan
and no LC Issuer shall be required to issue any Facility LC, unless on the
applicable Credit
Extension Date, both immediately prior to, and immediately after giving effect
to, such Credit Extension:
(i) Either (a) in the case of an Advance, the Agent shall have received a
Borrowing Notice in compliance with Section 2.9, (ii) in the case of a
-----------
Swing Line Loan, the Swing Line Lender shall have received a notice of
borrowing in compliance with Section 2.2(b), and (iii) in the case of
--------------
a Facility LC, LC Issuer shall have received a request for the
issuance of a Facility LC in compliance with Section 3.4(i) (together
---------------
with any Facility LC application agreement requested by the LC Issuer
pursuant to Section 3.4(i)).
--------------
(ii) The Aggregate Outstanding Credit Exposure does not and would not
exceed the Aggregate Commitment.
(iii) There exists no Default or Unmatured Default.
(iv) For any Credit Extensions made on or after February 1, 1998, the
Borrower has furnished to the Agent (with sufficient copies for the
Lenders), the Pledge Agreements executed by the Borrower for each of
its Material Foreign Subsidiaries as of the Closing Date, together
with appropriate corporate resolutions, opinions, stock certificates,
stock powers and other documentation in form and substance
satisfactory to the Agent.
(v) The representations and warranties contained in Article VI (other
----------
than Section 6.5) are true and correct as of such Borrowing Date
-----------
except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct on and as of such earlier
date.
(vi) All legal matters incident to the making of such Credit Extension
shall be satisfactory to the Lenders, the LC Issuers, the Swing Line
Lender and their counsel.
Each Borrowing Notice with respect to each such Advance, each notice of
borrowing with respect to any Swing Line Loan and each request for the issuance
of a Facility LC pursuant to Article III, shall constitute a representation and
-----------
warranty by the Borrower that the conditions contained in Sections 5.2(i) and
---------------
(ii) have been satisfied. Any Lender, the Swing Line Lender or any LC Issuer
- ----
may require a duly completed compliance certificate in substantially the form of
Exhibit G as a condition to making an Advance or Swing Line Loan or issuance of
- ---------
a Facility LC.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, the Swing Line Lender, the LC Issuers and the
Lenders to enter into this Agreement and to make the Credit Extensions to the
Borrower described herein, the Borrower represents and warrants as follows to
each Lender, each LC Issuer, the Swing Line Lender and the Agent as of the
Closing Date, and thereafter on each date as required by Section 5.2:
-----------
6.1. Existence and Standing. Each of the Borrower and its Consolidated
----------------------
Subsidiaries is a corporation or (in the case of Consolidated Subsidiaries only)
a partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted unless the
failure so to qualify would not be reasonably expected to have a Material
Adverse Effect.
6.2. Authorization and Validity. Each of the Borrower and its
--------------------------
Consolidated Subsidiaries has the power and authority and legal right to execute
and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by each of the Borrower and
its Consolidated Subsidiaries of the Loan Documents to which it is a party and
the performance of each of its obligations thereunder have been duly authorized
by proper corporate proceedings (or in the case of Consolidated Subsidiaries,
partnership or company proceedings), and the Loan Documents to which each of the
Borrower and its Consolidated Subsidiaries is a party constitute legal, valid
and binding obligations of the Borrower and its Consolidated Subsidiaries
enforceable against the Borrower and its Consolidated Subsidiaries in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
6.3. No Conflict; Government Consent. Neither the execution and delivery
-------------------------------
by the Borrower or any of its Consolidated Subsidiaries of the Loan Documents
to which it is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or (ii) the Borrower's or any
Subsidiary's articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, loan agreement, credit agreement, mortgage or deed
of trust, or any other material contract, agreement or instrument to which the
Borrower or any of its Subsidiaries is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on any
material Properties of the Borrower or a Subsidiary pursuant to the terms of any
such indenture, loan agreement, credit agreement, mortgage, deed of trust or
other material contract, agreement or instrument other than pursuant to the
Collateral Documents. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by the Borrower
or any of its Subsidiaries in connection with the execution and delivery of the
Loan Documents, the borrowings under this Agreement, the payment and performance
by the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
6.4. Financial Statements. The September 28, 1997 unaudited consolidated
--------------------
financial statements of the Borrower and its Consolidated Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and operations
of the Borrower and its Consolidated Subsidiaries at such date and the
consolidated results of their operations for the period then ended, subject to
normal year-end audit adjustments.
6.5. Material Adverse Change. Since September 28, 1997 and up to the date
-----------------------
of the initial Credit Extension hereunder, there has been no change in the
business, Property, prospects, condition (financial or otherwise) or results of
operations of the Borrower or its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
6.6. Taxes. The Borrower and its 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 of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with GAAP and as to which no Lien
exists. The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1985. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
6.7. Litigation and Contingent Obligations. There is no litigation,
-------------------------------------
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans. Other than any liability incident to any litigation, arbitration or
proceeding which could not reasonably be expected to have a Material Adverse
Effect and other than as set forth on Schedule 2, the Borrower has no material
----------
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 6.4.
-----------
6.8. Subsidiaries. Schedule 3 contains an accurate list of all
------------ ----------
Subsidiaries (identifying which of those Subsidiaries are Consolidated
Subsidiaries) of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries together with a calculation, in the case of foreign
Subsidiaries, as of the quarter ended immediately prior to the Closing Date of
such Subsidiaries' total assets as a percentage of the consolidated total assets
of the Borrower and its Consolidated Subsidiaries . All of the issued and
outstanding shares of capital stock or other ownership interests of such
Subsidiaries have been (to the extent such concepts are relevant with respect to
such ownership interests) duly authorized and issued and are fully paid and non-
assessable. After the formation or acquisition of any New Subsidiary permitted
under Section 7.13, if requested by the Agent or any Lender, the Borrower shall
------------
provide a supplement to Schedule 3 to this Agreement.
----------
6.9. ERISA; Foreign Pension Plan Matters. The sum of (a) the Unfunded
-----------------------------------
Liabilities of all Single Employer Plans and (b) the aggregate unfunded
liabilities of all Foreign Pension Plans (after giving effect to any reserves
for such liabilities) do not in the aggregate exceed $30,000,000. Neither the
Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur, any withdrawal liability to Multiemployer Plans in
excess of $1,000,000 in the aggregate. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group has withdrawn from any Plan or initiated steps to
do so, and no steps have been taken to reorganize or terminate any Plan, other
than such non-compliance, Reportable Events, withdrawals, reorganizations and
terminations which are not reasonable expected to result in liability to the
Borrower and its Consolidated Subsidiaries, in the aggregate, in excess of
$5,000,000. Each Foreign Pension Plan is in compliance in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such plan.
6.10. Accuracy of Information. No factual information, exhibit or report
-----------------------
furnished by the Borrower or any of its Subsidiaries to the Agent, the Swing
Line Lender, any LC Issuer or to any Lender, including, without limitation the
November 1997 Confidential Information Memorandum entitled "Howmet Corporation
$300,000,000 Senior Unsecured Revolving Credit Facility", in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading. The projections
furnished by the Borrower and its Subsidiaries to the Agent, the Swing Line
Lender, the LC Issuers and the Lenders prior to and in connection with the
execution of this Agreement were prepared in good faith and, at the time of the
preparation thereof, based on good faith estimates and assumptions believed by
management of the Borrower to be reasonable, subject to the uncertainties
inherent in projections.
6.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
------------
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
6.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
-------------------
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Material Indebtedness.
6.13. Compliance With Laws. The Borrower and its Subsidiaries have
--------------------
complied in all respects with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property, except for
non-compliance therewith which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
6.14. Ownership of Properties. Except as set forth on Schedule 4, on the
----------------------- ----------
date of this Agreement, the Borrower and its Consolidated Subsidiaries will have
good title, free of all Liens other than those permitted by Section 7.14, to all
------------
of the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Consolidated Subsidiaries.
6.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity
------------------------------------
deemed to hold "plan assets" within the meaning of 29 C.F.R. (S) 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
------------
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
------------
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
-------
406 of ERISA or Section 4975 of the Code.
- --- ------------
6.16. Environmental Matters. In the ordinary course of its business, the
----------------------
officers of the Borrower and its Subsidiaries consider the effect of
Environmental Laws on the business of the Borrower and its Subsidiaries, in the
course of which they identify and evaluate potential risks and liabilities
accruing to the Borrower and its Subsidiaries due to Environmental Laws. On the
basis of this consideration, the Borrower has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
6.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
----------------------
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.18. Public Utility Holding Company Act. Neither the Borrower nor any
----------------------------------
Subsidiary is 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.
ARTICLE VII: COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
7.1. Financial Reporting. The Borrower will maintain, for itself and each
-------------------
Consolidated Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public
accountants of nationally recognized standing or otherwise acceptable
to the Lenders, prepared in accordance with GAAP on a consolidated
basis for itself and its Consolidated Subsidiaries, including balance
sheets as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows,
accompanied by (a) any management letter prepared by said accountants
and (b) a certificate of said accountants that, in the course of their
examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default under
the financial terms contained in Section 7.10, 7.12, 7.13, 7.14, 7.19
------------ ---- ---- ---- ----
or 7.20, or if, in the opinion of such accountants, any such Default
----
or Unmatured Default shall exist, stating the nature and status
thereof.
(ii) Within 45 days after the close of each of the first three
quarters in each fiscal year, for itself and its Consolidated
Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and consolidated profit and loss and reconciliation
of surplus statements and a statement of cash flows for the period
from the beginning of such fiscal year to the end of such quarter
(subject in each case to normal year-end audit adjustments), all
certified by its chief financial officer or treasurer.
(iii) As soon as available, but in any event within 90 days after the
beginning of each fiscal
year of the Borrower, beginning with the fiscal year commencing
January 1, 1999, a copy of the plan and forecast (including a
projected consolidated balance sheet, income statement and funds flow
statement) of the Borrower and its Consolidated Subsidiaries for such
fiscal year.
(iv) Together with the financial statements required under Sections
--------
7.1(i) and (ii), a compliance certificate in substantially the form of
------ ----
Exhibit G signed by its chief financial officer or treasurer showing
the calculations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status
thereof.
(v) Within 270 days after the close of each fiscal year, a statement
of the Unfunded Liabilities of each Single Employer Plan, certified as
correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to
any Plan, or any material unfunded liability has arisen with respect
to any Foreign Pension Plan, a statement, signed by the chief
financial officer or treasurer of the Borrower, describing said
Reportable Event or material unfunded liability and the action which
the Borrower proposes to take with respect thereto.
(vii) As soon as possible and in any event within 30 days after
receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of any material release by the
Borrower, any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and (b) any notice
alleging any material violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower or
any of its Subsidiaries.
(viii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
which the Borrower or any of its Consolidated Subsidiaries files with
the Securities and Exchange Commission.
(x) Promptly after the execution thereof, copies of all material
amendments to any of the Receivables Purchase Documents.
(xi) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
7.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
---------------
to, use the proceeds of the Loans for working capital, capital expenditures and
other general corporate purposes (which may include refinancing certain existing
indebtedness, including, without limitation, prepayment of the Senior
Subordinated Notes and dividends by the Borrower to Howmet Holdings Corporation
for its prepayment of a large portion of the current balance of the subordinated
promissory notes issued by it as partial consideration in connection with the
transactions evidenced by the Stock Purchase Agreement dated as of October 12,
1995 among Pechiney S.A., Pechiney International, Howmet Cercast S.A. and Howmet
Holdings Corporation) or to repay outstanding Loans in accordance with the terms
of Section 2 or Reimbursement Obligations in accordance with the terms of
---------
Article III. The Company shall use the proceeds of Advances in compliance with
- -----------
all applicable legal and regulatory requirements and any use shall not result in
a violation of any such applicable regulatory requirements, including, without
limitation, Regulation U, and the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the regulations thereunder. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation U) or to make any
other Acquisition other than a Permitted Acquisition.
7.3. Notice of Default. The Borrower will, and will cause each Subsidiary
-----------------
to, give prompt notice in writing to the Lenders of the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
7.4. Conduct of Business. The Borrower will carry on and conduct its
-------------------
business in the manner of a diversified industrial company with a commitment to
the aerospace and industrial gas turbine industries and will cause each
Subsidiary to conduct its business in a manner consistent with the Company's
objectives as such. The Borrower will, and will cause each Subsidiary to, do
all things necessary to remain duly incorporated or organized, validly existing
and (to the extent such concept applies to such entity) in good standing as a
corporation, partnership or limited liability company in its jurisdiction of
incorporation or organization, and maintain all requisite authority to conduct
its business in each jurisdiction where, because of the nature of its activities
or properties, such authority is required and the failure to maintain such
authority would materially and adversely affect its business, assets, financial
condition, operations or prospects.
7.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
-----
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with GAAP.
7.6. Insurance. The Borrower will, and will cause each Consolidated
---------
Subsidiary to, maintain insurance in such amounts and covering such risks as is
consistent with sound business practice.
7.7. Compliance with Laws. The Borrower will, and will cause each
--------------------
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, except for non-compliance therewith
which individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
7.8. Maintenance of Properties. The Borrower will, and will cause each
-------------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements, except for Property no longer
used or useful in the respective businesses of the Borrower or such Subsidiary.
7.9. Inspection. To the extent permitted by applicable law and not in
----------
violation of any agreements of the Borrower or its Subsidiaries with any third
party regarding confidential, proprietary or secret information, the Borrower
will, and will cause each Consolidated Subsidiary to, permit the Agent and the
Lenders, by their respective representatives and agents, to inspect any of the
Property, books and financial records of the Borrower and each Consolidated
Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Consolidated Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Consolidated
Subsidiary with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as the Agent or any Lender may designate.
7.10. Indebtedness. The Borrower will not, nor will it permit any
------------
Consolidated Subsidiary to, create, incur or suffer to exist any Indebtedness,
except:
(i) The Loans and Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 4.
----------
(iii) Indebtedness arising under Rate Hedging Agreements which at the time
of entering into such Rate Hedging Agreements were permitted under the
terms of Section 7.18.
------------
(iv) Indebtedness incurred in connection with the Receivables Purchase
Documents; provided that Receivables Facility Attributed Indebtedness
incurred in connection therewith does not exceed in $75,000,000 in the
aggregate at any time.
(v) Intercompany Indebtedness between any members of the Obligor
Group.
(vi) Other Indebtedness in addition to that referred to elsewhere in
this Section 7.10 incurred by the Borrower's Consolidated
------------
Subsidiaries; provided that no Default or Unmatured Default shall have
occurred and be continuing at the date of such incurrence or would
result therefrom; and provided further that the aggregate outstanding
amount of all Indebtedness incurred by the Borrower's Consolidated
Subsidiaries (other than Indebtedness incurred pursuant to any other
clause of this Section 7.10) shall not at any time exceed $75,000,000.
-------------
(vii) Indebtedness incurred in connection with Sale-Leaseback
transactions permitted pursuant to Section 7.12.
------------
(viii) Indebtedness secured by Liens permitted pursuant to Section
-------
7.14; provided, that no Default or Unmatured Default shall have
----
occurred and be continuing at the date of such incurrence or would
result therefrom and provided, further, that to the extent that such
Indebtedness is subject to restrictions or limitations contained in
other provisions of this Agreement, such Indebtedness is in compliance
with such other restrictions or limitations.
(ix) Other unsecured Indebtedness in addition to that referred to
elsewhere in this Section 7.10 incurred by the Borrower; provided that
------------
no Default or Unmatured Default shall have occurred and be continuing
at the date of such incurrence or would result therefrom.
7.11. Merger. The Borrower will not, nor will it permit any Consolidated
------
Subsidiary to, merge or consolidate with or into any other Person, except that a
Consolidated Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary
or with any other Person in connection with a Permitted Acquisition.
7.12. Sale of Assets. Other than in connection with transactions
--------------
expressly permitted by Sections 7.11, 7.13 and 7.14, the Borrower will not, nor
------------- ---- ----
will it permit any Consolidated Subsidiary to, lease, sell or otherwise dispose
of its Property to any other Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property (other than
pursuant to clause (iii) below) that, together with all other Property
------------
of the
Borrower and its Consolidated Subsidiaries previously leased,
sold or disposed of (other than inventory in the ordinary course of
business and other than pursuant to clause (iii) below) as permitted
------------
by this Section from and after the Closing Date, do not constitute a
Substantial Portion of the Property of the Borrower and its
Consolidated Subsidiaries.
(iii) Any transfer of an interest in accounts or notes receivable on a
limited recourse basis under the Receivables Purchase Documents,
provided that such transfer qualifies as a legal sale and as a sale
under GAAP and that the amount Receivables Facility Attributed
Indebtedness does not exceed $75,000,000 at any one time outstanding.
(iv) Sale Leaseback Transactions; provided that the Property subject
to all such Sale Leaseback Transactions shall not exceed an aggregate
amount in excess of five percent (5.0%) of consolidated assets of the
Borrower and its Consolidated Subsidiaries as would be shown in the
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries as at the beginning of the twelve-month period ending
with the month in which such determination is made.
7.13. Investments and Acquisitions; New Subsidiaries . The Borrower will
----------------------------------------------
not, nor will it permit any Consolidated Subsidiary to, make or suffer to exist
any Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of any
Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Consolidated Subsidiaries and other
Investments in existence on the date hereof and described in
Schedule 5.
----------
(iii) Investments in Consolidated Subsidiaries (other than Joint
Ventures).
(iv) Investments in the Joint Ventures as set forth in this clause
(iv); provided the aggregate amount of such Investments shall not
exceed:
(a) $30,000,000 in Komatsu-Howmet Ltd;
(b) $10,000,000 in Sprayform Technologies International, LLC;
(c) $45,000,000 in a Joint Venture identified to the Agent pursuant
to a confidential disclosure letter; provided such Investment is
made on or prior to September 30, 1998; and
(d) $85,000,000 in the aggregate for all other Investments in Joint
Ventures (including, without limitation, Investments made in any
Consolidated Subsidiary which later becomes a Joint Venture at
such time as it becomes a Joint Venture).
For purposes of calculating the Investments in any particular Joint
Venture or group of Joint Ventures pursuant to clauses (a) through (d)
above, the Investment shall equal (1) the aggregate amount of the
Investments minus (2) the aggregate amount of all distributions
received by the Borrower and its Consolidated Subsidiaries from such
Joint Venture or group of Joint Ventures.
(v) Investments in Blade required in connection with the Receivables
Purchase Documents.
(vi) Acquisitions meeting the following requirements (each such Acquisition
constituting a "PERMITTED ACQUISITION"):
(a) No Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(b) The businesses being acquired shall be consistent with the
Borrower's objective to carry on and conduct its business in the manner of
a diversified industrial company with a commitment to the aerospace and
industrial gas turbine industries;
(c) Material Indebtedness, if any, incurred by the Borrower or any of
its Subsidiaries to the seller as part of the consideration therefor shall
be subordinated on terms and conditions acceptable to the Agent and the
Required Lenders;
(d) The purchase is consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis;
(e) After giving effect to such Acquisition, the representations and
warranties set forth in the Credit Agreement shall be true and correct in
all material respects on and as of the date of such Acquisition with the
same effect as though made on and as of such date;
(f) If the aggregate purchase price for the Acquisition (including,
without limitation, the cash portion of the purchase price, all
Indebtedness incurred and/or assumed in connection with such Acquisition,
and transaction related contractual payments, including amounts payable
under
non-compete, consulting or similar agreements) (valuing all non-
cash consideration at fair value) is equal to or greater than
$100,000,000, prior to each such Acquisition, the Borrower shall
deliver to the Agent and the Lenders a certificate from one of the
authorized financial officers certifying that after giving effect to
such Acquisition and the incurrence of any Indebtedness under the
Credit Agreement or otherwise in connection therewith, on a pro forma
--- -----
basis, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the
last day of the Borrower's most recently completed fiscal quarter, the
Borrower would have been in compliance with all of the covenants
contained in this Agreement; and
(g) The written consent of the Required Lenders shall have been
obtained in connection with any Acquisition if the aggregate purchase
price (including, without limitation, the cash portion of the purchase
price, all Indebtedness incurred and/or assumed in connection with
such Acquisition, and transaction related contractual payments,
including amounts payable under non-compete, consulting or similar
agreements) (valuing all non-cash consideration at fair value) is
equal to or greater than $100,000,000.
(vii) Investments resulting from Financial Contracts entered into
in the ordinary course of business and which do not violate the terms
of Section 7.18.
------------
The Borrower will not, nor will it permit any Consolidated Subsidiary to, create
or acquire a Subsidiary (a "NEW SUBSIDIARY") other than in connection with a
Permitted Acquisition or pursuant to any transaction that is permitted by or not
otherwise prohibited by this Agreement; provided that (1) upon the creation or
--------
acquisition of each New Subsidiary which is a domestic Consolidated Subsidiary,
the Borrower shall cause each such New Subsidiary to promptly (but in any event
within 30 days ) deliver to the Agent an executed counterpart of a Guaranty
Supplement to become a Subsidiary Guarantor under the Subsidiary Guaranty in the
form of Annex I to the form of Subsidiary Guaranty attached as Exhibit C hereto;
------ ---------
(2) upon the creation or acquisition of each New Subsidiary which is a Material
Foreign Subsidiary the Borrower shall or shall cause its applicable domestic
Subsidiary promptly (but in any event within 60 days following the creation or
acquisition thereof) to execute a Pledge Agreement with respect to 65% of the
stock of such Material Foreign Subsidiary; and (3) in either case, shall deliver
appropriate corporate resolutions, opinions, stock certificates, stock powers
and other documentation in form and substance satisfactory to the Agent in
connection therewith.
7.14. Liens. The Borrower will not, nor will it permit any Consolidated
-----
Subsidiary to, create, incur, assume or suffer to exist any Lien in, of or on
the Property of the Borrower or any of its Consolidated Subsidiaries , or assign
any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute,
except:
(i) Liens in favor of the Agent, for the benefit of itself, the Swing
Line Lender, the LC Issuers and the Lenders, granted pursuant to any
Collateral Document.
(ii) Liens arising under the Receivables Purchase Documents.
(iii) Inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with GAAP (or the equivalent thereof in any
country in which a foreign Consolidated Subsidiary is doing business,
as applicable);
(iv) Liens in respect of property or assets of the Borrower or any of
its Consolidated Subsidiaries imposed by law, which were incurred in
the ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of the property or assets of the Borrower or
the Borrower and its Subsidiaries taken as a whole, or materially
impair the use thereof in the operation of the business of the
Borrower or the Borrower and its Subsidiaries taken as a whole or (y)
which are being contested in good faith by appropriate proceedings,
which proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale of
the property or assets subject to any such Lien;
(v) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule 4, but only to the
----------
respective date, if any, set forth in such Schedule 4 for the removal
----------
and termination of any such Liens, plus renewals and extensions of
such Liens to the extent set forth on Schedule 4, provided that (x)
---------- --------
the aggregate principal amount of the Indebtedness, if any, secured by
such Liens does not increase from that amount outstanding at the time
of any such renewal or extension and (y) any such renewal or extension
does not encumber any additional assets or properties of the Borrower
or any of its Consolidated Subsidiaries;
(vi) Licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the
conduct of the business of the Borrower or the Borrower and its
Subsidiaries taken as
a whole or materially diminishing the aggregate value of any
collateral for the Obligations;
(vii) Liens upon assets of the Borrower and its Consolidated
Subsidiaries subject to Capitalized Lease Obligations provided that at
no time shall the Indebtedness with respect to such Capitalized Lease
Obligations exceed $10,000,000 in the aggregate at any one time
outstanding; provided that (x) such Liens only serve to secure the
payment of Indebtedness arising under such Capitalized Lease
Obligation and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset (other
than proceeds thereof) of the Borrower or any Consolidated Subsidiary
of the Borrower;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrower or any of its Consolidated Subsidiaries at
the time of acquisition thereof by the Borrower or any such
Consolidated Subsidiary or within 120 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof; provided that (x) the aggregate outstanding principal amount
of all Indebtedness secured by Liens permitted by this clause (viii)
shall not at any time exceed $5,000,000 and (y) in all events, the
Lien encumbering the assets so acquired does not encumber any other
asset (other than proceeds thereof) of the Borrower or such
Consolidated Subsidiary;
(ix) Easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now
or hereafter in existence, not securing Indebtedness, not materially
interfering with the conduct of the business of the Borrower or the
Borrower and its Subsidiaries taken as a whole and not materially
diminishing the aggregate value of any collateral for the Obligations;
(x) Liens arising from precautionary UCC financing statement filings
regarding Operating Leases entered into by the Borrower or any of its
Consolidated Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 8.9, provided that no
-----------
cash or property is deposited or delivered to secure the respective
judgment or award (or any appeal bond in respect thereof, except as
permitted by following clause (xiii));
(xii) Statutory and contractual landlords' liens under leases or
subleases to which the Borrower or any of its Consolidated
Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security, (y) to secure the performance of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and
appeal bonds, statutory bonds, bids, leases, government contracts,
trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money) or (z) arising by virtue of deposits made in the
ordinary course of business to secure liability for premiums to
insurance carriers, provided that the aggregate amount of deposits at
any time pursuant to sub-clause (y) and sub-clause (z) shall not
exceed $5,000,000 in the aggregate;
(xiv) Any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement;
(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection
with the importation of goods;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the manufacture or sale of
goods entered into by the Borrower or any of its Consolidated
Subsidiaries in the ordinary course of business in accordance with the
past practices of the Borrower and its Consolidated Subsidiaries prior
to the Closing Date;
(xvii) Deposits made to secure statutory obligations in the form of
excise taxes;
(xviii) Liens upon specific items of inventory or other goods and
proceeds thereof granted in favor of any Person (but not directly or
indirectly securing any Indebtedness) to facilitate the purchase,
shipment or storage of such inventory or other goods in the ordinary
course of business;
(xix) Liens encumbering deposits securing permitted Rate Hedging
Obligations, so long as the aggregate amount of deposits at any time
subject to Liens pursuant to this clause (xix) does not exceed
$3,000,000 in the aggregate;
(xx) Liens encumbering deposits made in the ordinary course of
business, not to exceed $5,000,000 in the aggregate at any time, to
secure nondelinquent obligations arising from statutory, regulatory,
contractual or warranty requirements of the Borrower or its
Consolidated Subsidiaries for which a reserve or other appropriate
provision, if any, as shall be required by GAAP, shall have been made;
(xxi) Liens on assets of foreign Consolidated Subsidiaries, provided
that (x) such Liens do not extend to, or encumber, assets which
constitute collateral for the Obligations or the capital stock of the
Borrower or any of its Consolidated Subsidiaries and (y) such Liens
extending to the assets of any foreign Consolidated Subsidiary secure
only Indebtedness incurred by such foreign Consolidated Subsidiary in
compliance with Section 7.10(v);
---------------
(xxii) Liens on assets of any Consolidated Subsidiary of the Borrower
acquired as a result of a Permitted Acquisition and securing only
Permitted Acquired Debt of such Consolidated Subsidiary, so long as
such Liens comply with the requirements set forth in the definition of
Permitted Acquired Debt; and
(xxiii) Liens not otherwise permitted by the foregoing clauses (i)
through (xxii) to the extent attaching to properties and assets with
an aggregate fair value not in excess of, and securing liabilities not
in excess of, $10,000,000 in the aggregate at any time outstanding.
In addition, neither the Borrower nor any of its Consolidated Subsidiaries shall
become a party to any agreement, note, indenture or other instrument, or take
any other action, which would prohibit the creation of a Lien on any material
portion of its Property in favor of the Agent for the benefit of itself, the
Lenders, the Swing Line Lender and the LC Issuers, as collateral for the
Obligations.
7.15. Affiliates. Except as set forth on Schedule 6, the Borrower will
---------- ----------
not, and will not permit any Consolidated Subsidiary to, enter into any
transaction (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate except in
the ordinary course of business and pursuant to the reasonable requirements of
the Borrower's or such Consolidated Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Consolidated
Subsidiary than the Borrower or such Consolidated Subsidiary would obtain in a
comparable arms-length transaction other than Permitted Receivables Transfers.
7.16. Incorporation of Senior Subordinated Note Indenture Restrictions.
----------------------------------------------------------------
Until the outstanding principal balance of the Indebtedness evidenced by the
Senior Subordinated Notes has been reduced below $10,000,000, all covenants and
defaults contained in the Senior Subordinated Note Indenture which are
applicable at any time to such Indebtedness are incorporated herein by reference
to the extent such covenants or defaults are more restrictive on the Borrower or
its Subsidiaries than those set forth herein and the Borrower and its
Subsidiaries shall be required to comply with such more restrictive terms as
though fully set forth herein.
7.17. Subordinated Indebtedness. Other than with respect to the Senior
-------------------------
Subordinated Notes, the Borrower will not, and will not permit any Subsidiary
to, make
any amendment or modification to the indenture, note or other agreement
evidencing or governing any Subordinated Indebtedness of the Borrower or such
Subsidiary, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire.
7.18. Financial Contracts. The Borrower shall not and shall not permit
-------------------
any of its Consolidated Subsidiaries to enter into any Financial Contract, other
than interest rate, foreign currency or commodity exchange, swap, collar, cap or
similar Rate Hedging Agreements entered into by the Borrower or such
Consolidated Subsidiaries pursuant to which the Borrower or such Consolidated
Subsidiary hedged its actual interest rate, foreign currency or commodity
exposure existing at the time thereof.
7.19. Pledge Agreements. The Borrower will not at any time permit the
-----------------
aggregate assets of all of the Borrower's foreign Consolidated Subsidiaries in
connection with which the Agent has not received a Pledge Agreement to exceed
ten percent (10%) of consolidated total assets of the Borrower and its
Consolidated Subsidiaries.
7.20. Financial Covenants.
-------------------
7.20.1. Interest Coverage Ratio. The Borrower will not permit the
-----------------------
ratio, determined as of the end of each of its fiscal quarters for the then
most-recently ended four fiscal quarters, of (i) Consolidated EBIT to (ii)
Consolidated Interest Expense to be less than 2.50 to 1.0.
7.20.2. Leverage Ratio. The Borrower will not permit its Leverage
--------------
Ratio, determined as of the end of each of its fiscal quarters, to be
greater than 3.25 to 1.0.
7.20.3. Minimum Net Worth. The Borrower will at all times maintain
-----------------
Consolidated Net Worth of not less than the sum of (i) $265,000,000 plus
(ii) fifty percent (50%) of Consolidated Net Income earned in each fiscal
quarter beginning with the quarter ending December 31, 1997 (without
deduction for losses).
7.21 Subsidiary Covenants. Except for encumbrances or restrictions
--------------------
existing under or by reason of (i) applicable law, (ii) this Agreement or the
other Loan Documents, (iii) the Receivables Purchase Documents, (iv) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest, and (v) restrictions imposed by the holder of any Lien
permitted under Section 7.14 on the transfer of the assets subject thereto, the
------------
Borrower will not, and will not permit any Consolidated Subsidiary to, create or
otherwise cause to become effective or permit to exist any consensual
encumbrance or restriction of any kind on the ability of any Consolidated
Subsidiary to pay dividends or make any other distribution on its stock, redeem
or repurchase its stock, make any other similar payment or distribution, pay any
Indebtedness or other Obligation owed by the Borrower or any other Consolidated
Subsidiary, make loans or advances or other Investments in the Borrower or any
other
Consolidated Subsidiary, or sell, transfer or otherwise convey any of its
property to the Borrower or any other Consolidated Subsidiary.
ARTICLE VIII: DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
8.1. Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders, the Swing Line Lender,
the LC Issuer or the Agent under or in connection with this Agreement, any
Credit Extension, or any certificate or information delivered in connection with
this Agreement, any Credit Extension or any other Loan Document shall be
materially false on the date as of which made.
8.2. Nonpayment of principal of any Loan or Reimbursement Obligation when
due, or nonpayment of interest upon any Loan or of any facility fee, letter of
credit fee or other obligations under any of the Loan Documents within five days
after the same becomes due.
8.3. The breach by the Borrower of any of the terms or provisions of
Section 7.2 (only as to the last sentence thereof), 7.3, 7.10, 7.11, 7.12, 7.13,
- ----------- --- ---- ---- ---- ----
7.14, 7.16, 7.17, or 7.20.
- ---- ---- ---- ----
8.4. The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VIII) of any of the terms or
------------
provisions of this Agreement which is not remedied within fifteen days after
written notice from the Agent or any Lender.
8.5. Failure of the Borrower or any of its Consolidated Subsidiaries to
pay when due any Indebtedness aggregating in excess of $10,000,000 ("MATERIAL
INDEBTEDNESS"); or the default by the Borrower or any of its Consolidated
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any agreement
under which any such Material Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of the Borrower or any of its Consolidated
Subsidiaries shall be declared to be due and payable or required to be prepaid
or repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Consolidated Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.
8.6. The Borrower or any of its Consolidated Subsidiaries shall (i) have
an order for relief entered with respect to it under the Federal bankruptcy laws
or other applicable
bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) 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 Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws or
other applicable bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or 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, (v) take any
corporate or partnership action to authorize or effect any of the foregoing
actions set forth in this Section 8.6 or (vi) fail to contest in good faith any
-----------
appointment or proceeding described in Section 8.7.
------------
8.7. Without the application, approval or consent of the Borrower or any
of its Consolidated Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its Consolidated
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 8.6(iv) shall be instituted against the Borrower or any of
---------------
its Consolidated Subsidiaries and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of 60 consecutive
days.
8.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Consolidated Subsidiaries which, when taken
together with all other Property of the Borrower and its Consolidated
Subsidiaries so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
8.9. The Borrower or any of its Consolidated Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $5,000,000, which is not stayed on appeal.
8.10. The sum of (a) the Unfunded Liabilities of all Single Employer Plans
and (b) the unfunded liabilities with respect to all Foreign Pension Plans shall
exceed $30,000,000 in the aggregate or any Reportable Event shall occur in
connection with any Plan.
8.11. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $1,000,000 per annum.
8.12. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $1,000,000.
8.13. The Borrower or any of its Consolidated Subsidiaries shall (i) be
the subject of any proceeding or investigation pertaining to the release by the
Borrower, any of its Consolidated Subsidiaries or any other Person of any toxic
or hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
----------
clause (ii), could reasonably be expected to have a Material Adverse Effect.
- -----------
8.14. Any Change in Control shall occur.
8.15. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
8.16. The Subsidiary Guaranty shall fail to remain in full force or effect
with respect to each Subsidiary Guarantor or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of the Subsidiary
Guaranty, or any Subsidiary Guarantor shall fail to comply with any of the terms
or provisions of the Subsidiary Guaranty, or any Subsidiary Guarantor shall deny
that it has any further liability under the Subsidiary Guaranty, or shall give
notice to such effect.
8.17. Any of the following shall occur: (i) any Collateral Document shall
for any reason fail to create a valid and perfected first priority security
interest in any collateral purported to be covered thereby, except as permitted
by the terms of any Collateral Document, (ii) any Collateral Document shall fail
to remain in full force or effect, (iii) any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any Collateral
Document, or (iv) the Borrower or any of its Subsidiaries shall fail to comply
with any of the terms or provisions of any Collateral Document, and, in the case
of clauses (i), (ii) and (iv), such occurrence shall continue for a period of 60
days after the earlier of the Borrower's knowledge thereof or the Borrower
received notice thereof from the Agent or any Lender.
8.18 An "Early Amortization Event," "Servicer Default" or event shall
occur resulting in the termination of purchases and/or funding under the
Receivables Purchase
Agreement, or the Borrower shall cease to act as "Servicer" under the Amended
and Restated Pooling and Servicing Agreement dated as of April 18, 1996 executed
in connection with the Receivables Purchase Agreement, as the same may have been
or may hereafter be amended, modified , supplemented or restated.
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND
REMEDIES
9.1. Acceleration. (a) If any Default described in Section 8.6 or 8.7
------------ ----------- ---
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder, the obligation of the Swing Line Lender to make Swing Line
Loans and the obligation of the LC Issuers to issue Facility LCs shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, the LC Issuers,
the Swing Lender or any Lender. If any other Default occurs, the Required
Lenders (or the Agent with the consent of the Required Lenders) may terminate or
suspend the obligations of the Lenders to make Loans hereunder, the Swing Line
Lender to make Swing Line Loans and the obligation of the LC Issuers to issue
Facility LCs, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
(b) In addition, the Borrower agrees that upon the occurrence and during
the continuance of any Default, it shall, if requested at any time by the Agent
upon instruction from the Required Lenders, pay (and, in the case of any of the
Defaults specified in Section 8.6 or 8.7 with respect to the Borrower,
----------- ---
forthwith, without any demand or the taking of any other action by the Agent or
any Lender, it shall pay) to the Agent an amount in immediately available funds
equal to the then aggregate amount of the LC Obligations to be held as security
therefor for the benefit of the Lenders and the LC Issuer.
(c) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder, the obligation of the Swing Line Lender to make Swing Line Loans and
the obligation of the LC Issuers to issue Facility LCs as a result of any
Default (other than any Default as described in Section 8.6 or 8.7 with respect
----------- ---
to the Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
9.2. Amendments. Subject to the provisions of this Article IX, the
---------- ----------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided,
however, that no such supplemental agreement shall, without the consent of all
of the Lenders:
(a) Reduce the principal of or rate of interest on any Loan, any
Reimbursement Obligation or any fees hereunder; or
(b) Postpone the date fixed for any payment of principal of or
interest on any Loan, any Reimbursement Obligation or any fees
hereunder; or
(c) Extend the Facility Termination Date, or otherwise extend the term
of the Commitment of any Lender; or
(d) Change the definition of Required Lenders or the percentage of the
Commitments, the Outstanding Credit Exposures or the Outstanding LC
Exposures or of the aggregate unpaid principal amount of the Notes, or
the number of Lenders, which shall be required for the Lenders or any
of them to take any action under this Section or any other provision
of the Loan Documents; or
(e) Permit the Borrower to assign any of its rights or obligations
under this Agreement;
(f) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or which
shall otherwise have been approved in writing by the Required Lenders
(or, if required by the other terms of Section 9.2, all of the
-----------
Lenders), release any Subsidiary from all or any portion of its
guaranty liability under the Subsidiary Guaranty; or
(g) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or which
shall otherwise have been approved in writing by the Required Lenders
(or, if required by the other terms of Section 9.2, all of the
-----------
Lenders), release any of the collateral pledged pursuant to the Pledge
Agreements; or
(h) Amend or waive any of the provisions of this Section 9.2.
-----------
No amendment of any provision of this Agreement relating to the Agent, the Swing
Line Lender or the LC Issuers shall be effective without the written consent of
the Agent, the Swing Line Lenders or the LC Issuers, as applicable. The Agent
may waive payment of the fee required under Section 13.3.2 without obtaining the
--------------
consent of any other party to this Agreement.
9.3. Preservation of Rights. No delay or omission of the Lenders, Swing
----------------------
Line Lenders, LC Issuers or the Agent to exercise any right under the Loan
Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or the inability of the Borrower to satisfy the conditions precedent
to such Loan shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 9.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full.
ARTICLE X: GENERAL PROVISIONS
10.1. Survival of Representations. All representations and warranties of
---------------------------
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
10.2. Governmental Regulation. Anything contained in this Agreement to
-----------------------
the contrary notwithstanding, no Lender, Swing Line Lender or LC Issuer shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
10.3. Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.4. Entire Agreement. The Loan Documents embody the entire agreement
----------------
and understanding among the Borrower, the Agent, the Swing Line Lender, the LC
Issuers and the Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent, the Swing Line Lender, the LC Issuers and the
Lenders relating to the subject matter thereof other than the fee letter
described in Section 11.13.
-------------
10.5. Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 10.6, 10.10 and 11.11 to the extent specifically set
------------- ----- -----
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
10.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
-------------------------
Agent and the Arranger for any reasonable costs, internal charges and out-of-
pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Agent, the Arranger, the Swing Line Lender, the LC Issuers and the Lenders
for any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, the Arranger, the Swing Line
Lender, the LC Issuers and the Lenders, which attorneys may be employees of the
Agent, the Arranger, the Swing Line Lender, the LC Issuers or the Lenders) paid
or incurred by the Agent, the Arranger, the Swing Line Lender, the LC Issuer or
any Lender in connection with the collection and enforcement of the Loan
Documents. Expenses being reimbursed by the Borrower under this Section
include, without limitation, costs and expenses incurred in connection with the
Reports described in the following sentence. The Borrower acknowledges that
from time to time First Chicago may prepare and may distribute to the Lenders
(but shall have no obligation or duty to prepare or to distribute to the
Lenders) certain audit reports (the "REPORTS") pertaining to the Borrower's
assets or business for internal use by First Chicago from information furnished
to it by or on behalf of the Borrower, after First Chicago has exercised its
rights of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the Swing Line Lender, each of the LC Issuers and each Lender, its
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 Agent, the
Arranger, the Swing Line Lender, any LC Issuer or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan or
Facility LC hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
solely from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 10.6 shall
------------
survive the termination of this Agreement.
10.7. Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.8. Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
10.9. Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.10. Nonliability of Lenders. The relationship between the Borrower on
-----------------------
the one hand and the Lenders, the LC Issuers, the Swing Line Lender and the
Agent on the other hand shall be solely that of borrower and lender. Neither
the Agent, the Arranger, the LC Issuers, the Swing Line Lender nor any Lender
shall have any fiduciary responsibilities to the Borrower. Neither the Agent,
the Arranger, the LC Issuers, the Swing Line Lender nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
The Borrower agrees that neither the Agent, the Arranger, the Swing Line Lender,
the LC Issuers nor any Lender shall have liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the Swing Line
Lender, the LC Issuers nor any Lender shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to sue for, any special,
indirect or consequential damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
10.11. Confidentiality. Each Lender, Swing Line Lender, LC Issuer and the
---------------
Agent agrees to hold any confidential information which it may receive from the
Borrower pursuant to this Agreement in confidence, except for disclosure (i) to
its Affiliates and to other Lenders, LC Issuers, the Swing Line Lender or the
Agent and their respective Affiliates, (ii) to legal counsel, accountants, and
other professional advisors to that Lender, Swing Line Lender, LC Issuer, the
Agent or to a Transferee, (iii) to regulatory officials, (iv) to any Person as
requested pursuant to or as required by law, regulation, or legal process, (v)
to any Person in connection with any legal proceeding to which that Lender,
Swing Line Lender, LC Issuer or the Agent is a party, and (vi) permitted by
Section 13.4.
- ------------
10.12. Nonreliance. Each Lender, LC Issuer and Swing Line Lender hereby
-----------
represents that it is not relying on or looking to any margin stock (as defined
in Regulation U of the Board of Governors of the Federal Reserve System) for the
repayment of the Loans provided for herein.
ARTICLE XI: THE AGENT
11.1. Appointment; Nature of Relationship. The First National Bank of
-----------------------------------
Chicago is hereby appointed by each of the Lenders, LC Issuers and the Swing
Line Lender as its contractual representative (herein referred to as the
"AGENT") hereunder and under each other Loan Document, and each of the Lenders,
the Swing Line Lender and each of the LC Issuers irrevocably authorizes the
Agent to act as the contractual representative of such Lender, Swing Line Lender
and LC Issuer with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this Article XI.
----------
Notwithstanding the use of the defined term "Agent," it is expressly understood
and agreed that the Agent shall not have any fiduciary responsibilities to any
Lender, LC Issuer or Swing Line Lender by reason of this Agreement or any other
Loan Document and that the Agent is merely acting as the contractual
representative of the Lenders, the Swing Line Lender, and the LC Issuers with
only those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Lenders', LC Issuers' and Swing Line
Lender's contractual representative, the Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, Swing Line Lenders or LC Issuers (ii) is
a "representative" of the Lenders, Swing Line Lender and LC Issuers within the
meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting as
-------------
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, the Swing Line Lender and the LC Issuers hereby agrees to assert no
claim against the Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender, each LC Issuer
and the Swing Line Lender hereby waives.
11.2. Powers. The Agent shall have and may exercise such powers under the
------
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, the LC Issuers or the Swing
Line Lender or any obligation to the Lenders, LC Issuers or Swing Line Lender to
take any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Agent.
11.3. General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to the Borrower, any Lender, any
LC Issuer or the Swing Line Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen solely from the gross negligence or willful misconduct of such Person.
11.4. No Responsibility for Loans, Recitals, etc. 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 (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender, LC Issuer or Swing Line Lender; (c) the
satisfaction of any condition specified in Article V, except receipt of items
---------
required to be delivered solely -to the Agent; (d) the existence or
possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders, LC Issuers or the Swing Line Lender information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
11.5. Action on Instructions of Lenders. The Agent shall in all cases be
---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders, the LC Issuers and the
Swing Line Lender. The Lenders, the Swing Line Lender and the LC Issuers hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.6. Employment of Agents and Counsel. The Agent may execute any of its
--------------------------------
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, the Swing Line Lender or the LC Issuers, except as to money or
securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Agent shall be entitled to advice of counsel concerning
the contractual arrangement between the Agent and the Lenders, the LC Issuers
and the Swing Line Lender and all matters pertaining to the Agent's duties
hereunder and under any other Loan Document.
11.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
------------------------------
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
11.8. Agent's Reimbursement and Indemnification. The Lenders agree to
-----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, the Swing Line Lender or the LC Issuers in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Lender, LC Issuer or the Swing Line Lender or between two or more of the
Lenders, LC Issuers and the Swing Line Lender) and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted against the Agent in
connection with any dispute between the Agent and any Lender, LC Issuer or the
Swing Line Lender or between two or more of the Lenders, the LC Issuers and the
Swing Line Lender), or the enforcement of any of the terms of the Loan Documents
or of any such other documents, provided that no Lender shall be liable for any
of the foregoing to the extent any of the foregoing is found in a final non-
appealable judgment by a court of competent jurisdiction to have resulted solely
from the gross negligence or willful misconduct of the Agent. The obligations
of the Lenders under this Section 11.8 shall survive payment of the Obligations
------------
and termination of this Agreement.
11.9. Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
11.10. Rights as a Lender. In the event the Agent is a Lender, Swing Line
------------------
Lender or LC Issuer, the Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender, LC Issuer or the Swing Line Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders" , "LC Issuer"
or "LC Issuers" and "Swing Line Lender" shall, at any time when the Agent is a
Lender, LC Issuer or Swing Line Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person.
11.11. Lender Credit Decision. Each Lender, LC Issuer and Swing Line
----------------------
Lender acknowledges that it has, independently and without reliance upon the
Agent, the Arranger or any other Lender, LC Issuer or Swing Line Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each of the Lenders, LC Issuers and the Swing Line Lender also acknowledges that
it will, independently and without reliance upon the Agent, the Arranger or any
other Lender, the Swing Line Lender or LC Issuer, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
11.12. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the resigning Agent gives notice of
its intention to resign. The Agent may be removed at any time with or without
cause by written notice received by the Agent from the Required Lenders, such
removal to be effective on the date specified by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Borrower and the
Lenders, the Swing Line Lender and the LC Issuers, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of the Borrower or any Lender, Swing Line Lender or LC Issuer, appoint
any of its Affiliates which is a commercial bank as a successor Agent hereunder.
If the Agent has resigned or been removed and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender, Swing Line Lender and LC Issuer and for all other purposes shall deal
directly with the Lenders, the Swing Line Lender and the LC Issuers. No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has accepted the appointment. Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article XI shall continue in effect for the
----------
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or
the Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 11.12, then the term "Corporate Base Rate" as used in
- -------------
this Agreement shall mean the prime rate, base rate or other analogous rate
of the new Agent.
11.13. Agent's Fee. The Borrower agrees to pay to the Agent and the
-----------
Arranger the fees agreed to by the Borrower and the Agent pursuant to that
certain letter agreement dated November 14, 1997, or as otherwise agreed from
time to time.
11.14. Delegation to Affiliates. The Borrower, the Lenders, the Swing
------------------------
Line Lender and the LC Issuers agree that the Agent may delegate any of its
duties under this Agreement to any of its Affiliates. Any such Affiliate (and
such Affiliate's directors, officers, agents and employees) which performs
duties in connection with this Agreement shall be entitled to the same benefits
of the indemnification, waiver and other protective provisions to which the
Agent is entitled under Articles X and XI.
---------- --
11.15. Execution of Collateral Documents. The Lenders, the Swing Line
---------------------------------
Lender and the LC Issuers hereby empower and authorize the Agent to execute and
deliver to the Borrower on their behalf the Pledge Agreement(s) and all related
agreements, documents or instruments as shall be necessary or appropriate to
effect the purposes of the Pledge Agreement(s).
11.16. Collateral and Guaranty Releases. The Lenders, the Swing Line
--------------------------------
Lender and the LC Issuers hereby empower and authorize the Agent to execute and
deliver to the Borrower on their behalf any agreements, documents or instruments
as shall be necessary or appropriate to effect any releases of any entities'
liability with respect to the Subsidiary Guaranty or release of any collateral
pledged pursuant to any Pledge Agreement in connection with any transactions
which shall be permitted by the terms hereof or of any other Loan Document or
which shall otherwise have been approved in writing by the Required Lenders (or,
if required by the terms of Section 9.2, all of the Lenders), and the Agent
-----------
shall be obligated to execute and deliver to the Borrower such releases in
connection with any such permitted transactions.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1. Setoff. In addition to, and without limitation of, any rights of
------
the Lenders, the Swing Line Lender or the LC Issuers under applicable law, if
the Borrower becomes insolvent, however evidenced, or any Default occurs, any
and all deposits (including all account balances, whether provisional or final
and whether or not collected or available) and any other Indebtedness at any
time held or owing by any Lender, Swing Line Lender, LC Issuer or any Affiliate
of any Lender, Swing Line Lender or LC Issuer to or for the credit or account of
the Borrower may be offset and applied toward the payment of the Obligations
owing to such Lender, LC Issuer or Swing Line Lender whether or not the
Obligations, or any part hereof, shall then be due.
12.2. Ratable Payments . If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Obligations (other than payments received
pursuant to Section 4.1, 4.2, 4.4 or 4.5) in a greater proportion than that
----------- --- --- ---
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans. If any Lender,
LC Issuer or the Swing Line Lender, whether in connection with setoff or amounts
which might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to setoff,
such Lender, LC Issuer or Swing Line Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders, LC Issuers and the Swing Line
Lender share in the benefits of such collateral ratably. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1. Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders, the Swing Line Lender, the LC Issuers, the Agent, the Arranger and the
Swing Line Lender and their respective successors and assigns, except that (i)
the Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 13.3. Notwithstanding clause (ii) of this Section, any
------------ -----------
Lender, Swing Line Lender or LC Issuer may at any time, without the consent of
the Borrower or the Agent, assign all or any portion of its rights under this
Agreement and any Note to a Federal Reserve Bank; provided, however, that no
such assignment to a Federal Reserve Bank shall release the transferor Lender,
LC Issuer or the Swing Line Lender from its obligations hereunder. The Agent
may treat the Person which made any Loan or which holds any Note as the owner
thereof for all purposes hereof unless and until such Person complies with
Section 13.3 in the case of an assignment thereof or, in the case of any other
- ------------
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of the rights to any Loan or any Note agrees by
acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder, transferee or assignee of the rights to such Loan.
13.2. Participations.
--------------
13.2.1 Permitted Participants; Effect. Any Lender may, in the ordinary
------------------------------
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment of such Lender, any LC Interest or any other interest of
such Lender under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of its
Loans and the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
13.2.2. Voting Rights. Each Lender shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases all or
substantially all of the collateral, if any, securing any such Loan.
13.2.3. Benefit of Setoff. The Borrower agrees that each Participant
-----------------
shall be deemed to have the right of setoff provided in Section 12.1 in
------------
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided
that each Lender shall retain the right of setoff provided in Section 12.1
------------
with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 12.1,
------------
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with Section 12.2 as if each Participant were a Lender.
------------
13.3. Assignments.
-----------
13.3.1. Permitted Assignments. Any Lender may, in the ordinary course
---------------------
of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("PURCHASERS") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall
be substantially in the form of Exhibit E or in such other form as may be
---------
agreed to by the parties thereto. The consent of the Borrower and the Agent
shall be required prior to an assignment becoming effective with respect to
a Purchaser which is not a Lender or an Affiliate thereof; provided,
however, that if a Default has occurred and is continuing, the consent of
the Borrower shall not be required. Such consent shall not be unreasonably
withheld or delayed. Unless the Borrower and the Agent otherwise consents (
provided, however that if a Default has occurred and is continuing, the
consent of the Borrower shall not be required), each such assignment shall
be in an amount not less than the lesser of (i) $10,000,000 or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as at the
date of such assignment).
13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a
----------------------
notice of assignment, substantially in the form attached as Exhibit 1 to
---------
Exhibit E (a "NOTICE OF ASSIGNMENT"), together with any consents required
---------
by Section 13.3.1, and (ii) payment of a $3,500 fee to the Agent for
--------------
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment,
LC Interests and Loans under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any other
Loan Document executed by or on behalf of the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent
or action by the Borrower, the Lenders, the Swing Line Lender or the LC
Issuers or the Agent shall be required to release the transferor Lender
with respect to the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3.2, the transferor Lender, the Agent
--------------
and the Borrower shall, if the transferor Lender or the Purchaser desires
that its Loans be evidenced by Notes, make appropriate arrangements so that
new Notes or, as appropriate, replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting
their respective Commitments, as adjusted pursuant to such assignment.
13.4. Dissemination of Information. The Borrower authorizes each Lender
----------------------------
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective
Transferee any and all information in such Lender's possession concerning the
creditworthiness of the Borrower and its Subsidiaries, including without
limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 10.11 of
-------------
this Agreement.
13.5. Tax Treatment. If any interest in any Loan Document is transferred
-------------
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 4.5(iv).
---------------
ARTICLE XIV: NOTICES
14.1. Notices. Except as otherwise permitted by Section 2.15 with respect
------- ------------
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower and the Agent, at its address or facsimile number
set forth on the signature pages hereof, (y) in the case of any Lender, Swing
Line Lender or LC Issuer at its address or facsimile number set forth below its
signature hereto or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Agent and the Borrower in accordance with the provisions of this Section
-------
14.1. Each such notice, request or other communication shall be effective (i)
- ----
if given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (ii) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission, received) at
the address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
- ----------
14.2. Change of Address. The Borrower, the Agent, the Swing Line Lender,
-----------------
any LC Issuer and any Lender may each change the address for service of notice
upon it by a notice in writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by facsimile transmission or telephone
that it has taken such action.
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER
OF
JURY TRIAL
16.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO APPLICABLE FEDERAL LAWS.
16.2. CONSENT TO JURISDICTION.
-----------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
---------------------- --------------
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
--------------
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY LENDER,
-------------------
ANY LC ISSUER OR THE SWING LINE LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST
THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
(1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE ON ANY
COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT
ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE
ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
--------------
16.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUERS, THE
--------------------
SWING LINE LENDER AND EACH LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, the Borrower, the Lenders, the Swing Line Lender, the
LC Issuers and the Agent have executed this Agreement as of the date first above
written.
HOWMET CORPORATION
By:
---------------------------------
Title:
Notice Address: 475 Steamboat Road
Greenwich, CT 06836-1960
Attention: Treasurer
Telephone: (203) 625-8744
FAX: (203) 861-4746
With a copy to: Thiokol Corporation
2475 Washington Blvd.
Ogden, UT 84401-2398
Attention: Nicholas J. Iuanow
Telephone: (801) 629-2211
FAX: (801) 629-2222
THE FIRST NATIONAL BANK OF CHICAGO.
Individually as a Lender, as Agent and as the LC Issuer
By:
------------------------
David G. Dixon
Title: Authorized Agent
---------------------
Notice Address: One First National Plaza
Chicago, Illinois 60670
Attention: Timothy J. King
Telephone: (312) 732-6456
FAX: (312) 732-3885
MELLON BANK, N.A.
By:
-------------------------------
Lawrence C. Ivey
Title: Vice President
Notice Address: 400 South Hope St.
5th Floor
Los Angeles, CA 90071
Attention: Lawrence C. Ivey
Telephone: (213) 553-9543
FAX: (213) 629-0492
WACHOVIA BANK, N.A.
By:
-------------------------------------
James McCreary
Title: Senior Vice President
Notice Address: 191 Peachtree Street NE
Atlanta, GA 30303
Attention: U.S. Corporate
Telephone: (404) 332-6210
FAX: (404) 332-6048
BANK OF MONTREAL
By:
--------------------------------------
Joanna Bellocq
Title: Director
Notice Address: 115 South LaSalle Street
11th Floor
Chicago, IL 60603
Attention: Joanna Bellocq
Telephone: (212) 605-1647
FAX: (212) 605-1451
ABN AMRO BANK, N.V.
By:___________________________________
Title: _______________________________
By:__________________________________
Title:_________________________________
Notice Address: 135 South LaSalle Street
Suite 2805
Chicago, IL 60603
Attention: Robert Decker
Telephone: (312) 904-2949
FAX: (312) 606-8428
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By:
------------------------------------
Dianne P. Allen
Title: Vice President
Notice Address: 555 South Flower Street
11th Floor
Los Angeles, CA 90071
Attention: Dawn Esser
Telephone: (213) 228-2820
FAX: (213) 623-1959
BANQUE NATIONALE DE PARIS
By:
----------------------------------
D. Guy Gibb
Title: Vice President
Notice Address: 180 Montgomery Street
3rd Floor
San Francisco, CA 94104
Attention: D. Guy Gibb
Telephone: (415) 956-0707
FAX: (415) 296-8954
THE NORTHERN TRUST COMPANY
By:
-------------------------------------
John E. Burda
Title: Vice President
Notice Address: 50 South LaSalle Street
Chicago, IL 60675
Attention: John E. Burda
Telephone: (312) 444-4575
FAX: (312) 444-5055
BANKERS TRUST COMPANY
By:
--------------------------------
Anthony LoGrippo
Title: Vice President
Notice Address: 130 Liberty Street
New York, NY 10006
Attention: Anthony LoGrippo
Telephone: (212) 250-4886
FAX: (212) 250-7218
CREDIT SUISSE FIRST BOSTON
By:
------------------------------------
Mark A. Sampson
Title: Vice President
Notice Address: 11 Madison Avenue
20th Floor
New York, NY 10010-3629
Attention: Mark A. Sampson
Telephone: (212) 325-3641
FAX: (212) 325-8319
FLEET NATIONAL BANK
By:
--------------------------------
Robert C. Rubino
Title: Senior Vice President
Notice Address: One Federal Street
MSN-MA-OF0308
Boston, MA 02211
Attention: Robert C. Rubino
Telephone: (617) 346-0574
FAX: (617) 346-0585
PRICING SCHEDULE
==========================================================================================================
Applicable Level I Level II Level III Level IV Level V Level VI
Margin Status Status Status Status Status Status
Debt/ .5 >.5 and >1.0 and >1.5 and >2.0 and >2.5
EBITDA 1.0 1.5 2.0 2.5
- ----------------------------------------------------------------------------------------------------------
Facility Fee 10.0 11.0 12.5 15.0 17.5 20.0
- ----------------------------------------------------------------------------------------------------------
Eurodollar Rate 20.0 24.0 25.0 30.0 32.5 42.5
& Applicable
LC Fee
Percentage
- ----------------------------------------------------------------------------------------------------------
All-In Funded 30.0 35.0 37.5 45.0 50.0 62.5
==========================================================================================================
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"FINANCIALS" means the annual or quarterly financial statements
of the Borrower delivered pursuant to Section 7.1(i) and (ii) of the
-------------- ----
Agreement.
"LEVEL I STATUS" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials,
the Leverage Ratio is less than or equal to .5 to 1.00.
"LEVEL II STATUS" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, (i) the Borrower has not qualified for Level I Status and (ii)
the Leverage Ratio is less than or equal to 1.0 to 1.00.
"LEVEL III STATUS" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, (i) the Borrower has not qualified for Level I Status or Level
II Status and (ii) the Leverage Ratio is less than or equal to 1.5 to 1.00.
"LEVEL IV STATUS" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, (i) the Borrower has not qualified for Level I Status, Level II
Status or Level III Status and (ii) the Leverage Ratio is less than or
equal to 2.0 to 1.00.
"LEVEL V STATUS" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials,
(i) the Borrower has not qualified for Level I Status, Level II Status,
Level III Status or Level IV Status and (ii) the Leverage Ratio is less
than or equal to 2.5 to 1.00.
"LEVEL VI STATUS" exists at any date if the Borrower has not
qualified for Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.
For the period from the Closing Date until receipt of the Borrower's
audited financial statements for the period ending December 31, 1997, the
Applicable Margin and Applicable LC Fee Percentage and applicable Facility Fee
will be at Level III Status. Thereafter, the Applicable Margin and Applicable
LC Fee Percentage and applicable Facility Fee shall be determined in accordance
with the foregoing table based on the Borrower's Status as reflected in the then
most recent Financials. Adjustments, if any, to the Applicable Margin or
Applicable LC Fee Percentage and applicable Facility Fee shall be effective five
Business Days after the Agent has received the applicable Financials. If the
Borrower fails to deliver the Financials to the Agent at the time required
pursuant to the Credit Agreement, then the Applicable Margin and Applicable LC
Fee Percentage and applicable Facility Fee shall be the highest Applicable
Margin and Applicable LC Fee Percentage and applicable Facility Fee set forth in
the foregoing table until five days after such Financials are so delivered.
COMMITMENT SCHEDULE
- ----------------------------------------------------------------------------------------------
Lender Commitment
- ----------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO $ 34,000,000
- ----------------------------------------------------------------------------------------------
ABN AMRO BANK, N.V. $ 33,000,000
- ----------------------------------------------------------------------------------------------
BANKERS TRUST COMPANY $ 33,000,000
- ----------------------------------------------------------------------------------------------
BANK OF AMERICA NATIONAL TRUST $ 27,000,000
& SAVINGS ASSOCIATION
- ----------------------------------------------------------------------------------------------
BANK OF MONTREAL $ 27,000,000
- ----------------------------------------------------------------------------------------------
CREDIT SUISSE FIRST BOSTON $ 27,000,000
- ----------------------------------------------------------------------------------------------
FLEET NATIONAL BANK $ 27,000,000
- ----------------------------------------------------------------------------------------------
BANQUE NATIONALE DE PARIS $ 23,000,000
- ----------------------------------------------------------------------------------------------
MELLON BANK, N.A. $ 23,000,000
- ----------------------------------------------------------------------------------------------
THE NORTHERN TRUST COMPANY $ 23,000,000
- ----------------------------------------------------------------------------------------------
WACHOVIA BANK, N.A. $ 23,000,000
- ----------------------------------------------------------------------------------------------
TOTAL $300,000,000
- ----------------------------------------------------------------------------------------------
EXHIBIT A
FORM OF NOTE
NOTE
[_____________________________], 1997
HOWMET CORPORATION, a Delaware corporation (the "Borrower"), promises
to pay to the order of [____________________________________] (the "Lender") the
aggregate unpaid principal amount of all Syndicated Loans made by the Lender to
the Borrower pursuant to Article II of the Credit Agreement hereinafter referred
----------
to (as the same may be amended or modified, the "Agreement"; capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement), in immediately available funds on the
dates and at the offices of The First National Bank of Chicago, as Agent,
specified in the Agreement, together with interest on the unpaid principal
amount hereof at the rates and on the dates determined in accordance with the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Syndicated Loans in full on the Facility Termination Date and as
otherwise set forth in the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Syndicated Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Syndicated Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement dated as of December 16,
1997, among the Borrower, The First National Bank of Chicago, as Agent, and the
lenders parties thereto, including the Lender, to which Agreement, as it may be
amended, modified, restated or supplemented from time to time, reference is
hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. The Agreement, among other things, provides for the
making of "Syndicated Loans" by the Lender to the Borrower from time to time in
an aggregate amount not to exceed at any time outstanding the Lender's
Commitment.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of Illinois but giving effect to applicable federal
laws.
HOWMET CORPORATION
By:
Title:
Schedule of Syndicated Loans and Payments of Principal
to
Syndicated Note of Howmet Corporation
Principal Maturity
Amount of of Interest Principal Unpaid
Date Loan Period Amount Paid Balance
- -------------------------------------------------------------
EXHIBIT B
FORM OF PLEDGE AGREEMENT
(Attached)
EXECUTION COPY
EQUITABLE SHARE CHARGE
BETWEEN
HOWMET CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
SIDLEY & AUSTIN
Royal Exchange
London EC3V 3LE
Ref: JM/HW/57072.7
Tel: 0171 360 3600
Fax: 0171 626 7937
THIS DEED OF CHARGE is made the 30th day of January 1998 made by HOWMET
CORPORATION (the "Chargor"), to THE FIRST NATIONAL BANK OF CHICAGO, as agent
(the "Chargee"), for the benefit of the Secured Creditors (as defined below).
Except as otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Chargor, various lenders from time to time party thereto (the
"Lenders") and The First National Bank of Chicago, as agent for the Lenders
(together with any successor agent, the "Agent"), have entered into a Credit
Agreement, dated as of December 16, 1997, providing for the making of Loans and
the issuance of, and participation in, Facility LCs as contemplated therein (as
used herein, the term "Credit Agreement" means the Credit Agreement described
above in this paragraph, as the same may be amended, modified, extended,
renewed, replaced, restated or supplemented from time to time, and including any
agreement extending the maturity of, or restructuring the Indebtedness under
such agreement or any successor agreements) (the Lenders, the Agent and the
Chargee are herein called the "Bank Creditors");
WHEREAS, the Chargor may at any time and from time to time enter into one
or more Financial Contracts with one or more Lenders or any affiliate thereof
(each such Lender or affiliate, even if the respective Lender subsequently
ceases to be a Lender under the Credit Agreement for any reason, together with
such Lender's or affiliate's successors and assigns, if any, collectively, the
"Other Creditors," and together with the Bank Creditors, the "Secured
Creditors");
WHEREAS, it is a condition to the making of Loans and the issuance of
Facility LCs under the Credit Agreement that the Chargor shall have executed and
delivered this Deed; and
WHEREAS, the Chargor will derive direct or indirect benefits from the
incurrence of Loans and the issuance of Facility LCs under the Credit Agreement
and the entering into of Financial Contracts and, accordingly, the Chargor
desires to enter into this Deed in order to satisfy the conditions described in
the preceding paragraph,
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Chargor, the receipt and sufficiency of which are hereby
acknowledged, the Chargor hereby makes the following representations and
warranties to the Chargee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Chargee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Deed is made by the
Chargor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) of the Chargor to the Bank
Creditors, whether now existing or hereafter incurred under, arising out
of, or in connection with the Credit Agreement and the other Loan Documents
to which the Chargor is a party (including, without limitation, all such
obligations and indebtedness of the Chargor under the Credit Agreement) and
the due performance and compliance by the Chargor with all of the terms,
conditions and agreements contained in the Credit Agreement and such other
Loan Documents (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with respect
to Financial Contracts, being herein collectively called the "Loan Document
Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) owing by the Chargor to
the Other Creditors under, or with respect to, any Financial Contracts,
whether such Financial Contract is now in existence or hereafter arising,
and the due performance and compliance by the Chargor with all of the
terms, conditions and agreements contained therein (all such obligations
and liabilities described in this clause (ii) being herein collectively
called the "Other Obligations");
(iii) any and all sums advanced by the Chargee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral (to the extent provided for in the Loan Documents);
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Chargor referred to
in clauses (i), (ii) and (iii) above, after any Default (as such term is
defined in the Credit Agreement) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale, selling or
otherwise disposing of or realising on the Collateral, or of any exercise
by the Chargee of its rights hereunder, together with reasonable legal fees
and court costs; and
(v) all amounts paid by any Secured Creditor as to which such Secured
Creditor has the right to reimbursement under Section 11 of this Deed.
All such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Deed or extended from time to time after the date of this
Deed.
2. DEFINITION OF SECURITIES, ETC. As used herein the term "Securities"
shall mean, all of the issued and outstanding share capital at any time
owned by the Chargor of any Material Foreign Subsidiary, provided that, the
Chargor shall not be required to charge hereunder, and nothing herein shall
be deemed to constitute a charge hereunder of, more than 65% of the total
combined voting power of all classes of issued share capital of any
Material Foreign Subsidiary. The Chargor represents and warrants that on
the date hereof (i) each Material Foreign Subsidiary of the Chargor, and
the direct ownership thereof, is listed in Schedule 1 hereto; (ii) the
Securities held by the Chargor consists of the number and type of shares of
the capital of the corporations as described in Schedule 1 hereto; (iii)
such Securities constitutes that percentage of the issued and outstanding
share capital of the corporation as is set forth in Schedule 1 hereto; and
(iv) the share certificates represent 65% of the issued and outstanding
share capital of each Material Foreign Subsidiary listed in Schedule 1.
3. CHARGE
(a) Charge. To secure the Obligations, the Chargor with full title
------
guarantee hereby charges in favour of the Chargee all of the Chargor's
interest in and to the Collateral (as defined below) with the intent that
such charge will take effect as a first equitable charge and shall rank
ahead of any other present or future security on the Collateral (as defined
below).
(b) Transfer of Shares. Forthwith upon execution of this Deed the Chargor
------------------
shall deliver to the Chargee all stock and share certificates and other
documents of title (including a certified true and correct copy of the
register of members of each Material Foreign Subsidiary listed in Schedule
1) relating to the Securities together with stock transfer forms executed
in blank and left undated (along with a Special Resolution of each Material
Foreign Subsidiary listed in Schedule 1, containing, inter alia, amendments
to its Articles of Association in the form specified in Schedule 2 hereto)
on the basis that the Chargee (or its nominee) shall be entitled to hold
such documents of title and stock transfer forms until the Obligations,
other than contingent indemnity obligations with respect to which no claim
has been made, has been irrevocably and unconditionally discharged in full
and shall be entitled, at any time if a Default shall have occurred and be
continuing, to complete (pursuant to its powers in Section 12(b) below) the
stock transfer forms on behalf of the Chargee in favour of itself or such
other person as it shall select.
(c) Subsequently Acquired Securities. If the Chargor shall acquire (by
--------------------------------
purchase, stock dividend or otherwise) any additional Securities at any
time or from time to time after the date hereof, the Chargor will promptly
thereafter charge and deliver to the Chargee all stock and share
certificates and other documents of title relating to the Securities
together with stock transfer forms executed in blank and left undated and
will promptly thereafter deliver to the Chargee a certificate executed by a
principal executive officer of the Chargor describing such Securities and
certifying that the same has been duly charged to the Chargee hereunder in
the same manner and on the same basis as it has done so in relation to
Securities under Section 3(b) hereof; provided, however, the Chargor shall
not be required at any time to charge hereunder Securities which constitute
more than 65% of the total combined voting power of all issued share
capital of any Material Foreign Subsidiary entitled to vote.
(d) Uncertificated Securities. Notwithstanding anything to the contrary
-------------------------
contained in Sections 3(a), 3(b) and 3(c) hereof, if any Securities
(whether now owned or hereafter acquired) are uncertificated securities,
the Chargor shall promptly notify the Chargee thereof, and shall promptly
take all actions required to perfect the security interest of the Chargee
under applicable law. The Chargor further agrees to take such actions as
the Chargee deems reasonably necessary or desirable to effect the foregoing
and to permit the Chargee to exercise any of its rights and remedies
hereunder.
(e) Definitions of Charged Securities and Collateral. 65% of all
------------------------------------------------
Securities at any time charged or required to be charged hereunder and
represented by the share certificate number/s set out in Schedule 1 are
hereinafter called the "Charged Securities;" and the Charged Securities,
together with:
(i) all dividends, distributions and other income paid or payable on or
derived from the Charged Securities;
(ii) all shares or other property derived from the Charged Securities
(whether by way of bonus, option or otherwise); and
(iii) all accretions, rights, benefits and advantages of all kinds
accruing, offered or otherwise derived from the Charged Securities
(whether by way of conversion, redemption, bonus, preference,
option, offer or otherwise),
are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS. ETC. The Chargee shall have the
right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Charged Securities, which may be held (in the
discretion of the Chargee) in the name of the Chargor, endorsed or assigned
in
blank or in favour of the Chargee or any nominee or nominees of the
Chargee or a sub-agent appointed by the Chargee.
5. VOTING, ETC., WHILE NO DEFAULT. (a) Unless and until there shall have
occurred and be continuing a Default and the Chargee shall have given the
Chargor written notice that the Chargee has elected to exercise such
rights, the Chargor shall be entitled to exercise any and all voting and
other rights and powers attaching to the Charged Securities owned by it,
and to give consents, waivers or ratifications in respect thereof,
provided, that no vote shall be cast or any consent, waiver or ratification
--------
given or any action taken which would violate or be inconsistent with any
of the terms of this Deed, the Credit Agreement, any other Loan Document or
any Financial Contract (collectively, the "Secured Debt Agreements") and in
particular, without limiting the foregoing, the Chargor shall not exercise
any voting rights or powers if such exercise would result in the Charged
Securities representing less than 65 per cent in nominal value of the
entire issued share capital of each Material Foreign Subsidiary. All such
rights of the Chargor to vote and to give consents, waivers and
ratifications shall cease in case a Default has occurred and is continuing
and the Chargee shall have given the Chargor written notice that the
Chargee has elected to exercise such rights, and Section 7 hereof shall
become applicable.
(b) The rights and powers attaching to the Charged Securities shall, for
the purposes of Section 5(a) above, include, without limitation, all powers
given to trustees by Section 10(3) and 10(4) of the Trustee Act 1925 (in
respect of securities subject to a trust) and shall be exercisable without
any need for any further consent or authority of the Chargee.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have
occurred and be continuing a Default, all cash dividends and distributions
payable in respect of the Charged Securities shall be paid to the Chargor. The
Chargee shall be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional shares or other securities (other than
cash) paid or distributed by way of dividend or otherwise, as the case may
be, in respect of the Charged Securities;
(ii) all other or additional shares or other securities paid or
distributed in respect of the Charged Securities by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(iii) all other or additional shares or other securities or property
which may be paid in respect of the Collateral by reason of any
consolidation, merger, exchange of shares, conveyance of assets,
liquidation or similar corporate reorganisation.
Nothing contained in this Section 6 shall limit or restrict in any way the
Chargee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Deed. All dividends, distributions or other payments
which are received by the Chargor contrary to the provisions of this Section 6
and Section 7 hereof shall be received in trust for the benefit of the Chargee,
shall be segregated from other property or funds of the Chargor and shall be
promptly paid over to the Chargee as Collateral in the same form as so received
(with any necessary endorsement).
7. ENFORCEMENT OF SECURITY.
(a) The restriction on the consolidation of mortgages imposed by Section 93 of
the Law of Property Act 1925 shall not apply to this Deed.
(b) Section 103 of the Law of Property Act 1925 shall not apply to the charges
created by this Deed which shall immediately become enforceable and the
power of sale and other powers conferred by Section 101 of such Act (as
varied or extended by this Deed) shall be immediately exercisable at any
time after notice demanding payment of any sum in respect of the
Obligations shall have been given by the Chargee to the Chargor following
the occurrence and during the continuance of Default.
(c) The powers conferred on mortgagees or receivers by sections 85 to 109 of
the Law of Property Act 1925 and sections 28 to 49 of the Insolvency Act
1986 shall apply to the security constructed by this Deed except insofar as
they are expressly or impliedly excluded and where there is ambiguity or
conflict between the powers contained in such Acts and those contained in
this Deed, those contained in this Deed shall prevail.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and remedy of
the Chargee provided for in this Deed or any other Secured Debt Agreement,
or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such
right, power or remedy.
The exercise or beginning of the exercise by the Chargee or any other Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Deed or any other Secured Debt Agreement or now or hereafter existing at
law or in equity or by statute or otherwise shall not preclude the simultaneous
or later exercise by the Chargee of all such other rights, powers or remedies,
and no failure or delay on the part of the Chargee or any other Secured Creditor
to exercise any such right, power or remedy shall operate as a waiver thereof.
No notice to or demand on the Chargor in any case shall entitle it to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Chargee to any other or further action in any
circumstances without notice or demand.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Chargee upon
any sale or other disposition of the Collateral, together with all other
moneys received by the Chargor hereunder, shall be applied to the payment
-------
of the Obligations as follows:
(A) first, to pay amounts referred to in Section 1(iii) and (iv)
hereof;
(B) second, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender
for which the Agent has not then been reimbursed by such Lender or the
Chargor;
(C) third, to pay interest on and then principal of any protective
advance made by the Agent for which the Agent has not then been paid by the
Chargor or reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(E) fifth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(F) sixth, to pay interest due in respect of Swing Line Loans;
(G) seventh, to pay interest due in respect of Loans (other than Swing
Line Loans) and LC Obligations;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(I) ninth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans) and Reimbursement
Obligations in such order as the Agent may determine in its sole
discretion;
(J) tenth, to provide required cash collateral, if required pursuant
to;
(K) eleventh, to the ratable payment of all other Obligations with
respect to the Credit Agreement and the Loan Documents; and
(L) twelfth, to the ratable payment of all Obligations with respect
to Financial Contracts.
(b) It is understood and agreed that the Chargor shall remain liable to the
extent of any deficiency between the amount of the proceeds of the Collateral
hereunder and the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL. (a) No purchaser from, or other person
dealing with, the Chargee shall be concerned to enquire whether any of the
powers which it has exercised or purported to exercise has arisen or become
exercisable, or whether any of the Obligations remains outstanding, or
whether any event has happened to authorise the Chargee to act or as to the
propriety or validity of the exercise or purported exercise of any such
power; and the title of such a purchaser and the position of such a person
shall not be impeachable by reference to any of those matters.
(b) Upon any sale of the Collateral by the Chargee hereunder the receipt of the
Chargee or the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Collateral so sold, and such purchaser
or purchasers shall not be obligated to see to the application of any part
of the purchase money paid over to the Chargee or such officer or be
answerable in any way for the misapplication or nonapplication thereof.
(c) In Sections 10(a) and 10(b), "purchaser" includes any person acquiring, for
money or money's worth, any Encumbrance (as defined below) over, or any
other interest or right whatsoever in relation to, any of the Charged
Property.
11. INDEMNITY. The Chargor agrees (i) to indemnify and hold harmless the
Chargee in such capacity and each other Secured Creditor and their
respective successors, assigns, employees, agents and servants
(individually an "Indemnitee," and collectively the "Indemnitees") from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature and (ii)
to reimburse each Indemnitee for all costs and expenses, including
reasonable legal fees, in each case growing out of or resulting from this
Deed or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement (but excluding any
claims, demands, losses, judgments and liabilities or expenses to the
extent incurred by reason of negligence or wilful misconduct of such
Indemnitee). In no event shall the Chargee be liable, in the absence of
negligence or wilful misconduct on its part, for any matter or thing in
connection with this Deed other than to account for monies actually
received by it in accordance with the terms hereof. If and to the extent
that the obligations of the Chargor under this Section 11 are unenforceable
for any reason, the Chargor hereby agrees to make the maximum contribution
to the payment and satisfaction of such obligations which is permissible
under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Chargor undertakes,
from time to time and at all times, whether before or after the security
constituted hereunder shall have become enforceable, to execute and do at
its own expense all such deeds, assurances, agreements, instruments, acts
and things as the Chargee may reasonably require for perfecting and
protecting the security hereby
constituted or facilitating the realisation thereof or for enforcing the
same or exercising any of the Chargee's rights hereunder and in particular,
but without limitation, the Chargor shall execute all transfers,
conveyances, assignments and assurances whatsoever and give all notices,
orders, instructions and directions whatsoever which the Chargee may deem
reasonably necessary or advisable in the exercise of its rights hereunder.
(b) The Chargor hereby irrevocably and by way of security appoints the
Chargee and any person nominated for the purpose by the Chargee in
writing under hand by an officer of the Chargee severally as its Attorney
and in its name and on its behalf and as its act and deed to execute as a
deed and deliver (using the company seal where appropriate) and otherwise
perfect and do any deed, assurance, agreement, instrument, act or thing
which may reasonably be required or deemed proper in the exercise of any
rights or powers hereunder or otherwise for any of the purposes of this
Deed and the Chargor hereby covenants with the Chargee to ratify and
confirm all reasonable acts or things made, done or executed by such
attorney as aforesaid.
13. THE CHARGEE AS AGENT. The Chargee will hold in accordance with this
Deed all items of the Collateral at any time received under this Deed on
the terms set forth herein and in Article XI of the Credit Agreement.
14. TRANSFER BY THE CHARGOR. The Chargor shall not (except as may be
permitted in accordance with the terms of the Credit Agreement):
(i) sell, create or permit to subsist any mortgage, charge, assignment,
pledge, lien, right of set-off, encumbrance or other security interest
(whether fixed or floating) whatsoever ("Encumbrance") on or over all
or any part of the Collateral or the right to receive or be paid the
same or agree to do so;
(ii) sell, transfer or otherwise dispose of the whole or any part of the
Collateral or the right to receive or be paid the same or agree to do
so; or
(iii) dispose of the equity of redemption in respect of any of the
Collateral.
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CHARGOR. The Chargor
represents, warrants and covenants that (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Charged
Securities charged by it hereunder, subject to no Encumbrance (except the
Encumbrance created by this Deed and other Encumbrances permitted by the
Credit Agreement); (ii) it has full corporate power, authority and legal
right to charge all the Collateral charged by it pursuant to this Deed;
(iii) this Deed has been duly authorised, executed and delivered by the
Chargor and constitutes a legal, valid and binding obligation of the
Chargor enforceable in accordance with its terms; (iv) no consent of any
other party (including, without limitation, any
shareholder or creditor of the Chargor or any of its Subsidiaries) and
no consent, licence, permit, approval or authorisation of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required to be obtained by the Chargor in
connection with the execution, delivery or performance of this Deed, the
validity or enforceability of this Deed, the perfection or enforceability
of the Chargee's security interest in the Collateral or the exercise by the
Chargee of any of its rights or remedies provided herein; (v) the
execution, delivery and performance of this Deed by the Chargor will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, applicable to the Chargor, or of the
certificate of incorporation or by-laws (or the equivalent organisational
documents) of the Chargor or of any securities issued by the Chargor or any
of its Subsidiaries, or of any mortgage, indenture, lease, deed of trust,
loan agreement, credit agreement or other material agreement, contract, or
instrument to which the Chargor or any of its Subsidiaries is a party or
which purports to be binding upon the Chargor or any of its Subsidiaries or
upon any of their respective assets and will not result in the creation or
imposition of (or the obligation to create or impose) any lien or
encumbrance on any of the assets of the Chargor or any of its Subsidiaries
except as contemplated by this Deed; (vi) all the shares which are part of
the Charged Securities have been duly and validly issued, are fully paid
and non-assessable and are subject to no options to purchase or similar
rights; and (vii) the charge, assignment and delivery to the Chargee of the
Securities (other than uncertificated securities) pursuant to this Deed
creates a valid and perfected first priority equitable charge over the
Collateral, subject to no other Encumbrance or to any Deed purporting to
grant to any third party an Encumbrance on the property or assets of the
Chargor which would include the Charged Securities. The Chargor covenants
and agrees that it will defend the Chargee's right, title and security
interest in and to the Collateral against the claims and demands of all
persons whomsoever in accordance with the Loan Documents; and the Chargor
covenants and agrees that it will have like title to and right to charge
any other property and any time hereafter charged to the Chargee as
Collateral hereunder and will likewise defend the right thereto and
security interest therein of the Chargee and Secured Creditors.
16. CHARGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the Chargor
under this Deed shall be in addition to and independent of every other
security which the Agent and the Lenders may at any time hold in respect of
any of the Chargor's obligations under the Loan Documents and shall be
absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (i) any renewal, extension,
amendment or modification of or addition or supplement to or deletion from
any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver,
consent, extension, indulgence or other action or inaction under or in
respect of
any such agreement or instrument including, without limitation, this Deed;
(iii) any furnishing of any additional security to the Chargee or its
assignee or any acceptance thereof or any release of any security by the
Chargee or its assignee; (iv) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement
or any term thereof; or (v) any winding-up, bankruptcy, insolvency,
administration, reorganisation, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Chargor or any
Subsidiary of the Chargor, (vi) any failure to realise or fully to realise
the value of, or any release, discharge, exchange or substitution of, any
such security or taken in respect of the Chargor's obligations under the
Loan Documents; or (vii) any other act, event or omission which, but for
this section, might operate to discharge, impair or otherwise affect any of
the obligations of the Chargor herein contained or any of the rights,
powers or remedies conferred upon the Agent by the Loan Documents or by law
or any action taken with respect to this Deed by any trustee or receiver or
by any court, in any such proceeding, whether or not the Chargor shall have
notice or knowledge of any of the foregoing.
17. RELEASE. (a) After the Termination Date (as defined below), the
Chargee, at the request and expense of the Chargor, will execute and
deliver to the Chargor such documents (or procure that its nominees execute
such documents) as the Chargor may reasonably request and which may be
required to release to the Chargor without recourse and without any
representation or warranty all the right, title and interest of the Chargee
in such of the Collateral as has not theretofore been sold or otherwise
applied or released pursuant to this Deed, together with any moneys at the
time held by the Chargee or any of its sub-agents hereunder. As used in
this Deed, "Termination Date" shall mean the date upon which the
Commitments and all Financial Contracts and the Loan Documents have been
terminated, no Note under the Credit Agreement is outstanding (and all
Loans and other Obligations have been unconditionally and irrevocably
discharged in full), all Facility LCs have been terminated, all Obligations
have been unconditionally and irrevocably discharged in full, other than
contingent indemnity obligations with respect to which no claim has been
made, and neither the Lenders nor the Chargee has any further contingent
obligations to lend or grant or create any commitment or liabilities under
or in connection with the Loan Documents or any instruments or documents or
issued pursuant thereto.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by the Credit Agreement or otherwise released
pursuant to the Credit Agreement and the proceeds of such sale or sales or
from such release are applied in accordance with the provisions of the
Credit Agreement, to the extent required to be so applied, the Chargee, at
the request and expense of the Chargor, will duly assign, transfer and
deliver to the Chargor (without recourse and without any representation or
warranty) such of the Collateral (and releases therefor) as is then
being (or has been) so sold or released and has not theretofore been
released pursuant to this Deed
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by the Credit Agreement or otherwise released
pursuant to the Credit Agreement and the proceeds of such sale or sales or
from such release are applied in accordance with the provisions of the
Credit Agreement, to the extent required to be so applied, the Chargee, at
the request and expense of the Chargor, will duly assign, transfer and
deliver to the Chargor (without recourse and without any representation or
warranty) such of the Collateral (and releases therefor) as is then being
(or has been) so sold or released and has not theretofore been released
pursuant to this Deed.
(c) At any time that the Chargor desires that the Chargee assign, transfer
and deliver Collateral (and releases therefor) as provided in Section
17(a) or (b) hereof, it shall deliver to the Chargee a certificate signed
by a principal executive officer of the Chargor stating that the release of
the respective Collateral is permitted pursuant to such Section 17(a) or
(b).
(d) The Chargee shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance
with this Section 17.
18. NOTICES, ETC. All notices, requests and other communications to either
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party
at the notice address for it as specified in the Credit Agreement. Each
such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (ii) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, or (iii) if given
by any other means, when delivered (or, in the case of electronic
transmission, received) at the address specified in this Section; provided
that notices to the Chargee shall not be effective until received.
19. WAIVER; AMENDMENT. (a) None of the terms and conditions of this Deed
may be changed, waived, modified or varied in any manner whatsoever unless
in writing duly signed by the Chargor and the Chargee.
(b) No delay or omission of the Chargee in exercising any right, power or
privilege hereunder shall impair such right, power or privilege or be
construed as a waiver of such right, power or privilege nor shall any
single or partial exercise of any such right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Chargee herein provided are
cumulative and not exclusive of any
rights or remedies provided by law. A waiver given or consent granted by
the Chargee under this Deed will be effective only if given in writing and
then only in the instance and for the purpose for which it is given.
20. CURRENCY (a) All moneys received or held by the Chargee under this
Deed shall be converted into such other currency in which the obligations
and liabilities comprised in the Obligations were denominated at the rate
of exchange then prevailing for purchasing that other currency with the
existing currency in accordance with the Chargee's customary practice for
the exchange of currencies.
(b) No payment to the Chargee (whether under any judgment or court order
or otherwise) shall discharge the obligation or liability of the Chargor in
respect of which it was made unless and until the Chargee shall have
received payment in full in the currency in which the obligation or
liability was incurred (the "Original Currency"). In the event of any
payment made in a currency other than the Original Currency ("Other
Currency"), such obligation or liability shall be discharged only to the
extent that on the Business Day following receipt by the Chargee of such
payment in such Other Currency the Chargee may in accordance with normal
banking procedures purchase the Original Currency with such Other Currency:
if the amount of the Original Currency so purchased is less than the sum
originally due to the Chargee in the Original Currency, the Chargee shall
have a further separate course of action against the Chargor and shall be
entitled to enforce the security constituted by this Deed to recover the
amount of the shortfall.
21. CERTIFICATES. For all purposes, including any legal proceedings, a
certificate signed by one of the Chargee's officers as to the amount of the
Secured Obligations (or any part thereof) shall, in the absence of manifest
error, be prima facie evidence thereof against the Chargor.
22. DEED. The parties hereto intend this agreement to take effect as a
deed.
23. MISCELLANEOUS. This Deed shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
assigns. The headings in this Deed are for purposes of reference only and
shall not limit or define the meaning hereof. This Deed may be executed in
any number of counterparts, each of which shall be an original, but all of
which shall constitute one instrument. In the event that any provision of
this Deed shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Deed which
shall remain binding on all parties hereto.
24. RECOURSE. This Deed is made with full recourse to the Chargor and
pursuant to and upon all the representations, warranties, covenants and
agreements on the part of the Chargor contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
25. GOVERNING LAW. The Deed shall be governed by and construed in
accordance with English law.
26. JURISDICTION. (a) Exclusive Jurisdiction. Except as otherwise provided
in subsection (b) each of the parties hereto agrees that all disputes among
them arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Deed or any
other Loan Documents shall be resolved exclusively by the Courts of
England. Each of the parties hereto waives in all disputes brought pursuant
to this subsection (a) any objection that it may have to the location of
the court considering the dispute.
(b) Other Jurisdictions. The Chargor agrees that the Chargee shall
--------------------
have the right to proceed against the Chargor or its property in a court in
any location to enable the Chargee to (i) obtain personal jurisdiction over
the Chargor or (ii) realise on any Collateral for the Obligations or to
enforce a judgment or other court order entered in favour of the Chargee.
The Chargor waives any objection that it may have to the location of the
court in which the Chargee has commenced a proceeding brought in compliance
with this subsection (b).
27. PROCESS AGENT. Each of the Chargor and the Chargee irrevocably agrees
that any writ, notice, or other document issued in connection with or for
the purpose of any proceeding, suit or action arising out of or in
connection with this Deed in the English Courts shall be duly served upon
it if delivered or sent by registered post to the following person, namely:
In respect of the Chargor:
Name: Mr Clive E. Cotton
Position: Secretary, Howmet Limited
Address: Kestrel Way, Exeter, Devon EX2 7LL England
In respect of the Chargee:
Name:
Position:
Address:
IN WITNESS WHEREOF, the Chargor and the Chargee have caused this Deed to
be executed as of the date first above written.
EXECUTED as a DEED by HOWMET CORPORATION )
acting by its duly authorised officer )
...........................
Vice President
EXECUTED as a DEED by THE FIRST NATIONAL BANK OF )
CHICAGO as Chargee acting by its duly authorised officer(s) )
....................... ............................
Officer Officer
SCHEDULE 1
MATERIAL FOREIGN SUBSIDIARIES OF THE CHARGOR
Material Foreign Subsidiary Chargor's Direct Ownership and Share
- --------------------------- ------------------------------------
Certificate Numbers
-------------------
Howmet Limited 1,000,001 fully paid ordinary shares
representing 99.9% of the issued
share capital of Howmet Limited
Share certificate number 4 represents
65% of the issued share capital of
Howmet Limited
SCHEDULE 2
WRITTEN RESOLUTION OF HOWMET LIMITED
------------------------------------
("THE COMPANY")
---------------
We, the undersigned, being the sole members for the time being of the above
named Company entitled to receive notice of and to attend and vote at General
Meetings of the Company HEREBY PASS the following written resolution and agree
that the said resolution shall, pursuant to Article 53 of Table A, for all
purposes be as valid and effective as if the same had been passed by a Special
Resolution at a General Meeting of the Company duly convened and held.
It is hereby resolved that:-
28. The Articles of Association be amended by inserting the words "Subject to
this Article" at the beginning of Article 3 and then adding the following
sentence to the end of Article 3: The lien referred to in clause 8 of Table
A shall not apply to any share registered in the name of Howmet
Corporation.
29. The Articles of Association of the Company be amended by inserting the
words "Subject to this Article" at the beginning of Article 14 and then
adding the following sentence to the end of Article 14:
"Notwithstanding anything contained in clause 24 and 26 and these
Articles, the directors shall not decline to register any transfer of
shares, nor may they suspend registration thereof where such a
transfer is executed by any bank or institution to whom such shares
have been charged by way of security, or by any nominee of such a bank
or institution, pursuant to the power of sale under such security, and
a certificate by any official of such bank or institution that the
shares were so charged and the transfer was so executed shall be
conclusive evidence of such facts."
Dated this day of January, 1998
For and on behalf of For and on behalf of
Howmet Corporation Roger Hambleton
............................. ..........................
MADE ON 30 JANUARY, 1998
_______________________________________________________________________________
SHARES ACCOUNTS PLEDGE AGREEMENT
(NANTISSEMENT DE COMPTES D'INSTRUMENTS FINANCIERS)
________________________________________________________________________________
BETWEEN
HOWMET CORPORATION
AS PLEDGOR
AND
THE FIRST NATIONAL BANK OF CHICAGO
AS COLLATERAL AGENT
AND
THE LENDERS
AND
HOWMET S.A.
AS ACCOUNT HOLDER
_______________________________________________________________________________
[LOGO]
GIDE LOYRETTE NOUEL
26, COURS ALBERT 1ER
75008 PARIS
CONTENTS
Page
THE UNDERSIGNED........................................ 3
WHEREAS................................................ 3
1. DEFINITIONS.................................. 4
2. PLEDGE (NANTISSEMENT)........................ 5
3. REPRESENTATIONS AND WARRANTIES............... 6
4. COVENANTS.................................... 7
5. FURTHER ASSURANCES........................... 8
6. TERM - COVENANT TO RELEASE................... 8
7. ENFORCEMENT.................................. 8
8. NOTICES...................................... 8
9. MISCELLANEOUS................................ 9
10. SUCCESSORS AND ASSIGNS....................... 9
11. GOVERNING LAW AND JURISDICTION............... 10
Annex 1 List of the Lenders
Annex 2 Addresses for notices
Annex 3 Form of Statement of Pledge
Annex 4 Form of Confirmation of Pledge
BETWEEN THE UNDERSIGNED :
- -----------------------
1. The First National Bank of Chicago a company governed by the laws of the
State of Illinois, whose registered office is at One First National
Plaza, Chicago, Illinois 60670, U.S.A., represented by Mr. David G.
Dixon, duly authorized for the purposes hereof, acting in its own name
and as Collateral Agent in the name and on behalf of a bank syndicate
(hereafter referred to as the "Lenders") parties to the Credit Agreement
mentioned below, hereafter referred as to the "Collateral Agent",
2. The Lenders (individually a "Lender" and collectively the "Lenders"),
listed on Annex 1 hereto, represented by the First National Bank of
Chicago as Collateral Agent for the purposes hereof, hereafter referred
to as the "Lenders".
AND
- ---
3. Howmet Corporation, a Delaware corporation, whose registered office is
at P.O. Box 1960, 475 Steamboat Road, Greenwich, Connecticut
06836-1960, represented by Mr Mark .F Lasker, duly authorized for the
purposes hereof, hereafter referred to as the "Pledgor",
AND
- ---
4. Howmet S.A., a French company, with a share capital of FRF
290,328,100.00 whose registered office is at 68-78, rue du Moulin de
Gage, 92230 Gennevilliers, France, duly incorporated in the Nanterre
Trade and Companies Register under n(degree) B 562 109 801, represented
by Mr. Michel Desvernois duly authorized for the purposes hereof,
hereafter referred to as the "Account Holder".
WHEREAS :
- -------
(A) The Pledgor, the Collateral Agent and the Lenders have entered into a
credit agreement dated as of December 16, 1997 providing for the making
of Loans and the issuance of, and participation in, Facility Lcs as
contemplated therein (such credit agreement as it may be amended,
restated or otherwise modified, extended, renewed, replaced, restated
or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring the Indebtedness under such
agreement or any successors agreement, being hereafter referred to as
the "Credit Agreement").
(B) The Pledgor is the owner of 1,887,132 shares in the share capital of
the Company (as defined below).
(C) Pursuant to the Credit Agreement, the Pledgor is required to grant to
the Pledgee certain security interest to secure its liabilities under
the Credit Agreement including in particular the pledge of 65% of the
sharecapital of the Company upon the following terms and conditions of
this Agreement (as defined below).
IT HAS BEEN AGREED AS FOLLOWS :
- -----------------------------
1. DEFINITIONS
-----------
1.1 In this Agreement, terms defined in the Credit Agreement have the same
meaning when used in this Agreement and the following terms and
expressions used in this Agreement shall, unless the context requires
otherwise, have the following meaning :
"Agreement" means this agreement for the pledge of the Shares Account
together with the annexes hereto, as it or they may be amended, restated
or supplemented in the future.
"Business Day" means a day (other than a Saturday or a Sunday) on which
banks are open for business in Paris and Chicago.
"Company" means Howmet S.A., a "societe anonyme" organised under the
laws of France, with a registered capital of FRF 290,328,100.00, whose
registered office is at 68-78, rue du Moulin de Gage, 92230
Gennevilliers, France, duly incorporated in the Nanterre Trade and
Companies Register under n(degree) B 562 109 801.
"Event of Default" means any event described in Article VIII of the
Credit Agreement.
"Pledge" means the pledge (nantissement) created over the Shares Account
("compte d'instruments financiers").
"Shares Account" means the shares account ("compte d'instruments
financiers") within the meaning of Article 29 of law n(degree) 83-1 of
3rd January, 1983, as amended by law n(degree) 96-597 of 2nd July, 1996
and as opened in the books of the Account Holder in the name of the
Pledgor and numbered 1424, to which the Shareholder Interest have been
credited in accordance with the terms of the Agreement, such shares
account being pledged thereunder.
"Shareholder Interest" means, in respect of the Pledgor and at any time
until this Agreement shall be terminated in accordance with its terms,
the 1,887,132 shares held in full ownership by the Pledgor in the issued
share capital of the Company, representing 65% of the share capital of
the Company, together with all shares or other securities ("valeurs
mobilieres"), whether present or future, actual or contingent, from time
to time credited to the Shares Account in accordance with the terms
hereof.
"Secured Liabilities" means all obligations and liabilities by the
Pledgor to the Collateral Agent and the Lenders (i) under, or with
respect to, the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement) (including, without limitation, all
such obligations and indebtedness of the Pledgor under the Credit
Agreement) to which the Pledgor is a party and the due performance by
the Pledgor with all of terms, conditions and agreements contained in
the Credit Agreement and such other Loan Documents, (ii) under or with
respect to any Financial Contracts (as defined in the Credit Agreement),
and the due performance by the Pledgor with all of the terms, conditions
and agreements contained therein, together with (iii) all costs, charges
and expenses incurred by the Collateral Agent
in connection with the preservation or enforcement of their rights under
this Agreement and the Credit Agreement including the Loans Documents,
the Financial Contracts or any other documents evidencing or securing
any such liabilities.
1.2 On and after the date hereof, each reference in this Agreement to :
(a) "Agreement", "hereunder", "hereof", "herein", or words of like
import referring to this Agreement shall mean and be a
reference to this Agreement ;
(b) articles and annexes shall mean and be a reference to the
articles and annexes of this Agreement.
2. PLEDGE (NANTISSEMENT)
---------------------
2.1 Pledged Shares Account
(a) Pursuant to Article 29 of law n(degree) 83-1 of 3rd January,
1983, as amended by law n(degree) 96-597 of 2nd July, 1996, the
Pledgor hereby irrevocably pledges to the Collateral Agent its
Shares Account, including its Shareholder Interest, as security
for the Secured Liabilities.
(b) The Pledgor hereby undertakes to execute immediately upon
signature of this Agreement a statement of pledge relating to
its Shares Account (a "Statement of Pledge") in the form of
Annex 3 and to cause the Account Holder to issue on the same
day a certificate of confirmation of pledge relating to its
Shares Account (a "Confirmation of Pledge") in the form of
Annex 4.
(c) Immediately following the execution of this Agreement, an
executed copy of this Agreement and of the Statement of Pledge
relating to its Shares Account shall for this purpose be
transmitted by the Pledgor to the Account Holder.
2.2 Pledged Shareholder Interest
(a) The Pledgor undertakes to credit to its Shares Account, any
and all dividends, interest and distributions received or to
be received by it and any all of its rights to receive
distributions in respect of its Shareholders Interest. As
long as no Event of Default has occurred, the Pledgor shall
be entitled to receive payment of any dividends paid in cash
("dividendes en numeraires") or other interest, distributions
or rights to distributions in cash only, in respect of the
Shareholder Interest. Upon the occurrence of an Event of
Default, the Pledgor shall not be entitled to receive
dividends or other sums in cash referred to hereabove.
(b) In addition to the provisions of paragraph 2.2 (a) above :
(i) Any proceeds as well as any other shares or
shareholder rights or interest resulting from the
Shareholder Interest and any securities or rights
which
may be substituted for, or added to, the Shareholder
Interest, by way of exchange, consolidation, division,
free distribution or otherwise, and any new shares or
other securities issued by the Company relating to the
Shareholder Interest and attributed to the Pledgor as
a result of a reduction of the Company's capital due
to losses; and
(ii) more generally, any shares or other shareholder
interest attributed to, and any additional shares or
other shareholder interest acquired by the Pledgor and
constituting ownership interests in the Company or any
legal entity resulting from the transformation or
merger of the Company or any similar operation,
shall automatically be deemed the Shareholder Interest of the
Pledgor for the purposes of this Agreement and shall be
promptly credited to the Shares Account, without any such
operation constituting in any manner a novation of the rights
and security granted to the Collateral Agent hereunder and the
Pledgor shall sign all documents and take all action necessary
to confirm the same in favor of the Collateral Agent as further
provided in article 5 provided, however, the Pledgor shall not
be required at any time to pledge hereunder Shares or other
Shareholder Interests constituting ownership interest in the
Company which constitute more than 65% of the Share capital of
the Company.
(c) The Pledgor shall not be entitled to replace or substitute the whole
or part of its Shareholder Interest without the prior written consent
of the Collateral Agent in each instance.
3. REPRESENTATIONS AND WARRANTIES
------------------------------
On the date hereof, the Pledgor represents and warrants to the
Collateral Agent (and such representations and warranties shall be
deemed true and accurate for the term of this Agreement) that :
(a) the execution and performance of this Agreement and all its
obligations hereunder have been duly authorized and any
necessary corporate actions have been taken in connection
therewith ;
(b) its obligations under this Agreement constitute and will
constitute legal, valid and binding obligations, enforceable
against it in accordance with its terms ;
(c) no consent, licence, approval and authorizations of and
registrations with or declarations to any governmental authority
are required in connection with the execution of this
Agreement ;
(d) it has valid title to its Shares Account and to the Shareholder
Interest credited to its Shares Account ;
(e) its Shareholder Interest are not subject to any security
interest, purchase option or similar restrictions which may
affect the rights of the Collateral Agent under this Agreement
or the value of the Pledge created over the Shares Account by
virtue of this Agreement ;
(f) the Pledge herein created over its Shares Account, once
perfected in accordance with the terms hereof, will constitute a
valid first ranking security interest in its Shares Account in
favor of the Collateral Agent.
4. COVENANTS
---------
4.1 Except as permitted or required under the Credit Agreement, the Pledgor
covenants not to allow any security interest to be created or remain on
its Shares Account or Shareholder Interest other than that created
pursuant to this Agreement.
4.2 Subject to the limitations specified in article 2.2(b) the Pledgor
undertakes to cause the Account Holder to credit to the Shares Account
any Shareholder Interest attributed to, and acquired by it, and
constituting ownership interest in the Company or any legal entity
resulting from the transformation or merger of the Company or any
similar operation as specified in article 2.2 (b), and the Pledgor shall
sign all documents and take all action necessary to this effect as
further provided in article 5.
4.3 The Pledgor undertakes not to exercise the voting rights attached to its
Shareholder Interest in a way that could reasonably be expected to void
the Plegde created hereunder.
4.4 Except as permitted hereunder, the Pledgor undertakes that it will not
locate or permit to locate any Shareholder Interest received by it from
any person for whatever reason in an account other than in its Shares
Account.
4.5 Subject to the provisions of Article 2.2 (c) above, the Pledgor (i)
shall refrain from debiting the Shares Account from any Shareholder
Interest credited on the Shares Account from time to time and (ii)
undertakes to cause the Account Holder to credit his Share Account any
additional shares in the Company required pursuant to and within the
limits of, article 2.2 (b).
5. FURTHER ASSURANCES
------------------
5.1 The Pledgor shall at any time and from time to time, at its expense,
and within the limits and in compliance with the terms of the Credit
Agreement promptly execute any such further instruments and documents,
and take such further action, as may be necessary or appropriate or as
the Collateral Agent may reasonably request, in order to perfect,
protect or replace any security interest granted or purported to be
granted with respect to its Shares Account and to enable the Collateral
Agent to exercise and enforce their rights and remedies under this
Agreement.
5.2 The Pledgor hereby undertakes to cause each successor Account Holder to
agree to be bound as Account Holder by all the terms and conditions of
this Agreement as if it were the Account Holder from the date hereof,
as a condition precedent to any transfer of any of its rights and
obligations by the Account Holder hereunder.
6. TERM - COVENANT TO RELEASE
--------------------------
6.1 This Agreement shall remain in full force until all of the Secured
Liabilities have been fully performed.
6.2 The Collateral Agent shall release the Pledge herein created, at the
Pledgor's expense, provided that and as soon as all amounts due in
respect of the Secured Liabilities shall have been repaid in full.
7. ENFORCEMENT
-----------
Following the occurrence of an Event, the Collateral Agent shall be
entitled to (i) exercise all rights, actions and privileges on the
Shares Account and/or the Shareholder Interest of the Pledgor as granted
by law to a secured creditor in order to recover the Secured
Liabilities, and in particular, (ii) request direct payment of moneys or
cash proceeds credited to the Shares Account, subject to the Collateral
Agent making request of the same by at least eight (8) days notice sent
to the Account Holder and to the Pledgor by registered letter in
acordance with any legal requirements including the Decree of May 21,
1997.
8. NOTICES
-------
8.1 Giving of notices
All notices or other communications under or in connection with this
Agreement shall be given in writing and, unless otherwise stated, may be
made by letter, telex or facsimile. Any such notice will be deemed to be
given as follows :
(a) if by letter, when delivered personally or on actual receipt ;
(b) if by telex, when dispatched, but only if, at the time of
transmission, the correct answerback appears at the start and at
the end of the sender's copy of the notice; and
(c) if by facsimile, when received in legible form.
However, a notice given in accordance with the above but received on a
non-Business Day or after business hours in the place of receipt will
only be deemed to be given on the next Business Day in that place.
8.2 Addresses for notices
The addresses, telex and facsimile number of the Pledgor and the
Colateral Agent are as set out in Annex 2 or any other notified by the
Pledgor and the Collateral Agent for this purpose by not less than five
(5) Business Days' notice.
9. MISCELLANEOUS
-------------
9.1 The rights and remedies of the Collateral Agent in this Agreement may be
exercised as often as necessary and are cumulative and not exclusive of
any rights or remedies provided by law or any other document.
9.2 No failure to exercise and no delay in exercising any right, power or
privilege under this Agreement by the Collateral Agent shall operate as
a waiver of the same, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise of
the same, or the exercise of any other right, power or privilege. No
waiver by the Collateral Agent shall be effective unless it is in
writing.
9.3 If any provision of this Agreement is prohibited or unenforceable in any
jurisdiction, such prohibition or unenforceability shall not invalidate
the remaining provisions of this Agreement or affect the validity or
enforceability of such provision in any other jurisdiction.
9.4 Neither the Collateral Agent nor any of its officers or employees shall
be liable for any action taken or omitted under or in connection with
this Agreement unless caused by its or their gross negligence or
willfull misconduct.
For purposes of clause 9.4 "Gross Negligence" means recklessness, the
absence of the slightest care or the complete disregard of
consequences.For avoidance of doubts "Gross Negligence" does not include
the mere absence of ordinary care or diligence, or an inadvertent act or
inadvertent failure to act.
10. SUCCESSORS AND ASSIGNS
----------------------
10.1 All the rights, privileges and options of the Collateral Agent hereunder
will benefit its respective successors and assigns and all terms,
conditions, representations and warranties and covenants of the Pledgor
hereunder shall oblige its respective successors and assigns in the same
manner, it being agreed and understood that :
(a) the Pledgor shall not assign, transfer, novate or dispose of any
of, or any interest in its rights and/or obligations hereunder,
except with the prior written consent of the Collateral Agent ;
and
(b) the Collateral Agent shall be entitled to assign, transfer,
novate or dispose of any of, or any interest in their rights
and/or obligations hereunder to any third party in accordance
with the relevant provisions of the Credit Agreement.
10.2 In the event of any assignment, transfer, novation or disposal of a part
or the whole of their rights and obligations by the Collateral Agent,
the above transferor expressly maintains, which the Pledgor accepts, all
its rights and privileges hereunder for the benefit of its assignees or
transferees, as the case may be, in accordance with the provisions of
Article 1278 of the French Civil Code.
11. GOVERNING LAW AND JURISDICTION
------------------------------
11.1 This Agreement shall be governed by, and interpreted in accordance with,
the laws of France.
11.2 The parties hereby irrevocably consent to the exclusive jurisdiction of
the Commercial Court of Nanterre (Tribunal de Commerce de Nanterre) in
connection with any action or proceeding arising out of or relating to
this Agreement or any documents or instruments delivered pursuant to
this Agreement.
Made in Asnieres
On January 30, 1998
In three (3) original copies
THE FIRST NATIONAL BANK OF CHICAGO HOWMET CORPORATION
as Collateral Agent for the Lenders as Pledgor
listed in Annex 1
By : /s/ Gregory J. Sjulle By : /s/ Marklin Lasker
- --------------------------- -----------------------------
Name : Gregory J. Sjulle Name : Marklin Lasker
HOWMET S.A
as Account Holder
By : /s/ Michel Devernois
- ---------------------------
Name : Michel Devernois
ANNEXE 1
Liste des Preteurs au Contrat de Pret
- ------------------------------------------------------------------------------------------------------------------------------------
Banks Address Participation
- ------------------------------------------------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO One First National Plaza, Chicago, $34,000,000
Illinois 60670, U.S.A., Attn :
Timothy J. King
Ph. : (312) 732-6456
Fax : (312) 732-3885
- ------------------------------------------------------------------------------------------------------------------------------------
MELLON BANK, N.A. 400 South Hope St. $23,000,000
5th Floor
Los Angeles, CA 90071
Attention : Lawrence C. Ivey
Ph. : (213) 553-9543
Fax : (213) 629-0492
- ------------------------------------------------------------------------------------------------------------------------------------
WACHOVIA BANK, N.A. 191 Peachtree Street NE $23,000,000
Atlanta, GA 30303
Attention : U.S Corporate
Ph : (404) 332-6210
Fax : (404) 332-6048
- ------------------------------------------------------------------------------------------------------------------------------------
BANK OF MONTREAL 115 South LaSalle Street $27,000,000
11th Floor
Chicago, IL 60603
Attention : Joanna Bellocq
Ph : (212) 605-1647
Fax : (212) 605-1451
- ------------------------------------------------------------------------------------------------------------------------------------
ABN AMRO BANK, N.V. 135 South LaSalle Street $33,000,000
Suite 2805
Chicago, IL 60603
Attention : Robert Decker
Ph : (312) 904-2949
Fax : (312) 606-8428
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Banks Address Participation
- ------------------------------------------------------------------------------------------------------------------------------------
BANK OF AMERICA NATIONAL 555 South Flower Street $27,000,000
TRUST & SAVINGS 11th Floor
ASSOCIATION Los Angeles, CA 90071
Attention : Dawn Esser
Ph. : (213) 228-2820
Fax : (213) 623-1959
- ------------------------------------------------------------------------------------------------------------------------------------
BANQUE NATIONALE DE PARIS 180 Montgomery Street $23,000,000
3rd Floor
San Francisco, CA 94104
Attention : D. Guy Gibb
Ph : (415) 956-0707
Fax : (415) 296-8954
- ------------------------------------------------------------------------------------------------------------------------------------
THE NOTHERN TRUST COMPANY
50 South LaSalle Street $23,000,000
Chicago, IL 60675
Attention : John E. Burda
Ph : (312) 444-4575
Fax : (312) 444-5055
- ------------------------------------------------------------------------------------------------------------------------------------
BANKERS 130 Liberty Street $33,000,000
TRUST COMPANY New York, NY 10006
Attention : Anthony LoGrippo
Ph : (212) 250-4886
Fax : (212) 250-7218
- ------------------------------------------------------------------------------------------------------------------------------------
$27,000,000
CREDIT SUISSE FIRST BOSTON 11 Madison Avenue
20th Floor
New York, NY 10010-3629
Attention : Mark A. Sampson
Ph : (212) 325-3641
Fax : (212) 325-8319
- ------------------------------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK One Federal Street $27,000,000
MSN-MA-OF0308
Boston, MA 02211
Attention : Robert C. Rubino
Ph : (617) 346-0574
Fax : (617) 346-0585
- ------------------------------------------------------------------------------------------------------------------------------------
ANNEX 2
-------
Addresses for notices
Agent:
-----
The First National Bank of Chicago,
One First National Plaza,
Chicago, Illinois 60670, U.S.A.
Attention: Mr. Timothy J. King
Telephone n(degree): (312) 732-6456
Facsimile n(degree): (312) 732-3885
Account Holder:
--------------
Howmet S.A.,
68-78, rue du Moulin de Cage,
92230 Gennevilliers, France,
Attention : Mr. Michel Desvernois
Telephone n(degree) : 01 40 80 25 03
Facsimile n(degree) : 01 40 80 25 99
Pledgor :
-------
Howmet Corporation
P.O. Box 1960,
475 Steamboat Road,
Greenwich, Connecticut 06836-1960,
Attention : Treasurer
Telephone n(degree) : (203) 625-8744
Facsimile n(degree) : (203) 861-4746
ANNEX 3
-------
Form of Statement of Pledge
(Article 29 of law n(degree) 83-1 of 3rd January,
1983 as amended by law n(degree) 96-597
of 2nd July, 1996)
DECLARATION DE GAGE DE COMPTE
D'INSTRUMENTS FINANCIERS
(soumises aux dispositions de l'article 29
de la loi n(degree) 83-1 du 3 janvier 1983, modifiee par la loi
n(degree) 96-597 du 2 juillet 1996)
LE SOUSSIGNE:
- ------------
Howmet Corporation, une societe de l'Etat du Delaware (U.S.A.), dont le siege
social se trouve a P.O. Box 1960, 475 Steamboat Road, Greenwich, Connecticut
06836-1960, U.S.A. representee par MonsieurMark.F Lasker, dument habilite aux
fins des presentes,
ci-apres designe "le Constituant"
conformement a un acte de nantissement de compte d'instruments financiers en
date de ce jour et intitule "Shares Accounts Pledge Agreement" (Nantissement de
Comptes d'Instruments Financiers) (le "Contrat de Nantissement"),
DONNE INSTRUCTION A:
Howmet S.A., societe anonyme au capital de FRF 290.328.100.00, situee au 68-78,
rue du Moulin de Cage, 92230 Gennevilliers, France, immatriculee au Registre du
Commerce et des Societes de Nanterre, sous le numero B 562 109 801,
ci-apres designe le "Teneur de Compte"
D'OUVRIR A SON NOM DANS SES LIVRES UN COMPTE SPECIAL D'ACTIONNAIRE N(degree)
1424 (CI-APRES LE "COMPTE GAGE")
ET D'Y TRANSFERER LES INSTRUMENTS FINANCIERS CI-APRES:
1.887.132 actions (soit 65 % a la date des presentes) de la societe Howmet S.A.,
societe anonyme au capital de FRF 290.328.100,00 ayant son siege social au
68-78, rue du Moulin de Cage, 92230 Gennevilliers, France, immatriculee au
Registre du Commerce et des Societes de Nanterre, sous le numero B 562 109 801,
d'une valeur nominale de 100 Francs chacune,
ci-apres designes les "Instruments Financiers"
ET CONSTITUE EN GAGE LE COMPTE GAGE
AU BENEFICE DE:
Les Preteurs dont la liste figure a l'Annexe 1 aux presentes, parties a un
contrat de pret (ci-apres le "Contrat de Pret ") en date du 16 decembre 1997 et
intitule "Credit Agreement" ainsi que leurs cessionnaires et successeurs
successifs qui deviendront parties au Contrat de Pret conformement a l'article
XIII du Contrat de Pret, representes par The First National Bank of Chicago, une
societe de droit de l'Etat de l'Illinois, dont le siege social se trouve a One
First National Plaza, Chicago, Illinois 60670, U.S.A., (sous reserve de la
designation d'un nouvel Agent conformement a l'article 11.12 du Contrat de
Pret), representee par Monsieur David G. Dixon, dument habilite a l'effet des
presentes,
ci-apres designe "le Beneficiaire"
EN GARANTIE DU PAIEMENT DES SOMMES DUES AU TITRE DE L'OBLIGATION CI-APRES
DEFINIE :
Nature :
- ------
Toutes les obligations du Constitutant a l'egard de l'Agent des Suretes et des
Preteurs (i) au titre du Contrat de Pret ("Credit Agreement") et des autres
documents de pret ("Loan Documents") (tels que definis dans le Contrat de Pret,
incluant, sans limitation, tous autres obligations et endettement du Constituant
en vertu du Contrat de Pret) auxquels le Constituant est partie, et l'execution
par le Constituant de tous les termes, conditions et accords contenus dans le
Contrat de Pret et autres documents de pret ("Loan Documents"), (ii) en vertu ou
au titre de tout contrat financier ("Financial Contract" tel que defini dans le
Contrat de Pret), et l'execution par le Constituant de tous les termes,
conditions et accords qui y sont contenus, ainsi que (iii) tous les couts,
charges et depenses encourus par l'Agent des Suretes en relation avec la
preservation ou la mise en oeuvre de ses droits en vertu du Contrat de
Nantissement et du Contrat de Pret incluant les documents de pret ("Loan
Documents"), les contrats financiers ("Financial Contracts") ou tout autre
document etablissant ou garantissant de telles obligations.
Montant Maximum :
- ---------------
Le Montant maximum des sommes dues au titre du Contrat de Pret soit trois cent
millions ($300,000,000) de Dollars en principal, augmente des interets, interets
de retard, penalites,
indemnites, commissions, frais et accessoires et autres paiements y afferents
stipules au Contrat de Pret incluant les montants qui pourraient etre dues par
le Constituant en vertu des documents de pret ("Loan Documents") et les contrats
financiers ("Financial Contracts").
ci-apres designee la "Creance Garantie"
DANS LES CONDITIONS SUIVANTES :
Conformement aux dispositions de l'article 29 de la loi n(degree) 83-1 du 3
janvier 1983, modifiee par la loi n(degree) 96-597 du 2 juillet 1996, le
Constituant affecte en nantissement au benefice du Beneficiaire, le Compte Gage
en garantie du paiement de l'integralite des sommes dues, en principal,
interets, frais et accessoires, au titre de la Creance Garantie jusqu'a son
complet remboursement.
Le Constituant declare que les Instruments Financiers ne font l'objet d'aucune
indisponibilite a quelque titre que ce soit, autre qu'au titre de la presente
declaration. Les Instruments Financiers, ceux qui leur sont substitues ou les
completent, de quelque maniere que ce soit, sont compris dans l'assiette du
gage.
Le Constituant ne pourra pas disposer des Instruments Financiers conformement
aux termes du Contrat de Nantissement, dont le Teneur de Compte declare avoir eu
connaissance.
Si la Creance Garantie est declaree exigible conformement au contrat constatant
la Creance Garantie, pour quelque cause que ce soit, le Beneficiaire pourra
proceder a la realisation du gage conformement aux textes en vigueur. Les frais
resultant de la realisation du gage demeureront a la charge du Constituant et
seront imputes sur le produit de cette realisation.
Le Teneur de Compte procedera a cette realisation sur demande ecrite du
Beneficiaire.
Les frais relatifs aux presentes seront a la charge du Constituant.
La presente declaration de gage est soumise au droit francais. Toute
contestation relative a la validite, l'interpretation ou l'execution des
presentes sera de la competence du tribunal de commerce de Nanterre.
Fait a Asnieres
le 30 Janvier 1998
en trois (3) exemplaires
Pour constitution du nantissement :
- -------------------------------------
Par : Howmet Corporation
- -------------------------------------
Titre : Mr.Mark .F Lasker
Translation for information purposes only
STATEMENT OF PLEDGE OVER SHARES ACCOUNT
(subject to provisions of Article 29 of law n(degree) 83-1 of 3rd January,
1983 as amended by law n(degree) 96-597 of 2nd July, 1996)
THE UNDERSIGNED:
- ---------------
Howmet Corporation., a Delaware corporation, whose registered office is P.O. Box
1960, 475 Steamboat Road, Greenwich, Connecticut 06836-1960, U.S.A., represented
by MrMark.F Lasker, duly authorized for the purposes hereof,
hereafter referred to as the "Pledgor"
pursuant to a Shares Account Pledge Agreement executed on the date hereof (the
"Pledge Agreement")
HEREBY INSTRUCTS
Howmet S.A., a "societe anonyme" organised under the laws of France, with a
registered capital of FRF 290,328,100.00, whose registered office is at 68-78,
rue du Moulin de Cage, 92230 Gennevilliers, France, duly incorporated in the
Nanterre Trade and Companies Register under n(degree) B 562 109 801,
hereafter the "Account Holder"
TO OPEN IN ITS NAME IN ITS BOOKS A SPECIAL ACCOUNT N(degree)1424 (THE "PLEDGED
ACCOUNT")
AND
TO TRANSFER ON SUCH ACCOUNT THE FOLLOWING SHAREHOLDER INTEREST:
1,887,132 shares representing 65% of the sharecapital of Howmet S.A., a "societe
anonyme" organised under the laws of France, with a registered capital of FRF
290,328,100.00, whose registered office is at 68-78, rue du Moulin de Cage,
92230 Gennevilliers, France, duly incorporated in the Nanterre Trade and
Companies Register under n(degree) B 562 109 801,
hereinafter referred to as the
"Shareholder Interest"
AND HEREBY PLEDGES THE PLEDGED ACCOUNT
TO THE BENEFIT OF:
The Lenders listed in the Annex 1 hereto, parties to a credit agreement
(hereafter the "Credit Agreement") dated 16 December, 1997 and entitled the
"Credit Agreement" and their respective successors and assigns which will become
parties to the Credit Agreement according to Article XIII thereof, represented
by The First National Bank of Chicago, a company governed by the laws of the
State of Illinois, whose registered office is at One First National Plaza,
Chicago, Illinois 60670, U.S.A., (subject to the designation of a new Collateral
Agent as provided for under Article 11.12 of the Credit Agreement) itself
represented by Mr. David G. Dixon, duly authorized for the purpose hereof,
hereafter the "Beneficiary"
AS SECURITY FOR PAYMENT OF THE FOLLOWING LIABILITIES:
Nature :
- ------
All obligations and liabilities by the Pledgor to the Collateral Agent and the
Lenders (i) under, the Credit Agreement and the other Loans Documents (as
defined in the Credit Agreement) (including, without limitation, all such
obligations and indebtedness of the Pledgor under the Credit Agreement) to which
the Pledgor is a party and the due performance by the Pledgor with all of terms,
conditions and agreements contained in the Credit Agreement and such other Loan
Documents, (ii) under or with respect to any Financial Contracts (as defined in
the Credit Agreement) and the due performance by the Pledgor with all of the
terms, conditions and agreements contained therein, together with (iii) all
costs, charges and expenses incurred by the Collateral Agent in connection with
the protection, preservation or enforcement of their rights under the Pledge
Agreement and the Credit Agreement including the Loans Documents, the Financial
Contracts or any other documents evidencing or securing any such liabilities.
Maximum Amount :
- --------------
The maximum amount due under the Credit Agreement being three hundred million US
Dollars($300,000,000) plus interest, late interest, penalties, indemnities,
commissions, fees, accessories and related payments provided by the Credit
Agreement including the amounts which could be due by the Pledgor under the Loan
Documents and the Financial Contracts.
hereafter the "Secured Liabilities"
UNDER THE FOLLOWING TERMS AND CONDITIONS:
Pursuant to Article 29 of law n(degree) 83-1 of 3rd January 1983 as amended by
law n(degree) 96-597 of 2nd July 1996, the Pledgor pledges to the Beneficiary
the Pledged Account as security of payment of any and all sums due, including
principal, interests, costs and accessories, as Secured Liabilities until such
sums have been paid in full.
The Pledgor represents that the transfer of the Shareholder Interest is not
subject to any restriction other than this statement.
The Shareholder Interest, any other rights which may be substituted for or added
to the Shareholder Interest in any way, shall be subject to the Pledge.
The Pledgor shall not assign the Shareholder Interest, in accordance with terms
of the Pledge Agreement. The Account Holder acknowledges that it has full
knowledge of the terms of the same.
Should the Secured Liabilities declared due in accordance with the agreement
creating the Secured Liabilities, the Beneficiary shall be entitled to enforce
the Pledge in compliance with applicable regulations. The Beneficiary shall not
be responsible for the value retained for the enforcement of the Pledge.
Expenses incurred by the enforcement of the Pledge shall be borne by the Pledgor
and charged on the proceeds remaining from the enforcement.
The Account Holder shall proceed to the enforcement of the pledge upon written
request from the Beneficiary.
The costs hereof shall be borne by the Pledgor.
This statement of pledge is governed by the laws of France. Any dispute relating
to the validity, interpretation and realization of this statement shall be in
the jurisdiction of the Nanterre Commercial Court ("Tribunal de Commerce de
Nanterre").
Signed in Asnieres on 30 january, 1998
in three (3) original copies
For the purpose of constituting the pledge:
- ------------------------------------------
By : Howmet Corporation
- -----------------------------
Name : Mr. Mark .F Lasker
ANNEX 4
Form of Confirmation of Pledge
Over Shares Accounts
(Article 29 of Law n(degree) 83-1 of January 3, 1983, as amended by Law
n(degree) 96-597 of July 2, 1996)
ATTESTATION DE NANTISSEMENT
DE COMPTE D'INSTRUMENTS FINANCIERS
(article 29 de la loi n(degree) 83-1 du 3 janvier 1983, modifiee par la loi du
n(degree) 96-597 du 2 juillet 1996)
Connaissance prise de la Declaration de Gage de Compte d'Instruments Financiers
. en date du :
. signee par : Howmet Corporation., une societe de l'Etat du Delaware
(U.S.A.), dont le siege social se trouve P.O.Box 1960, 475 Steamboat
Road, Greenwich, Connecticut 06836-1960, U.S.A., representee par
MonsieurMark F. Lasker, dument habilite aux fins des presentes,
(le "Constituant"),
. au benefice des Preteurs dont la liste figure en Annexe 1 des
presentes, parties a un contrat de pret (ci-apres le "Contrat de
Pret") en date du 16 decembre 1997 et intitule "Credit Agreement"
ainsi que leurs cessionnaires et successeurs successifs qui
deviendront parties au Contrat de Pret conformement a l'article XIII
du Contrat de Pret, representes par The First National Bank of
Chicago, une societe de droit de l'Etat de l'Illinois, dont le siege
social se trouve a One First National Plaza, Chicago, Illinois 60670,
U.S.A., (sous reserve de la designation d'un nouvel Agent
conformement aux dispositions de l'article 11.12 du Contrat de Pret),
elle-meme representee par Monsieur David G. Dixon, dument habilite a
l'effet des presentes,
(le "Beneficiaire"),
Ci-apres la "Declaration de Gage",
Nous soussignee, Howmet S.A., societe anonyme au capital de FRF 290.328.100,00,
situee au 68-78, rue du Moulin de Cage, 92230 Gennevilliers, France,
immatriculee au Registre du Commerce et des Societes de Nanterre, sous le numero
B 562 109 801,
agissant en qualite de Teneur du Compte Gage,
1/ attestons par la presente l'ouverture et le nantissement du compte
d'instruments financiers:
dont les references sont les suivantes :
Compte d'Instruments Financiers N(degree)1424 ouvert au nom de la
Societe Howmet Corporation ainsi qu'il est indique dans la
Declaration de Gage,
2/ donnons inventaire des instruments financiers ci-apres :
1.887.132 actions representant 65% de la participation detenue par le
Constituant dans le capital de la societe Howmet S.A. ;
3/ prenons acte de :
l'interdiction faite au Constituant de disposer des instruments
financiers inscrits dans le Compte Gage, conformement aux termes du
Contrat de Nantissement en date de ce jour vise dans la Declaration
de Gage,
4/ acceptons d'exercer la mission de controle en resultant.
Fait a Gennevilliers
le 1998
Howmet S.A en qualite de
Teneur de Compte
Par:
Titre:
Translation for information purposes only
Confirmation of Pledge
Over Shares Accounts
(Article 29 of Law n(degree) 83-1 of January 3, 1983, as amended by
Law n(degree) 96-597 of July 2, 1996)
Having knowledge of the Statement of Pledge over Shares Account,
. dated:
. signed by : Howmet Corporation, a Delaware corporation, whose
registered office is P.O. Box 1960, 475 Steamboat Road, Greenwich,
Connecticut 06836-1960, U.S.A., represented by MrMark.F Lasker, duly
authorized for the purposes hereof,
(the "Pledgor"),
. to the benefit of : the Lenders listed in Annex 1, parties to a
credit agreement (hereafter the "Credit Agreement") dated 16 December, 1997 and
entitled the "Credit Agreement" and their respective successors and assigns
which will become parties to the Credit Agreement according to Article XIII
thereof, represented by The First National Bank of Chicago, a company governed
by the laws of the State of Illinois (subject to the susbstitution of the Agent
as provided for by Article 11.12 of the Credit Agreement), whose registered
office is at One First National Plaza, Chicago, Illinois 60670, U.S.A., itself
represented by Mr. David G. Dixon, duly authorized for the purpose hereof,
(the "Beneficiary"),
hereafter the "Statement of Pledge",
We the undersigned, Howmet S.A., a "societe anonyme" organised under the laws of
France, with a registered capital of FRF 290,328,100.00, whose registered office
is 68-78, rue du Moulin de Cage, 92230 Gennevilliers France, duly incorporated
in the Nanterre Trade and Companies Register under n(degree) B 562 109 801,
acting in our capacity as Account Holder,
1/ hereby confirm the opening and constitution of a pledge over shares
accounts:
the references of which are the following :
Shares Account N(degree)1424 open in the name of Howmet Corporation
as provided in the Statement of Pledge
2/ present the inventory of shareholder interest as follows:
1,887,132 shares representing 65% of the interest held by the Pledgor
in the share capital of Howmet S.A. ;
3/ acknowledge that:
the Pledgor is not allowed to assign part or all of the shareholder
interest in accordance with the terms of the Pledge Agreement of the
dated hereof referred to in the Statement of Pledge,
4/ agree to exercise a control over the pledged account.
In Gennevilliers
on 1998
Howmet S.A. as
Account Holder
By:
Title:
DECLARATION DE GAGE DE COMPTE
D'INSTRUMENTS FINANCIERS
(soumises aux dispositions de l'article 29 de la loi n(degree) 83-1 du 3
janvier 1983, modifiee par la loi n(degree) 96-597 du 2 juillet 1996)
LE SOUSSIGNE :
- ------------
Howmet Corporation, une societe de l'Etat du Delaware (U.S.A.), dont le siege
social se trouve a P.O. Box 1960, 475 Steamboat Road, Greenwich, Connecticut
06836-1960, U.S.A. representee par MonsieurMark.F Lasker, dument habilite aux
fins des presentes,
ci-apres designe "le Constituant"
conformement a un acte de nantissement de compte d'instruments financiers en
date de ce jour et intitule "Shares Accounts Pledge Agreement" (Nantissement de
Comptes d'Instruments Financiers) (le "Contrat de Nantissement"),
DONNE INSTRUCTION A:
Howmet S.A., societe anonyme au capital de FRF 290.328.100.00, situee au 68-78,
rue du Moulin de Cage, 92230 Gennevilliers, France, immatriculee au Registre du
Commerce et des Societes de Nanterre, sous le numero B 562 109 801,
ci-apres designe le "Teneur de Compte"
D'OUVRIR A SON NOM DANS SES LIVRES UN COMPTE SPECIAL D'ACTIONNAIRE N(degree)
1424 (CI-APRES LE "COMPTE GAGE")
ET D'Y TRANSFERER LES INSTRUMENTS FINANCIERS CI-APRES :
1.887.132 actions (soit 65 % a la date des presentes) de la societe Howmet S.A.,
societe anonyme au capital de FRF 290.328.100,00 ayant son siege social au
68-78, rue du Moulin de
Cage, 92230 Gennevilliers, France, immatriculee au Registre du Commerce et des
Societes de Nanterre, sous le numero B 562 109 801, d'une valeur nominale de 100
Francs chacune,
ci-apres designes les "Instruments Financiers"
ET CONSTITUE EN GAGE LE COMPTE GAGE
AU BENEFICE DE :
Les Preteurs dont la liste figure en Annexe 1 des presentes, parties a un
contrat de pret (ci-apres le "Contrat de Pret ") en date du 16 decembre 1997 et
intitule "Credit Agreement" ainsi que leurs cessionnaires et successeurs
successifs qui deviendront parties au Contrat de Pret conformement a l'article
XIII du Contrat de Pret, representes par The First National Bank of Chicago, une
societe de droit de l'Etat de l'Illinois, dont le siege social se trouve a One
First National Plaza, Chicago, Illinois 60670, U.S.A., (sous reserve de la
designation d'un nouvel Agent conformement a l'article 11.12 du Contrat de
Pret), representee par Monsieur David G. Dixon, dument habilite a l'effet des
presentes,
ci-apres designe "le Beneficiaire"
EN GARANTIE DU PAIEMENT DES SOMMES DUES AU TITRE DE L'OBLIGATION CI-APRES
DEFINIE :
Nature :
- ------
Toutes les obligations du Constitutant a l'egard de l'Agent des Suretes et des
Preteurs (i) au titre du Contrat de Pret ("Credit Agreement") et des autres
documents de pret ("Loan Documents") (tels que definis dans le Contrat de Pret,
incluant, sans limitation, tous autres obligations et endettement du Constituant
en vertu du Contrat de Pret) auxquels le Constituant est partie, et l'execution
par le Constituant de tous les termes, conditions et accords contenus dans le
Contrat de Pret et autres documents de pret ("Loan Documents"), (ii) en vertu ou
au titre de tout contrat financier ("Financial Contract" tel que defini dans le
Contrat de Pret), et l'execution par le Constituant de tous les termes,
conditions et accords qui y sont contenus, ainsi que (iii) tous les couts,
charges et depenses encourus par l'Agent des Suretes en relation avec la
preservation ou la mise en oeuvre de ses droits en vertu du Contrat de
Nantissement et du Contrat de Pret incluant les documents de pret ("Loan
Documents"), les contrats financiers ("Financial Contracts") ou tout autre
document etablissant ou garantissant de telles obligations.
Montant Maximum :
- ---------------
Le montant maximum des sommes dues au titre du Contrat de Pret soit trois cent
millions de Dollars ($300,000,000) en principal, augmente des interets, interets
de retard, penalites, indemnites, commissions, frais et accessoires et autres
paiements y afferents stipules au Contrat de Pret incluant les montants qui
pourraient etre dues par le Constituant en vertu des documents de pret ("Loan
Documents") et les contrats financiers ("Financial Contracts").
ci-apres designee la "Creance Garantie"
DANS LES CONDITIONS SUIVANTES :
Conformement aux dispositions de l'article 29 de la loi n(degree) 83-1 du 3
janvier 1983, modifiee par la loi n(degree) 96-597 du 2 juillet 1996, le
Constituant affecte en nantissement au benefice du Beneficiaire, le Compte Gage
en garantie du paiement de l'integralite des sommes dues, en principal,
interets, frais et accessoires, au titre de la Creance Garantie jusqu'a son
complet remboursement.
Le Constituant declare que les Instruments Financiers ne font l'objet d'aucune
indisponibilite a quelque titre que ce soit, autre qu'au titre de la presente
declaration. Les Instruments Financiers, ceux qui leur sont substitues ou les
completent, de quelque maniere que ce soit, sont compris dans l'assiette du
gage.
Le Constituant ne pourra pas disposer des Instruments Financiers conformement
aux termes du Contrat de Nantissement, dont le Teneur de Compte declare avoir eu
connaissance.
Si la Creance Garantie est declaree exigible conformement au contrat constatant
la Creance Garantie, pour quelque cause que ce soit, le Beneficiaire pourra
proceder a la realisation du gage conformement aux textes en vigueur. Les frais
resultant de la realisation du gage demeureront a la charge du Constituant et
seront imputes sur le produit de cette realisation.
Le Teneur de Compte procedera a cette realisation sur demande ecrite du
Beneficiaire.
Les frais relatifs aux presentes seront a la charge du Constituant.
La presente declaration de gage est soumise au droit francais. Toute
contestation relative a la validite, l'interpretation ou l'execution des
presentes sera de la competence du tribunal de commerce de Nanterre.
Fait a Asnieres
le 30 janvier 1998
en trois (3) exemplaires
Pour constitution du nantissement :
- ---------------------------------
Par : Howmet Corporation
- -------------------------------------
Titre : Mr. Mark.F Lasker
ANNEXE 1
--------
Liste des Preteurs au Contrat de Pret
- ------------------------------------------------------------------------------------------------------------------------------------
Banks Address Participation
- ------------------------------------------------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO One First National Plaza, Chicago, $34,000,000
Illinois 60670, U.S.A., Attn : Timothy J. King
Ph. : (312) 732-6456
Fax : (312) 732-3885
- ------------------------------------------------------------------------------------------------------------------------------------
MELLON BANK, N.A. 400 South Hope St. $23,000,000
5th Floor
Los Angeles, CA 90071
Attention : Lawrence C. Ivey
Ph. : (213) 553-9543
Fax : (213) 629-0492
- ------------------------------------------------------------------------------------------------------------------------------------
WACHOVIA BANK, N.A. 191 Peachtree Street NE $23,000,000
Atlanta, GA 30303
Attention : U.S Corporate
Ph : (404) 332-6210
Fax : (404) 332-6048
- ------------------------------------------------------------------------------------------------------------------------------------
BANK OF MONTREAL 115 South LaSalle Street $27,000,000
11th Floor
Chicago, IL 60603
Attention : Joanna Bellocq
Ph : (212) 605-1647
Fax : (212) 605-1451
- ------------------------------------------------------------------------------------------------------------------------------------
ABN AMRO BANK, N.V. 135 South LaSalle Street $33,000,000
Suite 2805
Chicago, IL 60603
Attention : Robert Decker
Ph : (312) 904-2949
Fax : (312) 606-8428
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Banks Address Participation
- ------------------------------------------------------------------------------------------------------------------------------------
BANK OF AMERICA NATIONAL 555 South Flower Street $27,000,000
TRUST & SAVINGS ASSOCIATION 11th Floor
Los Angeles, CA 90071
Attention : Dawn Esser
Ph. : (213) 228-2820
Fax : (213) 623-1959
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BANQUE NATIONALE DE PARIS 180 Montgomery Street $23,000,000
3rd Floor
San Francisco, CA 94104
Attention : D. Guy Gibb
Ph : (415) 956-0707
Fax : (415) 296-8954
- ------------------------------------------------------------------------------------------------------------------------------------
THE NOTHERN TRUST COMPANY
50 South LaSalle Street $23,000,000
Chicago, IL 60675
Attention : John E. Burda
Ph : (312) 444-4575
Fax : (312) 444-5055
- ------------------------------------------------------------------------------------------------------------------------------------
BANKERS 130 Liberty Street $33,000,000
TRUST COMPANY New York, NY 10006
Attention : Anthony LoGrippo
Ph : (212) 250-4886
Fax : (212) 250-7218
- ------------------------------------------------------------------------------------------------------------------------------------
$27,000,000
CREDIT SUISSE FIRST BOSTON 11 Madison Avenue
20th Floor
New York, NY 10010-3629
Attention : Mark A. Sampson
Ph : (212) 325-3641
Fax : (212) 325-8319
- ------------------------------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK One Federal Street $27,000,000
MSN-MA-OF0308
Boston, MA 02211
Attention : Robert C. Rubino
Ph : (617) 346-0574
Fax : (617) 346-0585
- ------------------------------------------------------------------------------------------------------------------------------------
ATTESTATION DE NANTISSEMENT
DE COMPTE D'INSTRUMENTS FINANCIERS
(article 29 de la loi n(degree) 83-1 du 3 janvier 1983,
modifiee par la loi du n(degree) 96-597 du 2 juillet 1996)
Connaissance prise de la Declaration de Gage de Compte d'Instruments Financiers
. en date du 30 janvier 1998
. signee par : Howmet Corporation., une societe de l'Etat du Delaware
(U.S.A.), dont le siege social se trouve P.O.Box 1960, 475 Steamboat
Road, Greenwich, Connecticut 06836-1960, U.S.A., representee par
Monsieur Mark.F Lasker, dument habilite aux fins des presentes,
(le "Constituant"),
. au benefice des Preteurs parties a un contrat de pret (ci-apres le
"Contrat de Pret") en date du 16 decembre 1997 et intitule "Credit
Agreement" ainsi que leurs cessionnaires et successeurs successifs qui
deviendront parties au Contrat de Pret conformement a l'article XIII du
Contrat de Pret, representes par The First National Bank of Chicago,
une societe de droit de l'Etat de l'Illinois, dont le siege social se
trouve a One First National Plaza, Chicago, Illinois 60670, U.S.A.,
(sous reserve de la designation d'un nouvel Agent conformement aux
dispositions de l'article 11.12 du Contrat de Pret), elle-meme
representee par Monsieur David G. Dixon, dument habilite a l'effet des
presentes,
(le "Beneficiaire"),
Ci-apres la "Declaration de Gage",
Nous soussignee, Howmet S.A., societe anonyme au capital de FRF 290.328.100,00,
situee au 68-78, rue du Moulin de Cage, 92230 Gennevilliers, France,
immatriculee au Registre du Commerce et des Societes de Nanterre, sous le numero
B 562 109 801,
agissant en qualite de Teneur du Compte Gage,
1/ attestons par la presente l'ouverture et le nantissement du compte
d'instruments financiers:
dont les references sont les suivantes :
Compte d'Instruments Financiers N(degree)1424 ouvert au nom de la
Societe Howmet Corporation ainsi qu'il est indique dans la
Declaration de Gage,
2/ donnons inventaire des instruments financiers ci-apres :
1.887.132 actions representant 65% de la participation detenue par le
Constituant dans le capital de la societe Howmet S.A. ;
3/ prenons acte de :
l'interdiction faite au Constituant de disposer des instruments
financiers inscrits dans le Compte Gage, conformement aux termes du
Contrat de Nantissement en date de ce jour vise dans la Declaration
de Gage,
4/ acceptons d'exercer la mission de controle en resultant.
Fait aGennevilliers
le 1998
Howmet S.A en qualite de
Teneur de Compte
Par:
Titre:
EXHIBIT C
FORM OF SUBSIDIARY GUARANTY
(Attached)
GUARANTY
THIS GUARANTY (this "Guaranty") is made as of the 16th day of December,
1997, by Blade Receivables Corporation, a Nevada corporation, Howmet Cercast
(U.S.A.), Inc., a Delaware corporation, Howmet Management Services, Inc., a
Delaware corporation, Howmet Refurbishment, Inc., a Delaware corporation,
Turbine Components Corporation, a Connecticut corporation, Howmet Research
Corporation, a Delaware corporation, Warner Commerce Corporation, a Delaware
corporation, Howmet Sales and Services, Inc., a Delaware corporation, Howmet-
Tempcraft, Inc., an Ohio corporation, Howmet Thermatech Canada, Inc., a Delaware
corporation, Howmet Transport Services, Inc., a Delaware corporation, Sprayform
Technologies International, L.L.C., a Delaware limited liability company
(collectively, the "Initial Guarantors" and along with any New Subsidiaries
which become parties to this Agreement by executing an Addendum hereto in the
form attached as Annex I, the "Guarantors") in favor of the Agent, for the
ratable benefit of the Lenders, under (and as defined in) the Credit Agreement
referred to below;
WITNESSETH:
WHEREAS, Howmet Corporation, a Delaware corporation (the "Borrower"), The
First National Bank of Chicago, as contractual representative (the "Agent"), and
certain Lenders have entered into a certain Credit Agreement dated as of
December 26, 1997 (as same may be amended, modified, supplemented and/or
restated, and as in effect from time to time, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for extensions of credit
to be made by the Lenders to the Borrower;
WHEREAS, it is a condition precedent to the initial extensions of credit by
the Lenders under the Credit Agreement that each of the Guarantors (constituting
all the domestic Subsidiaries of the Borrower) execute and deliver this
Guaranty, whereby each of the Guarantors shall guarantee the payment when due,
subject to Section 8 hereof, of all principal, interest, letter of credit
---------
reimbursement obligations and other amounts that shall be at any time payable by
the Borrower under the Credit Agreement, the Notes and the other Loan Documents;
and
WHEREAS, in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower may
in the future provide, to the Guarantors, and in order to induce the Lenders and
the Agent to enter into the Credit Agreement, each of the Guarantors is willing
to guarantee the obligations of the Borrower under the Credit Agreement, the
Notes, and the other Loan Documents;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION l. Definitions. Terms defined in the Credit Agreement and not
-----------
otherwise defined herein have, as used herein, the respective meanings provided
for therein.
SECTION 2. Representations, Warranties and Covenants. Each of the
-----------------------------------------
Guarantors represents and warrants (which representations and warranties shall
be deemed to have been renewed at the time of the making of any Loan or issuance
of any Facility LC) that:
(a) It is a corporation, limited liability company, partnership or
other commercial entity duly incorporated or formed, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation
and has all requisite authority to conduct its business as a foreign Person in
each jurisdiction in which its business is conducted, except where the failure
to have such requisite authority would not have a Material Adverse Effect.
(b) It has the power and authority and legal right to execute and
deliver this Guaranty and to perform its obligations hereunder. The execution
and delivery by it of this Guaranty and the performance by it of its obligations
hereunder have been duly authorized by proper proceedings, and this Guaranty
constitutes a legal, valid and binding obligation of such Guarantor enforceable
against such Guarantor in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
(c) Neither the execution and delivery by it of this Guaranty, nor the
consummation by it of the transactions herein contemplated, nor compliance by it
with the terms and provisions hereof, will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on it or its
certificate or articles of incorporation or by-laws, limited liability company
or partnership agreement or the provisions of any indenture, instrument or
material agreement to which it is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on its property
pursuant to the terms of any such indenture, instrument or material agreement.
No order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any Governmental
Authority, is required to authorize, or is required in connection with the
execution, delivery and performance by it of, or the legality, validity, binding
effect or enforceability against the it of, this Guaranty.
In addition to the foregoing, each of the Guarantors covenants that,
so long as any Lender has any Commitment outstanding under the Credit Agreement
or any amount payable under the Credit Agreement, or any Note or any other
Obligations shall remain unpaid, it will, and, if necessary, will enable the
Borrower to, fully comply with those covenants and agreements of the Borrower
applicable to such Guarantor set forth in the Credit Agreement.
SECTION 3. The Guaranty. Subject to Section 8 hereof, each of the
------------ ---------
Guarantors hereby unconditionally guarantees, jointly with the other Guarantors
and severally, the full and punctual payment when due (whether at stated
maturity, upon acceleration or otherwise) of the Obligations, including, without
limitation, (i) the principal of and interest on each Loan made to and each Note
issued by the Borrower pursuant to the Credit Agreement, (ii) any Reimbursement
Obligations of the Borrower, (iii) all other amounts payable by the Borrower
under the Credit Agreement and the other Loan Documents (all of the foregoing,
subject to the provisions of Section 8 hereof, being referred to collectively as
---------
the "Guaranteed Obligations"). Upon failure by the Borrower to pay punctually
any such amount, each of the Guarantors agrees that it shall forthwith on demand
pay such amount at the place and in the manner specified in the Credit
Agreement, any Note or the relevant Loan Document, as the case may be. Each of
the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and is not a guaranty of collection.
SECTION 4. Guaranty Unconditional. Subject to Section 8 hereof, the
---------------------- ---------
obligations of each of the Guarantors hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, indulgence, compromise, waiver
or release of or with respect to the Guaranteed Obligations or any part
thereof or any agreement relating thereto, or with respect to any
obligation of any other guarantor of any of the Guaranteed Obligations,
whether (in any such case) by operation of law or otherwise, or any failure
or omission to enforce any right, power or remedy with respect to the
Guaranteed Obligations or any part thereof or any agreement relating
thereto, or with respect to any obligation of any other guarantor of any of
the Guaranteed Obligations;
(ii) any modification or amendment of or supplement to the Credit
Agreement, any Note, or any other Loan Document, including, without
limitation, any such amendment which may increase the amount of the
Obligations guaranteed hereby;
(iii) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any
collateral securing the Guaranteed Obligations or any part thereof, any
other guaranties with respect to the Guaranteed Obligations or any part
thereof, or any other obligation of any person or entity with respect to
the Guaranteed Obligations or any part thereof, or any nonperfection or
invalidity of any direct or indirect security for the Guaranteed
Obligations;
(iv) any change in the corporate, partnership or other existence,
structure or ownership of the Borrower or any other guarantor of any of the
Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Borrower or any other guarantor of
the Guaranteed
Obligations, or any of their respective assets or any resulting release or
discharge of any obligation of the Borrower or any other guarantor of any
of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which the
Guarantors may have at any time against the Borrower, any other guarantor
of any of the Guaranteed Obligations, the Agent, any Lender or any other
Person, whether in connection herewith or in connection with any unrelated
transactions, provided that nothing herein shall prevent the assertion of
--------
any such claim by separate suit or compulsory counterclaim;
(vi) the enforceability or validity of the Guaranteed Obligations or any
part thereof or the genuineness, enforceability or validity of any
agreement relating thereto or with respect to any collateral securing the
Guaranteed Obligations or any part thereof, or any other invalidity or
unenforceability relating to or against the Borrower or any other guarantor
of any of the Guaranteed Obligations, for any reason related to the Credit
Agreement, any other Loan Document, or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower or any other
guarantor of the Guaranteed Obligations, of any of the Guaranteed
Obligations;
(vii) the failure of the Agent to take any steps to perfect and maintain
any security interest in, or to preserve any rights to, any security or
collateral for the Guaranteed Obligations, if any;
(viii) the election by, or on behalf of, any one or more of the Lenders,
in any proceeding instituted under Chapter 11 of Title 11 of the United
States Code (11 U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code;
(ix) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;
(x) the disallowance, under Section 502 of the Bankruptcy Code, of all
or any portion of the claims of any of the Lenders or the Agent for
repayment of all or any part of the Guaranteed Obligations;
(xi) the failure of any other Guarantor to sign or become party to this
Guaranty or any amendment, change, or reaffirmation hereof; or
(xii) any other act or omission to act or delay of any kind by the
Borrower, any other guarantor of the Guaranteed Obligations, the Agent, any
Lender or any other Person or any other circumstance whatsoever which
might, but for the provisions of this Section 4, constitute a legal or
---------
equitable discharge of any Guarantor's obligations hereunder.
SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain
-------------------------------------------------------------
Circumstances. Each of the Guarantors' obligations hereunder shall remain in
- -------------
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments and all Facility LCs issued under the Credit Agreement
shall have terminated or expired. If at any time any payment of the principal
of or interest on any Loan, any Reimbursement Obligation or any other amount
payable by the Borrower or any other party under the Credit Agreement or any
other Loan Document is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each
of the Guarantors' obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 6. General Waivers. Each of the Guarantors irrevocably waives
---------------
acceptance hereof, presentment, demand or action on delinquency, protest, the
benefit of any statutes of limitations and, to the fullest extent permitted by
law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any Person against the Borrower, any other guarantor
of the Guaranteed Obligations, or any other Person.
SECTION 7. Subordination of Subrogation. Until the Obligations have been
----------------------------
indefeasibly paid in full in cash, the Guarantors (i) shall have no right of
subrogation with respect to such Obligations and (ii) waive any right to enforce
any remedy which the Lenders, LC Issuers or the Agent now have or may hereafter
have against the Borrower, any endorser or any guarantor of all or any part of
the Obligations or any other Person, and the Guarantors waive any benefit of,
and any right to participate in, any security or collateral given to the
Lenders, the LC Issuers and the Agent to secure the payment or performance of
all or any part of the Obligations or any other liability of the Borrower to the
Lenders or LC Issuers. Should any Guarantor have the right, notwithstanding the
foregoing, to exercise its subrogation rights, each Guarantor hereby expressly
and irrevocably (a) subordinates any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution, indemnification or set
off that the Guarantor may have to the indefeasible payment in full in cash of
the Obligations and (b) waives any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each Guarantor acknowledges and agrees that this
subordination is intended to benefit the Agent and the Lenders and shall not
limit or otherwise affect such Guarantor's liability hereunder or the
enforceability of this Guaranty, and that the Agent, the Lenders and their
respective successors and assigns are intended third party beneficiaries of the
waivers and agreements set forth in this Section 7.
---------
SECTION 8. Limitation. Notwithstanding any provision herein
----------
contained to the contrary, each Guarantor's liability under this Guaranty (which
liability is in any event in addition to amounts for which such entity may be
primarily liable) shall be limited to an amount not to exceed as of any date of
determination the greater of:
(a) the net amount of all Loans advanced to the Borrower under this
Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Guarantor; and
(b) the amount which could be claimed by the Agent and the Lenders
from such Guarantor under this Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking
into account, among other things, such Guarantor's right of contribution
and indemnification from each other Guarantor under Section 9.
---------
SECTION 9. Contribution with Respect to Guaranty Obligations.
-------------------------------------------------
(a) To the extent that any Guarantor shall make a payment under this
Guaranty (a "Guarantor Payment") which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Guarantor, exceeds
the amount which such Guarantor would otherwise have paid if each Guarantor had
paid the aggregate Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor's "Allocable Amount" (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of each of the Guarantors as determined immediately prior to
the making of such Guarantor Payment, then, following indefeasible payment in
----
full in cash of the Obligations and termination of the Commitments, such
Guarantor shall be entitled to receive contribution and indemnification payments
from, and be reimbursed by, each other Guarantor for the amount of such excess,
pro rata based upon their respective Allocable Amounts in effect immediately
- --- ----
prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could then be
recovered from such Guarantor under this Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 9 is intended only to define the relative rights of
---------
the Guarantors and nothing set forth in this Section 9 is intended to or shall
---------
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Guarantor to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Guarantors against other
Guarantors under this Section 9 shall be exercisable upon the full and
---------
indefeasible payment of the Obligations and the termination of the Commitments.
SECTION 10. Stay of Acceleration. If acceleration of the time for payment
--------------------
of any amount payable by the Borrower under the Credit Agreement, any Note or
any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any Note or any other Loan
Document shall nonetheless be payable by each of the Guarantors hereunder
forthwith on demand by the Agent.
SECTION 11. Notices. All notices, requests and other communications to
-------
any party hereunder shall be given in the manner prescribed in Article XIV of
the Credit Agreement with respect to the Agent at its notice address therein and
with respect to any Guarantor at the address set forth in the Credit Agreement
for notices to the Borrower or such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the Agent in
accordance with the provisions of such Article XIV.
SECTION 12. No Waivers. No failure or delay by the Agent or any Lender in
----------
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Credit Agreement, the
Notes, and the other Loan Documents shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 13. Successors and Assigns. This Guaranty is for the benefit of
----------------------
the Agent and the Lenders and their respective successors and permitted assigns
and in the event of an assignment of any amounts payable under the Credit
Agreement, the Notes, or the other Loan Documents in accordance with the
respective terms thereof, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty shall be binding upon each of the Guarantors and their respective
successors and assigns.
SECTION 14. Changes in Writing. Neither this Guaranty nor any provision
------------------
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each of the Guarantors and the Agent with the consent of the
Required Lenders (or all of the Lenders if required pursuant to the terms of
Section 8.3 of the Credit Agreement).
- -----------
SECTION 15. CHOICE OF LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO APPLICABLE FEDERAL LAWS.
SECTION 16. CONSENT TO JURISDICTION.
-----------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
---------------------- --------------
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
--------------
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH OF THE GUARANTORS AGREES THAT THE AGENT,
-------------------
ANY LENDER, ANY LC ISSUER OR THE SWING LINE LENDER SHALL HAVE THE RIGHT TO
PROCEED AGAINST SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER SUCH GUARANTOR OR
(2) REALIZE ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH GUARANTOR AGREES THAT
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON TO REALIZE ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. EACH OF THE GUARANTORS
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH
PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
--------------
SECTION 17. WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH HEREBY WAIVE
--------------------
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
SECTION 18. No Strict Construction. The parties hereto have participated
----------------------
jointly in the negotiation and drafting of this Guaranty. In the event an
ambiguity or question of intent or interpretation arises, this Guaranty shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Guaranty.
SECTION 19. Taxes, Expenses of Enforcement, etc. All payments required to
-----------------------------------
be made by any of the Guarantors hereunder shall be made without setoff or
counterclaim and free and clear of and without deduction or withholding for or
on account of, any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political or
taxing authority thereof, provided, however, that if any of the Guarantors is
required by law to make such deduction or withholding, such Guarantor shall
forthwith pay to the Agent or any Lender, as applicable, such additional amount
as results in the net amount received by the Agent or any Lender, as applicable,
equaling the full amount which would have been received by the Agent or any
Lender, as applicable, had no such deduction or withholding been made. The
Guarantors also agree to reimburse the Agent and the Lenders for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for the Agent and the Lenders,
which attorneys may be employees of the Agent or the Lenders) paid or incurred
by the Agent or any Lender in connection with the collection and enforcement of
amounts due under the Loan Documents, including without limitation this
Guaranty.
SECTION 20. Setoff. At any time after all or any part of the Guaranteed
------
Obligations have become due and payable (by acceleration or otherwise), each
Lender and the Agent may, without notice to any Guarantor and regardless of the
acceptance of any security or collateral for the payment hereof, appropriate and
apply toward the payment of all or any part of the Guaranteed Obligations (i)
any indebtedness due or to become due from such Lender or the Agent to any
Guarantor, and (ii) any moneys, credits or other property belonging to any
Guarantor, at any time held by or coming into the possession of such Lender or
the Agent or any of their respective affiliates.
SECTION 21. Financial Information. Each Guarantor hereby assumes
---------------------
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent
inquiry would reveal, and each Guarantor hereby agrees that none of the Lenders
or the Agent shall have any duty to advise such Guarantor of information known
to any of them regarding such condition or any such circumstances. In the event
any Lender or the Agent, in its sole discretion, undertakes at any time or from
time to time to provide any such information to a Guarantor, such Lender or the
Agent shall be under no obligation (i) to undertake any investigation not a part
of its regular business routine, (ii) to disclose any information which such
Lender or the Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (iii) to make any other or
future disclosures of such information or any other information to such
Guarantor.
SECTION 22. Severability. Wherever possible, each provision of this
------------
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty.
SECTION 23. Merger. This Guaranty represents the final agreement of each
------
of the Guarantors with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Guarantor and any Lender or the Agent.
SECTION 24. Release of Guarantor. In the event that all of the capital
--------------------
stock of one or more of the Guarantors is sold or otherwise disposed of (except
to [the Borrower or] any of the Borrower's Subsidiaries) in connection with a
sale permitted by the Credit Agreement and the proceeds of such sale or sales or
from such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that a sale of one or more Persons that own directly or
indirectly all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
-------
24.)
- --
SECTION 25. Conflict of Agreements. To the extent the terms of this
----------------------
Guaranty conflict with the terms of the Credit Agreement, the terms of the
Credit Agreement shall control.
SECTION 26. Headings. Section headings in this Guaranty are for
--------
convenience of reference only and shall not govern the interpretation of any
provision of this Guaranty.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
duly executed by its authorized officer as of the day and year first above
written.
BLADE RECEIVABLES CORPORATION
HOWMET CERCAST (U.S.A.), INC.
HOWMET MANAGEMENT SERVICES, INC.
HOWMET REFURBISHMENT, INC.
TURBINE COMPONENTS CORPORATION
HOWMET RESEARCH CORPORATION
WARNER COMMERCE CORPORATION
HOWMET SALES AND SERVICES, INC.
HOWMET-TEMPCRAFT, INC.
HOWMET THERMATECH CANADA, INC.
HOWMET TRANSPORT SERVICES, INC.
In each case:
By: _______________________________
Its: _______________________________
and
SPRAYFORM TECHNOLOGIES INTERNATIONAL, L.L.C.
By: HOWMET CORPORATION, a member
By:___________________________________
Its:___________________________________
S-1
ANNEX I TO GUARANTY
-------------------
Reference is hereby made to the Guaranty (the "Guaranty") made as of the
[____] day of December, 1997, by Blade Receivables Corporation, a Nevada
corporation, Howmet Cercast (U.S.A.), Inc., a Delaware corporation, Howmet
Management Services, Inc., a Delaware corporation, Howmet Refurbishment, Inc., a
Delaware corporation, Turbine Components Corporation, a Connecticut corporation,
Howmet Research Corporation, a Delaware corporation, Warner Commerce
Corporation, a Delaware corporation, Howmet Sales and Services, Inc., a Delaware
corporation, Howmet-Tempcraft, Inc., an Ohio corporation, Howmet Thermatech
Canada, Inc., a Delaware corporation, Howmet Transport Services, Inc., a
Delaware corporation, Sprayform Technologies International, L.L.C., a Delaware
limited liability company (collectively, the "Initial Guarantors" and along with
any other Subsidiaries which have become parties thereto and together with the
undersigned, the"Guarantors") in favor of the Agent, for the ratable benefit of
the Lenders, under the Credit Agreement. Capitalized terms used herein and not
defined herein shall have the meanings given to them in the Guaranty. By its
execution below, the undersigned [NAME OF NEW GUARANTOR], a _________________,
agrees to become, and does hereby become, a Guarantor under the Guaranty and
agrees to be bound by such Guaranty as if originally a party thereto. By its
execution below, the undersigned represents and warrants as to itself that all
of the representations and warranties contained in Section 2 of the Guaranty are
---------
true and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a ______________ has executed
and delivered this Annex I counterpart to the Guaranty as of this __________ day
of _________, ____.
[NAME OF NEW GUARANTOR]
By:___________________________________________
Title:_________________________________________
::ODMA\PCDOCS\CHICAGO4\518699\4
S-2
EXHIBIT D
FORM OF SWING LINE NOTE
Attached
SWING LINE NOTE
December 16, 1997
HOWMET CORPORATION, a Delaware corporation (the "Borrower"), promises to
pay to the order of THE FIRST NATIONAL BANK OF CHICAGO (the "Swing Line
Lender") the aggregate unpaid principal amount of the Swing Line Loans made by
the Swing Line Lender to the Borrower pursuant to Article II of the Credit
----------
Agreement hereinafter referred to (as the same may be amended, modified,
supplemented or restated the "Agreement"; capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Agreement), in immediately available funds on the dates and at the offices of
the Swing Line Lender, specified in the Agreement, together with interest on the
unpaid principal amount hereof at the rates and on the dates determined in
accordance with the Agreement. The Borrower shall pay the principal of and
accrued and unpaid interest on each Swing Line Loan in the amounts and at the
times set forth in the Agreement.
The Swing Line Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or otherwise record in accordance with its usual
practice, the date and amount and other pertinent terms of, and the interest
rate and interest payment dates applicable to, each Swing Line Loan, and the
date and amount of each principal payment hereunder.
This Swing Line Note is issued pursuant to, and is entitled to the benefits
of, the Credit Agreement dated as of December 16, 1997 among the Borrower, The
First National Bank of Chicago, as Agent, and the lenders parties thereto,
including the Swing Line Lender, to which Credit Agreement, as it may be
amended, modified, restated or supplemented from time to time, reference is
hereby made for a statement of the terms and conditions governing this Swing
Line Note, including the terms and conditions under which this Swing Line Note
may be prepaid or its maturity date accelerated.
The Borrower hereby waives presentment, demand, protest and notice of any
kind. No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of Illinois but giving effect to applicable federal
laws.
HOWMET CORPORATION
By:
Title:
Schedule of Swing Line Loans and Payments of Principal
to
Swing Line Loan Note of Howmet Corporation
Dated December 16, 1997
Applicable Interest Rate and Interest Other
Currency Principal Amount Basis for Payment Pertinent Principal Amount
Date of Loan of Loan Calculation Dates Terms Paid
- ---- ------------------ ---------------- ----------------- ------- --------- ----------------
EXHIBIT E
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and __________________ (the "Assignee") is dated as of
, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
---------------------
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
-------------------------
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans, if
the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
--------------
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "1" attached hereto
-----------
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 13.3.1 of the Credit
--------------
Agreement. In no event will the Effective Date occur if the payments required
to be made by the Assignee to the Assignor on the Effective Date under Sections
--------
4 and 5 hereof are not made on the proposed Effective Date. The Assignor will
- - -
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
-------------------
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale
and assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on
the Effective Date, an amount equal to the principal amount of the portion of
all Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect
to each Fixed Rate Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by the Assignor
and the Assignee or (c) on the date on which any such Fixed Rate Loan becomes
due (by acceleration or otherwise)(the date as described in the foregoing
clauses (a), (b) or (c) being hereinafter referred to as the "Payment Date"),
- ----------- --- ---
the Assignee shall pay the Assignor an amount equal to the principal amount of
the portion of such Fixed Rate Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such Fixed Rate Loan shall be the Effective Date, they shall
agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Fixed Rate Loan (the "Agreed Interest Rate")
and any interest received by the Assignee in excess of the Agreed Interest Rate
shall be remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Borrower
with respect to any Fixed Rate Loan sold by the Assignor to the Assignee
hereunder, the Assignee shall pay to the Assignor interest for such period on
the portion of such Fixed Rate Loan sold by the Assignor to the Assignee
hereunder at the applicable rate provided by the Credit Agreement. In the event
a prepayment of any Fixed Rate Loan which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment Date
but before the end of the Interest Period applicable to such Fixed Rate Loan,
the Assignee shall remit to the Assignor the excess of the prepayment penalty
paid with respect to the portion of such Fixed Rate Loan assigned to the
Assignee hereunder over the amount which would have been paid if such prepayment
penalty was calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments received from the
Agent with respect to Fixed Rate Loans prior to the Payment Date and (ii) any
amounts of interest on Loans and fees received from the Agent which relate to
the portion of the Loans assigned to the Assignee hereunder for periods prior to
the Effective Date, in the case of Floating Rate Loans or fees, or the Payment
Date, in the case of Fixed Rate Loans, and not previously paid by the Assignee
to the Assignor.] In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the other party
hereto./1/
5. FEES PAYABLE BY THE ASSIGNEE. The [Assignee shall pay to the Assignor
----------------------------
a fee on each day on which a payment of interest facility fees is made under the
Credit Agreement with respect to the amounts assigned to the Assignee hereunder
(other than a payment of interest or facility fees for the period prior to the
Effective Date or, in the case of Fixed Rate Loans, the Payment Date, which the
Assignee is obligated to deliver to the Assignor pursuant to Section 4 hereof).
---------
The amount of such fee shall be the
- ---------------------------------------
/1/Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
difference between (i) the interest or fee, as applicable, paid with respect to
the amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was ___ of 1% less than the
interest rate paid by the Borrower or if the facility fee was ___ of 1% less
than the facility fee paid by the Borrower, as applicable. In addition, the]
Assignee agrees to pay ___% of the recordation fee required to be paid to the
Agent in connection with this Assignment Agreement./2/
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
--------------------------------------------------------------
LIABILITY. The Assignor represents and warrants that it is the legal and
- ---------
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it has
-------------------------------
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information at it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (iii) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender, (v) agrees that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA
- --------------------------------------
/2/ Bracketed language may be modified by Assignor and Assignee.
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, and (vii) if applicable, attaches the forms
prescribed by the Internal Revenue Service of the United States certifying that
the Assignee is entitled to receive payments under the Loan Documents without
deduction or withholding of any United States federal income taxes.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
---------
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
----------------------
have the right pursuant to Section 13.3.1 of the Credit Agreement to assign the
--------------
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
---------- - -
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
----------------------------------
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
----------------
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
-------------
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
-------
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:_______________________________________________
Title:
[NAME OF ASSIGNEE]
By:_______________________________________________
Title:
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
CREDIT AGREEMENT DATED AS OF DECEMBER 16, 1977 BY AND AMONG HOWMET
CORPORATION, A DELAWARE CORPORATION, THE FINANCIAL INSTITUTIONS FROM TIME
TO TIME PARTY THERETO AS THE "LENDERS" AND THE FIRST NATIONAL BANK OF
CHICAGO, AS CONTRACTUAL REPRESENTATIVE FOR THE LENDERS.
2. Date of Assignment Agreement: _____________, 19__
3. Amounts (As of Date of Item 2 above):
a. Total of Commitments under
Credit Agreement $_____________
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement ____________% /3/
c. Amount of Assigned Share in
each Facility purchased under
the Assignment
Agreement $______________
4. Assignee's Aggregate
Commitment Amount
Purchased Hereunder: $
5. Proposed Effective Date: ________________________
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: __________________________ By:_____________________________
Title: ________________________ Title: ___________________________
- ----------------------------------------
/3/ Percentage taken to 10 decimal places
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
--------------------------------
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form attached)
ASSIGNOR INFORMATION
--------------------
Contact:
- -------
Name: Telephone No.:
Fax No.: Telex No.:
Answerback:
------------------------------
PAYMENT INFORMATION:
- --------------------
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNOR:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSIGNEE INFORMATION
--------------------
Credit Contact:
- --------------
Name: Telephone No.:
Fax No.: Telex No.:
Answerback:
------------------------------
KEY OPERATIONS CONTACTS:
- -----------------------
Booking Installation: Booking Installation:
Name: Name:
Telephone No.: Telephone No.:
Fax No.: Fax No.:
Telex No.: Telex No.:
Answerback: Answerback:
------------------------------
PAYMENT INFORMATION:
- --------------------
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
-------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNEE:
- --------------------------------- ----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FNBC INFORMATION
----------------
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
- ----------------------- -----------------------------
Name:
_______________ _________________________________
Telephone No.: _________________________________ Telephone No.: (312)
----------
Fax No.: _______________________________________ Fax No.: (312)
----------
FNBC Telex No.: 190201 (Answerback: FNBC UT)
------------------------------
FNBC WIRE INSTRUCTIONS: The First National Bank of Chicago, ABA # 071000013
- ----------------------
ADDRESS FOR NOTICES FOR FNBC: One First National Plaza, Chicago, IL 60670
- ----------------------------
Attn: Agency/Compliance Division, Suite 0353
Fax No. (312) 732-2038 or (312) 732-4339
EXHIBIT "1"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
-------------
- ----------------------------------------------------, 19__
To: The First National Bank of Chicago, as Agent
One First National Plaza
Chicago, IL 60670
[Howmet Corporation
475 Steamboat Road
Greenwich, CT 06836-1960]/4/
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to [the Borrower and]** the Agent pursuant to Section 13.3.2 of the Credit
--------------
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 13.3.1 and 13.3.2 of
--------------- ------
the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agent
- -------------------------------------------
/4/ Include reference to Borrower if required.
before the date specified in Item 5 of Schedule 1 to determine if the Assignment
Agreement will become effective on such date pursuant to Section 3 hereof, and
---------
will confer with the Agent to determine the Effective Date pursuant to Section 3
---------
hereof if it occurs thereafter. The Assignor shall notify the Agent if the
Assignment Agreement does not become effective on any proposed Effective Date as
a result of the failure to satisfy the conditions precedent agreed to by the
Assignor and the Assignee. At the request of the Agent, the Assignor will give
the Agent written confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before
the Effective Date the processing fee of $3,500 required by Section 13.3.2 of
--------------
the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacement notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Borrower
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the
Loan Documents in accordance with the terms thereof. The Assignee acknowledges
that the Agent has no duty to supply information with respect to the Borrower or
the Loan Documents to the Assignee until the Assignee becomes a party to the
Credit Agreement. /5/
NAME OF ASSIGNOR NAME OF ASSIGNEE
By:_____________________________ By:_______________________________________
Title:__________________________ Title:____________________________________
- ---------------------------------
/5/ May be eliminated if Assignee is a party to the Credit Agreement prior to
the Effective Date.
ACKNOWLEDGED AND CONSENTED TO [ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK BY HOWMET CORPORATION]
OF CHICAGO, as Agent
By:________________________________ By:____________
Title:_______________________________ Title:_________
EXHIBIT F
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated as of December 16, 1997 (as the same may be
amended, modified, supplemented or restated, the "Credit Agreement"), among
Howmet Corporation (the "Borrower"), the Lenders named therein and the
Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 14.1 of the
------------
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
- ------------
Facility Identification Number(s)_______________________________________
Customer/Account Name_____________________________________________
Transfer Funds To__________________________________________________
For Account No.___________________________________________________
Reference/Attention To _____________________________________________
AUTHORIZED OFFICER (CUSTOMER REPRESENTATIVE) Date:__________________________
___________________________
(Please Print)
- ------------------------------------
BANK OFFICER NAME Date:___________________________
___________________________
(Please Print)
- ------------------------------------
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT G
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of December 16, 1997 (as amended, modified, restated,
renewed or extended from time to time, the "Agreement") among the Howmet
Corporation, a Delaware corporation (the "Borrower"), the lenders party thereto
and The First National Bank of Chicago, as Agent for the Lenders. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct;
and
5. Schedule II hereto sets forth the determination of the Applicable
Facility Fee Rate, Applicable LC Fee Percentage and Applicable Margins
commencing on the fifth Business Day following the delivery hereof.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ____ day of
______________, _______.
By:
Name:
Title:
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____
A. MINIMUM INTEREST COVERAGE RATIO (Section 7.20.1)
--------------
1. Consolidated Net Income (as defined) $
a. + Consolidated Interest Expense (as defined) to
the extent deducted from revenues in determining
Consolidated Net Income $
b. + Expense for income taxes paid $
c. + Receivables Facility Financing Costs (as defined
and to the extent not otherwise included) $
d. = Sum of Lines 1., 1.a., 1.b. and 1.c.
(Consolidated EBIT) $
2. Consolidated Interest Expense (as defined) $
3. Interest Coverage Ratio
(Ratio of lines 1.d. / 2 above) ____ to 1.00
4. Minimum Interest Coverage Ratio 2.25 to 1.00
B. MAXIMUM LEVERAGE RATIO (Section 7.20.2)
--------------
1. Indebtedness (as defined) of Borrower and its Consolidated
Subsidiaries shown shown on balance sheet $
a. + all Receivables Facility Attributed Indebtedness
(as defined) of the Borrower and its
Consolidated Subsidiaries $
b. + all Off Balance Sheet Liabilities (as defined)
of the Borrower and its Consolidated
Subsidiaries $
c. = Consolidated Total Debt
(Sum of Lines 1, 1.a. and 1.b.) $
2. Consolidated EBITDA
a. Consolidated EBIT (Line A.l.d. above) $___________
b. + Depreciation $___________
c. + Amortization $___________
d. = Consolidated EBITDA $___________
3. Leverage Ratio
(Ratio of lines 1.c. / 2.d. above) _____to 1.00
4. Maximum Leverage Ratio 3.25 to 1.00
C. MINIMUM CONSOLIDATED NET WORTH (Section 7.20.3)
--------------
1. Consolidated Net Worth (as defined) $
2. Minimum Consolidated Tangible Net Worth
($525,000,000 + 50% of Consolidated Net Income
earned since December 31, 1997) $
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Margin, Applicable Facility Fee Rate and
Applicable LC Fee Percentage Calculation
Based on determination of the Leverage Ratio as set forth on Schedule I to
Compliance Certificate, Line B.3., determine the applicable Level Status from
the Pricing Schedule.
Leverage Ratio ________ to 1.00
Level that applies pursuant to Pricing Schedule: Level ___ Status
Applicable Facility Fee Rate applicable to Level ___ Status _____%
Applicable Margin and Applicable LC Fee
Percentage applicable to Level ___ Status _____%
All-In Funded rate applicable to Level ___ Status _____%
SCHEDULE 1
TO HOWMET CORPORATION
CREDIT AGREEMENT
Existing LCs
------------
(Definitions; Section 3.2)
Attached
EFFECTIVE EXPIRATION CURRENT
Number DATE BANK DATE DATE BENEFICIARY AMOUNT STATUS
- ----------- --------- ----------------------- --------- ---------- ------------------------------------ --------- ---------
0002 6-Dec-95 First Chicago 11-Dec-96 11-Dec-97 State of Connecticut -- Dept. of 250,000 250,000
Economic Development
0003 6-Dec-95 First Chicago 11-Dec-96 11-Dec-97 Morristown Utility Commission 25,000 25,000
0004 6-Dec-95 First Chicago 11-Dec-96 11-Dec-97 Travelers Indemnity Company of 3,400,000 5,300,000
Illinois
004A 24-Jul-96 11-Dec-96 11-Dec-97 Travelers Indemnity Company of 5,300,000
Illinois
0005 6-Dec-95 First Chicago 11-Dec-96 11-Dec-97 Connecticut Indemnity Co. 50,000 50,000
0007 15-Aug-96 ABN-AMRO Bank 15-Aug-96 15-Aug-97 New Jersey Department of 2,000,000 2,000,000
(Replaces Chase) Environmental Protection
0008 Bank of Montreal Canadian Customs 42,254 42,254
SCHEDULE 2
TO HOWMET CORPORATION
CREDIT AGREEMENT
Litigation and Contingent Obligations
-------------------------------------
(Section 6.7)
Attached
1. AAR Engine Group Inc. v. James Stoecker and Howmet Refurbishment, Inc.,
----------------------------------------------------------------------
Case No. 94 L 16039, Circuit Court, Cook County, Illinois
In a lawsuit commenced in 1996 against Borrower's subsidiary Howmet
Refurbishment, Inc., AAR Aviation Trading, Inc. claimed that one of its
former employees, for his own benefit, interfered with AAR's opportunity to
obtain a consignment agreement with American Airlines and instead assisted
HRI in obtaining the contract.
All of the claims against HRI have been dismissed except for a single
claim of civil conspiracy. In addition, the court has made a ruling on one
issue of law related to this remaining claim which will severely limit
AAR's ability to establish its claim. The court made a second ruling which
was favorable to AAR's claim but has been asked to reconsider the matter
and has indicated some willingness to change that ruling. These various
decisions have severely limited AAR's ability to establish its claim. The
commissions at stake could range from $200,000 to $500,000. Borrower
continues to believe that AAR's claim is without merit and is defending the
claim vigorously. Borrower has agreed with the purchaser of its
refurbishment business, United Technologies Corporation, to pay all
liability and expense related to this case.
2. Siemens Claim
-------------
Siemens, A.G., one of Borrower's IGT customers, has asserted a claim
against Borrower relating to a cracking problem discovered in the internal
cored passages on a number of turbine blades provided to this customer on
two different engine models. Borrower is working with the customer to
investigate the situation more fully, and has offered to replace the
components at no charge to Siemens (at an estimated cost to Borrower of $2-
3 million). Siemens, however, has asked for additional reimbursement to
cover its incurred costs in the amount of $10 million. Accordingly,
Borrower will record a fourth quarter 1997 charge with respect to this
matter preliminarily estimated in the $3-4.2 million range after taxes.
The Corporation's general and umbrella insurance carriers have also been
put on notice of this claim.
3. Environmental Matters
---------------------
Borrower has received recent test results indicating levels of
polychlorinated biphenyls ("PCBs") at its Dover, New Jersey facility which
will require remediation. These levels have been reported to the New
Jersey Department of Environmental Protection ("NJDEP"). Borrower is
preparing a work plan to define the risk and to test possible clean-up
options. The statement of work must be approved by the NJDEP pursuant to
an Administrative Consent Order entered into between Borrower and NJDEP on
May 20, 1991 regarding
clean-up of the site. Various remedies are possible and could involve
expenditures ranging from $2 million to $22 million or more. Borrower has
recorded a $2 million long-term liability as of September 28, 1997 for this
matter. Given the uncertainties, it is possible that the estimated range of
this cost and the amount accrued will change in the near future. The
indemnification discussed below applies to the costs associated with this
matter.
Borrower is currently investigating possible and known contamination
(including soil and groundwater contamination) at the following other North
American facilities currently or previously owned and operated by Borrower:
Whitehall, Michigan; Dover, New Jersey, Branford, Connecticut; Farmington,
Connecticut; and Hillsboro, Texas. Borrower currently estimates that the
total investigation and remediation costs at these facilities will be $1.2
million. Borrower is remediating environmental contamination at five
European facilities. Borrower has conducted an assessment and estimates
actual expenditures at these properties to be $100,000 to $1.3 million.
As a result of off-site waste disposal prior to the December 1995
acquisition of Borrower from Pechiney International (the "Acquisition"),
Borrower is subject to liability for, and is currently involved in certain
matters relating to the investigation and/or remediation of environmental
contamination at properties not owned or operated by Borrower. Borrower has
been or may be named a PRP at the following sites: Barkhampstead Landfill,
Connecticut; Combe Fill South Landfill, New Jersey; PJP Landfill, New
Jersey; Solvent Recovery Service, Connecticut; PCB Treatment Inc. Site,
Missouri; Omega Chemical Corporation Site, California; and SCA Independent
Landfill, Michigan. Borrower currently estimates that its total liability
at these sites will be approximately $2.4 million. Borrower has also
recently been named as a Potentially Responsible Party with respect to the
shipment of liquid and shell waste material in the early 1980s from its
Wichita Falls Casting facility to the Materials Recovery Enterprises
disposal site in Texas. The Corporation believes the volume of shell
material imputed to Borrower in this matter is grossly overstated, but
presently estimates potential liability to be between $100,000 and $1.3
million.
In connection with the Acquisition, Pechiney International and
Pechiney S.A. are required to indemnify Blade for environmental liabilities
and obligations stemming from events occurring or conditions existing prior
to the closing of the Acquisition to the extent such liabilities exceed
$6.0 million. Blade assigned its rights to Borrower with respect to any
such indemnification upon consummation of the Acquisition. Borrower has
recorded a long-term receivable of $2 million related to this
indemnification. There can be no assurance, however, that Pechiney
International and Pechiney S.A. will indemnify Borrower for all such
environmental matters set forth above when demanded by Borrower. If
Pechiney International and Pechiney S.A. do not honor their indemnification
obligations, Borrower likely would be responsible for such matters.
Borrower's parent company, Howmet International Inc., has contingent
liability exposure for environmental contamination and related costs
associated with certain discontinued mining operations owned and/or
operated by a predecessor in interest until the early 1960s. These
liabilities include approximately $21.3 million in remediation and natural
resource damage liabilities at the Blackbird Mine Site in Idaho and at
least $8.0 million in investigation and remediation costs at the Holden
Mine Site in Washington. Pechiney International and Pechiney, S.A. have
agreed to indemnify Howmet International, Inc. for such environmental when
demanded by Howmet International, Inc. Howmet International, Inc. assigned
its rights to Howmet Holdings and Borrower with respect to any such
indemnification to the extent that either Holdings or Borrower incurs
liability with respect to such matters. If Pechiney International and
Pechiney S.A. do not honor their indemnification obligations, the Company
likely would be responsible for such matters.
4. Stock Appreciation Rights
-------------------------
In the fourth quarter of 1997, the Company will incur a charge related
to its Amended SAR Program (as defined herein) which will be based on the
lower of the initial public offering price per share or the Company's stock
price at December 31, 1997. Based upon the initial public offering price of
$15 per share, the maximum after-tax charge would be $6.2 million or $.06
per share.
5. Costs Associated with this Agreement, Tender Offer for Senior Subordinated
--------------------------------------------------------------------------
Notes, and Retirement of Junior Subordinated Notes
--------------------------------------------------
On November 21, 1997, the Company announced that Howmet intends to
make a tender offer to repurchase all of the Senior Subordinated Notes. The
tender offer is conditioned upon completion of this Agreement. If fully
subscribed, will be funded with approximately $140 million of borrowings
under this Agreement. Completion of this Agreement and of the tender offer
is expected to result in after tax interest expense savings (exclusive of
amortization of debt issuance costs) of approximately $3.0 million
annually. The tender offer is expected to be completed by December 31,
1997, and will result in a one-time extraordinary after tax charge to
earnings preliminarily estimated to be $12 million to $13 million (assuming
the tender offer is fully subscribed) in the fourth quarter, including
write-off of unamortized debt issuance costs. Subject to market conditions,
the Company will also consider using a portion of the New Credit Facility
to refinance or retire some or all of its outstanding 10% junior
subordinated notes.
SCHEDULE 3
TO HOWMET CORPORATION
CREDIT AGREEMENT
Subsidiaries
------------
(Section 6.8)
Attached
SCHEDULE 3
LIST OF SUBSIDIARIES, CONSOLIDATED SUBSIDIARIES,
JURISDICTIONS OF INCORPORATION,
SHAREHOLDINGS, AND PERCENTAGE OF
ASSETS OF FOREIGN SUBSIDIARIES
Blade Receivables Corporation Nevada 1000 Shares (100%) held by Howmet Corporation
Howmet Cercast (Canada), Inc. Canada 1000 Shares (100%) held by Howmet Corporation
Howmet Cercast (U.S.A.), Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Howmet Foreign Sales Corporation U.S. Virgin Islands 10 Shares (100%) held by Howmet Corporation
Howmet Limited (5.5%)* United Kingdom 1,000,001 Shares (99.99%) held by Howmet
Corporation
1 Share held by Roger Hambleton (for the benefit
of Howmet Corporation)
Howmet Management Services, Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Howmet Refurbishment, Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Turbine Components Corporation Connecticut 1,572 Shares Class A Common Stock (100%) held by
Howmet Corporation
7,388 Shares Class B Limited Voting Stock held by
Howmet Corporation
Howmet Research Corporation Delaware 10 Shares (100%) held by Howmet Corporation
Warner Commerce Corporation Delaware 10 Shares (100%) held by Howmet Research
Corporation
Howmet S.A. (6.0%)* France 2,903,211 shares (99.99%) held by Howmet
Corporation
10 shares (.00%) each held by Roland Paul
Michel Devernois
Gilles Deconinck
Mark Lasker
Jack Lambert
John Chluski
Financiere D'Ocquier S.A. France 962,794 Shares (99.99%) held by Howmet S.a.
1 Share (.00%) each held by David Squier
Henri Fine
Roland Paul
Phillipe Vallade
Michel Devernois
Mark Lasker
CIRAL s.n.c. France 78,319 Shares (99.99%) held by Financiere
D'Ocquier S.A.
1 Share (.00%) held by Howmet S.A.
CIRAL IT. s.r.l. Italy 20,790 Shares (99%) held by CIRAL S.A.
210 Shares (1%) held by Financiere D'Ocquier S.A.
Howmet Sales and Services, Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Howmet-Tempcraft, Inc. Ohio 83 Shares (100%) held by Howmet Corporation
Howmet Thermatech Canada, Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Howmet Transport Services, Inc. Delaware 10 Shares (100%) held by Howmet Corporation
Sprayform Technologies International, L.L.C.+ Delaware 51% owned by Howmet Corporation
49% owned by United Technologies Corporation,
Pratt & Whitney Division
* Indicates, as of the quarter ended September 28, 1997, such Subsidiary's total
assets as a percentage of the consolidated total assets of the Borrower and
its consolidated Subsidiaries.
+ All Subsidiaries are Consolidated Subsidiaries except Sprayform Technologies
International, L.L.C.
SCHEDULE 4
TO HOWMET CORPORATION
CREDIT AGREEMENT
Indebtedness and Liens
----------------------
(Sections 6.14, 7.10 and 7.14)
Attached
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
I. LIENS
ST FILE NO. DATE TYPE SECURED PARTY LOCATION SUBJECT
CT 1663703 12-18-95 UCC-1 First National Bank of Chicago Greenwich, CT Security Agreement
CT 1663710 12-18-95 UCC-1 First National Bank of Chicago Winchester, CT Real Estate
CT 1663711 12-18-95 UCC-1 First National Bank of Chicago Winchester, CT Real Estate
CT 1662708 12-13-95 UCC-1 Manufacturers and Traders Trust Greenwich, CT Receivables Financing
CT 1689935 04-18-96 UCC-1 Manufacturers and Traders Trust Greenwich, CT Receivables Financing
CT 1801092 09-12-97 REL First National Bank of Chicago Branford, CT TCC Release
IN 2023770 12-19-95 UCC-1 First National Bank of Chicago LaPorte, IN Real Estate
IN 2023772 12-19-95 UCC-1 First National Bank of Chicago Greenwich, CT Security Agreement
IN 2147052 09-17-97 REL First National Bank of Chicago Indianapolis, IN HRI Release
MI 64850B 12/19/95 UCC-1 First National Bank of Chicago Whitehall, MI Real Estate
MI 64852B 12/19/95 UCC-1 First National Bank of Chicago Whitehall, MI Security Agreement
MI D182782 1/10/97 UCC-1 First National Bank of Chicago Whitehall, MI Security Agreement
MI D252109 7/1/97 UCC-1 Elkem Metals Company LP Whitehall, MI Electrolytic Chromium
MI 89326B 9/23/97 UCC-1 Magid Glove and Safety Manufacturing Whitehall, MI Work gloves, safety clothing,
Co. L.L.C. safety products
MI 89384B 9/25/97 UCC-1 Magid Glove and Safety Manufacturing Whitehall, MI Work gloves, safety clothing,
Co. L.L.C. safety products
NV 9518384 12-20-95 UCC-1 First National Bank of Chicago Greenwich, CT Security Agreement
NJ 1628441 4/6/95 UCC-1 Shieldalloy Metallurgical Corp. Dover, NJ Consigned alloy inventory
NJ 1672461 12/18/95 UCC-1 First National Bank of Chicago Dover, NJ Security Agreement
NJ 1672462 12/18/95 UCC-1 First National Bank of Chicago Dover, NJ Security Agreement
TN 962-000143 3/1/96 UCC-1 First National Bank of Chicago Morristown, TN Security Agreement
TN 962-000144 3/1/96 UCC-1 First National Bank of Chicago Morristown, TN Security Agreement
TN 971-511869 4/29/97 UCC-1 First National Bank of Chicago Morristown, TN Security Agreement
TX 242234 12-19-95 UCC-1 First National Bank of Chicago Greenwich, CT Security Agreement
TX 713790 09-17-97 UCC-3 First National Bank of Chicago Greenwich, CT Partial Release
VA 197156 12-19-95 UCC-1 First National Bank of Chicago Greenwich, CT Security Agreement
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
II. EXCEPTIONS TO TITLE
(SEE ATTACHED SCHEDULE BS TO TITLE POLICIES, LISTING EXCEPTIONS)
A. BRANFORD, CT
B. WINCHESTER, CT
C. LAPORTE, IN
D. WHITEHALL, MI
E. ROCKAWAY (DOVER), NJ
F. CLEVELAND, OH (TEMPCRAFT)
G. MORRISTOWN, TN
H. WICHITA FALLS, TX
I. HAMPTON, VA
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
III. INDEBTEDNESS
. Amended and Restated Credit Agreement between Howmet International, Howmet
Holdings and Howmet Corporation, various banks, and First National Bank of
Chicago, as Administrative Agent
Debt Value: $29,500,000
. Receivables Financing Facility with Falcon Asset Securitization Corporation
Debt Value: $55,000,000
. Senior Subordinated Notes, Marine Midland Bank, Trustee
Debt Value: 125,000,000
. Guaranty of Howmet Corporation of 50% of the indebtedness of Komatsu-Howmet
Ltd. Debt Value: (Yen)1,135,977,000 (~U.S.$13,109,000)*
. $100,000 American Express Financial Services credit line to support Howmet
Corporation's travel advance program, June 7, 1993
Debt Value: $30,000
. $5,000,000 Visa Procurement Card Credit Agreement with First Bank for
Howmet Corporation, November 29, 1993
Debt Value: $551,426 as of November 23, 1997
. $1,000,000 Visa Procurement Card Credit Agreement with First Bank for
Howmet Refurbishment, Inc., November 29, 1993
Debt Value: $14,793 as of November 23, 1997
. $1,000,000 Visa Procurement Card Credit Agreement with First Bank for
Howmet Research Corporation
Debt Value: $155,824 as of November 23, 1997
. Capital Lease Agreement between CIRAL, S.N.C. and Le District du Pays d'
Evron, dated March 23, 1992
Debt Value: Fr1,194,000 (~U.S.$192,000)
. Fr37,400,000 (original amount) 12.4% capital lease agreement between Howmet
S.A. and C.C. Bail, Societe de Credit Bail Immoblier, dated December 29,
1989,re: Dives sur Mer Factory**
Debt Value: Fr8,898,000 (~U.S.$1,491,000)
____________________
* The Borrower will be indemnified for 50% of any liabilities arising from
these guarantees.
** Le Magnesium Industriel has been merged in Microfusion S.A., now Howmet
S.A. C.C. Bail has assigned the lease to Sofia Mur.
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
SCHEDULE 5
TO HOWMET CORPORATION
CREDIT AGREEMENT
Investments
-----------
(Section 7.13)
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
SCHEDULE 5
EXISTING INVESTMENTS IN SUBSIDIARIES AND OTHER INVESTMENTS ((S)7.13(II))
Name of Subsidiary/Investment INVESTMENT VALUE
----------------------------- ----------------
Komatsu Howmet Ltd. (50% Owned) 10,000
Sprayform Technologies LLC (51% Owned) 1,672,000
Howmet Refurbishment Inc. 39,201,000
Howmet Cercast USA, Inc. 15,368,000
Howmet Cercast Canada, Inc. 20,474,000
Howmet Management Services, Inc. 230,000
Howmet Sales and Services, Inc. 2,377,000
Howmet Foreign Sales and Services, Inc. 4,385,000
Howmet Transport Services, Inc. 177,000
Howmet Research Corporation 40,005,000
Warner Commerce Corporation 24,000,000
Howmet Tempcraft, Inc. 14,275,000
Blade Receivable Corporation 60,267,000
Howmet S.A. 64,321,000
Howmet UK 56,945,000
Ciral 17,454,000
Turbine Components Corporation 14,045,000
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
SCHEDULE 6
TO HOWMET CORPORATION
CREDIT AGREEMENT
Transactions with Affiliates
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(Section 7.15)
Agreements of Howmet International Inc. with Parent Affiliates
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1. Management Agreement between Howmet International, Inc. and TCG Holdings,
L.L.C. to be executed as disclosed in the Prospectus of Howmet
International dated November 25, 1997.
2. Services Agreement between Howmet International, Inc. and Thiokol
Corporation to be executed as disclosed in the Prospectus of Howmet
International dated November 25, 1997.
3. Shareholders Agreement among Howmet International, Inc., The Carlyle Group
or an Affiliate thereof and Thiokol Corporation or an Affiliate thereof to
be executed as disclosed in the Prospectus of Howmet International dated
November 25, 1997.
4. Corporate Agreement between Howmet International, Inc. and Thiokol
Corporation to be executed as disclosed in the Prospectus of Howmet
International dated November 25, 1997.
5. Registration Rights Agreement between Howmet International, Inc. and
Carlyle Group or an Affiliate thereof to be executed as disclosed in the
Prospectus of Howmet International dated November 25, 1997.
Agreements with Borrower's Subsidiary Affiliates
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1. License Agreement between Howmet Limited and Howmet Research Corporation
regarding use of Howmet technology, dated January 1, 1996.
2. License Agreement between Howmet S.A. and Howmet Research Corporation
regarding use of Howmet technology, dated January 1, 1996.
3. Amended and Restated Pooling and Servicing Agreement among Blade
Receivables Corporation as Transferor, Howmet Corporation as Servicer, and
Manufacturers and Traders Trust Coompany as Trustee, dated April 18, 1996.
4. Representation Agreement between Howmet Corporation (Howmet Turbine
Components Corporation) and Howmet Sales and Services, Inc. (HTC Sales,
Inc.), dated January 1, 1986.
5. Export Services Agency Agreement between Howmet Corporation (Howmet Turbine
Components Corporation) and Howmet Foreign Sales Corporation, dated January
1, 1985.
6. Export Commission Agency Agreement between Howmet Corporation (Howmet
Turbine Components Corporation) and Howmet Foreign Sales Corporation, dated
January 1, 1985.
Schedule 4
Liens (ss6.14), Exceptions to Title (ss7.14(v)), and Indebtedness (ss7.10(ii))
7. Lease of Operhall Research Center,Whitehall, MI by Howmet Research
Corporation, tenant, from Howmet Corporation, Landlord, dated January 1,
1997.
8. Lease of Premises in Whitehall, MI by Sprayform Technologies International,
LLC, tenant from Howmet Corporation, dated April 2, 1997.
9. License Agreement and Technology Transfer Agreement Between Howmet
Corporation and Sprayform Technologies International, LLC, dated April 2,
1997.
10. Howmet Support and Services Agreement Between Howmet Corporation and
Sprayform Technologies International, LLC, dated April 2, 1997.