UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 12, 2003
Better Minerals & Aggregates Company
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
333-32518 55-0749125
(Commission File Number) (IRS Employer Identification No.)
Route 522 North, P.O. Box 187
Berkeley Springs, West Virginia 25411
(Address of principal executive offices, including zip code)
(304) 258-2500
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Matters and Required FD Disclosure.
On September 12, 2003, Better Minerals & Aggregates Company, through
its operating subsidiary U. S. Silica Company, completed a new $30.0 million,
asset based revolving line of credit agreement with Wachovia Bank, National
Association ("Wachovia"), a copy of which is attached as Exhibit 10 to this
Current Report on Form 8-K. Proceeds from the new credit agreement are being
used to repay all amounts due under, and terminate, the company's previously
outstanding senior secured credit agreement with BNP Paribas, provide the
company with a $10.0 million line for letters of credit and to fund the
general liquidity needs of the company, including the $9.75 million senior
subordinated notes interest payment due September 15, 2003.
Under the terms of the new credit agreement, which expires June 30,
2008, the company has pledged as security all of its personal property,
inventory, and accounts receivable, along with first mortgage liens on its
Berkeley Springs WV, Montpelier VA and Pacific MO plant operations as
collateral for the loan. The new credit agreement includes certain
conditions to borrowings, representations and covenants, including a required
fixed charge coverage covenant that is measured quarterly, and certain events
of default, including an event of default relating to material adverse
changes. Advances under the new credit agreement bear interest at either
LIBOR plus 250 basis points, or prime plus 125 basis points, at the company's
option.
Monthly borrowing availability (the borrowing base) is determined by a
formula, taking into consideration eligible accounts receivable and
inventory, reduced by any outstanding letters of credit and a pro-rata
reduction for future interest payments due with respect to the company's
senior subordinated notes. Each day, all cash receipts are automatically
applied as a reduction against any advances made by Wachovia to the company,
and, subject to the satisfaction or waiver of the conditions to borrowing set
forth in the credit agreement, Wachovia will advance at the company's request
new borrowings to meet its daily cash requirements, up to the amount
available under the borrowing base. If the monthly borrowing base is less
than the $30.0 million total line of credit, then, at Wachovia's sole
discretion, advances in excess of the borrowing base may be made up to the
full amount of the $30.0 million line of credit.
Based on the company's current $27.1 million borrowing base, and after
the $9.75 million interest reserve for the senior subordinated notes interest
payment due September 15, 2003, and payment of the outstanding amounts due
under the previous senior secured credit agreement with BNP Paribas, subject
to the conditions of the credit agreement, the company currently has unused
borrowing capacity of approximately $7.0 million available for its general
corporate use under the new credit agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
10. Credit Agreement dated as of September 8, 2003 among U.S. Silica
Company, as Borrower, BMAC Holdings, Inc., Better Minerals and Aggregates
Company, The Fulton Land and Timber Company, Ottawa Silica Company,
Pennsylvania Glass Sand Corporation, George F. Pettinos, LLC and BMAC
Services Co., Inc., each as Affiliate Guarantors, the financial institutions
identified as Lenders on the signature pages thereto, and Wachovia Bank,
National Association, as Administrative Agent and Swingline Lender.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Better Minerals & Aggregates Company has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Better Minerals & Aggregates Company
Date: September 12, 2003 By: /s/ Gary E. Bockrath
----------------
Name: Gary E. Bockrath
Title: Vice President and
Chief Financial Officer
Exhibit 10
______________________________________________________________________
$30,000,000
CREDIT AGREEMENT
Dated as of September 8, 2003
among
U.S. SILICA COMPANY,
as Borrower
and
BMAC HOLDINGS, INC.,
BETTER MINERALS & AGGREGATES COMPANY
THE FULTON LAND AND TIMBER COMPANY
OTTAWA SILICA COMPANY
PENNSYLVANIA GLASS SAND CORPORATION
GEORGE F. PETTINOS, LLC
and
BMAC SERVICES CO., INC.,
as Affiliate Guarantors
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES THEREOF
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Swingline Lender
with
WACHOVIA SECURITIES, INC.,
as Sole Arranger and Book Manager
______________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................2
1.1 General Definitions...........................................2
1.2 Accounting Terms and Determinations..........................30
1.3 Other Definitional Terms.....................................31
ARTICLE II LOANS......................................................31
2.1 Revolving Loans..............................................31
2.2 Optional and Mandatory Prepayments; Reduction of Commitments.36
2.3 Payments and Computations....................................38
2.4 Maintenance of Account.......................................41
2.5 Statement of Account.........................................41
2.6 Taxes........................................................41
2.7 Sharing of Payments..........................................43
2.8 Pro Rata Treatment...........................................44
2.9 Extensions and Conversions...................................44
2.10 Swingline Loan Subfacility...................................45
2.11 All Loans to Constitute One Obligation.......................46
2.12 Applications of Payments Generally...........................47
2.13 Certain Advances.............................................48
ARTICLE III LETTERS OF CREDIT..........................................48
3.1 Issuance.....................................................48
3.2 Notice and Reports...........................................49
3.3 Participation by Lenders.....................................49
3.4 Reimbursement................................................49
3.5 Repayment with Revolving Loans...............................50
3.6 Renewal, Extension...........................................51
3.7 Uniform Customs and Practices................................51
3.8 Indemnification; Nature of Issuing Bank's Duties.............51
3.9 Responsibility of Issuing Bank...............................53
3.10 Conflict with Letter of Credit Documents.....................53
ARTICLE IV INTEREST AND FEES..........................................53
4.1 Interest on Loans............................................53
4.2 Interest After Event of Default..............................54
4.3 Unused Line Fee..............................................54
4.4 Lenders' Fees/Administrative Agent's Fees....................54
4.5 Letter of Credit Fees........................................54
4.6 Authorization to Charge Account..............................55
4.7 Indemnification in Certain Events............................55
4.8 Inability To Determine Interest Rate.........................55
4.9 Illegality...................................................56
4.10 Funding Indemnity............................................56
ARTICLE V CONDITIONS PRECEDENT.......................................57
5.1 Closing Conditions...........................................57
5.2 Condition to all Loans and Letters of Credit.................62
ARTICLE VI REPRESENTATIONS AND WARRANTIES.............................62
6.1 Organization and Qualification...............................63
6.2 Solvency.....................................................63
6.3 Liens; Inventory.............................................63
6.4 No Conflict..................................................63
6.5 Enforceability...............................................64
6.6 Financial Data; Material Adverse Change......................64
6.7 Locations of Offices, Records and Inventory..................64
6.8 Fictitious Business Names....................................65
6.9 Subsidiaries.................................................65
6.10 No Judgments or Litigation...................................65
6.11 No Defaults..................................................65
6.12 No Employee Disputes.........................................66
6.13 Compliance with Law..........................................66
6.14 ERISA........................................................66
6.15 Compliance with Environmental Laws...........................67
6.16 Use of Proceeds..............................................67
6.17 Intellectual Property........................................67
6.18 Licenses and Permits.........................................68
6.19 Owned Real Property..........................................69
6.20 Leased Real Estate...........................................69
6.21 Title to Personalty..........................................69
6.22 Labor Matters................................................70
6.23 Not an Investment Company....................................70
6.24 No Margin Security...........................................70
6.25 No Event of Default..........................................70
6.26 Taxes and Tax Returns........................................70
6.27 No Other Indebtedness........................................71
6.28 Existing Subordinated Notes..................................71
6.29 Status of Accounts...........................................71
6.30 Representations and Warranties...............................71
6.31 Trade Relations..............................................72
6.32 Affiliate Transactions.......................................72
6.33 Material Contracts...........................................72
6.34 Common Business Enterprise...................................72
6.35 Accuracy and Completeness of Information.....................72
ARTICLE VII AFFIRMATIVE COVENANTS......................................73
7.1 Financial Information........................................73
7.2 Inventory....................................................75
7.3 Corporate Existence..........................................75
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7.4 ERISA........................................................75
7.5 Proceedings or Adverse Changes...............................77
7.6 Environmental Matters........................................77
7.7 Books and Records; Inspection................................78
7.8 Collateral Records...........................................79
7.9 Security Interests...........................................79
7.10 Insurance; Casualty Loss.....................................80
7.11 Taxes........................................................81
7.12 Compliance With Laws.........................................82
7.13 Use of Proceeds..............................................82
7.14 Fiscal Year..................................................82
7.15 Notification of Certain Events...............................82
7.16 Additional Affiliate Guarantors..............................83
7.17 Schedules of Accounts and Purchase Orders....................83
7.18 Collection of Accounts.......................................83
7.19 Notice; Credit Memoranda; and Returned Goods.................84
7.20 Landlord Agreements..........................................84
7.21 Intellectual Property........................................84
7.22 Maintenance of Property......................................84
7.23 Revisions or Updates to Schedules............................85
7.24 ITT Agreement................................................85
7.25 Mortgaged Real Property......................................85
ARTICLE VIII FINANCIAL COVENANTS........................................86
8.1 Fixed Charge Coverage Ratio..................................86
8.2 Leverage Ratio...............................................86
8.3 Capital Expenditures.........................................86
ARTICLE IX NEGATIVE COVENANTS.........................................86
9.1 Restrictions on Liens........................................87
9.2 Restrictions on Additional Indebtedness......................87
9.3 Restrictions on Sale of Assets...............................87
9.4 No Corporate Changes.........................................87
9.5 No Guarantees................................................88
9.6 No Restricted Payments.......................................88
9.7 No Investments...............................................89
9.8 No Affiliate Transactions....................................89
9.9 No Prohibited Transactions Under ERISA.......................89
9.10 No Additional Bank Accounts..................................90
9.11 No Excess Cash...............................................90
9.12 Restrictions on Sale of Capital Stock of the Subsidiaries....90
9.13 No Issuance of Stock by Subsidiaries.........................90
9.14 No Additional Negative Pledges...............................90
9.15 Indebtedness.................................................91
9.16 Sale and Leaseback...........................................91
9.17 Licenses, Etc................................................91
9.18 Limitations..................................................91
- iii -
9.19 Material Contracts...........................................92
9.20 Subsidiaries.................................................92
9.21 Prepayments of Subordinated Debt, Etc........................92
ARTICLE X POWERS.....................................................92
10.1 Appointment as Attorney-in-Fact..............................92
10.2 Limitation on Exercise of Power..............................93
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES.............................93
11.1 Events of Default............................................93
11.2 Acceleration.................................................95
ARTICLE XII TERMINATION................................................96
ARTICLE XIII THE ADMINISTRATIVE AGENT...................................96
13.1 Appointment of Administrative Agent..........................96
13.2 Nature of Duties of Administrative Agent.....................97
13.3 Lack of Reliance on Administrative Agent.....................97
13.4 Certain Rights of the Administrative Agent...................98
13.5 Reliance by Administrative Agent.............................98
13.6 Indemnification of Administrative Agent......................98
13.7 The Administrative Agent in its Individual Capacity..........99
13.8 Holders of Notes.............................................99
13.9 Successor Administrative Agent...............................99
13.10 Collateral Matters..........................................100
13.11 Actions with Respect to Defaults............................101
13.12 Delivery of Information.....................................102
ARTICLE XIV MISCELLANEOUS.............................................102
14.1 Waivers.....................................................102
14.2 JURY TRIAL..................................................102
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE............102
14.4 Arbitration.................................................103
14.5 Notices.....................................................105
14.6 Assignability...............................................105
14.7 Information.................................................108
14.8 Payment of Expenses; Indemnification........................109
14.9 Entire Agreement, Successors and Assigns....................110
14.10 Amendments, Etc.............................................110
14.11 Nonliability of Administrative Agent and Lenders............111
14.12 Independent Nature of Lenders' Rights.......................111
14.13 Counterparts................................................111
14.14 Effectiveness...............................................111
14.15 Severability................................................112
14.16 Headings Descriptive........................................112
14.17 Maximum Rate................................................112
14.18 Right of Setoff.............................................112
- iv -
14.19 Power of Attorney...........................................113
14.20 Replacement Lenders.........................................113
14.21 Seals.......................................................113
ARTICLE XV AFFILIATE GUARANTY........................................114
15.1 The Guarantee...............................................114
15.2 Obligations Unconditional...................................114
15.3 Reinstatement...............................................115
15.4 Deferral of Subrogation Rights..............................115
15.5 Remedies....................................................115
15.6 Continuing Guaranty.........................................116
15.7 Rights of Contribution......................................116
15.8 Limitation on Guaranteed Obligations........................116
15.9 Subordination...............................................117
15.10 Survival of Representations.................................118
- v -
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Landlord's Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Security Agreement
Exhibit E Form of Revolving Note
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Swingline Note
Exhibit H Form of Lockbox Agreement
Exhibit I Form of Notice of Extension/Conversion
Exhibit J Form of Incumbency Certificate
Exhibit K Form of Opinion of Borrower's Counsel
Exhibit L Form of Loss Payee Endorsement
Exhibit M Form of Closing Certificate
Exhibit N Form of Certificate Regarding Aggregate Sale
Exhibit O Form of Account Designation Letter
Exhibit P Form of Collateral Disclosure Certificate
Exhibit Q Form of Authorized Persons Letter
Exhibit R Form of Disbursement Instructions Letter
Exhibit S Form of Trademark Security Agreement
Exhibit T Form of Compliance Certificate
Exhibit U Form of Borrowing Base Certificate
Exhibit V Form of Joinder Agreement
- vi -
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Liens
Schedule 1.1C Indebtedness (Including Guaranties)
Schedule 1.1D Investments
Schedule 1.1E Existing Title Policies
Schedule 1.1F Existing Surveys
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
Schedule 6.9 Subsidiaries
Schedule 6.10 Litigation
Schedule 6.14 ERISA
Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Owned Real Estate
Schedule 6.20 Leased Real Estate
Schedule 6.21 Personal Property Leases
Schedule 6.32 Affiliate Transactions
Schedule 6.33 Material Contracts
Schedule 7.10 Silica-Related Insurance Policies
Schedule 9.10 Bank Accounts
- vii -
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 5, 2003 among
U.S. SILICA COMPANY, a Delaware corporation (the "Borrower"), BMAC HOLDINGS,
INC., a Delaware corporation ("BMAC Holdings"), BETTER MINERALS & AGGREGATES
COMPANY, a Delaware corporation ("BMAC"), THE FULTON LAND AND TIMBER COMPANY,
a Pennsylvania corporation ("FLTC"), OTTAWA SILICA COMPANY, a Delaware
corporation ("OSC"), PENNSYLVANIA GLASS SAND CORPORATION, a Delaware
corporation ("PGSC"), GEORGE F. PETTINOS, LLC, a Delaware limited liability
company ("GFP") and BMAC SERVICES CO., INC., a Delaware corporation ("BMAC
Services"; BMAC Services, GFP, PGSC, OSC, FLTC, BMAC and BMAC Holdings,
together with any other Persons which may become Affiliate Guarantors
hereunder pursuant to Section 7.16, being collectively referred to as the
"Affiliate Guarantors" or individually referred to as a "Affiliate
Guarantor"; hereinafter, the Borrower and the Affiliate Guarantors being
sometimes collectively referred to as the "Obligors" or individually referred
to as an "Obligor"); WACHOVIA BANK, NATIONAL ASSOCIATION, a national bank
("Wachovia" "WBNA" or the "Bank"), as a "Lender," together with each of the
other financial institutions identified as "Lenders" on the signature pages
hereto and any assignees thereof made pursuant to Section 14.6 (together with
each of their successors and assigns, being referred to individually as a
"Lender" and, collectively, as the "Lenders"); Wachovia, as the "Swingline
Lender" pursuant to Section 2.10; and Wachovia, acting as agent for the
Lenders (including the Swingline Lender) in the manner and to the extent
described in Article XIII hereof (Wachovia, or its successor, when acting in
such capacity, herein called the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, BMAC is a wholly-owned subsidiary of BMAC Holdings; and
WHEREAS, the Borrower and BMAC Services are wholly-owned Subsidiaries
of BMAC; and
WHEREAS, FLTC, OSC, GFP and PGSC are wholly-owned Subsidiaries of the
Borrower; and
WHEREAS, the Obligors share an identity of interests as members of a
consolidated group of companies engaged in similar or related businesses
wherein the making available to the Borrower of financial accommodations will
facilitate and enhance the overall financial strength and stability of the
consolidated group; and
WHEREAS, in furtherance of the foregoing, the Obligors wish to obtain a
credit facility to provide for the working capital, letter of credit and
general corporate needs of the Borrower; and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrower for the
foregoing purposes;
NOW, THEREFORE, the Obligors, the Lenders and the Administrative Agent
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 General Definitions.
As used herein, the following terms shall have the meanings herein
specified:
"Account Designation Letter" shall have the meaning given such term in
Section 5.1(n).
"Accounts" shall mean any "accounts," as such term is defined in the
UCC, now owned or hereafter acquired by an Obligor or in which an Obligor now
has or hereafter acquires any rights (whether or not specifically listed on
any schedule furnished to the Administrative Agent pursuant hereto or in
connection herewith) and, in any event, shall include, without limitation,
all accounts receivable, book debts and other forms of obligations (other
than forms of obligations evidenced by "Chattel Paper", "Documents",
"Investment Property' or "Instruments", as such quoted terms are defined in
the Security Agreement) now owned or hereafter received or acquired by or
belonging or owing to an Obligor (including, without limitation, under any
trade names, styles or divisions thereof) whether arising out of goods sold
or leased or services rendered by an Obligor or from any other transaction,
whether or not the same involves the sale or lease of goods or services by an
Obligor (including, without limitation, any such obligation, which might be
characterized as an account or contract right under the UCC) and all of an
Obligor's rights in, to and under all purchase orders or receipts now owned
or hereafter acquired by it for goods or services, and all of an Obligor's
rights to any goods represented by any of the foregoing (including, without
limitation, unpaid seller's rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods),
and all moneys due or to become due to an Obligor under all contracts for the
sale of goods or the performance of services or both by an Obligor (whether
or not yet earned by performance on the part of an Obligor or in connection
with any other transaction), now in existence or hereafter occurring,
including, without limitation, the right to receive the proceeds of said
purchase orders and contracts, the right to receive all proceeds of any
credit insurance policies relating thereto issued to an Obligor's favor, and
all collateral security, supporting obligations and guarantees of any kind
given by any Person with respect to any of the foregoing. Without limitation
of the foregoing, the term "Accounts" shall extend to and include all ITT
Accounts.
"Acquisition" shall mean the acquisition by an Obligor or any
Subsidiary of: (a) all, or a controlling interest in, the voting stock or
other equity securities of another Person; or (b) all, or substantially all,
of assets or property of a Person, or assets or property constituting all, or
substantially all assets or properties of a division or line of business of a
Person.
"Administrative Agent" shall mean Wachovia, as provided in the preamble
of this Credit Agreement, or any successor to Wachovia acting in such
capacity.
2
"Administrative Agent's Fees" shall mean the fees payable by the
Borrower to Wachovia, for its own account, as described in the Fee Letter.
"Affiliate" shall mean any entity which directly or indirectly
Controls, is Controlled by, or is under common Control with, any Obligor or
any Subsidiary of any Obligor.
"Affiliate Guarantor" and "Affiliate Guarantors" shall have the
meanings given to such term in the preamble of this Credit Agreement.
"Aggregates Purchaser" shall mean Hanson BMC Acquisition Co., a
Delaware corporation, its successors and assigns.
"Aggregates Sale" shall mean the disposition of the aggregates business
of BMAC pursuant to the Aggregates Sale Agreement which occurred prior to the
Closing Date.
"Aggregates Sale Agreement" shall mean the Purchase Agreement, dated as
of April 10, 2003, made between BMAC, as seller, and the Aggregates Buyer, as
buyer (among others) together with all schedules and exhibits thereto, and as
it may be amended or modified from time to time.
"Applicable Percentages" shall mean for Eurodollar Loans and Base Rate
Loans, the appropriate applicable percentages corresponding to Average Excess
Availability as of the most recent Calculation Date (as defined below) as
shown below:
- --------------------------------------------------------------------
Tier Levels Applicable Applicable
(Highest Average Excess Percentage for Percentage for
to lowest) Availability Eurodollar Loans Base Rate Loans
- --------------------------------------------------------------------
1 < $10,000,000 2.50% 1.25%
- --------------------------------------------------------------------
2 =/> $10,000,000 2.00% 0.75%
- --------------------------------------------------------------------
The Applicable Percentages shall be determined by Administrative Agent and
adjusted quarterly on the date (each a "Calculation Date") five (5) Business
Days after the end of each calendar quarter beginning with the calendar
quarter ending March 31, 2004; it being understood and agreed that the
initial Applicable Percentages shall be based on Tier Level 1 of the pricing
grid shown above as of the Closing Date and shall remain at Tier Level 1
until the first Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
"Approved Banks" shall have the meaning given such term in the
definition of "Cash Equivalents" herein.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of an Obligor or
Subsidiary of an Obligor) of any Obligor or its Subsidiaries, whether by
sale, assignment, lease, transfer or otherwise.
3
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Administrative Agent and, if applicable, the Borrower, as Obligors'
Representative, in accordance with Section 14.6(f), in the form attached
hereto as Exhibit A.
"Authorized Officer," for each Obligor, shall mean its chief executive
officer, chief operating officer, chief financial officer, director of
treasury, or controller (regardless of title).
"Average Excess Availability" shall mean that amount, determined
monthly or quarterly (as the case may be), as of the last Business Day of
each calendar month or calendar quarter, respectively, by which (A) the
lesser of (1) the Revolving Credit Committed Amount in effect on the first
day of such calendar month (or the Closing Date, for the initial such partial
month) or calendar quarter (as the case may be), or (2) the Borrowing Base
reported at the end of such calendar month or, as appropriate, at the end of
the calendar week closest to such month end, pursuant to Section 7.1(e) or
calendar quarter (as the case may be), exceeds (B) the greater of (1) the
total amount of Loans and Letter of Credit Obligations outstanding at the end
of such calendar month or calendar quarter (as the case may be) or (2) the
daily mean average amount of Loans and Letter of Credit Obligations for such
calendar month or calendar quarter (as the case may be).
"Base Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (i) the Federal Funds Rate in effect on such day plus one-half
of one percent (1/2%) per annum, or (ii) the Prime Rate in effect on such
day. If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable
after due inquiry to ascertain the Federal Funds Rate for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate
shall be determined without regard to clause (i) of the first sentence of
this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan).
"Borrower" shall have the meaning given to such term in the preamble of
this Credit Agreement.
"Borrowing Base" shall mean the sum, calculated as follows:
(1) an amount not to exceed eighty-five percent (85%) of
Eligible Accounts Receivable; plus
4
(2) an amount not to exceed the lesser of (i) seventy percent
(70%) of Eligible ITT Receivables or (ii) the sum of One Million Five
Hundred Thousand Dollars ($1,500,000); plus
(3) an amount not to exceed the lesser of (i) twenty percent
(20%) of Eligible Stores Inventory, or (ii) the sum of Two Million
Dollars ($2,000,000), with the dollar amount specified in this clause
(ii) reducing monthly, in equal increments of Eighty-Three Thousand
Three Hundred Thirty-Three Dollars ($83,333) per month, effective on
the first day of each calendar month, beginning on February 1, 2004,
and continuing on a monthly basis thereafter, until reduced to zero
(0); plus
(4) an amount not to exceed the lesser of (i) thirty percent
(30%) of Eligible WIP Inventory or (ii) the sum of One Million Five
Hundred Thousand Dollars ($1,500,000), plus
(5) an amount not to exceed the lesser of (i) sixty percent
(60%) of Eligible Finished Goods Inventory; or (ii) the sum of Three
Million Five Hundred Thousand Dollars ($3,500,000); plus
(6) for an interim period only, expiring forty-five (45) days
after the Closing Date, or sooner (as and when the amounts of
replacement Letters of Credit being issued on the Closing Date are
reduced) an amount not to exceed Three Million Eight Hundred Thousand
Dollars ($3,800,000) in respect of Equipment; minus
(7) reserves in respect of Eligible Accounts Receivable and
Eligible Inventory consistent with the definitions thereof, and such
other reserves as may be established by the Administrative Agent from
time to time in its sole discretion, which shall include, but not be
limited to, (a) a reserve in respect of any payments owing from time to
time by Borrower to ITT under or in respect of the ITT Agreement, (b) a
reserve in respect of interest accruals (pending payment) in respect of
the Existing Subordinated Notes, together with any Subordinated Debt
issued for the purpose of refinancing, in whole or in part, the
Existing Subordinated Notes, and (c) a reserve in respect of any past
due accounts payable.
The Administrative Agent at all times shall be entitled to decrease the
advance rates specified in clauses (1) through (5) above, and/or decrease the
dollar limitations specified in clauses (2), (3), (4), (5) and (6) above; in
each case, in its sole discretion.
"Borrowing Base Certificate" shall have the meaning given to such term
in Section 7.1(e).
"Business Day" shall mean any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in New York, New York;
provided, however, that, in the case of Eurodollar Loans, such day is also a
day on which dealings between banks are carried on in U.S. dollar deposits in
the London interbank market.
5
"Capital Expenditures" shall mean, as applied to any Person, any
expenditures (including any in respect of Capital Leases) which, in
accordance with GAAP, is or should be accounted for as a capital expenditure
on the balance sheet of that Person.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited
liability company, membership interests and (v) any other equity interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean, 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
the United States is pledged in support thereof) having maturities of not
more than one (1) year from the date of acquisition, (ii) time deposits or
certificates of deposit of any commercial bank incorporated under the laws of
the United States or any state thereof, of recognized standing having capital
and unimpaired surplus in excess of $1,000,000,000 and whose short-term
commercial paper rating at the time of acquisition is at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Moody's Investors Services, Inc. (any such bank, an
"Approved Bank"), with such deposits or certificates having maturities of not
more than one (1) year from the date of acquisition, (iii) repurchase
obligations with a term of not more than seven (7) days for underlying
securities of the types described in clauses (i) and (ii) above entered into
with any Approved Bank, (iv) commercial paper or finance company paper issued
by any Person incorporated under the laws of the United States or any state
thereof and rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation 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, and (v) investments in money market funds that are
registered under the Investment Company Act of 1940, as amended, which have
net assets of at least $1,000,000,000 and at least eighty-five percent (85%)
of whose assets consist of securities and other obligations of the type
described in clauses (i) through (iv) above. All such Cash Equivalents must
be denominated solely for payment in Dollars.
"Cash Management Document" shall mean any document, instrument or
agreement executed by an Obligor in respect of any Cash Management
Obligations of such Obligor with Wachovia (or an Affiliate of Wachovia).
"Cash Management Obligations" shall mean any direct or indirect
liability, contingent or otherwise, of an Obligor under any Cash Management
Document in respect of cash management services (including treasury,
depository, overdraft, credit or debit card and electronic funds transfer)
provided by Wachovia (or an Affiliate of Wachovia) whether pursuant to this
Agreement or otherwise.
6
"Casualty Loss" shall have the meaning given to such term in Section
7.10.
"Change of Control" shall mean the occurrence of either of the
following events: (i) any Person (or group of Persons acting in concert),
not in Control of Holdings on the Closing Date shall acquire Control of
Holdings; or (ii) the Controlling Shareholder shall cease to own and control,
on a fully diluted basis, at least forty percent (40%) of the securities of
Holdings having ordinary voting power (or that can be converted into
securities of Holdings having ordinary voting power) for the election of its
directors; or otherwise, and in any event, cease to be in Control of
Holdings; or (iii) during any period of twelve (12) consecutive calendar
months, individuals who were directors of Holdings on the first day of such
period shall cease to constitute a majority of the board of directors of
Holdings other than because of the replacement as a result of death or
disability of one or more such directors or (iv) the Borrower shall cease to
be, directly or indirectly, a wholly-owned Subsidiary of Holdings.
"Closing" shall mean the making of the initial Loan by the Lenders to
the Borrower under this Credit Agreement.
"Closing Date" shall mean the date on which the Closing occurs, which
shall be on the date of this Agreement or on any date thereafter, but not
later than five (5) Business Days thereafter (unless otherwise approved by
the Administrative Agent).
"Collateral" shall mean and include: (i) all "Collateral," as that
term is defined and described in the Security Agreement, including, without
limitation, all "Accounts," "Inventory" and "Equipment," as each of such
terms is defined herein; (ii) all "Pledged Collateral," as that term is
defined in the Pledge Agreement; (iii) all "Patent Collateral," as that term
is defined in the Patent Security Agreement described in Section 5.1(r); (iv)
all "Trademark Collateral"; as that term is defined in the Trademark Security
Agreement described in Section 5.1(r); and (v) all "Accounts" and all
"Funds," as those terms are defined in the Lockbox Agreement. The term
"Collateral" shall also mean and include, as appropriate, all Mortgaged Real
Property which, in accordance with Section 7.25, becomes subject to a
Mortgage, as and when the Mortgages become effective, together with all
Structures, fixtures and other property of the Obligors described in, and
encumbered by, the Mortgages (including mineral rights).
"Commitment" means the Revolving Credit Commitment of each Lender, the
Swingline Commitment of the Swingline Lender and the Letter of Credit
Commitment of the Issuing Bank, or each, as appropriate.
"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of a Person and all
of its consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable
period of computation, with respect to any Person, an amount equal to the
aggregate Capital Expenditures of such Person and its Subsidiaries on a
Consolidated basis during such period.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, with respect to any Person, the aggregate of all taxes of such
Person and its Subsidiaries on a Consolidated basis determined in accordance
7
with applicable law and GAAP, to the extent the same are paid in cash during
such period.
"Consolidated EBITDA" shall mean, for any applicable period of
computation, with respect to any Person, (a) Consolidated Net Income of such
Person and its Subsidiaries for such period, plus (b) the sum of, in each
case to the extent included in the calculation of such Consolidated Net
Income, but without duplication, (i) any provision for income taxes, (ii)
Consolidated Interest Expense, (iii) loss from extraordinary items, (iv) any
aggregate loss from the sale, exchange or other disposition of capital assets
by such Person, (v) depreciation, depletion and amortization expenses, and
(vi) in the case of BMAC and its Subsidiaries on a Consolidated basis, any
non-cash portion of Silica-Related Claims Costs within such period, plus (c)
for any applicable period of computation inclusive of any one or more of the
following Fiscal Quarters: September 30, 2002, December 31, 2002, March 31,
2003 and June 30, 2003, the following sums (without duplication from
quarter-to-quarter), respectively, $1,450,290, $23,293,263, $729,049 and
$4,479,575 minus (d) the sum of, in each case to the extent included in the
calculation of such Consolidated Net Income, but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, and (iv) any aggregate gain from the sale, exchange or
other disposition of capital assets by such Person.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense for the applicable period, to the extent paid in cash, plus (ii)
Consolidated Scheduled Funded Debt Payments made during the applicable
period, plus (iii) in the case of BMAC and its Subsidiaries, on a
Consolidated basis, Restricted Payments paid in cash during the applicable
period, other than those expressly permitted to be made under Section 9.6;
plus (iv) in the case of BMAC and its Subsidiaries on a Consolidated basis,
any amounts expended in such period to meet annual minimum funding
requirements under ERISA in respect of any Covered Benefit Plan, provided,
however, that, for any applicable period of computation in which any one or
more of Borrower's four (4) Fiscal Quarters in the Fiscal Year ending
December 31, 2004 is included, the amount described above in this clause (iv)
shall be offset (but not below zero) by the amount (without duplication) of
the aggregate Net Cash Proceeds from the sale, exchange or other disposition
of capital assets by BMAC and its Subsidiaries in such period permitted by
and conducted in accordance with the terms of Section 9.3 (excluding,
however, therefrom, any gain on the sale, exchange or other disposition of
the Millville Sale Property.
"Consolidated Funded Debt" shall mean, as of any applicable date of
determination, with respect to any Person, all Funded Indebtedness of such
Person and its consolidated Subsidiaries, determined on a Consolidated basis
in accordance with GAAP (without duplication).
"Consolidated Interest Expense" shall mean, for any applicable period
of computation, with respect to any Person, interest expense, whether paid or
accrued, on all Indebtedness, net of interest income, in each case, of such
Person and its Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, with respect to any Person, the net income (or net deficit) of
such Person and its Subsidiaries for any period, after deduction of all
8
expenses, taxes and other proper charges, all as determined on a Consolidated
basis in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" shall mean, for any
applicable period of computation, the sum of all scheduled payments of
principal on Consolidated Funded Debt for the applicable period ending on
such date (including the principal component of payments due on Capital
Leases or under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product during
the applicable period ending on such date).
"Contractual Obligations" shall mean, with respect to any Person, any
term or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Control" and its correlative components, "Controlled" and
"Controlling" shall mean the possession, directly or indirectly, of the power
to (i) vote twenty-five percent (25%) or more of the securities having
ordinary voting power for the election of directors (or similar governing
board) of such Person, or (ii) direct or cause the direction of management
and policies of a business, whether through the ownership of voting
securities, by contract or otherwise and either alone or in conjunction with
others or any group.
"Controlling Shareholder" shall mean J.P. Morgan Partners, LLC, and its
Affiliates.
"Credit Agreement" shall mean this Credit Agreement, dated as of the
date hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time; together with all exhibits and schedules
thereto.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Notes, the Letter of Credit Documents, the Security Documents, any Cash
Management Documents and all other documents, agreements, instruments,
opinions and certificates executed and delivered by any Obligor in connection
herewith or therewith, as the same may be modified, amended, extended,
restated or supplemented from time to time. The term "Credit Documents"
shall not include, however, any Hedge Contract to which a Lender (or a Lender
Affiliate) is party, unless and except to the extent otherwise set forth
expressly therein.
"Covered Benefit Plan" shall have the meaning given to such term in
Section 6.14.
"Default" shall mean an event, condition or default which, with the
giving of notice, the passage of time or both, would become an Event of
Default.
"Default Rate" shall have the meaning given to such term in Section 4.2.
"Defaulting Lender" shall have the meaning given to such term in
Section 2.1(d)(iii).
"DOL" shall mean the U.S. Department of Labor and any successor
department or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
9
"Domestic Subsidiaries" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws
of the United States, any State of the United States or the District of
Columbia.
"Eligible Accounts Receivable" shall mean the aggregate face amount of
the Borrower's Accounts (excluding, however, therefrom, any ITT Accounts)
that conform to the warranties contained herein and at all times continue to
be acceptable to the Administrative Agent in its sole discretion, less the
aggregate amount of all returns, discounts, claims, credits, charges
(including warehousemen's charges) and allowances of any nature (whether
issued, owing, granted or outstanding); provided, however, that, no Account
shall be deemed to be an Eligible Account Receivable if:
(i) it arises out of a sale or lease made by the Borrower to an
Affiliate (including any other Obligor); or
(ii) the Account is unpaid more than ninety (90) days after the
original invoice date, if the Account has no "dating" terms; or
(iii) the Account is unpaid more than sixty (60) days after the
due date for the payment of such invoice or more than ninety (90) days
after invoice date, whichever is the earlier date, if the Account has
"dating" terms; or
(iv) the Account is from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof) are
unpaid more than ninety (90) days after the original invoice date; or
(v) the amount of the Account, when aggregated with all other
Accounts of the same account debtor, exceeds twenty percent (20%) in
face value of all Eligible Accounts Receivable then outstanding, to the
extent of such excess; or
(vi) (A) the account debtor is also a creditor of any Obligor,
to the extent of the amount owed by such Obligor to the account debtor,
(B) the account debtor has disputed its liability on, or the account
debtor has made any claim with respect to, such Account or any other
Account due from such account debtor to the Borrower, which has not
been resolved, to the extent of the amount of such dispute or claim,
(C) the Account otherwise is or may become subject to any right of
setoff by the account debtor, to the extent of the amount of such
setoff; or
(vii) unless and except to the extent otherwise approved by the
Administrative Agent in its sole discretion from time to time, the
Account is owing by an account debtor that has commenced a voluntary
case under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to such account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application for
relief under the federal bankruptcy laws has been filed by or against
the account debtor, or if such account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a receiver,
10
trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or
(viii) the sale is to an account debtor outside the
continental United States, unless the sale is (A) on letter of credit,
guaranty or acceptance terms, or subject to credit insurance, in each
case acceptable to the Administrative Agent in its sole credit
judgment, or (B) otherwise approved by and acceptable to the
Administrative Agent in its sole discretion; or
(ix) the sale to the account debtor is on a "bill-and-hold",
"guaranteed sale", "sale-and-return", "sale on approval" or
"consignment" basis or made pursuant to any other written agreement
providing for repurchase or return; or
(x) the Administrative Agent believes, in its sole discretion,
that collection of such Account is insecure or that such Account may
not be paid by reason of the account debtor's financial inability to
pay; or
(xi) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly
assigns its rights to payment of such Account to the Administrative
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Section 3727 et seq.); or
(xii) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or its designee or
the services giving rise to such Account have not been performed by or
on behalf of the Borrower and accepted by the account debtor or its
designee or the Account otherwise does not represent a final sale; or
(xiii) the Administrative Agent does not have a first
priority, perfected security interest in the Account; or
(xiv) the Administrative Agent, in the exercise of its sole
discretion, otherwise determines it to be ineligible.
"Eligible Finished Goods Inventory" shall mean Eligible Inventory
consisting of Finished Goods.
"Eligible Inventory" shall mean the aggregate gross amount of the
Borrower's Inventory consisting of Stores Inventory, WIP Inventory or
Finished Goods Inventory, valued at the lower of its cost (on a FIFO basis)
or market value, which (A) is owned solely by the Borrower and with respect
to which the Borrower has valid title, (B) is subject to a valid, enforceable
and first priority Lien in favor of Administrative Agent, (C) is located in
the United States, (D) is not obsolete or slow moving, (E) which conforms to
the warranties contained herein and (F) at all times continues to be
acceptable to the Administrative Agent in its sole credit judgment, less and
except, however, (i) Inventory consisting of supplies, (ii) markdown
reserves, (iii) any goods returned or rejected by the Borrower's customers
for which a credit has not yet been issued, (iv) goods in transit to the
Borrower or to third parties, (v) damaged Inventory; (vi) any reserves
required by the Administrative Agent in its sole credit judgment for special
order goods and market value declines, (vii) any Inventory which is held by
the Borrower pursuant to "consignment," "sale or return," "sale on approval"
11
or similar arrangement, and (viii) any Inventory that the Administrative
Agent determines in its sole discretion to be ineligible. Without limitation
of the foregoing, to the extent that any Inventory is at any time situated on
real property that is not owned by the Borrower, including, for this purpose
any real property (A) rented or leased by the Borrower from a third party,
(B) owned and operated by a warehouseman for use by the Borrower (among
others), (C) owned and operated by any filler, processor, packer or finisher
of Inventory (the foregoing called, collectively, "Third Party Property"),
then, the following special eligibility rules shall apply: (i) as to any
Inventory located at Third Party Property on the Closing Date, such Inventory
will become ineligible hereunder sixty (60) days after the Closing Date
unless, within such period, either (A) the Borrower has obtained Landlord
Agreements, in form and substance satisfactory to the Administrative Agent in
its sole credit judgment, in regard thereto, and, to the extent any such
Inventory is on consignment, the Borrower has obtained the "consignment
notice" UCC financing statements referenced Section 5(h) of the Security
Agreement in regard thereto; or, (B) in lieu of the foregoing, the
Administrative Agent has imposed reserves on borrowing availability
sufficient, in the sole credit judgment of the Administrative Agent, to
protect the interests of the Lenders in regard thereto (the foregoing called
"Inventory Protective Measures"); and (ii) as to any Inventory which becomes
located at Third Party Property subsequent to the Closing Date pursuant to an
arrangement with a landlord, Customer, warehouseman, filler, processor,
packer or finisher not in privity of contract with the Borrower on the
Closing Date, such Inventory shall be ineligible without benefit of any grace
period subject to any Inventory Protective Measures then or thereafter being
obtained or implemented.
"Eligible ITT Receivable" shall mean the aggregate face amount of ITT
Receivables that conform to the warranties contained herein and at all times
continue to be acceptable to the Administrative Agent in its sole discretion,
less the aggregate amount of returns, counterclaims, offsets, credits. back
charges and allowances of any nature in respect thereof (whether issued,
granted or outstanding); provided, however, that no ITT Receivable shall be
deemed to be an Eligible ITT Receivable if:
(i) there does not exist a bona fide Silica-Related Claim
submitted by Borrower to ITT in accordance with the terms of the ITT
Agreement in respect thereof (a "Submitted ITT Claim");
(ii) a Submitted ITT Claim giving rise thereto has been
submitted to ITT for payment for ninety (90) days or more, without its
full payment;
(iii) ITT has ceased to have a senior debt rating, as reported by
Standard & Poor"s, of at least "BBB-";
(iv) ITT has disputed its liability in respect of all or any
portion of the Submitted ITT Claim giving rise thereto, to the extent
of such dispute;
(v) the Administrative Agent does not have a first priority,
perfected security interest in the ITT Receivable; or
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(vi) the Administrative Agent, in the exercise of its sole
discretion, otherwise determines it to be ineligible.
"Eligible Stores Inventory" shall mean Eligible Inventory consisting
of Stores.
"Eligible WIP Inventory" shall mean Eligible Inventory consisting of
WIP.
"Equipment" shall mean any "equipment," as such term is defined in the
UCC, now owned or hereafter acquired by an Obligor or in which an Obligor now
has or hereafter acquires any rights and wherever located, and, in any
event, shall include, without limitation, all machinery, equipment, molds,
furnishings, "Fixtures" (as that quoted term is defined in the Security
Agreement), mobile goods (including motor vehicles, fork lifts and trailers
whether or not subject to a certificate of title, tractors, cranes and earth
moving equipment) tools, parts, goods (other than consumer goods, farm
products or Inventory) and computers and other electronic data-processing and
other office equipment now owned or hereafter acquired by an Obligor or in
which an Obligor now has or hereafter acquired any rights and wherever
located, and any and all additions, substitutions and replacements of any of
the foregoing, wherever located, together with all attachments, components,
parts, equipment, accessions and accessories installed thereon or affixed
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean, with respect to any Person, any (i)
corporation which is or was at any time a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as such Person or any Subsidiary of such Person, determined on a
Consolidated basis; (ii) partnership or other trade or business (whether or
not incorporated) at any time under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with such Person or any such
Subsidiary; and (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as such Person or any
such Subsidiary, any corporation described in clause (i) above, or any
partnership or trade or business described in clause (ii) above.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that term is
13
defined in Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of Eurodollar Loans
is determined), whether or not any Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans shall be
deemed to constitute Eurocurrency liabilities and as such shall be deemed
subject to reserve requirements without benefits of credits for proration,
exceptions or offsets that may be available from time to time to a Lender.
The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" shall have the meaning provided for in Article XI.
"Excess Availability", as of any day, shall mean that amount by which
(A) the lesser of (1) the Revolving Credit Committed Amount on such day or
(2) the Borrowing Base, as then most recently reported pursuant to
Section 7.1(e), exceeds (B) the total amount of Loans and Letter of Credit
Obligations outstanding on such date.
"Excluded Taxes" shall have the meaning given to such term in Section
2.6.
"Existing Senior Secured Credit Facilities" shall mean the senior
secured credit facilities, in an original principal amount equal to
$230,000,000 in principal amount, heretofore entered into by BMAC pursuant to
a Credit Agreement, dated as of September 30, 1999, as amended or modified
from time to time.
"Existing Subordinated Notes" shall mean the senior subordinated notes,
in an original principal amount equal to $150,000,000, heretofore issued by
BMAC pursuant to the Existing Subordinated Notes Indenture.
"Existing Subordinated Notes Indenture" shall mean the Indenture, dated
as of October 1, 1999, among BMAC, certain other Obligors, and Bank of New
York, as trustee, in respect of the issuance of the existing Subordinated
Notes, as modified or amended from time to time.
"Existing Surveys" shall mean the existing boundary line surveys in
respect of the Mortgaged Real Property set forth and described on Schedule
1.1E hereto.
"Existing Title Policies" shall mean the existing title insurance
policies in respect of the Mortgaged Real Property set forth and described on
Schedule 1.1F hereto.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three (3) Federal Funds brokers of recognized standing selected by
it.
"Fee Letter" shall mean the letter agreement, dated on or prior to the
Closing Date, by and between the Administrative Agent and the Borrower
regarding the fees to be paid by the Borrower to the Administrative Agent, as
14
it may be supplemented, modified or amended from time to time.
"Fees" shall mean, collectively, the Administrative Agent's Fees, the
Lenders' Fees, the Unused Line Fee, the Letter of Credit Fees, the Issuing
Bank Fees and any other fees payable hereunder or under any Credit Document.
"Financials" shall have the meaning given to such term in Section 6.6.
"Finished Goods Inventory" shall mean and consist of extracted minerals
for which production has been completed which are awaiting resale.
"Fiscal Year" shall mean the fiscal year of BMAC in effect on the
Closing Date; and the terms "Fiscal Month" and "Fiscal Quarter" shall have
correlative meanings.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of each
Fiscal Quarter, the ratio of (i)(A) Consolidated EBITDA minus (B) Unfinanced
Capital Expenditures minus (C) cash income taxes, minus (D) all
Silica-Related Claims Costs, to (ii) Consolidated Fixed Charges; in each
case, computed for the trailing four (4) Fiscal Quarters then ending.
"Foreign Lender" shall have the meaning given to such term in Section
2.6(a).
"Foreign Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, the sum of the following (i)(a) all obligations of such Person
for borrowed money, including Subordinated Debt, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) the principal
portion of all obligations of such Person under Capital Leases, (f) the
maximum amount of all letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication,
all drafts drawn thereunder (to the extent unreimbursed), (g) the principal
portion of all obligations of such Person under off-balance sheet financing
arrangements, and (h) all preferred Capital Stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date, plus (ii) all Indebtedness of another
Person of the type referred to in clause (i) above secured by (or for which
the holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, plus (iii) all guaranties
of such Person with respect to Indebtedness of the type referred to in clause
(i) above of another Person, plus (iv) Indebtedness of the type referred to
in clause (i) above of any partnership or unincorporated joint venture in
15
which such Person is legally obligated or has a reasonable expectation of
being liable with respect thereto.
"Funding Bank" shall have the meaning given to such term in Section 4.7.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof and, in respect of
the Obligors, applied on a consistent basis with the Financials.
"Governmental Authority" shall mean any federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Hedging Agreements" shall mean any Interest Rate Protection Agreement,
foreign currency exchange agreement, commodity purchase or option agreement
or other interest or exchange rate or commodity price hedging agreements,
made or entered into by any Obligor.
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of New York (or the law of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Credit Agreement and the other Credit Documents), or under
applicable federal laws which may presently or hereafter be in effect and
which allow a higher maximum nonusurious interest rate than under New York or
such other jurisdiction's law, in any case after taking into account, to the
extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
"Holdings" shall mean USS Holdings, Inc., a Delaware corporation.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements
or under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
guaranties of such Person with respect to Indebtedness of the type referred
in this definition of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Interest Rate Protection Agreements, (j) the maximum amount of
all letters of credit issued or bankers' acceptances facilities created for
16
the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (k) all preferred Capital Stock
issued by such Person and required by the terms thereof to be redeemed, or
for which mandatory sinking fund payments are due, by a fixed date, (l) the
principal portion of all obligations of such Person under off-balance sheet
financing arrangements and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of
Directors of BMAC, which is "independent" as that term is defined in Rule
2-01 of Regulation S-X promulgated by the Securities and Exchange Commission.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
(1) month, two (2) months, three (3) months or six (6) months, as selected by
the Borrower, commencing on the date of the borrowing (including
continuations and conversions thereof); provided, however, (i) if any
Interest Period would end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day (except that
where the next succeeding Business Day falls in the next succeeding calendar
month, in which event such Interest Period shall end on the next preceding
Business Day), (ii) no Interest Period shall extend beyond the Maturity Date,
(iii) any Interest Period with respect to a Eurodollar Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period and (iv) during the thirty (30) day
period following the Closing Date, the Borrower shall only be permitted to
select either Base Rate Loans or Eurodollar Loans having Interest Periods of
one (1) month.
"Intellectual Property Agreements" shall have the meaning given to such
term in Section 5.1(r).
"Interest Rate Protection Agreement" shall mean any interest rate
"hedge," "collar," "cap" or similar agreement, made for the purpose of
protecting any Obligor against fluctuations in interest rates.
"Internal Revenue Service" shall mean the Internal Revenue Service and
any successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute thereto and all rules
and regulations promulgated thereunder.
"Inventory" shall mean any "inventory," as such term is defined in the
UCC, now owned or hereafter acquired by an Obligor or in which any Obligor
now has or hereafter acquires any rights and wherever located, and, in any
event, shall include, without limitation, all inventory, merchandise, goods
and other personal property, now owned or hereafter acquired by an Obligor or
in which such Obligor now has or hereafter acquires any rights and wherever
located, which are held for sale or lease or are furnished or are to be
17
furnished under a contract of service or which constitute raw materials, work
in process or materials used or consumed or to be used or consumed in an
Obligor's business, or the processing, packaging, delivery or shipping of the
same, all finished goods and all goods returned to or repossessed by any
Obligor.
"Investment" in any Person shall mean (i) any Acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise, but exclusive of the acquisition of inventory, supplies, equipment
and other property or assets used or consumed in the ordinary course of
business of the applicable Obligor or its Subsidiary and Consolidated Capital
Expenditures not otherwise prohibited hereunder), (ii) any deposit with, or
advance, loan or other extension of credit (other than sales of inventory on
credit in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms) to, such Person, (iii) any joint
venture, or (iv) any other capital contribution to or investment in such
Person, including, without limitation, any obligation incurred for the
benefit of such Person. In determining the aggregate amount of Investments
outstanding at any particular time, (a) the amount of any Investment
represented by a guaranty shall be taken at not less than the maximum
principal amount of the obligations guaranteed and still outstanding; (b)
there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received
as earnings on such Investment, whether as dividends, interest or otherwise;
and (d) there shall not be deducted from or added to the aggregate amount of
Investments any decrease or increases, as the case may be, in the market
value thereof.
"Issuing Bank" shall mean Wachovia and/or such other financial
institution among the Lenders as Administrative Agent may select from time to
time.
"Issuing Bank Fees" shall have the meaning given to such term in
Section 4.5(b).
"ITT" shall mean ITT Corporation, a Delaware corporation, and its
successors and assigns.
"ITT Agreement" shall mean the Agreement of Purchase and Sale of the
Capital Stock of Pennsylvania Glass Sand Corporation, dated as of
September 12, 1985, made between ITT and Pacific Coast Resources Co., its
successors and assigns, as amended or modified from time to time.
"ITT Receivables" shall mean certain amounts claimed by the Borrower to
be owing by ITT from time to time to the Borrower in the Borrower's capacity
as successor-in-interest to and/or assignee of, the rights of Pacific Coast
Resources Co. under the ITT Agreement, in respect of Silica-Related Claims
for which Borrower has sought indemnity from ITT in accordance with the terms
of the ITT Agreement.
"Landlord Agreement" shall mean a Landlord Waiver and Consent
Agreement, substantially in the form of Exhibit B (or such other form as
shall be acceptable to the Administrative Agent in its sole credit judgment),
between an Obligor's landlord and the Administrative Agent, acknowledging and
agreeing, among other things, (i) that any Liens of such Landlord on any of
the property of such Obligor or any Subsidiary shall be subordinate to the
Liens of the Administrative Agent thereon, on terms and conditions acceptable
18
to the Administrative Agent, in its sole credit judgment, and (ii) to permit
the Administrative Agent access to the property for the purposes of
exercising its remedies under the Security Agreement. The term "Landlord
Agreement," when used in respect of fillers, processors, packers or
finishers, shall mean a Landlord Waiver and Consent Agreement augmented as
appropriate to accommodate the special and more limited interests of such
third parties.
"Leased Real Property" shall have the meaning given to such term in
Section 6.20.
"Leases" shall mean any leases to which any Obligor or Subsidiary is a
party as tenant or lessee, including Capital Leases and operating leases.
"Lender" shall have the meaning given to such term in the preamble of
this Credit Agreement. The term "Lender" shall also include the Swingline
Lender, as appropriate.
"Lenders' Fees" shall mean any non-refundable fees payable to each of
the Lenders as set forth in each of the Lender's respective fee letters (if
any) with the Administrative Agent as an inducement to such Lender's entry
into this Agreement.
"Letter of Credit Committed Amount" shall have the meaning given to
such term in Section 3.1.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned or at
risk or (ii) any collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in
Section 4.5.
"Letter of Credit Obligations" shall mean, at any time, the sum of (i)
the aggregate undrawn amount of all Letters of Credit outstanding at such
time, plus (ii) the aggregate amount of all drawings under Letters of Credit
for which the Issuing Bank has not at such time been reimbursed, plus (iii)
without duplication, the aggregate amount of all payments made by each Lender
to the Issuing Bank with respect to such Lender's participation in Letters of
Credit as provided in Section 3.3 for which the Borrower has not at such time
reimbursed the Lenders, whether by way of a Revolving Loan or otherwise.
"Letters of Credit" shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of inventory, equipment
or otherwise) issued by the Issuing Bank for the account of the Borrower
pursuant to this Credit Agreement, and all amendments, renewals, extensions
or replacements thereof.
"Leverage Ratio" shall mean as of the last day of each Fiscal Quarter,
the ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA,
computed on the basis of the trailing four (4) Fiscal Quarters.
19
"Lien(s)" shall mean any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans (or a portion of any
Revolving Loan), and the Swingline Loans, individually or collectively, as
appropriate.
"Lockbox" shall have the meaning given to such term in Section 2.3.
"Lockbox Account" shall have the meaning given to such term in Section
2.3.
"Lockbox Agreement" shall have the meaning given to such term in
Section 2.3.
"Lockbox Bank" shall have the meaning given to such term in Section 2.3.
"London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on the Dow Jones Markets Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one (1) rate is specified on Telerate
Page 3750, the applicable rate shall be the arithmetic mean of all such
rates. If, for any reason, such rate is not available, the term "London
Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan for
the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two (2) Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one (1) rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
"Material Adverse Change" shall mean a material adverse change in (a)
the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower,
individually, or the Obligors, taken as a whole, (b) the Collateral, (c) the
ability of the Borrower, individually, or the Obligors, taken as a whole, to
perform its or their respective obligations under the Credit Documents, or
(d) the rights and remedies of the Lenders hereunder; in each case, as
determined by the Administrative Agent in its sole credit judgment.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower,
individually, or the Obligors, taken as a whole, (b) the Collateral, (c) the
ability of the Borrower, individually, or the Obligors, taken as a whole, to
perform its or their respective obligations under the Credit Documents, or
(d) the rights and remedies of the Lenders hereunder; in each case, as
determined by the Administrative Agent in its sole credit judgment.
"Material Contract" shall mean any contract or other arrangement (other
than any of the Credit Documents), whether written or oral, to which any
Obligor or any Subsidiary is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect. The term "Material Contract"
shall also include, in any event, the Organizational Documents of each
20
Obligor and Subsidiary, the ITT Agreement, the Silica-Related Claims
Policies, any Leases having aggregate annual rentals in excess of Two Hundred
Fifty Thousand Dollars ($250,000), any Hedge Contracts, the Existing
Subordinated Notes Indenture, and any other contracts evidencing, pertaining
to or securing the payment of, Funded Indebtedness.
"Maturity Date" shall mean June 30, 2008.
"Merchandise Returns" shall mean any of the products sold by the
Obligors or any of their Subsidiaries that are returned.
"Millville Sale Property" shall mean that portion of the Owned Real
Estate described on item 2 to Schedule 9.3 as a portion of the "New Jersey
Operations" consisting of the Millville Plant (Downe Portion).
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
"Mortgage" shall mean a mortgage, deed of trust, deed to secure debt or
similar agreement setting forth a Lien on real property, whether owned or
leased.
"Mortgaged Real Property" shall have the meaning given to such term in
Section 7.25.
"Net Cash Proceeds" shall mean the aggregate cash proceeds actually
received by any Obligor in respect of any Asset Disposition or issuance of
debt or equity securities, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) (b) taxes paid or payable as a result thereof; and (c) the
amount of Indebtedness secured by a Lien on any asset which is the subject of
such Asset Disposition if by the terms governing such Asset Disposition, such
Indebtedness is required to be paid by such Obligor, to the extent, in fact,
so paid at or prior to such Obligor's receipt of such proceeds, it being
understood that the term "Net Cash Proceeds" shall include, without
limitation, (i) any cash received upon the sale or other disposition of any
non-cash consideration received by an Obligor in any Asset Disposition and
(ii) any cash received upon release from any escrow arrangement entered into
in connection with such Asset Disposition.
"New Surveys" shall have the meaning given to such term in Section 7.25.
"New Title Policies" shall have the meaning given to such term in
Section 7.25.
"Note" or "Notes" shall mean the Revolving Notes and the Swingline
Note, individually or collectively, as appropriate.
"Notice of Borrowing" shall have the meaning given to such term in
Section 2.1(d)(i).
"Notice of Extension/Conversion" shall have the meaning given to such
term in Section 2.9.
21
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Obligor, or to
others for any Obligor's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon
(including interest which would be payable as post-petition interest in
connection with any bankruptcy or similar proceeding) and, including, without
limitation, any reimbursement obligation or indemnity of the Obligors on
account of Letters of Credit and all other Letter of Credit Obligations, and
all indebtedness, fees, liabilities and obligations which may at any time be
owing by any Obligor to any Lender in each case pursuant to this Credit
Agreement or any other Credit Document, whether now in existence or incurred
by an Obligor from time to time hereafter, whether unsecured or secured by
pledge, Lien upon or security interest in any of an Obligor's assets or
property or the assets or property of any other Person, whether such
indebtedness is absolute or contingent, joint or several, matured or
unmatured, direct or indirect and whether such Obligor is liable to such
Lender for such indebtedness as principal, surety, endorser, guarantor or
otherwise. The term "Obligations" shall also include any other Indebtedness
owing to any Lender by any Obligor under this Credit Agreement and the other
Credit Documents, any Obligor's liability to any Lender pursuant to this
Credit Agreement as maker or endorser of any promissory note or other
instrument for the payment of money, any Borrower's liability to any Lender
pursuant to this Credit Agreement or any other Credit Document under any
instrument of guaranty or indemnity, or arising under any guaranty,
endorsement or undertaking which any Lender may make or issue to others for
any such Obligor's account pursuant to this Credit Agreement, including any
accommodation extended with respect to applications for Letters of Credit,
and all liabilities and obligations owing from any Borrower to any Lender, or
any affiliate of a Lender, arising under Permitted Hedge Agreement. The term
"Obligations" shall further include, to the extent not otherwise expressly
provided above and in any event, (i) any Indebtedness arising hereunder or
under any Credit Document to the Administrative Agent, the Swingline Lender
or Wachovia, individually and (ii) any Indebtedness owing to a Lender or an
Affiliate of a Lender, in respect of any Cash Management Services.
"Obligor" and "Obligors" shall have the meaning given to such term in
the preamble of this Agreement.
"Obligors' Accountant" shall mean PricewaterhouseCoopers LLP, or
another Independent Accountant selected by the Obligors but acceptable to the
Administrative Agent.
"Obligors' Representative" shall mean the Borrower, acting in such
capacity, in accordance with Section 14.22.
"Organizational Documents" shall mean (i) for a corporation, its
articles (or certificate) of incorporation and by-laws; (ii) for a
partnership, its articles (or certificate) of partnership (if any) and any
partnership agreement; and (iii) for a limited liability company, its
articles (or certificate) of organization and any operating agreement and/or
bylaws.
"Other Claims" shall mean claims against the Obligors or any
Subsidiaries thereof, other than Silica-Related Claims.
"Other Taxes" shall have the meaning given to such term in Section
2.6(c).
22
"Ottawa Canada" shall mean Ottawa Silica Company, Ltd., a Canadian
company.
"Owned Real Property" shall have the meaning given to such term in
Section 6.19.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permitted Guaranties" shall mean and include (i) the endorsement of
negotiable instruments in the ordinary course of business, (ii) the giving of
indemnities in connection with the sale of Inventory or other Asset
Dispositions permitted hereunder, including, particularly, the Aggregates
Sale, (iii) guaranties given in connection with the incurrence of Permitted
Indebtedness, (iv) the obligations of the Borrower, as successor-in-interest
to Pennsylvania Glass Sand Corporation, under that certain Guaranty
Agreement, dated as of January 15, 1980, in respect of certain Indebtedness
of Winifrede Railroad Company, and (v) other guaranties, to the extent set
forth and described as such on Schedule 1.1C attached hereto.
"Permitted Hedge Agreements" shall mean (i) Interest Rate Protection
Agreements entered into for the purpose of hedging interest rate risk arising
under this Agreement; and (ii) other Hedging Agreements entered into from
time to time by any Obligor in the ordinary course of its business, and not
for speculative purposes.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Loans, the
Letters of Credit or otherwise, pursuant to the Credit Documents;
(ii) trade payables incurred in the ordinary course of an
Obligor's business;
(iii) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Obligors or any of their Subsidiaries to
finance the purchase of Equipment; provided that (A) the total of all
such Indebtedness for all such Persons, taken together, shall not
exceed an aggregate principal amount of Five Million Dollars
($5,000,000) at any one time outstanding (including any purchase money
Indebtedness incurred to finance Equipment existing on Closing Date and
referred to in clause (v) immediately below); (B) such Indebtedness
when incurred shall not exceed the purchase price of the Equipment so
financed; and (C) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing;
(iv) obligations of an Obligor in respect of Permitted Hedge
Agreements;
(v) Indebtedness described on Schedule 1.1C attached hereto and
any refinancings of such Indebtedness; provided that the aggregate
principal amount of such Indebtedness is not increased, the scheduled
maturity date of such Indebtedness is not shortened and such
refinancing is otherwise on terms and conditions no more restrictive to
the Borrower than the terms and conditions of the Indebtedness being
refinanced;
(vi) the Existing Senior Secured Credit Facilities, pending
their full prepayment on the Closing Date;
23
(vii) the Existing Subordinated Notes, together with any
Subordinated Debt issued for the purpose of refinancing, in whole or in
part, the Existing Subordinated Notes;
(viii) Indebtedness in respect of surety bonds fully
supported by Letters of Credit;
(ix) Indebtedness constituting Permitted Guaranties;
(x) Indebtedness in respect of Permitted Investments specified
in clauses (v) and (vi) of the definition thereof; and
(xi) other Indebtedness, not otherwise permitted in clauses (i)
through (x) above, which must be unsecured, however, not to exceed,
however, in aggregate amount outstanding at any one time, the sum of
Two Million Dollars ($2,000,000).
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance program;
provided, however, that the Borrower may, in the ordinary course of
their respective businesses, maintain in their disbursement accounts
from time to time amounts in excess of then applicable FDIC or other
program insurance limits;
(iii) Investments existing on the Closing Date and set forth on
Schedule 1.1D attached hereto;
(iv) advances to officers, directors and employees for expenses
incurred or anticipated to be incurred in the ordinary course;
(v) loans and Investments by any Obligor to or in any other
Obligor;
(vi) investments in respect of Permitted Hedge Agreements;
(vii) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(viii) investments in the ordinary course of business of an
Obligor on a basis substantially consistent with prior business
practice in the form of extensions of trade credit;
(ix) investments in the ordinary course of business an Obligor
in an insurer required as a condition to the provision by such insurer
of insurance coverage contemplated by Section 5.01(d);
24
(x) investments made by any Obligor in the publicly-traded
securities of a Person engaged in a similar line of business such
Obligor; provided, however, that the aggregate amount of all such
Investments of all Obligors at any one time shall not exceed Two
Hundred Fifty Thousand Dollars ($250,000);
(xi) investments made by any Loan Party in the form of the
incurrence of Debt in the form of a Permitted Guaranty;
(xii) investments consisting of deposits which constitute
Permitted Liens; and
(xiii) other investments, not described in clauses (i)
through (xii) above, which may be made at any time that no Default or
Event of Default exists, not to exceed, however, in aggregate amount
subsequent to the Closing Date, the sum of One Million Dollars
($1,000,000).
"Permitted Liens" shall mean:
(i) Liens granted to the Administrative Agent or the Lenders by
the Obligor pursuant to any Security Document;
(ii) Liens on fixed assets securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 9.2,
provided that any such Lien attaches to such assets concurrently with
or within thirty (30) days after the acquisition thereof and only to
the assets to be acquired or to other fixed assets (but, in the latter
case, any such Lien shall be subject and subordinate to the Lien of the
Administrative Agent thereon);
(iii) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers, landlords
and other similar Liens arising by operation of law or otherwise, not
waived in connection herewith, for amounts that are not yet due and
payable or which are being diligently contested in good faith by the
relevant Obligor by appropriate proceedings, provided that in any such
case an adequate reserve is being maintained by such Obligor for the
payment of same;
(iv) attachment or judgment Liens which individually or in the
aggregate would not result in an Event of Default;
(v) Liens for taxes, assessments or other governmental charges
not yet due and payable or which are being diligently contested in good
faith by an Obligor by appropriate proceedings, provided that in any
such case an adequate reserve is being maintained by such Obligor for
the payment of same in accordance with GAAP;
(vi) zoning and building code ordinances and regulations,
easements, rights of way, defects, encumbrances, covenants and other
restrictions on title to, or the use of real property and other title
or use exceptions that do not interfere in any material and adverse
respect with the present use of such real property by any Obligor or
any Subsidiary of an Obligor;
25
(vii) with respect to the Mortgaged Real Property, those matters
set forth as exceptions to title coverage in each of the Existing Title
Policies, which have been provided to Administrative Agent;
(viii) with respect to the Mortgaged Real Property, those
matters set forth in each of the Existing Surveys, which have been
provided to Administrative Agent;
(ix) with respect to the Mortgaged Real Property, any matters
that are disclosed as exceptions to title coverage on the New Title
Policies and those matters that are disclosed on the New Surveys, but
only to the extent that such matters either (a) were previously
disclosed in the Existing Title Policies or Existing Surveys, or (b) if
otherwise, would not reasonably be expected either to materially impair
the fair market value of, or interfere in any material adverse respect
with the present use of, any Mortgaged Real Property by any Obligor or
Subsidiary of an Obligor;
(x) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance;
(xi) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, regulatory or
statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business;
(xii) Liens given to secure the Existing Senior Secured Credit
Facilities, pending their full release on the Closing Date (it being
understood and agreed by Administrative Agent in regard thereto that
delivery to Administrative Agent of such releases or, as appropriate,
the giving of notice with respect thereto, in form acceptable for
recording on the public record, need not occur on the Closing Date but
shall have occurred as soon as practicable, but in any event not later
than sixty (60) days, thereafter); and
(xiii) other Liens (if any) listed on Schedule 1.1B attached
hereto.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the
successors, heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written.
"Pledge Agreement" shall mean the Pledge Agreement, of even date
herewith, among the Obligors (or certain of them) and the Administrative
Agent, in the form attached hereto as Exhibit C, in respect of the pledge of
the Capital Stock of all Obligors, excepting therefrom the Capital Stock of
BMAC Holdings.
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
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"Prime Rate" shall mean the rate which Wachovia announces from time to
time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Wachovia (and its affiliates)
may make commercial loans or other loans at rates of interest at, above or
below the Prime Rate.
"Proprietary Rights" shall have the meaning given to such term in
Section 6.17.
"Real Estate" shall mean (i) all Owned Real Property and (ii) all
Leased Real Property.
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA and the regulations thereunder (other than an event to which
the provisions of notice to the PBGC in respect thereof is waived under
applicable regulations promulgated pursuant to ERISA).
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the
Administrative Agent) and holding in the aggregate at least fifty-one percent
(51%) of (i) the Revolving Credit Commitments or (ii) if the Commitments have
been terminated, the outstanding Loans and participation interests (including
the participation interests of the Issuing Bank in any Letters of Credit).
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Obligor or any Subsidiary, as the case may be, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Obligor or any Subsidiary
now or hereafter outstanding by such Obligor or any Subsidiary, as the case
may be, except for any redemption, retirement, sinking funds or similar
payment payable solely in such shares of that class of stock or in any class
of stock junior to that class, (iii) any cash payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any shares of any
class of Capital Stock of any Obligor or any Subsidiary now or hereafter
outstanding, or (iv) any payment by any Obligor to any Affiliate of such
Obligor which is also not an Obligor, except to the extent otherwise
expressly permitted in this Credit Agreement.
"Retiree Health Plan" shall mean an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to persons
after termination of employment, other than as required by Section 601 of
ERISA.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make its portion of the Revolving Loans in a
principal amount up to such Lender's Revolving Credit Commitment Percentage
of the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender,
the percentage identified as its Revolving Credit Commitment Percentage on
Schedule 1.1A, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 14.6
27
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrower for Revolving Loans,
Swingline Loans and Letters of Credit pursuant to and in accordance with the
terms of this Credit Agreement, in an amount up to Thirty Million Dollars
($30,000,000), as such revolving credit line may be reduced from time to time
in accordance with Section 2.2(c).
"Revolving Loans" shall have the meaning given to such term in Section
2.1(b) and shall include Revolving Loans made as Base Rate Loans and
Revolving Loans made as Eurodollar Loans.
"Revolving Notes" shall have the meaning given to such term in Section
2.1(c).
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Administrative Agent and the Obligors, in the form
attached hereto as Exhibit D.
"Security Documents" shall mean, collectively, the Pledge Agreement,
the Security Agreement, the Mortgages together with all other Required
Mortgage Documentation, the Intellectual Property Agreements, any Landlord
Agreement and any Lockbox Agreement.
"Silica-Related Claims" shall mean claims against the Obligors or any
Subsidiaries thereof alleging silica exposure, including those that allege
that silica products sold by any Obligors (or their predecessors-in-interest)
were defective or that said Persons acted negligently in selling said
products without a warning or with an inadequate warning.
"Silica-Related Claims Costs" shall mean costs incurred by Obligors
from time to time in respect of Silica-Related Claims, including defense and
settlement costs and payment of any judgments, net of proceeds received from
the collection of any ITT Receivables, the Silica-Related Claims Policies and
other third party payments (including from co-defendants) for the applicable
period.
"Silica-Related Claims Policies" shall have the meaning given to such
term in Section 7.10(b).
"Stores Inventory" shall mean and consist of (i) spare parts and
replacement parts for Equipment; (ii) packaging materials; and (iii) fuel.
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Borrower
located on any Real Estate.
"Subordinated Debt" shall mean: (i) the Existing Subordinated Notes and
(ii) other unsecured Indebtedness of an Obligor which has been expressly
subordinated, in right of payment and claims, to the rights and claims of the
Lenders in respect of the Obligations, having terms and conditions (including
subordination provisions) which are acceptable to the Administrative Agent,
in its credit judgment.
"Subsidiary" shall mean, as to any Person, (a) any corporation more
than fifty percent (50%) of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the time,
28
any class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries and (b) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a fifty percent
(50%) interest in the total capital, total income and/or total ownership
interests of such entity at any time. Without limitation of the foregoing,
unless otherwise provided herein, the term "Subsidiary" when used herein
shall mean and refer to each Subsidiary of any Obligor or each Obligor, as
appropriate.
"Swingline Committed Amount" shall have the meaning given to such term
in Section 2.10.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in up to the Swingline Committed Amount in
accordance with Section 2.10.
"Swingline Lender" shall mean Wachovia, acting in such capacity
pursuant to Section 2.10, or any successor to Wachovia acting in such
capacity.
"Swingline Loan" shall have the meaning given to such term in Section
2.10.
"Swingline Note" shall have the meaning given to such term in Section
2.10.
"Taxes" shall mean any federal, state, local or foreign income, sales,
use, transfer, payroll, personal, property, occupancy, franchise or other
tax, levy, impost, fee, imposition, assessment or similar charge, together
with any interest or penalties thereon.
"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of a Person or
any ERISA Affiliate of such Person from a Benefit Plan during a Plan year in
which such Person was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a
Benefit Plan pursuant to Section 4041 of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan; (v)
any event or condition (a) which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer
Plan, or (b) that may result in termination of a Multiemployer Plan pursuant
to Section 4041A of ERISA; or (vi) the partial or complete withdrawal, within
the meaning of Sections 4203 and 4205 of ERISA, of a Person or any ERISA
Affiliate of such Person from a Multiemployer Plan.
"Title Company" shall have the meaning given to such term in Section
7.25.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of Georgia.
"Unfinanced Capital Expenditures" shall mean, for any period, Capital
Expenditures made during such period and not financed from the proceeds of
Funded Indebtedness (excluding the Loans).
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"Unused Line Fee" shall mean the fee required to be paid to the
Administrative Agent for the benefit of the Lenders at the end of each
calendar quarter as partial compensation for extending the Revolving Credit
Committed Amount to the Borrower, and shall be determined by multiplying (i)
the positive difference, if any, between (A) the Revolving Credit Committed
Amount in effect at such time and (B) the average daily Loans of the Borrower
and the Letter of Credit Obligations outstanding during such calendar
quarter, by (ii) a per annum rate of fifty hundredths of one percent (.50%),
computed for the number of days in said calendar quarter.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
"Wachovia" shall mean Wachovia Bank, National Association, having an
office in Atlanta, Georgia, and its successors and permitted assigns.
"Wachovia Account" shall mean an account established and maintained in
the name of the Administrative Agent at Wachovia, for the benefit of the
Lenders, in respect of the Borrower for purposes of this Agreement.
"WIP Inventory" shall mean and consist of extracted minerals awaiting
production.
1.2 Accounting Terms and Determinations.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes of
determining compliance with Article VIII hereof and otherwise to be made
under this Credit Agreement shall be made in accordance with GAAP applied on
a basis consistent in all material respects with the Financials. All
financial statements required to be delivered hereunder from and after the
Closing Date and all financial records shall be maintained in accordance with
GAAP. If GAAP shall change from the basis used in preparing the Financials,
the certificates required to be delivered pursuant to Section 7.1
demonstrating compliance with the covenants contained herein shall include
calculations setting forth the adjustments necessary to demonstrate how the
Borrower is in compliance with the financial covenants based upon GAAP as in
effect on the Closing Date. If the Borrower shall change its method of
inventory accounting, all calculations necessary to determine compliance with
the covenants contained herein shall be made as if such method of inventory
accounting had not been so changed.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual financial statements given in
accordance with the provisions of Section 7.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from
those applied in the most recently preceding annual financial statements and
(ii) a reasonable estimate of the effect on the financial statements on
account of such changes in application.
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1.3 Other Definitional Terms.
Terms not otherwise defined herein which are defined in the UCC shall
have the meanings given them in the UCC. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Credit Agreement
shall refer to the Credit Agreement as a whole and not to any particular
provision of this Credit Agreement, unless otherwise specifically provided.
References in this Credit Agreement to "Articles", "Sections", "Schedules" or
"Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Credit Agreement unless otherwise specifically provided. Any of the
terms defined in Section 1.1 may, unless the context otherwise requires, be
used in the singular or plural depending on the reference. "Include",
"includes" and "including" shall be deemed to be followed by "without
limitation" whether or not they are in fact followed by such words or words
of like import. "Writing", "written" and comparable terms refer to printing,
typing, computer disk, e-mail and other means of reproducing words in a
visible form. References to any agreement or contract are to such agreement
or contract as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of such Person. References
"from" or "through" any date mean, unless otherwise specified, "from and
including" or "through and including", respectively. References to any times
herein shall refer to Eastern Standard or Day Light time, as applicable, in
Philadelphia, Pennsylvania.
ARTICLE II
LOANS
2.1 Revolving Loans.
(a) Commitment. Subject to the terms and conditions hereof and in reliance
upon the representations and warranties set forth herein, each of the
Lenders severally agrees to lend to the Borrower at any time or from
time to time on or after the Closing Date and before the Maturity Date,
such Lender's Revolving Credit Commitment Percentage of the Revolving
Loans as may be requested or deemed requested by the Borrower.
(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and conditions of this Credit
Agreement, from time to time, to make loans and advances to the
Borrower hereunder on a revolving basis. Such loans and advances
to the Borrower (each, a "Revolving Loan"; and collectively, the
"Revolving Loans") together with the Letter of Credit Obligations
outstanding with respect to the Letters of Credit shall not in
the aggregate exceed the lesser of:
(A) the Revolving Credit Committed Amount then in effect; or
(B) the Borrowing Base.
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(ii) No Lender shall be obligated at any time to make available to the
Borrower its Revolving Credit Commitment Percentage of any
requested Revolving Loan if such amount plus its Revolving Credit
Commitment Percentage of all Revolving Loans and its Revolving
Credit Commitment Percentage of all Letter of Credit Obligations
then outstanding would exceed such Lender's Revolving Credit
Commitment at such time. The aggregate balance of Revolving
Loans plus the aggregate amount of all Letter of Credit
Obligations outstanding shall not at any time exceed the
Revolving Credit Committed Amount. No Lender shall be obligated
to make available, nor shall the Administrative Agent make
available, any Revolving Loans to the Borrower to the extent that
such Revolving Loan, when added to the then outstanding Revolving
Loans and all Letter of Credit Obligations would cause the
aggregate amount of all then outstanding Revolving Loans and all
Letter of Credit Obligations to exceed the Borrowing Base.
(c) Revolving Notes. The obligations of the Borrower to repay the
Revolving Loans and to pay interest thereon shall be evidenced by
separate promissory notes of the Borrower to each Lender in
substantially the form of Exhibit E attached hereto (the "Revolving
Notes"), with appropriate insertions, with each Revolving Note being
payable to the order of each Lender in a principal amount equal to such
Lender's Revolving Credit Commitment and representing the obligations
of the Borrower to pay such Lender the amount of such Lender's
Revolving Credit Commitment or, if less, the aggregate unpaid principal
amount of all Revolving Loans made by such Lender hereunder, plus
interest accrued thereon, as set forth herein. The Borrower
irrevocably authorizes each Lender to make or cause to be made
appropriate notations on its Revolving Note, or on a record pertaining
thereto, reflecting Revolving Loans and repayments thereof. The
outstanding amount of the Revolving Loans set forth on such Lender's
Revolving Note or record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Lender, but the failure to make
such notation or record, or any error in such notation or record shall
not limit or otherwise affect the obligations of the Borrower hereunder
or under any Revolving Note to make payments of principal of or
interest on any Revolving Note when due.
(d) Borrowings under Revolving Notes.
(i) Except as otherwise provided in Section 2.13, each request for a
borrowing hereunder shall be made by a notice of borrowing in the
form attached hereto as Exhibit F from the Borrower to the
Administrative Agent (a "Notice of Borrowing"), given not later
than 11:00 A.M. (A) on the Business Day on which the proposed
borrowing is requested to be made, for Revolving Loans that are
requested to be made as Base Rate Loans, and (B) three (3)
Business Days prior to the date of the requested borrowing, for
Revolving Loans that are requested to be made as Eurodollar
Loans. Each Notice of Borrowing shall be given by telecopy,
setting forth (1) the requested date of such borrowing, (2) the
aggregate amount of such requested borrowing, (3) whether such
requested borrowing will consist of Base Rate Loans or Eurodollar
Rate Loans, and if appropriate, the applicable Interest Period,
(4) certification by the Borrower that it has complied in all
32
material respects with Article V, all of which shall be specified
in such manner as is necessary to comply with all limitations on
Revolving Loans outstanding hereunder (including, without
limitation, availability under the Borrowing Base) and (5) the
account at which such requested funds should be made available.
Each Notice of Borrowing shall be irrevocable by and binding on
the Borrower. Revolving Loans made as Eurodollar Loans shall be
made in a minimum principal amount of One Million Dollars
($1,000,000) and integral multiples of Five Hundred Thousand
Dollars ($500,000) in excess thereof; provided, that no more than
five (5) Eurodollar Loans shall be outstanding hereunder at any
one time. Revolving Loans may be repaid and reborrowed in
accordance with the provisions hereof.
The Administrative Agent shall give to each Lender prompt
notice (but in no event later than 2:00 P.M. on the date of the
Administrative Agent's receipt of notice from the Borrower) of
each Notice of Borrowing by telecopy, telex or cable (other than
any Notice of Borrowing which will be funded by the
Administrative Agent in accordance with subsection (d)(ii)
below). No later than 3:00 P.M. on the date on which a borrowing
is requested to be made pursuant to the applicable Notice of
Borrowing, each Lender will make available to the Administrative
Agent at the address of the Administrative Agent set forth on the
signature pages hereto, in immediately available funds, its
Revolving Credit Commitment Percentage of such borrowing
requested to be made. Unless the Administrative Agent shall have
been notified by any Lender prior to the date of borrowing that
such Lender does not intend to make available to the
Administrative Agent its portion of the borrowing to be made on
such date, the Administrative Agent may assume that such Lender
will make such amount available to the Administrative Agent as
required above and the Administrative Agent may, in reliance upon
such assumption, make available the amount of the borrowing to be
provided by such Lender. Upon fulfillment of the conditions set
forth in Article V for such borrowing, the Administrative Agent
will make such funds available to the Borrower at the account
specified by the Borrower in such Notice of Borrowing.
(ii) Because the Borrower anticipates the possibility of requesting
borrowings of Revolving Loans on a daily basis and repaying
Revolving Loans on a daily basis through the collection of
Accounts and the proceeds of other Collateral, resulting in the
amount of outstanding Revolving Loans fluctuating from day to
day, in order to administer the Revolving Loans in an efficient
manner and to minimize the transfer of funds between the
Administrative Agent and the Lenders, the Swingline Lender has
agreed, with the Lenders' consent, subject to the terms and
conditions set forth in Section 2.10, to make Swingline Loans
available to the Borrower from time to time without necessity of
first giving each Lender prior notice of the proposed Swingline
Loan borrowing or of such Lender's Revolving Credit Commitment
Percentage of any resulting Revolving Loan; provided, however,
that the Swingline Lender shall not make any such Swingline Loan
if, prior to the making thereof, the Swingline Lender has
received, either directly or from the Administrative Agent (if
the Swingline Lender is not then the Administrative Agent) either
33
(1) an officer's certificate from the Borrower pursuant to and in
accordance with Section 7.1(i) that a Default or Event of Default
is in existence or (2) a Notice of Borrowing from the Borrower
wherein the certification provided therein states that the
conditions to the making of the requested Swingline Loan have not
been satisfied or (3) a written notice from the Administrative
Agent that the conditions to such borrowing specified in Section
5.2 have not been satisfied, which officer's certificate, Notice
of Borrowing or notice, in each case, shall not have been
rescinded (provided that if the Swingline Lender is the
Administrative Agent, the notice specified in subclause (3) shall
be presumed if the Administrative Agent has made such
determination). If the Swingline Lender makes any Swingline
Loans, as provided in the immediately preceding sentence, the
amount of outstanding Revolving Loans and each Lender's Revolving
Credit Commitment Percentage thereof shall be computed weekly
rather than daily and shall be adjusted upward or downward on the
basis of the amount of outstanding Revolving Loans as of 3:00
P.M. on the Business Day immediately preceding the date of each
computation, determined in the manner prescribed below; provided,
however, that the Administrative Agent retains the absolute right
at any time or from time to time to make the aforedescribed
adjustments at intervals more frequently than weekly. The
Administrative Agent shall deliver to each of the Lenders after
the end of each week, or such lesser period or periods as the
Administrative Agent shall determine, a summary statement of the
amount of outstanding Revolving Loans for such period after
giving effect to the conversion of then outstanding Swingline
Loans into Revolving Loans in accordance with Section 2.10 (such
week or lesser period or periods being hereafter referred to as a
"Settlement Period"). If the summary statement is sent by the
Administrative Agent and received by the Lenders prior to 12:00
Noon on any Business Day each Lender shall make the transfers
described in the next succeeding sentence no later than 3:00 P.M.
on the day such summary statement was sent; and if such summary
statement is sent by the Administrative Agent and received by the
Lenders after 12:00 Noon on any Business Day, each Lender shall
make such transfers no later than 3:00 P.M. on the next
succeeding Business Day. If, in any Settlement Period, the
amount of a Lender's Revolving Credit Commitment Percentage of
the Revolving Loans is in excess of the amount of Revolving Loans
actually funded by such Lender, such Lender shall forthwith (but
in no event later than the time set forth in the next preceding
sentence) transfer to the Administrative Agent by wire transfer
in immediately available funds the amount of such excess; and, on
the other hand, if the amount of a Lender's Revolving Credit
Commitment Percentage of the Revolving Loans in any Settlement
Period is less than the amount of Revolving Loans actually funded
by such Lender, the Administrative Agent shall forthwith transfer
to such Lender by wire transfer in immediately available funds
the amount of such difference. The obligation of each of the
Lenders to transfer such funds in accordance herewith shall be
irrevocable and unconditional and without recourse to or warranty
by the Administrative Agent. Each of the Administrative Agent
and the Lenders agrees to mark its respective books and records
at the end of each Settlement Period to show at all times the
34
dollar amount of the respective Revolving Credit Commitment
Percentages of the outstanding Revolving Loans. Because the
Administrative Agent, on behalf of the Lenders, may be advancing
and/or may be repaid Revolving Loans prior to the time when the
Lenders will actually advance and/or be repaid Revolving Loans,
interest with respect to Revolving Loans shall be allocated by
the Administrative Agent to each Lender (including the
Administrative Agent) in accordance with the amount of Revolving
Loans actually advanced by and repaid to each Lender (including
the Administrative Agent) during each Settlement period and shall
accrue from and including the date such Revolving Loans are
advanced by the Administrative Agent to but excluding the date
such Revolving Loans are repaid by the Borrower in accordance
with Section 2.3 or actually settled by the applicable Lender as
described in this Section 2.1(d)(ii). All Revolving Loans under
this Section 2.1(d)(ii) shall be made as Base Rate Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii) of this
Section 2.1 are not in fact made available to the Administrative
Agent by a Lender (such Lender being hereinafter referred to as a
"Defaulting Lender") and the Administrative Agent has made such
amount available to the Borrower, the Administrative Agent shall
be entitled to recover such corresponding amount on demand from
such Defaulting Lender. If such Defaulting Lender does not pay
such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower and the Borrower shall immediately (but in no
event later than five (5) Business Days after such demand) pay
such corresponding amount to the Administrative Agent together
with interest accrued thereon, at the then applicable rate of
interest, calculated in accordance with Section 4.1. The
Administrative Agent shall also be entitled to recover from such
Defaulting Lender, (A) to the extent not theretofore paid by the
Borrower pursuant to the preceding sentence, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at the then applicable
rate of interest, calculated in accordance with Section 4.1 plus
(B) an amount equal to any costs (including legal expenses) and
losses incurred as a result of the failure of such Defaulting
Lender to provide such amount as provided in this Credit
Agreement. Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
(iv) The failure of any Lender to make the Revolving Loan to be made by it
as part of any borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Revolving Loan on
the date of such borrowing, but no Lender shall be responsible
for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender on the date of any borrowing.
35
(v) Each Lender shall be entitled to earn interest at the then applicable
rate of interest, calculated in accordance with Article IV, on
outstanding Revolving Loans which it has funded to the
Administrative Agent from the date such Lender funded such
Revolving Loan to, but excluding, the date on which such Lender
is repaid with respect to such Revolving Loan.
(vi) Notwithstanding the obligation of the Borrower to send written
confirmation of a Notice of Borrowing made by telephone, in the
event that the Administrative Agent agrees to accept a Notice of
Borrowing made by telephone, such telephonic Notice of Borrowing
shall be binding on the Borrower whether or not written
confirmation is sent by the borrower or requested by the
Administrative Agent. The Administrative Agent may act prior to
the receipt of any requested written confirmation, without any
liability whatsoever, based upon telephonic notice believed by
the Administrative Agent in good faith to be from a Borrower or
its agents. The Administrative Agent's records of the terms of
any telephonic Notices of Borrowing shall be conclusive on the
Borrower in the absence of gross negligence or willful misconduct
on the part of the Administrative Agent in connection therewith.
(vii) Notwithstanding anything to the contrary contained elsewhere herein,
and whether or not a Default or Event of Default exists at the
time, unless otherwise objected to by the Required Lenders in
writing, the Administrative Agent may in its discretion require
all Lenders to honor requests or deemed requests by the Borrower
for Revolving Loans at a time that an Overadvance (as hereinafter
defined) exists or which would result in any Overadvance and each
Lender shall be obligated to continue to make its pro rata share
of Revolving Loans, up to a maximum amount outstanding equal to
its Revolving Credit Commitment, so long as such Overadvance is
not known by the Administrative Agent to exceed One Million
Dollars ($1,000,000) and so long as such Overadvance is not
outstanding for more than ten (10) Business Days. "Overadvance"
shall mean, as of any date of determination, the amount, if any,
by which the outstanding principal balance of Revolving Loans and
Letter of Credit Obligations exceeds the Borrowing Base. Nothing
contained herein shall oblige the Administrative Agent to cause
or permit any Overadvance, and if and so long as the
Administrative Agent is the only Lender, this paragraph (vii)
shall have no force or effect.
(viii) In the event of any conflict between any terms of this
Section 2.1(d) and those of Section 2.10, the terms of Section
2.10 shall be controlling.
2.2 Optional and Mandatory Prepayments; Reduction of Commitments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time, but otherwise without
premium or penalty; provided, however, that (i) Loans that are
Eurodollar Loans may only be prepaid on three (3) Business Days' prior
written notice to the Administrative Agent specifying the applicable
36
Loans to be prepaid; (ii) any prepayment of Loans that are Eurodollar
Loans will be subject to Section 4.10; (iii) each such partial
prepayment of Loans (other than Swingline Loans) shall be in a minimum
principal amount of One Million Dollars ($1,000,000) and integral
multiples of Five Hundred Thousand Dollars ($500,000). Subject to the
foregoing terms, amounts prepaid under this Section 2.2(a) shall be
applied, first, to Swingline Loans, and, then, to the Revolving Loans.
Prepayments on Revolving Loans shall be applied first to Base Rate
Loans and then to Eurodollar Loans in the direct order of their
respective Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any time, the sum of the
aggregate principal amount of outstanding Loans plus all Letter
of Credit Obligations then outstanding shall exceed the lesser of
(A) the Revolving Credit Committed Amount and (B) the Borrowing
Base, the Borrower immediately shall prepay the Loans (with
Swingline Loans to be paid first) and (after all Loans have been
repaid) cash collateralize the Letter of Credit Obligations, in
an amount sufficient to eliminate such excess.
(ii) Casualty Loss. To the extent of cash proceeds received by any Obligor
in connection with a Casualty Loss, promptly and in any event
within five (5) Business Days following receipt thereof, the
Borrower shall prepay the Loans in an amount equal to one hundred
percent (100%) of such cash proceeds, to the extent such proceeds
then are required to be applied to the prepayment of the Loans
pursuant to Section 7.10. Such prepayment shall be applied as
set forth in clause (v) below.
(iii) Asset Dispositions. Promptly and in any event within five (5) Business
Days following receipt by any Obligor of any Net Cash Proceeds in
respect of any Asset Disposition, other than any Asset
Disposition described in, and permitted under, subsections (a),
(d) or (e) of Section 9.3, the Borrower shall prepay the Loans in
an aggregate amount equal to such Net Cash Proceeds. Such
prepayment shall be applied as set forth in clause (v) below.
(iv) Securities Issues. Promptly and in any event within five (5) Business
Days following receipt thereof, the Borrower shall prepay the
Loans in an aggregate amount equal to the Net Cash Proceeds of
the issuance of (i) any Capital Stock (other than any issued
pursuant to any Plans maintained by the Borrower in accordance
with the terms of this Credit Agreement) or (ii) any debt
securities (other than any issued in respect of Permitted
Indebtedness), except in respect of Subordinated Debt issued in
exchange for, and to refinance, the Existing Subordinated Notes.
Such prepayment shall be applied as set forth in clause (v) below.
(v) Application of Mandatory Prepayments. All amounts required to be paid
pursuant to this Section 2.2(b) shall be applied to Loans (with
Swingline Loans to be paid first) and after all Loans have been
repaid to a cash collateral account held by the Administrative
37
Agent in respect of Letter of Credit Obligations. Within the
parameters of the applications set forth above for Loans,
prepayments shall be applied, first, to Base Rate Loans and,
then, to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.2(b) shall be
subject to Section 4.10.
(vi) Reduction in Commitment. Unless otherwise approved by the Required
Lenders, any amounts required to be paid pursuant to clause (iv)
of this Section 2.2(b), shall, coincident with their payment,
result in a corresponding dollar-for-dollar permanent reduction
in the Revolving Credit Committed Amount.
(c) Reductions of the Revolving Credit Committed Amount. The Borrower may
from time to time permanently reduce or terminate the Revolving Credit
Committed Amount in whole or in part in minimum aggregate amounts of
Two Million Dollars ($2,000,000) or in integral multiples of Five
Hundred Thousand Dollars ($500,000) in excess thereof (or, if less, the
full remaining amount of the then applicable Revolving Credit Committed
Amount) upon three (3) Business Days' prior written notice to the
Administrative Agent; provided, however, no such termination or
reduction shall be made which would cause the aggregate principal
amount of outstanding Loans plus Letter of Credit Obligations
outstanding to exceed the lesser of (A) the Revolving Credit Committed
Amount and (B) the Borrowing Base, unless, concurrently with such
termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess (with Swingline Loans to be paid first). The
Administrative Agent shall promptly notify each affected Lender of
receipt by the Administrative Agent of any notice from the Borrower
pursuant to this Section 2.2(c).
(d) Maturity Date. The Revolving Credit Commitment of the Lenders, the
Swingline Commitment of the Swingline Lender, and the Letter of Credit
Commitment of the Issuing Bank shall automatically terminate on the
Maturity Date.
(e) Generally. The Borrower shall pay to the Administrative Agent for the
account of the Lenders in accordance with the terms of Section 4.3, on
the date of each termination or reduction of the Revolving Credit
Committed Amount, the Unused Line Fee accrued through the date of such
termination or reduction on the amount of the Revolving Credit
Committed Amount so terminated or reduced.
(f) Effect on Interest Rate Protection Agreements. No prepayment shall
alter or affect any Obligor's obligations to continue making payments
under any Interest Rate Protection Agreement with any Lender (or
Affiliate of a Lender) then in effect, subject to the terms of such
agreement.
2.3 Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes not
later than 2:00 P.M. on the day when due. Payments made by the
Borrower shall be in Dollars to the Administrative Agent at its address
referred to in Section 14.5 hereof in immediately available funds
38
without deduction, withholding, setoff or counterclaim. Subject to any
contrary provisions set forth in Section 2.12, payments shall be
applied, first, with respect to outstanding Swingline Loans and, then,
with respect to Revolving Loans, and payments made with respect to the
Revolving Loans shall be applied to repay Revolving Loans consisting of
Base Rate Loans first and then Revolving Loans consisting of Eurodollar
Loans. As soon as practicable after the Administrative Agent receives
payment from the Borrower, but in no event later than one (1) Business
Day after such payment has been made, subject to Section 2.1(d)(ii),
the Administrative Agent will cause to be distributed like funds
relating to the payment of principal, interest, or Fees (other than
amounts payable to the Administrative Agent to reimburse the
Administrative Agent and the Issuing Bank for fees and expenses payable
solely to them pursuant to Article IV hereof and Swingline Loans,
together with accrued interest thereon, which shall be distributed
solely to the Swingline Lender) or expenses payable to the
Administrative Agent and the Lenders in accordance with Section 14.8
hereof ratably to the Lenders, and like funds relating to the payment
of any other amounts payable to such Lender. The Borrower's
obligations to the Lenders with respect to such payments shall be
discharged by making such payments to the Administrative Agent pursuant
to this Section 2.3(a) or if not timely paid or any Event of Default
then exists, may be added to the principal amount of the Revolving
Loans outstanding.
(b) (i) The Obligors, either individually or through the Borrower, shall
have each established as of the Closing Date and thereafter shall
maintain one or more lockboxes (each a "Lockbox") with Wachovia or with
one or more other financial institutions, selected by the Borrower but
acceptable to the Administrative Agent in its sole credit judgment
(each a "Lockbox Bank"), and shall instruct all account debtors on the
Accounts of each Obligor to remit all payments to its respective
Lockboxes. All amounts received by the Obligors from any account
debtor, in addition to all other cash received from any other source
including but not limited to proceeds from asset sales and judgments,
shall be promptly deposited into the applicable Lockbox Account (as
defined below).
(ii) Each Obligor, individually or acting through the Borrower, as Obligors'
Representative, the Administrative Agent and each Lockbox Bank shall
enter into three-party agreements substantially in the form of
Exhibit H hereto or in such other form as the Administrative Agent, in
its sole discretion, may request or approve from time to time (each a
"Lockbox Agreement"), providing, among other things, for the opening
and establishment for the benefit of the Administrative Agent on behalf
of the Lenders of an account at each Lockbox Bank (each a "Lockbox
Account"). All receipts held in the Lockboxes shall be remitted daily
to the appropriate Lockbox Account. All funds deposited into the
Lockbox Accounts on any Business Day shall be transferred to the
Wachovia Account. All funds deposited on any Business Day to the
Wachovia Account shall be applied by the Administrative Agent on the
following Business Day to reduce the then outstanding balance of the
Loans and to pay accrued interest thereon and to pay any other
outstanding Obligations which are then due and payable hereunder;
provided that for the purpose of determining the availability of Loans
hereunder, such funds deposited into the Wachovia Account shall be
deemed to have reduced the outstanding Loans on the Business Day such
funds were deposited into such account; and, provided, further, that
39
all electronic payments made to, or other immediately available funds
deposited into the Wachovia Account shall be applied by the
Administrative Agent on the date received in such account, if received
before 2:00 P.M. on such day. All amounts received directly by the
Obligors from any account debtor, in addition to all other cash
received from any other source including but not limited to proceeds
from asset sales and judgments, shall be held in trust by the Borrower
and promptly deposited into the applicable Lockbox Account or, if made
by wire transfer, directly to the Wachovia Account. Notwithstanding
any terms of subsection (B) above to the contrary, so long as (i) no
Event of Default or Default exists, and (ii) Average Excess
Availability then exceeds Three Million Dollars ($3,000,000), all or
portions of any funds deposited into the Lockbox Accounts on any
Business Day may, at the Borrower's option, be transferred to an
account of the Borrower other than the Wachovia Account, thereafter to
be used by the Borrower in a manner consistent with the terms of this
Credit Agreement. Should the Administrative Agent at any time
determine that either of the foregoing conditions is not being met,
then, forthwith, the Administrative Agent shall notify the Borrower and
the Lockbox Banks accordingly and the special permission granted herein
to the Borrower shall cease to be effective until such time as the
Administrative Agent, by subsequent notice to the Borrower and the
Lockbox Banks, determines that each of the foregoing conditions is
being met and that the special permission granted herein to the
Borrower may be restored.
(iii) All funds deposited into the Wachovia Account shall immediately become
the property of the Administrative Agent and the Borrower shall obtain
the agreement by the Lockbox Banks to waive any offset rights against
the funds so deposited. The Administrative Agent assumes no
responsibility for the Lockbox arrangements, including without
limitation, any claim of accord and satisfaction or release with
respect to deposits accepted by the Lockbox Banks thereunder.
(iv) The Obligors may close Lockboxes and/or open new Lockboxes with the
prior written consent of the Administrative Agent and subject to prior
execution and delivery to the Administrative Agent of Lockbox
Agreements consistent with the provisions of this Section 2.3(b) and in
form and substance satisfactory to the Administrative Agent and its
counsel.
(c) The Obligors hereby authorize each Lender to charge from time to time
against any or all of the Obligors' accounts with such Lender any of
the Obligations which are then due and payable by the Obligors. Each
Lender receiving any payment as a result of charging any such account
shall promptly notify the Administrative Agent thereof and make such
arrangements as the Administrative Agent shall request to share the
benefit thereof in accordance with Section 2.7.
(d) Except as otherwise provided herein with respect to Eurodollar Loans,
any payments falling due under this Credit Agreement on a day other
than a Business Day shall be due and payable on the next succeeding
Business Day and shall accrue interest at the applicable interest rate
provided for in this Credit Agreement to but excluding such Business
Day. Except as otherwise provided herein, computation of interest and
fees hereunder shall be made on the basis of actual number of days
40
elapsed over a 360 day year.
2.4 Maintenance of Account.
The Administrative Agent shall maintain an account on its books in the
name of the Borrower in which the Borrower will be charged with all Loans and
advances made by the Lenders to the Borrower or for the Borrower's account,
including the Revolving Loans, the Letter of Credit Obligations and any other
Obligations, including any and all costs, fees, expenses and attorney's fees
incurred by the Administrative Agent or any Lender which are required to be
paid or reimbursed by the Borrower pursuant to Sections 3.4, 4.7, 4.8, 4.9,
4.10 or 14.8. The Borrower will be credited in accordance with Section
2.3(b)(ii)(B) above, with all amounts received by the Lenders from the
Borrower's or from others for the Borrower's account, including, as above
set forth, all amounts received by the Administrative Agent in payment of
Accounts. In no event shall prior recourse to any Accounts or other
Collateral be a prerequisite to the Administrative Agent's right to demand
payment of any Obligation upon its maturity. Further, it is understood that
the Administrative Agent shall have no obligation whatsoever to perform in
any respect any of the Borrower's contracts or obligations relating to the
Accounts.
2.5 Statement of Account.
Within fifteen (15) days after the end of each calendar month, the
Administrative Agent shall send the Borrower a statement showing the
accounting for the charges, loans, advances and other transactions occurring
between the Lenders and the Borrower during that calendar month. Absent
manifest error, the monthly statements shall be deemed correct and binding
upon the Borrower and shall constitute an account stated between the Borrower
and the Lenders unless the Administrative Agent receives a written statement
of the Borrower's exceptions within thirty (30) days after same is mailed to
the Borrower.
2.6 Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes to or
for the benefit of any Lender shall be made, in accordance with Section
2.3, free and clear of and without deduction or withholding for any and
all present or future Taxes, deductions, charges or withholdings and
all liabilities with respect thereto, excluding, in the case of each
such Lender and the Administrative Agent, Taxes imposed on or measured
by the Administrative Agent's or any Lender's net income or receipts or
franchise taxes imposed on the Administrative Agent or such Lender (any
such excluded Taxes, collectively, "Excluded Taxes"). If the Borrower
shall be required by law to deduct or withhold any Taxes (other than
Excluded Taxes) from or in respect of any sum payable hereunder or
under any Note to or for the benefit of any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions or withholdings
of Taxes (including deductions or withholdings of Taxes applicable to
additional sums payable under this Section 2.6) such Lender or the
Administrative Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions or withholdings
been made, (ii) the Borrower shall make such deductions or withholdings
41
and (iii) the Borrower shall pay the full amount so deducted or
withheld to the relevant taxation authority or other authority in
accordance with applicable law; provided, however, that the Borrower
shall be under no obligation to increase the sum payable to any Lender
not organized under the laws of the United States or a state thereof (a
"Foreign Lender") to the extent that the obligation to so deduct or
withhold arises as a result of (i) the failure of such Foreign Lender
to be engaged in the active conduct of a trade or business in the
United States or the failure of any amount of interest or fees to be
paid to such Foreign Lender hereunder to be so effectively connected,
in each case within the meaning of U.S. Treasury Regulation 1.1441-4(a)
or (ii) the failure of such Foreign Lender to comply with Section
2.6(b).
(b) Each Lender agrees that it will deliver to the Borrower and the
Administrative Agent, as appropriate, (i) in the case of a Foreign
Lender, two duly completed copies of United States Internal Revenue
Service Form W-8 BEN or W-8 ECI or successor applicable form(s), as the
case may be, or (ii) in the case of a Lender other than a Foreign
Lender, an Internal Revenue Service Form W-9 or successor applicable
form, in each case together with any other certificate or statement of
exemption required under the Internal Revenue Code or regulations
issued thereunder. Each Lender also agrees to deliver to the Borrower
and the Administrative Agent two (2) further copies of the said Form
W-8 BEN or W-8 ECI or Form W-9, or successor applicable forms or other
manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower or the
Administrative Agent, unless in any such case an event (including,
without limitation, any 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
with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (A) in the case of a
Form W-8 BEN or W-8 ECI, that it is entitled to receive payments under
this Credit Agreement or under any Note without deduction or
withholding of any U.S. federal income taxes and (B) in the case of a
Form W-9, that it is entitled to an exemption from U.S. backup
withholding tax.
(c) In addition, the Borrower agrees to pay any present or future stamp,
documentary, privilege, intangible or similar taxes or any other excise
or property taxes, charges or similar levies that arise at any time or
from time to time (other than Excluded Taxes) (i) from any payment made
under any and all Credit Documents or (ii) from the execution or
delivery by the Borrower of, or from the filing or recording or
maintenance of, or otherwise with respect to, any and all Credit
Documents (hereinafter referred to as "Other Taxes").
(d) The Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including, without
limitation and without duplication, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.6), paid by such
Lender or the Administrative Agent (on its own behalf or on behalf of
any Lender), as the case may be, in respect of payments made or to be
42
made hereunder, and any liability (including penalties, interest and
expenses) arising solely therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted,
provided, however, that the Borrower shall not be obligated to
indemnify any Lender or the Administrative Agent for any Excluded Taxes
or any other Taxes with respect to which the Borrower would not be
obligated to increase a sum payable hereunder or under any Note under
Section 2.6(a) or Section 2.6(b). Payment of this indemnification
shall be made within thirty (30) days from the date such Lender or the
Administrative Agent, as the case may be, makes written demand
therefor, with a description of the applicable Taxes or Other Taxes.
(e) Within thirty (30) days after the date of any payment of Taxes or Other
Taxes, the applicable Borrower shall furnish to the Administrative
Agent, at its address referred to in Section 14.5, the original or
certified copy of a receipt evidencing payment thereof.
(f) Each Lender that sells or grants a participation shall, as appropriate,
(i) withhold or deduct from each payment to a participant the amount of
any Tax required under applicable law to be withheld or deducted from
such payment and not withheld or deducted therefrom by the Borrower or
the Administrative Agent, (ii) pay any Tax so withheld or deducted by
it to the appropriate taxing authority in accordance with applicable
law and (iii) indemnify the Borrower and the Administrative Agent for
any losses, costs and expenses that may incur as a result of any
failure to withhold or deduct and pay any Tax to the extent the amount
of such Tax and losses, costs and expenses exceeds the amount of Tax
and loses, costs and expenses that would have been imposed in the
absence of such participation.
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.6 shall survive the payment in full of all
Obligations hereunder and under the Revolving Notes.
2.7 Sharing of Payments.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Revolving Loans made by it or its participation in Letters of Credit in
excess of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Loans made by them or in their participation
in Letters of Credit as shall be necessary to cause such purchasing Lender to
share the excess payment accruing to all Lenders in accordance with their
respective ratable shares as provided for in this Credit Agreement; provided,
however, that if all or any portion of such excess is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall be
rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal
to such Lender's ratable share (according to the proportion of (i) the amount
of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) or any interest or other amount paid or payable
by the purchasing Lender in respect to the total amount so recovered. The
Borrower agrees that any Lender so purchasing a participation from another
43
Lender pursuant to this Section 2.7 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of setoff)
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
2.8 Pro Rata Treatment.
Each Loan, each payment or prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of interest on the Loans, each payment of the Unused Line Fee, each
payment of the Letter of Credit Fee, each reduction of the Revolving Credit
Commitment and each conversion or extension of any Loan, shall be allocated
pro rata among the Lenders in accordance with the respective principal
amounts of their outstanding Revolving Loans and their participation
interests in the Letters of Credit; provided, however, that the foregoing
fees payable hereunder to the Lenders shall be allocated to each Lender based
on such Lender's Revolving Credit Commitment Percentage.
2.9 Extensions and Conversions.
Subject to the terms of Article V, the Borrower shall have the option,
on any Business Day, to extend existing Eurodollar Loans into a subsequent
permissible Interest Period, to convert Base Rate Loans into Eurodollar
Loans, or to convert Eurodollar Loans into Base Rate Loans; provided,
however, that (i) except as provided in Section 4.10, Eurodollar Loans may be
converted into Base Rate Loans only on the last day of the Interest Period
applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the
terms of the definition of "Interest Period" and shall be in such minimum
amounts as provided in Section 2.1(d)(i) with respect to Revolving Loans, and
(iv) no more than five (5) separate Eurodollar Loans shall be outstanding
hereunder at any time. Each such extension or conversion shall be effected
by the Borrower by giving a written notice in the form of Exhibit I (a
"Notice of Extension/Conversion") (or telephone notice promptly confirmed in
writing) to the Administrative Agent prior to 11:00 A.M. on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan,
and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar
Loan, the date of the proposed extension or conversion, specifying the date
of the proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted and,
if appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall constitute a representation and
warranty by the Borrower of the matters specified in Article V. In the event
that the Borrower fails to request extension or conversion of any Eurodollar
Loan in accordance with this Section, or any such conversion or extension is
not permitted or required by this Section, then such Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest
Period applicable thereto. The Administrative Agent shall give each Lender
notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
44
2.10 Swingline Loan Subfacility.
(a) Swingline Commitment. During the period that the Revolving Credit
Commitments are in effect, subject to the terms and conditions hereof,
the Swingline Lender, in its individual capacity, agrees to make
certain Revolving Loans to the Borrower (each, a "Swingline Loan" and,
collectively, the "Swingline Loans") for the purposes hereinafter set
forth; provided, however, that: (i) the aggregate amount of Swingline
Loans outstanding at any time shall not exceed Three Million Dollars
($3,000,000) (the "Swingline Committed Amount"), and (ii) the sum of
the aggregate amount of outstanding Revolving Loans plus Swingline
Loans plus Letter of Credit Obligations shall not exceed the lesser
of: (A) the Revolving Credit Committed Amount then in effect; or (B)
the Borrowing Base. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower on any Business Day
upon request made by the Borrower not later than 12:00 Noon on
such Business Day. A notice of request for Swingline Loan
borrowing shall be made in the form of a Notice of Borrowing,
with appropriate modifications. Swingline Loans hereunder shall
be made in minimum amounts of One Hundred Thousand Dollars
($100,000) and in integral amounts of Fifty Thousand Dollars
($50,000) in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline Loan shall be due and
payable on the Maturity Date, if not sooner due and payable in
accordance with the terms set forth hereinbelow. Upon each
Business Day set by the Administrative Agent for settlement among
Lenders in respect of Revolving Loans, as prescribed in Section
2.1(d)(ii) or earlier, on any Business Day on which Swingline
Loans are outstanding, if the Swingline Lender shall so request,
by written notice to the Borrower and the Administrative Agent,
the Borrower shall be deemed to have requested a Revolving Loan
comprised entirely of Base Rate Loans in the amount of such
Swingline Loans on such Business Day; provided, however, that, in
the following circumstances, any such demand shall also be deemed
to have been given one (1) Business Day prior to each of (A) the
Maturity Date, (B) the occurrence of any Event of Default
described in Section 11.1(f), (C) upon acceleration of the
Obligations hereunder, whether on account of an Event of Default
described in Section 11.1(f) or any other Event of Default, and
(D) the exercise of remedies in accordance with the provisions of
Section 11.2 hereof (each such Revolving Loan made on account of
any such deemed request therefor as provided herein being
hereinafter referred to as a "Mandatory Borrowing"). Each Lender
hereby irrevocably agrees to make such Revolving Loans promptly
upon any such request or deemed request on account of each
Mandatory Borrowing in the amount and in the manner specified in
the preceding sentence and on the same such date notwithstanding
(i) the amount of Mandatory Borrowing then may not comply with
the minimum amount for borrowings of Revolving Loans otherwise
45
required hereunder (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an
Event of Default then exists, (iv) failure of any such request or
deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(d), (v) the date of such
Mandatory Borrowing, or (vi) any reduction in the Revolving
Credit Committed Amount or termination of the Revolving Credit
Commitments immediately prior to such Mandatory Borrowing or
contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then, each Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to
such purchase) from the Swingline Lender such participations in
the outstanding Swingline Loans as shall be necessary to cause
each such Lender to share in such Swingline Loans ratably based
upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments
pursuant to Section 11.2), provided that (x) all interest payable
on the Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective participation is
purchased, and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the Swingline Lender interest on the
principal amount of such participation purchased for each day
from and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if paid
within two (2) Business Days of the date of the Mandatory
Borrowing, the Federal Funds Effective Rate, and thereafter at a
rate equal to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section 4.2,
Swingline Loans shall bear interest at a per annum rate equal to the
Base Rate plus the Applicable Percentage for Revolving Loans that are
Base Rate Loans. Interest on Swingline Loans shall be payable in
arrears at the same time or times as prescribed herein for Base Rate
Loans.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the
original amount of the Swingline Committed Amount and substantially in
the form of Exhibit F-2.
2.11 All Loans to Constitute One Obligation.
The Loans and Letter of Credit Obligations shall constitute one general
obligation of the Obligors, and shall be secured by the Administrative
Agent's Lien upon all of the Collateral.
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2.12 Applications of Payments Generally.
(a) Except for payments and other amounts received by the Administrative
Agent and applied in accordance with the provisions of subsection (b)
below (or required to be applied in accordance with Section 2.2(b)(v)),
all payments and any other amounts received by the Administrative Agent
from or for the benefit of the Borrower shall be applied as follows:
first, to pay principal of, and interest on, any portion of the Loans
that the Administrative Agent may have advanced pursuant to the express
provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower; second, to pay all other Obligations then due and payable, in
such order and manner as the Administrative Agent shall elect; and,
third, as the Borrower so designates. Payments in respect of Revolving
Loans received by the Administrative Agent shall be distributed to each
Revolving Credit Lender in accordance with such Lender's Revolving
Credit Commitment Percentage of the Revolving Credit Commitments; and
all payments of Fees and all other payments in respect of any other
Obligation shall be allocated among such of the Lenders and the Issuing
Bank as are entitled thereto and, for such payments allocated to the
Lenders, in proportion to their respective Revolving Credit Commitment
Percentage.
(b) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations and
any proceeds of Collateral after the occurrence and during the
continuance of an Event of Default and agrees that, notwithstanding the
provisions of Section 2.2(b)(v), and clause (a) above, the
Administrative Agent may, and, upon either (A) the written direction of
the Agents or the Required Lenders or (B) the acceleration of the
Obligations pursuant to Section 11.2, the Administrative Agent shall,
apply all payments in respect of any Obligations and all proceeds of
Collateral in the following order:
first, to pay interest on and then principal of Swingline Loans
and any portion of the Revolving Loans that the Administrative Agent
may have advanced on behalf of any Lender for which the Administrative
Agent has not then been reimbursed by such Lender or the Borrower;
second, to pay Obligations in respect of any expense
reimbursements or indemnities and Cash Management Obligations then due
to the Administrative Agent;
third, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Bank;
fourth, to pay Obligations in respect of any Fees then due to the
Administrative Agent, the Lenders and the Issuing Bank;
fifth, to pay interest then due and payable in respect of the
Loans and Letter of Credit Obligations;
sixth, to pay or prepay principal amounts on the Loans and Letter
of Credit Obligations and to provide cash collateral for outstanding
Letter of Credit Obligations (then undrawn) ratably to the aggregate
47
principal amount of such Loans, Obligations and Letter of Credit
Obligations, and Obligations owing with respect to Hedging Contracts;
seventh, to the ratable payment of all other Obligations; and
last, any excess to the Borrower or as otherwise may be required
under applicable law or by a court of competent jurisdiction;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Obligation described in any of clauses
first, second, third, fourth, fifth, sixth and seventh above, the available
funds being applied with respect to any such Obligation (unless otherwise
specified in such clause) shall be allocated to the payment of such
Obligations ratably, based on the proportion of the Administrative Agent's
and each Lender's or Issuing Bank's interest in the aggregate outstanding
Obligations described in such clauses. The order of priority set forth in
clauses first, second, third, fourth, fifth, sixth and seventh above may at
any time and from time to time be changed by the agreement of the Required
Lenders without necessity of notice to or consent of or approval by the
Borrower or any Obligor or any other Person that is not a Lender or an
Issuing Bank. The order of priority set forth in clauses first, second,
third and fourth above may be changed only with the prior written consent of
the Administrative Agent in addition to that of the Required Lenders.
2.13 Certain Advances.
At the option of the Administrative Agent, principal on the Letter of
Credit Obligations, interest, Fees, expenses and other sums due and payable
in respect of the Revolving Loans may be paid from the proceeds of Revolving
Loans. The Borrower hereby authorizes the Administrative Agent to make
Revolving Loans from time to time in its discretion, that are in the amounts
of any and all interest, fees, expenses and other sums payable in respect of
the Revolving Loans, and further authorizes the Administrative Agent to give
the Revolving Credit Lenders notice of any Borrowing with respect to such
Revolving Loans and to distribute the proceeds of such Revolving Loans to pay
such amounts. The Borrower agrees that all such Revolving Loans so made
shall be deemed to have been requested by it and directs that all proceeds
thereof shall be used to pay such amounts.
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank
may reasonably require, the Lenders will participate in the issuance by the
Issuing Bank from time to time of such Letters of Credit in Dollars from the
Closing Date until the Maturity Date as the Borrower may request, in a form
48
acceptable to the Issuing Bank; provided, however, that (a) the Letter of
Credit Obligations outstanding shall not at any time exceed Ten Million
Dollars ($10,000,000) (the "Letter of Credit Committed Amount") and (b) the
sum of the aggregate principal amount of outstanding Revolving Loans plus
Letter of Credit Obligations outstanding shall not at any time exceed the
lesser of (i) the Revolving Credit Committed Amount and (ii) the Borrowing
Base. No Letter of Credit shall (x) have an original expiry date more than
one (1) year from the date of issuance or (y) as originally issued or as
extended, have an expiry date extending beyond the Maturity Date. Each
Letter of Credit shall comply with the related Letter of Credit Documents.
The issuance and expiry date of each Letter of Credit shall comply with the
related Letter of Credit Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day.
3.2 Notice and Reports.
The request for the issuance of a Letter of Credit shall be submitted
by the Borrower to the Issuing Bank at least three (3) Business Days prior to
the requested date of issuance. The Issuing Bank will, upon request,
disseminate to each of the Lenders a detailed report specifying the Letters
of Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the beneficiary, the face amount and
the expiry date as well as any payment or expirations which may have occurred.
3.3 Participation by Lenders.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Bank in
such Letter of Credit and the obligations arising thereunder, in each case in
an amount equal to its Revolving Credit Commitment Percentage of such Letter
of Credit, and shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to the Issuing
Bank therefor and discharge when due, such Lender's Revolving Credit
Commitment Percentage of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation
in any Letter of Credit, to the extent that the Issuing Bank has not been
reimbursed as required hereunder or under any such Letter of Credit, each
such Lender shall pay to the Issuing Bank its Revolving Credit Commitment
Percentage of such unreimbursed drawing pursuant to the provisions of Section
3.4. The obligation of each Lender so to reimburse the Issuing Bank shall be
absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Bank under any Letter of Credit, together
with interest as hereinafter provided.
3.4 Reimbursement.
In the event of any drawing under any Letter of Credit, the Issuing
Bank will promptly notify the Borrower thereof. Unless the Borrower shall
immediately notify the Issuing Bank that the Borrower intends to otherwise
reimburse the Issuing Bank for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in Section 3.5 on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Bank on the day
49
of drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If the
Borrower shall fail to reimburse the Issuing Bank as provided hereinabove,
the unreimbursed amount of such drawing shall bear interest at the Default
Rate. The Borrower's reimbursement obligations hereunder shall be absolute
and unconditional under all circumstances irrespective of any rights of
setoff, counterclaim or defense to payment the Borrower may claim or have
against the Issuing Bank, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to
receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Bank will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Administrative Agent for the account of the
Issuing Bank in Dollars and in immediately available funds, the amount of
such Lender's Revolving Credit Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the Business Day such notice is
received by such Lender from the Issuing Bank if such notice is received at
or before 2:00 P.M.; otherwise, such payment shall be made at or before 12:00
Noon on the Business Day next succeeding the day such notice is received. If
such Lender does not pay such amount to the Issuing Bank in full upon such
request, such Lender shall, on demand, pay to the Administrative Agent for
the account of the Issuing Bank interest on the unpaid amount during the
period from the date of such drawing until such Lender pays such amount to
the Issuing Bank in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Lender is required to make payments of
such amount pursuant to the preceding sentence, the Federal Funds Rate and
thereafter at a rate equal to the Base Rate. Each Lender's obligation to
make such payment to the Issuing Bank, and the right of the Issuing Bank to
receive the same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations of the Borrower
hereunder and shall be made without any offset, abatement, withholding or
reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Bank, such Lender shall, automatically and without
any further action on the part of the Issuing Bank or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of
such payment constituting interest owing to the Issuing Bank) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in the
interest thereon and in the related Letter of Credit Documents, and shall
have a claim against the Borrower with respect thereto.
3.5 Repayment with Revolving Loans.
On any day on which the Borrower shall have requested, or been deemed
to have requested, a Revolving Loan advance to reimburse a drawing under a
Letter of Credit, the Administrative Agent shall give notice to the Lenders
that a Revolving Loan has been requested or deemed requested by the Borrower
to be made in connection with a drawing under a Letter of Credit, in which
case a Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of Section
2.1(d)(i) with respect thereto) shall be immediately made to the Borrower by
all Lenders (notwithstanding any termination of the Commitments pursuant to
Section 11.2) pro rata based on the respective Revolving Credit Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 11.2) and the proceeds
thereof shall be paid directly by the Administrative Agent to the Issuing
50
Bank for application to the respective Letter of Credit Obligations. Each
such Lender hereby irrevocably agrees to make its Revolving Credit Commitment
Percentage of each such Revolving Loan immediately upon any such request or
deemed request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Article V are
then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to be
made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event
that any Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a bankruptcy or insolvency proceeding with respect to any
Borrower), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date
and prior to such purchase) from the Issuing Bank such participation in the
outstanding Letter of Credit Obligations as shall be necessary to cause each
such Lender to share in such Letter of Credit Obligations ratably (based upon
the respective Revolving Credit Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments
pursuant to Section 11.2)), provided that at the time any purchase of
participation pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Issuing Bank, to the extent not paid
to the Issuing Bank by the Borrower in accordance with the terms of Section
3.4, interest on the principal amount of participation purchased for each day
from and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate.
3.6 Renewal, Extension.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter
of Credit hereunder.
3.7 Uniform Customs and Practices.
The Issuing Bank may provide that the Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(the "UCP"), in which case the UCP may be incorporated by reference therein
and deemed in all respects to be a part thereof.
3.8 Indemnification; Nature of Issuing Bank's Duties.
(a) In addition to its other obligations under this Article III, but
without duplication of its obligations under Section 14.8, the Borrower
agrees to protect, indemnify, pay and save the Issuing Bank harmless
from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys'
51
fees) that the Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Bank to honor a drawing under
a Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(b) As between the Borrower and the Issuing Bank, the Borrower shall assume
all risks of the acts, omissions or misuse of any Letter of Credit by
the beneficiary thereof. The Issuing Bank shall not be responsible, in
the absence of its gross negligence or willful misconduct: (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 any Letter of Credit, 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 any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (iii) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(iv) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit
or of the proceeds thereof; and (v) for any consequences arising from
causes beyond the control of the Issuing Bank, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Bank's rights or powers
hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, and in the
absence of gross negligence or willful misconduct, shall not put such
Issuing Bank under any resulting liability to the Borrower. It is the
intention of the parties that this Credit Agreement shall be construed
and applied to protect and indemnify the Issuing Bank against any and
all risks involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower, including, without
limitation, any and all Government Acts. The Issuing Bank shall not,
in any way, be liable for any failure by the Issuing Bank or anyone
else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the Issuing
Bank.
(d) Nothing in this Section 3.8 is intended to limit the reimbursement
obligations of the Borrower contained in Section 3.4 above. The
obligations of the Borrower under this Section 3.8 shall survive the
termination of this Credit Agreement. No act or omission of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Bank to enforce any right,
power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this Section 3.8,
the Borrower shall have no obligation to indemnify the Issuing Bank in
respect of any liability incurred by the Issuing Bank (i) to the extent
arising out of the gross negligence or willful misconduct of the
52
Issuing Bank, as determined by a court of competent jurisdiction, or
(ii) caused by the Issuing Bank's failure to pay under any Letter of
Credit after presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
3.9 Responsibility of Issuing Bank.
It is expressly understood and agreed that the obligations of the
Issuing Bank hereunder to the Lenders are only those expressly set forth in
this Credit Agreement and that the Issuing Bank shall be entitled to assume
that the conditions precedent set forth in Article III or V have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that nothing
set forth in this Article III shall be deemed to prejudice the right of any
Lender to recover from the Issuing Bank any amounts made available by such
Lender to the Issuing Bank pursuant to this Article III in the event that it
is determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Bank.
3.10 Conflict with Letter of Credit Documents.
In the event of any conflict between this Credit Agreement and any
Letter of Credit Document (including any letter of credit application), this
Credit Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 Interest on Loans.
Subject to the provisions of Section 4.2, interest on the Loans shall
be payable (a) for Swingline Loans (all of which must be Base Rate Loans) and
Revolving Loans that are Base Rate Loans, monthly in arrears on the first day
of each calendar month (for the preceding calendar month) and the interest
rate shall be equal to the Base Rate plus the Applicable Percentage on the
outstanding amount of each such Base Rate Loan, and (b) for Revolving Loans
that are Eurodollar Loans, on the last day of the applicable Interest Period
(unless the Interest Period is greater than three (3) months, then, also on
the last day of each three-month period during such Interest Period), and the
interest rate shall be equal to the Eurodollar Rate plus the Applicable
Percentage on the outstanding amount of each such Eurodollar Loan. In the
event of any change in the Base Rate, the rate hereunder shall change,
effective as of the day the Base Rate changes. All interest rates and fees
hereunder shall be calculated based on a 360 day year for the actual number
of days elapsed, unless and except to the extent otherwise expressly provided
herein. If an interest payment date falls on a date which is not a Business
Day, then, such interest payment date shall be deemed to be the next
succeeding Business Day, except that, in the case of Eurodollar Loans, where
53
the next succeeding Business Day falls in the next succeeding calendar month,
then, such interest payment date shall be deemed to be the next preceding
Business Day.
4.2 Interest After Event of Default.
Interest on any amount of matured principal under the Loans, and
interest on the amount of principal under the Loans outstanding as of the
date an Event of Default occurs, and at all times thereafter until the
earlier of the date upon which (a) all Obligations have been paid and
satisfied in full or (b) such Event of Default shall have been cured or
waived, shall be payable on demand at a rate equal to the Base Rate, plus the
then highest Applicable Percentage, plus an additional two percent (2%) per
annum (the sum of the foregoing being called herein the "Default Rate").
Interest shall be payable on any other amount due hereunder and shall accrue
at the Default Rate, from the date due and payable until paid in full. The
rates hereunder shall be calculated based on a 360-day year for the actual
number of days elapsed.
4.3 Unused Line Fee
On the first day of each calendar quarter, the Borrower shall pay to
the Administrative Agent for the benefit of the Lenders the Unused Line Fee
due in respect of the preceding calendar quarter.
4.4 Lenders' Fees/Administrative Agent's Fees.
On the Closing Date, the Administrative Agent shall pay to each Lender
its respective Lender's Fees that are required to be paid on the Closing Date
pursuant to the terms of such Lender's fee letter with the Administrative
Agent. The Borrower shall pay all fees required to be paid to the
Administrative Agent under the Fee Letter at the times and in the amounts set
forth therein.
4.5 Letter of Credit Fees.
(a) Letter of Credit Fees. In consideration of the issuance of Letters of
Credit hereunder, the Borrower shall pay to the Administrative Agent
for the account of each Lender a fee (the "Letter of Credit Fee") on
such Lender's Revolving Credit Commitment Percentage of the average
daily maximum amount available to be drawn under each such standby
Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration equal to the Applicable
Percentage then in effect with respect to Eurodollar Loans. The Letter
of Credit Fee will be payable monthly in arrears on the first day of
each calendar month (for the preceding calendar month).
(b) Issuing Bank Fees. In addition to the Letter of Credit Fee payable
pursuant to clause (a) above, the Borrower shall pay to the Issuing
Bank for its own account without sharing by the other Lenders the
customary charges from time to time of the Issuing Bank with respect to
the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, all Letters of Credit including
"standby" Letters of Credit (collectively, the "Issuing Bank Fees").
54
(c) Fronting Fee. In addition to the Letter of Credit Fee payable pursuant
to clause (a) above, and any Issuing Bank Fees payable pursuant to
clause (b) above, the Borrower shall pay to the Administrative Agent
for its own account any fronting fee described in the Fee Letter, to
the extent then due and payable.
4.6 Authorization to Charge Account.
The Borrower hereby authorizes the Administrative Agent to charge the
Borrower's Loan accounts with the amount of all payments and fees due
hereunder to the Lenders, the Swingline Lender, the Administrative Agent and
the Issuing Bank as and when such payments become due. The Borrower confirms
that any charges which the Administrative Agent may so make to the Borrower's
Loan accounts as herein provided will be made as an accommodation to the
Borrower and solely at the Administrative Agent's discretion.
4.7 Indemnification in Certain Events.
If, after the Closing Date, (a) any change in or in the interpretation
of any law or regulation is introduced, including, without limitation, with
respect to reserve requirements, applicable to Wachovia or any other banking
or financial institution from whom any of the Lenders borrows funds or
obtains credit (a "Funding Bank") or any of the Lenders, or (b) a Funding
Bank or any of the Lenders complies with any guideline or request from any
central bank or other Governmental Authority or (c) a Funding Bank or any of
the Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation
or administration thereof has or would have the effect described below, or a
Funding Bank or any of the Lenders complies with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, and in the case of any
event set forth in this clause (c), such adoption, change or compliance has
or would have the direct or indirect effect of reducing the rate of return on
any of the Lenders' capital as a consequence of its obligations hereunder to
a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration the Funding Bank's
or Lenders' policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, and the result of any of the foregoing events
described in clauses (a), (b) or (c) is or results in an increase in the cost
to any of the Lenders of funding or maintaining the Revolving Credit
Committed Amount, the Revolving Loans or the Letters of Credit, then, the
Borrower shall from time to time upon demand by the Administrative Agent, pay
to the Administrative Agent additional amounts sufficient to indemnify the
Lenders against such increased cost (without duplication, however, of any
costs included in the definition of "Eurodollar Rate"). A certificate as to
the amount of such increased cost shall be submitted to the Borrower by the
Administrative Agent and shall be conclusive and binding absent manifest
error.
4.8 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, (a) the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
55
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period,
(b) the Administrative Agent has received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Eurodollar Loans during such Interest Period, or
(c) Dollar deposits in the principal amounts of the Eurodollar Loans to which
such Interest Period is to be applicable are not generally available in the
London interbank market, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter, and will also give prompt written notice to the
Borrower when such conditions no longer exist. If such notice is given (i)
any Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans, (ii) any Loans that were to have
been converted on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as Base Rate Loans and
(iii) each outstanding Eurodollar Loan shall be converted, on the last day of
the then current Interest Period thereof, to Base Rate Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the
right to convert Base Rate Loans to Eurodollar Loans.
4.9 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or
in the interpretation or application thereof occurring after the Closing Date
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Administrative
Agent (which notice shall be withdrawn whenever such circumstances no longer
exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar
Loans shall forthwith be canceled and, until such time as it shall no longer
be unlawful for such Lender to make or maintain Eurodollar Loans, such Lender
shall then have a commitment only to make a Base Rate Loan when a Eurodollar
Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
4.10.
4.10 Funding Indemnity.
The Borrower shall indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur
(other than through such Lender's gross negligence or willful misconduct) as
a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or extension of Eurodollar Loans after the Borrower have
given a notice requesting the same in accordance with the provisions of this
Credit Agreement, (b) default by the Borrower in making any prepayment of a
Eurodollar Loan after the Borrower have given a notice thereof in accordance
with the provisions of this Credit Agreement, and (c) the making of a
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prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or extended, for the period from the date of such
prepayment or of such failure to borrow, convert or extend to the last day of
the applicable Interest Period (or, in the case of a failure to borrow,
convert or extend, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Eurodollar Loans provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the
Issuing Bank to issue any Letter of Credit hereunder is subject to the
satisfaction of, or waiver of, immediately prior to or concurrently with the
making of such Revolving Loan or issuance of such Letter of Credit the
following conditions precedent:
5.1 Closing Conditions.
The obligation of each Lender to make the Loans and/or of the Issuing
Bank to issue Letters of Credit hereunder shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions
precedent:
(a) Executed Credit Documents. Receipt by the Administrative Agent of duly
executed originals of this Credit Agreement; the Notes; the Security
Documents (other than any Mortgages); and all other Credit Documents,
each in form and substance acceptable to the Administrative Agent in
its sole discretion.
(b) Organizational Documents. Receipt by the Administrative Agent of the
following for each Obligor:
(i) Charter Documents. Copies of (i) the articles or certificates of
incorporation or other formation or charter documents of each
Obligor certified to be true and complete as of a recent date by
the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation or organization and certified
by a secretary or assistant secretary of such Obligor to be true
and correct as of the Closing Date and (ii) to the extent
available, a certificate indicating payment of all corporate or
other franchise taxes certified as of a recent date by the
appropriate taxing Governmental Authorities.
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(ii) Bylaws. A copy of the bylaws or operating agreement or similar
agreement of each Obligor certified by a secretary or assistant
secretary of such Obligor to be true and correct as of the
Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of Directors or
similar managing body of each Obligor approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of such
Obligor to be true and correct and in force and effect as of the
Closing Date.
(iv) Good Standing. Copies of certificates of good standing, existence or
its equivalent with respect to each Obligor certified as of a
recent date by the appropriate Governmental Authorities of the
state or other jurisdiction of incorporation or organization and
each other jurisdiction in which the failure to so qualify and be
in good standing could reasonably be expected to have a Material
Adverse Effect.
(v) Incumbency. A certificate of each Obligor certified by a secretary or
assistant secretary to be true and correct as of the Closing
Date, confirming the incumbency of the officer(s) of each Obligor
authorized to execute the Credit Documents, together with the
matters disclosed in clauses (i) through (iv) hereinabove, to be
substantially in the form of Exhibit J.
(c) Financial Statements. Receipt by the Administrative Agent and the
Lenders of the financial statements and other information described in
Section 6.6 and such other information relating to the Obligors as the
Administrative Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described
herein.
(d) Opinions of Counsel. Receipt by the Administrative Agent of an
opinion, or opinions (which shall cover, among other things, authority,
legality, validity, binding effect, enforceability and attachment and
perfection of liens), satisfactory to the Administrative Agent,
addressed to the Administrative Agent and the Lenders and dated the
Closing Date, from legal counsel to the Obligors, to be substantially
in the form of Exhibit K.
(e) Personal Property Collateral. Receipt by the Administrative Agent of:
(i) searches of Uniform Commercial Code filings in the jurisdiction of the
chief executive office of each Obligor and each jurisdiction
where any Collateral is located or where a filing would need to
be made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
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(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent's sole
discretion, to perfect the Administrative Agent's security
interest in the Collateral;
(iii) searches of ownership of intellectual property in the appropriate
governmental offices and such patent/trademark/copyright filings
as requested by the Administrative Agent in order to perfect the
Administrative Agent's security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged to the
Administrative Agent pursuant to the Pledge Agreement, together
with duly executed in blank undated stock powers attached thereto;
(v) all instruments and chattel paper in the possession of any of the
Obligors, together with allonges or assignments as may be
necessary or appropriate to perfect the Administrative Agent's
security interest in the Collateral to the extent required under
the Security Agreement; and
(vi) Lockbox Agreements with respect to all deposit accounts of the
Obligors, except for petty cash and payroll accounts.
(f) Priority of Liens. Receipt by the Administrative Agent of satisfactory
evidence (to the extent not otherwise delivered pursuant to subsection
(e) above) that (i) the Administrative Agent, on behalf of the Lenders,
holds a perfected, first priority Lien on all Collateral (other than
any Mortgaged Real Property and subject to clause (ii)) and (ii) none
of the Collateral is subject to any other Liens other than Permitted
Liens.
(g) Opening Borrowing Base Certificate. Receipt by the Administrative
Agent of a Borrowing Base Certificate, substantially in the form of
Exhibit L and certified by an Authorized Officer of the Borrower to be
true and correct.
(h) Evidence of Insurance. Receipt by the Administrative Agent of copies
of insurance policies or certificates of insurance of the Obligors
evidencing liability and casualty insurance meeting the requirements
set forth in Section 7.10 of this Credit Agreement and in any other (as
applicable) of the Credit Documents, including, without limitation,
naming the Administrative Agent as loss payee on behalf of the Lenders
as additional insured and copies of credit insurance policies insuring
foreign Accounts to be included as Eligible Accounts Receivable. Each
loss payee endorsement shall be substantially in the form of Exhibit L.
(i) Consents. Receipt by the Administrative Agent of evidence that all
governmental, shareholder and third party consents and approvals
required in connection with the transactions and the related financings
contemplated hereby and expiration of all applicable waiting periods
without any action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on such transactions
or that could seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the
Administrative Agent could have such effect.
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(j) Litigation. There shall not exist any pending or threatened action,
suit, investigation or proceeding against any Obligor or its assets
that could reasonably be expected to have a Material Adverse Effect.
(k) Other Indebtedness. After giving effect to the making of the Loans
made on the Closing Date, the Obligors shall have no Funded Debt, other
than (i) any Funded Debt arising under the Credit Documents and (ii) as
disclosed on Schedule 1.1C.
(l) Closing Certificate. Receipt by the Administrative Agent of a
certificate or certificates executed by the president or chief
financial officer of the Borrower as of the Closing Date, to be
substantially in the form of Exhibit M, stating that (i) after giving
effect to the making of the Loans and application of the proceeds
thereof, each Obligor is in compliance with all existing financial
obligations, (ii) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents
and the transactions contemplated thereby have been obtained, (iii) no
action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality that
purports to affect any Obligor or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding
could reasonably be expected to have a Material Adverse Effect and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur
on such date, (A) each of the Obligors is solvent, (B) no Default or
Event of Default exists, (C) all representations and warranties
contained herein and in the other Credit Documents are true and correct
in all material respects, (D) the Obligors are in compliance with each
of the financial covenants set forth in Article VIII, and (E) the
Obligors have, or will have, complied with subsection (k) above and
subsections (t) and (u) below.
(m) Fees and Expenses. Receipt of the Administrative Agent of payment from
the Borrower of all fees and expenses owed by them to the Lenders and
the Administrative Agent, including, without limitation, payment to the
Administrative Agent of the fees set forth in the Fee Letter.
(n) Account Designation Letter. Receipt by the Administrative Agent of an
account designation letter from the Borrower (the "Account Designation
Letter"), in substantially the form of Exhibit O.
(o) Collateral Disclosure Certificate. Receipt by the Administrative Agent
of a Collateral Disclosure Certificate from each Obligor, to be
substantially in the form of Exhibit P.
(p) Authorized Persons Letter. Receipt by the Administrative Agent of a
letter from the Borrower regarding the authorization of certain Persons
(individuals) to request financial accommodations hereunder on behalf
of the Borrower, to be substantially in the form of Exhibit Q.
(q) Disbursement Instructions Letter. Receipt by the Administrative Agent
of a letter from the Borrower regarding the disposition of the proceeds
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of the initial disbursements of Revolving Loans hereunder, to be
substantially in the form of Exhibit R.
(r) Intellectual Property Agreements. Receipt by the Administrative Agent
of (i) a Trademark Security Agreement, in substantially the form of
Exhibit S, executed by each Obligor owning trademarks registered with
the U.S. Patent & Trademark Office ("USPTO") on the Closing Date, and
(ii) a Patent Security Agreement, in substantially the form of
Exhibit T, executed by each Obligor owning patents registered with the
USPTO on the Closing Date (the foregoing agreements called,
collectively, the "Intellectual Property Agreements").
(s) Material Adverse Change. No Material Adverse Change, or development
reasonably likely to have a Material Adverse Effect, shall have
occurred since December 31, 2002.
(t) Excess Availability. Receipt by the Administrative Agent of evidence,
satisfactory to it, that after giving effect to the initial Revolving
Loan being made, the retirement of any Indebtedness being refinanced
(in whole or in part) with the proceeds thereof, and the making of the
dividend described in Section 9.6 with the proceeds (in whole or in
part) thereof, and the issuance of any initial Letter of Credit on the
Closing Date, Excess Availability shall be at least Two Million Dollars
($2,000,000).
(u) EBITDA. Receipt by the Administrative Agent of evidence satisfactory
to it, from review of the Financials, that EBITDA, determined for the
twelve (12) Fiscal Months period ended July 31, 2003 (but giving
effect, on a pro forma basis, to the Aggregates Sale as having occurred
within such period) shall have been at least Thirty Million Dollars
($30,000,000).
(v) Aggregates Sale. Receipt by the Administrative Agent of evidence
satisfactory to it, which shall include a certificate from the
President or Chief Financial Officer of the Borrower, dated the Closing
Date, in substantially the form attached hereto as Exhibit N, to such
effect, that the Aggregates Sale occurred prior to the Closing Date on
terms substantially in accordance with the Aggregates Sale Agreement,
and that BMAC shall have received at least One Hundred Forty-Nine
Million Dollars ($149,000,000), in Net Cash Proceeds, in respect
thereof, with a listing of the uses of such Net Cash Proceeds.
(w) Existing Senior Secured Credit Facilities. Receipt by the
Administrative Agent of evidence satisfactory to it that the Existing
Senior Secured Credit Facilities shall, in connection with the
disbursement of the proceeds of the initial Revolving Loan be paid in
full.
(x) Millville Sale Property. Receipt by the Administrative Agent of
evidence satisfactory to it that the Millville Sale Property has been
sold and that the Borrower has received at least Three Million Dollars
($3,000,000) in Net Cash Proceeds therefrom.
(y) Other. Receipt by the Administrative Agent of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, without limitation, information regarding
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litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the
Borrower.
5.2 Condition to all Loans and Letters of Credit.
(a) On the date of the making of any Loan or the issuance of any Letter of
Credit, both before and after giving effect thereto and to the
application of the proceeds therefrom, the following statements shall
be true to the satisfaction of the Administrative Agent (and each
request for a Loan and request for a Letter of Credit, and the
acceptance by the Borrower of the proceeds of such Loan or issuance of
such Letter of Credit, shall constitute a representation and warranty
by the Borrower that on the date of such Loan or issuance of such
Letter of Credit before and after giving effect thereto and to the
application of the proceeds therefrom, such statements are true):
(i) the representations and warranties contained in this Credit Agreement
are true and correct in all material respects on and as of the
date of such Loan or issuance of such Letter of Credit as though
made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties
shall have been true and complete in all material respects on and
as of such earlier date);
(ii) no event has occurred and is continuing, or would result from such Loan
or issuance of such Letter of Credit or the application of the
proceeds thereof, which would constitute a Default or an Event of
Default under this Credit Agreement; and
(iii) no Material Adverse Change, or development reasonably likely to have a
Material Adverse Effect shall have occurred and be continuing.
(b) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing to the extent such Notice of Borrowing is required
to be given with respect to the making of such Revolving Loan on the
applicable date prescribed herein for delivery thereof.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement and
the Issuing Bank to issue the Letters of Credit, and to make available the
credit facilities contemplated hereby, each Obligor hereby represents and
warrants to the Lenders and the Issuing Bank as of the Closing Date and on
the date of each extension of credit hereunder, as follows:
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6.1 Organization and Qualification.
Such Obligor and each of its Subsidiaries (i) is a duly organized,
validly existing and in good standing under the laws of the state of its
organization, (ii) has the requisite power and authority to own its
properties and assets and to transact the businesses in which it is
presently, or proposes to be, engaged, and (iii) is duly qualified and is
authorized to do business and is in good standing in every jurisdiction in
which the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect. Schedule 6.1 contains a true, correct and complete
list of all jurisdictions in which such Obligor and its Subsidiaries are
qualified to do business as a foreign corporation as of the Closing Date.
6.2 Solvency.
The fair saleable value of such Obligor's assets exceeds all probable
liabilities, including those to be incurred pursuant to this Credit
Agreement. Such Obligor (i) does not have unreasonably small capital in
relation to the business in which it is or proposes to be engaged or (ii) has
not incurred, and does not believe that it will incur after giving effect to
the transactions contemplated by this Credit Agreement, debts beyond its
ability to pay such debts as they become due.
6.3 Liens; Inventory.
There are no Liens in favor of third parties with respect to any of the
Collateral, wherever located, other than Permitted Liens. Upon the proper
filing of financing statements and the proper recordation of other applicable
documents with the appropriate filing or recordation offices in each of the
necessary jurisdictions, the security interests granted pursuant to the
Credit Documents constitute and shall at all times constitute valid and
enforceable first, prior and perfected Liens on the Collateral (other than
Permitted Liens). The Obligors are or will be at the time additional
Collateral is acquired by them, the absolute owners of the Collateral with
full right to pledge, sell, consign, transfer and create a Lien therein, free
and clear of any and all Liens in favor of third parties, except Permitted
Liens. The Obligors and the Subsidiaries will at their expense warrant,
until payment in full of the Obligations and termination of the Commitments,
and, at the Administrative Agent's request, defend the Collateral from any
and all Liens (other than Permitted Liens) of any third party. The Obligors
will not, and will not permit any of their Subsidiaries to, grant, create or
permit to exist, any Lien upon the Collateral, or any proceeds thereof, in
favor of any third party (other than Permitted Liens).
6.4 No Conflict.
The execution and delivery by such Obligor of this Credit Agreement and
each of the other Credit Documents executed and delivered in connection
herewith and the performance of the obligations of such Obligor hereunder and
thereunder and the consummation by such Obligor of the transactions
contemplated hereby and thereby: (i) are within the requisite power and
authority of such Obligor; (ii) are duly authorized by the board of directors
or similar managing body of such Obligor; (iii) are not in contravention of
the terms of the Organizational Documents of such Obligor or of any Material
Contract to which such Obligor is a party or by which such Obligor or any of
its properties are bound; (iv) do not require the consent, registration or
63
approval of any Governmental Authority or any other Person (except such as
have been duly obtained, made or given, and are in full force and effect);
(v) do not contravene any statute, law, ordinance regulation, rule, order or
other governmental restriction applicable to or binding upon such Obligor;
and (vi) will not, except as contemplated herein for the benefit of the
Administrative Agent on behalf of the Lenders, result in the imposition of
any Liens upon any property of such Obligor under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other material agreement
or instrument to which such Obligor is a party or by which it or any of its
property may be bound or affected.
6.5 Enforceability.
This Credit Agreement and all of the other Credit Documents to which
such Obligor is party are the legal, valid and binding obligations of such
Obligor, and with respect to those Credit Documents executed and delivered by
any Subsidiary, of each such Subsidiary, and are enforceable against such
Obligor and such Subsidiaries, as the case may be, in accordance with their
terms except as such enforceability may be limited by (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of equity.
6.6 Financial Data; Material Adverse Change.
(a) The Obligors have furnished to the Lenders the following financial
statements (the "Financials"): (i) the balance sheet of the Obligors
as of, and statements of income, retained earnings and changes in
financial position for, the Fiscal Year ended December 31, 2002
certified by Obligors' Accountant, and (ii) the unaudited balance sheet
of the Obligors as of, and statement of income, retained earnings and
changes in financial position for the Fiscal Month and Fiscal Year to
date ending, June 30, 2003 prepared by an Authorized Officer of the
Borrower. The Financials are, and the historical financial statements
to be furnished to the Lenders in accordance with Section 7.1 below
will be, in accordance with the books and records of the Obligors and
fairly present the financial condition of the Obligors at the dates
thereof and the results of operations for the periods indicated
(subject, in the case of unaudited financial statements, to normal
year-end adjustments), and such financial statements have been and will
be prepared in conformity with GAAP consistently applied throughout the
periods involved.
(b) Since the respective dates of the Financials, there has been no
material adverse change in the financial condition or financial
performance of any of the Obligors.
6.7 Locations of Offices, Records and Inventory.
The Obligors' principal places of business and chief executive offices
as of the Closing Date are as set forth in Schedule 6.7 hereto, and the books
and records of the Obligors and all chattel paper and all records of accounts
are located at the principal places of business and chief executive offices
of the Obligors. There is no jurisdiction in which any Obligor or any of its
Subsidiaries has any Collateral (except for vehicles, Inventory held for
shipment by third Persons, Inventory in transit, Inventory held for
processing by third Persons, or immaterial quantities of assets, equipment or
Inventory) other than those jurisdictions listed on Schedule 6.7. Schedule
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6.7 is a true, correct and complete list of (i) the legal names and addresses
of each warehouseman, filler, processor and packer at which Inventory is
stored as of the Closing Date in an amount in excess of One Hundred Thousand
Dollars ($100,000), (ii) the address of the chief executive offices of the
Obligors and each of their Subsidiaries and (iii) the address of all offices
where records and books of account of the Obligors and each of their
Subsidiaries are kept. None of the receipts received by any of the Obligors
from any warehouseman, filler, processor or packer states that the goods
covered thereby are to be delivered to bearer or to the order of a named
person or to a named person and such named person's assigns.
6.8 Fictitious Business Names.
Neither such Obligor nor any of its Subsidiaries has used any corporate
or fictitious name during the five (5) years preceding the date hereof, other
than the name shown on its or such Subsidiary's articles or certificate of
incorporation or formation and as set forth on Schedule 6.8.
6.9 Subsidiaries.
The only direct or indirect Subsidiaries of the Obligors are those
listed on Schedule 6.9 attached hereto. Except for Ottawa Canada, there are
no Subsidiaries of any Obligors which are not Obligors on the Closing Date.
The Obligors are the record and beneficial owners of all of the shares of
Capital Stock of each of the Subsidiaries listed on Schedule 6.9 as being
owned by the Obligors. All Persons known to BMAC Holdings to be owners of
five percent (5%) or more of the Capital Stock of Holdings issued and
outstanding on the Closing Date are listed on Schedule 6.9. Except as listed
on Schedule 6.9, there are no proxies, irrevocable or otherwise, with respect
to the shares of Capital Stock of any Obligor, and no equity securities of
any of the Obligors are or may become required to be issued by reason of any
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any Capital Stock of any Obligor. There are no
contracts, commitments, understandings or arrangements by which any Obligor
is or may become bound to issue additional shares of its Capital Stock or
securities convertible into or exchangeable for such shares. All of such
shares of Capital Stock so owned by the Obligors are owned by them free and
clear of any Liens other than Permitted Liens.
6.10 No Judgments or Litigation.
Except as set forth on Schedule 6.10 or as contained in the summary
report specified in Section 7.5(b), no judgments, orders, writs or decrees
are outstanding against such Obligor or any of its Subsidiaries nor is there
now pending or, to the best of such Obligor's knowledge after diligent
inquiry, threatened any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against such Obligor or any of
its Subsidiaries except judgments and pending or threatened litigation,
contested claims, investigations, arbitrations and governmental proceedings
which could not reasonably be expected to have a Material Adverse Effect.
6.11 No Defaults.
Neither such Obligor nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, document or instrument
to which any of them is a party or by which any of them is bound which
65
default has had or could be reasonably expected to have a Material Adverse
Effect. Such Obligor knows of no dispute regarding any indenture, contract,
lease, agreement, document or instrument to which it is a party or by which
it is bound which could reasonably be expected to have a Material Adverse
Effect.
6.12 No Employee Disputes.
There are no controversies pending or, to the best of such Obligor's
knowledge threatened between such Obligor or any of its Subsidiaries and any
of their respective employees, other than those arising in the ordinary
course of business which could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
6.13 Compliance with Law.
Neither such Obligor nor any of its Subsidiaries has violated or failed
to comply with any statute, law, ordinance, regulation, rule or order of any
foreign, federal, state or local government, or any other Governmental
Authority or any self regulatory organization, or any judgment, decree or
order of any court, applicable to its business or operations except where the
aggregate of all such violations or failures to comply could not reasonably
be expected to have a Material Adverse Effect. The conduct of the business
of such Obligor and each of the Subsidiaries is in conformity with all
securities, commodities, energy, public utility, zoning, building code,
health, OSHA, MSHA, EPA and environmental requirements and all other foreign,
federal, state and local governmental and regulatory requirements and
requirements of any self regulatory organizations, except where such
non-conformities could not reasonably be expected to have a Material Adverse
Effect. Neither such Obligor nor any of its Subsidiaries has received any
notice to the effect that, or otherwise been advised that, it is not in
compliance with, and neither such Obligor nor any of its Subsidiaries has any
reason to anticipate that any currently existing circumstances are likely to
result in the violation of any such statute, law, ordinance, regulation,
rule, judgment, decree or order which failure or violation could reasonably
be expected to have a Material Adverse Effect.
6.14 ERISA.
Neither such Obligor nor any ERISA Affiliate of such Obligor maintains
or contributes to, or has any liability in respect of, any Benefit Plan as of
the Closing Date other than those listed on Schedule 6.14 (each such Benefit
Plan together with any Benefit Plan which any Obligor or ERISA Affiliate of
an Obligor maintains or contributes to, or has any liability in respect of,
subsequent to the Closing Date, herein called a "Covered Benefit Plan").
Each Covered Benefit Plan has been, during the immediately five (5) years
preceding the Closing Date, and is being, maintained and funded substantially
in accordance with its terms and in compliance in all material respects with
all provisions of ERISA and the Internal Revenue Code applicable thereto.
Such Obligor and each ERISA Affiliate has during the immediately five (5)
years preceding the Closing Date, fulfilled all material obligations related
to the minimum funding standards of ERISA and the Internal Revenue Code for
each Covered Benefit Plan, is in compliance in all material respects with the
currently applicable provisions of ERISA and of the Internal Revenue Code and
has not during the immediately five (5) years preceding the Closing Date,
incurred any liability (other than routine liability for premiums) under
Title IV of ERISA, except where such liability could not reasonably be
66
expected to have a Material Adverse Effect. No Termination Event has
occurred during the immediately five (5) years preceding the Closing Date
which could reasonably be expected to have a Material Adverse Effect. To
each Obligor's knowledge, no other event or events have occurred with respect
to a Benefit Plan in connection with which an Obligor any ERISA Affiliate,
any fiduciary of a Benefit Plan maintained by an Obligor or an ERISA
Affiliate or any Benefit Plan maintained by an Obligor or an ERISA Affiliate,
directly or indirectly, would be subject to any material liability,
individually or in the aggregate, under ERISA, the Internal Revenue Code or
any other law, regulation or governmental order or under any agreement,
instrument, statute, rule of law or regulation pursuant to or under which any
such entity has agreed to indemnify or is required to indemnify any person
against material liability incurred under, or for a material violation or
failure to satisfy the requirements of, any such statute, regulation or
order.
6.15 Compliance with Environmental Laws.
Except as disclosed on Schedule 6.15 attached hereto, (a) the
operations of such Obligor and each of its Subsidiaries comply in all
material respects with all applicable federal, state or local environmental,
health and safety statutes, regulations, or ordinance and (b) none of the
operations of such Obligor or any of its Subsidiaries is the subject of any
judicial or administrative proceeding alleging the violation of any federal,
state or local environmental, health or safety statute, regulation or
ordinance, which, if determined adversely to such Obligor, could reasonably
be expected to have a Material Adverse Effect. Except as disclosed on
Schedule 6.15, none of the operations of such Obligor or any of its
Subsidiaries is the subject of any federal or state investigation evaluating
whether such Obligor or any of its Subsidiaries disposed any hazardous or
toxic waste, substance or constituent or other substance at any site that may
require remedial action, or any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent, or other substance into
the environment, which could reasonably be expected to have a Material
Adverse Effect. Except as disclosed on Schedule 6.15, neither such Obligor
nor any of its Subsidiaries have filed any notice under any federal or state
law indicating past or present treatment, storage or disposal of a hazardous
waste or reporting a spill or release of a hazardous or toxic waste,
substance or constituent, or other substance into the environment. Except as
disclosed on Schedule 6.15, neither such Obligor nor any of its Subsidiaries
have any material contingent liability of which such Obligor has knowledge or
reasonably should have knowledge in connection with any release of any
hazardous or toxic waste, substance or constituent, or other substance into
the environment, nor has such Obligor or any of its Subsidiaries received any
notice, letter or other indication of potential material liability arising
from the disposal of any hazardous or toxic waste, substance or constituent
or other substance into the environment.
6.16 Use of Proceeds.
All proceeds of the Loans will be used only in accordance with Section
7.13.
6.17 Intellectual Property.
Such Obligor and each of its Subsidiaries possesses adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names to continue to conduct its business as heretofore conducted
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by it. Schedule 6.17 attached hereto sets forth (a) all of the federal,
state and foreign registrations of trademarks, service marks and other marks,
trade names or other trade rights of such Obligor and its Subsidiaries, and
all pending applications for any such registrations, (b) all of the patents
and copyrights of such Obligor and its Subsidiaries and all pending
applications therefor and (c) all other trademarks, service marks and other
marks, trade names and other trade rights used by such Obligor or any of its
Subsidiaries in connection with their businesses (collectively, the
"Proprietary Rights"). Such Obligor and its Subsidiaries are collectively
the owners of each of the trademarks listed on Schedule 6.17 as indicated on
such schedule, and no other Person has the right to use any of such marks in
commerce either in the identical form or in such near resemblance thereto as
may be likely to cause confusion or to cause mistake or to deceive. Each of
the trademarks listed on Schedule 6.17 is a federally registered trademark of
such Obligor or its Subsidiaries having the registration number and issue
date set forth on Schedule 6.17. Except as disclosed on Schedule 6.17, no
person has a right to receive any royalty or similar payment in respect of
any Proprietary Rights pursuant to any contractual arrangements entered into
by such Obligor, or any of its Subsidiaries and no person otherwise has a
right to receive any royalty or similar payment in respect of any such
Proprietary Rights except as disclosed on Schedule 6.17. Neither such
Obligor nor any of its Subsidiaries has granted any license or sold or
otherwise transferred any interest in any of the Proprietary Rights to any
other person. The use of each of the Proprietary Rights by such Obligor and
its Subsidiaries is not infringing upon or otherwise violating the rights of
any third party in or to such Proprietary Rights, and no proceeding has been
instituted against or notice received by such Obligor or any of its
Subsidiaries that are presently outstanding alleging that the use of any of
the Proprietary Rights infringes upon or otherwise violates the rights of any
third party in or to any of the Proprietary Rights, except where such
infringement or other violation could not reasonably be expected to have a
Material Adverse Effect. Neither such Obligor nor any of its Subsidiaries
have given notice to any Person that it is infringing on any of the
Proprietary Rights and to the best of such Obligor's knowledge, no Person is
infringing on any of the Proprietary Rights. All of the Proprietary Rights
of such Obligor and its Subsidiaries are valid and enforceable rights of such
Obligor and its Subsidiaries and will not cease to be valid and in full force
and effect by reason of the execution and delivery of this Credit Agreement
or the Credit Documents or the consummation of the transactions contemplated
hereby or thereby.
6.18 Licenses and Permits.
Such Obligor and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and
other rights and approvals which are necessary or appropriate for the
operation of their businesses as presently conducted and as proposed to be
conducted. Neither of such Obligor nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval except in any such case which could not reasonably be expected to
have a Material Adverse Effect.
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6.19 Owned Real Property.
Schedule 6.19 sets forth and describes all real property owned by each
Obligor and its Subsidiaries on the Closing Date having an estimated fair
market value in excess of One Hundred Thousand Dollars ($100,000) ("Owned
Real Property"), showing the county or other relevant jurisdiction, state,
property name and acreage (if applicable) thereof. Except to the extent the
failure to do so would not reasonably be expected to have a Material Adverse
Effect, as of the date hereof, each Obligor or one of its Subsidiaries, as
the case may be, has good, valid and insurable fee simple title to its Owned
Real Property, in each case free and clear of all Liens except for Permitted
Liens. Such Obligor and its Subsidiaries enjoy peaceful and undisturbed
possession of all such Owned Real Property. Neither the Obligors nor any
Subsidiaries has received notice of a pending or threatened condemnation
proceeding relating to any such Owned Real Property, and, to the knowledge of
the Obligors, there is no threatened condemnation proceeding relating to any
such Owned Real Property. The Structures located on Owned Real Property are,
to the knowledge of the Obligors, (a) insured to the extent and in a manner
customary in the industry in which such Obligor or such Subsidiaries are
engaged, (b) structurally sound with no known defects which have or could
reasonably be expected to have a Material Adverse Effect, (c) in good
operating condition and repair, subject to ordinary wear and tear, (d) not in
need of maintenance or repair except for ordinary, routine maintenance and
repair the cost of which is immaterial, (e) sufficient for the operation of
the businesses of such Obligor and its Subsidiaries thereon as currently
conducted and (f) operated in conformity with all applicable laws,
ordinances, orders, regulations and other requirements (including applicable
zoning, environmental, motor vehicle safety, occupational safety and health
and mining safety laws and regulations) relating thereto, except where the
failure to conform could not reasonably be expected to have a Material
Adverse Effect. No real property owned in fee simple by any Obligor or
Subsidiary of an Obligor has been the subject of an Asset Disposition since
December 31, 2002, except (i) as part of the Aggregates Sale or (ii) as
listed on Schedule 6.19.
6.20 Leased Real Estate.
Schedule 6.20 contains a complete listing of all real property leased
by each Obligor or any of its Subsidiaries as tenant or lessee from third
parties (including Affiliates) as of the Closing Date in which aggregate
annual rentals exceed Two Hundred Fifty Thousand Dollars ($250,000), whether
in the form of Capital Leases or otherwise showing the county or other
relevant jurisdiction, state, property name, acreage (if applicable) thereof
("Leased Real Property"), together with a listing (in summary form) of all
leases pertaining thereto ("Real Property Leases"). Each Obligor and its
Subsidiaries, as the case may be, have valid leasehold interests in all
Leased Real Property, and are in material compliance with all material terms
of all Real Property Leases on the Closing Date, except to the extent that
the failure to do so would not reasonably be expected to have a Material
Adverse Effect.
6.21 Title to Personalty.
Each Obligor and its Subsidiaries have valid title to, or a valid
leasehold interest in, all personal property operated or otherwise used in
their business operations as of the Closing Date. Schedule 6.21 sets forth
and describes all leases of personal property (including Capital Leases and
operating leases) from third parties (including Affiliates) in which an
Obligor or one of its Subsidiaries is lessee as of the Closing Date and
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wherein the annual rental thereunder exceeds Two Hundred Fifty Thousand
Dollars ($250,000); and such Obligor and its Subsidiaries are in material
compliance therewith.
6.22 Labor Matters.
Neither such Obligor nor any of its Subsidiaries is engaged in any
material unfair labor practice. There is (a) no material unfair labor
practice complaint pending against such Obligor or any of its Subsidiaries
or, to the best knowledge of such Obligor, threatened against any of them,
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements that has
or could reasonably be expected to have a Material Adverse Effect is so
pending against such Obligor or any of its Subsidiaries or, to the best
knowledge of such Obligor, threatened against any of them, (b) no strike,
labor dispute, slowdown or stoppage pending against either of such Obligor or
any of its Subsidiaries or, to the best knowledge of such Obligor, threatened
against any of them which could reasonably be expected to have a Material
Adverse Effect, (c) no union representation questions with respect to the
employees of such Obligor which could reasonably be expected to have a
Material Adverse Effect and (d) no union organizing activity with respect to
the employees of such Obligor which could reasonably be expected to have a
Material Adverse Effect.
6.23 Not an Investment Company.
Neither such Obligor nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, (b) 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, or (c) subject to any other law which purports to regulate or
restrict its ability to borrow money or to consummate the transactions
contemplated by this Credit Agreement or the other Credit Documents or to
perform its obligations hereunder or thereunder.
6.24 No Margin Security.
Such Obligor does not own any "margin stock" (as defined in Regulation
U of the Board of Governors of the Federal Reserve System) and no portion of
the proceeds of any Loans or Letters of Credit shall be used by the Obligors
for the purpose of purchasing or carrying any such "margin stock" for any
other purpose which violates the provisions or Regulation T, U or X of said
Board of Governors or for any other purpose in violation of any applicable
statute or regulation, or of the terms and conditions of this Credit
Agreement.
6.25 No Event of Default.
No Default or Event of Default has occurred and is continuing.
6.26 Taxes and Tax Returns.
Each Obligor has filed, or caused to be filed, all material tax returns
(federal, state, local and foreign) required to be filed and paid all
material amounts of taxes shown thereon to be due (including interest and
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penalties) and has paid all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (a) that are
not yet delinquent or (b) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. None of the Obligors is aware of any proposed
material tax assessments against it or any other Obligor.
6.27 No Other Indebtedness.
Such Obligor has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders
hereunder, except for Permitted Indebtedness.
6.28 Existing Subordinated Notes.
All obligations incurred, or to be incurred, shall constitute under the
terms of the Existing Subordinated Notes Indenture as in effect on the
Closing Date (i) "Senior Indebtedness," (ii) "Designated Senior Indebtedness"
and (iii) to the extent of the Existing Senior Secured Credit Facilities
being refinanced from the proceeds of the initial Loan being made pursuant
hereto, "Bank Indebtedness" and "Refinancing Indebtedness" (quoted terms used
hereinabove having the definitions given to such terms under the Existing
Subordinated Notes Indenture as in effect on the Closing Date).
6.29 Status of Accounts.
Each Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by such Obligor in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be
subject to any Lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Liens; and such
Obligor's customers have accepted the goods or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without any dispute, offset, defense, counterclaim or contra that
could reasonably be expected to have, when aggregated with any such other
disputes, offsets, defenses, counterclaims or contras, a Material Adverse
Effect. Such Obligor confirms to the Lenders that any and all taxes or fees
relating to its business, its sales, the Accounts or the goods relating
thereto, are its sole responsibility and that same will be paid by such
Obligor when due (unless duly contested and adequately reserved for) and that
none of said taxes or fees is or will become a lien on or claim against the
Accounts.
6.30 Representations and Warranties.
As of the Closing Date, each of the representations and warranties made
in the Credit Documents by each of the Obligors and their Subsidiaries, and
to the knowledge of each such Obligor, each other party thereto is true and
correct in all material respects, and such representations and warranties are
hereby incorporated herein by reference with the same effect as though set
forth in their entirety herein, as qualified therein.
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6.31 Trade Relations.
There exists no actual or threatened termination, cancellation or
limitation of, or any modification or change in, the business relationship
between such Obligor or any of its Subsidiaries and any customer or any group
of customers or with any supplier which could reasonably be expected to have
a Material Adverse Effect, and there exists no present condition or state of
facts or circumstances which would materially and adversely affect such
Obligor or any of its Subsidiaries or present such Obligor or any of its
Subsidiaries from conducting such business after the consummation of the
transaction contemplated by this Agreement in substantially the same manner
in which it has heretofore been conducted.
6.32 Affiliate Transactions.
Except as set forth on Schedule 6.32, neither such Obligor nor any of
its Subsidiaries is a party to or bound by any Material Contract (whether
oral or written) whereby any Affiliate of such Obligor or Subsidiary is an
opposite party.
6.33 Material Contracts.
Schedule 6.33 sets forth a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. All of the Material
Contracts are in full force and effect, and, to each Obligor's knowledge, no
material defaults currently exist thereunder.
6.34 Common Business Enterprise.
Such Obligor shares with each other Obligor an identity of interests as
members of a consolidated group of companies engaged in similar or related
businesses, operating under a common business plan, in which the making
available to the Borrower if the financial accommodations contemplated
hereunder will facilitate and enhance the overall financial strength and
stability of the consolidated group.
6.35 Accuracy and Completeness of Information.
All factual information heretofore or contemporaneously herewith
furnished by or on behalf of the Obligors or any of their respective
Subsidiaries in writing to the Administrative Agent, any Lender, or the
Independent Accountant for purposes of or in connection with this Credit
Agreement or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the date
as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information not
misleading at such time. There is no fact now known to any officer of any
Obligor or any of its Subsidiaries which has, or would have, a Material
Adverse Effect which fact has not been set forth herein, in the Financials,
or any certificate, opinion or other written statement made or furnished by
any Obligor to the Administrative Agent.
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ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations (other than then
contingent indemnification obligations) due or to become due hereunder, each
Obligor agrees that, unless the Required Lenders shall have otherwise
consented in writing:
7.1 Financial Information.
The Borrower will furnish (or cause to be furnished) to the Lenders the
following information within the following time periods:
(a) within ninety (90) days after the close of the Fiscal Year (i) the
audited consolidated and unaudited consolidating balance sheets and
statements of income and retained earnings and of changes in cash flow
of BMAC and its consolidated Subsidiaries, for such year, in reasonable
detail, each setting forth in comparative form the corresponding
figures for the preceding year, prepared in accordance with GAAP, and
accompanied by a report and unqualified opinion of Obligors' Accountant
and any corresponding management letter; and (ii) the unaudited
consolidated and consolidating balance sheets and statements of income
and retained earnings and of changes in cash flow of Holdings and its
consolidated Subsidiaries, for such year, in reasonable detail, each
setting forth in comparative form the corresponding figures for the
preceding year, prepared in accordance with GAAP;
(b) within forty-five (45) days after the end of each Fiscal Quarter other
than the final Fiscal Quarter in each Fiscal Year, unaudited
consolidated and consolidating financial statements of (i) BMAC and its
consolidated Subsidiaries and (ii) Borrower and its Consolidated
Subsidiaries, as of the end of such period and for such period then
ended and for the period from the beginning of the current Fiscal Year
to the end of such period, setting forth in comparative form the
corresponding figures for the comparable period in the preceding Fiscal
Year, prepared in accordance with GAAP (except that such quarterly
statements need not include footnotes and subject to year-end audit
adjustments) and certified as described in paragraph (d) below;
(c) within thirty (30) days after the end of each Fiscal Month other than
the Final Month of each Fiscal Quarter, unaudited consolidated and
consolidating financial statements of (i) BMAC and its consolidated
Subsidiaries and (ii) Borrower and its Consolidated Subsidiaries, as of
the end of such period and for such period then ended and for the
period from the beginning of the current fiscal year to the end of such
period, setting forth in comparative form the corresponding figures for
the comparable period in the preceding fiscal year, prepared in
accordance with GAAP (except that such monthly statements need not
include footnotes and subject to year-end audit adjustments) and
certified as described in paragraph (d) below;
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(d) at the time of delivery of each monthly, quarterly and annual statement
described hereinabove, a certificate, executed by an Authorized Officer
of BMAC, in substantially the form of Exhibit S attached hereto (the
"Compliance Certificate"), stating that such officer has no knowledge
of any Default or Event of Default during such month or quarter or at
the end of such year, or, if such officer has such knowledge,
specifying each Default or Event of Default and the nature thereof, and
showing continuing compliance as of the date of such statement with the
financial covenants set forth in Article VIII;
(e) not later that ten (10) Business Days after the end of each Fiscal
Month (or, at the option of Administrative Agent, on a weekly basis, on
the first Business Day of each calendar week, as of the last Business
Day of the preceding calendar week, if and so long as Average Excess
Availability is less than Three Million Dollars ($3,000,000), or any
Event of Default exists), a certificate, to be substantially in the
form of Exhibit T (the "Borrowing Base Certificate"), duly completed
and certified by an Authorized Officer of the Borrower, detailing the
Eligible Accounts Receivable and Eligible Inventory as of the most
recent date of determination (which shall be determined not less
frequently than monthly), together with a written report to the
Administrative Agent setting forth the accounts receivable aged trial
balance at the immediately preceding month end for each account debtor,
aged by due date, which aging reports shall indicate which Accounts are
current, up to 30, 30-to-60 and over 60 days past due and shall list
the names and addresses of all applicable account debtors, together
with the following reports which shall be delivered not later than ten
(10) Business Days after the end of each fiscal month: (i) a monthly
accounts payable listing with such listing to be in form satisfactory
to the Administrative Agent, and (ii) a schedule of Inventory owned by
each Obligor by location and category, in summary form, together with,
on at least a monthly basis, a detailed report in respect thereof. The
Administrative Agent shall be entitled to rely on each Borrowing Base
Certificate delivered hereunder as accurately setting forth the
available Borrowing Base for all purposes of this Credit Agreement (in
the absence of manifest error) until such time as a new Borrowing Base
Certificate is delivered to the Administrative Agent in accordance
herewith;
(f) promptly upon and in any event within five (5) Business Days after its
receipt thereof, copies of all management letters and other material
reports which are submitted by the Obligors' Accountants in connection
with any annual or interim audit of the books of the Obligors made by
such accountants;
(g) as soon as practicable but, in any event, within five (5) Business Days
after the issuance thereof, copies of such other financial statements
and reports as any Obligor shall send to its stockholders and holders
of debt securities as such, and copies of all regular and periodic
reports which any Obligor may be required to file with the Securities
and Exchange Commission or any similar or corresponding governmental
commission, department or agency substituted therefor, or any similar
or corresponding Governmental Authority;
(h) no later than the thirty (30) days after the end of each Fiscal Year,
during each year when this Credit Agreement is in effect, a business
plan and budget for the next Fiscal Year of BMAC and its Subsidiaries
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which shall include projected consolidated and consolidating balance
sheets, statements of income and statements of cash flows for BMAC and
its consolidated Subsidiaries on a monthly basis for such Fiscal Year,
together with projections of Loan usage and Excess Availability for
such Fiscal Year;
(i) promptly and in any event within five (5) Business Days after becoming
aware of the occurrence of a Default or Event of Default, a certificate
of Authorized Officer of the Borrower, as Obligors' Representative,
specifying the nature thereof and the Obligors' proposed response
thereto, each in reasonable detail; and
(j) promptly, and in any event within five (5) Business Days after the
delivery (or receipt) thereof, copies of any notices of default or of
actual, pending or threatened acceleration of, the Existing
Subordinated Notes.
(k) promptly, such other data regarding its business affairs and financial
condition as the Administrative Agent may reasonably request from time
to time.
7.2 Inventory.
Within fifteen (15) days after the end of each month, or more
frequently upon the request of the Administrative Agent from time to time,
the Obligors will provide to the Administrative Agent written statements
listing items of Inventory in reasonable detail as requested by the
Administrative Agent, segregated by Stores, WIP, Finished Goods and other
Inventory. Further, the Obligors will conduct annually a physical count (or
other form of examination which is acceptable to, and has been approved by,
the Administrative Agent) of the Borrower's Inventory and a report of such
count (or other form of examination) will be promptly supplied to the
Administrative Agent accompanied by a report of the value (valued at FIFO) of
such Inventory; provided, however, that the Obligors will conduct such a
physical count (or other examination) at such other times and as of such
dates as the Administrative Agent shall reasonably request.
7.3 Corporate Existence.
Each Obligor and each of its Subsidiaries (a) will maintain its current
corporate or other organizational existence, will maintain in full force and
effect all material licenses, bonds, franchise, leases, trademarks and
qualifications to do business, (b) will maintain patents, contracts and other
rights necessary to the conduct of their businesses, (c) will continue in,
and limit their operations to, the same general lines of business as that
presently conducted by them and (d) will comply with all applicable laws and
regulations of any federal, state or local Governmental Authority, except, in
each case, where noncompliance could not reasonably be expected to have a
Material Adverse Effect.
7.4 ERISA.
The Obligors will deliver to the Administrative Agent, at the Obligors'
expense, the following information at the times specified below:
(a) within five (5) Business Days after any Obligor or any ERISA Affiliate
knows that a Termination Event with respect to a Covered Benefit Plan
has occurred which could reasonably be expected to have a Material
75
Adverse Effect, a written statement of the chief financial officer or
controller of the Borrower describing such Termination Event and the
action, if any, which the Obligors or other such entities have taken,
are taking or propose to take with respect thereto, and when known, any
action taken or threatened by the Internal Revenue Service, DOL or PBGC
with respect thereto;
(b) within five (5) Business Days after any Obligor or any ERISA Affiliate
knows that a prohibited transaction (as defined in Section 406 of ERISA
and Section 4975 of the Internal Revenue Code) has occurred with
respect to a Covered Benefit Plan which could reasonably be expected to
have a Material Adverse Effect, a statement of the chief financial
officer or controller of the Borrower describing such transaction and
the action which the Obligors or other such entities have taken, are
taking or propose to take with respect thereto;
(c) within five (5) Business Days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed
with respect to any Covered Benefit Plan and all communications
received by any Obligor or any ERISA Affiliate with respect to such
request except where such funding waiver could not reasonably be
expected to have a Material Adverse Effect;
(d) within five (5) Business Days after receipt by any Obligor or any ERISA
Affiliate of the PBGC's intention to terminate a Covered Benefit Plan
or to have a trustee appointed to administer a Benefit Plan maintained
by an Obligor or an ERISA Affiliate copies of each such notice;
(e) within five (5) Business Days after receipt by any Obligor or any ERISA
Affiliate of a notice regarding the imposition of withdrawal liability
with respect to a Covered Benefit Plan on the Obligor or an ERISA
Affiliate copies of each such notice except where such liability could
not reasonably be expected to have a Material Adverse Effect;
(f) within five (5) Business Days after any Obligor or any ERISA Affiliate
fails to make a required installment or any other required payment
under Section 412 of the Internal Revenue Code with respect to a
Covered Benefit Plan maintained by an Obligor or an ERISA Affiliate on
or before the due date for such installment or payment, a notification
of such failure; and
(g) within five (5) Business Days after any Obligor or any ERISA Affiliate
knows (a) a Multiemployer Plan to which an Obligor or any ERISA
Affiliate of the Obligor is required to make contributions has been
terminated, (b) the administrator or plan sponsor of a Multiemployer
Plan to which an Obligor or any ERISA Affiliate of the Obligor is
required to make contributions intends to terminate the Multiemployer
Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan to which
an Obligor or any ERISA Affiliate of the Obligor is required to make
contributions, a written statement setting forth any such event or
information, except where such termination under clauses (a), (b) or
(c) could not reasonably be expected to have a Material Adverse Effect.
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For purposes of this Section 7.4, any Obligor and any ERISA Affiliate
shall be deemed to know all facts known by the administrator of any Covered
Benefit Plan.
The Obligors will establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Internal Revenue
Code, and all other applicable laws, and the regulations and interpretations
thereunder other than to the extent that the Obligors are in good faith
contesting by appropriate proceedings the validity or implication of any such
provision, law, rule, regulation or interpretation.
7.5 Proceedings or Adverse Changes.
(a) The Obligors will as soon as possible, and in any event within five (5)
Business Days after any Obligor learns of the following, give written notice
to the Administrative Agent of (i) any material proceeding(s) (other than any
pertaining to Silica Related Claims otherwise being reported pursuant to
subsection (b)) in which the Obligors are alleged to have liability in excess
of Two Hundred Fifty Thousand Dollars ($250,000) being instituted or
threatened to be instituted by or against any Obligor or any of its
Subsidiaries in any federal, state, local or foreign court or before any
commission or other regulatory body (federal, state, local or foreign).
(b) The Borrower shall provide to the Administrative Agent on the Closing
Date and quarterly thereafter within fifteen (15) days after the end of each
Fiscal Quarter, a statistical summary in respect of the existence and status
of all Silica-Related Claims in substantially the form provided by the
Borrower to the Administrative Agent prior to the Closing Date.
(c) The Obligors will, as soon as possible, and in any event within five
(5) Business Days after any Obligor learns of any event, circumstance or
condition constituting Material Adverse Change or having (or reasonably
likely to cause) a Material Adverse Affect, give written notice to the
Administrative Agent thereof. Provision of such notice by the Obligors will
not constitute a waiver or excuse of any Default or Event of Default
occurring as a result of such changes or events.
7.6 Environmental Matters.
Each Obligor will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all
environmental laws, regulations, and ordinances in all jurisdictions in which
any of them is or may at any time be doing business including, without
limitation, environmental land use, occupational safety or health laws,
regulations, ordinances, or permits in all jurisdictions in which any of them
is or may at any time be doing business, except to the extent that any
Obligor or any of its Subsidiaries are contesting, in good faith by
appropriate legal proceedings, any such law, regulation, direction,
ordinance, or permit or the interpretation thereof or application thereof;
provided, further, that each Obligor and each of the Subsidiaries will
materially comply with the order of any court or other governmental body of
the applicable jurisdiction relating to such laws unless such Obligor or the
Subsidiaries shall currently be prosecuting an appeal or proceedings for
review and shall have secured a stay of enforcement or execution or other
arrangement postponing enforcement or execution pending such appeal or
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proceedings for review. If any Obligor or any of its Subsidiaries shall (a)
receive written notice that any material violation of any federal, state or
local environmental law, regulation, ordinance may have been committed or is
about to be committed by such Obligor or any of its Subsidiaries, (b) receive
written notice from a governmental agency that any administrative or judicial
complaint or order has been filed or is about to be filed against such
Obligor or any of its Subsidiaries alleging material violations of any
federal, state or local environmental law, regulation, ordinance or permit,
or requiring such Obligor or any of its Subsidiaries to take action in
connection with the release of toxic or hazardous substances into the
environment or (c) receive any written notice from a federal, state, or local
governmental agency alleging that such Obligor or any of its Subsidiaries may
be materially liable or responsible for costs associated with a response to
or cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby, the Obligors will provide the
Administrative Agent with a copy of such notice within forty-five (45) days
after the receipt thereof by the applicable Obligor or any of its
Subsidiaries. Within forty-five (45) days after any Obligor learns of the
enactment or promulgation of any federal, state or local environmental law,
regulation, ordinance, which could reasonably have a Material Adverse Effect,
such Obligor will provide the Administrative Agent with notice thereof. Each
Obligor will promptly take all actions necessary to prevent the imposition of
any Liens on any of its properties arising out of or related to any
environmental matters. At the request of the Administrative Agent from time
to time, but in any event not more frequently than once in any twelve month
period (unless an Event of Default then exists), and at the sole cost and
expense of the Obligors, the Obligors will retain an environmental consulting
firm, satisfactory to the Administrative Agent in its commercially reasonable
judgment, to conduct an environmental review and audit of the properties of
the Obligors and the Subsidiaries located in the United States and provide to
the Administrative Agent and each Lender a copy of any reports delivered in
connection therewith.
7.7 Books and Records; Inspection.
Each Obligor will, and will cause each of its Subsidiaries to, maintain
books and records pertaining to the Collateral in such detail, form and scope
as is consistent with good business practice. Each Obligor agrees that the
Administrative Agent or its agents may enter upon the premises of each
Obligor or any of its Subsidiaries at any time and from time to time, during
normal business hours, and at any time at all on and after the occurrence of
an Event of Default and during its continuance, for the purpose of (a)
enabling the Administrative Agent's internal auditors or outside third party
designees to conduct field examinations at such Obligor's expense, (b)
inspecting the Collateral, (c) inspecting and/or copying (at the Obligors'
expense) any and all records pertaining thereto, (d) discussing the affairs,
finances and business of any Obligor with any officers, employees and
directors of any Obligor or with the Independent Accountant, and (e)
requesting written verification from third parties (in the name of an
Obligor) of the amounts of Eligible Accounts Receivable and Eligible
Inventory. The Lenders, in the reasonable discretion of the Administrative
Agent, may accompany the Administrative Agent at their sole expense in
connection with the foregoing inspections. Each Obligor agrees to afford the
Administrative Agent at least thirty (30) days prior written notice of any
change in the location of any Collateral (other than Inventory held for
shipment by third Persons, Inventory in transit, Inventory held for
processing by third Persons or immaterial quantities of assets, equipment or
Inventory) or in the location of its chief executive office or place of
business from the locations specified in Schedule 6.7, and to execute in
advance of such change, cause to be filed and/or delivered to the
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Administrative Agent any financing statements or other documents required by
the Administrative Agent and to take such other action as is necessary or
advisable to cause the Lien of the Administrative Agent on the Collateral to
continue to be perfected, all in form and substance satisfactory to the
Administrative Agent. Each Obligor agrees to advise the Administrative Agent
promptly, in sufficient detail, of any substantial change relating to the
type, quantity or quality of the Collateral or any event which could
reasonably be expected to have a Material Adverse Effect.
7.8 Collateral Records.
Each Obligor will, and will cause each of the Subsidiaries to, execute
and deliver to the Administrative Agent, from time to time, solely for the
Administrative Agent's convenience in maintaining a record of the Collateral,
such written statements and schedules as the Administrative Agent may
reasonably require, including without limitation (or duplication), those
described in Section 7.1 and Section 7.7 of this Credit Agreement,
designating, identifying or describing the Collateral pledged to the Lenders
hereunder. Each Obligor's or any Subsidiary's failure, however, to promptly
give the Administrative Agent such statements or schedules shall not affect,
diminish, modify or otherwise limit the Lenders' security interests in the
Collateral. Such Obligor agrees to maintain such books and records regarding
Accounts and the other Collateral as the Administrative Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral.
7.9 Security Interests.
The Obligors will, at their expense, warrant, until payment in full of
the Obligations and termination of the Commitments and, at the Administrative
Agent's request, defend the Collateral from any and all Liens (other than
Permitted Liens) and claims and demands of other Persons. Each Obligor
agrees to comply with the requirements of all state and federal laws in order
to grant to the Lenders valid and perfected security interests in the
Collateral. The Administrative Agent is hereby authorized by each Obligor to
file any financing statements covering the Collateral whether or not any
Obligor's signature appears thereon. Each Obligor agrees to do whatever the
Administrative Agent may reasonably request, from time to time, by way of:
filing notices of liens, financing statements, fixture filings and
amendments, renewals and continuations thereof; cooperating with the
Administrative Agent's custodians; keeping stock records; using credit
efforts to obtain waivers from landlords and mortgagees and from
warehousemen, fillers, processors and packers and their respective landlords
and mortgagees; paying claims, which might if unpaid, become a Lien (other
than a Permitted Lien) on the Collateral; assigning its rights to the payment
of Accounts pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Sec 3727 et seq.) (the failure of which so to assign will permit the
Administrative Agent to exclude such Accounts from the Borrowing Base); and
performing such further acts as the Administrative Agent may reasonably
require in order to effect the purposes of this Credit Agreement and the
other Credit Documents. Any and all fees, costs and expenses of whatever
kind and nature (including any Taxes, reasonable attorneys' fees or costs for
insurance in accordance with Section 7.10), which the Administrative Agent
may incur with respect to the Collateral or the Obligations: in filing public
notices; in preparing or filing documents; making title examinations or
rendering opinions; in protecting, maintaining, or preserving the Collateral
or its interest therein; in enforcing or foreclosing the Liens hereunder,
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whether through judicial procedures or otherwise; or in defending or
prosecuting any actions or proceedings arising out of or relating to its
transactions with any Obligor or any of its Subsidiaries under this Credit
Agreement or any other Credit Document, will be borne and paid by the
Obligors (without duplication of its obligations in regard thereto under
Section 14.8). If same are not promptly paid by the Obligors, the
Administrative Agent may pay same on the Obligors' behalf, and the amount
thereof shall be an Obligation secured hereby and due to the Administrative
Agent on demand.
7.10 Insurance; Casualty Loss.
(a) Subject, in the case of Silica-Related Claims, to the terms of Section
7.10(b), each Obligor will, and will cause each of the Subsidiaries to,
maintain public liability insurance, third party property damage
insurance and replacement value insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts
and covering such risks as are usually carried by companies of
comparable size to such Obligor and engaged in the same, or
substantially the same business, but which are at all times otherwise
satisfactory to the Administrative Agent in its credit judgment. All
policies covering the Collateral are to name the Obligors and the
Administrative Agent as mortgagee/loss payee in case of loss, as their
interests may appear, and are to contain such other provisions as the
Administrative Agent may reasonably require to fully protect the
Administrative Agent's interest in the Collateral and to any payments
to be made under such policies. All liability insurance policies are
to name the Administrative Agent as additional insured. True copies of
all original insurance policies or certificates of insurance evidencing
such insurance covering the Collateral are to be delivered to the
Administrative Agent on or prior to the Closing Date, with premium
prepaid, and with the loss payable endorsement in the Administrative
Agent's favor, and shall provide for not less than twenty (20) days
prior written notice to the Administrative Agent, of the exercise of
any right of cancellation. In the event any Obligor or any of its
Subsidiaries fail to respond in a timely and appropriate manner (as
determined by the Administrative Agent in its sole credit judgment)
with respect to collecting under any insurance policies required to be
maintained under this Section 7.10, or at any time should an Event of
Default then exist, the Administrative Agent shall have the right, in
the name of the Administrative Agent, any Obligor or any Subsidiary, to
file claims under such insurance policies, to receive and give
acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the
collection, compromise or settlement of any claims under any such
insurance policies. Each Obligor will provide written notice to the
Lenders of the occurrence of any of the following events within five
(5) Business Days after it receives knowledge or notice of the
occurrence of such event: any asset or property owned or used by any
Obligor or any of its Subsidiaries is (i) materially damaged or
destroyed, or suffers any other material loss or (ii) condemned,
confiscated or otherwise taken, in whole or in part, or the use thereof
is otherwise diminished so as to render impracticable or unreasonable
the use of such asset or property for the purpose to which such asset
or property were used immediately prior to such condemnation,
confiscation or taking, by exercise of the powers of condemnation or
eminent domain or otherwise, and in either case the amount of the
damage, destruction, loss or diminution in value of the Collateral
which is in excess of Five Hundred Thousand Dollars ($500,000)
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(collectively, a "Casualty Loss"). Each Obligor will diligently file
and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In the event of a Casualty Loss, the
Obligors will pay to the Administrative Agent, promptly upon receipt
thereof, any and all insurance proceeds and payments received by any
Obligor or any of its Subsidiaries on account of damage, destruction or
loss of all or any portion of the Collateral. The Administrative Agent
may, at its election and in its sole discretion, either (a) apply the
proceeds realized from Casualty Losses to payment, first, of any
Obligations then due and owing, but unpaid, and, thereafter, to the
outstanding principal of the Revolving Loans, or (b) pay such proceeds
to the Obligors to be used to repair, replace or rebuild the asset or
property or portion thereof that was the subject of the Casualty Loss.
After the occurrence and during the continuance of an Event of Default,
(i) no settlement on account of any such Casualty Loss shall be made
without the consent of the Lenders and (ii) the Administrative Agent
may participate in any such proceedings and the Obligors will deliver
to the Administrative Agent such documents as may be requested by the
Administrative Agent to permit such participation and will consult with
the Administrative Agent, its attorneys and agents in the making and
prosecution of such claim or claims. Each Obligor hereby irrevocably
authorizes and appoints the Administrative Agent its attorney-in-fact,
after the occurrence and during the continuance of an Event of Default,
to collect and receive for any such award or payment and to file and
prosecute such claim or claims, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest, and
each Obligor shall, upon demand of the Administrative Agent, make,
execute and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to
the Administrative Agent for the benefit of the Lenders, free and clear
of any encumbrances of any kind or nature whatsoever.
(b) Notwithstanding any terms of Section 7.10(a) above to the contrary,
with specific respect to liability for Silica-Related Claims, the only
insurance which the Borrower shall be required to maintain shall be the
insurance evidenced by those insurance policies in existence on the
Closing Date and listed by general description on Schedule 7.10
attached hereto in which the Borrower is named as an insured (or
additional insured), either directly or as successor-in-interest to, or
assignee of, ITT, U.S. Boras Company, PGSC or OSC, in respect of
Silica-Related Claims (the "Silica-Related Claims Policies"). In
regard thereto, the Borrower will (i) continue to keep all such
policies in full force and effect at all times hereafter, and (ii)
notify the Administrative Agent promptly, but in any event within five
(5) Business Days after receiving any notice or knowledge of any
actual, pending or threatened termination or cancellation of any
thereof or denial of coverage thereunder.
7.11 Taxes.
Each Obligor will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against any Obligor, any Subsidiary or any of the Collateral;
provided, however, that unless such Taxes have become a federal tax or ERISA
Lien on any of the assets of any Obligor or any Subsidiary, no such Tax need
be paid if the same is being contested in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
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reserve or other appropriate provision shall have been made therefor as
required in order to be in conformity with GAAP.
7.12 Compliance With Laws.
Each Obligor will, and will cause each of the Subsidiaries to, comply
with all acts, rules, regulations, orders, directions and ordinances of any
legislative, administrative or judicial body applicable to the Collateral or
any part thereof, or to the operation of its business, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect.
7.13 Use of Proceeds.
The proceeds of any Loan made hereunder shall be used by the Obligors
solely to finance the working capital needs of the Obligors, to repay
existing Indebtedness on the Closing Date in the case of the Existing Senior
Secured Credit Facilities, and to finance other general corporate purposes of
the Obligors, provided, however, that in any event, no portion of the
proceeds of any such Loans shall be used by the Obligors for the purpose of
purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose
which violates the provisions or Regulation T, U or X of said Board of
Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
7.14 Fiscal Year.
Each Obligor agrees that it will not change its fiscal year from a year
ending December 31 unless required by law, in which case such Obligor will
give the Administrative Agent at least thirty (30) days prior written notice
thereof.
7.15 Notification of Certain Events.
Each Obligor agrees that it will promptly notify the Administrative
Agent of the occurrence of any of the following events:
(a) any order or judgment in respect of any Silica-Related Claim or any
Other Claim in excess of Two Hundred Fifty Thousand Dollars ($250,000),
considered individually or in the aggregate with any other then
existing orders, judgments or decrees in respect thereof as to which
the Administrative Agent has not received notice from an Obligor, shall
have been entered against any Obligor or any of its Subsidiaries or any
of their respective properties or assets;
(b) any notification of violation of any law or regulation or any inquiry
shall have been received by any Obligor or any of its Subsidiaries from
any local, state, federal or foreign Governmental Authority or agency
which notice, violation or inquiry could reasonably be expected to have
a Material Adverse Effect; or
(c) any actual, pending or threatened cancellation termination of any
Material Contract which has or could reasonably be expected to have a
Material Adverse Effect.
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7.16 Additional Affiliate Guarantors.
Except with respect to Ottawa Canada, upon any Person becoming a direct
or indirect Subsidiary of any Obligor, such Obligor will provide the
Administrative Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a)
cause such Person (excluding any such Person not organized under the laws of
the United States or any state thereof) to execute a Joinder Agreement in
substantially the same form as Exhibit V hereto, (b) cause such Person
(excluding any such Person not organized under the laws of the United States
or any state thereof) to pledge all of its assets to the Administrative Agent
pursuant to a security agreement in substantially the same form of the
Security Agreement (c) cause all of its Capital Stock (or in the case of any
Person not organized under the laws of the United States or any state
thereof, sixty-five percent (65%) of its Capital Stock) to be delivered to
the Administrative Agent (together with undated stock powers signed in blank
and pledged to the Administrative Agent pursuant to an appropriate pledge
agreement(s) in substantially the same form as the Pledge Agreement and (d)
deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, Acknowledgment Agreements, certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
7.17 Schedules of Accounts and Purchase Orders.
In furtherance of the continuing assignment and security interest in
the Accounts of each Obligor granted pursuant to the Security Agreement, upon
the creation of Accounts, each Obligor will execute and deliver to the
Administrative Agent in such form and manner as the Administrative Agent may
require in its sole discretion, solely for its convenience in maintaining
records of collateral, such confirmatory schedules of Accounts, and other
appropriate reports designating, identifying and describing the Accounts as
the Administrative Agent may require in its sole discretion. In addition,
upon the Administrative Agent's request, each Obligor will provide the
Administrative Agent with copies of agreements with, or purchase orders from,
the customers of each Obligor and its Subsidiaries, and copies of invoices to
customers, proof of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the
Administrative Agent may require. Failure to provide the Administrative
Agent with any of the foregoing shall in no way affect, diminish, modify or
otherwise limit the security interests granted herein. Each Obligor hereby
authorizes the Administrative Agent to regard such Obligor's or any
Subsidiary's printed name or rubber stamp signature on assignment schedules
or invoices as the equivalent of a manual signature by such Obligor's or such
Subsidiary's authorized officers or agents.
7.18 Collection of Accounts.
Each Obligor may and will continue to enforce, collect and receive all
amounts owing on the Accounts, for the Lenders' benefit and on the Lenders'
behalf but at the Obligors' expense in accordance with the provisions of
Section 2.3; provided, however, upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent shall be
entitled, upon first giving written notice to the Obligors to such effect
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(which notice requirement shall be waived if the Event of Default is of the
type described in subsections (e) or (f) of Section 11.1) to enforce, collect
and receive all amounts owing on the Accounts and all other amounts for the
Lenders' benefit and on the Lenders' behalf (but at the Obligor's expense)
pursuant to cash management arrangements satisfactory to the Administrative
Agent and in accordance with the Security Agreement. Any checks, cash, notes
or other instruments or property received by any Obligor or any of its
Subsidiaries with respect to any Accounts shall be held by such Obligor or
such Subsidiary in trust for the benefit of the Lenders, separate from such
Obligor's or Subsidiary's own property and funds, and immediately turned over
to the Administrative Agent with proper assignments or endorsements. No
checks, drafts or other instruments received by the Administrative Agent
shall constitute final payment unless and until such instruments have
actually been collected.
7.19 Notice; Credit Memoranda; and Returned Goods.
Each Obligor will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectibility of
any Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be
required as to any such matter that affects Accounts outstanding at any one
time from any account debtor, which affected Accounts have a value greater
than Two Hundred Fifty Thousand Dollars ($250,000). Each Obligor will issue
credit memoranda promptly (with duplicates to the Administrative Agent upon
its request for same) upon accepting returns or granting allowances, and may
continue to do so until the occurrence of an Event of Default which continues
beyond the expiration of the applicable grace or cure period, or which has
not otherwise been waived by the Required Lenders. After the occurrence and
during the continuance of an Event of Default, each Obligor agrees that all
returned, reclaimed or repossessed merchandise or goods shall be set aside by
such Obligor, marked with the Lenders' name and held by such Obligor for the
Lenders' account as owner and assignee.
7.20 Landlord Agreements.
Each Obligor will assist the Administrative Agent, diligently and in
good faith, in attempting to obtain executed Landlord Agreements from each of
the warehousemen, processors, packers, fillers, landlords and mortgagees with
whom such Obligor conducts business from time to time.
7.21 Intellectual Property.
Each Obligor will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of intellectual
property, including trademarks, service marks and other marks, trade names or
other trade rights unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
7.22 Maintenance of Property.
Each Obligor will, and will cause each of the Subsidiaries to, keep all
property useful and necessary to its respective business in good working
order and condition (ordinary wear and tear excepted) in accordance with
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their past operating practices and not to commit or suffer any waste with
respect to any of its properties, except for properties which either
individually or in the aggregate are not material.
7.23 Revisions or Updates to Schedules.
If any of the information or disclosures provided on any of
Schedules 6.7, 6.8, 6.9, 6.17 or 6.19, originally attached hereto become
outdated or incorrect in any material respect, the Obligors shall deliver to
the Administrative Agent and the Lenders as part of the compliance
certificate required pursuant to Section 7.1(c) such revision or updates to
such Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s), which revisions shall be effective from the date accepted in
writing by the Administrative Agent, such acceptance not to be unreasonably
withheld; provided, that no such revisions or updates to any such Schedule(s)
shall be deemed to have cured any breach of warranty or misrepresentation
occurring prior to the delivery of such revision or update by reason of the
inaccuracy or incompleteness of any such Schedule(s) at the time such
warranty or representation previously was made or deemed to be made.
7.24 ITT Agreement.
The Borrower will: (i) maintain the ITT Agreement in full force and
effect at all times hereafter; (ii) not amend, modify in material respect,
cancel or terminate the ITT Agreement; and (iii) notify the Administrative
Agent promptly, but in any event within five (5) Business Days, of any
actual, pending or threatened termination or cancellation of the ITT
Agreement or any denial of coverage in respect of the indemnity set forth
thereon.
7.25 Mortgaged Real Property.
As soon as practicable after the Closing Date, but in any event not
later than sixty (60) days after the Closing Date, the Obligors shall have
executed and delivered to the Administrative Agent one or more Mortgages
pursuant to which the Obligors shall grant Liens to the Administrative Agent
in those tracts or parcels of the Owned Real Property known generally as the
"Montpelier Plant, Virginia," the "Berkeley Springs Plant, West Virginia" and
the "Pacific Plant, Missouri" and set forth and described more particularly
on Schedule 7.25 attached hereto, including all adjacent tracts or parcels so
described on Schedule 7.25 under such headings, as Items 1, 10 and 11
thereof, respectively (the "Mortgaged Real Property"), together with all
Structures thereon and all minerals and mineral rights associated therewith,
as additional security for the payment of the Obligations, subject to no
other Liens, except Permitted Liens. Such Mortgages shall be accompanied
by: (i) fully paid mortgagee's title insurance policies insuring the
Administrative Agent's Mortgage, from Lawyers Title Insurance Company (the
"Title Company"), for an amount and in a form and substance satisfactory to
the Administrative Agent in its credit judgment (the "New Title Policies");
(ii) current environmental assessments of the Mortgaged Real Property in
demonstrating Borrower's compliance with Section 6.15 hereof in a form and
substance satisfactory to the Administrative Agent in its credit judgment;
(iii) current, "as-built" boundary line surveys of the Mortgaged Real
Property in a form and substance satisfactory to the Administrative Agent in
its credit judgment (the "New Surveys"), unless the standard survey exception
is omitted by the Title Company from the applicable New Title Policy; and
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(iv) such other documents, certificates, instruments and agreements as may be
set forth in the Mortgages or as may be usual and customary in regard thereto
(collectively with each Mortgage, the "Required Mortgage Documentation").
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations (other than then
contingent indemnification obligations) due or to become due hereunder, the
Obligors agree that, unless the Required Lenders shall have otherwise
consented in writing:
8.1 Fixed Charge Coverage Ratio.
As of the last day of each Fiscal Quarter, beginning with the Fiscal
Quarter ending June 30, 2003, the Fixed Charge Coverage Ratio must be at
least 1.00:1.
8.2 Leverage Ratio.
As of the last day of each Fiscal Quarter described below, beginning
with the Fiscal Quarter ending March 31, 2004, the Leverage Ratio must not
exceed the amount described below corresponding thereto:
Fiscal Quarters Leverage Ratio
--------------- --------------
3/31/04 through 9/30/04 6.00:1
12/31/04 through 9/30/05 5.50:1
12/31/05 through 9/30/06 5.25:1
12/31/06 and thereafter 5.00:1
8.3 Capital Expenditures.
Consolidated Capital Expenditures in any Fiscal Year shall not exceed
Ten Million Dollars ($10,000,000).
ARTICLE IX
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations (other than then contingent
indemnification obligations) due or to become due hereunder, each Obligor
agrees that, unless the Required Lenders shall have otherwise consented in
writing, it will not, and will not permit any of its Subsidiaries (and, in
the case of Section 9.9, any ERISA Affiliates of such Obligor) to:
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9.1 Restrictions on Liens.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or properties, whether real property, personal property, or mixed real
property and personal property, whether now owned or hereafter acquired,
including, but not limited to, any Collateral and any Real Property, except
for Permitted Liens.
9.2 Restrictions on Additional Indebtedness.
Incur or create any Indebtedness, other than Permitted Indebtedness.
9.3 Restrictions on Sale of Assets.
Make or enter into any Asset Disposition, other than (a) sales of
Inventory in the ordinary course of business, (b) sales or other dispositions
in the ordinary course of business of assets or properties (other than
Inventory) that are obsolete or that are no longer used or useful in the
conduct of such Obligor's or Subsidiary's business, so long as the Net Cash
Proceeds therefrom are applied when received in accordance with Section
2.2(b), (c) sales or other dispositions in the ordinary course of business
for cash of assets or properties (other than Inventory) used in such
Obligor's or Subsidiary's business that are worn out or in need of
replacement and that are replaced with assets of reasonably equivalent value
or utility within one hundred twenty (120) days of their disposition, so long
as the Net Cash Proceeds therefrom are applied, initially, when received in
accordance with Section 2.2(b), (d) dispositions of any asset by any Obligor
to any other Obligor, (e) transfers of Real Estate to a state, county, local
or municipal governmental agency in exchange for the granting of a permit or
the taking of other regulatory action by such governmental agency to the
extent that such transfers (i) do not, individually or in the aggregate,
materially interfere with the business of the Obligors and (ii) enhance the
value of mining properties owned by the Obligors, provided that in the case
of each such exchange, the board of directors of the relevant Obligor has
determined in good faith that such exchange is in the best interest of such
Obligor, (f) on the Closing Date, the Millville Sale Property so long as the
Net Cash Proceeds therefrom are at least Three Million Dollars ($3,000,000);
(g) except when any Default or Event of Default exists, sales of the Real
Estate described on Schedule 9.3 hereto as "designated for sale," provided,
that the Net Cash Proceeds derived therefrom equal or exceed the "strike
prices" specified therefor on said Schedule 9.3 and are applied, when
received, in accordance with Section 2.2(b), and (h) except when any Default
or Event of Default exists, disposition of other assets or properties (other
than Inventory or Accounts) of any Obligor or Subsidiary of an Obligor, not
otherwise described in subsections (a) through (h) above, so long as the
aggregate consideration for all such dispositions does not exceed One Million
Dollars ($1,000,000) in any consecutive twelve (12) month period and the Net
Cash Proceeds therefrom are applied, when received, in accordance with
Section 2.2(b).
9.4 No Corporate Changes.
Either (a) merge or consolidate with any Person except that, unless an
Event of Default exists, any Affiliate Guarantor may merge or consolidate
with any other Affiliate Guarantor or, provided that the Borrower is the
survivor of any such merger or consolidation, with the Borrower, upon first
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giving the Administrative Agent at least ten (10) days advance written notice
to such effect; or (b) alter or modify any Obligor's or any Subsidiary's
Organizational Documents or form of organization; or (c) alter or modify any
legal names, principal places of business, structure, status or existence
except upon at least thirty (30) days advance written notice to the
Administrative Agent; or (d) enter into or engage in any business, operation
or activity materially different from that presently being conducted by the
Obligors.
9.5 No Guarantees.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any
Subsidiary or Affiliate of any Obligor, except Permitted Guaranties.
9.6 No Restricted Payments.
Make a Restricted Payment, except that the Borrower may pay cash
dividends or make other cash distributions to BMAC and BMAC Services in any
Fiscal Year solely for the purpose of funding (without duplication) the
following:
(i) ordinary operating expenses of BMAC and BMAC Services, including (A)
insurance premiums, (B) payments in an amount necessary to permit
BMAC to satisfy its obligations as a reporting company under
securities laws of the United States, (C) regulatory compliance
costs and payments with respect to other governmental
regulations, (D) salaries and other director or employee
compensation to officers or directors of Holdings, (E) legal fees
and expenses and (F) other miscellaneous administrative expenses;
(ii) liabilities (other than ordinary operating expenses included in clause
(i) above), judgments and settlements required to be paid by
Holdings in an amount not to exceed One Million Dollars
($1,000,000), in the aggregate, in any Fiscal Year;
(iii) payments by BMAC in respect of the Existing Subordinated Notes, to the
extent then permitted to be paid and received under the terms of
the Existing Subordinated Notes Indenture; and
(iv) tax sharing payments by BMAC in respect of foreign, federal, state or
local taxes owing by BMAC in respect of BMAC and its Consolidated
Subsidiaries; provided, however, that such payments shall not be
materially greater than the amount that would be payable by the
Borrower, on a Consolidated basis, if the Borrower were the
taxpayer; and
(v) on the Closing Date, an amount sufficient to pay in full all
obligations then owing under the Existing Senior Secured Credit
Facilities;
provided, further, however, that the Restricted Payments described
hereinabove shall not be permitted if either (A) an Event of Default or
Default shall have occurred and be continuing at the date of declaration or
payment thereof or would result therefrom or (B) such Restricted Payment is
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prohibited under the terms of any document, instrument or agreement
evidencing or securing other Indebtedness of the Borrower.
9.7 No Investments.
Make any Investment, other than Permitted Investments.
9.8 No Affiliate Transactions.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to,
any Subsidiary or Affiliate of any Obligor, except (i) as expressly permitted
to occur under the terms of this Agreement, or (ii) if otherwise, then, in
the ordinary course of and pursuant to the reasonable requirements of such
Obligor's business and upon fair and reasonable terms no less favorable to
such Obligor than would be obtained in a comparable arm's-length transaction
with an unaffiliated Person and where, if such transaction (or any series of
related transactions) is for an amount exceeding Five Hundred Thousand
Dollars ($500,000) only after notice of the pertinent facts of such
transactions has been given to the Administrative Agent.
9.9 No Prohibited Transactions Under ERISA.
Except where a violation otherwise prohibited below could not
reasonably be expected to have a Material Adverse Effect:
(a) Engage in any prohibited transaction which could reasonably be expected
to result in a civil penalty or excise tax described in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code for which a
statutory or class exemption is not available or a private exemption
has not been previously obtained from the DOL;
(b) permit to exist with respect to any Covered Benefit Plan any
accumulated funding (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail to pay timely required contributions or annual installments due
with respect to any waived funding deficiency to any Covered Benefit
Plan;
(d) terminate any Covered Benefit Plan where such event would result in any
liability of the Obligor, any Subsidiary or any ERISA Affiliate under
Title IV of ERISA;
(e) fail to make any required contribution or payment to any Multiemployer
Plan maintained by such Obligor or ERISA Affiliate;
(f) fail to pay any required installment or any other payment required
under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment;
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(g) amend any Covered Benefit Plan resulting in an increase in current
liability for the plan year so that such Obligor or ERISA Affiliate is
required to provide security to such Benefit Plan under Section
401(a)(29) of the Internal Revenue Code; or
(h) withdraw from any Multiemployer Plan maintained by such Obligor or
ERISA Affiliate where such withdrawal may result in any liability of
such Obligor or ERISA Affiliate under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be untrue in any
material respect at any time during the term of this Agreement.
9.10 No Additional Bank Accounts.
Open, maintain or otherwise have any checking, savings or other
accounts at any bank or other financial institution, or any other account
where money is or may be deposited or maintained with any Person, other than
the accounts set forth on Schedule 9.10 hereto and petty cash and payroll
accounts and after the Closing Date, such other accounts so long as each such
account is subject to a Lockbox Agreement satisfactory to the Administrative
Agent. All such deposit accounts, other than payroll accounts, shall be
under the sole dominion and control of the Administrative Agent in accordance
with the provisions of the Security Agreement.
9.11 No Excess Cash.
Maintain in the aggregate in all of the checking, savings or other
accounts of the Obligors, excepting, however, therefrom, Lockbox Accounts
(and related overnight accounts), total cash balances and Permitted
Investments in excess of Two Hundred Fifty Thousand Dollars ($250,000) at any
time during which any Loans are outstanding hereunder.
9.12 Restrictions on Sale of Capital Stock of the Subsidiaries.
Except in connection with any transaction permitted under Section 9.3
or Section 9.4, sell, transfer or otherwise dispose of any shares of Capital
Stock in any Subsidiary.
9.13 No Issuance of Stock by Subsidiaries.
Permit any Subsidiary to issue or distribute any Capital Stock, except
that a Subsidiary whose Capital Stock have been pledged to the Administrative
Agent pursuant hereto may issue and distribute additional such Capital Stock
from time to time hereafter, provided that such Capital Stock are also
pledged to the Administrative Agent promptly upon their issuance on terms and
conditions satisfactory to the Administrative Agent in its sole discretion.
9.14 No Additional Negative Pledges.
Create or otherwise cause or suffer to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause or suffer to
exist or become effective, directly or indirectly, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of the
Administrative Agent and the Lenders) on the creation or existence of any
Lien upon the assets of any Obligor or the Subsidiaries, other than Permitted
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Liens or (ii) any Contractual Obligation which may restrict or inhibit the
Administrative Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default
(except customary non-assignment provisions contained in leases and purchase
agreements for assets secured by a purchase money security interest).
9.15 Indebtedness.
Effect or permit any change in or amendment to any document or
instrument pertaining to the subordination, terms of payment or required
prepayments of any Indebtedness, effect or permit any change in or amendment
to any document or instrument pertaining to the covenants or events of
default of any Indebtedness if the effect of any such change or amendment is
to make such covenants or events of default more restrictive, give any notice
of optional redemption or optional prepayment or offer to repurchase under
any such document or instrument, or, directly or indirectly, make any payment
of principal of or interest on or in redemption, retirement or repurchase of
any Indebtedness, except for the scheduled payments required by the terms of
the documents and instruments evidencing such Indebtedness.
9.16 Sale and Leaseback.
Except in connection with Asset Dispositions permitted under Section
9.3(d), enter into any arrangement, directly or indirectly, whereby Obligor
or any Subsidiary shall sell or transfer any property owned by it to a Person
(other than another Obligor or any Subsidiary) in order then or thereafter to
lease such property or lease other property which such Obligor or any
Subsidiary intends to use for substantially the same purpose as the property
being sold or transferred.
9.17 Licenses, Etc.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent an Obligor or any Subsidiary
from selling, transferring, encumbering or otherwise disposing of any such
patent, trademark or copyright, unless and except to the extent that the
taking of such action could not reasonably be expected to have a Material
Adverse Effect.
9.18 Limitations.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Person to (a) pay dividends or make any other
distribution on any of such Person's Capital Stock, (b) pay any Indebtedness
owed to the Obligors, (c) make loans or advances to any other Obligor or (d)
transfer any of its property to any other Obligor, except for encumbrances or
restrictions existing under or by reason of (i) customary non-assignment
provisions in any lease governing a leasehold interest (or purchase
agreements for assets secured by a purchase money security interest), (ii)
any agreement or other instrument of a Person existing at the time it becomes
a Subsidiary of a Obligor; provided that such encumbrance or restriction is
not applicable to any other Person, or any property of any other Person,
other than such Person becoming a Subsidiary of a Obligor and was not entered
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into in contemplation of such Person becoming a Subsidiary of a Obligor, and
(iii) this Credit Agreement and the other Credit Documents.
9.19 Material Contracts.
Amend, modify in any material respect, cancel or terminate any Material
Contract, except to the extent that the taking of such action could not
reasonably be expected to have a Material Adverse Effect.
9.20 Subsidiaries.
Create or acquire any Subsidiary not in existence and constituting a
Subsidiary on the Closing Date, except upon first giving the Administrative
Agent at least thirty (30) days' advance written notice thereof and complying
with Section 7.16.
9.21 Prepayments of Subordinated Debt, Etc.
(i) Prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, the Subordinated Debt, other than the payment of
regularly scheduled interest and principal payments as and when due in
respect thereof, or (ii) amend, modify or waive any of its rights in respect
of any Subordinated Debt.
ARTICLE X
POWERS
10.1 Appointment as Attorney-in-Fact.
Each Obligor hereby irrevocably authorizes and appoints the
Administrative Agent, or any Person or agent the Administrative Agent may
designate, as such Obligor's attorney-in-fact, at the Obligors' cost and
expense, to exercise, subject to the limitations set forth in Section 10.2,
all of the following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations to the Lenders have been paid and
satisfied in full and all of the Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all in the name of
the Administrative Agent, the Lenders or such Obligor, as the case may
be, any and all checks, notes, drafts, and other documents or
instruments relating to the Collateral coming into the possession or
control of Administrative Agent;
(b) To receive, open and dispose of all mail addressed to such Obligor and
to notify postal authorities to change the address for delivery thereof
to such address as the Administrative Agent may designate;
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(c) To request in writing at any time from customers indebted on Accounts,
in the name of such Obligor or a third party designee of the
Administrative Agent, information concerning the Accounts and the
amounts owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders' interest
therein, and/or to instruct such customers to make payment directly to
the Administrative Agent for such Obligor's account;
(e) To take or bring, in the name of the Administrative Agent, the Lenders
or such Obligor, all steps, actions, suits or proceedings deemed by the
Administrative Agent necessary or desirable to enforce or effect
collection of the Accounts; and
(f) To file, record and register any or all of the Lenders' security
interest in intellectual property of the Borrower with the United
States Patent and Trademark Office.
10.2 Limitation on Exercise of Power.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) of Section 10.1 above may only be
exercised by the Administrative Agent on and after the occurrence of an Event
of Default and during its continuation which has not otherwise been waived by
the Administrative Agent. The powers set forth in subparagraphs (a), (c) and
(f) above may be exercised by the Administrative Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default.
The occurrence of any of the following events shall constitute an
"Event of Default" hereunder:
(a) failure of the Borrower to pay (i) any interest or Fees hereunder
within three (3) Business Days of when due hereunder, in each case
whether at stated maturity, by acceleration, or otherwise, (ii) any
principal of the Loans or the Letter of Credit Obligations when due,
whether at stated maturity, by acceleration or otherwise, or (iii) any
expenses hereunder within five (5) Business Days after receipt by the
Borrower from the Administrative Agent or any applicable Lender of
notice that such expenses are payable or (iv) any other Obligations,
within five (5) Business Days after the stated due date for the payment
thereof;
(b) any representation or warranty of any Obligor contained in this Credit
Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among any Obligor, the Administrative Agent
and the Lenders or executed by any Obligor in favor of the
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Administrative Agent or the Lenders shall prove untrue in any material
respect on or as of the date it was made or was deemed to have been
made;
(c) failure of any Obligor to perform, comply with or observe any term,
covenant or agreement applicable to it contained in Section 7.1,
Section 7.5, Section 7.7, Article VIII or Article IX;
(d) failure to comply with any other covenant contained in this Credit
Agreement or any of the other Credit Documents, to the extent not
otherwise covered by any other subsection of this Section 11.1, and, in
the event such breach or failure to comply is capable of cure, such
breach or failure to comply is not cured within twenty (20) days of its
occurrence;
(e) dissolution, liquidation, winding up or cessation of the business of
any Obligor or any Subsidiary, or the failure of any Obligor or any
Subsidiary to meet its debts generally as they mature, or the calling
of a meeting of any Obligor's or any Subsidiary's creditors generally
for purposes of compromising any Obligor's or any Subsidiary's debts,
or the admission in writing by any Obligor or its inability to pay its
debts generally as they become due;
(f) the commencement by or against any Obligor or any Subsidiary of any
bankruptcy, insolvency, arrangement, reorganization, receivership or
similar proceedings with respect to it under any federal or state law
and, in the event any such proceeding is commenced against any Obligor
of any Subsidiary, such proceeding is not dismissed within sixty (60)
days;
(g) the occurrence of a Change in Control;
(h) any Material Contract shall be cancelled, terminated, revoked or
disaffirmed which has, or could reasonably be expected to have, a
Material Adverse Effect;
(i) any event that results in or would permit the acceleration of the
maturity of any note, agreement or instrument evidencing any
Indebtedness of any Obligor or any of its Subsidiaries, to the extent
that the amount thereof exceeds One Million Dollars ($1,000,000);
(j) any covenant, agreement or obligation of any party contained in or
evidenced by any of the Credit Documents shall cease to be enforceable
in accordance with its terms, any other Credit Document shall fail to
be in full force and effect or to give the Administrative Agent and/or
the Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except as such documents
may be terminated or no longer in force and effect in accordance with
the terms thereof, other than those indemnities and provisions which by
their terms shall survive), or any party (other than the Administrative
Agent or the Lenders) to any Credit Document shall deny or disaffirm
its obligations under any of the Credit Documents, or any Credit
Document shall be canceled, terminated, revoked or rescinded without
the express prior written consent of the Administrative Agent, or any
action or proceeding shall have been commenced by any Person (other
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than the Administrative Agent or any Lender) seeking to cancel, revoke,
rescind or disaffirm the obligations of any party to any Credit
Document, or any court or other Governmental Authority shall issue a
judgment, order, decree or ruling to the effect that any of the
obligations of any party to any Credit Document are illegal, invalid or
unenforceable;
(k) one or more judgments or decrees shall be entered against one or more
of the Obligors or any Subsidiary involving a liability in the
aggregate, in excess of Five Hundred Thousand Dollars ($500,000) (to
the extent not paid or fully covered by pursuant to the ITT Agreement
or otherwise by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within thirty (30) days from the date of entry thereof
(or any shorter required by applicable statute);
(l) any Termination Event with respect to a Benefit Plan maintained by an
Obligor or an ERISA Affiliate shall have occurred and be continuing
thirty (30) days after notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender, and the then
current value of such Benefit Plan's benefits guaranteed under Title IV
of ERISA exceeds the then current value of such Benefit Plan's assets
allocable to such benefits by more than Five Hundred Thousand Dollars
($500,000) (in the case of a Termination Event involving the withdrawal
of a substantial employer, the withdrawing employer's proportionate
share of such excess exceeds such amount);
(m) any Material Adverse Change shall occur; or
(n) Borrower, any other Obligor, or any Subsidiary of an Obligor shall be
criminally indicted or convicted under any law that could lead to a
forfeiture of any of its assets or properties, including, particularly,
any Collateral.
11.2 Acceleration.
Upon the occurrence and during the continuance of an Event of Default,
at the direction of the Required Lenders, the Administrative Agent shall,
upon the written, telecopied or telex request of the Required Lenders, and by
delivery of written notice to the Borrower from the Administrative Agent,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent, any Lender or the holder of any Note to enforce its
claims against any Borrower: (a) declare all Obligations to be immediately
due and payable (except with respect to any Event of Default set forth in
Section 11.1(f) in which case all Obligations shall automatically become
immediately due and payable without the necessity of any notice or other
demand and except with respect to Obligations under Permitted Hedge
Contracts, unless and except to the extent otherwise expressly provided
therein) without presentment, demand, protest or any other action or
obligation of the Administrative Agent or any Lender, (b) immediately
terminate this Credit Agreement and the Commitments hereunder; and (c)
enforce any and all rights and interests created and existing under the
Credit Documents or arising under applicable law, including, without
limitation, all rights and remedies existing under the Security Documents and
all rights of setoff. The enumeration of the foregoing rights is not intended
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to be exhaustive and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative.
In addition, upon demand by the Administrative Agent or the Required
Lenders upon the occurrence of any Event of Default, and at any time
thereafter unless and until such Event of Default has been waived by the
requisite Lenders (in accordance with the voting requirements of
Section 14.10), the Borrower shall deposit with the Administrative Agent for
the benefit of the Lenders with respect to each Letter of Credit then
outstanding, promptly upon such demand, cash or Cash Equivalents in an amount
equal to the greatest amount for which such Letter of Credit may be drawn.
Such deposit shall be held by the Administrative Agent for the benefit of the
Issuing Bank and the other Lenders as security for, and to provide for the
payment of, outstanding Letters of Credit.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Commitments made hereunder shall terminate on the Maturity Date and all
then outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded, all Obligations shall become due and payable as of any termination
hereunder or under Article XI and, pending a final accounting, the
Administrative Agent may withhold any balances in the Borrower's Loan
accounts, in an amount sufficient, in the Administrative Agent's sole
discretion, to cover all of the Obligations, whether absolute or contingent,
unless supplied with a satisfactory indemnity to cover all of such
Obligations. All of the Administrative Agent's and the Lenders' rights,
liens and security interests shall continue after any termination until all
Obligations (other than then contingent indemnification obligations) have
been paid and satisfied in full.
ARTICLE XIII
THE ADMINISTRATIVE AGENT
13.1 Appointment of Administrative Agent.
(a) Each Lender hereby designates Wachovia as Administrative Agent to act
as herein specified. Each Lender hereby irrevocably authorizes, and
each holder of any Note or participation in any Letter of Credit by the
acceptance of a Note or participation shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on its behalf
under the provisions of this Credit Agreement and the Notes and any
other instruments and agreements referred to herein and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by
the terms hereof and thereof and such other powers as are reasonably
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incidental thereto. The Administrative Agent shall hold all Collateral
and all payments of principal, interest, Fees, charges and expenses
received pursuant to this Credit Agreement or any other Credit Document
for the ratable benefit of the Lenders. The Administrative Agent may
perform any of its duties hereunder by or through its agents or
employees.
(b) The provisions of this Article XIII are solely for the benefit of the
Administrative Agent and the Lenders, and none of the Obligors shall
have any rights as a third party beneficiary of any of the provisions
hereof (other than Section 13.9). In performing its functions and
duties under this Credit Agreement, the Administrative Agent shall act
solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency
or trust with or for any Obligor.
(c) Without limiting the generality of this Section 13.1, each Lender
expressly authorizes the Administrative Agent to determine, subject to
the terms of this Credit Agreement, on behalf of such Lender whether or
not (i) Accounts shall be deemed to constitute Eligible Accounts
Receivable, or (ii) Inventory shall be deemed to constitute Eligible
Inventory. Such authorization may be withdrawn by the Required
Lenders; provided, however, that unless otherwise agreed by the
Administrative Agent such withdrawal of authorization shall not become
effective until the thirtieth Business Day after receipt of such notice
by the Administrative Agent. Thereafter, the Required Lenders shall
jointly instruct the Administrative Agent in writing regarding such
matters with such frequency as the Required Lenders shall jointly
determine.
13.2 Nature of Duties of Administrative Agent.
The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Credit Agreement. Neither the
Administrative Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or
willful misconduct. The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not
have by reason of this Credit Agreement a fiduciary relationship in respect
of any Lender; and nothing in this Credit Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative
Agent any obligations in respect of this Credit Agreement except as expressly
set forth herein.
13.3 Lack of Reliance on Administrative Agent.
(a) Independently and without reliance upon the Administrative Agent, each
Lender, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial or other
condition and affairs of each Obligor in connection with the taking or
not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of each Obligor, and, except as
expressly provided in this Credit Agreement, the Administrative Agent
shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other
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information with respect thereto, whether coming into its possession
before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Administrative Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of
this Credit Agreement or the Notes or the financial or other condition
of any Obligor. The Administrative Agent shall not be required to make
any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Credit Agreement or the
Notes, or the financial condition of any Obligor, or the existence or
possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Lender.
13.4 Certain Rights of the Administrative Agent.
The Administrative Agent shall have the right to request instructions
from the Required Lenders or, as required, each of the Lenders. If the
Administrative Agent shall request instructions from the Required Lenders or
each of the Lenders, as the case may be, with respect to any act or action
(including the failure to act) in connection with this Credit Agreement, the
Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
instructions from the Required Lenders or each of the Lenders, as the case
may be, and the Administrative Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder
in accordance with the instructions of the Required Lenders or each of the
Lenders, as the case may be.
13.5 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex teletype or telecopier message, cablegram, radiogram,
order or other documentary, teletransmission or telephone message believed by
it to be genuine and correct and to have been signed, sent or made by the
proper person. The Administrative Agent may consult with legal counsel
(including counsel for the Obligors with respect to matters concerning the
Obligors), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
13.6 Indemnification of Administrative Agent.
To the extent the Administrative Agent is not reimbursed and
indemnified by the Obligors, each Lender will reimburse and indemnify the
Administrative Agent, in proportion to its respective Commitment, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in
performing its duties hereunder, in any way relating to or arising out of
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this Credit Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's gross negligence or willful misconduct.
13.7 The Administrative Agent in its Individual Capacity.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Notes issued to it, its participation in Letters of
Credit issued hereunder, and all of its rights and obligations as a Lender
hereunder and under the other Credit Documents, the Administrative Agent
shall have the same rights and powers hereunder as any other Lender or holder
of a Note or participation interests and may exercise the same as though it
was not performing the duties specified herein; and the terms "Lenders",
"Required Lenders", "holders of Notes", or any similar terms shall, unless
the context clearly otherwise indicates, include the Administrative Agent in
its individual capacity. The Administrative Agent may accept deposits from,
lend money to, acquire equity interests in, and generally engage in any kind
of banking, trust, financial advisory or other business with the Obligors or
any Affiliate of the Obligors as if it were not performing the duties
specified herein, and may accept fees and other consideration from the
Obligors for services in connection with this Credit Agreement and otherwise
without having to account for the same with the Lenders.
13.8 Holders of Notes.
The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
the holder of any Note, shall be conclusive and binding on any subsequent
holder, transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
13.9 Successor Administrative Agent.
(a) The Administrative Agent may, upon five (5) Business Days' notice to
the Lenders and the Obligors, resign at any time (effective upon the
appointment of a successor Administrative Agent pursuant to the
provisions of this Section 13.9(a)) by giving written notice thereof to
the Lenders and the Obligors. Upon any such resignation, the Required
Lenders shall have the right, upon five (5) days' notice, to appoint a
successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then, upon five
(5) days' notice , the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
bank or a trust company or other financial institution which maintains
an office in the United States, or a commercial bank organized under
the laws of the United States of America or of any State thereof, or
any affiliate of such bank or trust company or other financial
institution which is engaged in the banking business, having a combined
capital and surplus of at least $500,000,000. Notwithstanding anything
herein to the contrary, so long as no Event of Default shall have
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occurred and be continuing, any successor Administrative Agent (whether
appointed by the Required Lenders or the Administrative Agent) shall
have been approved in writing by the Borrower (such approval not to be
unreasonably withheld).
(b) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Credit
Agreement. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article XIII
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Credit
Agreement.
13.10 Collateral Matters.
(a) Each Lender authorizes and directs the Administrative Agent to enter
into the Security Documents for the benefit of the Lenders. Each
Lender authorizes and directs the Administrative Agent to make such
changes to the form Acknowledgment Agreement attached hereto as
Exhibit A as the Administrative Agent deems necessary in order to
obtain any Acknowledgment Agreement from any customer, landlord,
warehouseman, filler, packer or processor of any Obligor. Each Lender
also authorizes and directs the Administrative Agent to review and
approve all agreements regarding the Lockboxes and the Lockbox Accounts
(including the Lockbox Accounts Agreements) on such terms as the
Administrative Agent deems necessary. Each Lender hereby agrees, and
each holder of any Note by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by
the Required Lenders or each of the Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the Security
Documents, and the exercise by the Required Lenders or each of the
Lenders, as applicable, of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. The
Administrative Agent is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from
any Lender, from time to time prior to an Event of Default, to take any
action with respect to any Collateral or Security Document which may be
necessary or appropriate to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the
Security Documents.
(b) The Lenders hereby authorize the Administrative Agent, at its option
and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the
Commitments and payment in cash and satisfaction of all of the
Obligations (including the Letter of Credit Obligations) at any time
arising under or in respect of this Credit Agreement or the Credit
Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the
proceeds of such sale by the Administrative Agent if the applicable
Obligor certifies to the Administrative Agent that the sale or
disposition is made in compliance with Section 9.3 (and the
Administrative Agent may rely conclusively on any such certificate,
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without further inquiry) or (iii) if approved, authorized or ratified
in writing by the Required Lenders, unless such release is required to
be approved by all of the Lenders hereunder. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing
the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Obligor, the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the
Administrative Agent for the benefit of the Lenders herein or pursuant
hereto upon the Collateral that was sold or transferred; provided that
(i) the Administrative Agent shall not be required to execute any such
document on terms which, in the Administrative Agent's opinion, would
expose the Administrative Agent to liability or create any obligation
or entail any consequence other than the release of such Liens without
recourse or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of such Obligor or any Subsidiary in respect of) all
interests retained by such Obligor or any Subsidiary, including
(without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any
sale or transfer of Collateral, or any foreclosure with respect to any
of the Collateral, the Administrative Agent shall be authorized to
deduct all of the expenses reasonably incurred by the Administrative
Agent from the proceeds of any such sale, transfer or foreclosure.
(d) The Administrative Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or
is owned by the Obligors or any Subsidiary or is cared for, protected
or insured or that the liens granted to the Administrative Agent herein
or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise or to continue exercising at all or
in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the
Administrative Agent in this Section 13.10 or in any of the Security
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the
Administrative Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Administrative Agent's own interest in
the Collateral as one of the Lenders and that the Administrative Agent
shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.
13.11 Actions with Respect to Defaults.
In addition to the Administrative Agent's right to take actions on its
own accord as permitted under this Credit Agreement, the Administrative Agent
shall take such action with respect to a Default or Event of Default as shall
be directed by the Required Lenders or all of the Lenders, as the case may
be; provided, however, that, until the Administrative Agent shall have
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received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable and in
the best interests of the Lenders.
13.12 Delivery of Information.
The Administrative Agent shall not be required to deliver to any Lender
originals or copies of any documents, instruments, notices, communications or
other information received by the Administrative Agent from the Obligors, any
Subsidiary, the Required Lenders, any Lender or any other Person under or in
connection with this Credit Agreement or any other Credit Document except (a)
as specifically provided in this Credit Agreement or any other Credit
Document and (b) as specifically requested from time to time in writing by
any Lender with respect to a specific document instrument, notice or other
written communication received by and in the possession of the Administrative
Agent at the time of receipt of such request and then only in accordance with
such specific request.
ARTICLE XIV
MISCELLANEOUS
14.1 Waivers.
Each Obligor hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Administrative Agent or the Lenders to exercise any right or
remedy hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or shall operate as a waiver thereof or
as a waiver of any such Event of Default. No single or partial exercise by
the Administrative Agent or the Lenders of any right or remedy shall preclude
any other or further exercise thereof, or preclude any other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OBLIGOR, THE
ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE
CREDIT DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT SHALL BE BROUGHT IN THE
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COURTS OF THE STATE OF NEW YORK IN THE CITY AND COUNTY OF NEW YORK, OR
THE STATE OR THE UNITED STATE FOR THE SOUTHERN DISTRICT OF NEW YORK;
AND, BY EXECUTION AND DELIVERY OF THIS CREDIT AGREEMENT, EACH OF THE
OBLIGORS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION
OF EACH OF SUCH COURTS. EACH OF THE OBLIGORS FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE
ADDRESS SET OUT FOR NOTICES PURSUANT TO SECTION 14.5, SUCH SERVICE TO
BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR TO OTHERWISE PROCEED AGAINST ANY OBLIGOR IN ANY
OTHER JURISDICTION.
(b) EACH OF THE OBLIGORS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN SUBSECTION (A) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
14.4 Arbitration.
(a) Notwithstanding the provisions of Section 14.3 to the contrary, upon
demand of any party hereto, whether made before or after institution of
any judicial proceeding, any dispute, claim or controversy arising out
of, connected with or relating to this Credit Agreement and other
Credit Documents ("Disputes") between or among parties to this Credit
Agreement shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the
right of that party to demand arbitration hereunder. Disputes may
include, without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as class
actions, claims arising from Credit Documents executed in the future,
or claims arising out of or connected with the transaction reflected by
this Credit Agreement. Arbitration shall be conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the
"AAA") and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in New York, New York. A hearing shall begin within ninety
(90) days of demand for arbitration and all hearings shall be concluded
within one hundred twenty (120) days of demand for arbitration. These
time limitations may not be extended unless a party shows cause for
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extension and then no more than a total extension of sixty (60) days.
The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than One
Million Dollars ($1,000,000). All applicable statutes of limitation
shall apply to any Dispute. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge
from the highest court of general jurisdiction, state or federal, of
the state where the hearing will be conducted or if such person is not
available to serve, the single arbitrator may be a licensed attorney.
The parties hereto do not waive applicable Federal or state substantive
law except as provided herein. A judgment upon the award may be
entered in any court having jurisdiction. Notwithstanding the
foregoing, this arbitration provision does not apply to disputes under
or related to Hedging Agreements, unless and except to the extent
otherwise expressly provided therein.
(b) Notwithstanding the preceding binding arbitration provisions, the
Administrative Agent, the Lenders and the Obligors agree to preserve,
without diminution, certain remedies that the Administrative Agent on
behalf of the Lenders may employ or exercise freely, independently or
in connection with an arbitration proceeding or after an arbitration
action is brought. The Administrative Agent on behalf of the Lenders
shall have the right to proceed in any court of proper jurisdiction or
by self-help to exercise or prosecute the following remedies, as
applicable (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted under
Credit Documents or under applicable law or by judicial foreclosure and
sale, including a proceeding to confirm the sale; (ii) all rights of
self-help including peaceful occupation of real property and collection
of rents, setoff, and peaceful possession of personal property; (iii)
obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver
and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or
controversy with regard to the Administrative Agent's entitlement on
behalf of the Lenders to exercise such remedies is a Dispute.
Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party
in a Dispute.
(c) The parties hereto agree that they shall not have a remedy of punitive
or exemplary damages against the other in any Dispute and hereby waive
any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether
the Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Credit Agreement, each of the parties
hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating
to any arbitration proceedings conducted under the Arbitration Rules in
New York, New York and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available.
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14.5 Notices.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail return
receipt requested, or by overnight delivery service, with all charges
prepaid, (i) if to the Administrative Agent, then, to Wachovia Bank, National
Association, Asset Based Lending, 1339 Chestnut Street, Philadelphia,
Pennsylvania 19107; (ii) if to the Obligors, then, to the Borrower, as
Obligors' Representative, at Route 522 North, P.O. Box 187, Berkeley Springs,
West Virginia 25411, and (iii) if to any Lender, then at the address set
forth beneath the signature of such Lender contained herein or in any
Commitment Transfer Supplement, or by facsimile transmission, promptly
confirmed in writing sent by first class mail, (i) if to the Administrative
Agent and (267) 321-6741, (ii) if to the Obligors, then to the Borrower, as
Obligors' Representative, at (304) 258-3500, and if to any Lender, at the
facsimile number set forth beneath the signature of such Lender contained
herein. All such notices and correspondence shall be deemed given (i) if
sent by certified or registered mail, five (5) Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at the
above stated addresses or when delivery is refused and (iii) if sent by
facsimile transmission, when receipt of such transmission is acknowledged;
provided that notices to the Administrative Agent shall not be effective
until received.
14.6 Assignability.
(a) No Obligor shall have the right to assign this Credit Agreement or any
interest therein except with the prior written consent of the Lenders.
(b) Notwithstanding subsection (c) of this Section 14.6, nothing herein
shall restrict, prevent or prohibit any Lender from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of borrowings made
by such Lender from such Federal Reserve Bank or (ii) granting
assignments or participations in such Lender's Loans and/or Commitments
hereunder to its parent company and/or to any affiliate of such Lender
or to any existing Lender or affiliate thereof. Any Lender may make,
carry or transfer Loans at, to or for the account of, any of its branch
offices or the office of an affiliate of such Lender except to the
extent such transfer would result in increased costs to the Obligors.
(c) Each Lender may, assign to one or more banks or other financial
institutions all or a portion of its rights and obligations under this
Credit Agreement and the Notes; provided, however, that (i) unless the
assignee is another Lender or an affiliate of the assignor Lender,
then, each of the Administrative Agent and the Borrower shall have
given its prior consent to such assignment (neither such consent to be
unreasonably withheld, conditioned or delayed), provided that if a
Default or Event of Default then exists, the Borrower's consent shall
be deemed waived (but concurrent notice of such assignment shall be
given to the Borrower), (ii) for each such assignment, the parties
thereto shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with any Note or Notes subject to
such assignment and a processing and recordation fee of Three Thousand
Five Hundred Dollars ($3,500) to be paid by the assignee, (iii) no such
assignment shall be for less than Two Million Dollars ($2,000,000) or,
if less, the entire remaining Commitments of such Lender of the
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Commitments, (iv) if such assignee is a Foreign Lender, all of the
requirements of Section 2.7(b) shall have been satisfied as a condition
to such assignment and (v) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and
in respect of both the Revolving Credit Commitment of such Lender and
all Loans of such Lender. Upon such execution and delivery of the
Assignment and Acceptance to the Administrative Agent, from and after
the date specified as the effective date in the Assignment and
Acceptance (the "Acceptance Date"), (x) the assignee thereunder shall
be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, such assignee shall have the rights and obligations of a
Lender hereunder and (y) the assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (other than
any rights it may have pursuant to Section 14.8 which will survive) and
be released from its obligations under this Credit Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Credit Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the assignee
thereunder confirms and agrees as follows: (i) other than as provided
in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, the Notes or any other instrument or document
furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Obligors or the performance or
observance by the Obligors of any of its obligations under this Credit
Agreement or any other instrument or document furnished pursuant
hereto, (iii) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the financial statements
referred to in Section 7.1 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance, (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Credit Agreement, (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Credit Agreement as are delegated to
the Administrative Agent by the terms hereof, together with such powers
as are reasonably incidental thereto and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations
which by the terms of this Credit Agreement are required to be
performed by it as a Lender.
(e) The Administrative Agent shall maintain at its address referred to in
Section 14.5 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount
of the Loans owing to, each Lender from time to time (the "Register").
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The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Obligors, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register and copies of each Assignment and Acceptance
shall be available for inspection by the Obligors or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with the Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Obligors. Within
five (5) Business Days after its receipt of such notice, the Obligors
shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes (which the assigning Lender agrees to
promptly deliver to the Borrower) a new Note or Notes to the order of
the assignee in an amount equal to the Commitment or Commitments
assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment or Commitments hereunder, a
new Note or Notes to the order of the assigning Lender in an amount
equal to the Commitment or Commitments retained by it hereunder. Such
new Note or Notes shall re-evidence the indebtedness outstanding under
the old Notes or Notes and shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the Closing Date and shall otherwise be in
substantially the form of the Note or Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent of the
Administrative Agent, the Obligors or any other Lender) to one or more
parties in or to all or a portion of its rights and obligations under
this Credit Agreement (including, without limitation, all or a portion
of its Commitments, the Loans owing to it and the Note or Notes held by
it); provided that (i) such Lender's obligations under this Credit
Agreement (including, without limitation, its Commitments to the
Obligors hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Credit Agreement, (iv)
the Obligors, the Administrative Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Credit Agreement,
(v) no participant under any such participation shall be entitled to
amounts otherwise payable to it with respect to its participations
under Sections 2.6, 4.7 or 14.8 unless such amount would have been
payable to the Lender that sold such participation if such
participation had not been sold, (vi) such Lender shall comply with
Section 2.6(f) in regard to such participation, and (vii) such Lender
shall not transfer, grant, assign or sell any participation under which
the participant shall have rights to approve any amendment or waiver of
this Credit Agreement except to the extent such amendment or waiver
would (A) extend the final maturity date or the date for the payments
of any installment of fees or principal or interest of any Loans or
Letter of Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of
the Loans or Letter of Credit reimbursement obligations in which such
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participant is participating, (C) except as otherwise expressly
provided in this Credit Agreement, reduce the interest rate applicable
to the Loans or Letter of Credit reimbursement obligations in which
such participant is participating, or (D) except as otherwise expressly
provided in this Credit Agreement, reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Obligors and the Administrative Agent, it will not make any assignment
or sell a participation hereunder in any manner or under any
circumstances that would require registration or qualification of, or
filings in respect of, any Loan, Note or other Obligation under the
securities laws of the United States of America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Obligors in accordance with
Section 14.7.
(j) Anything in this Section to the contrary notwithstanding, any Lender
may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank, provided that any payment
in respect of such assigned Loans and/or obligations made by the
Borrower to the assigning and/or pledging Lender in accordance with the
terms of this Agreement shall satisfy the Borrower's obligations
hereunder in respect of such assigned Loans and/or obligations to the
extent of such payment. No such assignment shall release the assigning
and/or pledging Lender from its obligations hereunder.
14.7 Information.
The Administrative Agent and each Lender (each, a "Lending Party")
agrees to keep confidential any information furnished or made available to it
by the Obligors pursuant to this Credit Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party
from disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or affiliate of any Lending Party, (b) to any
other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or regulation,
(d) upon the order of any court or administrative agency, (e) upon the
request or demand of any regulatory agency or authority, provided, however,
that, to the extent permitted by law, the affected Lending Party shall
provide prior written notice to the affected Obligor of any such request or
demand, (f) that is or becomes available to the public or that is or becomes
available to any Lending Party other than as a result of a disclosure by any
Lending Party prohibited by this Credit Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) subject
to provisions substantially similar to those contained in this Section 14.7,
to any actual or proposed participant or assignee and (j) to Gold Sheets and
other similar bank trade publications; such information to consist of deal
terms and other information customarily found in such publications.
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Notwithstanding the foregoing, however, this Section 14.7 shall not limit the
ability of a party hereto to disclose the tax treatment or tax structure of
the transactions contemplated hereby and all materials of any kind related
thereto (including opinions or tax analyses) to any Person, provided that the
foregoing is not intended to waive any attorney-client privilege or other
privileges, including the tax advisors privilege under Section 7525 of the
Internal Revenue Code. For this purpose, "tax structure" is any fact that
may be relevant to understanding the U.S. federal or state income tax
treatment of the transactions.
14.8 Payment of Expenses; Indemnification.
The Obligors agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Administrative Agent in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the
reasonable fees and expenses of special counsel to the Administrative Agent
and the fees and expenses of counsel for the Administrative Agent in
connection with collateral issues), and (B) any amendment, waiver or consent
relating hereto and thereto including, without limitation, any such
amendments, waivers or consents resulting from or related to any work-out,
re-negotiation or restructure relating to the performance by the Obligors
under this Credit Agreement and (ii) the Administrative Agent and the Lenders
in connection with enforcement of the Credit Documents and the documents and
instruments referred to therein, including but not limited to, any work-out,
re-negotiation or restructure relating to the performance by the Obligors
under this Credit Agreement, including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel
for the Administrative Agent and each of the Lenders (including the allocated
costs of internal counsel). The Obligors shall indemnify, defend and hold
harmless the Administrative Agent, the Issuing Bank and each of the Lenders
and their respective directors, officers, agents, employees and counsel from
and against (a) any and all losses, claims, damages, liabilities,
deficiencies, judgments or reasonable expenses incurred by any of them
(except to the extent that it is finally judicially determined to have
resulted from their own gross negligence or willful misconduct) arising out
of or by reason of any litigation, investigation, claim or proceeding which
arises out of or is in any way related to (i) this Credit Agreement, any
Letter of Credit, any other Credit Documents or the transactions contemplated
hereby or thereby, (ii) any actual or proposed use by any Obligor of the
proceeds of the Loans or (iii) the Administrative Agent's, the Issuing Bank's
or the Lenders' entering into this Credit Agreement, the other Credit
Documents or any other agreements and documents relating hereto, including,
without limitation, amounts paid in settlement, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (b) any such losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred in
connection with any remedial or other action taken by any Obligor or any of
the Lenders in connection with compliance by any Obligor or any of its
Subsidiaries, or any of their respective properties, with any federal, state
or local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the
obligations of any Obligor hereunder are unenforceable for any reason, such
Obligor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.
The Obligors' obligations under this Section 14.8 shall survive any
termination of this Credit Agreement and the other Credit Documents and the
payment in full of the Obligations, and are in addition to, and not in
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substitution of, any other of their Obligations set forth in this Credit
Agreement. In addition, the Obligors shall, upon demand, pay to the
Administrative Agent and any Lender all reasonable costs and expenses
(including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Administrative Agent, the Issuing Bank
or such Lender in (A) enforcing or defending its rights under or in respect
of this Credit Agreement, the other Credit Documents or any other document or
instrument now or hereafter executed and delivered in connection herewith,
(B) in collecting the Loans, (C) in foreclosing or otherwise collecting upon
the Collateral or any part thereof and (D) obtaining any legal, accounting or
other advice reasonably necessary in connection with any of the foregoing.
14.9 Entire Agreement, Successors and Assigns.
This Credit Agreement along with the other Credit Documents and the Fee
Letter constitutes the entire agreement among the Obligors, the
Administrative Agent and the Lenders, supersedes any prior agreements among
them, and shall bind and benefit the Obligors and the Lenders and their
respective successors and permitted assigns.
14.10 Amendments, Etc.
Neither the amendment or waiver of any provision of this Credit
Agreement or any other Credit Document, nor the consent to any departure by
any Obligor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders (or if the Lenders shall not
be parties thereto, by the parties thereto and consented to by the
Administrative Agent) and the Borrower, and each such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall
unless in writing and signed by all the Lenders, do any of the following: (a)
increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (b) except as otherwise expressly provided in this
Credit Agreement, reduce the principal of, or interest on, any Note or any
Letter of Credit reimbursement obligations or any fees hereunder, (c)
postpone any date fixed for any payment or mandatory prepayment in respect of
principal of, or interest on, any Note or any Letter of Credit reimbursement
obligations or any fees hereunder, (d) change the percentage of the
Commitments, or any minimum requirement necessary for the Lenders or the
Required Lenders to take any action hereunder, (e) amend or waive Section
2.3(b), Section 2.8, Section 2.9, Section 7.16, Section 13.6 or this Section
14.10, or change the definition of Required Lenders, (f) except as otherwise
expressly provided in this Credit Agreement, and other than in connection
with the financing, refinancing, sale or other disposition of any asset of
the Obligors permitted under this Credit Agreement, release any Liens in
favor of the Lenders on any material portion of the Collateral, (g) release
any guaranties of the Obligations, or (h) except as expressly permitted
hereunder, increase the advance rates used to calculate the Borrowing Base
beyond that in effect on the Closing Date and, provided, further, that no
amendment, waiver or consent affecting the rights or duties of the
Administrative Agent or the Issuing Bank under any Credit Document shall in
any event be effective, unless in writing and signed by the Administrative
Agent and/or the Issuing Bank, as applicable, in addition to the Lenders
required hereinabove to take such action. Notwithstanding any of the
foregoing to the contrary, the consent of the Obligors shall not be required
for any amendment, modification or waiver of the provisions of Article XIII
(other than the provisions of Section 13.9). In addition, the Obligors and
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the Lenders hereby authorize the Administrative Agent to modify this Credit
Agreement by unilaterally amending or supplementing Schedule 1.1A from time
to time in the manner requested by the Obligors, the Administrative Agent or
any Lender in order to reflect any assignments or transfers of the Loans as
provided for hereunder; provided, however, that the Administrative Agent
shall promptly deliver a copy of any such modification to the Obligors and
each Lender.
14.11 Nonliability of Administrative Agent and Lenders.
The relationship between any Obligor on the one hand and the Lenders
and the Administrative Agent on the other hand shall be solely that of
obligor and lender. Neither the Administrative Agent nor any Lender shall
have any fiduciary responsibilities to any Obligor. Neither the
Administrative Agent nor any Lender undertakes any responsibility to any
Obligor to review or inform such Obligor of any matter in connection with any
phase of such Obligor's business or operations. NEITHER ADMINISTRATIVE
AGENT, ISSUING BANK NOR ANY LENDER, NOR ANY AFFILIATE, OFFICER, DIRECTOR,
EMPLOYEE, ATTORNEY, OR AGENT OF ADMINISTRATIVE AGENT, ISSUING BANK OR ANY
LENDER, SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND EACH OBLIGOR HEREBY
WAIVES, RELEASES, AND AGREES NOT TO SUE ANY OF THEM UPON, ANY CLAIM FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED
BY ANY OBLIGOR IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO,
THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS.
14.12 Independent Nature of Lenders' Rights.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.13 Counterparts.
This Credit Agreement may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
14.14 Effectiveness.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by each Obligor and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of each Obligor, the Administrative
Agent and each Lender and their respective successors and assigns.
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14.15 Severability.
In case any provision in or obligation under this Credit Agreement or
the Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
14.16 Headings Descriptive.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.
14.17 Maximum Rate.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Obligors, the
Administrative Agent and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever shall the amount paid,
or agreed to be paid, to the Administrative Agent or any Lender for the use,
forbearance, or detention of the money loaned to any Obligor and evidenced
hereby or thereby or for the performance or payment of any covenant or
obligation contained herein or therein, exceed the Highest Lawful Rate. If
due to any circumstance whatsoever, fulfillment of any provisions of this
Credit Agreement or any of the other Credit Documents at the time performance
of such provision shall be due shall exceed the Highest Lawful Rate, then,
automatically, (unless otherwise prohibited under applicable law) the
obligation to be fulfilled shall be modified or reduced to the extent
necessary to limit such interest to the Highest Lawful Rate, and if from any
such circumstance any Lender should ever receive anything of value deemed
interest by applicable law which would exceed the Highest Lawful Rate, such
excessive interest shall be applied (unless otherwise prohibited under
applicable law) to the reduction of the principal amount then outstanding
hereunder or on account of any other then outstanding Obligations and not to
the payment of interest, or if such excessive interest exceeds the principal
unpaid balance then outstanding hereunder and such other then outstanding
Obligations, such excess shall be refunded to the applicable Obligor. All
sums paid or agreed to be paid to the Administrative Agent or any Lender for
the use, forbearance, or detention of the Obligations and other indebtedness
of the Obligors to the Administrative Agent or any Lender shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the actual rate of interest on account of all such indebtedness does not
exceed the Highest Lawful Rate throughout the entire term of such
indebtedness. The terms and provisions of this Section shall control every
other provision of this Credit Agreement and all agreements among the
Obligors, the Administrative Agent and the Lenders.
14.18 Right of Setoff.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender
or other holder of a Note shall, if any Event of Default has occurred and is
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continuing and whether or not such Lender or such holder has made any demand
or the Obligations of any Obligor are matured, have the right to appropriate
and apply to the payment of the Obligations of such Obligor all deposits
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Lender or other holder, including, without limitation, any and all amounts in
the Wachovia Account. Any amount received as a result of the exercise of
such rights shall be reallocated among the Lenders as set forth in Section
3.8.
14.19 Power of Attorney.
Each Obligor appoints the Borrower to be its representative (the
Borrower, acting in such capacity herein called the "Obligors'
Representative") and, in facilitation thereof, hereby nominates and appoints
the Borrower in its name and on its behalf and as its act and deed or
otherwise to sign all Credit Documents and carry out all such acts as are
necessary or appropriate in connection with executing any Notice of
Borrowing, Notice of Extension/Conversion or any Borrowing Base Certificate
or any Security Documents in connection with this Credit Agreement or giving
(or receiving any notice hereunder or thereunder). The power of attorney
granted herein shall be valid for the duration of the term of this Credit
Agreement. Each Obligor hereby undertakes to ratify everything which the
Borrower shall do in order to carry out the foregoing.
14.20 Replacement Lenders.
Within thirty (30) days after receipt by the Borrower of written notice
and demand from any Lender (an "Affected Lender") (i) for payment of
additional amounts or increased costs as provided in Section 2.6 and Section
4.7 or (ii) or of the inability of a Lender to make Eurodollar Loans under
Section 4.9, the Borrower may, at its option, notify the Administrative Agent
and such Affected Lender of its intention to replace the Affected Lender. So
long as no Event of Default shall have occurred and be continuing, the
Borrower, with the consent of the Administrative Agent (such consent not to
be unreasonably withheld, conditioned or delayed), may obtain, at the
borrower's expense, a replacement Lender ("Replacement Lender") for the
Affected Lender. If the Borrower obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender
must sell and assign its Loans and commitments to such Replacement Lender for
an amount equal to the principal balance of all Loans held by the Affected
Lender and all accrued interest and fees with respect thereto through the
date of such sale, provided that the Borrower shall have reimbursed such
Affected Lender for the additional amounts or increased costs that it is
entitled to receive under this Agreement through the date of such sale and
assignment.
14.21 Seals.
To the extent that in this Credit Agreement or any other Credit
Agreement, in reference to the execution of such Credit Documents by any
Person, provision is made for affixation of a seal, the word "seal" or the
symbol "L.S." shall itself be sufficient to connote such affixation.
14.22 Inconsistencies With Other Documents; Independent Effect of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Credit Document, the terms of this Agreement
shall control; provided, however, that any provision of any Credit
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Document which imposes additional burdens on any Obligor or any of its
Subsidiaries or further restricts the rights of any Obligor or any of
its Subsidiaries or gives the Administrative Agent or Lenders
additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) Each covenant or agreement contained herein or in any other Credit
Document shall be given independent effect.
ARTICLE XV
affiliate guaranty
15.1 The Guarantee.
The Affiliate Guarantors hereby jointly and severally guarantee to the
Administrative Agent and the Lenders the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Obligations
(such Obligations herein called, collectively, the "Guaranteed Obligations"),
in each case strictly in accordance with the terms hereof. The Affiliate
Guarantors hereby further jointly and severally agree that if the Borrower
shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Affiliate
Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid
in full when due (whether at extended maturity, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.
15.2 Obligations Unconditional.
The obligations of the Affiliate Guarantors hereunder are absolute and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the Obligations of the Borrower
under this Credit Agreement, the Notes or any other Credit Document or any
substitution, release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor (other than full payment and satisfaction of all Guaranteed
Obligations), it being the intent of this Section that the obligations of the
Affiliate Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of
the foregoing, it is agreed that, unless otherwise prohibited by applicable
law, the occurrence of any one or more of the following shall not alter or
impair the liability of the Affiliate Guarantors hereunder which shall remain
absolute and unconditional as described above: (i) at any time or from time
to time, without notice to any of the Affiliate Guarantors, the time for any
performance of or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived; (ii) any of the
acts mentioned in any of the provisions of this Agreement or the Notes or any
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other Credit Document shall fail to be done or be omitted; (iii) the maturity
of any of the Guaranteed Obligations shall be accelerated, or any of the
Guaranteed Obligations shall be modified, supplemented or amended in any
respect, or any right under this Agreement or the Notes or any other Credit
Document shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole
or in part or otherwise dealt with; or (iv) any lien or security interest
granted to, or in favor of, the Administrative Agent as security for any of
the Guaranteed Obligations shall fail to be perfected. The Affiliate
Guarantors further hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that
Administrative Agent or any Lender exhaust any right, power or remedy or
proceed against Borrower under this Agreement or the Notes or any other
Credit Document, or against any other Person under any other Guaranty of, or
security for, any of the Guaranteed Obligations.
15.3 Reinstatement.
The obligations of the Affiliate Guarantors hereunder shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise and the Affiliate Guarantors jointly and
severally agree that they will indemnify each Administrative Agent and Lender
on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees and disbursements of legal counsel) incurred by
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
15.4 Deferral of Subrogation Rights.
Each Affiliate Guarantor hereby subordinates to Administrative Agent
and the Lenders all rights of subrogation or contribution against the
Borrower, whether arising by contract or operation of law (including, without
limitation, any such right arising under the Bankruptcy Code) or otherwise by
reason of any payment by it pursuant to the provisions hereof until all
Obligations (other than any constituting contingent indemnity obligations)
are fully paid and satisfied and all Commitments are terminated.
15.5 Remedies.
The Affiliate Guarantors jointly and severally agree that, as between
the Affiliate Guarantors and Administrative Agent and Lenders, the Guaranteed
Obligations may be declared to be forthwith due and payable as provided
herein (and shall be deemed to have become automatically due and payable in
the circumstances provided herein) for purposes hereof, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Borrower and that, in the event of such declaration in accordance with the
terms hereof (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Affiliate Guarantors for purposes hereof.
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15.6 Continuing Guaranty.
The guaranty set forth herein is a continuing guaranty, and shall apply
to all Guaranteed Obligations, whenever and howsoever arising.
15.7 Rights of Contribution.
The Affiliate Guarantors hereby agree, as between themselves, that if
any Affiliate Guarantor shall become an "Excess Funding Guarantor" (as
defined below) by reason of the payment by such Affiliate Guarantor of any
Guaranteed Obligations, each other Affiliate Guarantor shall, on demand of
such Excess Funding Guarantor (but subject to the next sentence), pay to such
Excess Funding Guarantor an amount equal to such Affiliate Guarantor's "Pro
Rata Share" (as defined below and determined, for this purpose, without
reference to the properties, debts and liabilities of such Excess Funding
Guarantor) of the "Excess Payment" (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of an Affiliate Guarantor to
any Excess Funding Guarantor under this Section shall be subordinate and
subject in right of payment to the prior payment in full of the obligations
of such Affiliate Guarantor under the other provisions of this Section and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all such
obligations. For purposes hereof, (i) "Excess Funding Guarantor" means, in
respect of any Guaranteed Obligations, an Affiliate Guarantor that has paid
an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "Excess Payment" means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations (iii) "Pro Rata Share" means, for any Affiliate
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which
the aggregate present fair saleable value of all assets of such Affiliate
Guarantor (excluding any shares of stock of any other Affiliate Guarantor)
exceeds the amount of all the debts and liabilities of such Affiliate
Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Affiliate Guarantor
hereunder and any obligations of any other Affiliate Guarantor that have been
guaranteed by such Affiliate Guarantor) to (y) the amount by which the
aggregate fair saleable value of all assets of all of the Affiliate
Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Affiliate Guarantor hereunder) of the
Affiliate Guarantors, determined (A) with respect to any Affiliate Guarantor
that is a party hereto on the Closing Date, as of the Closing Date, and (B)
with respect to any other Affiliate Guarantor, as of the date such Affiliate
Guarantor becomes an Affiliate Guarantor hereunder.
15.8 Limitation on Guaranteed Obligations.
In any action or proceeding involving any state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of the
Affiliate Guarantors hereunder, after giving effect to the contribution
rights provided herein above, would otherwise be held or determined to be
void, invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability hereunder, then,
notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by any Affiliate Guarantor,
Administrative Agent, any Lender or any other Person, be automatically
limited and reduced to the highest amount that is valid and enforceable and
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not subordinated to the claims of other creditors as determined in such
action or proceeding.
15.9 Subordination.
In the event that any Affiliate Guarantor shall advance any sums to the
Borrower, or in the event the Borrower has heretofore or shall hereafter
become indebted to any Affiliate Guarantor before the Obligations have been
paid in full and this Agreement is terminated, all such advances and
indebtedness shall be subordinate in all respects to the Obligations (the
foregoing herein called the "Affiliate Guarantor Subordinated Debt"). Any
payment to any Affiliate Guarantors on account of the Affiliate Guarantor
Subordinated Debt shall be collected and received by the Affiliate Guarantors
in trust for the Lenders and shall be paid over to the Administrative Agent
on account of the Obligations without impairing or releasing the obligations
of the Affiliate Guarantors hereunder. Without limitation of the forgoing,
without the prior written consent of the Required Lenders, the Affiliate
Guarantors shall not ask, demand, receive, accept, sue for, set off, collect
or enforce the Affiliate Guarantor Subordinated Debt or any collateral and
security therefor until all of the Obligations have been paid in full and
this Agreement is terminated. In the event of any sale, receivership,
insolvency or bankruptcy proceeding, or assignment for the benefit of
creditors, or any proceeding by or against the Borrower for any relief under
any bankruptcy or insolvency law or other laws relating to the relief of
debtors, readjustment of indebtedness, reorganizations, compositions or
extensions, then and in any such event any payment or distribution of any
kind or character, either in cash ,securities or other property, which shall
be payable or deliverable upon, or with respect to, all or any part of the
Affiliate Guarantor Subordinated Debt or otherwise shall be paid or delivered
directly to the Administrative Agent for application to the obligations and
liabilities of the Affiliate Guarantors under this Agreement (whether due or
not due and in such order and manner as the Administrative Agent may
determine in the exercise of its sole discretion) until the obligations of
the Affiliate Guarantors hereunder shall have been fully paid and satisfied.
The Affiliate Guarantors hereby irrevocably authorize and empower the
Administrative Agent to demand, sue for, collect and receive every such
payment or distribution on account of the Affiliate Guarantor Subordinated
Debt and give acquittance therefor and to file claims and take such other
proceedings in the Administrative Agent's own name or in the name of the
Affiliate Guarantors or otherwise, as the Administrative Agent may deem
necessary or advisable to carry out the provisions of this Agreement. The
Affiliate Guarantors hereby agree to execute and deliver to the
Administrative Agent such powers of attorney, assignments, endorsements or
other instruments as may be requested by the Administrative Agent in order to
enable the Administrative Agent to enforce any and all claims upon, or with
respect to, the Affiliate Guarantor Subordinated Debt, and to collect and
receive any and all payments or distributions which may be payable or
deliverable at any time upon or with respect thereto. So as to secure the
performance by the Affiliate Guarantors of the provisions hereof, each
Affiliate Guarantor assigns, pledges and grants to the Administrative Agent a
security interest in, and lien on, the Affiliate Guarantor Subordinated Debt,
all proceeds thereof and all any security and collateral therefor. Upon the
request of the Administrative Agent, the Affiliate Guarantors shall endorse,
assign and deliver to the Administrative Agent all notes, instruments and
agreements evidencing, securing, guarantying or made in connection with the
Affiliate Guarantor Subordinated Debt.
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15.10 Survival of Representations.
All representations made by such Obligor in this Credit Agreement and
in any other Credit Document shall survive the execution and delivery hereof
and thereof.
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IN WITNESS WHEREOF the parties hereto have caused this Credit Agreement
to be executed under seal and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER:
U.S. SILICA COMPANY (SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Senior Vice President - Finance
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BMAC HOLDINGS, INC. (SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Vice President
BETTER MINERALS & AGGREGATES COMPANY
(SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Vice President
BMAC SERVICES CO., INC. (SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Vice President
120
THE FULTON LAND AND TIMBER
COMPANY (SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Treasurer
OTTAWA SILICA COMPANY (SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Treasurer
PENNSYLVANIA GLASS SAND CORPORATION
(SEAL)
By: /s/ Gary E. Bockrath
--------------------
Name: Gary E. Bockrath
Title: Treasurer
GEORGE F. PETTINOS, LLC (SEAL)
By: U. S. SILICA COMPANY (SEAL)
By: /s/ Gary E. Bocrath
-------------------
Name: Gary E. Bockrath
Title: Senior Vice President - Finance
121
ADMINISTRATIVE AGENT AND LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION
(SEAL)
as Administrative Agent and as a Lender
By: _____________________________________
Name: Kevin B. Harrison
Title: Managing Director
Lending Office (Base Rate Loans):
Address: Wachovia Bank, National
Association
Asset Based Lending
1339 Chestnut Street
Philadelphia, PA 19107
Attention: James A. Kelly, V.P.
Telephone: 267-321-6685
Facsimile: 267-321-6741
Lending Office (Eurodollar Loans):
Address: Wachovia Bank, National
Association
Asset Based Lending
1339 Chestnut Street
Philadelphia, PA 19107
Attention: James A. Kelly, V.P.
Telephone: 267-321-6685
Facsimile: 267-321-6741
Notice Address:
Address: Wachovia Bank, National
Association
Asset Based Lending
1339 Chestnut Street
Philadelphia, PA 19107
Attention: James A. Kelly, V.P.
Telephone: 267-321-6685
Facsimile: 267-321-6741
122
with copy to:
Kevin B. Harrison
Managing Director
Asset Based Lending
Wachovia Bank, National Association
191 Peachtree Street
Atlanta, Georgia 30303
Telephone: (404) 332-5269
Facsimile: (404) 332-6920
123